NAPLES ?The Federal Housing Finance Agency wants to do something about the thousands of vacant foreclosed houses on the market.
So the agency is considering renting out real estate that?s held by government-controlled mortgage companies Fannie Mae and Freddie Mac and the Federal Housing Administration.
Renting out foreclosed property may reduce ?credit losses and help stabilize neighborhoods and home values,? Edward DeMarco, acting director of the agency, said in an August prepared statement.
Federal officials haven?t shared the number of properties they are considering renting out.
Although the short-term option of renting properties would modify the inventory of distressed property, it may not be the best for growth of the American economy, said Jack McCabe, a Deerfield Beach-based real estate analyst and CEO of McCabe Research Consulting LLC.
?If the number of rentals increases dramatically it will negatively affect our gross domestic product,? he said.
Moreover, the expenses to get the houses ready to be habitable could be very costly for Fannie Mae and Freddie Mac, McCabe added.
The government-controlled mortgage companies have an estimated 248,000 vacant, foreclosed homes in the nation, with the majority in Florida, Nevada, Arizona and California, McCabe said.
?As we continue moving forward on housing finance reform, it?s critical that we support the process of repair and recovery in the housing market,? Treasury Secretary Tim Geithner said in a prepared statement. ?Exploring new options for selling these foreclosed properties will help expand access to affordable rental housing, promote private investment in local housing markets, and support neighborhood and home price stability.?
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Even though it would increase the inventory of rental properties, Louis Pfaff, director of operations at Gulf Coast Management Group, said he still doesn?t want to see the federal government involved in the rental industry.
Gulf Coast Management Group manages about 300 properties in Southwest Florida and Pfaff said he handles about 20 leases a month.
?I don?t believe that the federal government should have a role in owning and renting real estate,? said Pfaff, a licensed broker.
?I think that investors should be managing rental real estate individually, not the federal government,? he said. ?They clearly can do a better job of maximizing property performance.?
According to 2010 U.S. Census Bureau reports, 17.45 percent ? or 1.6 million ? of the Sunshine State?s homes are vacant. That?s an increase of more than 66 percent during the past 10 years.
In Collier County, 32.5 percent of homes ? or 64,119 ? were vacant, while Lee County had a 30 percent ? or 111,281 homes ? vacancy rate, according to the census.
What the agency needs to start offering is a rental deal before a house is foreclosed on, such as a ?rent to own? program, suggested John Steinwand, broker and owner of Naples Realty Services.
The agency should have used the rental program approach before foreclosure, he added.
?Until they stop the foreclosure totally, we are never going to get out of (what) we are in,? said Steinwand, a broker for 20 years and past president of the Naples Area Board of Realtors.
Similar to others, Michael Lyons, property manager at Zivkovic Associates and a licensed real estate agent, remains neutral to the proposal.
Regardless of what happens, Lyons, who manages 450 homes through Collier and Lee counties, said he doesn?t think it would have much effect on the market.
?They should have done this a long time ago,? he said.
The result could be an increase in prices of properties sold, and a potential decrease of monthly lease costs because there would be more rental housing units in the marketplace, Lyons said.
?It?s just a waiting game to see what they are going to do,? he said.
Some experts think this is a good idea. However, it could change the nation from being an ownership society to a rental society, McCabe said.
Renting these homes wouldn?t be the greatest benefit for the long-term health of the American economy, McCabe said.
?If we reduce the amount of home ownership, it will inhibit the growth of the American economy,? he said.
For the long-term health of the economy, McCabe said, it would be better to sell the homes so that people start building equity again.
?Until we address the housing problem, the economy will not get any better,? McCabe said.
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