Bulldozing All the Extra Homes in America

Ideas have been floating around that the government should take bulldozers to the extra homes in America to get rid of the excess supply which is bringing down prices.

Do you think it’s crazy?

There is an op-ed espousing just that in today’s Wall Street Journal- so apparently the idea has reached the mainstream now.

Called “The Radical Solution“, the op-ed says there are 80 months worth of inventory in some parts of Florida. Apparently, if we simply get rid of that inventory, it will solve the problem.

The article cites to four main states as the real culprit in the housing downturn: California, Arizona, Nevada and Florida.

Question: what percentage of the population of the country is in these four states? Quite a large percentage, I would think.

The argument goes that the bulldozers go into the planned communities in, say, the Inland Empire of California and just gets rid of the houses. They aren’t selling, they are a scene of crimes (thieves are stealing the copper piping and appliances out of the houses, squatters move into the homes etc.) and it costs police and fire manpower to watch over the empty homes.

But what do you do about all the condos? A big percentage of the empty homes in Nevada and Florida are condominiums. You can’t just blow up a 30 story high-rise to get rid of inventory- or can you?

And do you take the bulldozers into the subprime neighborhoods where lower income homeowners have been foreclosed? In some neighborhoods in Detroit and Cleveland, there are 5 homes out of 10 on a block in foreclosure and boarded up. What do you do there? Does the government buy out the other five homeowners and then bulldoze the whole block?

Apparently, that’s already happening:

Cleveland spends $6 million a year to demolish buildings. Dayton plans to demolish 550 this year.

In the article, the author mainly focuses on the new housing developments instead of the older inner-city neighborhoods.

Many analysts have called the housing boom “unproductive.” Apparently- if we’re going to bulldoze new housing developments that were built in the last three years- that was an understatement.

The housing boom was such a waste of resources and the talents of America. Imagine the businesses we could have been building with all of that “investment” money? Imagine all those smart 20-something “developers” who could have been making the next iPhone instead?

Hopefully, now that housing is busting, we get back to the basics and turn the country’s top talent to industries that will push us to be more competitive on the world stage. Flipping a house in the middle of San Francisco or Miami is not going to help us compete with the Chinese or the Brazilians.