The Right to Rent Plan
BY DEAN BAKER
Millions of families face the loss of their homes over the next few years. While
there is a long list of complicated and sometimes convoluted proposals to
address the country's foreclosure crisis, there is a simple solution: Congress
and the Obama Administration can give families facing foreclosure the right to
rent their homes at the market rate for a substantial period of time.
This Right to Rent plan1 would prevent families from being thrown out of
their homes as well as help reduce the neighborhood blight that is devastating
communities with high levels of foreclosures.
In March 2009, Freddie Mac launched a similar policy as part of its REO
Rental Initiative,2 giving qualified tenants and former owners the option to
lease their recently-foreclosed properties on a month-to-month basis.
Right to Rent would give former homeowners the right to remain in their
homes as renters for a more substantial period of time (e.g. 5 to 10 years). This
would provide more security of tenure. The right to rent for a substantial
period of time also would give homeowners much more bargaining power
when trying to work out mortgage modifications, resulting in far more
homeowners avoiding foreclosure altogether.
During the previous Congress, Rep. Raul Grijalva introduced the Saving
Family Homes Act,3 which would have given former homeowners the option
to remain as renters in their home for up to 20 years following a foreclosure.
By allowing families to remain in their homes, Right to Rent would alleviate
neighborhood blight and preserve family and community stability. Right to
Rent is simple, it can take effect immediately, it requires no taxpayer dollars,
and it creates no new bureaucracy.
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