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?  

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?

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

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.)

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.

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

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

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

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.

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.