National Trends

PE Firms Renting Homes Proves How Fraudulent Federal Housing Policy Is

Since when is this a thing? (cnbc)

Since when is this a thing? (cnbc)


New York Magazine had a truly scathing article about the Department of Housing and Urban Development under Secretary Carson last week and it’s worth reading. He is as disinterested and unaware of housing policy as many feared, but surprisingly, to me anyway, he is also as prone to incompetence, nepotism, and cronyism as his boss. I could go on about how bad things are at HUD and why that is terrible for the affordable housing crisis, but one person who played a minor role in the story deserves more focus: Maren Kasper.

Ms. Kasper’s presence in government offers a chance to talk about the significant growth of private equity firms in the single-family housing market and why it confirms how fraudulent the federal government’s stated policy of encouraging homeownership truly is. It also shows that addressing the affordable housing crisis is not a priority of the federal government under either party.

Before I get to Ms. Kasper, let’s quickly review what happened during the foreclosure crisis in 2007–2008. The long-held bi-partisan focus on promoting homeownership in the US created a policy apparatus that over decades became a two-headed monster that was bound to devour itself and us along with it.

On the one side, through massive Government Sponsored Organizations (GSOs) like Fannie Mae and Freddie Mac, the federal government subsidized homeownership by backing mortgages and allowing them to be securitized and traded on secondary markets. Over time, mortgages were bundled and unbundled, divided and combined, sold and resold to the extent that it was hard to know where they originated. The largest, most powerful banks in the country traded in this profitable and increasingly complex system, which became a main engine of the American economy.

On the other, in the interest of raising homeownership rates, government policies created incentives for banks and other mortgage lenders to offer increasingly absurd or pernicious mortgages for traditionally unqualified buyers — the most infamous example being the sub-prime mortgage. Millions of Americans took out mortgages that they could not realistically expect to support based on willful ignorance, carelessness, and outright criminality from the industry.

You know the rest. Inevitably, the system collapsed on itself and caused the greatest economic crisis since the Great Depression. An estimated 10 million Americans lost their homes and 30% of all homeowners were underwater in their mortgages. The financial system was bailed out and Fannie and Freddie came under government receivership, where they remain today.

Some banks like Wells Fargo, Bank of America, and Goldman Sachs were forced to pay millions in fines and one or two low-level people went to jail. Some lending policies were tweaked and financial regulations were added in Dodd-Frank. Some people continued to lose their homes or remain underwater. The country and the press largely moved on.

But the crisis never really went away. That’s because the underlying roots of the crisis were never honestly accounted for or discussed at the policy level. The bigger problem is that Americans can’t afford basic goods and services anymore without taking on huge amounts of debt. 

Rather than address ways to increase Americans’ incomes and purchasing power, or to control the costs of important needs like housing, education, and healthcare, we’ve encouraged increasingly exotic financial instruments to fill the gap.

That’s what our federal housing policy actually is — a series of exotic financial instruments. On the surface, it provides a means for Americans to buy homes, but look deeper and it is in fact a giant wealth transfer for financial institutions. 

By allowing housing — the land, the structure, and the mortgage — to become a commodity (through the policies that I mentioned earlier, but just as importantly, through the tax code) they’ve increased the incentive to speculate on housing just like any other traded good.

In the immediate aftermath of the crisis, this naturally led to a rush of private equity firms into the housing market, buying up thousands of foreclosed homes on the cheap. 

The government could have helped keep families in these homes, could have kept ownership of them, or could have sold them to non-profit housing groups. Instead it allowed speculators to dominate this vulnerable market, flying in the face of what the goals of housing policy were supposedly intended to do.

That brings us to Ms. Kasper, who worked at a west coast startup company called Roofstock before she entered the Trump Administration. The company is a platform that helps investors buy single-family homes with the intention of renting them. Roofstock offers a chance for smaller investors to compete with PE firms in the same speculative game.

The space for renting single-family homes is rapidly expanding, thanks to the government. Just this month, Blackstone merged with Starwood Waypoint Homes to form one of the largest landlord entities in the country, with over 80,000 homes under management. The NY Times had a detailed article about the new focus and it’s worth checking out. 

In 2015, when Blackstone originally announced it was spinning-off its business into a publicly traded home rental company, it also quietly announced that Fannie Mae was backing $1 billion of its mortgage debt.

If it seems counter-intuitive for a single-family home to be owned by large private equity firms, you’re right. If it seems counter-intuitive for the federal government to support private equity firms — or investor platforms like Roofstock — in owning single-family homes, you’d also be right. But that’s exactly what is happening.

So let’s be clear: it has been federal policy to encourage homeownership for the average American family for 70 years to create an ownership society, to promote economic development and strengthen civic commitment (with decidedly mixed results). The government has spent trillions of dollars subsidizing the industry as a result. Now, that policy directly supports the opposite. How does that make any sense?

It doesn’t. The truth is, secure housing for Americans may have been the initial goal of federal policy (for white Americans, anyway) but by the 1970s the true goal was to enrich private interests through the commodification of housing. 

The move to subsidize private equity firms as they rent out homes just shows that this reality no longer has to be hidden from the public. This contradiction doesn’t factor in to policy discussions — at all. Who in either party is willing to talk about this? Who is willing to question if this is good for the country?

It’s also clear that this trend is making it harder for Americans to afford homes, particularly at the lower-end of the market and in hotter secondary markets. First time buyers are competing with these investors for the same housing, but often don’t have nearly as much cash on hand for the deposit. In many cases, they instead get to rent those homes for increased rents. The federal government has increased the cost of shelter for Americans.

It is clear that affordable housing will not be a central goal in the Trump Administration. HUD is in serious trouble under Secretary Carson. Massive budget cuts are expected to further weaken the agency’s mission. Tax reform threatens the only (flawed) federal affordable housing policy, the Low-Income Tax Credit. And the desire to deregulate the financial industry further only speeds up a future crisis.

As a coda, Ms. Kasper, the only visible member of the administration with even a modicum of housing experience, is now working at Ginnie Mae, which like Fannie and Freddie, backs mortgages. She will likely pursue more support for private investors to enter the single-family housing rental market.

If this doesn’t show how bad federal housing policy is, I don’t know what will. We have learned little from the Great Recession and we have no new ideas at the federal level for the ongoing affordable housing crisis that doesn’t rely on the same flawed market thinking. Until either party is confronted with the flawed logic of our housing policy, the cycle of crisis will continue.

On the Housing Crisis, Don't Blame Landlords, Blame Legislators

Work dumber, not harder (

Work dumber, not harder (

This week the Low-income Housing Coalition released a stunning report that shows that a person making minimum wage can’t afford a one-bed room apartment in 99% of counties in America. If you think we can address the affordable housing crisis by blaming landlords, this report should be sobering, but helpful.  As preverbal landlords of Congress and our State Houses, we should be kicking out our legislators for allowing this mess to happen in housing and in the economy in general.

The basic numbers are grim.  The wage per hour to afford the average one-bed room apartment in the US is $17.45, but the average wage per hour is $16.45.  (The federal minimum wage is $7.45/h but 29 states have a higher min. wage.) That means that you can’t work a 40-hour week and afford a place without being rent-burdened in all but a handful of counties.

It’s easy to blame landlords for rising housing costs and in some cases speculative greed is the culprit.  But landlords aren’t driving the crisis.  They don’t have enough power to do that. And by that logic, they also don’t have the power to help the crisis either.  

As Harvard’s Joint Center for Housing Studies housing report shows, despite the fact that housing construction has recovered from the recession, the private market is not building or maintaining nearly enough housing to meet demand and lower rental costs. 11 million Americans are still rent burdened, paying over 30% of their monthly income towards housing.  I’ll get to why local policies impact that later, but even in areas where costs are lower, housing isn’t getting built.  If the market could solve the housing crisis, it would have solved the housing crisis.

The larger problem is that only ¼ Americans who qualify for housing assistance receive it, which means that we rely on private landlords to service ¾ of Americans who are struggling with housing costs.  That’s an absurd outcome and it’s the result of poorly-considered political choices made at the local and federal level that have nothing to do with the actions of individual landlords.

At the local level, particularly in New York, I have covered many issues (tax laws, zoning laws, occupancy laws, and rent control laws) related to housing that create a needlessly complex and expensive housing environment.

At the federal level, I’ve explored the deeper problem with promoting homeownership and its racial, social, and environmental consequences.  This has calcified conversations on public housing, rental housing, and alternative methods for affordable housing construction.

But for all my focus on housing policy, I think legislators are guilty of a much larger sin: letting market ideology replace republican values as the main driver of our society.

How we organize ourselves economically is a means to a greater end, not an end of itself.  Our country was not founded on the ideals of capitalism; it was founded on the ideals of self-determination, justice before the law, and support for the public interest. 

When channeled properly, capitalism has been an undeniably superior tool in furthering those aspirations.  But when it isn’t properly channeled, it dominates our society and wreaks havoc on millions of people.

It is clear that we are in such a period and have been for some time.  It is equally clear that our state and federal legislators have abandoned their responsibilities to channel capitalism and in turn have abandoned their responsibilities of defending and supporting the republic’s larger purpose.

Forty-odd years of neoliberal economic policies of deregulation, privatization, and globalization supported at all levels of government by both parties have not unleashed the power of a rational market to address the problems in our society as promised.

Instead, they have transferred untold wealth to a tiny, nearly stateless pool of individuals while allowing our physical infrastructure to rust, our institutional capacity to rot, and our civic identity to recede.  

All while poverty is increasing dramatically and becoming highly concentrated.  Nearly 48 million Americans live in poverty, up from 34m just 15 years ago and over half of those live in high poverty neighborhoods (up from 43% in 2000.)

Rather than making the hard choices and sacrifices that are required to support and nurture our republic today and into the future, our period of late capitalism has been marked by short-termism that borders on nihilism.

As a result, the top 1% of earners has accumulated a self-reinforcing amount of economic and political power to continue this situation.  But it would be impossible if not for many more willing participants.  As Annie Lowrey points out in Citylab this week, the top 20% (households with an income greater than $112,000) have co-signed much of this new social contract.  The upper-middle class has surpassed the bottom 80% in health, education, income, family stability, and longevity at a stunning pace over the same period.

The implicit assumption guiding all of this is that America is now a zero-sum game. As Tyler Cowen points out in his recent bookThe Complacent Class: The Self-Defeating Quest for the American Dream” this is backed up by declining mobility, competition across industry, and firm creation. The type of positive-sum thinking that allowed America to continually reinvent itself has been stymied.  If there are only so many resources to go around, you’d better worry about getting enough for yourself and your family.  This is what the power of the market has wrought.

Until we hold our legislators accountable for this larger sin, we can’t realistically expect better policies at the ground level on things like housing.  It starts by rejecting the premise that we are in a zero-sum game or that our city/state governments and federal government can’t do more to break up the stagnation at the top of our economic and political ladder.  It starts by rejecting the premise that the market is more important than the republic. 

Eleven million renters are struggling to stay in their homes because too many legislators think the market is the end all be all.  If it were, we wouldn’t be in this mess. 

We need our state and federal governments to stop working for the top 20% of income earners exclusively and focus on everyone collectively. This means considering metrics beyond GDP and the stock market to measure the health of our economy.  It means considering metrics beyond economic growth to measure the health of our republic.  It means creating more dynamism in our politics, our economy, and our society.  If our legislators can’t or won’t remember their duty to the public interest – both the present and the future – then we should kick them out and find new tenants who do.

5 Arguments to Help Change the Debate on Public Housing

A beautiful day at Mill Brook Houses (homebody)

A beautiful day at Mill Brook Houses (homebody)

Despite the unprecedented affordable housing crisis across the country, there is seemingly no popular support for more public housing. President Trump instead reflects the general sentiment in Congress by outlining a budget that would cut billions of dollars from housing assistance for millions of low-income Americans. Though many residents, housing groups, and elected officials are speaking out against these cuts, they are hobbled by a lack of national attention. Frankly, I believe it’s because their message “#nocuts” is hardly a battle cry, as important as it is.

If we are to prevent these draconian cuts from becoming law this year, we must put as much pressure on Congress as we can. It’s likely that some of these programs will be saved if we do. But simply reducing the cuts or saving certain programs is not enough to help the millions of Americans struggling to find affordable shelter.

We must fundamentally transform the discussion about housing in the US and we must once again create a national effort to support, build, and maintain public housing on a significant scale. In the spirit of “#nocuts” I have outlined 5 hashtags that describe where I believe we can succeed in doing so.

1. #HousingIsARight and Denying it is a Crime

We live in a deeply segregated country. This is not an accident. This was not an organic result of natural clustering or preferences. As Richard Rothstein has pointed out in detail in his book The Color of Law, it was the result of direct, explicit federal and local policy decisions to favor white Americans over all other types of Americans. The US Government made housing a de facto right for white people and denied it to black people and other minorities. The consequences have been devastating.

A lot of people, including the Supreme Court, do not know or accept this. This can no longer be tolerated. Just as we are finally taking down statuescelebrating an armed insurgency based on white supremacy and slavery, we must also face the blatant suppression that has been staring us in the face for generations every time we drive from a suburb to an inner-city core. The geography of our built environment must finally be accounted for with proper historic context.

Only by recognizing that housing is a basic human right and a basic obligation of our government, will we ever truly reconcile with and change the accepted narrative that downplays the scale of suppression. The God’s honest truth can tear down more than just statues in this country.

2. #RealTakers and Subsidizing Wealthy Homeownership

Once we accept how awful our housing policy was in the 20th century, we can then take a critical eye to how terrible our current housing policy is in the 21st. The specter of racism undoubtedly hangs over our current policies by the sheer scale of previous decades. However, today the true outrage is more about class.

As Matthew Desmond, author of Evicted, has recently written about, the federal government spends $134 billion a year — more than the entire budget of the Education, Justice, and Energy Departments combined — subsidizing homeownership, particularly through the Mortgage Interest Deduction. About 60% of that money goes to wealthy homeowners. The 7 million households that make over $200,000/year receive a larger share of that savings than the 50 million households who earn less than $50,000/year.

This is far from “free market” principles and in fact inflates the housing market to the benefit of wealthy homeowners. It’s estimated that removing such programs could reduce housing prices across the country by 13–17%, making it far easier for many people to purchase a home if they chose.

When a record number of Americans are rent burdened, and over 600,000 Americans are homeless, the fact that we subsidize these homes is a national disgrace. By placing a hand on the scale (again, for explicitly racist purposes) the housing market has exacerbated the economic inequality ravaging all quarters of the country.

Let’s start calling these households what they actually are: takers. Let’s remove the moralizing and euphemisms around how some politicians use that term currently and instead, by placing basic logic and fairness on it, aim it towards those who are actually taking the most from all of us.

3. #PublicHousingWorks and Has Always Worked

Despite decades of discriminatory policies favoring white homeownership (and now more general wealthy homeownership) and systemic neglect against everyone else, we can still point to an obvious truth: public housing works.

During the brief period when there was popular support for public housing and federal intervention in general, the US government built thousands of units. Though some, like Pruitt-Igoe, became shorthand for crime and neglect, the larger truth is that many more continue to be wonderful homes. And the complexed that did fail, failed because the federal government let them fail due to systemic neglect and more racial discrimination.

NYCHA is by far the largest public housing authority in the country, housing nearly 400,000 people across thousands of units. It is a bigger city than Miami and Las Vegas. Despite a rapid retreat of federal funding and larger demographic shifts that decimated NYC in the 1960s and 1970s, NYCHA has endured. Even today, as it faces billions in capital budget gaps and millions more in potential cuts in Trump’s Budget, residents are happy with their communities and the agency. And only 13% of residents receive public assistance.

The idea that Public Housing is a wasteland where people want to get out of, or where they should be encouraged to get out of, has never been true. As Affordable Housing in New York shows repeatedly, even in the hardest times when crime was high and many facilities were in poor shape, these communities survived and in some cases thrived.

NYCHA residents should be proud of where they live. Employees of the agency, past and present, should be proud of the work they did and continue to do to keep it going when no one could or would help.

Public housing residents shouldn’t be pitied or demonized and they don’t need to be romanticized either. They are normal Americans who happen to be part of something bigger than any one person or one building. Their experiences represent just how much the republic can achieve if it follows its values and how many it can fail when it abandons them. We should be telling this story everywhere to everyone.

4. The #FutureOfPublicHousing Will Not Look like the Past

There were many flaws in the design and support of public housing in the US during the 20th century that caused many complexes to fail outright or fail for a period of time. Early generations of complexes were sterile and anti-social. Many of the funding sources were fleeting and easily diverted. Sociological assumptions in design were flawed and discriminatory.

No one is suggesting that we go back and do this over again. Throw out the idea that public housing means tall brick towers isolated from neighborhoods. Instead, we should articulate a new vision for the 21st century that reflects lessons learned from the past and a broader mission for the future.

Instead of building new residential towers on superblocks, repurpose older infrastructure and combine multi-use functionality within existing city and town fabrics.

Instead of designing uniform apartments or complexes with rigid specifications, allow for innovative construction techniques like pre-fab units, modern SROs or shared living arrangements that strive for different, locally desired outcomes.

Instead of subsidizing homeownership (especially for wealthy Americans), invest those resources in community land trusts and land banks to give local communities more agency and sustainability. Take the speculation out of (at least parts) of the housing market by tipping the scale towards affordability.

We should simplify yet broaden HUD’s mission based on housing as a right. Set its goals and budget around lowering the cost of shelter across the country in whatever forms that shelter is needed for local conditions. Make HUD about providing Public Housing whether it’s apartments or a single-family home.

The possibilities of future Public Housing are almost endless when you shed the vision of the past. Let’s start showing the country what the future could look like and how it could help everyone, whether you live in a city, a suburb, or the country.

5. #RebootTheUS Can Start With Public Housing

The polarization of our politics has increasingly bled into all corners of our public policy discussions, crippling our ability to address the challenges facing our rapidly changing nation and planet. The polarization of our economics, in the form of runaway income inequality, has also poisoned our broader civic life and national identity. We were in crisis long before President Trump and will remain so long after him unless we can do what America has always done best — reinvent itself.

As when the Gilded Age spawned the Progressive Era and the Great Depression spawned the New Deal, we must lay the seeds now for a great rebirth of national promise and purpose. We must embrace the core values and aspirations of our republic — freedom, justice, and the public interest — and shed the rot of late capitalist values of commodification, exploitation, and greed. In the digital age, no term better represents what I think we need than a great “reboot.”

And there’s no better place to start than with public housing. Committing again to a massive nation-wide effort to provide affordable housing in many forms not only addresses the moral urgency of our current situation, but it also addresses the economic urgency as well.

Public Housing is infrastructure. Its creation means jobs and economic activity on a scale unseen in decades. Its existence means more take-home income for millions of Americans who are rent burdened or underwater in their mortgages. Its location means more mobility for families and individuals in economically productive regions.

What other effort could so thoroughly demonstrate the power of a great national reboot to inject economic and civic purpose into a country that should never have to sacrifice either. We don’t need to abandon the experiment of national government to do so. We need to reinvigorate our civic intellect as well as our institutions. We start by showing how a focused federal effort in housing can promote our values, help our citizens, and share our prosperity.

None of these ideas are new or radical. They reflect an obvious truth about contemporary America: what we have now is not working. We are ultimately presented with two options. First, we can continue on with our late capitalistic doctrine that we are all consumers on our own or, second, we could revitalize our identity as citizens and recognize that we are in this together. One leads to a brutal, empty society. The other leads to something much stronger and fulfilling.

Secretary Carson as Useful Idiot

But don't let him, or us, off the hook (housingwire)

But don't let him, or us, off the hook (housingwire)

When Dr. Ben Carson was announced as the nominee for HUD Secretary, it was pointed out that he had never worked in government and had no experience in housing.   When he took questions before the Senate, it was pointed out that he barely mentioned anything to do with housing (and was barely promoted to).  And when he went on his listening tour shortly after becoming Secretary, it was pointed out that he praised the results of programs that would likely be cut or eliminated by his boss.  Now that the budget is officially here, and does include devastating cuts to HUD, it’s safe to say that Secretary Carson is as bad as housing advocates feared.  But truthfully, he has been everything the Trump Administration wanted him to be.  The implication for our country is disheartening.

I know it’s harsh to refer to Secretary Carson as a “useful idiot” but he is the literal definition of the term.  President Trump is cynically using Dr. Carson to go along with policies that the doctor (and, frankly, the President) doesn’t fully understand for purposes he may also not fully appreciate.  Dr. Carson seems quite content with the arrangement.

It is unlikely that Secretary Carson was consulted or even notified of the budget cuts outlined for HUD.  I’m not entirely convinced he knows what is in the budget. Not that the department is even staffed enough to have anyone around to tell him. Despite Dr. Carson’s testimony during the nomination to defend the mission and programs of his department, he has done nothing of the sort and never intended to.

This was all from the White House.  The department faces cuts of 15%, or $7.4 billion, which would include the elimination of bedrock programs like the Community Development Block Grant, the Housing Trust Fund, HOME investment partnerships, capital funding for public housing, and many other regional rental assistance programs.  Hundreds of thousands of poor, young, old, disabled, or otherwise vulnerable Americans would lose housing assistance in the midst of the affordable housing crisis.

Secretary Carson has still been useful by putting a genial face on what is a dark, cruel vision of public policy that has emerged as the only through-line in the Trump Administration.  Secretary Carson has made national headlines for two statements that reflect the naked truth of the Trump Administration but spares the President of having to say them himself: Fuck the Poor.

First he said that public housing, or presumably any subsidized housing, shouldn’t be “too comfortable” for residents because they won’t be motivated to find other housing.  Second (and not for the first time) he called poverty a “state of mind."

These comments are horrifying and stupid for several reasons. 

Let’s look at the first statement.  The logic that public/assisted housing should only be temporary was abandoned decades ago by HUD because it never made sense to begin with.  Providing permanently affordable housing for low-income families is a worthy public investment because it creates more economic opportunity for individuals and communities, reduces public spending in other supportive services, and maintains a mixing of income (and by extension, racial) groups that is fundamentally necessary for the health of our civil society.

If residents have the opportunity to move up the economic and housing latter, then great, American mobility is working.  But, more accurate to today, if they have to stay economically, or want to stay socially, they shouldn’t be punished with Spartan accommodations. Where are the good jobs and opportunities in our economy today? Decades of terrible economic policy have trapped millions of Americans in all corners of the country.  The idea that this housing shouldn’t be “too comfortable” is not only cruel and condescending, it is ignorant and classist.

Which brings us to Secretary Carson’s second statement about poverty being a state of mind.  This statement is so utterly wrong on its merit, so astonishingly ahistorical, and so morally debased that in a healthier society, we would have demanded and received his resignation. 

Our brand of American exceptionalism has always had a darker tone when it comes to poverty.  We romanticize the idea that anyone can do anything if they work hard enough, and point to any number of anecdotal stories to show this kind of success.  However, this allows us to ignore the larger structures in our society that have exploited the poor and vulnerable from the founding of our republic to present day – from Native Americans to slaves, to immigrants, to women and children, to veterans and foreign workers.

It’s why our national consciousness remembers the wagon trains of western expansion more than the violent removal and murder of Native Americans to achieve it.  It’s why we recall the great industrial expansion during the Gilded Age through the mansions of the robber barons without remembering their violent suppression of labor strikes at places like Tompkins Square in 1874 or on Grand Street in 1886. Its why we gloss over MLK's true message of economic justice for a waterer-down version of inclusiveness.

Dr. Carson’s views on poverty are no doubt shaped by his own exceptional life story (which, unlike the President, he achieved on his own.)  He has made a lucrative second career as a writer and motivational speaker by telling willing audiences that he overcame poverty and achieved greatness, reaffirming this great narrative of America by personifying it himself.

But is everyone blessed with Dr. Carson’s brain? How many other poor young men and women – who likely had equally strong and dedicated mothers - were unable to achieve even modest economic prosperity?  For every Dr. Carson, there are a hundred anonymous poor who, if even acknowledged by our broader society, are blamed for their condition. 

That this blame is also leveled by a man like Dr. Carson, who should know better given his background, his stated religious beliefs, and his position in government, shows everything that is wrong with our country today.

We can debate the likelihood of the cuts in the president’s budget actually passing and take some hope in knowing that many won’t.  We can hide behind the fact that Dr. Carson is simply inexperienced and overwhelmed in government. We can tell ourselves that the economy is doing well, that it could even improve, and that anyway it’s only a small portion of people impacted by these cuts.

But this thinking would let us all off the hook.  We can’t turn away from what is staring right in front of us.  Our society is growing crueler.  Our government, and even President Trump, is only a reflection of this. Our illness runs much deeper.

We are looking at the challenges posed by globalization, coming automation, and climate change with tax cuts for the wealthy and program cuts for everyone else. We are blaming the poor for their condition and excusing the mega rich for theirs.  We are lying about the past, ignoring the true problems of the present, and betraying the future - for nothing. 

Yes, we can start by demanding Secretary Carson step down.  We can continue by blocking the president’s housing agenda (and general agenda) and voting him out (if it comes to that). But we must acknowledge that the cruelty running through our society is a much larger plague that must be eradicated. 

We must discover a new civic spirit and a new commitment to our shared republican values of liberty, justice, and peace. We must acknowledge that these values are only viable when every citizen has access to them.  We must create a government that reflects the supremacy of collective effort and shared benefit over exploitation and selfish gain.  We must reject the ideology that says we are on our own.  That has never been anything but an excuse for the bigger fish to eat the little ones.  America is greater than that.

Trump's Budget is Garbage, Especially for NYC

First over the ledge perhaps (OMB)

First over the ledge perhaps (OMB)

As President Trump was busy underwhelming or shoving European leaders this week, his budget was released back in DC in his absence.  Normally it would be shocking that such an important political statement would be delivered without the President on hand, except when you see how his presence has generally been a disaster in other policy discussions. 

A somewhat more cynical take would consider this distance an intentional move given how politically unpopular this budget was bound to be.  However, there is no way distance can hide how much of a betrayal this budget is to the President’s campaign pledges and how terrible a budget it is on its own merits.

There are three big takeaways from the budget process before we get into how bad it would be for NYC. 

First, it would be a huge wealth-transfer and massive realignment of priorities.  The social safety net would be severely reduced (or altogether erased in some cases) while tax cuts would give billions back to the wealthiest Americans.  Funding for research into things like cancer and climate change, programs for economic development and housing assistance, and aid programs for students and the young poor would all be radically cut, robbing the country of future investment. All in the name of tax cuts for the wealthiest Americans.

Second, it is based on 3% annual growth, which no one thinks is possible (most predict about 1.8%) and seemingly includes a basic math error that double counts a trillion dollars in revenue.  This isn’t even voodoo economics, it’s garbage economics.  Even many Republicans are shocked by the brazen dishonesty of this budget and its defense by members of the administration.  It can’t be stressed enough that this budget does not make any sense on its merits. That is unacceptably irresponsible.

Finally, partly because of the first two reasons, this budget will never get passed.  That's true of most President's budgets anyway, but this one is wildly unpopular even with many Republicans.  That’s not to say many conservative Republicans oppose these types of cuts – they do support them.  This budget is the logical outcome of much of the Republican rhetoric of the last 15 years.  It’s just wildly unpopular with most Americans, so Republicans don’t want to be that obvious about it. And, as many Republicans have already found out with the ACHA vote, they don’t want to go back to their districts to face the ire of constituents over dramatic cuts to popular programs.

Just because this budget won’t pass doesn’t mean it isn’t incredibly dangerous.  It sets the political debate and will make incredibly bad final decisions look better in comparison.  The danger is the basic logic of this budget, and of the general approach Republicans have taken, which is to get the federal government out of the way as much as possible.  The defense of this argument lies with putting responsibility back with the states. 

This would be a valid argument if there were any indication that states could make up the differences in funding.  They can’t.  There is simply no way for even the wealthiest states to provide the types of services that people need in our modern economy.  Whether Republicans genuinely believe that states can do this or disingenuously know that they can’t is up for debate. 

In any case, passing the buck to states won’t solve the problems facing Americans. There is still systemic economic insecurity for a vast number of Americans, which isn’t go away no matter who has the buck.  This budget will only make that insecurity worse.

We can look at NYC as a good example.  Under the Trump Budget, the city would see over $850 million in cuts:

  • $200m from the public housing capital fund that supports NYCHA
  • $165m of direct funding to NYCHA
  • $68m for senior centers, domestic violence services
  • $48m for rental assistance
  • $23m for home heating assistance
  • $12m for affordable housing for low-income families

Though the State of New York doesn’t rely on the federal government that much for funding, NYC does, especially around housing assistance.  If these cuts passed, how much could we expect the state to cover the difference to keep these services running? Setting aside the political beef between Governor Cuomo and Mayor de Blasio, there just isn’t that kind of money laying around in Albany.

This would mean the poor in NYC would suffer - the old, the young, the sick, the disabled, and the abused.  They would take the brunt of these budget cuts and there’s no clear alternative help on the horizon for them. 

Sadly, we would expect a Republican-driven budget to be harsh on the urban poor. They aren’t in a position to punish Republican leaders.  But what is truly shocking about this budget is how much it also punishes the rural poor, many of which backed President Trump and other Republican candidates. 

Republicans have won over rural white voters without offering them any real solutions to their economic problems.  President Trump offered a more populist (and racially tinged) message promising to do so during his campaign, but has largely abandoned that rhetoric for more traditional Republican policies that favor the wealthy. 

That’s not to say Democrats have presented any real solutions for the urban or rural poor, either.  As some of the recent Congressional special elections have shown, the Republican message might be unpopular (with or without the President’s unpopularity weighing in) but Democrats haven’t won anything.  It’s not clear what the Democrats are offering as a real solution to President Trump or the Republican agenda, as unpopular as they are.

Both parties have failed to offer real solutions to the underlying economic struggles most Americans are experiencing.  The Trump Budget is a monstrous document based on brazen cruelty and breathtaking shortsightedness.  But it’s not clear that a Clinton Budget would have offered bold solutions to our problems. 

That’s because the basic logic pushed by Republicans for the last 30 years – deregulation, tax cuts, and global trade - has so thoroughly penetrated our politics that Democrats have never articulated a real alternative. 

That alternative is obvious – we need more federal intervention in domestic policy.  30 years of neoliberal economic policy has hallowed out the middle-class, empowered stateless corporations and individuals, and undermined the civic health of our society.  One outcrop of this is the affordable housing crisis, which I have covered extensively in this blog.  States can’t solve the housing crisis, or any of these problems.  Cities, even ones as big and prosperous as New York City, can't solve these problems.  Tax cuts at the federal level certainly can’t solve these problems.  An activist federal government can and must.

For now, we’re left to continue to fight losing battles over budgets like President Trump’s.  We’ll keep under-investing in housing, infrastructure, and our people.  We’ll keep eroding our civil society and our future prospects.  Until this fever breaks, or until Democrats or someone else articulates a bold alternative, the premise of this debate will guarantee a continuation of garbage economics, garbage politics, and garbage leadership.

In Debt We Trust

Going in the wrong direction (privatedebtproject)

Going in the wrong direction (privatedebtproject)

As Slate writer Henry Grabar pointed out this week, the US reached a symbolic (but, admittedly, arbitrary) milestone in March when the total amount of household debt measured by the Federal Reserve reached $12.73 trillion, surpassing the previous high in 2008.  There’s nothing inherently wrong with holding debt - capitalism can’t function without it - but the type of debt that Americans now hold has changed considerably, especially in the last ten years, and the trend is troubling.  This change is inescapably linked to the affordable housing crisis and the larger crisis of late capitalism that we are slowly waking up to. 

Home mortgages make up the vast majority of household debt ($8.63 trillion, 68%), which is to be expected, but student loans ($1.34 trillion, 11%) and car loans ($1.17 trillion, 9%) have risen as a share of total debt to a remarkable degree just in ten years (from 5% and 6%, respectively).  Credit card debt ($764 billion, 6%) and home equity credit ($456 billion, 4%) are the other large debt categories, but like mortgage debt, their relative share of total debt are about the same over 10 years.

I pointed out earlier that the milestone of $12.73t is basically arbitrary because it’s not adjusted for inflation and doesn’t contextualize the overall growth of the economy.  Relative to the size of the economy, this level of debt is 67% of GDP, down from 85% of GDP in 2008 at the height of the crash.  You could argue that this shows we are in better shape than 10 years ago, which is true, but it also shows that even “better shape” is not very good.

So what does this all mean? And how does this inform the affordable housing crisis?

Basically, all of these numbers reinforce the narrative that Americans, particularly of the younger and poorer variety, are struggling to gain security in today’s economy at an unprecedented scale – even as the economy continues to grow and corporate profits continue to increase.

Having a degree, having a car, and having a house used to be affordable ways to gain entry into the middle class.  But these assets are exponentially more expensive today than 30 years ago and we are going into greater debt to get them.  What's worse, they aren’t the guarantees of security they used to be.  That’s not a sign of a healthy economy or society.

There is one simple explanation for why this is happening: workers are not getting paid enough.  Since 1973 the average economic output per worker has grown by 72%.  That’s a steady clip of increased productivity (though it has slowed down) and is partly the result of the Information Technology revolution in the work place.

However, during that same period, average wages have only gone up by 9%.  Since 2000, this gap has gotten even bigger. Productivity has increased by 21% but wages have only increased by 2%.

As the Economic Policy Institute points out in a 2015 report, this was no accident. The explosion of compensation at the top end of the pay scale and the concentration of profit at the shareholder level (as opposed to labor) are the direct results of 30 years of federal regulatory, trade, and tax policies.  We live in a deeply unequal period as a result of a particular form of government intervention.

(As the recent American Airlines effort to raise wages shows, even corporations that try to buck this trend are punished in the market.)

It’s no surprise that by the late 1970s household debt started rising rapidly while personal savings decreased rapidly. By the early 1990s, the average Americans household had more debt than savings (as the picture at the top of this article shows). This trend has only gotten worse, despite a slight dip during the Great Recession. 

Our consumer culture didn’t adjust to a decrease in wages (or even put political pressure on increasing wages.)  It simply created new financial tools to allow us to keep spending.

There has long been the basic idea that there is “good debt” and “bad debt.”  Good debt is an investment in the future, like taking out a loan to build a bigger factory, which pays for itself in the long run. Bad debt is borrowing from the future to cover today, like a pay-day loan or covering operating costs with capital budgets. That rarely works out.

The problem today is that it’s no longer clear what debt is good and bad.  Student loans were generally seen as good debt - an investment in acquiring skills that will pay off in the long run in a higher salary - but its unclear what skills will be valued and at what salary in the near or long term economy.  The cost of undergraduate and graduate degrees have also increased dramatically as we have placed more importance on them as a society – all while their value has become more uncertain.

Nowhere is this debt doubt more apparent than homeownership. Even though homeownership rates are at the lowest they have been in 50 years, 64% of Americans still own their home. This represents the bulk of American households’ wealth and financial security.

As I’ve written before, that’s no accident or organic market outcome either.  It has been a concentrated policy effort at the federal level for 80 years.  We spend $134 billion a year subsidizing homeownership in this country – more than the entire budget of the Dept. of Justice, Education, and Energy combined.

The thinking was (and still is for the most part) that homeownership drives economic growth nationally and economic security personally.  (We really don’t know if that’s the case objectively because our society has been built around subsidizing this theory.) But, despite all of this intervention, these two basic conceits are not holding up in the modern economy. 

First, the idea that homes are guaranteed financial security is largely not true over the long run.  Robert Schiller has written often about how, despite the hype of house flipping or the recent bubble, home values on the national level haven’t increased at all.  For every hot real estate market like Las Vegas, there is a dying one in Youngstown, Ohio. 

Additionally, the foreclosure crisis never really ended.  There are still 3 million Americans underwater in their mortgages and many millions more that are dangerously close.  There has been a steady, if slow, increase in foreclosures in several markets.  Another downturn and we could see another spike.

Finally, and perhaps most troubling, there is an entire generation of suburban homeowners in certain markets (the Northeast and Midwest in particular) retiring whose wealth is tied up in homes that no one wants to buy.  The paper wealth associated with a home is only real if someone buys it at that price.  Long term demographics and economic development trends should cast serious doubt on the value of many of these homes in the near future.  

Second, the emphasis on homeownership (particularly in far-flung suburbs) is terrible for the national economy’s future.  All signs point to millennials wanting to own homes just like any other generation, but that doesn’t mean they will want to live where cheap single-family homes are available, because those areas don’t generally have a concentration of accessible, high-paying jobs.

On the flip side, high-paying jobs are increasingly concentrated in cities with highly regulated land use and, not surprisingly, housing prices have skyrocketed.  The economic benefit of high wages are largely gobbled up by big down payments and expensive mortgages, which limits the ability for a household to invest in other purchases.  

The federal government has consciously created the affordable housing crisis through debt on two fronts.  On the one hand, they have spent decades, along with billions of dollars, encouraging suburban homeownership through subsidizing mortgages among other policies, which has counter-intuitively created an asset class that has little re-adaptability as the economy changes along with demographics. Millions of Americans have wealth tied up in their homes that might simply vanish in the coming decades.

And on the other hand, they have instituted 40 years of economic policy that has frozen wages for the majority of Americans while lavishing profits on the top individuals and biggest corporations.  They have allowed increasingly exotic and pernicious financial tools to mask this scandal by allowing people to build massive amounts of personal debt.  Only after the crash did they properly regulate the mortgage market (now 60% of mortgages go to individuals with high credit scores, double from a decade ago) while other debt markets (particularly car loans) are largely under-regulated. 

Because there is no such thing as the free market without government intervention, we must re-examine what economy we want our government to create.  Do we want a debt-riddled society that is financially vulnerable at a near-permanent level? Do we want a society that politically and financially rewards a tiny percentage of the population at the expense of the rest?

Our government has created a homeownership society that is increasingly based on higher levels of debt. It has the power to create an affordable housing society that doesn’t rely on debt.  It’s up to us to make it do so.

Frontline Doc on Housing Crisis Sidesteps Larger Problem

Is that light at the end of the tunnel? (pbs/frontline)

Is that light at the end of the tunnel? (pbs/frontline)


This week, Frontline  released a documentary focusing on the affordable housing crisis. Specifically, reporter Laura Sullivan examined Section 8 and the Low Income Housing Tax Credit (LIHTC) - the two main federal policy tools tasked with providing affordable housing - to see why these programs are not making an impact on the crisis. The doc suggests the reason is a combination of local resistance, lack of oversight, and outright fraud. Though these do play a role and must be addressed, the larger issue is that the US does not see housing as a right. Without focusing federal policy around this principle, the current, weak federal intervention in rental housing will never solve the affordable housing crisis.

The documentary is at once heartbreaking and hopeful. We see individuals and families that are trapped in a cycle of poverty utterly beyond their control. But we see individuals who have benefited from low-income housing programs, who now have a stable home for the first time in their lives. Though the documentary does not make a value claim, it shows how decisive an affordable home is in the outcomes of Americans, and how important it is that we provide one as a society.

As the doc points out, however, only 1 in 4 Americans who qualify for housing assistance receive any. That there are so many Americans who need housing assistance (approx. 12 million) and that they do not receive it are equally scathing indictments on our nation’s priorities.

The Americans that do receive aid do so mostly through Section 8 vouchers, which allow an individual to rent a home (that accepts the program and has a certain cap) and to pay no more than 30% of their monthly income for it. The federal government, administered through the states, covers the difference. The program costs about $30 billion a year (less than half the cost of the annual mortgage interest deduction) and houses 2.1 million Americans . It was started in 1974 as a correction to the mistakes of concentrating large public housing blocks in poor urban neighborhoods, but more on that later.

Part in parcel with Section 8 is housing built through the LIHTC that generally requires a percentage of units be put aside for residents with those vouchers. As I explained here, LIHTC was part of the landmark 1986 tax reform and created tax incentives for affordable housing construction. The idea was/is to create affordable housing by allowing developers to sell IRS-issued tax credits to private investors for cash towards their projects. A given community gets nice new affordable housing, the investors (usually banks) get a significant tax credit, and the developers make a small profit.

It’s the ultimate public-private partnership and a lot of people across the political spectrum support this premise. LIHTC has built 2.7 million affordable housing units over 30 years and represents 90% of all affordable housing construction in the country.

To recap, the federal government’s answer to the affordable housing crisis is to incentivize the private sector to create affordable housing and to then help subsidize some residents into those units. But as Frontline shows, this premise is deeply flawed at almost every point in this cycle because the federal government is basically absent.

Beyond the fact that so few receive Section 8 vouchers, those that do often face incredible odds against finding a home anyway. Many landlords simply refuse to rent to people with Section 8 vouchers. Few wealthy communities, which are closer to better jobs and schools, offer Section 8 housing at all. And, as witnessed in the doc and elsewhere, those individuals that get a home in those communities often face a disgusting level of communal and institutional discrimination.

Section 8 was not designed with enough understanding or acknowledgement of how race and class define that geography of our nation and how that geography provides opportunity. As a result, the program is incapable of overcoming this aforementioned type of local resistance and discrimination. “Section 8” is often a shorthand for a racial slur in many places and existing residents don’t want them in their communities.

Luckily for those residents, cities and towns have many ways around providing Section 8 housing, whether explicitly through zoning or implicitly through delay tactics, as the doc points out. Even though the Supreme Court has intervened to acknowledge and try to prevent this, decades of institutional discrimination have limited the ability of any current federal programs to overcome local governments. Additionally, the current administration is unlikely to enforce any real changes at the local level.

As for the other end of the cycle, the LIHTC is a deeply flawed policy tool. I have discussed why it only works in relation to other bad tax policy that might not last, why its focus on market principles limits individual developments’ effectiveness in size and location, and why its complexity actually drives up the cost per unit.

However, Frontline focused on two elements that I did not cover: corruption and lack of oversight. Because LIHTC funds are administered by the states and cities have significant local discretion on development, there is a lot of ambiguity to how developers proceed through this regulatory complexity. The result, at least in some cases, has been kickbacks or pay-to-play schemes that have led to several high-profile federal corruption convictions.

Any big dollar programs are going to attract bad actors and I’m not convinced that fraud is a systemic issue with LIHTC, but the point is, we really don’t know. There is basically no federal auditing. Most state housing agencies simply don’t have the resources to audit the program either. In many cases compliance and cost estimates are done pro forma which means, outside of the small sample of investigations, it’s difficult to tell if there is a bigger problem at hand. However, given the widespread corruption in the mortgage industry leading to the crash in 2008, it’s not hard to imagine that a lot of federal tax dollars are getting sucked out of affordable housing.

Section 8 and LIHTC were programs that evolved after the New Deal/Great Society eras of mass public housing development funded by the federal government. The popular consensus is that those years were a failure of public policy. No doubt many Jacobisan neighborhoods were destroyed by Urban Renewal projects and in their wake highways and lifeless towers concentrated poverty around isolated pockets of cities. Public housing became synonymous with crime and anti-social behavior that crippled those communities for decades. There were absolutely many terrible failures with this approach.

But the truth is more complex and more sinister. The failures with the era’s specific approach to public housing undermined the premise of public intervention in housing overall. Public housing was neglected almost as quickly as it was built, while the federal government intervened massively to create suburban America and its twin pillars of car ownership and home ownership. It wasn’t that the premise of public housing failed, it was the commitment to it that failed. Intentionally.

By the 1970s, the idea that the federal government can, let alone should, intervene in the rental housing market died along with the liberal consensus that controlled domestic politics for 40 years. But the problem of providing affordable housing didn’t go away. Section 8 and LIHTC were follow up neoliberal admissions that the affordable housing problem could not be fixed by the market alone.

However, they were built on a flawed premise that failed to acknowledge how much the federal government intervened in homeownership and how much that intervention fell along racial lines. Under that premise, there is no way these programs could possibly tackle the structures that created the affordable housing crisis to begin with.

In fact, they have made the crisis worse by calcifying the national policy conversation on housing. Both parties (for the most part) continue to point to the two programs as evidence that the federal government is doing all that it can — and that it’s working. This is a politically convenient fantasy for both sides.

The death of public housing as national policy after the 1960s proves two related points: first, the federal government can decide how it wants to house Americans and, second, it can make it a reality. The US decided that post-war economic growth would be based on cars and homes and built policies to guarantee that outcome. It worked.

If the federal government (or more accountably, we as Americans) wants to end the affordable housing crisis, we can. It will never end through Section 8 or LIHTC. It will never end by addressing the flaws in those programs raised by the Frontline documentary. It will never end by subsiding homeownership. It will only end if we commit to the simple concept that housing is a right and start re-imaging our country from there.

5 Reasons We Need More Federal Intervention in Housing

The United Cities of America (wired via garrettdashnelson)

The United Cities of America (wired via garrettdashnelson)

This past week, Urban Institute released a report on the dire state of the affordable housing crisis.  Put simply, every county in the country has a significant shortage of affordable rental housing.  Every. Single. County. This report focuses on extremely low-income (ELI) households (which make 30% of average median income) and shows that there are only 21 market-rate units for every 100 ELI renter households. The number climbs to 46 units with federal programs.  On it’s own, this report shows why federal intervention in housing is so important to this population, but taken in a broader context, it shows why we need to re-embrace the type of large-scale federal intervention that we saw from the 1930s-1960s. Here are five reasons.

1. Localism Makes Things Worse

“Localism” is a call for more local autonomy that acknowledges the deep geographical divisions that have paralyzed our federal government. Frenemies Richard Florida and Joel Kotkin have come together to make a compelling argument for why the only way to overcome this is to essentially admit defeat, avoid relying on the federal government, and let local preferences control tax dollars/policy. 

As I explained in last week’s blog, though both scholars, coming from different ideological perspectives, present solid reasons for supporting this idea, there are two practical problems that would potentially make the housing crisis worse.

First, we already have localism and it stinks.  As Matthew Yglesias pointed out recently about Palo Alto, localized planning policy has skewed political outcomes for one constituency – the connected present – at the expense of the non-connected present (and the future). These local groups in these select economic areas are suffocating the entire national economy. Right now.

Second, the history of NYC before the dawn of federal intervention in the 1930s shows that in many cases, even at the local level, the interests of “financial power” and “voting power” rarely align and at best create a corrupt status quo that serves only the leaders of each faction.  We wouldn’t likely see a return to political machines, but can we assume that contemporary “financial power” and “voting power” have similar political goals? Or can they find political strategies that both sides buy into?

Whether its local planning policies that prevent growth or deeply divided local political interests, our current reliance on localism is counterproductive. Removing the small federal power that exists now would only make these issues worse. We need to supersede these local interests as a nation.

2. Regionalism Has Too Many Boundaries

A counter-argument presented to localism is regionalism.  Amy Liu wrote about several areas – Chicago, Denver, and Seattle – where local municipalities are working together, across city-lines, to create equitable development.  Though these examples are encouraging, they show the larger political conundrum of planning this way.

Regions, let alone cities, are not recognized in the Constitution, which poses fundamental challenges to cooperation and coordination at the sub-state level. You only need to look at the dysfunction in North Carolina over Charlotte’s bathroom policy to show that the partisan divisions at the federal level are just as toxic, if not more so, at the state level. Cities and regions are not powerful enough to overcome bad state-level planning.

Even worse, NYC shows the challenge of interstate coordination.  Hundreds of thousands of commuters are stuck in perma-hell over the deteriorating train tunnels under the Hudson River, partly because NY and NJ have bickered about who pays for what. Forget Bridgegate, Governor Chris Christie's legacy will be scandalized for canceling ARC.

State boundaries in many cases do not reflect the larger economic and political cohesion of a commuter-shed and instead have the affect of pitting residents of the same region against each other or putting residents in one state under the whims of politicians in another. The only recognized power to overcome these obstacles – to get cities, states, and regions to work together - is the federal government.

3. There Already is Intervention - Just the Wrong Kind

The US is a majority suburban, majority homeowner society.  Why? Because the government decided that we should be. More specifically, the US federal government decided to promote white homeownership and car ownership as the bedrocks of the post-war American economy by building free highways, underwriting mortgages, and segregating neighborhoods.

There is nothing organic or market-driven about how our communities are organized in America.  These were political choices that tipped the scales decidedly towards certain outcomes that were not pre-destined and were certainly not universally accessible.

Over the last 80 years, the US government has spent trillions of dollars subsidizing the suburban expansion of our country.  Even today, 60% of government spending on housing (over $100b) goes to subsidizing homes for wealthy Americans.  We don’t think of this as a ‘handout’ in the classic sense, but it absolutely is and it has had immeasurable consequences to our society.

If we acknowledge that the federal government has always played a central role in our economy, we can get over the childish ideologies that continue to harm our country.  Instead, we can focus on how we want the government to intervene.

Do we really want to spend billions of dollars subsiding the homes of wealthy Americans when we can spend a fraction of that on providing guaranteed, affordable housing to all vulnerable citizens? This isn’t a crazy, ideological question.  It’s a value judgment first and foremost, but it also makes more economic sense on top of that.

If the economy is moving towards innovative jobs clustered in urban areas, we need to build more housing in those communities to encourage spillover affects for all workers. The federal government has picked housing winners for 80 years - we just need it to pick different ones now.

4. Late Capitalism is Eroding Our Civil Society

Late capitalism is an increasingly mainstream term to describe the inevitability of the economic and political malaise we have been in (depending on how you measure it) for decades.  We are in a sustained period of inequality, inopportunity, and insecurity that shows, demonstrably, that something is deeply wrong with our economy and the politics organizing it. The person who ignores this is a fool and the person who defends it is a villain.

Just as I outlined in the previous section, this is no accident.  The federal government over the last 40 years has tilted the economic playing field towards stateless globalization, corporatist monopoly, and sanctioned corruption. The logical conclusion of this unabated trend is social collapse. Maybe that sounds hyperbolic, but the populism seen on both ends of the political spectrum in the US and across much of the western world is a direct response to late capitalism and another step towards this frightening possibility. How (and if) this anger can be channeled constructively is the great political question of our time.

However, as we’ve seen during other eras of extreme political and financial inequality, that anger can be channeled positively at the federal level.  The legislation passed during the Progressive Era, the New Deal, and the Great Society were all far-reaching attempts to address massive, system-level problems (obviously with uneven results.)  Just as federal policies are the cause of many of these current problems, they can and must be the solution too.

5. It’s the Environment, Stupid

All of this comes back to the ghost at the feast: climate change.  Sorry Bret Stephens, but there is no debate about the danger this poses to our society.  Sure, scientists don’t know exactly how, where, or when these changes will manifest as an existential threat, but it’s not an academic question.  We are experiencing this all over the world right now.

The simple, unsexy truth is that our development history – sprawl – has been terrible for the environment overall and terrible for the health of many people specifically.  (One area where HUD Secretary Ben Carson has shown some potential is this connection between housing and health.)

Creating denser communities where housing and jobs are walkable and connected to public transit isn’t some liberal fantasy for its own sake.  It’s a proven form of addressing inequalities and inefficiencies harming our environment and our collective health. 

Localism and regionalism can’t address the dangers of climate change if some localities “want” to maintain sprawl.  Decades of federal intervention in homeownership and car ownership that cause climate change can’t naturally be reversed. The ills of late capitalism that have damaged the physical and political health of our society won’t fix themselves.

The federal government is the only entity strong enough and ultimately legitimate enough to adequately address all of these problems.  Giving up on this idea, as academics or advocates, is giving up on the American experiment itself.

Rather than abandon the idea that the federal government can help, we must commit ourselves to a national “reboot” of political, economic, and social priorities.

Starting with housing seems like the logical place to begin this process.  The moral urgency of the housing crisis calls for big, bold national ideas.  The economic and social benefits of committing the nation to housing-as-a-right are self-evident.  Where and how we build that housing may just be the difference between a sustainable future or something far darker.

Localism Is OK If It Means Less "democracy"

Make NYC Boss Again? (niemanrports/thomasnast)

Make NYC Boss Again? (niemanrports/thomasnast)

This week, President Trump has been busy trying to amass some “wins” for his 100-day mark (which, sure, is arbitrary, but sort of isn’t) and has taken two shots at cities to do so. The first is his (so far) failed attempt at “punishing” Sanctuary Cities and the second is his “skinny” tax cut plan which would presumably make good on proposed significant cuts to HUD.  Both cases highlight the specter of Federal cuts hanging over struggling cities in the Trump era, which has heightened the call for greater local control.  There are some sound arguments for ‘localism’ but they must include less democracy to make sense.

Before I get attacked for being a fascist or (even worse) a technocratic neo-liberal, let me explain what I mean by less democracy.  There are two naturally existing powers that make our quirky form of urban democracy uniquely dysfunctional.  These powers are currently harming our cities, each in their own way, and they would only get worse if cities were able to control themselves without federal intervention or oversight.  Both of these powers would have to be weakened significantly to make the types of changes our cities need. It’s unclear to me how exactly localism would do that.

The first power in urban politics is financial power.  As progressive and liberal as big coastal cities like NYC are in many ways, rich people that live in them still donate to and vote for rich people policies.  This means lower taxes, less regulation, and more privatization. These policies generally don’t help a lot of not-rich people, but get a lot of attention and support from elected leaders who need rich people’s money and support.

The idea that these folks would embrace (or, more cynically, allow) truly progressive politics to capture and distribute their mega wealth or undermine their political or social power to shape policy is…optimistic.  It’s much more likely that they would continue to find, support, and get elected Cory Booker-types to appeal to the left while diligently normalizing rightward policies that potentially undermine the civic health of the city in the long run.

The second power in urban politics is voting power.   As progressive and liberal as big coastal cities like NYC are in many ways, most people that live in them still vote against policies that change (or perceive to change) their neighborhoods too much. NIMBYISM is a unifying feature across all income-levels. A lot of people just don’t want taller buildings, greater density, or more homeless shelters in their neighborhoods. They don’t think that the short-term disruption they would endure would benefit them in the long run (which is true in many cases) and generally resist top-down or outside-in policy prescriptions.  

After the horrors of Urban Renewal (though federally funded, its programs were controlled at city and state level, infamously by Robert Moses in bulk) this reaction was understandable and necessary.  Community Boards, ULURP, historical preservation, and other policy tools were all successful attempts to localize power at the neighborhood level.

However, decades later, many of these same tools have devolved into reactionary platforms that can easily be gamed by incumbent interests at the expense of other constituencies in the present, who don’t know the ropes, or future residents who can’t be at CB meetings and the like. This doesn’t serve the city's civic interests either.

So the inherent problem with localism is thinking that even in liberal, progressive NYC, we all want the same thing.  If only we could stop sending so much of our money to DC, we’d get the political out comes we all want spending it locally. It’s obviously not that simple.

Financial power and voting power sometimes align in NYC, but for the most part have few shared political goals.  And even if they have shared goals, they don’t have shared strategies.  For example, would most voters want charter schools to replace public schools? Would most wealthy residents (or corporations) stay if their taxes went up significantly? What would the political environment look like if these two groups clashed endlessly for power? Would it actually produce better results for NYC?

We don’t have to speculate much on this scenario, because its how politics worked in NYC for generations before there was any federal intervention. The city’s long and colorful political history is dominated by the struggle between financial power and voting power, which constituted “democracy” at the time. 

Tammany Hall is perhaps the most infamous political machine in American history and dominated the voting power in NYC (mostly by corralling the immigrant working class) from the late 18th century well into the 1940s, occasionally losing power at the city or state level to various temporary reform coalitions backed by wealthy interests.

The consistent result of this political dynamic was a deeply, shockingly divided city.  For most of the 19th century and early 20th century, New York was the epicenter of modern capitalism’s contradictions: The highest levels of progress and culture and the lowest levels of squalor and brutality.  No level of municipal government, political machine, or private philanthropy could fix this generational poverty and inequality.  These institutions had no interest in challenging the status quo because, in many cases, they benefited from it. 

By the way, if you haven’t heard of Henry George, this is a good opportunity to check him out.  This type of normalized corruption is what prompted Mr. George to study contemporary urban capitalism and democracy.  His seminal work on the topic, Progress and Poverty (1879) is why he is considered the father of progressivism. He even tried (and failed) to run for Mayor in NYC against Tammany Hall.

I’m not suggesting that NYC would return to 19th century machine-style politics in a new form of localism, but this history shows how truly “local” politics tend to create extremely disconnected factions.  Corruption and demagoguery thrive in this environment. Even worse, these factions tend to stabilize around a mutually beneficial status quo that rarely serve the interests of the larger political body (in the present or future). It also shows how exceedingly difficult it is for new politics to enter this status quo once its established.

This to me is the great contradiction of promoting localism.  How can localism create the type of political room to change our current status quo? Would it simply mean greater power in the hands of a small elite? Would it also mean greater power in the hands of NIMBYists? These problems already exist with the current levels of federal involvement, how would removing that involvement fix them?

Returning to Henry George for a moment, he (like me if you can believe it) was an optimist and believed firmly in people.  Democracy to him was not a collection of token attributes achieved simply by voting.  It was an ever-changing intellectual and emotional forum for all people to challenge the purpose of our economic and political organization.  He saw the small-d ‘democracy’ of the Gilded Age as an affront to this ideal and as a threat to our republican form of government.  No doubt he would see today’s small-d “democracy” in a similar vein. 

I see the appeal of ‘localism’ in its basic sense.  Next week I’ll talk about some of the larger dangers that I think it could present, but there is nothing wrong with wanting more local control.  Who would actually wield that control and to what end is the great unknown. 

3 Reasons Why Affordable Housing Isn't Affordable

Via Verde (2012) in South Bronx is beautiful, but 800 families wanted spots for just 151 rental units. Is this a successful model? (inhabitatnyc)

Via Verde (2012) in South Bronx is beautiful, but 800 families wanted spots for just 151 rental units. Is this a successful model? (inhabitatnyc)

There is a crippling lack of affordable housing in the US. That statement is no surprise for anyone who follows this issue (or reads this blog.) Trying to figure out why and how to fix this problem is incredibly complicated, which is also no surprise. This week Joe Cortright had a good article on why affordable housing isn’t that affordable, focusing on the flawed micro-level issues of subsidizing market-rate housing construction.

Though this is fair criticism, I think it fails to address the larger structural flaws of the democratic capitalist model that we’ve relied on for so long. Challenging at least some aspects of this model remains outside of mainstream housing policy discussions, so I’ll focus on three today (though there are absolutely more that can/should be considered). Until we can reframe the debate around these larger philosophical questions, we are simply not going to solve the crisis.

1. Relying on the Private Market is Bonkers

Matthew Desmond just won the Pulitzer Prize for his sensational book, Evicted, which follows the heartbreaking story of scores of residents struggling to get by in Milwaukee. And it is heartbreaking. But Mr. Desmond’s book most importantly calls into question two deeply flawed pillars of our national housing policy (which altogether lacks a focus on renting): 1. We do not consider housing a basic right 2. We rely on the private rental market to house poor Americans.

We have collectively deemed certain government services worthy of being guaranteed to all citizens or as need-based. But, as opposed to social security or food stamps (or even slightly more abstract “default entitlements” like the mortgage interest deduction), housing is not a guaranteed or need-based government service at any level. This means that only 1 out of 4 Americans that need housing assistance receive any. That’s crazy.

Instead, we have collectively placed the small landlord on the frontline of housing the poor. As Mr. Desmond points out, we can’t reasonably rely on these individuals to handle such an overwhelming burden. Yes, there are some villainous landlords, but many more, as demonstrated in Evicted, are trying to do the right thing by tenants, trying to be fair, and trying to survive themselves.

They stand-in as convenient sin-eaters for the rest of us — politicians, advocates, activists — while the reliance on the private market goes unchallenged at the state or federal level. We can’t honestly address the affordability crisis without challenging this basic assumption. This should be easy since it is clearly failing on such a large scale.

The answer is a concentrated public effort to house the poor. I’ve been a big defender of public housing in this blog and it still shocks me how little traction the idea of returning to large public intervention gets, even from housing advocates.

Yes, there were ample flaws in the New Deal and Great Society approaches to public housing. But we can have the same scale of political and social commitment of those past interventions without the same physical and cultural destruction.

Building on examples like the New York City Housing Authority (NYCHA), where nearly 600,000 (1 in 8 New Yorkers) live in public housing of some kind, we can easily show that the model has quietly been working for 80 years despite systemic neglect and stigmatism. We should be championing NYCHA because it is and always has been a major success.

We have models to work with, we have local stakeholders to lead with — we just need the will to act. There is clearly a groundswell for this type of political realignment. If we finally recognize how much private market fetishization has failed, we can strike a better public-private balance that can affirm the public commitment to housing as a right.

2. Housing is Too Much About Land

Relying on the market also means purchasing land at market rates. Given the fact that most affordable housing is targeted in dense urban centers where land costs are prohibitive, this means that the cost per unit before construction is already an albatross for many developers.

Building farther out from city centers has long been the tried/true answer for affordable housing, and certainly lowers the land cost, but it puts those residents at a severe disadvantage geographically. This system simply can’t work alone.

There are models, like community land trusts, that remove this obstacle. After an initial subsidy to purchase land, it enters a trust that removes it from the market — and from the speculation that can raise its value regardless of the structure on it. The result is permanently affordable housing that doesn’t eat up additional tax dollars annually. This has worked in many areas, even NYC, for decades.

NYC is (sort of) examining the CLT model but has it backwards. NYC Housing Preservation and Development (HPD) is looking for proposals from non-profits that are interested in forming a CLT, but most of these groups can’t realistically afford the land cost and most are on scattered-sites that make them hard to rationalize as a cohesive entity. The city also doesn’t have the funding to help with land acquisition for these groups even if they get that far.

However, NYC does own hundreds of vacant lots that it could easily convert to a city-owned CLT. Mayor de Blasio has recently championed cleaning up the 500th vacant lot as part of OneNYC — but then turns them over to private or non-profit developers (though many of these projects are positive developments). Combining city-owned land — small, scattered sites mostly — into a single CLT would be transformative policy shift with far-reaching implications for other cities.

Every city has similar vacant assets already on the books and, even a decade after the Great Recession (caused in part by real estate speculation), many have foreclosed properties that they are still trying to unload. Stop it! Keep those properties out of the market and create cheap, sustainable housing with them. The net benefit of increased affordable housing supply will offset any property tax losses.

3. We Got Rid of Great Affordable Housing Options

I have a lot to say about the flawed regulatory jumble that has created our failing housing status quo, and, unfortunately, there is a lot of blame to go around by a lot of mostly well-meaning folks. Richard Florida has dubbed some of these actors as the “New Urban Luddites.” But the regulations that have raised the cost of housing the most for certain renters are also the quickest and cheapest to change. They are perhaps the least appreciated — occupancy laws.

NYC, under pressure from neighborhood groups and homeowners, has regulated away thousands of affordable housing units over decades by outlawing single room occupancy, outlawing basement/garage apartments, and over-regulating occupancy laws (like square footage and types of amenities) within apartments.

Most of these regulations were done in the name of public health, but many had more nefarious, even racial motivations. The result is not just a loss of hundreds of thousands of affordable rental units but also the total disappearance of an entire flexible, affordable style of living.

These types of units used to house young singles, seasonal laborers, older family members, and extended family that were willing to sacrifice certain amenities for cheaper lodging. Most of the time these were short-term arrangements as these individuals saved money for more permanent housing.

Particularly in NYC, where many single working people live alone or with roommates, and the overall population is aging, reintroducing this type of housing flexibility would quickly address a lot of housing needs without a huge effort, or a large financial commitment, from the city.

By easing the pressure on the housing market for these types of renters, this could free up units for middle-class or working-class families with children — a portion of the population that the private market (or, frankly, a lot of affordable housing development) is simply ignoring with new construction.

There are many other reasons why affordable housing isn’t affordable, but I chose these three examples to show why it is so important for us to challenge the philosophical and cultural assumptions baked into our market + localized approach to housing policy. Of course the biggest assumption that needs to be challenged is the idea that homeownership should be our national housing policy. We can’t realistically address these other issues without first reviewing the costs and benefits to our society of thinking this way. But even if we determine this is still the best course of action, figuring out how to help people towards that goal will require addressing the affordable housing crisis for renters first.

The Urban Crisis in Late Capitalism

We can crop him out before posting, right? (elianlindt)

We can crop him out before posting, right? (elianlindt)

It’s purely a coincidence that the startling footage of a paying customer being dragged off of a United Flight by airport police went viral the same week that Richard Florida’s latest bookThe New Urban Crisis” came out, but I think the two events demonstrate the same problem.  As individual consumers, as cities, or as entire regions, we are experiencing the long building, negative consequences of “late capitalism.”  It is a force that has not only dehumanized many aspects of our society, but it has also failed to deliver its promised shared prosperity.  How we address this problem, or if we are even able to, will take more than zoning reform or affordable housing funding.

Late capitalism as a term has its origins in Marxist critiques of capitalism from 100 years ago, but has generally been applied to capitalism post-1945.  As I’ll explain, I think the term works better when focusing on the post-Cold War period.  In any case, it is meant to describe our current period of development as a limited stage of evolution as opposed to a permanent state. Eventually, as the theory generally goes, the extreme concentration of economic and political power will undermine and potentially destroy the stability of the larger society.

This is certainly a provocative way to understand what has been almost a century of relative global economic growth and stability.  No generation is fully aware of its place in broader historical cycles, but particularly after WWII, our period sure feels unique.  Famously, Francis Fukuyama published an essay, then book, called “The End of History and the Last Man” in 1992 about how liberal democracy (which is how I’ll describe our model for this blog) might represent the endpoint of human social and economic evolution.  How could such triumph be described as “late” to imply that it won’t last?

Fukuyama has at times been misunderstood (he didn’t think liberal democracy would go unchallenged or wouldn’t experience set-backs) but his belief that the economic and social model of western democracy would be the default setting for human evolution has been criticized by some as historically naïve or culturally biased.  History doesn’t “end” obviously and many systems have looked stable and enduring until they aren’t.

Fukuyama also assumed that the liberal democratic model “worked,” inherently. There are lots of metrics to point to about how much peace-and-prosperity the world has enjoyed post-1945. Of course there are also many metrics that point to this peace-and-prosperity being a zero-sum game that relied on denying peace-and-prosperity to a considerable amount of the global (and domestic) population. 

More importantly to this idea, though, is that liberal democracy produced the most peace-and-prosperity at least compared to communism. That’s the big catch to all of this.  As Churchill famously stated (or restated) about democracy, it is the worst system of government except when compared to every other form of government.  For most of the post-1945 world order, we had the Soviet Union as a competing model to compare to.  And it’s pretty easy to see which system was ‘better’ relative to the other.

However, over the 25 years since the fall of the Soviet Union and the end of the Cold War, it’s harder for us to remember just how much of our foreign and domestic policy was based on competing with communism. The US Government wanted and needed to show the world, let alone its own citizens, that liberal democracy created a better life than communism.

The New Deal coalition that emerged from the Depression to dominate domestic politics for most of the post-1945 period was based partly on the existential fear that Americans might want an alternative system if there was one to compare with. If capitalism were more brutal than communism, as it certainly appeared to be during the Great Depression, maybe the American model would fall.

This real tension served as a check against unfettered capitalism and produced public and private institutions that ensured prosperity – and power - would be shared on a large scale. This check is what allowed the greatest wealth creation in the history of the world to expand in America.

That check is gone.  (It started to breakdown before the end of the Cold War certainly.) Our politics have enshrined the supremacy of the market and our culture has so sufficiently demonized “government intervention” as ‘socialism’ that we have allowed many of those public and private institutions to be gutted or removed entirely.

Whether it’s the loss of unions or anti-monopoly agencies, the march of stateless, shareholder corporatism has continued unabated for decades.  It is no wild-eyed conspiracy to say that big, global corporations are the dominant actors in our society.  It seems like a quaint formality that it was even necessary to give them the same constitutional rights as citizens (without many of the same responsibilities.)

Many people will point to the wealth creation and job creation of these corporations (along with the cheap goods and services they create) as a clear public good.  No doubt there is some public good there.  But the cost of this concentration of power at the same time as it recuses responsibility has a clear public cost.  Wages have stagnated, health outcomes have declined, economic mobility has flatlined, and our environment continues to deteriorate at a frightening pace.  We have no mechanism politically to make those corporations pay these costs.  The public – present and future - does instead.

And, after the Cold War, there is no external pressure on our system to keep corporations and the capital behind them accountable. The idea that our system has to ‘compete’ with another system to maintain its legitimacy is laughable now.  Capitalism won. 

It shouldn’t be laughable.  Long before the 2016 primaries and election, it has been clear that many Americans across all political spectrums simply don’t believe in the legitimacy of our model.  This anger has, regrettably, manifested in different forms with different villains depending on the constituency you’re looking at, but the message is clear and universal.  Our form of liberal democracy isn’t producing the type of economic prosperity or social progress that we’ve been trained to expect as Americans. 

The social contract has broken down and been replaced by one-sided terms and conditions.  The joke is now on us, whether we fly Untied or not. That is late capitalism.

This is where the "new urban crisis" and Richard Florida’s book comes in.  Mr. Florida famously coined the term “creative classes” in his first book 15 years ago that showed how the concentration of knowledge economy jobs in cities was driving the urban revival that was destined to benefit all of humanity.  That optimism might sound hyperbolic but Mr. Florida and many urban boosters championed this in earnest and for sincere reasons. (I also believe urbanism is a better way of organizing society.)

However, late capitalism was always going to create a winner-take-all urbanism. Smaller (mostly non-coastal) cities have been gutted while larger (mostly-coastal) cities have been gilded.  The poor and working class suffer in both scenarios, but the very wealthy are the only ones benefiting from this urban revival. 

Mr. Florida has undergone a commendable self-correction. He acknowledges that the great urban revival hasn’t happened.  Outside of a few ‘superstar cities,’ too many places in America haven’t benefited from the ‘creative class.’ Even the gains made in those cities haven’t been shared and haven’t led to an expansion of opportunity for others. As a result, Most Americans still live in the suburbs or want to move there eventually. Poverty in the suburbs is in fact exploding as a result of some of these trends in cities. Cities aren’t part of the solution. If anything, they are exacerbating the problem.

Mr. Florida has also come to recognize the larger structural issues facing cities around class and race that were neglected in his original work.  Building tech and young-friendly neighborhoods with great amenities and transportation networks doesn’t help existing working-class or poor residents and makes it too expensive to attract new ones.  Too many of the benefits are going to a small pool of affluent, educated residents that are mostly white.

Mr. Florida outlines several city-level and state-level policy suggestions about how to mitigate some of these stratifying elements.  Some are worthy of support, others are not as comprehensive.

But more importantly, he acknowledges that these are larger questions that we must address as a society.  He hedges on criticizing capitalism overtly (and as far as I know has never commented on late capitalism) but it is refreshing for someone with such passion for cities and experience studying urbanism to challenge our assumptions about our liberal democratic model. More of this is needed.

The urban crisis is not a problem for technocrats.  This isn’t the fault of urban planning.  It’s the inevitable consequence of economic nihilism.  It is a political problem and a values problem.  These require value-based solutions (as opposed to ideologically-based ones) and political changes that our current model refuses to entertain or acknowledge.

As it stands now, it is likely that the unfortunate United passenger is going to get millions of dollars in a settlement.  Maybe the airlines relax some of their overbooking policies.  But the structure of the airline industry – the oligopoly – is enshrined in our laws and culture, which won’t change anytime soon.  Most passengers won’t have the option to refuse to fly United.  As consumers, we have lost the fight in late capitalism.

The urban crisis is more complicated (indeed, crisis isn't really the right word), spanning many industries, many political interests, and many stakeholders.  There is no single incident to go viral (or maybe there are too many) to galvanize the nation and there are no simple, populist solutions that can quickly satisfy it.  But there can be change. Frankly, there must be change. As citizens, the fight against late capitalism must begin. It is our only way to define what comes next.

Yes, Save LIHTC, But It's Not That Great

Not much in common (newsmax)

Not much in common (newsmax)

The big news this week is obviously centered on the American Health Care Act, but whether it passes or fails in the House, it has massive implications for affordable housing.  That’s because, as President Trump has made clear recently, the real focus of this administration is tax cuts, which will be on the agenda one-way or the other. As it stands, the proposed level of tax cuts would likely kill the Low-Income Housing Tax Credit (LIHTC) program, which has been the most successful vehicle for construction of affordable housing since it passed in 1986 by President Reagan.  That’s a bigger problem and these potential cuts prove why.

The LIHTC was a bi-partisan amendment, basically an afterthought, added to the overall Tax Reform Act of 1986 and was intended to create incentives for building multi-family rental housing.  The original tax reform kept with the long-standing bi-partisan support for homeownership that has wasted billions of taxpayer dollars on subsidizing middle-class and wealthy homeowners.  Rather than tackle this larger problem, LIHTC was designed to share some of the wealth with low-income Americans who were (and are) more likely to live in rental housing.

So perhaps it wasn’t the product of the most rational political landscape, but it has undoubtedly worked at building affordable housing.  A report last year for the 30th anniversary stated that over 2.7 million homes have been built (including over 100,000 units in New York over the last 10 years) which is an average of 90,000-95,000 units a year.  $100 billion of private capital has been allocated through the tax credit.  90% of federally identified “affordable housing” has been created by it over the last 30 years.

The LIHTC program works by pairing investors with affordable housing developers to offset some of the cost of new construction or rehabilitation. An affordable housing developer can find investors directly or, more commonly, through a broker that syndicates different projects into a single equity fund to spread the risk of individual projects.  This funding is usually a precursor to the developer securing traditional loans in the private market.

Tax credits are a pretty sweet deal for participants because, as opposed to a tax deduction, the credit is a dollar-for-dollar trade. This makes them really attractive, particularly to institutional investors.  Of that $100 billion invested, less than 10% came from individual investors.

Now you can see where a drastic reduction in corporate tax rates could kill this vehicle for affordable housing.  If the rates drop from 35% to 15% as the president has proposed, there will be a lot less incentive to park money in affordable housing construction.  There is already a notable decline in projects as firms wait to see what happens on the hill.  There is considerable doubt that the equity value of LIHTC will be worth it after these cuts.

This is, of course, assuming that the LIHTC survives to begin with – something that no one can really say.   Aside from the President’s proposed cuts to HUD in his “skinny budget,” the administration hasn’t been on record with any policy view towards LIHTC.  

It’s quite possible that the Trump Administration supports the idea of LIHTC, it is after all an immensely popular bi-partisan program, but could still manage to undermine it without making necessary improvements to maintain its investment incentive. There is already a bi-partisan plan floating around in Congress to strengthen the LIHTC, but it can’t account for the larger tax reform agenda and won’t move until that agenda takes shape.

Hanging in the balance is the $10 billion ‘affordable housing industry’ and millions of low-income Americans struggling to find or keep their homes.  We simply have no alternative policy tools at scale to impact affordable housing construction anywhere in the country.  Without more clarity on LIHTC, there is no national affordable housing policy.

The fact that we are currently in a crippling affordable housing crisis makes this lack of policy clarity nearly a criminal act.  Rents as a percentage of household income are at their highest levels since the 1960s.  Nearly 50% of Americans who rent are rent burdened – which means spending more than 30% of monthly income on housing.  Housing costs in our most productive urban centers are skyrocketing which is killing economic growth and mobility.  It’s estimated that the lack of affordable housing costs the American economy $1.6 trillion a year.

This shows that relying exclusively on the LIHTC to drive affordable housing policy is a catastrophic mistake for us as a society.  As successful as it has been in many regards, it has also failed in many more.

First, relying on tax policy to drive development policy is inherently unstable, as we’re currently seeing.  Too many variables can impact the relative value of a LIHTC fund to make this a long-term strategy in today’s political climate.  It only works as a policy in relation to other bad tax policy.

Second, relying on private market principles means developments are typically located where land is cheaper, which is rarely where affordable housing is most needed – whether in the local or regional sense.  It also relies on complicated AMI (average medium income) metrics that rarely create enough affordable housing for extremely low-income households.  Though the program’s output is impressive on first glance, these numbers have only made a small dent in the larger crisis as a result.

Third, the complexity of the LIHTC itself, coupled with other state-level requirements, drives up the overall cost of affordable housing relative to private development.  Some estimates suggest that it adds an additional 13% per unit on some projects.  This system counter-intuitively makes itself more expensive.

Many of these issues are by-products of other flawed policies or even good policies working against each other.  They are also the product of a flawed understanding of housing policy in general and what affordable housing is specifically.

Thoughtful people can disagree on how much the federal government should intervene in the housing market, and the LIHTC has in many ways been a rare success in bi-partisan policy making.  But the federal government already has a massive role in housing in the form of subsidizing homeownership to the tune of $135 billion a year.  We don’t really call it “intervention” or “subsidy” but that’s what our current policies do on a massive scale.  It’s so big we don’t notice it.

If we’re honest about how much we already subsidize homeownership as taxpayers, we can start to be more open to direct involvement in affordable rental housing.  Rather than asking the private market to jump through so many hoops, just to produce middling results, we should consider creating a direct federal program to construct affordable housing on the scale that we used to see during the Great Depression. 

That period saw direct investments in public housing with private sector help, which succeeded in building millions of units of housing in major urban areas. I’m not suggesting we repeat the mistakes of that period, but the commitment to building affordable public housing worked in doing so. As much as NYCHA, by far the largest public housing agency in the country, gets a bad rap, much of their portfolio exists as a result of these programs from 70 years ago. That’s a remarkable achievement.

It might seem radical to suggest creating a vast public market for affordable housing in today’s age, but it shouldn’t be.  It makes a lot more sense than quietly subsidizing millions of homeowners while driving up the cost of a flawed affordable housing strategy all in the midst of an unprecedented crisis. The status quo is obviously not working.  We need to think big again in this country.

30 years of some success through the LIHTC program hasn’t adequately addressed the affordable housing crisis philosophically or practically.  Maybe it’s time to dust off policies and thinking that has quietly been working for more than 70 years.

NYCHA, Don't Sell Out - Hold Out!

Jacob Riis Houses, a pillar of public housing success (homebodynetwork)

Jacob Riis Houses, a pillar of public housing success (homebodynetwork)

It’s budget season and President Trump’s first proposal to Congress has sent shockwaves through all levels of government for the audacity of its cuts.  Nowhere is that clearer than at HUD, where he is proposing $6b in cuts.  NYCHA, which gets two-thirds of its $3.2b operating budget from HUD, could be devastated.  However, recent plans to inject private capital into NYCHA (to offset some of its $17b in outstanding capital needs) show how much is at risk to the long-term mission of providing public housing by grasping for private sector funds under these circumstances.

The Trump Administration has always been clear about gutting HUD and why – because it helps the wrong people.  Much of the President’s “skinny budget” is merely symbolic posturing, with little chance of passing through Congress, but I would bet a lot of these HUD proposals would find sympathy from conservative Republicans.

NYCHA is a telling example.  By far the largest public housing agency in the country, it provides homes for over 400,000 poor and low-income residents across 2,500 buildings and 176,000 units. In addition, it also provides housing assistance through Section 8 vouchers for another 200,000 residents.  If it were its own city, it would be the 30th biggest city in the country.

However, it’s made up of poor and low-income residents, many of them very old or very young, with the majority of them representing minority communities.  When President Trump speaks of“making America great again” and “America first” he is simply not speaking to or for this population.  The Republican Party, and frankly some parts of the Democratic Party, has little interest in helping residents of New York City in general, and poor, minority residents specifically.

That’s why NYCHA has already received word to expect $35 million in cuts for the rest of 2017.  This would dramatically reduce the agencies ability to fund its operations and Section 8 programs – even before the more dramatic cuts to HUD in the president’s budget proposal. It has been called “devastating” by Shola Olatoye, the chair of NYCHA.

Public housing still gets a bad rap in the broader public image, but the truth is far more inspiring, which makes these cuts all the more depressing.  Despite years of poor management in the past, in 2016 the agency actually saw a surplus of $21m - which is now entirely wiped out. And despite some major issues, to be expected across such a large footprint, the vast majority of residents have a positive view of their homes.  There is a waiting list with nearly 260,000 families who want to move in.  This isn’t a failed government program, it’s a shining example of a living, thriving public commitment to housing.

The main problem facing NYCHA is the $17b in outstanding capital needs that remain unfunded (compounded by the missing $3b promised by FEMA for Sandy recovery.)  Many of the complexes were built at the height of the New Deal and are over 70 years old.  These buildings need new roofs and plumbing, remodeled fixtures and appliances, lead paint removal, new electricity and energy investments - just to name a few of the daunting list of projects.  This was true even before the Trump budget proposal and only becomes more of a threat to NYCHA’s long term viability if its operating budget keeps getting hacked apart (it was already potentially facing a deficit of $200m by 2020).

Starting during the Bloomberg Administration, NYCHA has increasingly turned to the private sector for ideas to make up for its funding gap.   One part of Mayor de Blasio’s 2015 plan, NextGeneration NYCHA, has called for selling underutilized NYCHA-owned land to developers in exchange for committing 50% of new units to affordable housing. It hopes to net 10,000 additional affordable units on NYCHA land, with about 7,000 market-rate units.

This part of the plan has been extremely controversial with residents and housing advocates. Though there are reasonable arguments to be made around selling certain pieces of land on individual developments, ‘underutilized land’ in many cases seems to mean a parking lot or a playground. Many residents would question how underutilized this land actually is (and some feel under-represented in these conversations).  

NYCHA has also partnered with private developers to upgrade some of its existing housing stock in exchange for equity stakes in those developments, which some advocates worry is the beginning of a slow creep towards privatization of public housing.

In the Far Rockaways, NYCHA has placed over 1,400 units in HUD’s Rental Assistance Demonstration Plan (RAD) that removes them from public housing and instead enrolls them in a Section 8 program. This allows the agency to partner with private lenders to qualify for mortgage-backed tax breaks netting significant revenue while removing fixed costs.

The program began under President Obama and has many supporters in the housing world, however, despite its outlined tenant protections, there is a distinct risk that these units will eventually lose the federal funding that protects them (more likely now, surly) forcing them to convert to market rates eventually.

In the East Village, NYCHA has sold 50% of its stake in several developments, notably Campos Plaza on Ave C to L+M and PDP Triborough in exchange for $350 million over the next 15 years.  Campos I has already seen parts of the $100m investment from developers in the form of remodeled units, a remodeled façade, and a new park.  However, a portion of those units can now be rented at market rate, with the private developers capturing the difference between market rates and the 30% income cap NYCHA can charge residents. 

In both cases, NYCHA has contractual protections in place to dismiss their private partners if they are unhappy with their services; and they have right of first refusal if they wish to sell their stakes.  That sounds good, but in reality NYCHA has gone down a road where they can’t risk scaring off potential private developers by dismissing them and they can’t anticipate being more financially solvent in 15 or 20 years based on current federal and state support. 

Private developers, even the most progressive, know this.  Maybe things work out well under this model, but these developers have more protections than NYCHA if it doesn’t. The risk is real that these units will leave public housing. It’s also opened the door to rationalize more private intervention in the future, perhaps across entire developments.

It’s difficult for me to criticize the Mayor or NYCHA employees for pursuing every option to fund its operating costs, especially given the federal hostility to its mission even before President Trump’s arrival.  The majority of the initiatives outlined in NextGen deserve our support, including investments in infrastructure,  more effort on efficiency gains in management and energy, tenant-centric empowerment and reach out, and new interior/exterior design guidelines, and a non-profit fundraising org. If you accept the reality that we live in, this is probably the best you can get.

However, this already frustrating reality is going to get a lot worse very quickly because so much of NYCHA’s plans rely on current HUD funding commitments.  Those are going to decrease, even when the President’s budget gets chopped down through Congress. How much can this plan work without the predicted fed funding? Mayor de Blasio has come out forcefully against the proposal but, cautioned that it's just the beginning of the process.  That reeks of hoping for the best and reeks of not working out.

But I also think this reality is unacceptable, cuts or not.  NextGen talks about the origins of NYCHA during the heights of FDR’s New Deal through LBJ’s Great Society.  There were 30 years of successful federal and state commitment to public investment in housing, along side a viable, competitive private sector. That's the reality we should live in again - with public housing on the offensive, not the defensive.

But don’t conflate the two.  Public housing should remain committed to being public.  Selling off to the private sector slowly over another 30 years will betray the values at the heart of the program.  As a republic, we should commit ourselves to offering affordable housing to all citizens. We already have a model that shows it can work if we remain committed to it. Even for all its leaky roofs, NYCHA still serves almost half a million New Yorkers, which shows that public housing is a strong investment the city and the country. 

Instead, for the last 30 years, too many housing advocates and government employees have been apologizing for the decline in funding, largely amongst themselves, rather than making the easy case for more funding to the broader public. They have accepted that the private sector is the only answer even though it hasn’t been in previous housing crisis.   They have accepted a reality that will only lead to public housing’s demise. All Americans would suffer in its absence.

We should, once and for all, reject the outdated narrative of public housing’s failure and reclaim the real one – that public housing works. Public housing is a commitment to and an investment by Americans for Americans.  It has worked in the past and continues to work today. 

We should be parading NYCHA around the country as a sign that supporting public housing is not just a great social program, but also a phenomenal economic development program. We should be organizing NYCHA residents together with NYCHA employees to promote its virtues to other Americans, rural or urban, who would benefit from more federal intervention in housing. We need to be a loud, passionate group that shifts the conversation politically.  A Tea Party for government investment.

NYCHA is fighting for its life, but if it recognizes and embraces that its fight is a bigger one for the right to affordable housing for all Americans, for a return of federal commitment and investment in public life, I believe it will find allies across all parts of the country.  Rather than being a symbol of past ‘failed government overreach’ it should be a symbol of hopeful, smart government investment.  The cause has the security of being true and the obligation of being right. 

The answer is clear – NYCHA must endure without conceding to the private sector.  It must endure without conceding to cynical dismissals of its purpose or possibilities.  It must endure in the Trump Age, because the ebb and flow of history will inevitably bring in another age, one committed again to the power of government and the power of public housing. NYCHA, its residents, and supporters should focus on bringing on that age sooner than later.

But Look at What Secretary Carson Didn't Say Once: Housing. Urban. Development.

We all need a bit more help than that (newyorker)

We all need a bit more help than that (newyorker)

Newly appointed HUD Secretary Dr. Ben Carson made headlines this week for his first remarks to HUD employees.  Towards the end of his speech he referred to slaves as ‘immigrants’ and caused a predictable upheaval in the media.  However, we should be more concerned about what he didn’t mention. In 30 minutes, not once did he mention “housing,” “urban,”or “development.” Not alone, not together. Only once vaguely did he even reference HUD’s mission. Given the massive cuts already announced by HUD, Secretary Carson showed again why his appointment is an insult to every American and a cynical misdirection from the Trump Administration.

Secretary Carson’s slavery comment was perhaps lazy and insensitive (although it's debatable), but we shouldn’t make that much of it.  Dr. Carson has many more regrettable views on the historical and current relationship between state power and personal agency.

The only thing that I took from that comment is how clearly, almost comically, it illustrates the difference between his usual motivational speech audiences and his new audience. Those conservative, older and whiter audiences buying his books don’t have a lot of overlap with the core constituency of HUD - be it its employees or those receiving its investments.  As humorous and uplifting as his other well-paced anecdotes were, what the hell do they have to do with housing? Secretary Carson has a lot to learn about messaging to this audience. Book tour is over.

It’s perfectly fine to introduce your new employees to your personal background and how it shaped your worldview, and Dr. Carson certainly has an admirable story to tell. But that introduction needs to transition to include some discussion about your commitment to the mission of your agency and your vision of the policies that your employees are working on. Or at least acknowledge that you understand them.  Platitudes about the American Dream and ‘fairness for everybody’ don’t cut it.

This is especially important when you are, by your own admission, an unqualified novice at government work and, lest we forget, entirely new to housing.  You are coming into a world that is much larger than just those HUD employees in the room.  You are facing skepticism, if not outright hostility, from just about every stakeholder in housing.  You also represent an administration that is openly dismissive of your agency’s mission.  People have a right to be deeply worried about the future of HUD under your leadership.  It either shows profound arrogance or prohibitive ignorance (or maybe both) not to address those concerns.

Secretary Carson isn’t selling books.  He’s running a $50 billion federal agency with close to 10, 000 employees that helps millions of Americans pay their rent, get a mortgage or construction loan, and access fair and affordable housing.  Over 20 million Americans – half of all renters – are rent burdened.  Millions of Americans are near or underwater in their mortgages or can’t afford to buy a home. HUD’s mission has never been more important - or more in doubt.

Given these stakes, what is even more galling about Secretary Carson’s substance-free speech is that it came after HUD announced the beginning of significant cuts to its programs.  New York City is expected to lose $58 million in funding by the end of this year for NYCHA and HPD. That's just the beginning.

This is on top of the rumors that President Trump will cut $6 billion from HUD in his proposed budget, which would effectively end many of the programs that give housing investments to the poorest Americans. How can Secretary Carson not speak about this to the employees working on those programs? How is it that he has still not commented on these cuts to anyone?

I entertain the possibility that Secretary Carson wasn’t told about the cuts and wasn’t consulted on the budget proposal.  The announced cuts are based on a somewhat wonky, previously outlined policy formula, which would have occurred regardless, so I’ll give him a pass on that for his first week.  And it’s clear that most of President Trump’s Cabinet are figureheads who don’t get consulted on policy decisions, so that isn’t surprising at all.

But I don’t honesty know what would be worse.  That Secretary Carson hasn’t been consulted or informed on HUD-related policy, that he has been consulted and doesn’t understand it enough to comment on, or that he doesn’t think he needs to comment on it? None of those scenarios should comfort HUD employees and housing advocates. And none of them should be surprising.

President Trump has made it clear that, at best, he doesn’t understand the systemic injustices surrounding housing in America or, at worst, he doesn’t care.  His rhetoric from the campaign to the Oval Office has been a steady stream of dog whistles about “inner-city hell holes,” “law and order” and “urban renewal.”  His language, and its racial implication, is straight out of the lawsuit HUD brought against him in the early 1970s.  

Selecting Dr. Carson to head HUD was always about putting a genuinely amicable, entirely weak face on an agency that will be gutted at every turn.  The fact that President Trump picked a man with no experience in government and no experience in housing proves this.  The fact that Dr. Carson is black also shows the cynicism behind President Trump’s ‘urban agenda.’  

Don’t pity Dr. Carson as some unfortunate rube.  Behind his uplifting personal story and sunny disposition lies an unforgivable misreading of American history and an unwarranted belief in the power of personal responsibility to overcome obstacles (he would never acknowledge the existence of systemic oppression). His listening tour and time at HUD won’t change that. Yes, he’ll change his tune a bit after the embarrassment of this week, but he’ll do so more in the hopes of expanding his future book and speaking opportunities than in helping the millions of Americans that need HUD to live safely.

The Bigger Problem: Why Didn't Tenants Have Right to Counsel in First Place?

Long wait for justice (NYT)

Long wait for justice (NYT)


Recently, housing advocates celebrated the announcement that New York City will provide free legal counsel to low-income tenants in housing court. This relatively inexpensive program will undoubtedly improve the lives of many vulnerable New Yorkers by reducing the risk of eviction.  But why didn’t these tenants have access to legal representation in the first place?  Therein lies the bigger housing problem with our legal system and our country.

The obvious place to start is the difference between criminal and civil court in the US.  The 6th Amendment guarantees the right to counsel in all criminal proceedings (although surprisingly it wasn’t expressly outlined by the Supreme Court until 1963).  Anytime the state brings charges against you, you are guaranteed fair, conflict-free legal counsel through the public defender system (though some are cared for more than others.)

However, unlike most western democracies, you are not guaranteed the right to counsel in civil court in the US.  There are some exceptions to this - if there are concerns over due process or if the case risks your personal liberty.  This narrow view is partially based on Lassiter v Dept. Social Services in 1981.  It’s an utterly heart-breaking case and I strongly recommend you read this article about it to understand the sexist and racist assumptions that went into the broader argument against providing counsel for civil cases.

In New York City, the Housing Court (which was formalized as its own branch of the civil court system in 1973) sees 350,000 filings a year with just 50 judges. That makes for a painfully slow process that favors those who can afford lawyers who are familiar with its pace and process (and who can afford to take that long).  As of 2015, 90% of landlords had legal representation and only 10% of tenants did.

Now, ask any landlord and they will tell you its exceedingly difficult to evict a tenant in New York (which is absolutely true, certainly relative to other states) but with such a discrepancy between representation, it’s clear that tenants don’t have the same access to due process.  It’s also a substantially different circumstance when your home is at stake vs. part of an investment. 

It’s not hard to see why this is a problem.  According to the Coalition for the Homeless, eviction is the number one cause of homelessness for women and children in the city, who represent over 75% of shelter system residents (about 48,000 out of 62,000 people).  The right to counsel will have a profound impact on this particularly vulnerable population.

But why did it take this long to address? Because we don’t think of housing as a right.  Or, put another way, we don’t think the loss of a home is the same as loss of personal liberty

And therein lies the problem with our civil legal system (putting aside how unacceptably overworked and underfunded that system is) and our broader society.  Who defines personal liberty? Would a mother with several children consider herself free if she is homeless? Is she not deprived of her personal liberty and her children’s? Not being able to afford a home is not the same as choosing not to have one.

Courts have generally shown concern about the ‘slippery slope’ of where to draw the line on personal liberty.   That’s reasonable and one that the courts ultimately shouldn’t have to decide.  We should.  The right to counsel to prevent evictions is a wonderful start, but we must go further as a society.  We must decide that housing is a right.

To be clear, I don’t mean to suggest that it is the landlord’s obligation to provide that right.  There are malevolent landlords out there for sure, but there are also many more that are trying to make ends meet just like everybody else.  We can’t simply put the burden of providing free housing on landlords or demonize them when they are trying to get a return from their property.

We must think bigger. Adopting housing as a right as an organizing principle would have several major policy implications to do just that.

First, at the local level it would have a liberating effect on the stifling status quo of our current rent, occupancy, zoning, and property tax laws that collectively play a large role in the affordable housing crisis.  It would spur significant innovation around these regulations that would likely provide gains for all stakeholders.

Second, it could fix the federal government’s wasteful role in housing.  For too long, and at far too high a cost, the federal government has supported homeownership exclusively.  This choice has caused generations of systemic segregation, degraded our environment and civic life, and nearly destroyed our economy.  Building more types of housing in more kinds of communities for more types of people could arguably create a sustainable, equitable economic boom the likes of which we haven’t experienced in decades, if ever.

Finally, it could also potentially lead to a cultural reboot; something that Americans of all political identities appear to agree is needed.  For too many people, it’s not clear today what America’s role in the world is or will be.  It isn’t clear that our system is producing the type of peace and prosperity we’ve come to expect - or that it’s capable of fixing itself in order to do so.  It isn’t clear what America is. Let’s fix that.

Let’s start by getting back to basics. What is “life, liberty, and the pursuit of happiness’? Is it merely positive liberty (the freedom to do something) or is it also negative liberty (the freedom from something)?  How can you pursue happiness, liberty, or life without a place to call home?

We’ve always been our best when we’ve used our noble ideals to defend the vulnerable and innocent from the violent injustices of the world, here and abroad.  Surly we can address the housing needs of millions of Americans.  In the process, we can rediscover the ideals that have made us such a beacon for the rest of the world.

Cities of Refuge, Country of Refusal

Hello or goodbye? (ericschnurer)

Hello or goodbye? (ericschnurer)

The first week of President Trump’s administration has seen a flurry of executive actions that begin to follow through on many of the promises he made during the campaign.  Though it seems to be a surprise to people, even some of his supporters, it shouldn’t be.

As troubling as this may be for opponents of the President’s agenda, and for the American economy and society overall, there are limits to what these executive actions can achieve. “Sanctuary Cities” will quickly serve as a test case on how effective they will be for the Trump Administration or how effective resistance will be.

On Wednesday, President Trump announced that sanctuary jurisdictions  (cities and counties that don’t cooperate with Immigration and Customs Enforcement (ICE)) “willfully violate the law by shielding aliens,” have caused “immeasurable harm to the American people and the very fabric of the Republic,” and will not be ‘eligible to receive federal grants.”

This means the Trump Administration intends to take draconian measures to force cities and counties into cooperating with ICE or risk losing millions if not billions of dollars of federal aid.  He now seems sincere about deporting all 11 million illegal Americans and wants local law enforcement agencies to be the foot soldiers by effectively deputizing them as ICE officers.  He has also set up a truly Orwellian department within ICE called The Office for Victims of Crimes Committed by Removable Aliens.

(This is an addition to his other executive orders on immigration outlining plans for building a wasteful wall along the Mexican border and banning Muslims (only from countries we've bombed) from entering the US.)

President Trump, the “law and order” candidate, might be unaware that the modern American concept of Sanctuary City actually started through efforts by law enforcement departments in the 1980s.  Many police officers found it difficult to work with communities with high-levels of illegal immigrants. They were attempting to do everyday community policing, but residents were fearful of cooperating.  Cops wanted to remove the fear of immigration status from hurting their greater mission of providing public safety.

Hundreds of cities and counties have followed suit over the following decades. Though there is some disagreement in law enforcement circles about this, many sherifs and chiefs continue to support sanctuary policies in the interest of public safety and budgetary limitations.  Many other social service agencies have adopted similar policies in the interest of public health and public education.  It's a federal issue, not a local one.

Contrary to President Trump’s anecdotes from the campaign, illegal immigrants are less likely to commit violent crimes than Americans.  It is outright demonization to suggest otherwise let alone to set up an additional federal bureaucracy to treat a vanishingly small problem.  These men, women, and children are not threats to the republic or to Americans.  They aren’t even threats to most Americans’ jobs. They simply want to be Americans (many of their children already are) and often do jobs most Americans don’t want to do.

Turning to New York City, it’s no surprise that it is a sanctuary city.  It has been for hundreds of years.  It’s a city built by, of, and for immigrants (including my grandparents). Today close to 40% of New Yorkers are foreign born residents.  Of that, over 500,000 are illegal immigrants, which is one of the largest concentrations in the country.  Yet NYC is also one of the safest cities in America.  Where is this hellscape of crime by Removable Aliens? It’s much more likely that the city would suffer by removing these men, women, and children from our workforce, our communities, and our culture. Just ask outspoken Trump supporter former Mayor Rudy Giuliani about what he said back in 1994:

“Some of the hardest-working and most productive people in this city are undocumented aliens," Giuliani said at the time. "If you come here and you work hard and you happen to be in an undocumented status, you're one of the people who we want in this city. You're somebody that we want to protect, and we want you to get out from under what is often a life of being like a fugitive, which is really unfair."

However, NYC and other cities are breaking the law.  The arguments for doing so have always been framed in practical terms for economic and public safety reasons, but they are still flouting federal laws.  Attempts to reform those laws famously failed in 2013 and fueled the rise of Trump.  And the Trump Administration is going to make NYC and the other jurisdictions pay.

It is unclear if this executive action (or his others) will succeed. Evidently the president didn’t even consult his own cabinet about his executive actions, which makes articulating policy fairly hard. And as President Obama found out with his own executive orders, President Trump can expect a flood of lawsuits

Mayor de Blasio and many others seem confident that the courts will strike down many of the threats associated with federal funding, but there are no guarantees.   It is clearly illegal to coerce local governments to compile with federal laws through denying funds. It is possible that NYC would lose millions of dollars for direct law enforcement support, but that would likely impact anti-terrorist efforts or Trump Tower security, which could cause political or personal headaches for the President.

There is a sad irony that in today’s world of religious conflict, xenophobia, and eroding liberalism sanctuary cities are under threat. They are a concept that spans all religions across thousands of years.  Cities of Refuge can be found in the Old Testament. They were places that granted persecuted individuals or individuals under threat a save harbor under religious and/or government protection. 

The entire founding myth of America is as a sanctuary city.  It is a tragic betrayal of American values. We've had similar periods of xenophobia and anti-immigration hysteria in our past, and they have all been self-defeating stains on our history.  I've always lamented how ahistorical we are as a country, but this current vitriol is heartbreaking and entirely avoidable. 

Most of these periods shared something in common - economic insecurity.  Blaming immigrants for that is seductive because it is easy.  Tackling the actual reasons for it are hard and involve challenging long-held assumptions by the working class and the ruling class.  There have been practical solutions on the table to address our current immigration challenges. Ones that respect the current laws, hold those who have violated them accountable, but allow these men, women, and children to remain in the country that they have called home and to remain productive members of our society.  Political cowardice and cynical misdirection have lead us to this point instead. 

It is cliché to refer to America as an immigrant country, but it is and remains so.  It is cliché to say that immigration is what creates the vibrancy of American society and its economy, but it has and continues to.   What is equally true, and should be equally comforting even to those who fear immigration, is that America remains America even if Americans change.  The only type of people who threaten America are those that wrongly think America shouldn't change.  If they succeed America will still change, but it will be for the worse.

The Trump Age: Nobly Save or Meanly Lose?

What can we expect? (inquisitor)

What can we expect? (inquisitor)

Today Donald Trump will become the 45th President of the United States.  He comes into office having lost the popular vote by 3 million to Secretary Clinton, after experiencing the lowest approval rating of any incoming president on record, all while under a shroud of unprecedented allegations of foreign meddling in the election.  He takes the most powerful office in the land with a federal government dominated by his questionably-aligned party, facing a decimated and rudderless opposition, under the confused, delegitimized eyes of the press.  He enters a world stage that is suffering a near universal retreat of liberal values and the rise of ethno-nationalism in the wake of ever-increasing inequality, temperatures, and sea levels. And yet, as of today, many claim not to know what to expect from the man.

Of course there are reasons for this confusion.  President Trump ran a campaign that oscillated wildly between standard Republican positions, shocking hard-right proposals, and incoherent populist rhetoric.  I won’t spend time rehashing the litany of lies, contradictions, or fantasies that spewed from the candidate anymore than I will spend time rehashing the offensive, irresponsible, and dangerous language that he used. 

But we know many things about the Trump Administration based on the Trump Campaign. First, some successes: Mr. Trump has a genius for social media and showmanship, has an ear for the underrepresented voices in America (in media if not government at any rate), and a knack for slaying the sacred cows of our conventional politics.  These were assets for gaining attention in a shallow, media-soaked campaign environment. 

Some of these assets no doubt could be refreshing in government.  Mr. Trump may be a coastal elite who inherited his wealth and surrounds himself with all its trappings and sycophants (which will be a common theme in his cabinet), but he is also clearly outside of the Washington scene.  Questioning long-held assumptions about American domestic and foreign policy is healthy and long overdue.  Expanding debate to include ideas from vast segments of forgotten regions and people is an imperative that could potentially reinvigorate the trust and enthusiasm for our republic’s institutions. Whether he uses his brashness to these ends or not, President Trump will have permanently disrupted the neo-liberal consensus. The electorate has said demonstrably that this consensus has failed and that they want something else. It is about to get what it wants.

Now, the failures: Mr. Trump has consistently proven to be unorganized, incoherent, and disinterested.  These are three attributes that don’t translate into strong governance.  As good as Candidate Trump was at getting attention and throwing (or tweeting) popular bombs at the establishment (and many vulnerable individuals and groups), his campaign was a chaotic mess that fell backwards into a victory that they didn’t see coming just like everyone else. Winning softens that narrative (as it does with any presidential campaign) but it doesn’t mean those trends will change in the White House.  There is little doubt that the Trump Administration will be just as chaotic, if not more chaotic.

This is because, whatever Trumpism represents, it is not a cohesive agenda or ideology, but a cult of personality.  The three axes running through the Trump Administration – orthodox Republicanism, alt-right populism, and retro nationalism – have few areas of overlap and many more areas of direct opposition.  Ugly conflicts will be inevitable.  There are a lot of big egos new to government walking through the door.  The one thing these factions will have in common will be competing for and relying on the whims of the President to choose sides on an issue-by-issue, day-to-day basis. Again, this is not a formula for effective governance (and will do significant damage to the institutions and agencies within this orbit that would normally have some autonomy).  

Instead of a focused, on-message White House, we will see one with lots of noise, lots of backtracking, and lots of blame shifting. However, that circus could (perhaps intentionally) distract the public from what should be a sustained if unsteady unraveling of domestic policy. For all the chaos over the last 18 months, Mr. Trump has held remarkably consistent views on most things for a much longer period of time.

More often than not, President Trump's brand of orthodox Republicanism, one with a messianic hard-right flavor, will dictate the Trump agenda. This will mean dramatic budget cuts to most discretionary agencies, the termination of many smaller programs and departments, privatization and deregulation, and a general sustained federal retreat from many policy fronts. America will become a place with distinctly sharper edges and higher boundaries between its winners and losers.

Housing is a good example. It is unlikely that the Trump Administration believes in many of the goals of the Department of Housing and Urban Development (which is by no means the only federal agency that impacts housing).  Those goals include assisting poor Americans with direct housing costs, supporting affordable housing construction, enforcing fair housing laws, and overseeing the vast agencies Fannie Mae and Freddie Mac that subsidize homeownership for millions of middle-class Americans.  Aside from perhaps this final goal, none of the three factions in the Trump Administration will want to continue those policies.

Mr. Trump’s personal interactions with HUD consisted of being sued for racial discrimination. His Secretary of Treasury candidate Steven Mnuchin profited from the housing crash of 2007 and its aftermath.  Candidate Trump’s repeated usage of ‘inner-cities’ and ‘urban renewal’ reveal either a deeply cynical tendency to dog whistle to his white working-class base and/or a persistent ignorance of the changing shape of our cities and the larger spectrum of minority experiences in America. 

His pick of Dr. Carson to run HUD encapsulates this indifference-to-outright hostility perfectly. I, and many others, have already discussed why Dr. Carson is unfit to run the Department of Housing and Urban Development.  Nothing in his Senate hearing changed that judgment. 

Like his boss, he is unaware of or unwilling to recognize the history of government-sanctioned segregation in our communities that has perpetuated multi-generational poverty for millions of Americans.  Instead, Dr. Carson has spoken of poverty as being a choice.

Like his boss, Dr. Carson is entirely unfamiliar with the majority of activities HUD undertakes or that most of them don’t involve aid to black Americans stuck in “inner-city hell-holes.” 

Dr. Carson also seems unwilling to (or, perhaps more troubling, unaware of the need to) challenge Mr. Trump’s dated and offensive characterizations of urban America. This doesn’t bode well for the priorities of HUD under his watch.  It’s difficult to see Dr. Carson having the stomach for defending HUD’s mission from the White House let alone for budget fights on the Hill. President Trump will have near-free reign to dismantle much of HUD with an affable face at the helm and willing co-conspirators in Congress. This will have an untold impact on millions of struggling Americans.

Because of who Mr. Trump is as a man and what divergent worlds he has rode to power on, we truly don’t know a lot about what will happen over the next four years.  President Trump will have an immense amount of power to impact the lives of billions of people.  His lack of humility and leadership in the face of this responsibility give many reasons for progressives and conservatives alike to fret.

But he is no king.  It will be up to the institutions set up by the Founding Fathers to check his authoritative impulses.  It will be up to the free press to challenge him and to reassert its role as a vital public advocate.  And most importantly, it will be up to us as citizens, regardless of whom we voted or didn’t vote for, to remain vigilant, engaged, and hopeful.  The stakes for our republic, our world, are real and they are high.  To paraphrase President Lincoln, over the next four years, we shall nobly save, or meanly lose, the last great hope of earth.

Cities Forcing Airbnb to Shift Strategy

Floods of the frat variety (nytimes/williamwidmer)

Floods of the frat variety (nytimes/williamwidmer)

Stepping away from the Carson-at-HUD controversy for a moment, Airbnb has quietly signaled a significant tactical change in its approach to working with city governments. The Silicon Valley company, which currently has an estimated $30 billion value, has gained a reputation for stonewalling local governments as it expands across the globe.  This has included actively flouting local laws, refusing to share data (or sharing cherry-picked data) and ignoring local housing advocates and neighborhood groups. As a result of this behavior, the company is experiencing a severe backlash - whether it’s losing lawsuits or being completely banned.  It appears they are finally abandoning their ‘shoot first’ growth strategy.

The biggest recent news concerning the company came from right here in NYC.  The state passed a potentially crippling law making it illegal to advertise short-term renting in the state, which could jeopardize Airbnb’s biggest single domestic market.  The law stems from several years of the state unsuccessfully attempting to work with Airbnb to come to terms with existing occupancy laws. The company adopted a hard-nosed strategy (similar to Uber’s strategy against the TLC, which it ultimately abandoned as well) that made a lot of enemies in NYC and Albany (Governor Cuomo signed the law in October). 

Whereas many New Yorkers agreed with Uber about how awful the TLC was and welcomed the catch-me-if-you-can strategy, Airbnb was mistaken to assume that New Yorkers felt the same way about the hotel lobby.  New Yorkers simply don’t feel the pain of an expensive hotel room as much as they feel the pain for not getting a cab when they need it.  They do feel the pain when tourists overrun their building or neighborhood.  Misunderstanding that nuance proved costly.

As Airbnb has done in the past (including in its home city of San Francisco) it decided to sue.  The legal argument is somewhat convoluted, but the basic hope of the company was to clarify its liability with the new law (they wanted to make sure only a host could be found guilty and not the company.) The strategy also clearly was to put popular pressure on the city and state and to use its deep war chest to force both to make a better deal with the company.

Once it became clear that the company would not be found liable under the new law (and that there was no political pressure to cave to the company,) Airbnb quickly settled (separately with the city and state) and has accepted the ruling that will come into effect next year.  This was a big win for opponents of Airbnb (and a big loss for potential hosts) but the move was likely a tactical retreat for the company rather than a total surrender. How the new law will impact Airbnb’s revenue will be clear relatively quickly and will likely dictate the scope of a future legal counter-strike.

Having apparently learned its lesson over the last few years in NYC, this week the company demonstrated a radically different approach with New Orleans – it struck a deal with the city government and local groups before a prolonged legal fight.

The deal outlines an agreement between the company and the city to share its list of registered hosts, to ban any hosts in the French Quarter, and to crack down on ‘party houses’ that have negatively impacted local neighborhoods.  This was seen as a major concession to the city, the hotel lobby, and local residents – three groups the company has all but ignored or dismissed previously whether in New Orleans or other cities.

Though New Orleans is a dramatically smaller market than New York, the company has clearly signaled that it no longer sees fighting these groups as the fastest growth strategy. Though it remains to be seen if this will be the new model for the company in other cities, the backlash has clearly spooked the company’s investors enough to shift gears. 

To be clear, growth is still the driving force of Airbnb (just as it is with any company) and there doesn’t appear to be any cultural shift within the company.  Any company that takes that type of capital and hits that type of valuation is under tremendous pressure to increase growth to justify such lofty expectations.  But as cities and residents become more aware of the pros and cons of the company, they are starting to organize in a way that threatens the established pace of growth.  The company has exhausted its “shoot first” growth strategy and has to recalibrate in a more informed marketplace. It took too long for them to recognize this, but perhaps they have now.

Understanding this makes anticipating what happens next in NYC and New Orleans relatively easy. Airbnb has made concessions that will no doubt harm short-term revenues in these markets, but it has bought valuable time to let the political heat subside (while continuing to expand to other friendlier markets.)  During this period they can evaluate how vigilant these cities are on enforcing the new agreements and how much of a price (literally or figuratively) the company would pay for dragging its feet. They have already been accused of this in several international markets.

If either city’s policies appear to be manageable, they will have helpful case studies for other eventual conflicts and move on.  However, if NYC or New Orleans significantly damage the company’s revenue, Airbnb will most certainly sue in federal court.  The company’s investors will leave them no choice.  How those scenarios form and play out is just speculation at this point, but you can bet their legal team is preparing for all of them.

Airbnb likely expected some of this backlash and hoped for a delaying-action as it continued to expand.  Now it must recognize that in more mature markets, it must make concessions to local interests.  This may or may not harm growth in these markets or new markets, but a new strategy is inevitable now.  The pressure to continue to grow – and to justify its evaluation – will not subside, however.  Playing nice with cities is one way to keep growth going. Another is to create new streams of revenue, which it has already begun to do.  But if these efforts don’t meet investors’ expectations, Airbnb could very easily come back with its guns blazing. 

Trump Infrastructure Plan Would Harm Cities and Cost Taxpayers

Don't worry, the private sector will fix it (andyblair)

Don't worry, the private sector will fix it (andyblair)

Earlier this week, President-elect Trump announced that Elaine Chao will be his pick to head the Department of Transportation, a move that was welcomed as a refreshingly ‘normal’ appointment.  Ms. Chao served as President Bush’s Labor Secretary for all eight years and served in his father’s administration as an undersecretary in the DOT.  Although she has strong conservative ties (she is married to Senate Majority Leader Mitch McConnell), she is seen by many in DC as a highly qualified, bi-partisan bridge (as it were) that could serve well in a traditionally bi-partisan position.

The appointment will certainly play well in the press, but it also appears to be distracting it from examining the Trump infrastructure plan.  If the press did examine the plan, they would see that it would fail to address the infrastructure needs of our country, particularly our cities, and would also likely cost taxpayers more in the short and long run. It would also undermine the types of infrastructure policy that our economy and environment require.

The Trump plan, outlined in a report released casually before the election, boasts of a $1 trillion investment strategy that is budget neutral to taxpayers.  Naturally, this statement is misleading.  The thrust of the plan is to rely entirely on the private sector to invest in and build/rehabilitate our nation’s troubled infrastructure. The Trump plan would first offer any private entity a tax credit for 82% of its upfront equity cost and then rely on that private entity to borrow from the bond markets for the rest.  So to get to their aspirational amount of $1 trillion, the US would give out $137 billion in tax credits.

There are two obvious problems with relying on the private sector to drive our infrastructure.  First, governments (whether local or federal) can borrow money for a lot less than private companies, giving them a huge built-in advantage on projects while reducing the overall cost of a project to taxpayers. The Trump plan relies on magical thinking to assume that every private entity would be so efficient to offset that advantage prima facie. It also attempts to hide the full cost of a project as part of that assumption.

Second, private companies will only focus on projects that can return a profit.  This is entirely rational, but it leaves a significant inventory of critical infrastructure projects out of contention.  Unless a private company can predict a certain profit margin by extracting significant user fees (more on this later), they will focus on another project. Questions of equity and sustainability will defer to profit and immediacy.  This will inevitably ignore the needs of poorer residents (rural or urban) who likely can’t pay for such projects while ignoring larger questions of environmental protection. (It will also clearly favor road construction over transit investment.)

This shows the contradiction at the heart of infrastructure spending and the problem with public-private partnerships.  Investment in infrastructure is universally good for the economy; there is no debate about it. A reliable, robust infrastructure leads to more (and more productive) economic activity (and more tax revenue). However, individual projects (like operating the MTA or replacing the water pipes in Flint) are extremely capital-intensive and unlikely to create a direct or immediate return.

That’s why our transportation systems are publicly owned and operated – most were private originally but couldn’t turn a profit; public agencies (like the MTA) were created to absorb those companies and maintain vital public services.  (And don’t expect Uber to save the day. That VC trickle-down effect has an expiration date for the same reason.)

Governments can take the long view on its infrastructure investment and reap the benefits holistically by creating more economic activity across the entire economy.  They are also obligated (more or less) to meet certain basic needs of all of its citizens regardless of cost.  They must provide clean water sources, they must provide public transportation; but they can capture the overall economic gains from those investments through tax revenue (and some regulated direct user-fees.)

Private companies can’t think in terms of the entire economy.  They must seek returns on the capital they invest in a given project, regardless of its ancillary benefits (unless they can capture some of those as well.) 

There are only two ways for private companies to profit from infrastructure. The first, as outlined in the Trump plan, is to have the government subsidize a significant portion of the cost. The Trump plan will cover 82% of upfront costs for private developers, which is a big chunk of change.

But let’s not overlook two other obvious assumptions – first, these projects will be too big to fail, and, second, President Trump will eliminate other costs related to labor and environmental review.  If, in a Trump future, a private company runs into trouble rebuilding the George Washington Bridge, they can expect the US Taxpayer to bail them out. We have a lot of experience with this in our economy already. It’s also unlikely that these contractors will be required to pay union-wages or submit to extensive government oversight and regulations.  (Something Ms. Chao was criticized for allowing at Labor.)

The second way is through user-fees.  The Trump plan doesn’t spend much time talking about this (it shifts gears to talking about a one-time 10% repatriation corporate tax and hammering Obama/Clinton and bridges to nowhere) because the authors know it wouldn’t look very appealing upon honest review (just look at Chicago and their parking problem).  Privatizing our infrastructure would cost you way more – your water bills would go up, your highway tolls would go up and your service access would probably decline – because a private company can’t run those systems at a loss like governments can.

There is also little evidence that this plan would treat these entities similarly to public utilities – requiring them to provide baseline universal service at a controlled cost.  Not gonna happen under President Trump.  As much as we will bitch about the MTA going up to $3 in 2017, that doesn’t begin to cover the actual per-ride cost today or what we would experience under a private system (and forget further subsidies for poor New Yorkers.)

There are of course significant flaws in how we finance our infrastructure currently, so I’m not idly defending our current system.  Most public agencies’ procurement and RFP processes follow lowest-bid requirements that often get gamed by connected private entities and hide eventual total costs.  And it’s not that public projects are subjected to too many requirements, it’s that they lack true ownership capable of pushing through them quickly.  Too many agencies are political compromises in structure with limited/conflicting jurisdictions in practice.

There are less radical ways to fix these issues than to turn them over to the private sector entirely.  Philadelphia has experimented with a radically simple alternative for projects – identify a problem and do an RFP for solutions, rather than identify a solution as well. This allows for more creativity from the private sector and more options for the public.  We could also redesign our public agencies to capture more of the economic value they create – similar to what Hong Kong’s transit system does. Why not have the MTA take equity in high-worth residential or commercial development that benefits from access to public transit?

There is nothing wrong with public-private partnerships in the public sphere.  Realistically, the term itself is redundant. Of course every project combines public and private agencies and interests.  That dynamic is the basis of our entire society. What is wrong is to adopt a radical policy change that undermines that dynamic and turns over elements of our infrastructure entirely to private interests, while allowing others to be ignored. 

How we think about our infrastructure, how we plan it, and how we engineer it must be approached with our entire society in mind.  If we adopt a simplistic mindset about covering the dollar for dollar cost of specific projects without taking a comprehensive view, we might get the infrastructure certain private companies think are justified, but we won’t get the one our economy and environment will need.

What Trump Means for Housing

How should I know? (rollingstone)

How should I know? (rollingstone)

Before I jump into the question of housing over the next 2-4 years, I want to talk about normalizing.  There is a very real concern that our media and political structures that were incapable of checking Mr. Trump’s unprecedented bad behavior as a candidate risk normalizing very dangerous rhetoric, policy proposals, and potential threats to our institutions once he assumes office.  I share those concerns.  I have found much of Mr. Trump’s rhetoric, temperament, and personal history to be disqualifying full stop.  I have found his lack of policy detail and evident lack of interest in policy detail to be confounding.   I have also found his contempt for many of our civic institutions and cultural norms to be alarming. 

Our system of government is built on a competition of ideas during the election, and on compromise and restraint during the session.  I hope that the ugliness of this election season can be cured throughout the next congressional session, but it won’t be unless we address that ugliness and remain vigilant for and protective of the larger principles that our republic are built on.  It will be a very dark period for our country and the world if we fail those principles. We cannot allow the actions of Mr. Trump as a candidate to become normal when he becomes President Trump.

A number of articles have come out about what the election of Donald Trump could mean for cities in general and they all basically say the same thing: nobody knows.  This is true for two reasons. First, Donald Trump has risen to power without outlining specific policy proposals on most subjects, while outlining flawed policy proposals on some, and dangerous proposals on a few.  How sincere he is on any of these remains to be seen.  We don’t know what “Trumpism” as an ideology means or if it even exists. 

Second, we also don’t really know what kind of Republican Party Mr. Trump has brought to power with him.  He blew through the primary and general election on a wave of vague populism but the deep divisions in the Republican Party didn’t go anywhere. Far from mending the divisions between ‘the establishment’ and the ‘drain the swamp’ crowd, it already looks like the Trump Administration will be the frontline in a bitter fight between the two. 

Could President Trump turn into a more or less generic Republican and isolate the more fringe elements of his base or emerge as a distinct nationalist wiping out the establishment?  Given what we’re seeing in the transition team, it could also be a disorganized, muddled grab bag with no centralizing rationale other than the personal mood of the president. That’s not a formula for coherent executive action.

It’s also entirely plausible that Mr. Trump will continue to show little interest in policy details and the drudgery of the office, conceding actual governing power to the Republican majority in Congress. Speaker Ryan has been chomping at the bit for this scenario and has a conservative agenda waiting in the wings that would reshape American domestic policy in ways that would likely shock many Trump voters (particularly older ones).  

It isn’t clear that Mr. Trump agrees with this message (he certainly campaigned against it) but, come January, if only one body of government is ready to govern, it isn’t hard to see him going along with it. It is clear that Mr. Trump wouldn’t allow for the perception that he isn’t in control, but reality is a very different matter for him.

All of this is to say that, although we don’t really know what cities should expect in terms of housing policy, there isn’t a lot to be optimistic about in the immediate future.  Best-case scenario, President Trump emerges as a slightly more populist Republican with a predictable agenda that does little for affordable housing.  Worst-case scenario, he emerges as a vindictive nationalist that harms cities economically and socially (intentionally or unintentionally) by continuing to ‘other’ the types of people and ideas that congregate in them, largely in rental housing.  How our other civic institutions respond to him will determine how far to one or the other we drift.

I spent much of the campaign season lamenting how little housing came up as an issue, despite how important it is.  Let me quickly restate why:

-       Half of American renters are rent-burdened (30% or more of their income goes to renting - and a quarter of those pay over 50%.)

-       Millions of homes are still underwater 8 years after the mortgage crisis “ended.”

-       As a nation, our productivity as dropped for the first time in 30 years because economic output is concentrated in dense coastal cities where housing costs/policies are eating income gains or blocking more people from being able to move to those opportunities.

The scale of the problem is staggering for renters and homeowners (and renters wishing to be homeowners).  Our economic output is concentrating in fewer places where it is prohibitively expensive to live in.  This puts huge pressure on all income levels and drains the future earning and savings potential of everyone.  It is outrageous that this isn’t a bigger issue in the media and in political circles.  It clearly is for most Americans.

Mr. Trump has said little about housing, despite his background in the industry. That background is worth revisiting because it tells us two things that will probably define his approach to housing.

First, that the private sector should lead the process, but with massive government handouts for developers.  Mr. Trump’s ability to squeeze out decades worth of tax breaks for his developments is well documented. It’s one of the rationales for his ‘business genius.’  But this philosophy has proven to be a terrible deal for the public.  Hundreds of millions of tax dollars were ‘spent’ on developments that produced a vanishingly small amount of affordable housing units.  Having built a fortune over 40 years based on these policy assumptions, it’s hard to picture President Trump entertaining alternative methods of creating more housing, which is exactly what we need to do.

Second, Mr. Trump burst out on to the national scene for being sued by the federal government for racially discriminating against potential tenants in his father’s complexes. Despite settling for millions of dollars based on an abundance of evidence, Mr. Trump never admitted to any wrongdoing.  Perhaps he can claim that as a victory, but it has made Mr. Trump’s racial rhetoric difficult to dismiss.  Politicians, particularly Republicans starting with President Nixon, have exploited racial anxieties around housing policies to electoral success for decades.  Clearly Mr. Trump is not above this tactic, and given the connection most Americans make between affordable/fair housing policies and minorities, what type of attention, if any, will be given to this issue?

We don’t have much to go on yet.  Early rumors about who will be the HUD Director center around Westchester Country Executive Rob Astorino. He has been extremely hostile to affordable housing and fair housing policies and comes from a region with a long history of hostility to it.  If Mr. Trump does choose Mr. Astorino, we can start to picture a policy agenda that might confirm the lessons Mr. Trump has learned over his career.  This could lead to more ill-advised efforts to promote homeownership against prevailing economic trends.  It could mean less federal money for housing-assistance programs.  It could mean less focus on desegregating communities that lock many people into cycles of poverty and isolation. This could be a disaster for housing and for the country.

Housing advocates have a long road ahead.  The first job to do is to hold the media accountable for ignoring affordable housing on the campaign trail despite the enormity of the problem.  The second is framing the issue as one that affects all Americans – whether renters or homeowners, middle-class or poor, suburban or urban.  The third is to offer far-reaching policy proposals that can capture the national conversation and perhaps finally make housing as central an issue as it needs to be.

The stakes are high.  Our economy can’t grow and our country can’t heal with these types of pressures on housing remaining in place.  The cost of inaction extends to our environment as well.  We must find better ways to organize ourselves and to power our economy.  These are not normal problems facing a normal president, so they require abnormal means to address them.