Don Stewart has lived comfortably in his Conyers home for 38 years. But when he looks out his window now, the 80-year-old Southern Bell retiree shudders.
“Look. One. Two. Three. Four foreclosed homes I can see from right here,” Stewart said. “And they are all empty. It is scary. Frightening.”
It is a frightening situation throughout Georgia. The state’s foreclosure rate continues to be one of the highest in the country, and critics from Capitol Hill to metro Atlanta have blasted President Barack Obama’s fixes as ineffective. Now, with Super Tuesday looming, Georgia residents, policy wonks and economists are looking to the GOP presidential candidates for answers.
But among the candidates — Newt Gingrich, Ron Paul, Mitt Romney and Rick Santorum — the housing crisis has taken a backseat to broader economic issues and discussion of social issues.
“I think Newt has addressed it; I heard him talk about housing a few times,” Stewart said. “But I don’t think any of them have addressed it to the point where it needs to be. They could address it more if they wanted to; I just don’t think they know how.”
William Boone, associate provost and dean of graduate studies at Clark Atlanta University, said a common theme of all the candidates is that government’s job is to get out of the way.
“If we were to project, based on their current statements, they will say you have to tough it out and get by using market forces instead of depending on the government,” he said. “They claim that the cause of the problem is government regulations, so we need more deregulation to let the market work its will.”
None of the campaigns responded to calls and emails from The Atlanta Journal-Constitution requesting information about the candidate’s policies on housing and foreclosures.
In October, Romney said that, as president, he would allow the foreclosure situation to “run its course and hit the bottom,” after which the housing industry would recover. “The right course is to let markets work,” he said.
Romney also has tried to drop the housing crisis directly in Gingrich’s lap, assailing Gingrich’s work for Freddie Mac, a federal mortgage agency. Gingrich, who was paid $1.6 million by Freddie Mac, has denied that he lobbied for the agency, saying he worked as a consultant and historian.
Both Gingrich and Romney have railed against the 2010 financial regulatory overhaul known as Dodd-Frank, on the grounds that it has actually worsened the crisis.
On Paul’s campaign website, he says that “government should enforce contracts, not undermine them,” in regards to foreclosures.
Santorum, while critical of Fannie Mae and Freddie Mac’s actions during the boom that preceded the crash, last week blamed the recession on high energy prices rather than the housing bubble.
Georgia has the fourth highest rate of foreclosures nationally. In January alone, 12,467 homes — about 1 in 328 — were the subject of foreclosure filings, according to recent data from real estate research firm RealtyTrac.
With 4,600 government-owned foreclosed properties, metro Atlanta has more than any other in the country, including poster children of the real estate collapse such as Phoenix and Las Vegas. Among states, Georgia ranks second only to California.
“Without addressing the foreclosure issue, we are not going to stabilize the housing market and approach stabilizing the banking industry. All of it is inter-related,” said David Ellis, executive vice president for Greater Atlanta Home Builders, a trade organization for the residential housing and construction markets.
“None of them [the candidates] have distinguished themselves on the issue,” Ellis said. “We clearly will be watching to see which one develops a cogent policy related to housing.”
In other post-World War II recoveries, the housing sector generally led the way, said Andy Carswell, an associate professor of housing and consumer economics at the University of Georgia. But today’s housing market weighs on Georgia’s economic recovery like a ship’s anchor.
“We’re a top foreclosure state,” Carswell said. “You’d think this would be an issue that they’d address.”
Georgia lost 14,000 jobs from December 2010 to December 2011. But the state would have enjoyed a net increase of more than 1,000 jobs without the losses in the construction and financial services sector — losses driven by the housing slump — said Mercer University economist Roger Tutterow.
Eventually, foreclosures are bound to surface as a campaign issue, he said, but perhaps not until the fall. “We’ve seen kind of cursory discussions on housing and foreclosure, but we haven’t seen it elevated in importance as you’ll see later in the cycle,” Tutterow said.
Not every economist is eager to see the candidates concentrate on the real estate crisis, however.
The broader matters being discussed in the GOP primaries — entitlement reform, reducing government deficits and overhauling the tax code — could mean more to the economy in the long run, said Dorsey Farr, an economist and partner at the Buckhead investment advisory firm French Wolf & Farr.
The Obama’s administration has devoted a lot of resources to housing with mixed results, Farr said.
The debate “ought to be about more than one sector of the economy and how we can get it going,” he said.
Atlanta-based real estate agent Tal Kramer agrees that nothing done thus far to stem the foreclosure tide has lived up to its promises, leaving millions of families still foundering — but he still wants the candidates to talk more about housing.
Kramer, with Atlanta Communities Real Estate, said 65 percent to 70 percent of his firm’s business relates to foreclosed properties and short sales.
The housing bust “hurts the economy overall,” Kramer said. “But I’m the first to admit there are no simple answers.”
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