A Way Out of the Housing Mess?

Joseph Nocera reports on a proposal to rescue homeowners that lets people live in their homes, and doesn't require any government money.

2 minute read

October 20, 2008, 10:00 AM PDT

By Michael Dudley


"[O]ne out of every six homeowners has a troubled mortgage. This is an enormous social problem. It is also a continuing economic problem. In the year since the crisis began, the world's financial institutions have written down around $500 billion worth of mortgage-backed securities. Unless something is done to stem the rapid decline of housing values, these institutions are likely to write down an additional $1 trillion to $1.5 trillion. In other words, we ain't seen nothin' yet.

But recently a proposal came across my desk that I believe is so smart, and so sensible, that I hope our nation's policy makers will give it a serious look. It comes from Daniel Alpert, a founding partner of Westwood Capital, a small investment bank. I have quoted Mr. Alpert frequently in recent columns, because he has been both thoughtful and prescient on the subject of the financial crisis.

Here's his idea: Pass a law that encourages homeowners with impaired mortgages to forfeit the deed to their lenders but allows them to stay in the homes for five years, paying prevailing market rent. Under the law Mr. Alpert envisions, the lender would be forced to accept the deed, and the rent. After five years, the homeowner-turned-renter would have the right to buy the home back, at fair market value, from the lender.

There are so many things I like about this idea that I hardly know where to begin."

Monday, October 20, 2008 in AlterNet

portrait of professional woman

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching. Mary G., Urban Planner

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching.

Mary G., Urban Planner

Get top-rated, practical training

Aerial view of single-family homes with swimming pools in San Diego, California.

San Diego to Rescind Multi-Unit ADU Rule

The city wants to close a loophole that allowed developers to build apartment buildings on single-family lots as ADUs.

March 9, 2025 - Axios

Canadian flag in foreground with blurred Canadian Parliament building in background in Ottawa, Ontario, Canada.

Has President Trump Met His Match?

Doug Ford, the no-nonsense premier of Canada's most populous province, Ontario, is taking on Trump where it hurts — making American energy more expensive.

March 11, 2025 - Toronto Star

Close-up of green ULEZ sign in London, UK.

Study: London ULEZ Rapidly Cleaning up Air Pollution

Expanding the city’s ultra low-emission zone has resulted in dramatic drops in particle emissions in inner and outer London.

March 10, 2025 - Smart Cities World

Tents set up by unhoused people under freeway overpass in San Jose, California with American flag above them.

San Jose Mayor Takes Dual Approach to Unsheltered Homeless Population

In a commentary published in The Mercury News, Mayor Matt Mahan describes a shelter and law enforcement approach to ending targeted homeless encampments within Northern California's largest city.

March 14 - The Mercury News

Blue Atlanta streetcar on street in downtown Atlanta, Georgia.

Atlanta Changes Beltline Rail Plan

City officials say they are committed to building rail connections, but are nixing a prior plan to extend the streetcar network.

March 14 - Saporta Report

New York City city hall building.

Are Black Mayors Being Pushed Out of Office?

The mayors of New York, St. Louis, and Pittsburgh all stand to lose their seats in the coming weeks. They also all happen to be Black.

March 14 - Governing

Urban Design for Planners 1: Software Tools

This six-course series explores essential urban design concepts using open source software and equips planners with the tools they need to participate fully in the urban design process.

Planning for Universal Design

Learn the tools for implementing Universal Design in planning regulations.