The causes of the housing problem can give you a facial tick. Here goes one recent example; the housing market has added single-family-rental securitization. This specimen is made of our old friend mortgage-backed securities that continue to be backed by inflated home value and a rising market for rental housing. Combined with the collapse of employment, a friend from Michigan put it this way, this could turn into a nasty brew of outraged and hungry people, all of whom have guns.
By 2016, 95 percent of the distressed mortgages on Fannie Mae and Freddie Mac’s books were auctioned off to Wall Street investors without preconditions and few provisions. The market recovered but without homeowners. Private-equity firms acquired over 200,000 homes. While cities like New York are attractive but expensive investments, a substantial percentage of these new acquisitions occur in middle-class and low- and moderate-income suburban neighborhoods. Single-family-buildings have been in the rental market for a long time, but only recently has this practice added volatility to the market with the public humiliation of eviction.
Matthew Desmond’s book focused on eviction as a cause and consequence of distress in low to high-density communities. Once considered a big-city problem where evictions occurred formally through the courts. Less known and understood are management practices using subtle displacement practices such as “rent to buy schemes,” where low rent is the “hook,” and high down payments provide the profit. Overall, the increased rate of housing displacement is driven by weak government policies attracted to quick fixes, leading to the rise of institutionally managed and owned rental housing, and a court system that does not recognize the rights of tenants as comparable to landlords or developed the capacity for mediation before calling a U.S. Marshal.
The tables below will look very different from 2020 onward, so the best place to keep an eye on America’s housing policy crisis will be found on Eviction Lab’s website(here). The legislators’ learning curve can be flattened by examining the Lab’s scoreboard of state policy changes in response to the pandemic. The continuing legacy of the 2008 crisis is directly reflected in their lab’s state-by-state checklist (here) and the help of NYC’s Columbia Law School. May landlords in New York can’t file eviction orders against tenants right now – but they can after June 20, 2020. The best source for monitoring policy changed in NYC is through the New York University Furman Center.
The market recognizes home value fluctuations with an increased number of tenants available to cover mortgages. The market could not recognize the collapse of renter capacity to prioritize shelter over all else. Another fly in the soup (aka malfunction) is the invisibility of increased corporate ownership in low-density areas whose legal systems heavily favor owner over renter. The table below shows how NYS is attempting to protect its 8.2 million people in rental households, of which 5 million are in NYC. The share of renter households whose gross rent made up more than 30 percent of their monthly pre-tax income is approaching 50% of households.
A 2018 study of New York eviction cases (Collinson & Reed, here) established a connection between eviction and homelessness in New York City. The malfunctions of the housing market go both ways. A similar graph showing the percentage of household income for rent would also move steadily up from a baseline of affordability at 30%, rising to over 50% in 2019.
America’s complicated housing market story includes a blaze of web articles (example here) that claim property management and rental housing acquisitions are good investments based on the volatility of sales (figure 3 below), offering the fun of bargain hunting coupled with the steady upward trend in asking rents (figure 2 above).
Wall Street as Landlord
Wall Street’s $60 billion real estate purchases have altered housing markets all over the United States. (NYT Story) The total funding for the Housing Choice Voucher program (Section 8) was a third of that at $20.292 billion in FY 2017. As in the 2008 recession, the malfunction is not paying attention to the possibility that former housing policies put equity in ordinary families’ lives through homeownership have disappeared just as the public might have been ready to recognize the inequity built into the system since 1950 could be corrected for the damage to families of color.
New York City’s real estate market includes some of the most high-profile properties in the world. It is also one of the most expensive in which to invest. This wrinkle in a hot market is smooth with the invention of publicly traded real estate investment trusts (REITs).
These outfits are companies that invest directly in real estate through properties or mortgages. The Internal Revenue Service requires REITs to pay taxable profits in dividends to shareholders. Companies with REIT status do not pay corporate income tax. It has developed adjudicative services with support systems that recognize the rights of residents as renters. Investopedia’s description of Investing In New York City REITs is recommended reading.
In 1968 the Citizen’s Housing and Planning Council of New York (CHPC) produced a little sixteen-page booklet on the housing problem with the above graphic on the cover. As a housing affordability advocacy group, they wanted people to understand what it took to build and operate affordable housing. They put in the form of a five-room apartment in which the average cost of its development came to $20,000.
It is important to point out that this was considered reasonable and $20,000 in 1967, based only on the consumer price index changes that would be $155,000 in 2020 to yield a total inflation rate of 675% or 12.73% per year. The genius of the CHPC presentation is how the five rooms (image above) represented in the development was composed of 1) construction, 2) taxes, 3) land, 4) money, and 5) operating costs and then pointed out of the five which had the greatest impact on rent. Answer: the cost of money is the major factor. Today a change of one percent in the average interest rate from development through permanent financing could alter rents by $120 per month. Manipulate all of the other costs, and it will yield minimal impact on rent.
The affordability of housing is built entirely on Wall Street’s finance and banking industries’ desire to sustain both low (for them) and high-interest rates (for everyone else). Since 1967, or just over fifty years, the rate is based on the CPI alone, the trend toward high and almost 675%.
The lack of affordable rents and housing (a human right) sits squarely on government steps in how it has handled the cost of money for the American people’s safety and health.
The July 2019 review will focus on the Tweets from housing advocacy groups. Just as these organizations warned of the 2008 Recession, they see another housing crisis forming in America. The question of equity that was stolen from people is an issue because of the nation’s 400 hundred year heritage of enslavement, cold, racist terrorism, and bigotry. These facts also describe the history of the world, but it is the U.S. Constitution had some ideas about how immoral societies could be changed by moral people. Problems that hurt people and go undefined and unanswered, creates a climate for authoritarian solutions.
Every problem is a housing problem. The often-told solution is an old retort of hard work, healthy homes, communities, and families. The response is correct but blind to the history of privileges extended to white America as it became the United States. For centuries rights and freedoms extended to all people not of color without a moment’s reflection. The crime of bias barred the accumulation of wealth from property to succeeding generations. The quiet yet insidious reduction and denials of opportunity from education are proven.
Access to work from the ordinary trades to the most highly skilled professions is proven with painful references such as “they are not ready,” or the best work suited “for them” is agricultural service. These actions still rip the opportunity for equity with an intense generational impact on people of color. In the centuries that led to the rise of American hegemony, no one, not one person, not W.E.B. DuBois or even Martin Luther King, has been able to fully articulate what this loss of equity has meant to the people of color in America. The voice of Ta-Nehisi Coates is the most current (here). He stands on firm ground because the U.S. has participated in reparations four times.
Ending the Wherever Movement
A new housing crisis is in the air for reasons other than systemic racism in America. Every issue connects to a housing problem. For some time, the equity crisis re-establishes classicism under headings such as “culture wars,” but the results change little. The metaphor is weak. The facts on the structure of every “next disaster” can be different. Technology offers opportunities to build a broader coalition on equity with justice that includes race by correcting past wrongs, yet moves forward to circumvent long-established rules of “divide to conquer.”
The surge of affordable single-family housing in America continues in the hot wetlands of the south with sporadic drought and the flat drylands of the southwest with asymmetrical flash floods. The onset of climate change will drown the wetlands, scorch and burn the drylands, and cause enormous disruptions in every region of the United States. Denying the annual recurrence of this possibility is just plain denial. I will not be surprised if we experience a bout of biblical pestilence. These impacts are called “environmental racism” by pointing to the disproportionate number of low-and-moderate-income people losing equity. The damage and despair reveal a broad swath of painful historic bigotry, but now the dangers are thrown at all people.
After WWII, localities have kept their hand on the tail of the revenue bull, blind to the rest of the beast. In the last century, millions of households benefited from federal housing policies with only one location principle – housing wherever you want. In this new century reducing the mortgage interest subsidy on the demand side and weakening a long list of development incentives on the supply side has severely weakened federal leadership in housing preservation and development to continue the “build wherever” policy.
The opportunity to bring national policies back with conditions that mitigate the impact of regional climate change by region makes it possible to re-establish national housing development policies as the leading edge of a new strategy. It will be re-focused by climate protection that builds restoration with resilience. It will create sustainable equity in communities despite storms of enormous ferocity and designed to survive the hatred, bigotry, and high water, drought, and fire.
Two Centuries Out
In the following summary of Tweets from the Housing Advocacy People (HAP) of July 2019, it may be possible to find threads of principle and elements of novelty in current policy efforts that will alter the pervasive opinion that the size and purpose of the national government have not lost its way, that it will be possible to forge new policy from environmental protection as a national defense strategy forced by the bright light of survival. If the ocean’s tide is once again destined to flow up and into the Great Appalachian Valley from Maine’s ports to the shores of South Carolina over the next few centuries, getting ready should be a top priority. Preparation for this kind of “sea change” in all its meanings is the most important action of this century (the original map is here).
If the fate of the Gulf of Mexico is to be an alga thickened swamp we need ideas to be prepared, if the vast torrents of the Pacific Ocean alters the Gulf Stream and the surface heat of El Niño yields hundreds of tornadoes and hurricanes not being ready is a super bad idea. Whether friendly or with horrible force, from the sky or the sea, heed these words, “the water will come.”
The March 2019 summary (here) introduced all the Tweet-O-Rama organizations and the Random Tweet-O-Rama. The idea is to learn something from the wits from this vast new area of the blah blah world. The April summary (here) examined the Think-Tank People. In May (here), I looked at the organizations working to produce a good economy combined with voter rights organizations. With those thoughts in mind, it is logical to look at politics as a sport and as a practice that is now very different from the role of leadership that it implies. Please enjoy June, everyone should, and then July (here) for a look at the one thing of great importance – housing (here)
The housing expertise in New York City represents an extraordinary depth of staff from its network of neighborhood organizations to the extensive analytical prowess of national offices. So why are they failing?
Brooklyn’s nonprofit community development corporations and others have decades of experience in the preservation and development of housing throughout the city. This resource faces a variety of new challenges in the prevention of displacement. To succeed, they will need a far more sophisticated network for sharing housing innovations and achieving political change. Not doing is why they face catastrophic failure. Just one example: The Trump Administration proposes an $8.8 billion cut funds serving a low-and moderate-income community (an 18.3% reduction)in FY 2019 Budget. Will opposition to this proposal succeed? No.
The primary asset on forged from the grassroots up coupled with the ability to serve short-term needs while producing long-term solutions. Regardless of the “feeding-hand” problem that publicly funded organizations confront, the congressional delegation of New York City will still be the first in the nation to fully understand the subtle waves of displacement aimed at the vulnerable, but working members of their community. The question becomes will they lose their self-respect if they do not resist these forces with every talent they possess? The maps that follow attempt to visualize the membership of a Brooklyn Housing and Community Development Summit that will ask and answer just one question. What is the information community-based organization need to share to build a more comprehensive and progressive community development strategy?
On the map below, CAMBA illustrates the ability to see people in real places before data. The services represented by this map also visualize the importance of a comprehensive approach to community development in the context of the Ninth Congressional District and its immediate surroundings. Have a look, and for more detail click (here). This process is replicable for all geo-filters from Census Tracts to city and state political districts.
Yvette D Clarke (D-NY) ranks 381st in the House with an estimated net worth of $115,502 in 2014. (More Recent)
CD9 is super important because the average net worth in the U.S. House of Representatives is over $6 million (2014). Nevertheless, according to the Center for Responsive Politics, Yvette D. Clarke received 82% her of campaign contributions ($537,295) from outside district. (Rank: 206 out of 421.), and she received 32% of campaign contributions ($211,772) from outside state. Over her career, for Responsive Politics)
Draft for Comment and Selection of Research Roles
Congressional Districts in dense urban environments do not sit in a vacuum easily separated from other neighborhoods, especially in NYC, and even more so in Brooklyn. The following litmus-test issues are important, but there is a larger issue. How do we recognize the power available to our congressperson and strengthen it if necessary? Second, what is the overall political power of NYC and NYS congressional delegation in the U.S. Congress? Here are five main issues to consider:
Broadband Policy (franchise accountability and capital investments)
Coastal Flooding, Extreme Weather Resilience, and Global Warming
Homelessness Crisis, Supportive and Affordable Housing and the role of HUD in NYC
Government services build through the committee positions held by elected officials that is reviewed below and demands long tenures. Congressional District’s are won or lost on two issues — Jobs and Taxation. Tenure for a Ninth Congressional representative is threatened by the top two.
Based on American Community Survey Data 2015: Congressional District Nine earns over $4.5 billion in annual payroll, but over half of it is from health care and social services. The total 2015 annual payroll for the district is $4.5 billion and $2.4 billion comes from the provision of health care and social assistance.
Immigration reform (aka family disruption) threatens the well-being and employment of low- and moderate-income wage earners. This is the exact opposite of what people believe. Worse still, cuts in Medicaid and the gutting of the Affordable Care Act (that can be fixed) means significant job losses in the Ninth.
The Republican opposition design is complicated (e.g. the Faso and Collins upstate play is part of a national attack on Dem govs.), but for our district, the assault on Medicaid alone threatens the jobs and well-being of Brooklyn families in a very serious way. The Downstate medical campus (Winthrop/Clarkson) already face serious institutional deficits, but the issue is broader than that employment base alone.
Will our the NY Congressional delegation influence, authorize and allocate? Can they clarify these issues and resolve problems? How much time do they need? They must stand for NYC and NYS first, and only after that argue the positions of their respective political party. To this end, an intense focus on CD9 first and then the NYC delegation as a whole to evaluate their effectiveness regarding specific concerns affecting the economic health, well-being, and diversity of urban life in NYC.
To begin, an examination of District 9 and the participation the NY Delegation’s committee assignments will be the first primary task. These committees respond to the development of legislation that can expand or reduce the government’s role in your life and after that, in the authorization and future allocation of public resources.
Please review the following for the NYC locus of power in the House of Representatives committee structure. Below are Evette Clarke’s assignments in the House. Pick an area of research that interests you and begins a fact-finding mission. Share this interest for coordination with other teams of Indivisible 9th as our communications protocol develops.
Be concrete and limit data to facts. These are names, places, dates, times, and other numbers. An idea can be concrete only if named individuals are accredited.
Yvette Clark’s Committees and Subcommittees
The following is aimed at developing a Research Group
Energy and Commerce Committee
Energy and Commerce are the oldest standing legislative committee in the U.S. House of Representatives. The Committee is vested with jurisdiction over matters relating to healthcare, energy, consumer safety, telecommunications, and trade.
Subcommittee on Communications and Technology
This subcommittee reviews electronic communications, both Interstate and foreign, including voice, video, audio, and data, whether transmitted by wire or wirelessly, and whether transmitted by telecommunications, commercial or private mobile service, broadcast, cable, satellite, microwave, or other mode; technology generally; emergency and public safety communications. The primary concern is cybersecurity, privacy, and data security. The main agencies are the Federal Communications Commission, the National Telecommunications and Information Administration, the Office of Emergency Communications in the Department of Homeland Security; and all aspects of the above-referenced jurisdiction related to the Department of Homeland Security.
Subcommittee on Energy
This subcommittee examines national energy policy; fossil energy; renewable energy; nuclear energy; nuclear facilities. The main agencies are the Department of Energy; the Nuclear Regulatory Commission, and the Federal Energy Regulatory Commission. A primary concern is the use of synthetic and alternative fuels; energy conservation; energy information; utility issues; interstate energy compacts; energy generation, marketing, reliability, transmission, siting, exploration, production, efficiency, cybersecurity, and rate making for all generated power; and pipelines. This committee is responsible for the laws, programs, and government activities affecting energy matters and its jurisdiction as they relate to the Department of Homeland Security.
Subcommittee on Oversight and Investigations
The committee’s responsibility is to conduct the evaluation of agencies, departments, and programs related to the jurisdiction of the full committee on oversight and investigations.
Subcommittee on Health
This committee’s primary concern is with issues related to public health and quarantine, drug abuse, hospital construction; mental health; biomedical research, and health information technology. The main concern is privacy, and cybersecurity; public health insurance (Medicare, Medicaid) and private health insurance, including medical malpractice and malpractice insurance. The regulation of food, drugs, and cosmetics is also a prime responsibility. The main agencies are the Department of Health and Human Services; the National Institutes of Health; the Centers for Disease Control; Indian Health Service; and all aspects of the above-referenced jurisdiction related to the Department of Homeland Security.
Subcommittee on Environment
This committee examines all matters related to soil, air, and water contamination, including Superfund and the Resource Conservation and Recovery Act. The primary concern is the regulation of solid, hazardous, and nuclear wastes, including mining, nuclear, oil, gas, and coal combustion waste. The authorizations derive from the Clean Air Act on air emissions. The nation’s emergency environmental response in industrial plant security, including cybersecurity; the regulation of drinking water (Safe Drinking Water Act), including underground injection of fluids (e.g., deep well injection or hydro-fracking). The regulation of toxic substances (Toxic Substances Control Act) including noise; and all aspects of the above-referenced jurisdiction related to the Department of Homeland Security.
Subcommittee on Digital Commerce and Consumer Protection
Interstate and foreign commerce, including all trade matters within the jurisdiction of the full committee; regulation of commercial practices (the Federal Trade Commission), including sports-related matters; consumer affairs and consumer protection, including privacy matters generally; data security; consumer product safety (the Consumer Product Safety Commission); product liability; motor vehicle safety; and regulation of travel, tourism, and time.
Initially a “select committee” it a became permanent standing committee in 1975, the House members granted legislative jurisdiction and oversight to protect and assist small businesses. The Committee has jurisdiction over matters related to small business financial aid, regulatory flexibility, and paperwork reduction. Additionally, the House Small Business Committee has legislative authority over the Small Business Administration (SBA) and its programs.
The committee addresses policies that enhance rural economic growth, increasing America’s energy independence as focused on how well small businesses can compete effectively in a global marketplace. There are five oversight responsibilities 1) on all agricultural policies, 2) on environmental issues and regulations (including agencies such as the Environmental Protection Agency and the Army Corps of Engineers), 3, regarding energy issues, including expansion of domestic resources whether they are renewable or non-renewable. The remaining concerns regard international trade policy with particular emphasis on agencies that provide direct assistance to small businesses. The main bodies are the Small Business Administration’s (SBA) the Office of International Trade, the Department of Commerce’s United States Export Assistance Centers, the Department of Agriculture’s Foreign Agricultural Service, and the Export-Import Bank. Oversight of infringement of intellectual property rights by foreign competition is also a major concern.
The committee addresses how healthcare policies may inhibit or promote economic growth and job creation by small businesses. Members examine small business job growth through the creation and adoption of advanced technologies. Oversight includes implementation of the Patient Protection and Affordable Care Act. Maintaining the availability and affordability of health care coverage for small businesses is a top concern. The committee examines general technology issues, including intellectual property policy in the United States, telecommunications policies including, but not limited to, the National Broadband Plan and allocation of electromagnetic spectrum. The Small Business Innovation Research Program and the Small Business Technology Transfer Program are the main implementation resources
This committee evaluates the operation of the financial markets in the United States and their ability to provide capital to small businesses. It reviews federal programs, overseen by the SBA. The impact of federal tax policies on small businesses requires oversight of capital access and financial markets and the Implementation and revision of the Dodd-Frank Wall Street Reform and Consumer Protection Act. All SBA financial assistance programs, including guaranteed loans, microloans, certified development company loans, and small business investment companies are its central concern, including the Department of Agriculture business and industry guaranteed loan program. The management of the SBA disaster loan program is included in its oversight responsibilities.
This committee examines the operation of government programs that affect small businesses, including the SBA. It creates proposals to improve cost-effectiveness, and it reviews the regulatory burdens and how they may be alleviated. Oversight includes all issues affecting small businesses and federal agencies, the management of the SBA, and the SBA’s Inspector General. It oversees the implementation of the Regulatory Flexibility Act and the Office of Information and Regulatory Affairs at the Office of Management and Budget. It uses the Congressional Review Act. It calls for transparency of the federal rulemaking process as required by the Administrative Procedure and Data Quality Acts and supports the implementation of the Paperwork Reduction Act.
This committee assesses the federal procurement system, including the participation of small businesses in providing goods and services to the federal government. The committee examines technical assistance services to small businesses in general and reviews the broad scope of workforce issues that affect the ability of small businesses to obtain and maintain qualified employees. Oversight includes government-wide procurement practices and policies that inhibit or expand participation by small businesses in the federal contracting marketplace. All contracting programs established by the Small Business Act, including HUBZone, 8(a), Women-, and Service-Disabled Veteran-Owned Small Business Programs. Technical assistance through SBA personnel as it involves the Offices of Small and Disadvantaged Business Utilization, and Procurement Technical Assistance Centers The committee also oversees the SBA Surety Bond Guarantee program all federal policies that affect the workforce including, but not limited to, the roles of the Department of Labor and the National Labor Relations Board. The SBA’s entrepreneurial development and technical assistance programs unrelated to participation in the federal government contracting is of equal interest.
Evaluating the State of Congressional District Nine
It is reasonable for Indivisible Ninth to provide our representatives with supports of every kind. RESEARCH if Indivisible Ninth can imagine strengthening the position of Evette Clarke in the U.S. Congress in a variety of ways. Our goal is to do so until it becomes necessary or apparent for us not do so. That is our right as voters.
We also recognize that representing the Ninth Congressional District and the community is a family tradition of the Clarke family. Yvette’s mother, Una Clark is a Former NYC Councilmember, 40th District, Brooklyn, New York, and in June 2015, Major Bill DeBlasio appointed Mrs. Clarke to the Board of Trustees of the City University of New York (CUNY), an institution that breaks down barriers and glass ceilings with great success.
A goal of Indivisible Ninth is to assure it reflects in its membership the people of this district based on what they know is right outside their front door and what they feel in their hearts as voters. The Indivisible Ninth membership sees its diversity as one of the great powers of NYC that must be respected, whether we citizens or not, whether native or foreign-born, of any racial or ethnic origin that we care to describe ourselves. We will stand as one and make our views known to one another.
See on the demography of CD9 for details. In brief, CD9 has over 750,000 people. Name a country; we have people from there. Our West Indian population is our largest, our Congressperson, Yvette Clarke has Jamaican roots. District Nine has a growing population from the Middle East and Latin America. We are old and young, white, brown and black and we like it that way. We will fight to keep our diversity with every resource at our command.