2020 Democratic presidential candidate Elizabeth Warren has unveiled a modest affordable housing plan that would work to improve existing development mechanisms in an effort to increase the supply of affordable housing across the country.
Arguing that "government at all levels hasn’t done enough to tackle our housing problems over the past few decades," Warren recently reintroduced her 2018 American Housing and Economic Mobility Act in the United States Senate. The act, which forms the basis for Warren's affordable housing plan, falls somewhat short of some of the more structurally-oriented housing proposals put forth by competing presidential candidates, including New Jersey senator Cory Booker, but aims to improve the existing system nonetheless.
First and foremost, Warren is pushing to increase the supply of affordable housing nationwide by embracing some of the principles of the Yes in My Backyard (YIMBY) movement by compelling cities to change their zoning codes to make it easier to build new affordable housing units in the first place. By creating incentives for local governments to "eliminate unnecessary land use restrictions that drive up costs" while also directing $10 billion into "a new competitive grant program that communities can use to build infrastructure, parks, roads, or schools," Warren hopes to entice municipalities to allow and permit more affordable housing projects, generally-speaking. The caveat? To be eligible for these incentives, Warren states, local governments "must reform land use rules that restrict production of new affordable housing." The proposal, according to studies cited by Warren, could reduce rents nationwide for affordable housing residents by an average of 10-percent, or roughly $100.
Warren also aims to fund the development of affordable housing outright. She argues that raising estate taxes would allow the federal government to allocate $500 billion over the next 10 years to "build, preserve, and rehab" affordable housing units for lower-income families. The plan, according to Warren, would also "leverage private dollars so that taxpayers get the most bang for their buck." The cost of building an affordable housing unit varies greatly by state, so it is unclear how many new housing units could result from Warren's plan. In California, for example, a single unit of affordable housing costs an average of $450,000. In Texas, the cost can be one-third of that amount.
In an effort to undo decades' worth of housing discrimination, Warren's plan would also bring mortgage assistance to communities that have historically been denied government-backed loans by providing "down payment grants to first-time homebuyers living in formerly redlined or officially segregated areas." The bill includes an additional $2 billion to support homeowners with negative equity on their mortgages, an effort to address some of the lingering effects of the Great Recession.
The plan also includes a ban on housing discrimination based on sexual orientation, gender identity, marital status, veteran status, and source of income, while also creating pathways for wider acceptance of government-sponsored housing vouchers "in neighborhoods with good schools and good jobs."
Warren also seeks to curb the growing trend of private equity funds purchasing distressed housing properties by limiting the situations in which federal agencies are allowed to sell mortgages to these corporate buyers.
Lastly, without being specific, Warren plans to "take whatever legal steps it can to stop states from preempting local efforts to enact tenant protection laws."
In addition to rent control, I would like to see investment in the maintenance of the existing stock of public housing, and a commitment to building new public housing or publicly subsidized co-op housing in major American cities, particularly in cities and heavily gentrified or rapidly gentrifying neighborhoods.
All 11 Comments
Increase taxes and give mortgages to people who will default on them.
Sounds sensible to me!
Nothing is without downsides and tradeoffs, and by listing the downsides while ignoring the benefits it's possible to make anything look bad.
Lastly, without being specific, Warren plans to "take whatever legal steps it can to stop states from preempting local efforts to enact tenant protection laws."
If tenants have more “protections” I for one would certainly raise the rent that I charge for my house that I rent out because I am now taking on more risk. Or, I’d sell it. In Spain, tenants have so much “protection” that they can effectively not pay their rent for years and you can’t evict them. You just gain floppers. The effect? A family member (not rich and evil) has a couple properties in Spain that he is just letting sit there because it’s better than letting potential floppers destroy them and create liability. She seeks to block State legislation, because it’s more scrutinous than local municipalities that her cohorts would like to turn into zones of limited land rights.
Coming soon to the Hamptons, the Vineyard, and Nantucket.
It's sensible, just like the 'affordable' health care act.
Which works for most people...
In which universe is that?
Raising property taxes: a short-sighted solution. Because landlords will just pass on the added cost to the residents - the lowest on this food chain.
Warren's "plan" is incrementalist bullshit.
Nothing will change until the ownership class is divested of rental property for profit. These are people who do nothing but sit back and collect money from people who actually work.
You want to know why housing isn't affordable? There is your answer. On one side there are a few people who have vast portfolios of real estate - on the other are millions of poor SOBs paying 1/3 to 1/2 of their income to further line the already gilded pockets of the obscenely rich.
Time for some good tax policy to change behavior and keep money from piling up in all the wrong places.
Not getting my property.
Housing isn't affordable because we don't build enough of it in places where people want to live.*
*edit: Among other reasons. Your reasons are not incorrect, just not primary.
^that I agree with
EXACTLY. All candidates' proposals are nothing but a temorary, symptom-treating, feudalism-preserving gift to the asset class, on the backs of employees and employers who are actually doing the real work in this country.
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Here's the COMPREHENSIVE plan that will transform our dysfunctional housing system into an equitable, highly-functioning system that prioritizes the housing of people over the profiteering of the real estate corps, asset class, money managers, and banks:
http://www.dougthedrummer.com/affordable-housing-forever-act/
Wtf is the “the asset class”?
“Upon passage of the AHFA, purchasing housing for investment is prohibited. A housing unit may only be purchased by buyers committed to being occupants. A buyer’s former residence must be on the market within six months of the new purchase date.”
Wants to dictate housing policy, can’t design a website...smh
If we removed stupid zoning laws and let investors build according to changing trends in housing we wouldn’t be in this predicament. Notice the problem is the worst in places where govt regs are highest and Dems (cough cough) have been in power for decades. Zoning has codified economic striation in the built environment. Zoning has superimposed class on the landscape, in effect creating “good” areas and “bad” areas. If we let the whole thing average out, the costs wouldn’t be so artificially inflated in certain areas, with the exception of areas in proximity to desired natural features and possibly downtown districts. The problem is not private investment, it’s government.
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Are you also proposing we end hunger by outlawing snacktime?
Hey jla-x I found the literally communism you're looking for. It's this "Act"
"Required down-payments for existing home purchases will start off at 20% of purchase price and increase 2% per year for 15 years and will remain at 50% from thereon."
My god, you're going to eviscerate the rental market by forcing the mass sell-off of non-owner-occupied housing, and then slap a 50% required down payment onto people who are living paycheck to paycheck? I can't think of a dumber combination.
The neighborhood that I grew up in was mostly small sfh. Working class area. My house was 1400sf, 2 stories + a finished basement. 5 of us + 3 dogs and a cat occupied the middle floor that was probably about 700sf. My mom rented the upstairs to a Colombian family of 4, a pet squirrel (no joke), a dog, and a snapper turtle that they kept in a bathtub for some reason. 1/2 of the basement was rented to a young guy and his pregnant girlfriend. The other 1/2 was a makeshift call center that my mom rented out to some alarm system business (my friends and I often used their phones for my prank call operation when they weren’t there)
2 points...
1. This is probably why I’m a little crazy
2. If we let people adapt their space without the threat of fines or jail, they will create a situation that.
No, it probably wasn’t legal, but everyone in the neighborhood was doing it. Many families from the Caribbean were able to live in a relatively decent area because of this practice. Had these illegal apartments not been available, most people would have ended up moving to a more dangerous area or into public assisted housing. The local high school was the highest performing majority black HS in the state at the time. The community was a tight, diverse, and pretty safe compared to surrounding areas.
By doing this we were able to survive, as were the people who rented from us. We often ate with the family upstairs, did favors for one another, rides, watching kids, etc. Humans are good at adapting to their environments. Let humans be humans.
I should note, there were also many families who were in better shape financially, who didn’t rent out portions of their homes. Because of this, we had an area of pretty mixed income levels. From middle class to poverty. The mixed nature of the area kept it from becoming either a ghetto or a middle class enclave. Something about mixed income neighborhoods works on multiple levels. Zoning is designed to stratify class.
I've said it before (and this may be a controversial opinion) but class segregation is more of a plague on our societal health than racial segregation. Unfortunately, class and race overlap significantly in the US.
Absolutely, and because they overlap so much, it’s been historically used as a tool for de facto racial segregation in a post segregation era.
IMO, public housing blocks have also been a way to concentrate poverty and race. Inequality is not an issue when in the context of some people having less than other people. Inequality that has been institutionalized IS imo the real problem. This isn’t fixed with adding govt, redistribution, etc, it’s fixed by removing govt protectionism of the upper class and govt protectionism of large corporations. Until we shrink govt from the areas it is creating problems, we have no business adding more layers.
Supply is only part of the problem. You could have all of the supply in the world but if you allow it to be bought up by investors housing will still be unaffordable. The asset class is the people who are hoarding assets and making money from those assets instead of actually working. Here's an informative article: https://www.annpettifor.com/2018/02/the-financialisation-of-the-housing-market/
Housing has been inflating at a much higher rate than general inflation for many decades. Inflation due to low supply and high demand is limited to the money supply. The Fed and the banks have j
(continued)... the fed and the banks I have known this for decades. Decisions to increase the money supply must be considered carefully...the positive effects of growth/production must be weighed against the negative effects of inflation. In the case of the massive credit extensions for EXISTING home sales, nothing is being produced. The end results are hyperinflation of existing home sales, thus hyperinflation of housing costs across the board. The banks have created a massive 24/7 income stream that produces nothing. They are now indispensable to the average American buying a home. Had we not allowed this, the market would have adapted and we would today have an ample supply of necessity-based, income-appropriate homes.
The AHFA stops the hemorrhaging of unnecessary, hard-earned cash expenditures to the all-powerful banks; returns credit, at least in the case of housing, to productive ventures; stops the hyperinflation of housing; ensures adequate supply will be built; puts a halt to the great money transfer from the employers & employees in this country who are actually producing to those doing nothing but hoarding housing; and most importantly of all, ensures everyone will have a home.
Housing is extremely complex. It takes several reads to understand the scope of this plan. Every aspect is there to address one of the many factors contributing to the affordable housing crisis. If we don't effectively address all of these factors, the affordable housing crisis will go on...and on...and on...just as it's been doing for decades now.
Again, the problems you note are caused by govt, not lack there of.
Yes & no. Government doesn't force people to hoard housing in order to exploit & profiteer from those in need of housing. While yes, the Fed is involved in this, it was in their autonomy and loyalty to banks & real estate corps that they put almost no restraints on credit going to existing home sales. The AHFA effectively addresses this. Restrictive building rules, some necessary & some unnecessary, are indeed at play here also. These laws are typically at the city or state level. The AHFA also addresses that.
"could reduce rents nationwide for affordable housing residents by an average of 10-percent, or roughly $100." over 10 years.
A decrease of 10% over 10 years is nothing, especially in a major American city. My rent has increased by $500 over 6 years. Warren's plan barely makes a dent. But hey, she got plans. Plans plans plans.
A decrease of 1% a year only sounds bad if you assume the alternative is no increase. I see this a lot, where people say "Well it's not going to make my rent as low as it was in 2009 so we shouldn't do anything!" when in fact doing nothing is just going to mean continued increases of 10% or more per year, like it's been.
Put another way, a *gross* 1% decrease relative to the status quo is a *net * decrease of 10% or more.
Maybe she could create a plan that does more. That is also an option.
Rent control would be a good thing.
I know of no rent control laws that decrease rent over time.
What could she do to do more? Without specifics - and to be clear I'm talking about specific *inputs* (like zoning reform, mortgage lending rules, tenant protection), not *outputs* (like "she could reduce rent by 5% per year) - just saying "She could create a plan that does more" is an empty criticism. Maybe she actually can't. Can you? Can someone else? *Has* anyone?
Rent control would probably do more than her plan that would maybe (just maybe) reduce rent by 1%/year. If median rent increase in the US is 2.8% right now. For a 2 bedroom in NYC, the rate of increase is almost 4%.
Rent control would probably do more than her plan that would maybe (just maybe) reduce rent by 1%/year. If median rent increase in the US is 2.8% right now. For a 2 bedroom in NYC, the rate of increase is almost 4%.
In addition to rent control, I would like to see investment in the maintenance of the existing stock of public housing, and a commitment to building new public housing or publicly subsidized co-op housing in major American cities, particularly in cities and heavily gentrified or rapidly gentrifying neighborhoods.
I also think that increasing wages, medicare for all, and canceling student debt factor heavily into ones ability to pay rent. (I know that both Warren and Sanders are good on these issues).
Expanding public transportation and creating more complete networks of public transportation that run 24 hours is also important.
I agree with pretty much everything you've said other than rent control.
When the tax on cigarettes is raised, the number of smokers goes down. When solar was given tax incentives, everybody installed photovoltaics.
Developers receive large financial incentives in the form of reduced taxes on rent and capital gains, the various loopholes for high incomes, real estate tax abatements on most profitable developments such as stadiums and superlux, etc. The high profitability of development is due to these policies. Trump's tax laws further reward developers.
This is the market in which public housing (publicly funded) must compete - where prices have been established by the most rapacious developers flooded with economic incentives.
Capitalism is based on the private ownership of everything for profit. Ever wonder why software is now all subscription based? Because the purchase model (ownership) was only good for a single sale. The subscription model is rent extraction. You don't own anything. As long as you want to use it, you have to keep paying. Ownership is denied because it limits profitability.
Private health insurance is another result of capitalism. It is essentially extortion legislated as rent extraction. Why should human health and well-being - and the denial of such - be a source of profit? Because capitalism only cares about profit, and everything and everyone that does not serve that interest is discarded. Medical services are the ultimate extortion because without them you suffer and die. Health insurance is not medical care.
The richest country in history, awash in the sick and homeless. U$A!
I actually agree with some of this. No one should be getting any special advantages. Again though, until we remove policies that tip the scale, we ought not add policies that seek to balance it out. The tax system is picking winners and losers. Remove all taxation with the exception of sales/consumption tax, including on RE. The loopholes that aid in creating such imbalances are not results of free markets, they are results of lobbying, cronyism, and govt overreach.
Without private ownership you get government ownership. Ownership becomes centralized. Ownership is power as you seem to inadvertently admit. By logic, if ownership is centralized, power is centralized. How do you centralize ownership and power and maintain rights and liberties? What is property? What if I create a painting and that painting has a perceived value that people want to pay for? Should I be able to leverage resources from my skill and labor to further creative endeavors? How do you leverage resources to do something that speaks against power when the power owns the resources? Socialism always leads to oppression. Look not further than AiWeiWei and the Chinese govt to see how lack of property rights can be used to suppress dissonance.
You people speak negatively about capitalism without understanding the downstream effects of its alternative and suppression. No one is arguing that capitalism is always fair, but it is the best system we have. I, and most would also agree that corporatism and cronyism is bad. That’s a pretty bipartisan thing. How about we don’t throw the baby with the bath water and work on fixing capitalism to a more pure form, than try to import a system that has failed and led to death, oppression, poverty, and misery every single time
it’s been tried.
We also have to address eviction, and the industry built up around weaponizing eviction against poor tenants.
On the Media had a great series on this called "The Scarlet :Unmasking America’s Eviction Crisis"
https://www.wnycstudios.org/po...
If someone doesn’t pay rent the homeowner should adopt them and take care of them like children?
I really hope you're not an architect.
Like I said, in Spain it’s nearly impossible to evict tenants. People move in with no intent to pay, and essentially become floppers. Consequently, no one is renting their properties. They would rather let them sit there vacant. You speak of the poor as if “the poor” equates to a virtue, and demonize the wealthy. There are plenty of poor people who are the scum of the earth and plenty of good successful people, and vica-versa. People will undoubtedly take advantage. Poor and rich matters nothing. Humans take advantage of situations to get ahead. I own a second home that I rent at a fair price. Tenants have no right to my property once they stop paying. If law changes and says I have to float the mortgage while they occupy the house, I will stop paying it, sell it, or physically kick them out. I have my own kids to take care of. Not going to support a family against my will. May do so out of good will, but definitely not if govt requires it. You don’t know what you are talking about.
I really hope you are not an American.
I suspect you are, and live in close proximity to an artisanal mayo shop.
I just noticed Liz is standing behind a 'Reparations to Puerto Rico' sign.
wtFUCK is that?!?
It’s woke shit. Makes white people feel good.
Notice the flags? It’s ok to be patriotic as long as the country is poor and in bad shape, regardless of human rights violations, etc. Something to do with overly simplistic Marxist power
dynamics
Wonder if they know abortion is criminalized in
El Salvador...
We should pay reparations to Puerto Rico.
It's the caplitalist solution - accounting for externalities.
How far back can we go? I think the Ottoman Empire owes me some money.
Case in point: NYT article today about rampant RE speculation in Arlington ahead of the Amazon HQ project. Amazon got some $800m in “incentives” from the state.
Corporate socialism.
Chud like jla-x never seem to talk about the amount of governmental and military support that props up corporate America.
Actually I do. Just talked about it in this thread matter of fact.
Corporations should get no special advantage. The solution requires shrinking government and military and is consistent with everything I’ve been saying.
I’ve also said multiple times, that govt has no business raising taxes one cent until we reprioritize revenues away from military spending. I am not necessarily opposed to safety nets, just consolidation of govt power in the name of class warfare, inequality, etc, and the suppression of economic liberties. If we figure out a way to create a minimalist govt with a good safety net I will be all for it. Marxism is not the way. Reprioritizing revenue from military, inefficient programs, bloated state, etc is a good first step. Removing all subsidies and govt advantages for corporations and certain classes is a good step. Looking for revenue streams from a fair tax transaction is the right step. Permeable borders and making immigration and trade easy and free is the right step. Removing stifling land use regulations and occupational licensing regs is a good step. Lots of things we could be agreeing on if people would get off the Marxism bandwagon and work towards improving and expanding economic
liberties rather than handing the baton to the govt cronies.
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