Trump Presidency

Trump's Real Estate Taxes, the Supreme Court, and Climate Change Are All Related (That's a Good Thing)


It’s only been a week since the New York Times published an article about Trump’s prolific tax cheating with his father’s real estate fortune, but it’s fallen out of the news. That’s not surprising given the complexity of the story and the baked-in awareness that Donald Trump was/is not an honest businessman. It’s also nowhere near being the most important national story given the ugly Kavanaugh confirmation debacle and the dire UN climate change report. That doesn’t mean it isn’t important. In fact, all three stories are deeply related.

To put it broadly, without radically changing our real estate laws, we can not save our country from climate change and to change our laws that radically, they will need to pass through the Supreme Court eventually. 

As of today, both seem like a daunting if not impossible tasks. The Supreme Court is set up to spend the next generation turning us back to the 19th century. The entire conservative movement over the last 40 years has worked to empower a judicial philosophy that is openly hostile to popular democratic governance and legislative oversight of the economy. And they just locked in power for next 40. 

On top of that, real estate has long been one of the most privileged industries and asset classes in America. That makes it deeply small-c conservative and has given it a powerful set of tools and incentives to prevent major reform, whether on its tax policy, its relationship to political contributions, or its environmental impact. 

These interests have lots of lobbying power at the national level, but their true power is on the state and local levels. They block candidates and policy initiatives that are perceived to “threaten” property values and are the main barrier to reforming land-use policy around economic and environmental justice. Overcoming that structure is extremely challenging.

But before you despair, let’s consider why the Trump tax cheat story is so important: it offers a hack into changing all of this. 

To defeat President Trump or the Republican Party, we must defeat Real Estate Developer Donald Trump.

To quickly recap, the Times story poured over thousands of court and tax documents and spoke with hundreds of people associated with the Trump Organization and family to reveal three fundamental facts: 

  • Donald Trump didn’t build his real estate empire like he claims, he illegally inherited it from his father. 

  • Fred Trump, the father, built most of that empire through gaming the federal government for millions in tax subsidies. 

  • Father and son committed systemic tax fraud over decades that directly harmed tenants

All of this happened by aggressively exploiting the already favorable tax code that allows real estate developers to self-assess lower property values for tax purposes, to arbitrarily split management structures to hide profits while overcharging vendors and tenants, and to shield ownership through obscure legal entities to further dwindle tax liabilities. 

The bad news is that, at this stage, it seems likely that the Trump family has already gotten away with it (although New York is looking into it). Most (but definitely not all) of these moves are perfectly legal given how the real estate lobby has helped write the tax code at the local and federal level for decades. That’s true in every state.

This is largely because a tiny fraction of the population, like the Trump family, has an immense amount of the wealth generated over the last few decades and as a result has captured almost all of the political power. Real estate money is the foundation of this power structure and always has been. Who owns the land is the very basis of power in America, which both Republicans and Democrats have protected. 

When then-candidate Trump bragged about giving money to both parties, this is basically what he was bragging about. Almost every big real estate interest is like that. 

The Trump tax cheating story then is incredibly useful as a rallying cry for real estate reform because it is a shorthand to explain how damaging real estate law is in the US and it is also a roadmap for how to change it. 

That’s where the good news comes in: we are already starting to dismantle this power structure. 

In New York, the Democratic primary on Sept 13th saw a slate of progressive pro-tenant candidates defeat real-estate backed candidates, potentially shifting the balance of power in Albany for the first time in generations. Their victories were backed by a growing bottom-up coalition for universal rent control that has a real shot of removing the type of legal loopholes that the Trumps used to jack up rents and avoid taxes for decades.

If Democrats take the senate in Albany next month, there is a real chance that a once-in-a-generation reform movement can take hold in Albany. Universal rent control should start with issues related to rents of course, but it should expand to address all of the background mechanics of real estate tax law and political contributions that have fed this unjust system for decades. 

This coalition is gaining power as a popular response to the affordable housing crisis and has a real plan to address it. But just as importantly it is also helping people begin to see that the affordable housing crisis is part of a larger inequality crisis across our late capitalist society. The environmental destruction ravaging our planet is a logical outcome.

There are few, if any, states that aren’t subject to the toxic mix of shadowy real estate law and shadowy political contributions from real estate. Without removing their hold on power, we will never be able to make the changes we need to protect the environment in the long-term and protect the must vulnerable populations in the short-term. 

Even if that happens, the real estate interests profiting from this power structure will inevitably look to the Supreme Court to protect it. 

Anti-union, pro-voter suppression, and generally skeptical of the administrative state, the current court, now with Kavanaugh confirmed, looks set up to bail out “Big Real Estate” (or maybe the more Georgist “Big Land”?) But on closer look, they shouldn’t be so sure.

The Supreme Court famously does not have the power of the purse or the sword. It is a deliberative body that interprets laws, which is inherently a subjective process (which so-called “originalists” prove in action). It’s credibility as a separate, legitimate third branch of government has always rested on its popular support regardless of any rhetoric suggesting otherwise. It can get away with being out of step with the majority of people for only so long.

Senate Majority Leader Mitch McConnell doesn’t need to worry about that. Blocking Judge Merrick Garland and now jamming through Brett Kavanaugh has severely damaged the court’s image as a non-partisan institution, but Republicans will be rewarded by their donor class for it. (Their base may get some short-term victory on further restricting abortion access, but it will pale in comparison to the losses they suffer in the long-run from the conservative movement’s real priorities). 

Chief Justice Roberts does need to worry about the Court’s image. It’s one thing to strike down EPA restrictions on (flimsy) grounds of federal overreach, but it’s entirely another to strike down direct laws passed by state legislatures. There is at least some evidence that Chief Justice Roberts understands that blindly delivering partisan victories for conservatives is bad for the health of the court, and, perhaps generously, for the country. Overturning popularly supported state laws even if they are counter to prevailing a la carte conservative judicial theory seems unlikely. There is hope, at least.

But even getting in front of the Supreme Court starts with getting laws passed at the state level. That will take building broad coalitions across and within states that agree on a narrow set of legislative priorities that can get them passed. 

I believe that real estate reform is the perfect issue to kindle the formation of these coalitions. The power of developers and landowners over our politics has crippled our democracy, long before its crippled our ability to face climate change. There are immediate and well-defined legislative goals that can be achieved to break that structure. 

The progress made on electing candidates in the New York Senate that support universal rent control is a great start. There is much to be done from there. But if we can create a model for passing progressive laws on real estate reform, we can do so for climate change. 

It starts with telling a simple story to as many people as possible. We have one now. Showing how Real Estate Developer Trump has harmed New Yorkers both as a landlord and a political contributor is a powerful way to start dismantling the system that created President Trump, the plutocrat supporting, climate-change denier. 

(market watch/ getty images)

(market watch/ getty images)

The Coming Budget Will be a Disaster for Housing, but Housers Are Part of the Problem

"The Marriage of Real Estate and Money" (Tom Otterness, 1996)

"The Marriage of Real Estate and Money" (Tom Otterness, 1996)

Republican-controlled Congress passed a major hurdle in their plan to radically reshape the nation’s tax code last week by narrowly passing a budget for 2018 in a close 216-212 vote.  The narrow spread included 20 Republican defections, which is a clear signal of the considerable challenges that lay ahead.  Regardless, this process will be a disaster for housing policy – affordable housing or otherwise.  The fact that this process is proceeding in rapid, secretive, and reckless fashion barely registers anymore shows how far our legislative process has come apart. It also shows how little the housing community can do to prevent this damage and how little it understands the changing landscape of national politics.

I have written extensively about three major threads since the beginning of the Trump Era (although they originate well before) that continue to dominate housing policy discussions. This budget (which is not law yet and is still largely unknown as policy) reflects these trends. The response the housing community has to each also shows how much it needs to change its approach and fight for a simple, clear cause: housing as a right.

1. Down with Public Housing

First, President Trump, despite his incoherencies, has been steadfast in his utter indifference to affordable housing, especially public housing. Given other mounting evidence, it seems more likely that he holds the people (or those people, more aptly) that rely on it in contempt. 

Appointing Secretary Carson has worked out exactly as the President had hoped and as housing advocates had feared.  HUD will face devastating cuts whether the Secretary understands them or not. The 13% across-the-board cuts long-promised by the administration are starting to take form and no one suffers more than the poor Americans who rely on housing vouchers, community block grants, and of course, public housing. 

Public housing authorities across the country will be further starved of funding and will likely turn increasingly to measures such as the Obama-era program Rental Assistance Demonstration (RAD) that provides upfront funding by turning public housing into privately-leased Section 8 units.  Seen as a necessity, or even as a progressive fail-safe by many housers, this program will only weaken cash-strapped public housing authorities and undermine their broader mission. Housers who support RAD will live to regret those decisions instead of rallying around a robust defense of public housing on its merits.

Saying Secretary Carson is unqualified or simply dumb doesn't change the narrative on public housing.  Saying the President doesn't support or respect poor Americans' struggles won't change the support most Americans have for public housing.  Making the case that public housing - and greater federal involvement in affordable rental housing - is good for the country and good for everyone - city or suburb - is the only way to effectively fight the Trump administration.  Right now, the playbook is wracking up losses. It's time to change it.

2. Up With LIHTC

Second, Congress continues to gaslight the housing community about the effectiveness of the main national affordable housing policy – the Low-Income Housing Tax Credit (LIHTC).  Enacted after the last major tax overall in 1986, it has created over 3 million housing units representing 90% of all affordable units built during the period.

That’s seen as a success by many well-meaning actors in housing despite the fact that it is has demonstrably failed to provide the volume of units our country needs.  99% of US counties are in an affordable housing crisis. When the only policy explicitly designed to address affordable housing is failing that broadly, it is irresponsible to defend the status quo. But that is largely what is happening at the moment.

The legitimate fear from this proposed tax cut plan - I won't pretend it's some nebulous "tax reform" - is that lower corporate rates will dramatically weaken the incentive to partake in the LIHTC program. What will be left unsaid is that relying on the private sector to build affordable housing through tax incentives is inherently and obviously flawed.

Instead of arguing for a larger policy shift, many housers will try to defend LIHTC and, by extension, the status quo of federal housing priorities. When, inevitably, both parties do offer some type of carve out for LIHTC to remain attractive, this will be hailed as a victory. We should know better by now. We should be arguing for more policies like community land trusts that offer the same type of decentralized, local control that many communities want, while rejecting the speculative component that largely dictates development today.

3. Upside Down on Homeownership

Third, we have learned nothing from the 2008 mortgage crisis.  Not only have we failed to address the dangers of increased financialization of the housing market, or the more fundamental challenges of slow wage-growth, rising debt, and geographic inequality that is crushing the housing market, but we have never rectified that promoting homeownership for 80 years has been a disaster for our country.

Homeownership has undoubtedly pushed millions of Americans into the middle class but it has also prevented millions more from doing so.  Wealth inequality across racial lines has increased in recent decades.  Racial segregation has increased in recent decades.  The environmental and social costs of single-family suburban sprawl will only get worse as a generation of baby boomers age and realize no one is coming to buy their homes at what they think they are worth.  Nobel-prize winning economist Robert Schiller has long debunked that houses automatically appreciate in the US. In fact, on average, they haven't at all since the 1940s. That's only going to get worse in many parts of the country.

The only minutely (unintentionally) progressive element of the tax cut plan currently under consideration is reducing the mortgage interest deduction, which disproportionately benefits wealthier Americans. This is being met with fierce resistance by the housing industry. It's not hard to see why homeowners and housing developers wouldn't want to support massive tax cuts for corporations and the top percent of earners.  Reducing the MID to pay for tax cuts isn't what many housing reformers had in mind, but it shows how hard it will be to try such a thing under any circumstances.

This is because treating housing as a tool of wealth creation as opposed to one for shelter provision is the definitive policy choice of 20th century America.  We have built a nation on this principle (along with car ownership, which of course is directly tied to housing.)  There are many ills facing our society today and our housing policy explains a lot of them.

To truly change this, we must first accept a blatantly obvious reality: treating housing like an asset has failed.  We have commodified it, securitized it, and speculated on it like it’s something less important than a basic human right.  Many elements of our country have profited handsomely from this.  Indeed, go to any real estate conference now and there will be a technocratic consensus that “the market is doing well” while ignoring the larger truth: our society is not doing well.

Housers must recognize the opportunity that we have to dramatically change the discussion on housing by rejecting the 20th century concept of housing.  Millions of Americans are hurting and are angry.  Ideas that might have once been considered 'radical' by some people - even many housing advocates - are now entering the conversation and public policy. Most Americans recognize that the old way we constructed our politics isn't working. 

We must extend that realization to the built environment and offer a positive, actionable vision for a better future.  Housers have to stop accepting a failed premise and fight to establish a new one. It starts with saying simply, proudly, and forcefully that housing is a right. 

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.

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.

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. 

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.

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.

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.

Carson Heading HUD Would be an Insult to Everybody

Asleep, but figuratively or literally? (fallssociety)

Asleep, but figuratively or literally? (fallssociety)

In 1966, Dr. Robert C. Weaver became the first Secretary of Housing and Urban Development (HUD) and the first black man to have a Cabinet-level position in the federal government.  He had a Bachelors, Masters, and PhD from Harvard University and started in government during the New Deal as a member of FDR’s famous “Black Cabinet.”  He later worked in the Kennedy Administration and helped lay the groundwork for HUD, which was eventually created during President Johnson’s “Great Society” platform with Dr. Weaver envisioned at its head.  Though largely forgotten today (though his name is on the HUD Building in DC) Dr. Weaver’s influence on government and civil rights, forged through years of government work and policy execution, is a testament to what talented individuals can overcome and accomplish through a dedicated federal government.

So it is in surprisingly stark contrast this week that there have been strong indications that President-elect Trump has picked another black doctor - Dr. Ben Carson - for Secretary of the US Dept. of Housing and Urban Development.  Though no official announcement has been made, Mr. Trump has floated the name on twitter and Dr. Carson, a former Presidential hopeful and accomplished brain surgeon with no government experience, has signified that he is considering the position.  If this does pan out, it would be an insult to every American.

Let’s start with the obvious: Dr. Carson is not at all qualified to run any government agency. Just ask him - a week earlier he took himself out of the running for any cabinet position because he didn’t think he was qualified to run a federal agency.  He is right. He has no experience in government and no experience in managing a large agency of any type, let alone one concerning housing.

Dr. Carson was clearly a talented doctor and an inspiring speaker, but he has never worked in housing (and has not show much aptitude for politics).  He has only commented on housing issues publicly a few times. In those cases, he has come out against fair housing policies and the Supreme Court ruling on disparate impact in Texas because they are ‘social engineering.”  That either shows a shocking ignorance towards the legacy of housing policies on economic segregation and inequality or a deep cynicism. I will give Dr. Carson the benefit of the doubt and assume it is ignorance.

In any case, Dr. Carson is not prepared to take over one of the most important federal agencies in government – tasked with managing $1 trillion of home mortgages and a $50 billion annual budget towards fair and affordable housing policies and legal defense for hundreds of thousands of Americans.

Apparently, Mr. Trump felt Dr. Carson was qualified because: 1. He was born in a city (and presumably has lived in a few houses) and 2. He supported Mr. Trump early.  You could also easily add in a third reason: Dr. Carson is black.  Given Mr. Trump’s clear preference for older white men for his top positions (and the growing criticism for it), this was an easy, if entirely empty, gesture to make.

Unfortunately, it is not uncommon in any Presidency for cabinet positions to be filled by unqualified loyalists or isolated figureheads. It has been especially true at HUD where many Presidents have placed token minority hires or personal loyalists who have been ignored (George Romney, Jack Kemp) or guilty of massive corruption (Samuel Pierce). So while there have been accomplished Secretaries in the past (Shaun Donovan comes to mind), HUD has largely been an afterthought for most Presidents. The fact that Mr. Trump has picked Dr. Carson is sadly not unprecedented.

However, what is unprecedented is the affordable housing crisis gripping the nation and crippling its long-term economic potential.  This blog has documented just how bad the crisis is and just how much it could damage our economic and social prosperity for generations.  It is simply too important an issue to be dismissed with such an abysmal appointment.

Picking Dr. Carson tells us much about what a President Trump will do for housing. At best he appears uninterested and likely to simply ignore the problem. Dr. Carson, unless he surprises, would not be a powerful advocate for housing and will not have a powerful voice in the administration.  Whether it’s the still-troubling status of Freddie Mac and Fannie Mae or the systemic lack of affordable housing in our cities, there are too many issues in housing for President Trump to take such a dismissive approach about it.

At worst, President Trump will use Dr. Carson as cover while appointing undersecretaries like Rob Astorino from Westchester who would very likely peel back affordable housing policies and cease to enforce fair housing laws.  Dr. Carson could oversee HUD as it quietly retreats into underfunded irrelevance.  The federal government could stop defending poor residents against discrimination at the local or city level and allow the continued resegregation of our communities.  HUD could also likely enrich the private sector by dismantling mortgage assistance and other housing programs without addressing the needs for poorer homeowners and renters.

It remains to be seen what Dr. Carson will decide on, but that it is up to him – after just stating he wasn’t qualified for such a position – shows a troubling sign for what the Trump Administration will prioritize.  Rather than acknowledging the scale of problem facing the nation with housing and finding qualified people with the experience and ideas (whether one agrees with them or not) to tackle it, Mr. Trump has evidently thought little of policy implications and a lot about personal loyalty. This does not bode well for Americans across every type of home.