Is This What It Means To Be An American? If we acquiesce to a system that creates such glaring inequality, we are saying YES!
Instead we could pursue a Social Housing Development Authority at the federal level. I hope those maintaining HOUSING JUSTICE IS CLIMATE JUSTICE will embrace this concept and promote it with policymakers.
Independence Day is usually a time when I see historical reviews examining where we’ve come from and analyzing where we may be going. This July 4, 2021, I thought I would make my own attempt. The scenes around me in downtown Portland, Oregon are of increasing sidewalk tents filled with humans that most of our business community wants to see swept away so that people with money will come back to downtown.. Some of them are willing to help build more shelters to get folks off the street. They hope to hide the glaring inequality our society has produced through it’s housing policy.
A few days ago, I was reminded of an underlying cause of this housing inequity situation by an ad in our statewide newspaper, The Oregonian.
The ad invites readers to join Fund II for the 251 room Ritz-Carlton Hotel and the 132 luxury condominiums, along with 153,000 square feet of Class A office space. It’s a “Qualified Opportunity Zone Fund” –meaning that if you are wealthy enough, you can get a big tax break for such an investment. While downtown Portland’s designation as an “Opportunity Zone” was especially egregious when it was first declared, now, with all of its boarded up storefronts, such a designation for downtown would raise fewer eyebrows than it did when it first came out. Regardless, there is no better symbol of what’s wrong with United States housing policy than this enormous tax break for the wealthy.
CALLING FOR HOUSING AND TAX POLICY CHANGE
There is now a chorus of authors, myself included, who are calling for a “Brave New US Housing Policy”—one that treats housing as a social good rather than an investment. We are critical of the way that US tax policy has been used to make housing into a commodity–leading to greater and greater financialization of what should be a social good.. One such author, tax professor, Dorothy A. Brown, testified before the U.S. Senate Finance Committee on April 20, about how current tax policy greatly disadvantages Black families.
Her book, The Whiteness of Wealth gives several solutions that would lead to more equity in the housing system. Brown makes a case for a far more progressive tax policy. The change that she feels will work is to eliminate all existing deductions and exclusions, reduce or eliminate income taxes for those taxpayers who earn less than the living wage in their geographic area and, in fact, pay those earning less the difference. This solution would not only help many in the Black community, but many in what used to be the “middle class” all races.
More recently, through a post by the PLACE Initiative, I learned about Gianpaolo Baiocchi and H. Jacob Carlson, two activist academics who came together to publish Housing Is A Social Good. Baiocchi is from NYU and Carlson is from Brown University. Not only do they offer a critique of the Biden Administration’s American Jobs Plan strategy in the housing arena, but they also offer a proactive solution.
AMERICAN JOBS PLAN OFFERS MORE OF THE SAME
The American Jobs Plan calls for a new “Neighborhood Homes Tax Credit to attract private investment in the development and rehabilitation of affordable homes for low- and moderate-income homebuyers and homeowners”–according to the Administration.
Baiocchi and Carlson point out that “… the bulk of the proposals in the American Jobs Plan … mostly mirror earlier policies to stimulate ownership and new construction of affordable housing through subsidies and tax-breaks for private developers.”
Like Dorothy A. Brown, they point out that “These mechanisms have not only contributed to our problems, but failed African Americans. For the last several decades in the United States, the highly regressive policy of tax breaks for mortgage interest, for example, has encouraged greater household indebtedness while deeply disadvantaging African Americans.”
SOCIAL HOUSING DEVELOPMENT AUTHORITY
I will get onboard Baiocchi and Carlson’s proposal for the creation of the Social Housing Development Authority, a federal agency that would purchase distressed real estate, ensure it is livable and environmentally sound, and finance its transfer to the social housing sector, including tenant cooperatives, community land trusts, nonprofits or public housing. And I will encourage the PLACE Initiative and other groups that I’m involved with to get aboard too.
But, before I go into greater detail, one area where the authors and I differ–they write: “Through its retrofitting efforts, the SHDA would also contribute to climate mitigation efforts.” They also mention in their Notes: “Retrofitting affordable housing is seen by many analysts as an important pillar of the Green New Deal.” I don’t disagree with those statements, but, because I believe that housing justice is climate justice, I believe their proposal relates to mitigating climate change even more than they may recognize.
Baiocchi and Carlson et al describe the institutional design of the SHDA. Part 1 describes the overarching mission and organizational structure of the SHDA. Within the mission we find: • Reverse decades of neglect, predatory practices, and discriminatory policies by focusing efforts on historically marginalized communities. • Invest in green infrastructure and climate mitigation by assuring that transferred properties are retrofitted.
Part 2 elaborates on how the SHDA acquires distressed properties. “It would likely prioritize housing that is at risk of predatory activity, such as what policy makers sometimes denominate “naturally occurring affordable housing” in gentrifying areas, among others.”
Part 3 outlines what happens while the SHDA holds the assets, from servicing mortgages to maintaining and rehabbing distressed property.“The maintenance function of the SHDA would be a significant stimulus into the local economy through maintenance and construction jobs.”
Part 4 lays out the asset disposition process. Preferred housing providers — community land trusts, housing cooperatives, tenant groups, non-profit housing organizations, public housing authorities, and other government agencies — gain first priority to purchase the SHDA’s assets.
Part 5 discusses two pieces of companion policy that would enhance the ability of the SHDA to carry out its mission: the repeal of the Faircloth Amendment and the establishment of a national Tenant Opportunity to Purchase (TOPA) policy.
I suspect that TAX POLICY is not something to which most of us want to pay attention. For those of us who run a small business, we may think the IRS Schedule C seems quite arcane, but, after our taxes are filed we put it out of our mind. It is the wealthy who hire tax attorneys and accountants to find every possible deduction they can take and buy into systems like the Low-Income Housing Tax Credit and Opportunity Zones Tax Credits who are the real beneficiaries. “These market-oriented programs are fundamentally costly to public coffers and, at their foundation, prioritize profit over public function”, write Baiocchi and Carlson.
With Senator Wyden (D-OR) the chair of the Senate Finance Committee, those of us in Oregon have a special responsibility to speak out against this long-entrenched, but highly inequitable system to say that our present housing policy is NOT what we want as Americans . And Join me in calling for the Social Housing Development Authority proposed by the group from NYU Gallatin!
My search for the root cause of the housing crisis in the US has been fueled by the writings of authors as divergent as Samuel Stein, Diana Lind,, Heather McGhee and Alan Durning in addition to those mentioned above. The books or articles by these authors all go into far more policy history than I covered above–as does the Boston Review piece linked in this post.