Whats Wrong with Crony Capitalism?
At 300 East 23rd Street in the exclusive Gramercy Park neighborhood of Manhattan, where to get into the local part you need a key granted only to residents, a new 98-unit luxury apartment complex has been built with an outdoor movie theater and panoramic city views. Problem is, not enough buyers are coughing up the $820,000 to $3 million the project’s developers are asking for the privilege to own a unit in the building. But don’t worry, the Obama administration is coming to the rescue. Last December, the Federal Housing Administration loosened its financing rules so that U.S. taxpayers would have the honor of backing loans with down payments as low as 3.5 percent. Now rich Manhattanites can better afford condos in buildings with pet spas, concierges and rooftop lounges on the taxpayers’ dime. You read that correctly: the FHA, created in 1934 to make homeownership attainable for low- to moderate-income Americans, is now subsidizing Manhattan luxury condominiums. How did we get here? Th
