Responding to a Housing Crisis

New York Times (08/26/08) P. C1; Bajaj, Vikas
Many cities across the country are taking action to prevent an increasing number of foreclosed homes from blighting neighborhoods; and they hope their efforts will get a boost from the federal housing bill, which earmarked $4 billion in grant money for them to purchase distressed properties. Cities are taking different approaches, with Boston snapping up homes in the Dorchester area and selling them to developers for the purpose of renovating and reselling them; Cleveland, meanwhile, is seeking permission to raze properties and replace them with small parks or side yards for other residents as a way to revitalize affected communities. However, there are concerns about local governments purchasing foreclosed properties, with Cato Institute senior fellow Daniel Mitchell insisting that it hinders the efficiency of the housing market by adding politics and bureaucracy.