Renting Our Way To A Housing Recovery?

by:  Peter J. Gallagher

News about a housing recovery usually focuses on home sales, but Bloomberg ran a story this week, "U.S. Can Rent Its Way To A Housing Recovery" (h/t/ Land Use Prof Blog) that suggests that this focus may be off.   The author suggests that the Obama Administration should allow a tax write-off for investors who buy empty properties and rent them out.  The author claims this would help with two of the biggest problems with the housing market – the large amount of owner-occupied houses on the markets, which pushes prices down, and the millions of homes with negative equity: “Dealing with excess inventory by shifting vacant properties into the rental market would help to stabilize prices and thereby mitigate, to some degree, the negative-equity issue — although additional action would also be warranted to attack such ‘underwater’ situations."  The ideas expressed in the article are obviously not without controversy, however, as even a cursory glance at the comments posted about the article make clear.