Tuesday, July 06, 2004

Location Discriminatory Mortgages

I once thought "Location Efficient Mortgages" (LEMs could address the problem of exurban development patterns (e.g. living in Riverside and working in LA) but then my brain started working again. I call location efficient mortgages transit apartheid. "Location efficient mortgage" is like "smart growth." Who would want a location -inefficient- mortgage or who would support dumb growth. Meaningless catch phrases, nothing more. Location Discriminatory Mortgages are the exactly descriptive phrase. Funny how the old VA loan policies that inadvertently used to favor new suburban housing, and jumpstarted the exurban nation trend, were struck down as unfair by the very same people advocating this new version of redlining. (Red Line as in Los Angeles and Boston, etc.) I'm surprised at the willingness of people who claim to want fairness to resort to unequal treatment (LEMs, density bonuses, transit subsidies, tax breaks) as a first step when they agree with the agenda. I'm also concerned about the unintended consequences that always appear. We both know that govt with good intentions ALWAYS results in unanticipated problems. In the case of LEMs; people will buy near transit, use more transit, pay less taxes to local govt and eventually get cars. Result, normal traffic overloading local roads while burdened by higher transit subsidies. In case you haven't noticed I'm describing LEMs in terms of transit but we were talking about POV commute patterns and Prop 13. That's because of two things. First LEMs have been hijacked by transit advocates despite there being no connection. Second, lenders already do a little of this when you apply for a mortgage. They take into account your living costs including travel budgets when determining lending limits.

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