In an article published today, the Wall Street Journal describes some unintended negative consequences of the television show Extreme Home Makeover.
(1). They can’t afford to maintain the house.
From the article:
There are two big reasons why the people who qualify to be on shows like Extreme Home Makeover are not suited for owning a McMansion. First, these people already have a limited income, if any, and they can’t afford the increased operational costs and taxes that are associated with living in such a large home. Second, these people get into trouble (e.g., they lose their jobs, they get sick, they take out home equity loans they can’t pay back), and can’t afford to keep the houses that they were given on the show.
(2) They can’t resell the house.
Again, from the article:
The situation is a veritable catch-22 — people who are working-class can’t afford to buy and live in the McMansion, and people who could afford to buy and live in the home would be disinterested in living in a working-class neighborhood.
Tangentially, I also like the following post by Billy Quirk in the comments section following the article:
My answer is, “probably not.” Being placed in a luxury home is not going to solve these people’s problems. It’s simply increasing their level of consumption, which will exacerbate their existing financial problems. They would benefit more from starting an education fund for their children, catching up on the mortgage of their current home, finding steady employment, etc. Instead of placing people in a gigantic house that they can’t afford, maybe the show could teach people basic skills about how to maximize their utility with what they already have.
Filed under: Unintended Consequences