Commentary

Is Obama Making Home Ownership an Entitlement?

Ever since the housing bust, restoring stability to the housing market has been a cornerstone of both the Bush and Obama presidential administrations. Most recently, President Obama introduced programs to reduce financing costs for mortgages originating or secured by the Federal Housing Administration and Ginnie Mae. This new initiative, however, is another step toward converting federal housing policy from one focused on housing opportunity to one guaranteeing homeownership as a new middle-class entitlement. I discuss this in more detail in a commentary published over at RealClearMarkets.com (March 15, 2012). I note in part:

“President Obama forcefully argued for “no bailouts, no handouts, and no copouts” in his State of the Union Speech in January, but it’s hard to take those words seriously after examining his housing and homeownership policies over the last three years. In fact, the White House is well on its way to orchestrating a very large middle class bailout as it transitions its federal housing policy from one that strives to create housing opportunities, to one that establishes homeownership as an entitlement.

“This policy shift became much clearer this month when the Obama administration announced directives to lower financing fees at the Federal Housing Administration (FHA) and Veteran’s Administration (VA). The fees will make it even easier for households to secure home mortgages, but will separate loan approval decisions from estimates of borrower risk. Since FHA is already dangerously close to becoming insolvent (it is currently leveraged higher than Lehman Brothers was when it declared bankruptcy), this puts taxpayers at a greater risk of having to offer another bailout down the road.”

For more on the financial crisis, see the work by my colleagues Anthony Randazzo and James Groth on the Reason Foundation’s Housing Policy page.

Samuel R. Staley, Ph.D. is a senior research fellow at Reason Foundation and managing director of the DeVoe L. Moore Center at Florida State University in Tallahassee where he teaches graduate and undergraduate courses in urban planning, regulation, and urban economics. Prior to joining Florida State, Staley was director of urban growth and land-use policy for Reason Foundation where he helped establish its urban policy program in 1997.

Staley is the author of several books, most recently co-authoring Mobility First: A New Vision for Transportation in a Globally Competitive 21st Century (Rowman & Littlefield, 2008). Texas Gov. Rick Perry aid Staley and Moore "get it right" and world bank urban planner Alain Bartaud called it "a must read for urban managers of large cities in the United States and around the world."

He is also co-author, with Ted Balaker, of The Road More Traveled: Why The Congestion Crisis Matters More Than You Think, and What We Can Do About It (Rowman and Littlefield, September, 2006). Author Joel Kotkin said, "The Road More Traveled should be required reading not only for planners and their students, but anyone who loves cities and wants them to thrive as real places, not merely as museums, in the 21st Century." Former U.S. Secretary of Transportation Mary Peters said, "Balaker and Staley clearly debunk the myth that there is nothing we can do about congestion."

Staley's previous book, Smarter Growth: Market-based Strategies for Land-use Planning in the 21st Century (Greenwood Press, 2001), was called the "most thorough challenge yet to regional land-use plans" by Planning magazine.

In addition to these books, he is the author of Drug Policy and the Decline of American Cities (Transaction Publishers, 1992) and Planning Rules and Urban Economic Performance: The Case of Hong Kong (Chinese University Press, 1994).

His more than 100 professional articles, studies, and reports have appeared in publications such as The Wall Street Journal, The New York Times, Washington Post, Los Angeles Times, Investor's Business Daily, Journal of the American Planning Association, Planning magazine, Reason magazine, National Review and many others.

Staley's approach to urban development, transportation and public policy blends more than 20 years of experience as an economic development consultant, academic researcher, urban policy analyst, and community leader.

Staley is a former chair for his local planning board in his hometown of Bellbrook, Ohio. He is also a former member of its Board of Zoning Appeals and Property Review Commission, vice chair of his local park district's open space master plan committee, and chair of its Charter Review Commission.

Staley received his B.A. in Economics and Public Policy from Colby College, M.S. in Social and Applied Economics from Wright State University, and Ph.D. in Public Administration, with concentrations in urban planning and public finance from Ohio State University.