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Harris Says Privatizing Fannie Mae And Freddie Mac Could Add $1,200 To Mortgage Costs: Is She Right? (finance.yahoo.com)

submitted 3 months ago by MCasq_qsaCJ_234@lemmy.zip to c/politics@lemmy.world

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Vice President Kamala Harris has rolled out several initiatives as part of her housing plan. She wants to incentivize builders to create 3 million units of affordable housing and develop a $25,000 housing credit for first-time homebuyers. Harris's housing goals have been widely dissected by the media, showing that the nationwide housing problem is top of mind for many people.

Harris believes that former president Trump has it all wrong when it comes to solving the housing crunch. In her Aug. 16,2024, political rally, she stated, "If his Project 2025 agenda is put into effect, it will add around $1,200 a year to the typical American mortgage. He's got it backward. We should be doing everything we can to make it more affordable to buy a home, not less."

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[-] Loduz_247@lemmy.world 75 points 3 months ago

Yes, next question.

[-] xmunk@sh.itjust.works 41 points 3 months ago

Ayup, privatization is always a terrible idea!

[+] NotAnotherLemmyUser@lemmy.world -19 points 3 months ago

"Always" is a pretty strong word here. In some cases this is true, but in others it's not.

For example, if you live in an area where all of the public schools are terrible, you're going to want to look for other options. If the private schools in your area are way better (and hopefully affordable) then you would want to send your kids there. Public schools can also compare/see what private schools are doing that's working, and update their policy/curriculum to improve themselves.

Privatizing public libraries is a terrible idea and is currently happening at an alarming rate in the U.S.

Removing all privatization from the entire economy is where we end up with command economies or communism which means that we end up with a lot of monopolies. There isn't much of an incentive for innovation in those economies. Then you're either living under some crazy dictatorship, or the country is falling apart and they are forced to change how their economy works.

[-] tills13@lemmy.world 20 points 3 months ago

Privatization helps people who can afford to not be in a situation where they are choosing between only shitty options. The point of a (good) public system is that it's a consistent, good baseline for ALL people regardless of their socio-economic status.

So in your example, sure, if you can afford it you can put your kid into private school or simply move but what about your neighbors? Can they as well? Society functions best when everyone has fair equity.

[-] NotAnotherLemmyUser@lemmy.world 0 points 3 months ago

It's not a perfect system by far and I'm not arguing that.
But we've already seen how removing all privatization from an economy leads to worse outcomes because we have less options, less innovation, and more monopolies.
In my opinion we need to find a balance between the two systems that works best for everyone. Arguing for either extreme doesn't make sense (in my opinion). I would rather see if we can come up with some other solutions that are better than the current system.

[-] kibiz0r@midwest.social 6 points 3 months ago

where all of the public schools are terrible

…from having no money

you're going to want to look for other options

…if you have money

If the private schools in your area are way better

…funded

then you would want to send your kids there

…and your money

Public schools can also compare/see what private schools are doing that's working

…like having money

and update their policy/curriculum to improve themselves

…like by enacting a policy of having money

[-] captainlezbian@lemmy.world 3 points 3 months ago

Privatization isn’t allowing a private options, it’s selling the public one. If public schools suck we shouldn’t sell them to a profit seeking company

[-] NotAnotherLemmyUser@lemmy.world 1 points 3 months ago

Yep, I definitely misunderstood that. Thanks for pointing that out.

[-] captainlezbian@lemmy.world 1 points 3 months ago

No problem. Privatization has a long history of being sold to us in very positive and plausible ways. At the end of the day when private options are better than public ones there are questions that need to be asked about the public options, usually regarding if we’re funding it properly and if we’re allowing private industry to take all the profitable parts of a necessary venture and leaving the unprofitable aspects to the public options.

In general I’m much more hesitant to allow private options to compete with public ones because of the points there. That profit is coming from somewhere and while sometimes it’s innovation providing a better product, that’s rarely the case unless the public option is so chronically underfunded it can’t run efficiently, and in that case I think it needs funding.

So in short, fund Amtrak.

[-] linearchaos@lemmy.world 55 points 3 months ago

It certainly doesn't help healthcare or education prices when you privatize them.

Privatizing an industry it's just another way to take something out of the public eye and turn it into a opportunity for the ultra rich to make more money.

[-] itsonlygeorge@reddthat.com 48 points 3 months ago

Privatization and deregulation are the bread and butter of conservatives. Always works out real well for the owners while everyone else pays the bill.

[-] DragonTypeWyvern@midwest.social 13 points 3 months ago

It's quite literally a core tenant of neoliberalism.

[-] WhatYouNeed@lemmy.world 6 points 3 months ago

You mean the part about the owners making lots of dough while everyone else pays for it?

[-] ExFed@lemm.ee 2 points 3 months ago

Always works out real well for the owners while everyone else pays the bill.

Ironically, there's a whole movement that directly fights that sentiment by deregulating the supply of housing. It's called YIMBY. When housing is a rarity, it's more expensive, so why not make more housing?

[-] captainlezbian@lemmy.world 5 points 3 months ago

When we deregulate we must be very careful. Sometimes it’s good like saying that residential and commercial properties can be next to each other. Other times it puts the coal plant next to the kindergarten. You’ve gotta be careful to not throw the baby out with the leaded bath water

[-] ExFed@lemm.ee 2 points 3 months ago

Yes, absolutely. My point is that some regulations are counterproductive, or just plain wrong... like redlining.

[-] ristoril_zip@lemmy.zip 47 points 3 months ago

Privatizing anything will lead to higher prices.

The claim (which I think we should be comfortable calling a "lie" at this point) is that services provided by the government are almost inherently wasteful. Conservatives (it's always conservatives) believe that civil servants (our neighbors) are overpaid and lazy. They believe that top level bureaucrats don't have incentives for innovation and cost/waste minimization, and that top level executives in a for profit corporation do.

And the additional claim ("lie") is that commercial profit incentives de facto lead to improved customer (citizen) outcomes.

However, I've never seen any long term data that supports ANY transition from public to private leading to either better innovation OR internal performance OR customer outcomes. I've also never seen data supporting the reverse (converse? inverse?) contention that nationalizing something corporate leads to worse innovation, performance, or outcomes.

Just for clarity I'm not looking for "data" from kleptocracies, oligarchies, military juntas, or other non free, non democratic, arguably non market based countries.

So basically only NATO, maybe EU, North America, Australia, Japan, South Korea... And I bet such data doesn't exist (or exposes the lie).

[-] captainlezbian@lemmy.world 3 points 3 months ago

South Korea and Japan shouldn’t be on that list. Corporate oligarchy in systems like the chaebols

[-] untorquer@lemmy.world 41 points 3 months ago

Nationalized services do not need a profit motive.

I wish we could slap it through our heads that socialized systems are OK to be lossy. They are paid for through taxation. They do not need to profit off the consumer. Privatization reverses this. It defunds them and moves the cost to the consumper, implementing a profit motive.

There are few simpler concepts.

[-] rhythmisaprancer@moist.catsweat.com 17 points 3 months ago

This has been argued for years with regards to USPS, but here we are 🤷 you're right, tho, services dont need to make a profit, they need to provide a service.

[-] untorquer@lemmy.world 17 points 3 months ago

Honestly convincing the public that privatization is a functional solution to any problem is one of the biggest achievements of right wing propaganda and political action of the 20th/21st century.

[-] rhythmisaprancer@moist.catsweat.com 5 points 3 months ago

I agree totally and this is something I bring up whenever possible. Mixed results but worth it IMO.

[-] captainlezbian@lemmy.world 13 points 3 months ago

How about we don’t privatize anything. Ever again. But especially not things that have private competition like those. If you want a private bank use it. I’ll use my public or cooperative bank

[-] K1nsey6@lemmy.ml 9 points 3 months ago

Instead of making housing affordable they will make a 40 year mortgage the standard.

[-] RememberTheApollo_@lemmy.world 2 points 3 months ago

It doesn’t even have to be direct costs. It could just be service fees tacked on to third parties like title search agencies, and those fees will be passed on to the consumers.

[+] Avg@lemm.ee -9 points 3 months ago

I appreciate trying to help people buy a house but won't handing out money only exacerbate the problem? Demand is already high and that really hasn't helped increase supply.

[-] LifeInMultipleChoice@lemmy.world 6 points 3 months ago

Your skipping the first part about inventiving increasing supply. (The government building them themselves would be labeled communism and faught against tooth and nail, so the government has to lose money by paying private companies more to get the same product, still with which they will charge more money.).

3 millions homes, average home in America is 2.5 person per household ~ 7.5million new residencies.

Hope would be to add a little over 2% more homes than would be build otherwise which isn't a fuck ton, but it should make it so supply increases over the current "standard" increase.

Now an additional 10% would be great, until we realize the ramifications on land and maintenance we would be taken up, and there could end up being more houses being abandoned and left to be bulldozed eventually if costs ever permit, but it places more distance between people's houses and stores, which increases transit times and energy use.

I got tired of the fuckcars sub and blocked it eventually, but they can tell you why it would be beneficial to keep these homes close together and near commodities. Creates a healthier society in general. (More walking/biking, public transport, public parks, community, which all entisis social skills and less pollution/environmental impacts). They are great people in that sub, just got tired of the same old conversation

[-] Coreidan@lemmy.world 4 points 3 months ago

None of this shit will help.

The only thing that will change the current dynamic is banning home purchases as investment vehicles.

The whole reason the home market is in the toilet is because hedge funds and other investment institutions are allowed to buy up entire neighborhoods to prop up home prices.

Stop investing and home prices go back to normal. Nothing else matters.

[-] Avg@lemm.ee 1 points 3 months ago

That's part of what I'm thinking, short supply is only one dimension of the problem, there is still corporate ownership of homes, low density/single family homes zoning, and limited commercial space. I'm not against the money, I won't be eligible but I fear we will just have the same situation as higher education, ever more expensive for not fucking reason.

[-] AA5B@lemmy.world 3 points 3 months ago

She’s only proposing to hand out money to first time home buyers. Since most people will not get this free money, it shouldn’t affect pricing much or at all.

Getting more people into the housing market in the first place is the hard part. Once you already have a home, the value typically follows the market, so you’re still good. I would have a hard time buying my current house, because the value has gone up so much. The down payment and loan would both be horrendous. However I can easily buy a similar one now, because my home value has gone up as much as theirs.

Even if it did affect pricing, it will still work. When you get a loan, the bank would rather see you with $25k down on a $200k house than zero down on a $175k house. In the former case, you have something to lose, and they have a margin to profit, even if the deal goes wrong. Even if all starter homes raised prices by that amount, it should be easier for first time buyers because they have a bigger down payment.

this post was submitted on 02 Sep 2024

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