Category Archives: US Housing Policy

HOUSING JUSTICE IS CLIMATE JUSTICE

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.

Is Freedom what we want?

On April 16, this sprawling homeless encampment at the edge of downtown Portland displayed a FREEDOM sign. Find it in the shade of the upper right corner.

Did Freedom go somewhere else?

By Jun 9 FREEDOM was gone! I’ve searched around in the rubble, but no trace of the sign. The very small tent that is partially hidden by two tarps is still there today.

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.

Block 216 Fund II ad

This half-page ad in The Oregonian Jun 20 offering a tax break to the wealthy symbolizes a root cause of the housing crisis.

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

Dorothy Brown is one of many writing about how housing policy fails Black families

Dorothy Brown author of THE WHITENESS OF WEALTH @DorothyABrown

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.

Image from their Boston Review article

The American Jobs Plan mirrors past efforts at affordable housing that contributed to our problems and failed Black Americans. We need to take housing out of the private market. say the authors

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

Published Nov 2020 by NYU Gallatin, this document is a manual for how the Social Housing Development Authority would work

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.

CONCLUSION

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!

NOTES

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.

 

Brave New US Housing Policy PLACE Initiative Presentation

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Brave New U.S. Housing Policy

February 12, 2021- PlanGreen

To expedite building market rate housing, as well as more public housing, that is affordable to BIPOC communities and to young people, we need to lobby for TAX POLICY CHANGES that will shift our perceptions about “the American Dream”–away from homeownership and towards security, equity and legacy for all.  

HOUSING DOESN’T HAVE TO BE A COMMODITY

For the last few years, as long as the issue was housing, I could be found on Fridays at the Q&A microphone at Portland City Club Friday Forum.  I would ask: How can you square promotion of homeownership as a means of wealth building and reform of our housing system?  

An example of a Portland City Club Friday Forum recent ad for a housing forum. This one was 11-15-19. Image from XRAY-FM.

An example of a Portland City Club Friday Forum ad for a housing forum 11-15-19. Image from XRAY-FM.

Wealth building depends upon housing being a commodity to be bought and sold for a profit.  Rather, don’t we need to see housing as a social good that all have the right to access? If I could get away with a few extra seconds, I might add: The Community Land Trust, as it was originally conceived, is a NEW MODEL OF LAND TENURE that provides security, equity and legacy, but doesn’t promote housing as a commodity. Isn’t that what we need to be moving quickly toward?

Young people at this 2016 Bernie rally showed
great enthusiasm to transform healthcare.
We need to repeat that for HOUSING in 2021-2022!
Photo by PlanGreen

Housing has NOT gone away as an issue, but you wouldn’t know it from the last two cycles of Presidential debates, which had almost no questions of any substance about housing.  As a supporter of Bernie Sanders in 2016, I became irritated with my candidate when he virtually sidestepped local Portland TV reporter Laurel Porter’s question to him about housing affordability and homelessness. I had been attempting to get him to awaken his Millennial base to the idea that we did not necessarily need to continue the current system of housing. I tried hard to get my blog Housing Affordability: Put a Bern on It  to members of his campaign and to the candidate himself, but seemingly without success.  Since Bernie was Mayor of Burlington, VT when the largest Community Land Trust in the nation was started, he understands the potential of this new system of land tenure. He even told the CLT at an annual meeting that helping to get them federal funding was the best thing he had ever done as Mayor. As Chair of the Senate Budget Committee, he can still mobilize that base.

NEW OPPORTUNITY WITH SENATE FINANCE COMMITTEE

Sen Ron Wyden at Forest Grove Town Hall (with two reporters shown taking notes) lays out his tax reform priorities. They don't yet include HOUSING! Photo by Pamplin Media.

Sen Ron Wyden at Forest Grove Town Hall lays out his tax reform priorities. They don’t yet include HOUSING! Photo by Pamplin Media.

Now, young people through groups like Portland: Neighbors Welcome, Sunrise PDX, and NextUp now find that their Senior Senator, Ron Wyden, has become the Chair of the Senate Finance Committee. Peter Wong in a Jan. 21 article in the Portland Tribune lists the priorities for Tax Code reform that Senator Wyden laid out at a January Town Hall in Forest Grove. OR.  Corporate Taxes, Capital Gains, Energy, Health Care, and Infrastructure are priority areas, but HOUSING is not one of those priority areas—even though it is probably the largest expenditure in most Americans’ budget. (See comments for update.)

Image of front cover of Brave New Home: Our Future in Smarter, Simpler, Happier Housing by Diane Lind.

Nevertheless, that doesn’t mean that we,, shouldn’t try to plant the seed for profound change to US housing policy while Wyden is up for re-election. I loved the suggestions from Diana Lind’s  Brave New Home:Our Future in Smarter, Simpler, Happier Housing because they match so nicely to my own.  Lind began her book after the birth of her son because she felt isolated  and disconnected in her own single family row house–and this was before COVID-19.  She is Executive Director for the Arts + Business Council for Greater Philadelphia which hardly makes her seem like a radical.

I’d seen other authors question the mortgage interest deduction (MID) before (e.g., Matthew Desmond in Evicted and Richard Florida in The New Urban Crisis), but I believe Lind goes further when she questions the entire assumption that homeownership does or should present  a path to wealth building for most Americans.  She wonders why the government would continue its subsidization of homeownership when so many homes have now been bought up by multinational companies like Blackstone and affiliates. She also questions such a subsidy even though the mortgage interest deduction is one of the country’s largest regressive tax loopholes and even though student debt has changed the landscape of housing choices for young people. Lind travels the country exploring what people are doing for alternatives.

WE BUY UGLY HOUSES.COM HomeVestors: America's #1 Home Buyer. Photo by Mary Vogel/PlanGreen taken in east Portland, OR

WE BUY UGLY HOUSES.COM HomeVestors: America’s #1 Home Buyer. Photo by Mary Vogel/PlanGreen taken in east Portland, OR

Any system that pushes housing as an investment (hence a commodity) is bound to attract those who are ready to game the system. It should be no surprise that we see hedge funds, REITs and institutional investors buying up single-family housing and developing portfolios of thousands of properties. They comb sites like Zillow and the MLIS to find, renovate and flip undervalued properties. They buy billboards and post signs on lampposts.  Their size allows them to fix prices and this price-fixing becomes a primary reason for skyrocketing housing costs. Yet in Portland, and I believe elsewhere, these companies often face less resistance than new construction or redevelopment—even though they are likely to be bigger contributors to gentrification.

POTENTIAL ASKS TO SENATE FINANCE COMMITTEE

I’ve come up with these broad directives (with a nod to Diana Lind) that will need to be further fleshed out to be actionable:

  1. Actively transition our policies away from homeownership and single-family homes. 
  2. Investigate how best to subsidize people, rather than their property. 
  3. Regulate landlords and buyers who own hundreds to thousands of properties, while finding ways to leverage their scale for good. 
  4. Rethink zoning that privileges single family homes 
  5. Rethink the variety of ways the federal government incentivizes and rewards single family housing—e.g., IRS, FHA, VA, Fannie Mae, Freddie Mac. 

I’We might also explore our connections to members of the coalition that got the “Yes In My Backyard (YIMBY) Act” (H.R. 4351) passed in the US House in 2020 and help them to get an even stronger bill passed in the US Senate in 2021.  (See update in comments.)

SHIFTING PUBLIC OPINION

Evicted website https://www.evictedbook.com screen shot. Without a Home Everything Else Falls Apart.

Let’s team up with well-known authors such as: 

  • Matthew Desmond (Evicted: Poverty and Profit in the American City
  • Richard Florida (The New Urban Crisis: How Our Cities Are Increasing Inequality, Deepening Segregation, and Failing the Middle Class-and What We Can Do About It
  • Diana Lind (Brave New Home: Our Future in Smarter, Simpler, Happier Housing)

who can get media attention of all kinds: TV, radio, social media, newspapers, magazines, etc. Locally, we might team up with Sightline Institute Founder  Alan Durning who recently authored The Problem With US Housing Policy Is That It’s Not About Housing. Durning begins: Here, I sketch the hidden reality of federal US housing policies: they are about real estate appreciation, not housing. And I spell out how they polarize wealth, exacerbate racial inequality, cut productivity and job creation, speed climate change, and exaggerate the ups and the downs of the business cycle. He plans to next address how we might form a left-right coalition to shift federal policy.

THE BUDGET AS A MORAL DOCUMENT

Photo of US flag flying at US Capitol from Oregon Center for Public Policy blog. Pop-out says In 2021 Oregon can free up money to invest in Oregonians by disconnecting from wasteful federal tax breaks.

Image from OCPP.org/agenda links to their Disconnect from Wasteful Federal Tax Breaks blog.

Many of us–especially in my Boomer generation–find it difficult to rethink long-held assumptions and perhaps to give up some financial privileges. Some of the most introspective among us–such as those in Portland’s Interfaith Alliance on Poverty have been exploring the root cause of poverty and homelessness for the several years. 

Chair, Les Wardenaar, has an eloquent “Commentary On The Budget As A Moral Document” in the January 2021 issue of the Alliance newsletter showing that he has given some deep thought to the Alliance’s series on the topic over the last few months.. He especially cites OCPP Executive Director Alejandro Queral’s presentation (Oct 2020) on the Oregon tax structure and the benefits that many of us gain from it at the obvious expense of those with lower income. That prompted him to ask himself the question: “how much of my personal finance and with it my lifestyle am I willing to sacrifice to make the system more just?”  Wardenaar goes on to conclude:

As one of my Alliance friends put it, “The Budget as a Moral Document” ultimately demonstrates that we—as Portlanders, as Oregonians, as Americans– are deliberately choosing to perpetuate social and economic injustice. We choose to force people to live on the streets. We choose to provide a sub-standard education for many of our children, thus impacting their chances of lifting themselves up. We choose to put “people of color” into a chasm of inequity that only a small minority could ever climb out of. And we make those choices year after year after year. 

Many more in the Boomer generation are even more fearful–without being quite so introspective and soul searching as those in the Alliance. Some reinforce each others fears in neighborhood associations where they attempt to block change.

HOUSING JUSTICE: CLIMATE JUSTICE AND PUBLIC HEALTH

Housing Justice is Climate Justice is a meme embraced by BIPOC advocates in Oregon and many supporters such as those in Portland: Neighbors Welcome, Sunrise PDX, and NextUp 

What if, rather than bemoan the change to our single-family neighborhoods, we embraced it instead? Ever larger American homes have become a huge factor in climate change at the same time they have led to increased loneliness. And public health officials are recognizing that loneliness is the new smoking or worse–equivalent to 15 cigarettes a day! As homes have become bigger they have led to increased emissions from heating and cooling, more furniture and appliances to fill the space and more fossil fuel to travel further distances–all with a carbon cost. “Why isn’t there a more robust public conversation about how living differently–more affordably, more communally, and more simply–could strengthen our society, economy, and health?” asks Lind.

An equitable housing policy at the federal level needs to be a policy that will expedite building market rate and public housing that is affordable and available to BIPOC communities and to young people. That will happen only when we shift our perceptions about “the American Dream” away from homeownership and towards security, equity and legacy for all.  

Our Future in Smarter, Simpler, Happier Housing could be around the corner–we first need to permit it, fund it and build it! And the fearful may then want to get on board.

Screen capture  of Twitter site by PlanGreen

UPDATE May 19:  While preparing a slide presentation for the PLACE Initiative Climate Summit, I found out that the Senate Finance Committee held a Tax Inequality Hearing on April 20, 2021. The first person to testify was Dorothy A. Brown, author of  The Whiteness of Wealth and tax law professor at Emory University. 

Also see my slide show embedded in my post of May 20. I’m working on including the text that goes with the slides.