Dr. Richard Green, Director of the USC Lusk Center for Real Estate, is quoted in the June 14, 2009 edition of Business Week
Investors vs. Consumers: Misaligned Interests?
Business Week
By David Bogoslaw
...As the mortgage loan securitization fiasco has shown, business practices that generate the highest returns for investors are often at odds with the best interests of consumers...
..."If house prices go up everywhere, it doesn't help you" as a consumer since you can't afford to buy a new home in the same market, says Richard Green, director and Lusk Chair in Real Estate at the Lusk Center for Real Estate at the University of Southern California. "The only way you can benefit is if you sold a house in California in 2006 and moved to Alabama." But while you would have cashed out, you would no longer be living where you wanted to live, he adds...
..."I'm coming around to the idea that people need to make a really big down payment like 20% in order to buy a home," says Green at USC. "And to do that, we need to encourage the use of default savings mechanisms to spur a higher savings rate." Those mechanisms, when incorporated into 401[k] plans, have proven to result in higher savings than retirement plans that require employees to opt in to be enrolled, he says. "When companies structure a plan so that employees have to opt out if they don't want to be enrolled, people don't opt out..."
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June 14, 2009