Are you ready for a challenge? This is the first in a series of political scenario puzzles, which I'll refer to, apologetically, as "All Us in Plunderland". This first brainteaser, titled "Housing Around", focuses on the wildly adventurous journey of home ownership. Please excuse the simplicity of presentation, as it is intended to facilitate the solution. Before posting your solution, please review all options carefully. Once you have arrived at a solution, see if you can answer the following questions:
(1) What are the problems?
(2) Why do the problems exist?
(3) How could the problems have been avoided?
(4) Who benefits from this process?
(5) Who is harmed by this process?
(6) Is this process fair and reasonable?
(7) How would you structure this system?
(8) How would you resolve the issues outlined?
(9) Why was the system designed this way?
People need a place to live. Some people live in apartments. Some people live in houses. Some people don't have an apartment or a house to live in. They are called homeless. People are called home owners if they have a mortgage on a house or condo. Renters can live in houses or apartments. Some people who live in apartments cannot afford to buy a house because (1) they have bad credit, (2) their income is too low, or (3) they lack a qualifying down payment. If they qualify for a loan, the bank may still refuse to give them a loan if the banks aren't lending. If they could get an affordable home loan, their payments might be less than their apartment rental, except for the high cost of credit. Even a low interest rate can cost home buyers hundreds of thousands of dollars when payments span 30 years. Credit charges inflate the price of homes, which in turn makes homes expensive to purchase without credit. Sometimes realtors and banks use tricky schemes to help people purchase homes they cannot afford. Once they miss a payment on the home they bought, but couldn't afford, the bank forecloses on them. They have entered the realm of the homeless. They could rent a house or apartment, except the default on their home loan ruined their credit. Now they are forced to live in their car, on the street or with friends or relatives. After foreclosure, the bank takes possession of the house, but they neglect it. The house sits empty for months as the depressed housing market remains flat. The value of the home collapses. Before long the price of the home drops so much that it is eventually affordable for even the former buyers, but it is too late for them. The former buyers remains homeless and the house sits empty generating no income.
What is your solution? If you can decipher this puzzle, you might be a political genius, because the government has struggled with it for years and the status quo is their best solution.