Saturday, October 15, 2011

USA: Banks turn to demolition of foreclosed properties to ease housing-market pressures - Profit before People

Cleveland — The sight of excavators tearing down vacant buildings has become common in this foreclosure-ravaged city, where the housing crisis hit early and hard. But the story behind the recent wave of demolitions is novel — and cities around the country are taking notice.

A handful of the nation’s largest banks have begun giving away scores of properties that are abandoned or otherwise at risk of languishing indefinitely and further dragging down already depressed neighborhoods.

The banks have even been footing the bill for the demolitions — as much as $7,500 a pop. Four years into the housing crisis, the ongoing expense of upkeep and taxes, along with costly code violations and the price of marketing the properties, has saddled banks with a heavy burden. It often has become cheaper to knock down decaying homes no one wants.

The demolitions in some cases have paved the way for community gardens, church additions and parking lots. Even when the result is an empty lot, it can be one less pockmark. While some widespread demolitions could risk hollowing out the urban core of struggling cities such as Cleveland, advocates say that the homes being targeted are already unsalvageable and that the bulldozers are merely “burying the dead.”

WRH Comment:
Basically, the banks are destroying homes to create an artificial shortage to drive housing prices back up.

Banks hate inexpensive housing. If people can buy a home for the price of a car and then pay it off over five years, then the house is of no more use to the banks. The goal of the banks is to have people always have to work their entire working life to pay for their house, thirty years or more.

So banks work to keep home prices high, to keep you slaves to their mortgages. and now they are destroying perfectly good homes to create an artificial shortage to drive prices back up.

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