Rent to Own.
What if there was a way that we could significantly reduce homelessness? We could reduce the number of people in America who have been forever burdened with paying rent their entire lives. Not only for the paying tenant but for their children. They can finally get out from living under poverty, and can achieve some generational wealth and value from years of hard work. What if you could be rent free in as fast as 10 years?
We know people have been paying rent, for twenty, thirty, forty years, to large corporations of rental properties. They get no real value out of it except for a temporary place to stay, weather it is apartments or houses. You can drive anywhere and see new apartment buildings being built all the time. People say this is good because of course we always need new housing.
Well I believe there is a way to break free of this cycle of perpetual struggling and barely making ends meet. This would mean more money to spend on food, health, clothing and education. With that little bit of more income not spent on rent they could help their families and everyone would benefit.
Instead of being built by a for-profit corporation it can be funded by the government, and NOT by Big Banks. So for example a new apartment building with 100 units goes up, and it cost $10 million and one year to build. The government Housing Management starts renting it out ... let's see on average $2,000 per unit (some are 1 bedroom some are 2 bedroom), They get $200,000 per month. After financing costs and interest rates, they pay back $11 million, in 55 months, and that's less than 6 years.
I think the government could reduce the rent rates slightly and plan to pay it all back in exactly 10 years. So the tenants / owners Each pay for their unit in exactly ten years and the rent would be less than the average rent in that area. Win-Win !! For example if you paid only $1,000 a month, then in 10 years that would be a $120,000 that would go towards buying your single apartment.
The genius part of all this is that it's not money spent and gone FOREVER. It's almost exactly like school loans where everyone is PAYING IT BACK. Instead of section 8 and welfare that subsidizes rent, and the money is gone out the window to the corporation landlord, the money is paid back to the government and can be used again to make the next housing project.
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There will be a few big rules that will have to be followed because it is a government project.
1. Every tenant will have to pay a maintenance type fee, like an HOA, which would cover a small staff of management, building maintenance and the cost of insurance to make sure the entire building is insured against fire or destruction. The managers would take everyone's monthly rent and make sure it goes towards the PURCHASE of your apartment unit. Financing would be handled off-site by some government loan housing fund administration (like school loans). Let's say for example it was $300 a month for this building maintenance fee. That would bring in $30,000 a month for the maintenance, the managers, and insurance. Should be no problem if the managers don't NEED to make a 100k a year as a wage salary each.
2. For everyone who lives in these government assisted apartments, it must be their single primary residence. In other words there will be no sub-renting / subleasing. This will get us away from some company trying to profit by renting. With this rule it must be the only place that you are living.
3. If you have to move for one reason or another there is some options. You can transfer the ownership of your apartment to a family member or friend but that housing must also now be their single primary residence. And it has to be a person who can qualify to make rent payments. Again you can't use government assistance to make your payments, and you need to show employment. The exception is if you have retirement income.
4. If you can't transfer your ownership, then you can get a "sale value" equal to something like 50% of the equity that you have put into it. Basically defaults to a rental subsity for the time you were there.
5. After it's been paid in full, like 10 to 20 years down the line, you will be responsible for the maintenance of your own apartment. The building maintenance will take care of all common areas. If you ever sell it the new owner will have to show it to be their primary residence.
6. To make it fair to the demographics of the local area, the demographics will have to be represented in this apartment, That means if , for example it's 30% black Americans, 42% latinos, Then out of 100 units, 30 units should be for black, and 42 units for Latinos. Nobody can say this is unfair because it will truly represent the local demographics.
Some people will complain and might be alarmed thinking that it's too socialist for our country . but I think we need to help each other out - we can't just be complete capitalist. That has gotten us a failing economy, homelessness, joblessness, and serious social inequity. The government right now is helping us with a social program which is housing supplement called Section 8.
The other is called student loans. The government will now loan out 50k or 100k to people to go to college for 4 years. Then they have to pay it back over the next 20 years. So yes I say thank you to the government for helping us with education. They can also help us with housing, which will reduce poverty which in turn reduces homelessness.
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