Diagrams

The Economics of Housing and homelessness

Household

Mortgage Originator

Fannie Mae

Life Insurance Company

FHA

Household

Mortgage Originator

Fannie Mae

Investors

Household

Mortgage Originator

Fannie Mae

Investors

6.77\%

5.48\%

6/30/25

Binding

Household

Mortgage Originator

Fannie Mae

Salomon Brothers

First Boston

Mortgage Originator

Investors

US Government

Household

Mortgage Originator

Fannie Mae

Salomon Brothers

First Boston

Mortgage Originator

Investors

US Government

Risky

Household

Mortgage Originator

Fannie Mae

Goldman Sachs

Chase

Mortgage Originator

Investors

US Government

Risky

Household

Fannie Mae

Salomon Brothers

First Boston

Investors

US Government

Investors

Affordable Housing

Rating Agencies

Assets

\$7.8 \ \text{Trillion}

Liabilities

\$7.6 \ \text{Trillion}

Capital

\$160 \ \text{Billion}

Total Equity

\$160 \ \text{Billion}

Gov Senior Preferred

Regular Preferred

\$33 \ \text{Billion}

\$350 \ \text{Billion}

Common Shareholder

Claims

79\% \text{Government}

Option #1

Option #2

Lend them the money, charge them a high interest rate, and take a big equity kicker (say 79.9% of their stock).

Just nationalize them entirely, zero the shareholders, zero the preferred shareholders

Assets

Liabilities

\$1 \ \text{Million Equity}

\$5 \ \text{Million Property}

\$4 \ \text{Million Debt}

2025

Assets

Liabilities

\$2 \ \text{Million Equity}

\$6 \ \text{Million Property}

\$4 \ \text{Million Debt}

2027

\mathbb{E}\Big[\mathbb{E}\big[\frac{d}{da}\tilde{Y}_i(a)\big]\Big]

Average

(Over Voucher Length)

Marginal Change

Expected

(Over People)

Housing Stability

Voucher Length

A \perp B \ \vert \ C

Treated

Control

\tilde{Y}_i(1)

\tilde{Y}_i(0)

Filled in Subsets Denote "Attrition"

All Possible Worlds

X_1

X_2

X_{360}

\vdots

Mortgage

X_{359}

Asset

All Possible States of the World

\sum _{i=1}^nX_i

Mortgage Backed Security

Housing Supply Elasticity

Demand

Atlanta

Dallas

Phoenix

*Not Meant to be Entirely Representative

Boston

New York City

Los Angeles

San Francisco

Cleveland

Detroit

2005

Y_1

Y_2

Y_3

Y_4

X_1

X_2

X_3

X_4

All Possible Functions

Our Focus

Assets

Liabilities

Equity

The Balance Sheet

Assets

Liabilities

Equity

The Balance Sheet

30-Year Mortgages

Deposits

Residential Mortgage Market

Mortgage Bonds

Price

Supply

Demand

Price

Supply

Demand

Demand'

Residential Mortgage Market

Mortgage Bonds