Garden Grove and Westminster are the latest Southern California cities to consider using taxpayer dollars to "solve" the so-called housing crisis. But there's little chance that the dollars will do anything more than waste money, increase the power of local government fiefdoms and even slow the market correction that's going on in real estate. Officials' explanations for why they may embrace this state-government-funded program are contradictory. And local housing programs have been unsuccessful over the years, in good economic times and bad, so it's foolhardy to expand them.
The program, as the Orange County Register explained, would create a partnership between the two cities "to apply for funding that would help both communities buy back or redevelop foreclosed homes and distressed properties in their neighborhood." Both cities are involved in ongoing public discussions about the proposal, with no decisions likely until later this month.
There are so many problems with this idea. There is no real housing crisis. Market-based economies are constantly adapting to new realities, provided the government doesn't interfere with market processes. Housing prices have tumbled in the past year, and when prices fall back to Earth, buyers snap up the bargains. Yet government at all levels seems committed to trying to artificially reinflate the housing bubble.
Furthermore, the state is in tremendous budget crisis -- a real crisis, thanks to constant overspending by Sacramento politicians.
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Any government agency that proposes to use state money to fund another program is involved in something unethical, even if it's "free money" that's already allocated to specific programs. These housing programs can never help more than a few people.
Given the budget insanity at the state level and the stimulus insanity at the federal level, it's hard to be too harsh on cities for wanting to join in on the action. Still, the best antidote for craziness is sanity, not more craziness. Why don't Garden Grove and Westminster tend to the basics of city government and let real estate buyers and sellers work out the foreclosure situation on their own?