As we go to press, Congress is in recess. Throughout the country, Representatives and Senators extol the booming economy that has resulted in a budget “surplus.” To spend that money, House and Senate Republicans have passed a $792 billion, 10-year tax cut. While the President has promised a veto, he appears willing to return up to $300 billion to taxpayers and use the rest to shore up Social Security and Medicare and pay down the national debt. What most American’s don’t realize, however, is that a significant portion of the “surplus” comes from cuts to spending imposed by budget caps that went into effect in 1997. The appropriations bills, including those for HUD, EPA, Veteran’s Affairs, and others moving through Congress, are subject to those cuts and promise to undo the largest HUD budget in a decade.
For housing and community development, that means draconian cuts to virtually every HUD program. Advocates are urging action now. It is vital that readers familiarize themselves with the issues and educate their Congressional representatives on the consequences of these cuts. Act fast. Congress returns September 7 to decide the fate of these appropriate bills.
Failure of Imagination
Former Labor Secretary Richard Reich wrote in a recent New York Times editorial that the national debate on what to do with the surplus focuses exclusively on the issues noted above. Virtually no word has been uttered on infrastructure investment – education, housing, transportation, research. Short sighted indeed during prosperous times when this country still suffers from poverty and inequality and faces ever-growing global competition.
This kind of failure of imagination is aptly illustrated by the move to make homelessness illegal instead of dealing with the underlying issues causing homelessness – unaffordable housing, joblessness, and the lack of available assistance to those with psychiatric illnesses or drug dependency. Drawing from information gathered in the recent report Out of Sight – Out of Mind?, Kristen Brown of the National Law Center on Homelessness & Poverty looks at anti-homeless legislation and successful alternatives to help people come off the streets. We also see how two groups organized to fight anti-homelessness legislation in Philadelphia.
Organizing is Key
Whether fighting slumlords or budget cuts, organizing is the key to success. But organizing has always been hard to fund. Few foundations openly embrace those who challenge the system. Collaborations and partnerships are easier sells. But some progressive foundations have a mission to fund the fight against oppression, poverty, and inequality by directly challenging power. And they fund organizing. Miriam Axel-Lute profiles two such foundations.
Housing Preservation
Efforts to stem development in outer suburbs require that central cities and inner-ring suburbs once again become desirable places to live. At the same time, advocates for the poor must be vigilant that uncontrolled gentrification and displacement do not occur. Karen Ceraso shows us how historic preservation can serve to revitalize a community and keep it affordable. While some say historic preservation comes with a price tag, developers of historic affordable housing maintain that it creates long-term community assets.
Are You Rich?
If so, America will do its best to help you accumulate as many assets as possible. Your investment earnings will be taxed at a lower rate than your income, for example, and a significant portion of your housing cost will be returned to you through the mortgage interest deduction.
But if you’re a low- or moderate-income worker, few public policies or tax provisions (with the notable exception of the earned income tax credit) exist to help you build assets so that you too can finance an education, start a business, or buy a home.
However, the notion that accumulating “assets” or building “wealth” is an effective way to fight poverty is beginning to take hold. Based on the research of people like Michael Sherraden, Melvin Oliver, and Thomas Shapiro, and programs developed by groups like the Center for Enterprise Development (CFED), many foundations and policy makers are examining ways to increase the assets of the poor.
For example, the National Housing Institute has been researching ways to enhance or revise the mortgage interest deduction to increase homeownership – the single largest asset for most Americans – among low-income and minority households. (While the homeownership rate among minorities has increased significantly in the past few years, homeownership among blacks remains under 50 percent, while white homeownership is over 70 percent.) And CFED has been on the forefront of innovation with their Individual Development Account program. We first wrote about IDAs in 1996 (Shelterforce #89), and Ray Boshara and Elizabeth Corman of CFED bring us up to date on the success of IDAs and their implications for future programs.
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