Home Ownership isn't a Guarantee or Entitlement

The American Dream of Home Ownership: an opportunity, not a guarantee
By Peggy Venable

The City of Houston is in dire straights. They are so broke they had to borrow money.

Two months ago, without any mention in the media at all, Harris County bailed the City of Houston out of a bad deal by loaning it $118 million. As reported on the Chronicle's website on Sunday,

“A series of unexpected market swings and a relationship with a troubled bank has left the city of Houston paying more than $600,000 a month in interest — far higher than the market rate for comparable securities — to a very unusual investor: Harris County.

“The county came to Houston’s rescue in December after a bank that backed $182 million in city bonds had its credit downgraded, leaving the city with a 15 percent interest rate.”

(Thanks for that info, Houston Chronicle reporter Bradley Olson.)

Fast forward to today: the City of Houston is proposing spending almost a half million dollars to give individuals unable to qualify for a home loan up to $3,000 to pay off their credit cards and debts.

Hum…

First, the City was paying a 15% interest rate on bonds and they are going to loan unqualified potential homeowners with money to buy a home they likely can’t afford and who aren’t disciplined enough to pay their current bills on time?

Does this make sense?

Of course not.

It’s clear the Houston leaders didn’t learn their lesson handed to them in the federal housing finance disaster.

The American dream of home ownership is an opportunity, not a guarantee.

It’s an issue of fairness.

Taxpayers who played by the rules and paid their bills on time should not be forced to help pay off the credit cards for folks who didn’t. It would be rewarding irresponsibility and creating adverse incentives.

Houstonians don’t need a new entitlement program they can’t afford, to put people who aren’t financially responsible in homes they don’t afford.

Clearly, Houston doesn’t need to play Robin Hood. Prospective homeowners need to learn first to pay their bills on time, then earn the opportunity for home ownership.