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Habitat For Humanity[1] works in a similar way. At least in my town, families help to build or renovate the home they move into, and their mortgage payments ar

Habitat For Humanity[1] works in a similar way. At least in my town, families help to build or renovate the home they move into, and their mortgage payments are capped at a reasonable percentage of their income (I think 30%). 1: https://www.habitat.org/about/faq#homeownership https://www.habitat.org/about/faq#homeownership

toomuchtodo 6y ago
HfH typically provides the mortgage with a 0% interest rate also. They are a tremendous program that should be scaled up.
- bombcar 6y ago
  Like any limited (by funds or numbers) program HfH can do great good but it can also turn away those form whom it wouldn’t work (not capable of meeting the requirements/sticking it out). Handling EVERY case is much more difficult (not that we shouldn’t expand HfH-style programs). A multitude of solutions are needed and trying to limit the types is part of the problem.
  - toomuchtodo 6y ago
    Agree entirely.
- rsj_hn 6y ago
  All these programs that subsidize the cost of borrowing merely drive up the price of houses. This is why things like the mortgage interest deduction or zero percent financing are not in the long term interests of home buyers when they are "scaled up", and when they are niche programs they are basically a convoluted form of charity. There is nothing wrong with that, some people like their charities to be convoluted and have a penchant for financial engineering, but at the end of the day charities, by definition, cannot scale: A large group can give money to a small group, but when the society as a whole gives money to itself then it is no longer charity, it's just spending money on yourself in a convoluted way.
  - Spooky23 6y ago
    Not always. The program I described was really a way to transition folks into a sustainable lifestyle. Rents in this place are more than property values, so training to let working class people afford a home and rent the downstairs bring stability to the family and he neighborhood. Real estate is insane because we’re in an era where wealth is being shoveled into a few peoples hands, and we are literally printing money to extend a boom cycle for as long as possible without regard for the future. The house I grew up in Queens was purchased by my folks in 1976 for $15 and recently sold for $1.3M. My dad was a clerk for the city then, and my uncle, now a millionaire across the street was an able seaman.
    - rsj_hn 6y ago
      I am not saying Habitat for Humanity (or any charity) is bad, nor am I trying to discourage anyone from giving to charity. I'm pointing out that what works in a small scale charity does not work for addressing social problems at scale, and in fact is often (more often than not) harmful when done at scale. This is because the specific things that charities are good at: giving stuff to small groups of people, is not really a path forward for problems faced by society as a whole, with the exception of the problem of poor people not having enough stuff. But when you try to use this approach for, say, housing policy, then you get bad outcomes. We have had in this country a long term, bipartisan consensus that home ownership should be subsidized. The end result is transfers from renters to home-owners, record high homeownership rates, and many people buying homes because it's a way to make leveraged bets on asset prices at taxpayer expense. There are many people who have no business owning a home but who feel they must do so in order to not be left behind in this game of leveraged bets. The result is a toxic tangle of cross-subsidies between the real-estate and financial sectors and a whole army of various parasitical industries that has sprung up to feed on these subsidies -- everything from real estate brokers, title insurers, inspectors, appraisers, a virtual caravan of people lined up at the trough of our housing subsidies, all in the name of "helping the middle class" afford homes. When you have such a terrible problem of mispricing and people chasing after windfall gains, the idea that the industry should be approached as a type of charity is really the last thing you want to do. If you want to give money to a poor person, then by all means do so, but that's not a path forward for national housing policy.
- clairity 6y ago
  based on my experience volunteering for habitat, the hard part of scaling the model is finding affordable and buildable infill in cities (which is where the highest need is). it typically takes years for each project to go from ideation to purchase to design to zoning variances to enviromental review to groundbreaking. the construction itself is only on the order of months. everything that comes before actual construction is what makes it expensive.
  - deleted 6y ago
    [deleted]

toomuchtodo 6y ago

HfH typically provides the mortgage with a 0% interest rate also. They are a tremendous program that should be scaled up.

bombcar 6y ago
Like any limited (by funds or numbers) program HfH can do great good but it can also turn away those form whom it wouldn’t work (not capable of meeting the requirements/sticking it out). Handling EVERY case is much more difficult (not that we shouldn’t expand HfH-style programs). A multitude of solutions are needed and trying to limit the types is part of the problem.
- toomuchtodo 6y ago
  Agree entirely.
rsj_hn 6y ago
All these programs that subsidize the cost of borrowing merely drive up the price of houses. This is why things like the mortgage interest deduction or zero percent financing are not in the long term interests of home buyers when they are "scaled up", and when they are niche programs they are basically a convoluted form of charity. There is nothing wrong with that, some people like their charities to be convoluted and have a penchant for financial engineering, but at the end of the day charities, by definition, cannot scale: A large group can give money to a small group, but when the society as a whole gives money to itself then it is no longer charity, it's just spending money on yourself in a convoluted way.
- Spooky23 6y ago
  Not always. The program I described was really a way to transition folks into a sustainable lifestyle. Rents in this place are more than property values, so training to let working class people afford a home and rent the downstairs bring stability to the family and he neighborhood. Real estate is insane because we’re in an era where wealth is being shoveled into a few peoples hands, and we are literally printing money to extend a boom cycle for as long as possible without regard for the future. The house I grew up in Queens was purchased by my folks in 1976 for $15 and recently sold for $1.3M. My dad was a clerk for the city then, and my uncle, now a millionaire across the street was an able seaman.
  - rsj_hn 6y ago
    I am not saying Habitat for Humanity (or any charity) is bad, nor am I trying to discourage anyone from giving to charity. I'm pointing out that what works in a small scale charity does not work for addressing social problems at scale, and in fact is often (more often than not) harmful when done at scale. This is because the specific things that charities are good at: giving stuff to small groups of people, is not really a path forward for problems faced by society as a whole, with the exception of the problem of poor people not having enough stuff. But when you try to use this approach for, say, housing policy, then you get bad outcomes. We have had in this country a long term, bipartisan consensus that home ownership should be subsidized. The end result is transfers from renters to home-owners, record high homeownership rates, and many people buying homes because it's a way to make leveraged bets on asset prices at taxpayer expense. There are many people who have no business owning a home but who feel they must do so in order to not be left behind in this game of leveraged bets. The result is a toxic tangle of cross-subsidies between the real-estate and financial sectors and a whole army of various parasitical industries that has sprung up to feed on these subsidies -- everything from real estate brokers, title insurers, inspectors, appraisers, a virtual caravan of people lined up at the trough of our housing subsidies, all in the name of "helping the middle class" afford homes. When you have such a terrible problem of mispricing and people chasing after windfall gains, the idea that the industry should be approached as a type of charity is really the last thing you want to do. If you want to give money to a poor person, then by all means do so, but that's not a path forward for national housing policy.
clairity 6y ago
based on my experience volunteering for habitat, the hard part of scaling the model is finding affordable and buildable infill in cities (which is where the highest need is). it typically takes years for each project to go from ideation to purchase to design to zoning variances to enviromental review to groundbreaking. the construction itself is only on the order of months. everything that comes before actual construction is what makes it expensive.
- deleted 6y ago
  [deleted]