It Takes a Heap o' Subs'dies In a House t' Make It Home

Mike "Mish" Shedlock takes a swipe at the Golden State's $100 million project to get people to buy newly constructed houses. The New Home Credit, according to the California Franchise Tax Board, "is available for qualified buyers who on or after March 1, 2009, and before March 1, 2010, purchase a qualified principal residence that has never been occupied. The buyer must reside in the new home for a minimum of two years immediately following the purchase date." As of last Wednesday, the flush, solvent, well-managed state government had doled out just shy of $66 million to help Californians realize every American's dream of owning a home built by politically active contractors.

Shedlock goes on a rant:

It is beyond reckless to waste money like this in the midst of a fiscal crisis. If you want to know why California is broke and looking to increase taxes, such idiocy is always at the heart of the matter.

Moreover, note that the California credit is on top of the Federal First-Time Home Buyer Tax Credit.

A tax credit of up to $8,000 is available for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009.

There is a massive oversupply of housing and the Federal government and states are attempting to stimulate home building!

The most amazing thing to me in all this is the number of people who blame regulation for the current crisis. The creation of Fannie Mae, Freddie Mac, idiotic programs like these, and the existence of the Fed itself are what regulation brings.

Meanwhile, the town of Victorville teaches Sacramento a thing or two about how to deal with excess new housing stock:

Comments

[JB]

Anyone who doesn't hate the government is evil.

The government itself is worse than evil.

[Shannon Love]

The only way subsidizing home buyers now could work would be if they put people in homes at a substantial loss to the current owners.

The government pushed homeownership financing to such ridiculous extremes that everybody who conceivably own a home has already got one. The only people who don't have homes are people who can't come close to affording them. The only way they can afford the houses is to give the houses away at a substantial discount.

The real problem is that we have an entire industry driven to vast over capacity by state intervention in the market. It's as if the state had created inducements for Detroit to build 30% more cars than people could buy and then wanted to prevent lay offs when the market became saturated. Well, they can't. Places like California have more housing than they need and the glut will last for years. If California's economy implodes, as it shows every sign of doing, the glut will just get worse.

It seems wasteful to the point of sin to tear down perfectly good houses but economically we have no choice. The only other option would be to let the banks just give the houses away but that would require a change in the accounting laws, I am sure. Even then, that wouldn't solve the housing glut.

[kinnath]

We need a link to the onion tv spot on digging holes and filling them with money . . . .

[JW]

I LOVE the money fires....

[Episiarch]

I LOVE the money fires....

For you, JW.

[JW]

Now, see? THAT's how you make a smart action movie, not like that piece o' lame Gen-Y shit Star Trek.

[Mike]

If the state really wanted to help both the economy and home buiders, it could force local governments to drop all of their inane building restrictions on privately owned land, but that would be too intelligent.

[Episiarch]

No one claimed the new Star Trek is particularly smart, JW. Stop yelling at the kids to get off your lawn.

[JW]

I don't yell. I have releasable hounds. Much more fun.

[24AheadDotCom]

Reason's complaints about subsidies and the problems CA is having might mean something if they didn't support massive subsidies and if their ideology hadn't played a role in helping CA get into the shape it is.

Reason has consistently supported MassiveImmigration without making eliminating the WelfareState a precondition. That MassiveImmigration has not only greatly increased spending by CA, it's given a massive subsidy to crooked businesses. And, it's given a great deal of PoliticalPower to the far-left; the far-left has responded by using their additional power to push for more spending.

I frankly don't know whether Reason is corrupt or stupid, but it doesn't really matter. Their ideas have been shown to be faulty and no one should take their advice on getting out of the problems their ideology helped create.

P.S. In case anyone replies to this, their responses will almost assuredly be ad homs, thereby conceding my points and showing the childish, anti-intellectual nature of libertarians.

[Warty]

Lonewacko! We missed you!

Shut the fuck up, Lonewacko.

[Warty]

P.S. In case anyone replies to this, their responses will almost assuredly be ad homs, thereby conceding my points and showing the childish, anti-intellectual nature of libertarians.

I love this. IF ANYBODY IS MEAN TO ME IT MEANS I WIN

[R C Dean]

For some reason, LoneWacko thinks that being anti-LoneWacko is the same as being anti-intellectual.

I don't get it.

[Episiarch]

LoneWacko was sick of people not responding to his arguments, especially that chucklehead Warty. He decided that the best way to handle it would be to preemptively announce that anyone who didn't respond, or mocked him, therefore got pwned by him. Yeah, that would work.

He finished typing, and then downed several laxatives. He had the transvestite coming over soon with the diapers and the milk and the M&Ms, and he needed to be really loose for it.

[bubba]

Best part:
Owner-built property: A home constructed by an owner -taxpayer is not eligible for the New Home Credit because the home has not been "purchased."

[ZERO]

We touched on this credit when I went to a tax seminar in February. The credit is so poorly designed as to be almost useless. You have to apply for the credit (before you even buy the home), the credit is limited to first-come first-serve basis, if for some reason you don't do all your home work and the home you buy is deemed ineligible (builder forgot to tell you it was lived in for 3 months) you have to pay it all back with interest; the credit is also nonrefundable meaning that for the credit to be worth something you have to already have that much state tax liability. So basically this credit if for rich people to buy brand new homes as soon as possible. FAIL

[Tim Cavanaugh]

It's funny, coz at first I was going to write "...home built by politically active contractors using illegal immigrant labor," just as a salute to LoneWacko. He must have heard my heart calling.

[Stormy Dragon]

What's the point of a tax credit when California has stopped issue tax refunds anyways?

[P Brooks]

California can kill two birds with one stone, if they lay off all the firemen during Santa Ana fire season. They can save a bundle of cash, and see a contraction in the housing supply at the same time.

Simple, see?

You owe me, Ahhnult, baby.

[24AheadDotCom]

Tim Cavanaugh writes: It's funny, coz at first I was going to write "...home built by politically active contractors using illegal immigrant labor," just as a salute to LoneWacko.

That's hilarious! I know if I wrote something like this, I'd definitely be sure to mention who was doing the work and that role in costing CA billions of dollars and encouraging PoliticalCorruption and in giving PoliticalPower to the far-left, racial power groups, and foreign governments and all the rest. But - just because Tim Cavanaugh is a real reporter and not just the citizen variety - he decided to edit that out.

Good job!

[P Brooks]

What's the point of a tax credit when California has stopped issue tax refunds anyways?

Next year, just send them the "refund" you didn't get this year.

[Stormy Dragon]

Next year, just send them the "refund" you didn't get this year.

Yeah, it'll give you an amusing anecdote to tell your future cellmate after the tax evasion conviction.

[Paul]

Amazing to watch that CAT do hundreds of thousands worth of improvements to Victorville.

[[e-mail]]

I don't get it. A bank and construction company decide to destroy homes, and suddenly it's Victorville's fault?

[Micha]

to JB: well the government isn't entirely evil. I don't necessarily condone everything they do, but I don't hate them. There are some pretty good stuff they do, I guess the bad experience you've had just overpowered it.