Can't the asset holder - the homeowner in this case - get rid of the asset which stopped performing? Why such a strange financial behavior? If the houses are financials - why not to deal with them as such?
That would be rational for the home owner, but for many losing money on the biggest investment they have is not really practical. Losing value on a percentage taxed asset is not really practical for govenrment.
Also - the mortgage lender may not allow a sale at a lower than loan value price. The result is foreclosure, and even more loss in value.
Allowing our cities to become unlivable, inhospitable, and overall crazy places to accommodate letting people have enormous gains on an asset they do barely any work to improve was not practical but we did it for many years and it's time to stop.
> letting people have enormous gains on an asset they do barely any work to improve was not practical but we did it for many years and it's time to stop
This makes little sense. In a democracy, it will be hard to get people to vote against their own best interest.
Can't the asset holder - the homeowner in this case - get rid of the asset which stopped performing? Why such a strange financial behavior? If the houses are financials - why not to deal with them as such?