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Addressing America’s Homelessness and Squalor: What We Could Do If We Cared

Published by Anonymous (not verified) on Sat, 17/04/2021 - 12:18am in

WASHINGTON, WARD 1 — “I wanna know where the $2.5 million is – that’s my reaction.” Muhsin Boe Luther Umar — or as we call him, Uncle Boe — throws his hands up and shakes his head. In his role as both Resident Council President at Garfield Terrace and D.C. Advisory Neighborhood Commission (ANC) 1B03 Member, he’s had more than his fair share of dealings with D.C. Housing Authority (DCHA). So I had asked him what his reaction was upon hearing about the recent audit of three DCHA contracts, which found nearly $1.4 million in wasted funds.

“You’re talking $1.4, I’m talking about $2.5 million spent on one senior housing building,” he says. Back in 2018, D.C. is said to have spent $2.5 million on “weatherizing” improvements for Garfield Terrace, “$975,000 spent to keep the roof from leaking – it’s still leaking,” Boe says, pointing to the water stains on the ceiling. He went on:

That money was supposed to put new light fixtures in the building, which you don’t see. That money was supposed to redo the rooftop area. It wasn’t done. And solar panels that don’t work. And if it’s working, where’s that money going? There’s a monthly payout for solar programs – so where is that money? Or if it don’t work, why doesn’t it work? Where is the money?”

We’re standing in the community room on the ninth floor of Garfield Terrace, a senior-citizen public housing building in D.C.’s Ward 1. Cans and boxes of non-perishable food sit ready to give out to residents. Art projects dot the tables and Boe buzzes from the newly painted kitchen to the seeding room to show me all the veggies, fruits and herbs getting ready for potting in the rooftop garden. On either side of the community room, spring is budding and blooming – from strawberries to lemon cucumbers to a ridiculously delicious tasting salad he has me try, chuckling at my wide-eyed reaction.

DC Housing

Boe in the seeding room standing among freshly sprouting herbs and veggies. Eleanor Goldfield | ArtKillingApathy.com

The rooftop is one of Boe’s many projects, along with making benches out of discarded shipping pallets, fine-tuning and improving the outdoor wheelchair accessible garden and hangout spot, and putting together new ideas for arts and crafts that the seniors can do to keep up their mental and physical acuity.

There’s also the COAN program, or “Check On A Neighbor,” which started soon after the pandemic and works just how it sounds: neighbors checking on neighbors to make sure needs are met, that folks are doing okay and have the resources and information they need to stay safe and healthy. Furthermore, with collaborative community partnerships, Boe estimates that some 60,000 meals have been served at Garfield Terrace. “And we served meals every day,” he says.  This was something that DCHA was supposed to have a handle on, Boe says, but ended up failing miserably at. “They contracted with a company named Terrific Inc., which falsified signatures, making millions of dollars saying that they were doing stuff that wasn’t being done,” he tells me. Terrific Inc. eventually left the building, but theirs is just one of the many stories and ways in which DCHA has battled Boe and his plans.


Housing Authority with the attitude of a weed-whacker

Last year, DCHA locked residents out of the community room, barring access to the kitchen and rooftop garden. They’ve called the cops on Boe, claiming he was causing a disturbance at the building only to find out that he was hundreds of miles away in Alabama. Whoops. Meanwhile, in his glass house throwing stones, DCHA Executive Director Tyrone Garrett is in the crosshairs of a whistleblower lawsuit after a former employee claimed that she was fired last August for raising concerns that Garrett was “neglecting the health and safety of DCHA employees and residents, violating the terms of her contract, and protecting his ‘friends,’ who hold high ranking positions in DCHA.”

This wouldn’t come as much of a surprise to the folks at Garfield Terrace. On top of the improvements they’ve contracted for but that have yet to materialize, DCHA owes Garfield Terrace roughly $15,000 in supplies that they green-lit back in 2018 and that would have prepared the seniors for the onslaught of the pandemic.

“We’re owed $29,000, and we were only planning on spending $15,000,” Boe says. “Podcasting and studio equipment, laptops and desktops for the seniors, printers, an upgrade to the kitchen, patio furniture for the rooftop, stuff to do hydroponics and aquaponics,” he specifies, counting them off on his fingers. “And this was in 2018. If we would’ve gotten that, we’d already have a garden up and running so that people could eat healthy. We were supposed to get sewing machines, so we could’ve made our own masks. We would’ve been prepared for the pandemic – for remote connection. We would’ve had the materials to engage, and protect the seniors,” he says.


Taking the fight to City Hall

As we continue our conversation, Boe reminds me that he still plans on getting that money. The fact that he can fill so many gaps left by DCHA doesn’t mean he’ll stop calling them out for their failures. And their reactions up till now show that they notice him. As the saying goes, “…then they fight you, then you win.”

DC Housing

Boe in the community room with some of the foodstuffs available to residents. Eleanor Goldfield | ArtKillingApathy.com

Still, it’s a battle hard fought and even more hard won. While those officially tasked with protecting and serving the people fight our work to protect and serve our communities, the question arises as to how to hold them accountable – how to watch the watchers and get what we’re owed. To be sure, there’s not just one answer to that question, just as there isn’t one cure-all tactic. But regardless of where our expertise and energies lie, we should expect a messy morass made thick by reams of paperwork, tangential switch-backs and roadblocks.

Take, for instance, audits. Now audits are pretty routine, be they independent audits, like the aforementioned one in D.C. or the audits via the Office of Inspector General (OIG). Indeed, outside of the ready OIG list, all you have to do is google a random city and “audit” and you’ll find plenty of links to reports on misuse, fraud, misappropriation and more. Still, just because something is plentiful doesn’t mean it’s accessible. This DCHA audit, for example, has yet to be released to the public. When I spoke to Mitch Ryals, the journalist who broke the story on the $1.4 million audit, he said that “DCHA still hasn’t disclosed the audit despite an FOIA request.” According to an email sent to Ryals by DCHA spokesperson Tony Robinson, the DCHA doesn’t think the audit is legitimate and asked Ryals to not publish the story. Sure, that sounds legit.

Still, housing audits are just one of many keyholes through which to glimpse the inner workings of housing authorities. Deborah Thrope is Deputy Director of the National Housing Law Project (NHLP), a housing justice and tenants rights organization. In order to bolster advocacy for tenants and recommendations for housing authorities, she tells me that NHLP pulls from a lot of sources, but it’s hardly a one-stop shop. She explains:

Only some of [the data the Department of Housing and Urban Development, HUD collects] is accessible to the public, and the data it collects and publishes is sometimes not the data that is most helpful for advocates and tenants. In that case, tenants and advocates must rely on local housing authorities for the data, which can be challenging if the housing authority is unwilling to provide it. This results in unnecessary delays to collect the data because advocates and tenants have to do public record act requests.”

Now, there’s the obvious question of who, aside from experts and journalists, has the time or energy to dig into housing data or submit public record requests, and why there isn’t generally more transparency and accessibility. However, there’s also the question of what’s happening with all this data. After all, what’s the point of collecting performance information unless you expect to address and/or change that performance? Without action, these reports become paper-thin illusions of intent.

“So, that’s the problem. A lot of times these things just go into the abyss,” Thrope says. “There are over 4,000 housing authorities,” she explains, “and as far as I know there’s no standard operating procedure for following up to ensure that recommendations have been followed.” She emphasizes that the recommendations found in audits are also just that – recommendations. Enforcing a suggestion is as flimsy as it sounds, and whether or not the housing authority takes action to address the issues found in an audit seems to be up to them.

I reached out to the HUD Press Office with these same questions and got a reply oddly specified for the Cleveland Public and Indian Housing Office (PIH) stating that the field office conducts “follow-up activities for audits,” helps to develop “appropriate management corrective action strategies,” issues “management decisions for audit findings within six months after receipt of the audit report,” and ensures “the public housing authority takes appropriate and timely corrective actions.”

As to my question of how HUD ensures those corrective actions are taken, the response was simply to see the “established guidance outlined” earlier. The response doesn’t build overwhelming confidence – even in the Cleveland PIH which was for some reason the highlight of their reply. It seems that something is getting lost in communication, and not just between me and the press office.


Very selective foot-dragging

To take an example, in February of this year, a report by the OIG showed that for decades HUD knew about and ignored lead poisoning at a public housing project in East Chicago, Indiana. Back in 1985, the EPA discovered high levels of lead at the West Calumet Housing Complex, built atop a former lead smelting plant in 1972 – what a coincidence! Fast forward to 2009 and the development was declared a Superfund site and was finally demolished in 2019. One might wonder why it took 24 years to classify a lead-soaked heap as a Superfund site or why it took another 10 years on top of that to finally move residents and demolish the building. Well, then you might also wonder why the HUD field office in Indianapolis responsible for conducting environmental reviews for the building, didn’t. They also failed to alert residents to the unsafe environmental conditions in which they were living.

The report goes on to point out that thousands more public housing projects built on contaminated land could be at risk of similar mass poisonings. It’s no surprise when you consider the fact that 70% of hazardous waste sites officially listed on the National Priorities List are located within one mile of federally assisted housing.


Source | Earthjustice

And yet, a report done last year by the Shriver Center on Poverty Law states that housing agencies routinely approve new construction and “substantial rehabilitation while ignoring known environmental contamination.” After all, there’s a growing need for affordable housing and we couldn’t possibly stem the construction of luxury apartments and homes so let’s just throw ’em into contaminated cesspools.


Build Back Better for Whom?

A mid-March report by the National Low Income Housing Coalition found that there’s “a shortage of nearly seven million affordable and available rental homes for extremely low-income renters, those with incomes at or below the poverty level or 30% of their area median income.” Based on the fact that some eight million Americans plummeted into poverty between May and October of 2020, my guess is that seven million is a conservative estimate.

Meanwhile, in January 2020, the Wall Street Journal estimated that builders were on track to build 371,000 new units of housing – more than any year since the 1980s – with 80% of those being luxury or “Class A” properties. And as millions of Americans struggle to find housing or stay in their homes (as I covered in the previous housing article) a recent Boston Globe investigative report digs into what they call “wealth storage” in the form of luxury real estate. Essentially, the richest of the rich purchase condos through anonymous shell companies in order to house their millions rather than themselves and their families.

The examples given are grotesque and staggering. For instance, in 2014, 54% of all real-estate purchased in New York City for more than $5 million was bought by anonymous shell companies. Some 900 condos in Manhattan, the majority of which are owned by anonymous shell companies, are worth the equivalent of 20,000 average American homes. In Boston, massive luxury projects spring up like gilded pimples across the city, here again with anonymous shell company ownership – in one building, close to 80% of the units were anonymously owned.

The mere thought of 80% empty buildings when thousands are homeless is enough to send blood shooting out of your ears – but wait, it gets worse. The sheer scale of these projects requires a shit ton of material and of course energy. After all, you can’t have a luxury condo entryway that isn’t properly lit – even if only two people see it. It goes so far that for one project in Boston a natural gas pipeline was constructed solely to service the units of that one building.

Across the country in the San Marcos Foothills in Santa Barbara County, California, community members have mounted a campaign to save the beautiful public wildlife preserve from being decimated by an eight-home luxury construction project (yes, that’s eight (8) homes on 104 acres). The scale and arrogance of these projects highlight yet another casualty of luxury homes: public space and amenities – parks, schools, libraries, trails, and more. The goal is shuttered wealth, in all senses of that word – shuttered from taxes, shuttered from the unwashed masses.

In the shadow of these empty high-rises, these sparkling sentinels of peak capitalism, vast poverty knocks on bolted doors. A quick internet search will show you row after row of ‘CLOSED’ signs at housing authorities across the country. Here in D.C., the public housing waiting list “is currently closed to new applicants. There is no scheduled time to re-open the waitlist.” The Panama City Housing Authority has a closed waiting list notice from July of 2018.

From big cities and regions like Oakland Housing Authority and Orange County Hosing Authority, to smaller ones like Windsor Housing Authority in Connecticut and Kelso, Washington Housing Authority (which has had a closed waiting list since March of 2018), public housing may as well be a luxury condo for these folks in need. Based on the latest report by Opportunity Starts At Home, only 5.2 million households get federal rental assistance “to afford modest housing.” Four in ten low-income people are homeless or pay over half their income in rent, and some 16 million households in need are shut out of the bare minimum in rental assistance because of funding limits.

Thrope echoes this point in our conversation, making it clear to me that while her work focuses on pushing housing authorities to do better, there is a serious funding issue to contend with from the outset:

Housing authorities are extremely under-resourced, so they’re running programs for the most part on a shoestring. You want the housing authorities to do the right thing, but what is the stick – because cutting funding really isn’t an option. Because families need support. If you cut the funding, they’ll just serve less people.”


Follow the money — bring your sick-bag

Indeed — as Diane Yentel, president and CEO of the National Low Income Housing Coalition, (NLIHC) testified to Congress in 2019 — “adjusting for inflation, the federal budget authority for housing assistance programs in the 1970s was nearly three times more than it is today, despite the significant growth in the number of low-income renters eligible for housing assistance.” To quote Boe:

Where is the money?”

Put simply, it’s misappropriation on a large scale.

It’s tax breaks for building luxury condos and letting those sit empty for the sake of shuttered wealth — then incentivizing the construction of more, devastating both environment and community.

It’s $107.5 billion dollars more spent on police than on public housing.

Boe’s workshop where he turns discarded pallets into benches with a message. Eleanor Goldfield | ArtKillingApathy.com

It’s a military budget, which Biden proposed increasing, bolstering the world’s largest terrorist organization and largest polluter in one fell swoop. I guess that’s ‘building back better.’

And while it’s become somewhat cliché to point out how severely grotesque our military budget is (and that’s just the official military budget – not even stuff like the $21 trillion that’s gone ‘missing’), we have to keep pointing this out – broken record or repetitive nag though we may be. A complacent passivity for $753 billion spent on each year of death and destruction would be unacceptable even if everyone in the country had a luxury condo, free healthcare and a fair-wage job planting trees.

It is of course, even more unacceptable since that is hardly the case. Still, the military budget is but the most glaring and macabre of money pots to pull from. In this land of consumption, there are many more.


A few simple, obscene cost comparisons

For instance, an op-ed from May of last year points out that “the nation’s homeless population could be housed for $10 billion a year — less than the price of one aircraft carrier.” Between 2000 and 2018, Amazon – that’s one company — has received more than $1 billion in tax credits. Every year, American corporations dodge some $70 billion in taxes via the use of offshore tax havens. Just the annual cost of the mortgage-interest deduction, another name for a tax subsidy for wealthy homeowners, is $77 billion – that’s every year! Hell, you could make more than $70 billion a year just by taxing the goddamn churches. How about some separation of church and state for once?

It would take less than half of that to pull more than 2 million children out of poverty. Isn’t that a thing that churches supposedly care about? The Children’s Defense Fund proposed housing vouchers for “all families with children with incomes below 150 percent of the poverty line, and for whom market rents are unaffordable.” This would come to roughly $22.3 billion annually, reducing child poverty by 22%.


Addressing our system’s deeply rotten and corrupt core

In other words, it’s not that we as a nation don’t have the money. It’s that the priorities on every rung of government are so painfully backwards.

It’s a combination of lack of funding in the right places and a lack of common sense, ethics, morals and/or a modicum of humanity when it comes to using that funding. Lest we forget, it was just a year and a half ago that then-Secretary of HUD Ben Carson was caught trying to buy $31,000 in office furniture. And let’s be honest, if you even get to the point where you’re spending $31,000 on office furniture, you shouldn’t be making decisions that affect people who make less than $31,000 in an entire year.

Likewise, there shouldn’t be a bill for $2.5 million in repairs when the roof is still leaking, when hallways and common spaces are in serious need of fixing.

There shouldn’t be recommendations for improvement – there should be deadlines for improvement.

There shouldn’t be questions about how much we can spend to house people, but rather how quickly we can get people into safe and comfortable homes.

And this is why piecemeal and shallow reforms won’t cut it – just as I wrote about in the previous article on housing. We need structural changes in order to address the deeply rotten and corrupt core of our system.

That takes time – it takes diversity of tactics. As Thrope says to me, “we’re always trying to think of creative ways to get housing authorities to comply with these recommendations, and in some cases requirements.” For Boe, a new tactic has been his position as an ANC member. “Being what you’d call an aggressive activist,” he says with a chuckle. “I’m not going away. It [the ANC position] gives we the people more leverage to be able to deal with DCHA. They gotta respect my position now.” However we advocate and fight for our communities, we gotta keep it up – we gotta grow and shift and build and spread – like the vines starting to climb on the trellis at Garfield Terrace’s rooftop garden.

From the south side of that garden, you can see the postcard view of D.C. – the Capitol, the Monument, cherry blossoms oozing color amidst the siege of gentrification. From the east side of the garden, you can see a brand new chic apartment building. Down the street there’s a Whole Foods. This is prime real-estate, and DCHA knows it. Last year a resident I met told me that her grandmother had once been a resident at Garfield Terrace – and back then it was the cream of the crop. It doesn’t take a house-flipping expert to see what’s at play here: make it deplorable, displace, raze, and that neoliberal dog whistle: build back better – for those who have the status to pay for better.

But Boe isn’t buying it and, as he shows me another outdoor space on the ground floor with overgrown concrete planters, he paints an idyllic picture of a vibrant garden retreat for residents, and neighbors. The antithesis of shuttered wealth – community. “Imagine it, sis,” he says, looking over at me, clearly smiling beneath his mask. “Not just for me, for us, for the whole community – and their kids, your kids and all of ’em, after I’m gone.”

Feature Photo |

Eleanor Goldfield is a creative radical, journalist, and filmmaker. Her work focuses on radical and censored issues via photo, video, and written journalism, as well as artistic mediums including music, poetry, and visual art. She is the host of the podcast, Act Out, co-host of the podcast Common Censored along with Lee Camp, and co-host of the podcast Silver Threads along with Carla Bergman. Her award-winning documentary film, “Hard Road Of Hope” is about West Virginia as both resource colony and radical inspiration. She also assists in frontline action organizing and training. See more of Elanor’s work @ ArtKillingApathy.com | HardRoadofHope.com

The post Addressing America’s Homelessness and Squalor: What We Could Do If We Cared appeared first on MintPress News.

Notes On Shelter Costs

Published by Anonymous (not verified) on Mon, 12/04/2021 - 11:26pm in


Housing, Inflation

Shelter is a necessity, and so it is certainly an important component of the cost of living. However, the issue that we are concerned with is inflation, as well as the narrower issue of how to shelter should appear in a consumer price index (like the CPI).
Different countries have different norms with respect to how shelter is provided, and those norms have changed over time. My comments here reflect the norms in Canada and the United States, but they should translate to other developed countries once we account for local idiosyncrasies.
NOTE: This article is a draft section from a chapter on asset prices and inflation. It is preliminary, and needs beefing up with data. It is in a far more tentative state than usual, as I will be iterating on it once the rest if the  chapter is finished. It needs more statistical data, and I am largely working from memory. However, chasing the data will take time, and I will only do so once the text is closer to a finished state.RentRented shelter is the simplest one to deal with, at least from a high-level perspective. We just need to survey rents, and then look at how much they change over time, taking into account quality differences. Although most rental units in North America are apartments or other multi-unit dwellings, houses can also be rented.
From a theoretical perspective, rents should fit within our notion of inflation. It is a service that is typically paid monthly and re-negotiated on an annual basis, which is a fairly common situation for services. It seems entirely plausible to argue that if wages are rising as a steady pace, sooner or later, rents will eventually follow. However, I want to underline that the relationship should not expected to be perfect – the rental market is a market, which also faces regulation that depends upon the jurisdiction. (For example, Quebec has rent controls.)
The theoretical simplicity of rents has meant that they are a part of consumer price indices, and effectively stand in for all of shelter.
(Note:The comments in this paragraph need to be validated.) One of the stranger issues associated with rents is the question of utilities. In many multi-unit rentals, heating and central air conditioning expense are embedded in the rent. If the statistical agency wants to split out the energy expense from the rent, we can end up with a strange effect: higher energy prices increase the energy component of the consumer price index, but since rents are fixed for the year, the non-energy component of rent must fall. As such, higher prices in energy causes a fall in “core” consumer prices (ex-food and energy). This effect is one of the weaknesses of looking at core inflation. Nevertheless, this is purely an issue for the interpretation of the consumer price index: the headline level reflects the cost of the overall basket.
House prices are the greater concern and will be the subject of the rest of this section.What is the Cost of Owning a House?For an individual who buys their residence, it is easy to measure the shelter component of their cost of living: they can just add up how much they have spent. However, when we are discussing inflation, we need an economy-wide measure, not how much someone spent on something.
Since writing “residence” is somewhat stilted, I will replace “buying a residence” with “buying a house.” The rising importance of multi-unit condominiums might make that somewhat dated. However, it also fits better with how the subject is normally framed – we refer to “house price indices,” and not “residence price indices.”
One of the joys of homeownership is the need for maintenance, as well as paying for insurance and utilities. Those are already incorporated into consumer price indices. Within this area, property taxes are one component of the cost of living that is not directly part of the CPI. As discussed in {another section of the book}, the CPI drops things like taxes, since they reflect the policy structure of the economy.
(Property taxes presumably indirectly appear in the CPI via rents. From the BLA FAQ: "In addition, property taxes are indirectly reflected in the BLS method of measuring the cost of the flow of services provided by shelter, called owners' equivalent rent, to the extent that these taxes influence rental values." Thanks to Jerry Brown for highlighting this point.)
This leaves us with the controversial cost: house prices. The problem with judging the financial effects of house price changes on people is that people are different. Not everyone follows the exact same path towards home ownership.

  • The most common path is for younger people to buy a relatively small house (“starter home”) with a down payment percentage that varies across jurisdictions and over time. In the good old days in North America, a typical down payment was at least 20% of the house value – but lending standards shifted towards lower down payment percentages. The house buyer thus faced an up front cost of 20% of home value, and a mortgage for the remaining 80%. There are also many other costs associated with buying a home, but they would show up in other components of the CPI.
  • Someone who already owns a home may buy another. They are only exposed to the difference in home prices (plus the costs of the move, including broker fees). If they trade up, they need to inject money to make up the difference (either cash, or a larger mortgage), but if they trade down, they receive cash. If we are concerned about “average” behaviour, there would be a lot of cancellation between people trading up and down.
  • Some people could inherit their house. They get it for free.
  • There could be relatively rich people who buy their first house without a mortgage.
  • A relatively small proportion of the population will own second (third…) properties. In Canada, a good portion of this demographic are cottages (“chalets” in Quebec), quite often passed down the family. 

One-Time Cost Plus a MortgageOne could imagine being concerned with the travails of a multi-millionaire who keeps buying houses and giving them away once they are bored with them. For them, a house price index would reflect the cost of living their chosen lifestyle. However, we are interested in a measure that reflects society at large, and for society at large, house purchases are debt-financed. It would be entirely typical to only make a single down payment once in their working life, and then finance any other houses bought via the equity built up in the home that they sell. 
This has the following effect: for such people, there is only a single payment in their life where their spending is directly proportional to house prices, every other payment they make is intermediated via mortgage payments. This means that that their cost of shelter is intimately tied to mortgage interest rates. The one-time nature of the payment also means that it would end up with a relatively low weighting in any notion of an aggregated cost of living.Mortgage PaymentsThe structure of residential mortgages varies across countries. As an example, I will use a 30-year fixed rate mortgage, which is a common structure in the United States. This allows a much longer period of fixed interest rates than is the case of other “Anglo countries” (the United Kingdom, Canada, Australia, and New Zealand).
(Note that this numerical analysis is tentative.)
Using the weekly average fixed rate mortgage series from Freddie Mac, the 30-year conventional mortgage rate dropped from a peak of 18.44% in 1981 to 2.66% in 2020. Unsurprisingly, this makes mortgages more affordable. At the peak interest rate, a monthly payment of $1 per week allows for a mortgage of $64.81 (ignoring other fees buried into the mortgage). At the low level, the same payment allows a mortgage of $247.84, which is a multiple of about 3.8 times.
Meanwhile, $1 in 1981 has a greater value than $1 in 2020, although there was disinflation, inflation rates were still positive. This means that if the “cost of a mortgage payment” kept up with inflation, the monthly payment would be $2.85 in 2020, which means that the equivalent mortgage principal is $706, or about 10.9 times the 1981 level. (Note: I used an inflation calculator, while I should have grabbed the specific monthly index values.)
As such, the secular bull market in housing – which is normally discussed in nominal terms – is not too surprising.Down Payments and Financial EngineeringFalling interest rates from the Volcker era peaks cushioned the impact of rising house prices on household monthly budgets. Nevertheless, households still were expected to make a down payment on the mortgage. If the terms of borrowing were unchanged, then rising house prices would directly translate into a higher down payment, making houses less affordable.
However, the financial sector is filled with highly paid people who take pride in their ability to conjure financial wizardry. The ingenious financial engineering solution to the greater difficulty of saving for a down payment was to lower lending standards. Traditional mortgages with 20% down payments are an extremely safe lending structure, and default rates on such mortgages were low. “We are being too conservative” was the assessment in the financial sector, and so they created new products to allow for a reduction in down payments. (For those readers with an interest in economic theory, this is exactly the script that Hyman Minsky described.) Meanwhile, governments love rising house prices, since a housing bull market creates jobs in construction – which is one area were college degrees generally superfluous. They also made it easier to make down payments through various housing “affordability” programmes. (These programmes have the effect of increasing the price of houses, which makes housing less affordable to people not using them.) For example, Canada lets workers dip into their registered retirement savings plans (RRSP) to help make their first down payment.
If we cut the down payment from 20% to 10%, we can double the price of the house we can buy, if we assume that the down payment and not the monthly mortgage payment is the constraint on spending. If we drop the down payment to 0% (which some more inventive bankers pioneered), down payments drop out of the picture entirely.Cost of Living ComplexityThe above considerations explain why raw house price changes do not translate one-to-one into a cost of living (or inflation) increase. We need to consider the effect of interest rates, and realistically, the historical reduction in the percentage size of the down payment. 
Such nuances are typically ignored by commentators with an ideological axe to grind, who focus solely on the changes in house prices. Their attitudes might change if and when mortgage interest rates rise, at which point they will probably incorrectly calculate the effect of higher interest rates.Why Did House Prices Rise?Although I make barbed editorial comments, my desire is that this book deals mainly with the facts and keep commentary to the absolute minimum. However, the subject of house price increases creates a fair amount of controversy, and so I will offer some of my views.
From my perspective, the aggregate housing market is relatively straightforward to analyse: we can count on households to spend as much on a house that their banks will lend them. (Admittedly, this has not helped my real estate forecasting ability; I have been bearish on house prices in my hometown for at least two decades, when they have course skyrocketed. Luckily, my wife had bought a house before we were a couple.) There can be regional bull and bear markets, owing to rising and falling fortunes of industries in different areas. 
What we see is that lending standards are based on payments as a percentage of household income. This percentage will vary relative to average rents, but these two costs generally do not get too far out of line with each other.
There are three factors that caused the generational bull market in housing from 1980 on.

  1. Average wages rose, generally slightly faster than the inflation rate. (This implies a rising standard of living.) If we keep the payments as a percentage of wages fixed, that means that house payments would rise faster than the inflation rate. Although quality improvements (larger houses) can absorb some of the higher payments, existing home prices are also likely to rise roughly in line with wages.
  2. However, rising standards of living and the falling relative prices of goods has meant that shelter payments are in increased share of incomes. This means that spending on shelter rises even faster than wages, which in turn rise faster than inflation.
  3. Finally, since interest rates fell, this means that house prices rose even faster than the spending on shelter.

Taken together, it should surprise nobody that house prices have risen faster than inflation measures like the CPI. More generally, market forces result in tying shelter costs to wages, and not the price of other consumer goods. In the same way that we do not expect wage rates to rise as the same rate as final consumer goods, we should not expect shelter spending costs to match the price rises of non-shelter components of the CPI, even without taking interest rate changes into account.
Although the inflation calculation is contentious, it is safe to say that many people are very mad about the rise in house prices. Although many economists cheerlead for rising house prices (particularly bank economists, who know where their bread is buttered), my view is that rising house prices damage the standard of living of citizens. Canada used to have cheap housing costs (outside of Toronto and Vancouver), and I felt the difference when I moved to southern England in the early 1990s. Those days are no more, and this has had negative effects.
The policy to deal with this problem is straightforward: tighten mortgage lending requirements. It is difficult to regulate business borrowing without instituting capital controls, but financiers are not going to “arbitrage” regulations in broad daylight for penny ante household borrowers. In principle, rolling back all the idiotic loosening of lending standards that allegedly made home ownership more “affordable” would in fact make them truly affordable. The problem – which is not easily ignored – is that drastic tightening of lending standards would torpedo the housing market, and that would cause hefty job losses in the construction sector. In the absence of some policy to absorb that blow, this would cause a repeat of the Financial Crisis downturn. (My earlier book, Modern Monetary Theory and the Recovery, discusses one policy to help stabilise the economy, the Job Guarantee.)
Raising interest rates would be another way to reduce home prices. However, the theory of interest rate policy is in disarray, and central bankers are casting about in a wide variety of directions to find a new framework for setting rates. Adding targeting house prices to the growing list of things that central banks are attempting to do just adds to the incoherence.
(c) Brian Romanchuk 2021

How COVID-19 Affected First-Time Homebuyers

Published by Anonymous (not verified) on Mon, 12/04/2021 - 9:00pm in

Donghoon Lee and Joseph Tracy

How COVID-19 Affected First-Time Homebuyers

Efforts in the spring of 2020 to contain the spread of COVID-19 resulted in a sharp contraction in U.S. economic growth and an unprecedented, rapid rise in unemployment. While the first wave of the pandemic slowed the spring housing market, home sales rebounded sharply over the rest of the year, with strong gains in house prices. Given the rising house prices and continuing high unemployment, concerns arose that COVID-19 may have negatively affected first-time homebuyers. Using a new and more accurate measure of first-time homebuyers, we find that these buyers have not been adversely affected by the pandemic. At the same time, gains from lower mortgage rates have gone to existing homeowners and not to households purchasing their first home.

The strong performance of the housing market during 2020 is reflected both in terms of the volume of home purchases as well as the growth in house prices. The chart below shows total purchase mortgages by year, broken down into first-time homebuyers (FTBs) and repeat buyers. The data are based on new mortgage liens on household credit files, and so will not reflect any “all cash” home purchases.

How COVID-19 Affected First-Time Homebuyers

The annual pace of new purchase mortgages has been trending higher since 2011. This growth accelerated in 2020, with purchase mortgage volume increasing 10.5 percent, compared to 6.0 percent in 2019. Similarly, house prices rose 9.2 percent in 2020 compared to 3.6 percent in 2019, according to CoreLogic, reflecting strong demand and relatively low inventories.

Using a large representative sample of U.S. household credit files, we can identify a FTB as the first instance of a mortgage lien on a household’s credit file. The share of new purchase mortgages taken out by FTBs each year is shown in the chart below.

How COVID-19 Affected First-Time Homebuyers

We find that in 2019, prior to the COVID-19 outbreak, the share of FTBs among all purchase mortgages (excluding all-cash purchases) was 48.2 percent. In 2020, the FTB share increased to 48.8 percent, as opposed to the decline based on NAR survey data. This slight increase is also in sharp contrast to the 8.5 percentage point decline in the FTB share following the financial crisis. The FTB share has been trending up since 2013 and is now essentially back to its level in 2000.

Meanwhile, rising house prices pushed up mortgage balances for both FTBs and repeat buyers. The chart below shows the average mortgage balance over time for the two types of buyers.


The average mortgage origination balance for FTBs increased by 10.2 percent in 2020, more than triple the pace of 3.2 percent in 2019. Similarly, mortgage balances for repeat buyers increased by 12.1 percent in 2020 after remaining relatively flat in 2019 (an increase of only 0.8 percent).

Rising house prices and a weak labor market might be expected to create affordability problems for FTBs, leading to a lower FTB share in 2020. Why did this not occur? Were FTBs in 2020 relatively older and thus had higher incomes and more time to save for a down payment? The next chart provides data on the average age of FTBs and repeat buyers.

How COVID-19 Affected First-Time Homebuyers

Instead of rising, the average age of FTBs actually declined slightly, to 36.1 years in 2020 from 36.5 years in 2019.

The monthly payments on a house depend on both the mortgage balance and the mortgage rate. S&P Global reports that the average rate on a thirty-year fixed-rate mortgage fell from 4.75 percent in 2019 to 3.77 percent in 2020. For FTBs, this decline in mortgage rates completely offset the rise in house prices (and consequently mortgage balances). Based on our credit panel data, the average scheduled monthly payment for a FTB declined slightly from $1,625 in 2019 to $1,598 in 2020.

In addition to being able to afford the monthly principal and interest payments on a home, a FTB must also accumulate sufficient savings to make a down payment. Higher house prices can make saving enough for a down payment even more challenging for FTBs. However, if households invested their down-payment savings in broad equity market indices, their after-tax return in 2020 would have exceeded the rise in house prices. Generous pandemic stimulus checks and automatic forbearance on federal student loans could possibly have helped FTBs save for a down payment as well.

If FTBs were facing difficulties in making a down payment as house prices increased, they could either have tried to make a smaller-percentage down payment or have sought down-payment assistance. CoreLogic provided us with average down-payment percentages for FTBs (using the official definition for FTB of not owning a home in the last three years). In 2019, the down payment for FTBs was 8.9 percent, on average. In response to rising house prices, this percentage declined slightly in 2020, to 8.6 percent.1

Borrowers using Federal Housing Administration (FHA)-backed mortgages can use down-payment assistance (DPA) to reduce the burden of saving for a home. However, the FHA does not break out DPA use by FTBs and non-FTBs, although FTBs represent 70 percent of FHA purchase mortgages in 2020, based on our data. The use of FHA DPA increased slightly from 39.3 percent in 2019 to 39.8 percent in 2020.2 Both the lower down-payment percentages and higher use of DPA indicate that some FTBs faced challenges in purchasing a home in 2020 but that credit markets were able to accommodate them.

Summing Up

The COVID-19 health crisis sent the economy into a sharp recession, resulting in an unprecedented increase in unemployment. At the same time, low inventories and strong demand led to faster gains in house prices. Despite these challenges, the share of FTBs actually increased slightly in 2020. The decline in mortgage rates offset rising house prices to keep monthly payments roughly unchanged. This result illustrates that in a market with low inventory and strong demand, the benefit from lower mortgage rates goes to sellers and not first-time buyers.

(1) We thank Frank Nothaft of CoreLogic for providing these tabulations.

(2) Table B-10, page 98. https://www.hud.gov/sites/dfiles/Housing

Donghoon LeeDonghoon Lee is an officer in the Federal Reserve Bank of New York’s Research and Statistics Group.

Joseph TracyJoseph Tracy is an executive vice president and senior advisor to the president of the Federal Reserve Bank of Dallas.

How to cite this post:

Donghoon Lee and Joseph Tracy, “How COVID-19 Affected First-Time Homebuyers,” Federal Reserve Bank of New York Liberty Street Economics, April 12, 2021, https://libertystreeteconomics.newyorkfed.org/2021/04/how-covid-19-affec....


The views expressed in this post are those of the authors and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the authors.

Moth-Eaten Eviction Moratorium Leaves Hundreds of Thousands Without a Roof

Published by Anonymous (not verified) on Thu, 08/04/2021 - 1:02am in


Evictions, Housing

WASHINGTON — “Raise your hand if you can’t pay rent,” she yelled sharply and resolutely into a microphone. A Spanish translation echoed her words as hands shot up across the crowd. “Now make that into a fist. Because we gotta fight! It’s only when we fight that we can win!” Cheers and hollers muffled by face masks reverberated off the brick facades. Cars honked as they drove by, throwing solidarity fists at the “Cancel Rent” posters lined up along the sidewalk. A woman with a “Food not Rent” banner waved back with encouragement.

According to the Center on Budget and Policy Priorities, “some 22 million adults reported that their household didn’t have enough to eat,” with Black and Latino households more than twice as likely as white residents to go hungry. Based on data collected from March 3 to March 15, 2021, an estimated one in six renters was not caught up on rent — and here, again, Black, Latino, and Indigenous households were twice as likely as White renters to be behind. One can imagine then the raised hands of millions turning into fists – literally the hungry, the tired and poor, “the huddled masses yearning to breathe free,” which our Statue of Liberty so ironically wears as a welcome to those coming in to the country. That’d be a hell of a sight – and a hell of a force.

Sierra Ramírez, the tenant organizer at the Woodner Apartments in Washington, continued, calling on all her fellow renters to stop paying rent and to organize not just for rent cancellation but for their overall human dignity: “What is possible when we come together as a working class? Everything. Everything is possible.” She asked those gathered to think about the big picture, to think “about the kind of dignity we want for our community, for our society,” and to build it. In this way, she said, “we can stop anything – even war.”

As the late March afternoon flecked sun halos across the pavement and grass where kids ran around playing, the community building that Ramírez spoke about was palpable. Folks picked through groceries from the mutual-aid tables and boxes while others spoke to those standing by the tenant union table. Neighbors chatted behind masks and bilingual signs that read “Defund the Police,” and “Don’t Exclude Immigrants!” Organizers connected with tenants of other buildings who were curious about this push. Folks pulled out instruments and started to play. The action was part celebration, part protest, and 100% grassroots.

Pandemic evictions

A DC Ward 1 Mutual Aid table set up at a Cancel Rent rally to support tenants. Eleanor Goldfield | ArtKillingApathy.com

The movement to cancel rent is in this sense nothing new. It’s another branch of the tree rooted in justice, human rights, and a livable future for all, intersecting with and encompassed by racial justice, public health, environmental justice, anti-capitalism, anti-colonialism, and more. Growing from the call and demand that housing is a human right, this branch stretches across the country – the richest nation in the world — where we sure as shit can afford to house the homeless, provide affordable housing, and stop evictions.


A moratorium full of holes

Here some might point to the eviction moratorium as proof that we at least have that covered. Allow me to unceremoniously burst your bubble. According to ongoing tracking by The Eviction Lab at Princeton University, during the pandemic, landlords have filed for 284,490 evictions – and that’s just in five states and 27 cities.

But how could this be? After all, a moratorium shouldn’t allow for hundreds of thousands of households to fall through the cracks. Well, let’s just say that “moratorium” is a misnomer. This moratorium is more like a bottleneck on a freeway: it’ll eventually let up, but things are just a little slowed down right now.

What should have been a fierce and clear-cut roadblock allows for landlords to evict tenants for reasons other than non-payment, and in places where leases have to be renewed by the landlord, they can just choose not to renew them. Furthermore, the burden lies on the tenant to provide their landlord with a signed CDC declaration that took me, a journalist, 10 minutes to find online when I already knew what I was looking for. And lest we forget, internet access is not a luxury every American can afford.

Only 52% of households earning less than $25,000 own or use a computer and, as reported by TruthCo, “78% of Whites, 68% of African Americans, and 66% of Latinos nationwide use the internet. In rural areas, however, only 70% of White Americans had adopted the Internet, compared to 59% of African Americans and 61% of Latinos.” In other words, that online declaration form might as well be a Willy Wonka golden ticket. Indeed, just knowing that you need to fill out a declaration is a fact seemingly more well-guarded than KFC’s secret sauce recipe. Age and gender also play a role here so, when taken all together, the most marginalized people are the most at risk of being evicted simply because they don’t have access to information about the measly protections available to them.

Pandemic evictions

Tenants and supporters hold signs facing the street. One on the left reads, ‘because of the pandemic, no food, no rent.’ Eleanor Goldfield | ArtKillingApathy.com

Landlords take advantage of this information gap and move forward with eviction proceedings – a trap into which thousands have fallen. After all, landlords can still file for eviction – Step Two in the five-step process of eviction: Notice, Filing, Hearing, Court Decision and Enforcement. So people see that notice on their door and think it’s all over when in fact, it’s really only just begun. That being said, many courthouses are moving forward with eviction proceedings and in several states, governors and state legislatures have effectively refused to pause evictions.

For example, here in D.C., a Superior Court judge ruled back in December that “legislation passed by the D.C. Council earlier this year banning landlords from filing eviction proceedings is unconstitutional and violates property owners’ rights.” So landlords are free to file away, leading to instances, as noted above, where people think they have to leave their homes in the midst of a pandemic. Fast forward to today, when the D.C. City Council voted to pass a bill that would allow landlords to evict tenants who pose a “current and substantial threat” to their neighbors, household members, and building staff — with housing advocates concerned that this will be used against any and all tenants that landlords want to get rid of, not least of all tenant organizers and those who haven’t been able to pay rent.

The bill, put forward by Councilmember Anita Bonds, is backed by the city’s Rental Housing Strike Force, a council put together by Mayor Muriel Bowser to address tenant/landlord issues that is suspiciously lacking in tenant voices, centering instead the voices and interests of landlords and developers. Ultimately the bill passed with some amendments — requiring, for instance, that alternative housing be secured in some cases prior to eviction — but housing advocates remain wary of the manifold opportunities for landlords to abuse this bill.


From California to the New York island…

D.C. is hardly alone in its struggles against a vague and weak ‘moratorium.’ In Idaho, tenants who have tried to use the moratorium as a defense have had judges knock it down as invalid or insufficient. As The Idaho Statesman reported in late March, the Boise-based nonprofit Jesse Tree, which works with folks facing eviction, says they’ve seen the moratorium “successfully” used as a defense in only one case out of hundreds. And that person was ultimately evicted anyway. So, I guess, not that successful after all. In Akron, Ohio a couple who are both battling stage 4 cancer was evicted via Zoom court proceedings because their landlord sold the property, yet another glaring loophole in the “moratorium.” A fellow Akron resident didn’t know she had to bring that shifty CDC declaration to court, so her eviction proceedings went ahead as well.

Meanwhile, the CDC is duking it out in court with several states and judges who say the moratorium, despite all its loopholes, doesn’t apply to them. In other words, these states are arguing for the right to kill more people. A November 2020 study by SSRN found that states that lifted eviction moratoriums had a combined 433,700 excess COVID cases and 10,700 excess COVID deaths. But hey, I guess from their perspective, it makes more sense to just let COVID kill people than to have to deal with all sorts of stupid delays before evicting them. Still, even if the CDC wins these absurd cases, the question of how local courts will interpret both the moratorium itself and any related cases is anyone’s guess.


Self-help evictions (whoops, did someone change the locks?)

And yet, these are just official court proceedings. A far more insidious beast lies in the ‘informal’ eviction — aka illegal, aka self-help (it’s really called that) eviction. Here in D.C., while landlords are allowed to move forward with official filings, tenants are (for now) supposedly protected from being evicted until the moratorium is lifted. Well, words like “official” and “supposedly” don’t mean much when you come home to find that the landlord has changed the locks on your front door. Here again, landlords take advantage of the fact that so many of these low-income tenants don’t have access to information that would protect them from their landlord’s illegal actions. Immigrant renters and those without immigration status are at particularly high risk, as many are afraid of retaliation from the likes of ICE if they do assert their rights.

Stomp Out Slumlords

A member of the DC DSA’s anti-eviction and tenant organizing campaign, Stomp Out Slumlords. Eleanor Goldfield | ArtKillingApathy.com

The Eviction Lab estimates that these ‘informal’ evictions are twice as common as official evictions, and last June The National Law Housing Project released a report that surveyed 100 legal aid and civil rights attorneys in 38 states and found that 91% of them reported illegal evictions in their area, with 53% actually seeing tenants being illegally locked out of their homes by landlords. Other intimidation and eviction tactics include cutting off utility service, refusing to make repairs, making threats, providing misinformation, and a slew of lease-violation accusations – such as a satellite dish or a partner who spends the night more than allotted for in the “guest” section of a lease.


Desperate Landlords of Beverly Hills?

On the flip side, several media outlets have been quick to point out the desperation many landlords are facing as they struggle to make ends meet themselves during the pandemic. It’s true that there are many small-scale landlords who, say, only own one property or rent out a basement of their home. But first of all, we have to make the distinction between losing some income and losing your home. Secondly, a report by CBS Money Watch from late March of this year shows that landlords, in general, are actually doing fine, and in many cases making big bucks off the pandemic.

For instance, Invitation Homes, the largest renter of single-family residences in the country, made $50 million more last year than in 2019. Mid-America Apartment Communities, owner of some 100,000 units, saw profits skyrocket by 60% last year. At the same time, apartment owners are doing perhaps the best of anyone in terms of staying up on their rent. January figures show that “just 2.3% of apartment building owners were behind on their rent, compared with 19% of hotel and 13% of mall proprietors.” They also have plenty of legal backing: 90% of landlords nationally have legal representation while only 10% of tenants do.

And when it comes to arguing for the so-called ‘mom and pop’ landlords, Diane Yentel, president of the National Low-Income Housing Coalition, points out that “With the latest stimulus bill, Congress has now put in billions in rental assistance, with most of that money going straight to landlords.” Meanwhile, you’d be hard pressed to find a renter who has come across any of those billions earmarked for rental assistance. Could it be that here again, we see a sadistic obstacle course of eligibility and accessibility issues combined with straight-up systemic dumbshittery? Indeed, we do. From state and local rollouts moving as slowly and crookedly as molasses through a pinball machine to having to “demonstrate a risk of homelessness,” it’s no wonder renters, the people who need aid the most, are not the ones getting it. And to be fair, even if they did get some assistance now, what good will that do when the debts are called in after the moratorium?


Here’s a little to tide you over

At the “Cancel Rent” rally, Ramírez took out a piece of paper and lifted it high into the air. “This is a bill,” she said. “It says I owe $13,000.” The crowd booed and gasped in response. According to the eviction “moratorium,” Ramírez will have to pay that and then some at the end of this sick purgatory. Renters not only are responsible for the rent they’ve missed but can also be looking at extra fees like late fees and interest. It’s yet another show of how vehemently out-of-touch our sociopathic politicians are that they think someone’s inability to pay $2,000 now will somehow translate into their being able to pay $20,000 later.

Of course, this could all be solved by comprehensive and loophole-free language. No forms, no golden tickets. If you have a home and it’s safe, stay in it. If you don’t, let’s get you one. Numbers from 2014 show that empty homes outnumber the homeless six to one and, while those stats have likely shifted in the past seven years, there are still plenty of homes for everyone, and more small-scale and creative solutions popping up all the time – like the tiny-house movement that’s been a benefit to the unhoused, those forced to downsize, and the minimalists alike.


The context is the crisis

This raises yet another important point: eviction was a crisis before the pandemic, and it will likely be one after. For instance, back in 2014, the MacArthur Foundation released a report showing that in Milwaukee, “a city of fewer than 105,000 renter households, landlords evict roughly 16,000 adults and children from 6,000 units each year. That’s 16 households evicted every day.” Black women were the most frequently evicted, prompting the report to draw parallels between Black men being locked up due to systemically racist mass incarceration, and Black women being locked out due to systemically racist eviction practices.

Likewise, giant, greedy, and shitty landlords were also a problem pre-pandemic. A 2019 investigative piece in The Atlantic showed that after the 2008 economic collapse, the federal government didn’t just bail out Wall Street, it gave them oodles of deals on things like empty houses, allowing them to easily purchase foreclosed homes by the hundreds: “Between 2011 and 2017, some of the world’s largest private-equity groups and hedge funds, as well as other large investors, spent a combined $36 billion on more than 200,000 homes in ailing markets across the country.” Tenants were promised competitive rent, 24/7 on-call maintenance, oodles of money to spend on upkeep, and more. Instead, investors took these promised perks straight to their banks and left renters in the lurch.

pandemic evictions

A banner with a message to DC Councilmember Anita Bonds reading: ‘30% of our families cannot pay rent.’ Eleanor Goldfield | ArtKillingApathy.com

More than 100 million people rent in the U.S. — that’s more than 30% of the population, a percentage that’s been growing rapidly since 1965. And here again, even before the pandemic, rent was unaffordable in every single state (plus D.C.): according to a report last year from National Low Income Housing Coalition, the national housing hourly wage in 2020 for a modest two-bedroom was $23.96, a full $16.71 above the federal minimum wage of $7.25. The national housing wage is based on what a minimum-wage earner would need to afford a rental home without spending more than 30% of their income on rent, the idea being that above 30% you’re unable to pay for other necessities such as food and healthcare.

These problems are systemic. While rent cancellation and an actual eviction ban are necessary for the duration of the pandemic, the issues go far deeper and further back. A quick glance at housing-rights and rent-cancellation organizations from across the country shows many of the same demands — from short-term demands, such as those voiced by Cancel Rent DC, that “tenants will not accrue debt for nonpayment,” to the broader and more long-term goals set forward by Housing Justice for All in New York, demanding an end to homelessness and the reclamation of millions of apartments as social housing for all, protected from the private market.


Not like we’ve never done this

These demands are hardly unrealistic. After all, following significant pressure from the working class, President Franklin Delano Roosevelt instituted a social security system, a strong (unlike today’s measly $7.25) minimum wage with unemployment compensation, and a federal jobs program that employed millions during the economic collapse of the late 1930s. And then of course came the massive shift to a war economy in the 1940s. It’s clear that in a time bolstered by far more technological advancement, it’s not a matter of ability. It’s a matter of giving a shit. And while corporate media has been quick to compare President Joe Biden to Roosevelt, let’s be sure to point out, as Richard D. Wolff did on a recent episode of his show “Economic Update,” that Roosevelt’s changes were structural, not paltry bread crumbs that only lasted a few months. Biden is certainly no Roosevelt.

Structural changes require more work but they’re the only changes that are in fact change. I’ve written before about the importance of not lambasting so-called stop-gap issues such as universal healthcare, universal basic income, or indeed rent cancellation simply because these measures would exist within the confines of our capitalist system. Some things are worth fighting for despite their imperfections simply because they will support people in the here and now. They will lessen the oppressive weight of capitalism upon people’s lives.

Our battles should be waged based on what benefits our communities, not just what will benefit them in the dawning of a new world. The shit the Dems offer up as the “best they can do” is not worth fighting for. A consolation $1400 that many in need won’t get, kicking the eviction can (or, as we’ve seen, not even kicking it), or a small pot of federal funds earmarked for rental assistance that’s harder to get to than an actual pot of gold, are not worth fighting for. They, like the Democrats, represent hope in relief that’ll never come. They’re smoke and mirrors – a cheap magic trick played on a stage littered with broken promises, early graves and Orwellian machinations. We must not think that what the Dems put forward is either what we need or in fact the best they can do. It is neither. What will support the people, what will allow folks to not just survive but to thrive – there we must put our energies, our fight.

At the Cancel Rent action, a little girl rushes past me with a hot dog and I see another kid eyeing it with that pure, youthfully unveiled look of craving. More events like these are planned across the city – across the country — actions that combine immediate demands with community building for long-haul imagining and manifesting. From these times and spaces, we learn to color outside the lines of specific issues, to get messy with it. We learn and remember to not ask anything of the ruling class, but rather to ask it of each other. For, as Ella Jo Baker said, “if you have strong people, you don’t need strong leaders.” Strong people, raised fists. One building, and one block at a time.

Just Shelter has a clickable map that allows users to find housing rights organizations in your area: https://justshelter.org/community-resources/ 

This is part one of a two-part series on housing. 

Feature photo | Two posters with messages for DC Council members Pinto and McDuffie behind supply tables at the rally. Eleanor Goldfield | ArtKillingApathy.com

Eleanor Goldfield is a creative radical, journalist, and filmmaker. Her work focuses on radical and censored issues via photo, video, and written journalism, as well as artistic mediums including music, poetry, and visual art. She is the host of the podcast, Act Out, co-host of the podcast Common Censored along with Lee Camp, and co-host of the podcast Silver Threads along with Carla Bergman. Her award-winning documentary film, “Hard Road Of Hope” is about West Virginia as both resource colony and radical inspiration. She also assists in frontline action organizing and training. See more of Elanor’s work @ ArtKillingApathy.com | HardRoadofHope.com

The post Moth-Eaten Eviction Moratorium Leaves Hundreds of Thousands Without a Roof appeared first on MintPress News.

Its Streets Safer, Baltimore Will Stop Prosecuting Minor Crimes

Published by Anonymous (not verified) on Wed, 07/04/2021 - 6:00pm in

Good morning, Baltimore!

In Baltimore, two criminal justice trends are happening simultaneously: fewer people are being put in jail, and crime rates are falling — fast.

It all started when the pandemic began. In an effort to thin out its jail population, the city announced it would stop prosecuting people charged with crimes like drug possession, prostitution and trespassing. A year later, the city is seeing lower crime rates than before. Since March 2020, violent crime has dropped by 20 percent, property crime by 36 percent and homicides by 13 percent. These declines have taken place against a backdrop of reduced prosecutions — during the same time period, the number of people being jailed fell by one-fifth. The city dismissed 1,400 pending cases and threw out another 1,400 warrants for non-violent crimes.

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In light of the results, last month the State’s Attorney made a groundbreaking announcement: the pandemic-era changes would be made permanent. Baltimore will no longer prosecute drug possession, prostitution or minor misdemeanor charges. At the same time, it will expand outreach to sex workers, people who use drugs and people suffering from mental health issues to direct them towards treatment.

“The era of ‘tough on crime’ prosecutors is over in Baltimore,” said State’s Attorney Marilyn J. Mosby. “We have to rebuild the community’s trust in the criminal justice system and that’s what we will do, so we can focus on violent crime.”

Read more at the Washington Post

A side of sustainability

In Vancouver alone, over 100,000 chopsticks end up in the trash every day. That’s a lot of wood for a single-use item. Rather than throwing them away, what if those chopsticks could be upcycled?

A local company is doing just that. ChopValue collects the castoffs from restaurants around the city and turns them into new wooden products. Over 600 pounds of the utensils are picked up each week. They’re cleaned, sorted, coated with resin and roasted in a kiln to kill off residual germs. Then they’re mashed into structurally sound tiles with a custom-built hydraulic compressor. Those tiles can be turned into almost anything: cutting boards, shelves, dominos, even large pieces of furniture. Since 2016, the company has upcycled 33 million chopsticks.

ChopValue is growing quickly. It started out as a small coaster company and now has three franchises, with more planned for 2021. “You put a few tiles and a few hexagons on your wall and you can say to your friends, ‘Hey, guess what, I have 1,800 chopsticks on my wall. And you’ve started a conversation about sustainability,” said founder Felix Böck.

Watch the video at Business Insider

This old house

A form of Swedish public housing that was once a mark of shame has been reborn as a sought-after place to live for residents seeking affordability.

swedenAn undated photo of a Barnrikehus in Sweden. Credit: Tommy Hjort / Flickr

Bloomberg CityLab tells the story of the Barnrikehus, housing projects built in the 1930s as Sweden’s now celebrated social safety net took shape. These humble apartments once housed poor families — and were an unfortunate source of stigma. Today, however, as rents in cities like Stockholm soar, a new generation is seeking out the Barnrikehus apartments, which, it turns out, were built to last. They also happen to be constructed in the sleek, minimalist Scandinavian design style many residents pay a premium for today.

Featuring “white walls, pale wood, ferns, shaggy textiles and a rigorously muted palette,” the homes that once offered cramped shelter for large families are finding new use as rent-controlled flats for young Swedes who don’t mind living in 430 square feet. “They are extremely attractive and sought-after — it’s a dream for every middle-class household to live in one,” said one researcher. “This means that, in Stockholm at least, the Barnrikehus aren’t used for what they were originally intended. If you look at the queue times on the rental housing list, they are very hard to get.”

Read more at Bloomberg CityLab

The post Its Streets Safer, Baltimore Will Stop Prosecuting Minor Crimes appeared first on Reasons to be Cheerful.

Do People View Housing as a Good Investment and Why?

Published by Anonymous (not verified) on Tue, 06/04/2021 - 1:00am in

Andrew Haughwout, Haoyang Liu, Dean Parker, and Xiaohan Zhang


Housing represents the largest asset owned by most households and is a major means of wealth accumulation, particularly for the middle class. Yet there is limited understanding of how households view housing as an investment relative to financial assets, in part because of their differences beyond the usual risk and return trade-off. Housing offers households an accessible source of leverage and a commitment device for saving through an amortization schedule. For an owner-occupied residence, it also provides stability and hedges for rising housing costs. On the other hand, housing is much less liquid than financial assets and it also requires more time to manage. In this post, we use data from our just released SCE Housing Survey to answer several questions about how households view this choice: Do households view housing as a good investment choice in comparison to financial assets, such as stocks? Are there cross-sectional differences in preferences for housing as an investment? What are the factors households consider when making an investment choice between housing and financial assets?

Exploring Survey Data

We study these questions using a novel survey on households' preferences for housing as an investment relative to investing in the stock market, and rationales behind their choices. In our survey, respondents are prompted to advise a couple in their early 30s from their zip code, after receiving a gift the size of a down payment, whether to invest in housing or the U.S. stock market. The question is framed in two ways, one asks if the young couple should buy a primary residence or invest in the stock market, and a second assumes the couple already has a primary home and asks whether they should consider buying a rental property or investing in stocks. Each respondent randomly receives one of the two framings. After reporting their recommendations, respondents are asked to select reasons behind their answers from a menu of reasons including, for example, stocks having higher returns, housing with lower volatility, commitment device for savings, or they can supply their own reasons. These survey questions were run in February 2020 (largely before the COVID-19 outbreak in the U.S.), October 2020, and February 2021. We report the following results:

Households View Housing as a Good Investment

The chart below plots the shares of household recommendations over time. We can see that in general, households view housing as a good investment in comparison to the stock market. When asked to choose between investing in a rental property or the overall stock market, more than 50 percent of the households recommended housing in all three administrations of the survey. In the primary residence versus stock market framing, preference for housing is even stronger with more than 90 percent of the survey respondents choosing housing. One interesting pattern is that the preference for housing dipped in October 2020 and returned back to the pre-COVID level by February 2021. Using reasons cited for these choices, we found that this shift away from housing in October 2020 wasn’t driven by lower home price expectations, but reflects other reasons. For example, investors were more worried about the risk of vacant rental units. For buying a primary residence, our survey respondents put less value on the stability provided by an owner-occupied home after the COVID-19 outbreak, potentially because of concerns about making mortgage payments or shortened expected tenure to stay at the current home.

Do People View Housing as a Good Investment and Why?

Cross-Sectional Differences in Viewing Housing as an Investment

We next examine important cross-sectional variation in households’ views of housing as an investment. Two strong predictors for investment recommendations are gender and education. For this analysis, we focus on the rental housing versus stocks framing. The next chart shows that women and non-college graduates have a stronger preference for housing than others do. For the gender gap, part of the explanation is that men in our sample are more risk-taking than women and are more willing to invest in the stock market, where returns are perceived as more volatile. For the education gap, college graduates tend to expect higher returns in the stock market than in housing and cite “time to manage a rental property” as one reason for choosing the stock market. We also note that these gender and education gaps were substantially reduced in the October 2020 survey, as women and non-college graduates temporarily shifted away from housing. In future work, we intend to study factors behind the gender and education gaps in preference for housing, and why they were temporarily reduced during the COVID-19 outbreak.

Do People View Housing as a Good Investment and Why?

Reasons for Choosing Housing

Turning to reasons cited by the survey respondents for choosing housing, the next chart shows the percentage of respondents selecting each reason for recommending a primary residence over investing in the stock market. Respondents can select multiple reasons. We can see that there is a reasonable share of respondents choosing each of the reasons. “Desired Living Environment and Provides Stability” and “Housing Prices Less Volatile” are among the most commonly selected. Compared to the 2020 responses, in 2021 more survey respondents selected higher house prices and lower volatility, and fewer respondents selected any of the other reasons, including for example, saving from rent, stability, locking in housing costs, and the amortization schedule as a commitment device for saving.

Do People View Housing as a Good Investment and Why?


Housing is an important asset class for middle-class households. Using a novel survey fielded before and during the COVID-19 outbreak, we show that investors view housing—both rental properties and primary residences—as a good investment relative to the aggregate stock market. There are important variations in preferences for housing, with women and non-college graduates being more likely to recommend housing. Relative to before the COVID-19 outbreak, more households now cite higher returns and lower volatility as reasons to buy a primary residence.

Chart data

Haughwout_andrewAndrew Haughwout is a senior vice president in the Federal Reserve Bank of New York’s Research and Statistics Group.

Liu_haoyangHaoyang Liu is an economist in the Bank’s Research and Statistics Group.

Dean Parker is a senior research analyst in the Bank’s Research and Statistics Group.

Xiaohan Zhang is an assistant professor at California State University-Los Angeles.

How to cite this post:

Andrew Haughwout, Haoyang Liu, Dean Parker, and Xiaohan Zhang, “Do People View Housing as a Good Investment and Why?,” Federal Reserve Bank of New York Liberty Street Economics, April 5, 2021, https://libertystreeteconomics.newyorkfed.org/2021/04/do-people-view-hou....

Related Reading

SCE Housing Survey

Mapping Home Price Changes - data visualization


The views expressed in this post are those of the authors and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the authors.

Monthly digest on housing affordability and homelessness: Feb/Mar 2021

Published by Anonymous (not verified) on Tue, 30/03/2021 - 4:44am in



The following is the latest instalment of a monthly digest of interesting articles, research reports, policy announcements and other material relevant to housing stress/affordability and homelessness.

Can I have a pet and be housed, too?  It all depends… [The Conversation, 23 February].

This article by six housing experts spanning five universities, liberally illustrated with drawings, depicts the outcome of a study of pet ownership policies affecting housing, and options for reform, claiming to be the first of its kind internationally. The underlying study assesses actual and potential reform of such policies, at both a state and territory housing level, across the private rental sector, social housing, homelessness services, strata title, aged care and caravan parks.

One key takeout is that despite more than 60% of Australian households having a pet, laws and policies remain restrictive and inconsistent across many housing sectors in Australia (particularly in private rental). This is despite what existing evidence tells us about the positive health and social impacts of more animal-inclusive housing and urban policies – especially for those in precarious living situations (such as domestic violence and homelessness).

Sydney named third worst city in the world for housing affordability [Savings.com.au (Alex Brewster), 25 February].

It’s certainly nothing to be proud of, but once again Sydney has been ranked as one of the most unaffordable housing markets globally, coming in third (behind Hong Kong and Vancouver) in the 2021 edition of the Demographia International Housing Affordability report, an annual survey of the rates of middle-income housing affordability across 92 major housing markets in eight countries.

The major housing markets in Sydney, Melbourne, Brisbane, Perth and Adelaide are all rated as “severely unaffordable”, and the report rates Australia’s national housing market as the third-worst of those surveyed. Melbourne is rated sixth most unaffordable city, behind Auckland and Toronto, but ahead of San Francisco, London and Honolulu.

The report finds a strong correlation between higher overall costs of living and higher housing costs. A separate OECD report has found that housing is the main driver of rising middle-class expenditure, with house prices growing three times faster than household median income over the last two decades.

The pandemic has of course made things worse, as house prices escalate (particularly in regional areas which are now seen as more viable for those capable of remote working) despite incomes dropping among middle-income households. The Demographia report cites Griffith University urban planner, Tony Matthews, as saying: “The move out of cities is on; we’re not going backward from this…. The most important connection had been the train line; now the most important infrastructure is a decent broadband connection.”

Experts say this is what Australia needs to do to solve the housing crisis [ABC News, 27 February].

The ABC asked four housing policy and economics experts for their views on what we can do about rising housing inequality and intergenerational poverty, made worse by soaring property prices and rental shortages in some parts of Australia. Although overall homeownership rates have not fallen dramatically in recent years, the position for some age and income demographics (eg. under 40s) has deteriorated much more markedly.

The experts consulted by the ABC identified some key policy reforms they say would make a significant difference. High on the list of priorities, according to UNSW Professor Hal Pawson, would be a national housing policy, which Australia hasn’t really had since 1945. Curtin University Professor, Rachel Ong, identified reform of the laws governing private rental (including better security of tenure) as an important focus, as well as better targeting of Commonwealth Rent Assistance.

Economist Cameron Murray noted the political obstacles to any policy reform that might reduce house prices, particularly given the importance of housing as a repository of wealth (for those fortunate enough to own their home). He pointed to the success the Singaporean government has had in promoting homeownership. Some 80% of Singapore’s population has been able to buy a government-subsidised home. Most of the experts agreed on the importance of increasing the stock of social housing, which has stagnated in recent decades, let alone kept up with rapid population growth.

Swinburne University Professor, Wendy Stone, warned that continued economic polarisation within Australian society, including that from housing inequality, would undermine our economy in the longer term.

Submission regarding NSW Treasury’s proposed property tax reforms [Tenants’ Union of NSW, March].

The Tenants’ Union of NSW, a peak body representing the interests of tenants in NSW, has made a submission in response to NSW Treasury’s proposals for reforms to our tax system, notably Treasury’s proposal to replace stamp duty with a broad-based land tax.

The Tenants’ Union has long supported a move towards land tax as a more efficient tax collection tool with minimal negative impacts relative to other taxes, and significant positive impacts. Their submission is unsurprisingly focused on safeguarding and enhancing the interests of renters, who collectively represent an already large (around one-third) and increasing proportion of the residential property market.

Landmark Victorian Inquiry into Homelessness report: What’s in it for young people? [ProBono Australia, 5 March]

Associate Professor David Mackenzie (from the University of South Australia), and his Upstream Australia colleague, Dr Tammy Hand, comment on some key takeaways from the recently tabled report of this inquiry.

A key message is that “homelessness is one of the most complex and distressing expressions of disadvantage and social exclusion in our society and requires immediate attention by government”, and that “Victoria can solve homelessness”.  The report strongly favours early intervention (eg. focused on child/youth homelessness) and the provision of more long-term social and affordable housing. See also Homelessness: better prevention and more housing are key, says inquiry [The Mandarin, 8 March]. Here’s a link to the full report.

Count confirms fewer rough sleepers in Sydney’s centre [City of Sydney News, 8 March]

The recent City of Sydney street count, conducted on 23 February 2021, showed fewer people sleeping rough in inner-city Sydney this summer, compared to the same time in 2020, before the onset of Covid-19. Crisis and temporary accommodation also showed lower occupancy levels than the previous year.

Commenting on the recent count, Lord Mayor Clover Moore commended the NSW Government for its $65m Together Home project, which she believed had helped the situation via securing private rentals and funding. It remains to be seen whether the improvements are short-term (thanks to Covid-19 temporary initiatives) or sustainable.

The City of Sydney conducts two street counts a year, one in summer and one in winter. See also Covid-19 measures reduced rough sleeping but will the change be permanent [The Age, 8 March]

Build-to-rent surge will change apartment living for Australians, but for better or worse? [The Conversation, 11 March]

Megan Nethercote, an ARC DECRA research fellow at RMIT’s Centre for Urban Research, reviews Australia’s emerging (“booming” by some accounts) build-to-rent (BTR) sector, and its promise and prospects.

There is little doubt about the momentum for BTR, given that 15,000 units worth more than $40 billion are apparently in the BTR project pipeline, across most of Australia’s major housing markets, but with Melbourne currently commanding over 50% of the market. BTR is already well established overseas, particularly in the US and in the UK, boosted in the latter case by government support. It accounts for one in five new homes in England and one in four in London. In the US, BTR makes up almost two-thirds of the rental stock in many of the largest cities, with large corporate landlords operating as many as 400,000 units each.

BTR presents an enticing vision, including flexible long-term tenancies, client-centric onsite management and allowances for pets and other tenant preferences, including painting and decoration. Nethercote says, “For cities, the model promises high-amenity, well-located, purpose-built rental apartments that cater to diverse and changing housing needs” and she notes that BTR’s proponents see it as a win-win, and salve for various housing woes, including concerns about housing rental supply, affordability and apartment quality – not to mention its beneficial stimulus to the construction sector.

She comments that the rise of BTR sets in motion two important structural shifts, namely:
(1) Institutionalising the private rental sector (away from “mum and dad” landlords) and;
(2) diversifying residential development models.

Nethercote asks the big question: “Could build-to-rent be a catalyst for more progressive tenancy reforms, leading towards tenure neutrality/equality where ownership isn’t seen as automatically superior to renting?” This is an important question as one in three Australian households now rent their housing.

She closes her article by sounding a note of caution as to whether the growth of BTR will be all good, particularly if this new model is left unchecked, and observes that BTR properties in Australia look set to attract rents of about 10% to 15% more than comparable non-BTR housing, as has apparently occurred in London. And she says that without government subsidies, market-rate BTR will not provide more affordable housing. Maintenance of good design standards for rental housing must also be safeguarded.

Calls for human right to shelter in Australia [Sydney Morning Herald, 14 March]

The SMH’s Paul Sakkal reports that Josh Burns, Labor MP for McNamara, has authored a report for the Labor-aligned think-tank, the McKell Institute, calling for the Australian government to legislate a human right to housing, thereby legally requiring it to take responsibility for homelessness and to provide enough social and affordable housing for the vulnerable.

Sakkal notes that both France and Scotland have established a legal right to housing and, in Britain, local authorities are responsible for ensuring no person is evicted unless they have secured alternative accommodation.  UQ Professor Tamara Walsh is quoted as saying that this sort of legislation can make a difference and marks a “recognition that people need to be respected and cared for as a rights-bearer rather than a problem case”.

Josh Burns has proposed a shared equity model where the government provides a proportion of the upfront cost of a home, taking on an equity share in order to reduce the amount homebuyers need for a deposit.

The McKell Institute report also suggests industry-specific subsidies for essential workers such as teachers and paramedics. The report claims that more than 74,000 homes would need to be built to cater for everyone on housing waiting lists and that the Commonwealth has reduced housing stock by 11,000 homes since 2018.  See also Calls for legislated human right to housing as rental market fails low-income Australians [The New Daily, 15 March]

By targeting house prices, NZ shows the way [AFR, 15 March]

In an opinion piece syndicated from the UK Financial Times, Ruchir Sharma (Morgan Stanley Investment Management’s chief global strategist and author of ‘The Ten Rules of Successful Nations’) reminds us that NZ’s central bank was the first to commit, back in 1989, to a specific target for consumer price inflation, then the biggest threat to the world economy.  The initially unpopular idea caught on and soon most central banks had adopted CPI style targets, in order to put the lid on runaway prices for consumer items.

It seems that NZ is once again leading the way in terms of central bank policy objectives, this time with a view to taming asset price inflation, and with a specific focus on the cost of housing. Home prices in NZ rose 19% in the 12 months to the end of January 2021, with the price of a typical Auckland home soaring past NZ$1m (A$920,000), to the embarrassment of Prime Minister Jacinda Ardern, who made it one of her key commitments during the last NZ election campaign to address affordable housing.

The Ardern government has now ordered NZ’s central bank to add stabilising home prices to its remit effective from 1 March 2021.

Sharma describes why housing bubbles are the worst type of investment bubble and that: “In general, recessions that follow debt-fuelled housing booms are the longest and deepest”. He acknowledges that Ardern’s move may not slow the housing boom soon, due to the strength of supply and demand dynamics, but thinks that ordering the NZ central bank to make housing price stability a higher priority is a start and could inspire others to rethink the role easy money has played in driving financial instability.

Homelessness in the US rises prior to the pandemic [Affordable Housing Finance, 18 March]

It is cold comfort to know that we in Australia are not alone amongst wealthy industrialised nations in facing the chronic and often worsening problem of homelessness.

Donna Kimura writes that US homelessness has risen for the fourth consecutive year, according to a recently released report by the US Department of Housing and Urban Development (HUD), which estimated that, in 2020, 580,000 people across the US were living in shelters, transitional housing or on the street, up 2% from 2019, or 7% in the number of unsheltered individuals.

Recently appointed HUD Secretary, Marcia Fudge, said “What makes these findings even more devastating is that they are based on data from before COVID-19, and we know the pandemic has only made the homelessness crisis worse.” The numbers in the HUD report are based on counts conducted in January 2020, before the pandemic took hold in the US. The report reveals that chronic homelessness increased 15% between 2019 and 2020 and that in 2020 just under 172,000 people in families with children were homeless (unchanged from 2019). Unsurprisingly, African American and indigenous peoples were considerably over-represented among the homeless, compared to the overall US population.

Nan Roman, President and CEO of the US National Alliance to End Homelessness said: “The 2020 report provides a deeply troubling accounting of homelessness in the United States.” As Kimura notes, President Joe Biden’s recently approved American Rescue Plan includes significant funding for housing and homeless programs, including US$27.4 billion for emergency rental assistance and US$5 billion for homelessness assistance.

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BBC’s continuing learning curve…

Published by Anonymous (not verified) on Fri, 26/03/2021 - 8:01am in

This is an item from the twitter feed of Andy Verity, BBC Economics correspondent, about housing and how he thinks the market is overheating: Andy Verity@andyverity·31mThe official forecaster the Office for Budget Responsibility has warned about the effect on government finances of a rise in interest rates. Never mind them (they can always ‘print’ money... Read more