Jared Kushner and his real estate partners wanted to take advantage of a federal program in 2015 that would save them millions of dollars as they built an opulent, 50-story residential tower in this city’s booming waterfront district, just across the Hudson River from Lower Manhattan.
There was just one problem: The program was designed to benefit projects in poor, job-starved areas.
So the project’s consultants got creative, records show.
— The Washington Post
Basically, the tactic is gerrymandering for real estate. Kushner and co. worked with state officials to demarcate the area around the site, 65 Bay Street in Jersey City, as including some of the city's poorest neighborhoods rather than the wealthy neighborhoods just blocks away. So the project looked like it was being built in an area of "extraordinarily high unemployment", reports the Washington Post, in order to get some $50M in low-cost financing via the EB-5 visa program.
The article notes that the move is perfectly legal and has been used by other developers. "But it illustrates how Kushner, who ran his family’s real estate company before he became a senior adviser to President Trump, and his partners exploited a loophole in a federal program that prominent members of both parties say has been plagued by fraud and abuse."
We need to return to the point where municipalities build public housing for its citizens. The current model that funnels public money into the hands of private developers in the hopes of producing affordable housing or targeted redevelopment has been a disaster.
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Idiocy to target Kushner. It's been done for decades and is known by every urban developer as a loophole. I wonder why Democrats weren't howling when their own were doing this. This is precisely why Trump screams biased media covfefe. And to be honest, he's right.
Which prominent Democrats were doing this?
Why be honest? Trump sure as fuck isn't.
Which prominent Democrats? Charles Kushner, for one, but no one cared when the family was a prominent Democratic Party donor.
First, precisely which Democrats are doing this? Second, just because Democrats abuse programs doesn't give Kushner a pass. Many of us are pissed off at Democrats and Republicans for their crony transactional neoliberal politics. Kushner happens to be in power now and his boss/daddy-in-law pretended to run against corrupt cronyism.
There's a pretty big difference between a wealthy party donor and an official white house advisor.
Big difference? They are the same person/company... just a different context.
I meant in terms of governmental prominence. Keep up!
An entirely corrupt system - perfectly legal of course - that scumbags of every flavor use to enrich themselves at the public expense.
Developers here avoid the luxury tax on houses over $1m by tearing them down before the closing, at which point only a vacant lot is changing hands.
But... but... Jared Kushner!
We need to return to the point where municipalities build public housing for its citizens. The current model that funnels public money into the hands of private developers in the hopes of producing affordable housing or targeted redevelopment has been a disaster.
Isn't that the same model that ended with Pruitt-Igoe? I think we need to focus our conversation on why public housing in any form always struggles in the USA to build a quality lifestyle that gets people into their own housing over a long term. What are we doing wrong as a society that fails to produce workable public housing?
There are may public housing projects that function well. The problems of Pruitt-Igoe had to do with design and inadequate operational funding for safety and maintenance. It was used by opponents of public housing to weave a false narrative.
Government should not be in the housing business at any level, whether direct construction, subsidy, or otherwise.
Why not?
Obvious. Government action in the housing market creates massive capital imbalances, directs resources to wasteful outcomes, subsidizes bad behavior, contributes to boom-bust cycles, makes housing LESS affordable in aggregate by driving out non-governmental providers or making them dependent on government finance/action, fuels corruption, and creates a housing supply chain which is immune and unresponsive to market demand.
And many other reasons besides.
Would you make the same argument against public education or public hospitals?
Would you make the same argument against public education or public hospitals?
That depends. Maybe. It's probably much more applicable to education than health care. There is no denying that our national education system was far more effective in both a private model and then local public model. The massive centralization of governmental education has been disastrous in the USA.
This sounds to me like the generic anti-public argument that took us down the road of public-private partnerships, privatization, subsides to private business, etc. Maybe the reason public services don't work in the US as well as they work in Europe is because we constantly have anarcho-capitalist politicians working to undermine it.
Nope. That's your interpretation through a very narrow worldview. I'm talking about history, economics, and politics. Not ideology.
You may want to consider an alternative hypothesis: that public services only function in high-trust, low-time-preference societies with relatively homogeneous population and culture.
Conservatives often claim to be operating outside of political ideology. They also often claim to be blind to race, gender, and class. Not acknowledging a political ideology doesn't mean it doesn't exist.
Isn't that a very convenient and self-congratulatory position for you to take.
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"Obvious. Government action in the housing market creates massive capital imbalances, directs resources to wasteful outcomes, subsidizes bad behavior, contributes to boom-bust cycles, makes housing LESS affordable in aggregate by driving out non-governmental providers or making them dependent on government finance/action, fuels corruption, and creates a housing supply chain which is immune and unresponsive to market demand."
An exact description of how private housing works. Market demand is justification for maximum profitability, lobbying is corruption dependent on government finance/action, less affordable because of profit-centered goals at the expense of everything else, creator of boom-bust cycles (pump and dump, baby!), subsidized by low tax rates, and the epitomie of wasteful outcomes.
I do agree that there is no market incentive to construct affordable housing without some sort of subsidy and that is why HUD put these incentives in place. In many ways the incentives aren't bad, they've succeeded in successfully integrating affordable and market rate units to create mixed income communities, a real turning point from the public housing debacles of the 60s and 70s. If that were all to flip back to municipal housing agencies constructing affordable units, you are likely headed back to the economic segregation you had previously. The problem is with private developers using incentives as a profit-motive (which is not all that different than the graft and corruption you had with public housing agencies previously). The challenge is to address the problem and not flip back to a public model which in my opinion had much bigger structural issues.
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