What Does the LIBOR Banking Scandal Mean For New Urbanism?
Recently a fraudulent banking scandal was brought to light known as the LIBOR scandal. LIBOR stands for London Inter-Bank Offer Rate. This fraudulent banking scandal has rocked the whole world's financial system, and could very well be the root cause of the economic downturns experienced by the US, as well as most other developed nations in the world. This is not good new for New Urbanist development, especially since the root of the LIBOR scandal revolves around mortgage-backed securities for home loans (which in the US was through the banking and loan institutions Fannie Mae and Freddie Mac), and interest rate rigging or rate-fixing by top executives of many of the largest banking institutions on Earth. This is why so many "bad loans" were handed down to home owners through banking institutions in the United States, and is most likely the main cause of the housing crisis and why one sees so many vacant and crumbling relatively new homes while driving through neighborhoods where I am from in Florida and in the rest of the country.
But can New Urbanism actually benefit from from this financial tragedy without going down the wrong path as those banks and bankers involved in the LIBOR scandal have clearly gone? I believe that the answer to this question is yes.
First and foremost, it is my opinion that CNU should distance itself from any banking institution involved in the LIBOR scandal. I know that this may not be an easy task, but I'm quite sure that this would be well worth the time and effort for the long-term. Those banking institutions that were involved in the LIBOR scandal's names have been forever tarnished, and would have the capability of dragging an organization with a good cause and reputation like CNU down with them.
However, the fact that many people have gotten out of their old homes and mortgages (which were usually in suburban sprawl type neighborhoods) gives those people a chance to start over and reevaluate how they want to live and what type of community they want to live in. This is where the LIBOR scandal and financial crisis it caused can be a good thing for New Urbanism. I think that most people that have lost their homes in these suburban sprawl communities will decide that they do not want to live the lifestyle that the suburban sprawl community has to offer and will instead opt for the walkable, mixed-use New Urbanist community with good public transportation instead. New Urbanist communities also usually have residences for rent for peoples of various income levels for those whose credit has been ruined by the banks and bankers. New Urbanist living is a healthier, more active, more social and vibrant way of life. Those that have lost their homes and credit may find that they have gained alot more by opting for the New Urbanist lifestyle than if they would have stayed in their old home in the suburban community anyway.
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