Maybe improve their lives?
by Tom Sullivan
Lost in the pre-election horse-race coverage, the latest in pipe-bomb news, and her own DNA kerfuffle, Sen. Elizabeth Warren’s American Housing and Economic Mobility Act has not drawn headlines. For all her skills on the stump, Warren is still a policy wonk. A real one, not an over-hyped wannabe like House Speaker Paul Ryan. Warren’s policy proposals, solid though they are, draw fleeting press.
Mehrsa Baradaran and Darrick Hamilton dive into her bill to address decades of federal housing discrimination dating back to the New Deal. The bill is the first since the Fair Housing Act aimed at “redressing the iterative effects” of the kind of housing discrimination Ta-Nehisi Coates chronicled in his 2014 “The Case for Reparations” in The Atlantic. Anyone still needing a primer in redlining and its effects on disfavored communities can find one there.
Basically, under President Franklin D. Roosevelt, the Home Owners’ Loan Corporation and the Federal Housing Administration that helped build the American middle class left black families behind. The programs, with private lenders in tow, refused to insure mortgages for nonwhites. White families built wealth in their homes they could pass along to their children. They used their equity to start businesses. Meanwhile, redlined neighborhoods stagnated, passing along only intergenerational poverty.
Warren’s bill seeks to redress the problem in part with a down-payment assistance program:
The bill directs HUD to provide a grant that would be equivalent to an FHA loan down payment to all low- and middle-income first-time homebuyers who live in formerly redlined communities that are still low income. While many first-time homebuyers have help from family in putting together a down payment, government discrimination robbed most families in redlined neighborhoods of that opportunity.
The bill also extends the Community Reinvestment Act to include nonbank lenders and credit unions that now provide half of all mortgages. Warren would expand Fair Housing Act protections from discrimination, Baradaran and Hamilton write, to “sexual orientation, gender identity or marital status, and source of income, including government benefits.”
Perhaps the greatest sticking point for Warren’s bill will be its spending on affordable housing:
The American Housing and Economic Mobility Act also addresses the poverty caused by generations of housing discrimination. Black families are more likely to rent their homes because of historic exclusion from the housing market and restriction from accumulating and passing down wealth in general. In recent years, a severe shortage of affordable housing affecting every county in America has caused rents to spike for low- and middle-income renters, stretching their budgets and putting them at risk of eviction. The bill would invest $45 billion a year for 10 years in proven federal programs that use public capital to subsidize the construction and preservation of housing that’s affordable to working families. An independent analysis by Moody’s Analytics suggests this investment will produce more than 3 million new units and that new supply will pull down rents by 10 percent and create 1.5 million new jobs. In addition, the bill provides $2 billion in new grants to states to help homeowners and communities targeted with the most abusive loans before the financial crisis—often communities of color—where many homeowners still owe more on their mortgages than their properties are worth. These grants could be used for loan modifications that include principal reduction, purchasing or rehabilitation of vacant lots to increase neighborhood property values, or providing loans to negative equity borrowers to allow them to maintain or rehabilitate their homes.
New Deal housing assistance demonstrated the “iterative and multigenerational value of wealth creation” government assistance can provide. The question is whether a white America falling out of the middle class and intent on protecting its gains from encroachment by other-hued neighbors will support such a program. Republicans now stand behind democratic principles only so long as they win. Republican legislators support government spending only so long as it benefits those who support them at the polls. Warren’s proposal does not.
With nearly 30 million Latinos eligible to vote, Democrats might want to emphasize the potential for Warren’s housing proposal to help not just black voters, but a Latino community struggling to climb into the middle class. On The Daily Friday, Jose A. Del Real of the New York Times observed that Latino voters are not as monolithic as both major parties treat them. Latinos “care about a lot more issue than they are being spoken to about.” Immigration is not the primary driver of their participation in elections. Like other Americans, they care about mental health, education for their kids, and paycheck issues. They care about building middle class lives for themselves.
Eric Levitz writes at New York magazine:
On the eve of the 2014 midterms, just 35 percent of Latino voters told Pew Research that they were paying “quite a lot” of attention to the upcoming elections; the latest Pew poll puts that figure at 52 percent. Meanwhile, 55 percent of Hispanic voters say they are “more enthusiastic” about voting in this year’s midterm than they have been in previous years.
And only a small minority of those voters are excited to cast a ballot for the party of Trump. According to Pew’s data, two-thirds of Latino adults say the Trump administration’s policies have been harmful to Hispanics; half have serious concerns about their “place in American society” now that Trump is president (up from 41 percent in 2017); 55 percent say they are worried that either they, a family member, or friend could be deported; 69 percent disapprove of Donald Trump; and 63 percent of registered Latino voters prefer Democratic congressional candidates to Republican ones, up from 57 percent in 2014.
The “Elizabeth Warren wing” of the Democratic Party might want to laser-focus on what having Democrats back in control might mean both for those Americans struggling to reach the middle class and for those hanging on for dear life. Pitching her American Housing and Economic Mobility Act as a way to help African-Americans left behind by the New Deal may not provide the clout she’ll need to pass it. For that, she and the Democrats will need to build a broader coalition.
“Around 60% of registered Latino voters nationwide are not even being contacted by these campaigns,” Del Real says. “And when they are, it’s largely focused on President Trump and his comments which didn’t motivate them to turn out in 2016, and about immigration policy which we’ve been hearing about for decades.”
Maybe they would rather hear about how Democrats will improve their lives?
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