RealEstate Investing:Rep. Frank: Time to increase federal funding for affordable housing

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Barney Frank is right on. Mostly.

Yesterday the Democratic Representative from Massachusetts called for the federal government to increase its funding of affordable rental properties.

You can read more about Frank’s statements in this story from CNN.

Frank also took time to criticize a policy of the last Bush administration, a policy that he said helped exacerbate the housing crisis that the country now faces.

It’s hard for a politician, Democrat or Republican, not to get political. But much of what Frank said, minus the anti-Bush political rhetoric, is accurate.

During a speech at the National Low Income Housing Coalition’s policy conference in Washington, D.C., Frank said that the government has not spent enough money for affordable rental properties. He made a valid point, too: For too long the federal government had encouraged everyone to buy a home.

The reasons for this were laudable: Owners usually take better care of a property than do renters. They form closer ties to their communities. Generally, homeowners watch out for each other.

But in pushing policies that boosted the country’s homeownership rate to record levels, the federal government encouraged mortgage lenders to make loans to people who had no business buying  a home. Some people are just better off as renters, and that was a fact that the federal government seemed to ignore.

During his speech, Frank said that a Busy-era policy to turn more low-income families into homeowners instead of renters helped cause the sub-prime mortgage crisis. That crisis, of course, led to the bigger economic problems facing the country.

This statement I do find fault with. Remember when Republicans were criticizing Democratic policies that opened up housing opportunities to minority buyers as being behind the sub-prime lending crisis? Well, that was nonsense, too. There are a lot of causes for the sub-prime lending crisis. No one policy — whether supported by Republicans or Democrats — caused it.

I wish our politicians could somehow stop criticizing each other and instead come up with real solutions to the housing crisis. The longer the housing slowdown lasts, the longer our country’s recession will last. You’d think politicians would know that it’s time to stop bickering and start working toward solutions.

But I suppose if they really did that, they wouldn’t be politicians.

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