How banks could help solve homelessness

model portraying homeless woman

How can two problems add up to a solution? Here's how:

Problem #1: Nearly 11% of U.S. houses are empty, with millions of them repossessed by lenders since the housing boom ended in 2006, and millions more on the verge of foreclosure.

Problem #2: Hundreds of thousands of people in the U.S. are homeless, with many of them chronically homeless.

Solution: Instead of booting people out of homes and letting them sit vacant for months or years, banks could permit people to live in them rent-free in exchange for continually improving them. People with carpentry and other home improvement skills can fix problems and upgrade homes, substantially increasing their value. Just about everyone can paint, clean, and do yard work that can add up to a big difference.

A local man almost doubled the value of his home by adding a garage and upgrading its siding and shingles along with smoothing and reseeding its lawn. Just the lawn alone made a major difference, going from shabby to breathtaking, remarkably improving the street appeal—and hence value—of that home.

Another family transformed their plain yard so it looks like Shangri La, drawing so many people eager to see its beauty they added a sign to deter inquisitive uninvited visitors. The landscaping improvements add at least $100,000 of value to the home.

Strategic upgrades can significantly boost home values. While almost every home could benefit from some TLC and betterments, foreclosed homes often need more attention. Furthermore, unoccupied homes are more likely to be vandalized or perhaps gutted by burglars who swipe toilets, light fixtures, electrical wiring, and copper pipes, with the latter two being harvested for the value of their copper. Thieves who take such things aren't very careful, so they often produce extensive property damage.

A less obvious but still serious effect of home vacancy is what happens inside stagnant water pipes. Just as a rolling stone gathers no moss, “an unused water supply inside a vacant house can grow all kinds of things,” including slimy biofilms that can enmesh pathogenic organisms and subsequently release them, endangering health and degrading water taste and odor. Once formed, those biofilms cling tenaciously, so a simple or even prolonged flush won't remove them.

Another effect of biofilms in pipes

If you're familiar with Poiseuille’s Law (a.k.a., the Hagen–Poiseuille equation) governing the flow of fluids through pipes, you know that flow increases as the fourth power of the pipe’s radius, so small reductions in effective pipe internal diameter (produced by biofilms partially plugging pipes) substantially impair flow rate. For example, flow decreases 16-fold when a pipe’s radius is halved.

Is this solution to homelessness just a pipe dream?

Bankers should avail themselves of this opportunity to help solve a pressing societal problem while also helping themselves make more money, but I suspect that most bankers lack the mental flexibility needed to escape from inside-the-box thinking. Hence, they may need a nudge or two.

Nudge One could come from the federal government, using its power to compel banks to do what is better for them, homeless people, and society in general. No one should object to this win-win-win situation.

Nudge Two could come from civic-minded corporations, wealthy individuals, and others banding together to gain more clout. They could insist their banks help solve homelessness, or they will use another bank.

Banks could encourage people to do more for the homes they temporarily occupy by offering financial incentives, from cash for basic necessities to a small parcel of land and enough money to build a microhome on it. They might also sponsor contests, giving a home to the grand prize winner.

By thinking outside the box, bankers could help themselves and put homeless people inside boxes: homes.

Mom and daughter standing in front of their new home
The views expressed on this page may or may not reflect my current opinions, nor do they necessarily represent my past ones. After reading a slice of what I wrote in my various websites and books, you may conclude that I am a liberal Democrat or a conservative Republican. Wrong; there is a better alternative. Just as the primary benefit from debate classes results when students present and defend opinions contrary to their own, I use a similar strategy as a creative writing tool to expand my brainpower—and yours. Mystified? Stay tuned for an explanation. PS: The wheels in your head are already turning a bit faster, aren't they?

“The test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function.”
F. Scott Fitzgerald

Reference: Imagining dialogue can boost critical thinking: Excerpt: “Examining an issue as a debate or dialogue between two sides helps people apply deeper, more sophisticated reasoning …”

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