In America, everything is for sale, but not everything is always bought
I have been living in the States for almost 20 years, and I feel this difference. Especially since I have to compare based on my own example. Recently, one of my friends wrote that he saw a TV program about a city in New Jersey where 700 families cannot pay for housing, and many are being evicted from their homes. He asks: why doesn't the American government help these poor people?
A Little History
To answer this question, let's look at history. America is a country of free spirit and entrepreneurship. People here are used to relying only on themselves, unlike other older civilizations with developed social systems. Any statement about government interference in the private sphere is met with hostility.
The vast expanses and the atmosphere of "taming the wilderness" (the American Wild West) laid the foundations for a peculiar "local way of life." People love everything of their own: house, garden, plot, stream.
After the war, there was an economic boom in the country, trade unions strengthened, and a middle class formed, whose core values included owning one's own home. Remember the classic American dream - your own house and children in universities. While Soviet people dreamed of a separate apartment in "Khrushchev-era buildings" – America was building the private sector. According to statistics, about 60% of families in America live in 70 million own homes.
In the 1970s, a recession began, first linked to Vietnam, then to the Iranian crisis and oil prices. Housing became terribly expensive, and especially the mortgage rate (or mortgage in American) rose to 12-15% per year. Gradually, the number of home purchases decreased.
In the 1980s, the liberal government decided: everyone has the right to housing! They activated new financial programs that allowed even the least well-off families to buy their own home. The interest on mortgages fell sharply, and for many years now it has fluctuated between 6% and 8%. The strict quota for homeowners was also relaxed. At the same time, two semi-governmental companies were formed: Fannie Mae and Freddie Mac, which cleverly bought these mortgages by the tens of thousands, packaged them into bundles, and resold them to private investors and abroad.
And then lawlessness began: homeless people also rushed to buy houses, and even those who could not be lent a pen to sign documents, let alone a hundred thousand dollars for 30 years. Banks understood: since money is flowing, we need to grab it! They started coming up with a lot of "tricky" mortgages, where in the first couple of years the interest seemed low, but then sharply increased. Some simpletons were caught, not noticing the "fine print" at the bottom of the page. And some, very Russian-like, relied on the American "maybe" – that is, somehow get by. The good old rule that monthly housing payments should not exceed 30% of income, the accommodating banks began to gradually "forget." A lot of "flippers" appeared, who bought houses and immediately resold them at a profit. This is a vicious circle: to buy the next house faster, they mortgaged the one not yet sold. There is something in this from Russian "financial pyramids" - whoever made it in time, ate.
Even "normal" people decided that a house is the best investment. They started changing housing of normal size into mansions, hoping that it would be a kind of retirement savings. If earlier the average size of an American dwelling was 130 sq. m, now it is about 160 sq. m - and this is a modest house with three bedrooms, dining room, living room, kitchen, and two bathrooms. From such, they sought to move into a more "decent" one. For example, 10 years ago we exchanged such an "average" house for a four-bedroom one of 220 sq. m. And this is not considered too much for three adults, and now even for two – it is just a normal standard of living for the middle class.
The Bubble Burst!
By this time, many mortgages began to enter the "fine print" phase, the interest rate rose sharply, and homeowners realized they could not pay monthly installments. The crisis spread to the entire economy, people began to lose jobs en masse, and there was simply nothing to pay for the houses. The "flippers" also came to an end. The result of this financial Hiroshima is as follows: today almost 3-4 million are insolvent, and their number is growing.
Let's return to the question: should the state help everyone? Since America is the least nationalized country in the world, the government has practically no share in the economy, unlike most other countries. The tax system is built on this, so there is no money in the budget for such a case. There is now a broad discussion on how to save the situation, where to get funds. The government is trying to take measures: working with private banks, trying to influence the reduction of interest rates, persuading financial institutions to loosen the knot. Leading banks agreed to postpone defaults for a few months. The duration of unemployment benefits was extended from 20 to 33 weeks. But it is impossible to buy everyone out.
To be honest, I don't really feel sorry for those who, due to their own stupidity, got into an insurmountable debt. For example, I did not get into it! And my son is now unemployed, barely paying for the house. But I don't even dream that someone would give him a handout. Increase the national debt? That would mean borrowing money from China. And who will pay it back? Our children, through rising taxes. No – he got in himself, let him get out himself! And if my son doesn't manage, then he'll go under proudly and without charity.
Evictions. Who?
If a family simply rents an apartment or a whole house from the owner, it is practically impossible to evict them by force. Here the law protects the 'weak', I know from examples of friends and relatives who are homeowners. Sometimes you get unlucky with tenants - they don't pay rent, hooliganize, damage the house and property, drinking, drugs, etc. The owner can argue with them, even threaten. But when it comes to eviction - no such luck. The police don't get involved unless it smells of obvious criminality. And just for chronic non-payment, you can't really throw them out. You have to go to court, waste time and money. And if it's a single mother, the law is entirely on her side.
Are homeowners evicted for not paying their mortgage to the bank? Sometimes, but not onto the street or under a bridge. If they manage to sell the house, they move into a rental apartment they can afford – and the matter is resolved.
Well, what if the house cannot be sold, as is the case now? They bought it at a crazy price, maybe didn't put anything as a down payment (again these 'tricky' mortgages!), meaning the debt to the bank is still equal to the purchase price. And the sale price has fallen by half, and there are almost no buyers. Many declare bankruptcy, move their belongings and move to another apartment, or to their children, parents. The house goes to the bank, gets closed and put up for sale. The bank isn't happy about it either, a bad case: the house hangs like a dead weight on them, that's all.
Well, some don't pay and don't leave. Those types can be evicted.
State assistance to the poor
For the chronically insolvent and unemployed, there is the so-called Section 8 program. This is when specially built large houses in cities, or many homeowners sign a contract with local authorities for the right to rent apartments under this program. These houses are normal, with all amenities. But tenants must be either unemployed or below a certain income level. Then their rent is tiny, about 20% of the market price. The rest is paid from the local budget.
Many elderly immigrants live quite comfortably in such apartments. And many chronically unemployed too. This category is like a plague: from generation to generation they do not try to escape poverty, but simply parasitize on society.
I am not against helping those in need: that is the first and main mission of the state. But there are reasonable limits to everything.
When we arrived in the US, we were supported for three or four months with money and food stamps. Oh, how they burned my hands! I didn't know where to look in stores. And we quickly got to work, even for a meager salary. But I am grateful to the grave that we were supported in a difficult time. And I have long since repaid that small debt with interest. But I am not very inclined to pay for someone else's house (even indirectly, in the form of taxes from my children or grandchildren). Maybe we should let someone burn, and the strongest will survive? That is how America has always been built, and so far no one has proven that it is a mistake.
• New owners of land often have to deal with designing and building a house. At the same time, many, unfortunately, complain in vain about projects that, in their opinion, are not diverse enough. However, it should be noted that timber house designs include both multifunctional cottages and small cozy summer houses, and the beginning of construction of a future 'family nest'. With modern technologies and competent work with a designer, even the simplest project at first glance can fulfill the dreams of homeowners and become a convenient, functional solution to their needs and requirements for suburban housing.
Alexander ROZUMOVICH,
Cincinnati, USA.
Especially for 'Zagranitsa'.