March/April 1984 RAIN Page 15 of people and resources set exorbitant expectations of return on investment. The result is that we, and our housing expenditures, have been pulled into a similarly exploitative relationship. Removal of housing finance from that market is necessary to permit humane and sound housing decisions to be made. A no-interest revolving loan fund recognizes that social and economic productivity, not short-term financial “rate-of-return,” are the essential measures of the use of our housing dollars. Resources shifted into extremely durable ways of meeting basic needs produce an unusually high level of social and economic value. Conversion of home financing to nonprofit public operation, as occurs with public streets, highways, water supplies, and utlities that serve everyone, means both immense cost savings to everyone and a much more effective use of our dollars. Removal of finance charges from housing expenditures would also allow building costs to more closely reflect economic productivity of more durable housing by eliminating interest surcharges on their higher initial costs. A revolving loan fund should operate on a state-wide basis to provide no-interest home financing for all state residents. It should be tax-funded rather than bond- based, as its intention is not to secure cheaper finance money for home buyers through the state's borrowing power, but to remove the home-purchasing market from the high-profit finance industry. Such funds would involve large sums of money and require several years to build up. With a massive initial backlog of new housing demand and outstanding loans on existing housing purchases, loans would at first be restricted to new construction, and later extended to all other housing purchases. Because of the cost savings to buyers, the initial emphasis on new construction would shift purchases into new housing to expand the housing supply. As housing vacancies eventually developed, the fund would be self-regulating—prices of existing houses would drop closer to their economic cost, it would become cheaper for most people to buy existing houses rather than to build new houses, and less use would be made of the fund. Loan repayments would be kept as close to those of conventional mortgages as feasible within household budget guidelines. Because of the lack of interest charges, repayment would occur in one-half to one-third the usual time, making the funds available more quickly for other loans. The function of the fund would be that of an exchange mechanism, where all state residents exchange their time/energy/money as they each establish their housing PUfSCHASB COST'S. Or HOOSIhKs ‘ZcoYo «=^*sEqes ■SMS- PR'CE. lir. inv. BoiLPeKs PEortr ; (30SPHOAD ZSX /Mtewals ZSfi I I It ^^53A ZCO% f=7NANCE CM Aeejes HacE1 1 V 11 11 11 1 1 Ct Bfc»SLTOE ' ^> v! & sokjacnv PBce - X / / UOCA^eUK. 05S.T s ^ pib <jc»t , - Tom Bender
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