Marketplace: A simple fix for crisis in housing

Brad Anderson

As far as ideas go for rescuing America’s housing market, Brad Anderson’s proposal may have merit. Anderson (no relation) is convinced that the best way to stop the downward spiral of home values around the nation, as well as here in Clark County, is to take 10 percent of the inventory off the market and convert it to rental housing.

Anderson has been so committed to his idea that he got a couple of his friends to help bankroll a recent trip to Washington, D.C., where he attempted to explain the concept to as many elected and government agency officials as would listen. Here’s how it would work:

-- By regulation, banks, mortgage companies and investors who own more than 10 residential properties would be required to withdraw them from the market and convert them to rental housing.

-- The houses would be owned by wholly owned property management companies created by the banks and mortgage companies for that purpose.

-- The management companies would remit all rental revenue less a management fee to the banks, mortgage companies and investors.

The move would eliminate non-performing assets from bank books and allow them to reduce their losses on those properties. Most importantly, it would decrease the supply of homes-for-sale and thus increase demand for the remaining inventory. Buyers would be less fearful of investing in a house because higher demand would stabilize prices and lenders would be less nervous about lending for the same reason.

“More than anything, we need property values to stabilize,” said Anderson, who works for Coldwell Banker Barbara Sue Seal Properties in Vancouver. “My plan would address the problem and not cost taxpayers bailout money.”

While in D.C., Anderson met with Congressman Brian Baird, D-Vancouver, Dennis Shaul, legal counsel to the House of Representatives Banking Committee and Congressmen Patrick Kennedy and Al Green. He described the reaction from those he talked with as appreciative. Several asked for copies of an open letter he wrote to “Mr. Bush & Mr. Paulson,” emphasizing that his proposed solution involves no taxpayer money.

“The housing market got us into this mess, along with deregulation. The housing market, along with regulation will get us out,” he said in the letter. Anderson likes his idea partly because of its simplicity. All other things being equal, the simplest solution is the best, he said. “A lot of the foreclosures here in Clark County are going back to banks to be resold at less than market value,” he said. “This is a way to help the banks and help the market.”

Washington State University Vancouver is presenting another forum about the ongoing financial crisis. The latest is set for noon Wednesday in Room 22 of the multimedia classroom building on the campus. Presenters include U.N. Umesh and Joe Cote, business professors, Ron Wysaske, president of Riverview Bank, and others. Admission is free.

Julia Anderson is The Columbian’s business editor. Reach her at 360-735-4509.