Avoiding the Next Real Estate Crisis

The national discussion about the housing market crisis has, for the most part, lacked a human element. The entire industry is not just about making money on the creation; it’s also about people’s lives — and our lives change, circumstances change, and the economy changes.

In an editorial published in The Arizona Republic, Mark Stapp, director of the W. P. Carey MRED program, describes how avoiding another crisis may give rise to a new opportunity for empathy with consumers and communities.

"This industry does not work well at fixing problems," writes Stapp. "It is not designed to deal with individuals, their problems and their stories. Private business exists to make a profit, and profit is made in the creation, at the transaction, not fixing problems that emerge after the creation."

Stapp adds that the recent recession dealt a major blow to homebuyers across the spectrum, from recent purchasers duped by bad mortgages to those who felt the sting of other areas of the financial crisis. But which way is up? How does the real estate development industry turn things around for itself — and more importantly for its customers?

Stapp offers a long-term fix "that deals with inevitable economic downturns will mean building empathy into the process," but notes that the industry cannot reach that point without regulation that "enforces a public purpose and provides an efficient, transparent, equally available system to deal with individuals and communities after the mortgage has been created, packaged, sold, sliced, diced and given to an impassioned third party to collect payments."

Read the entire commentary in The Arizona Republic.