Congressional Budget Office Scores House Health Bill with an “F”

Oakland    The Congressional Budget Office finished its nonpartisan, objective evaluation of the costs and impacts of their recently passed bill to replace the Affordable Care Act, and channeling Gertrude Stein found that there was “no there, there,” at least if any of us were looking for health insurance, especially when we have health problems.

Begin with the fact that they estimate that 23 million Americans will lose health insurance. I say “begin,” because there is no way to get an accurate view on how high that number could rise. The Republican bill, as written, gives states the ability to ask for waivers from an anti-healthcare Department of Human Services, which would rubber stamp the ability of states to eviscerate care for the individuals with preexisting conditions, women’s health needs, and allow skinnier and skinnier requirements from the plans, thereby eliminating the minimum health provisions of Obamacare for everyone on the program. Analysts report that the CBO usually consults with states in making its estimates, so the 23 million may include some, but this number would likely swell in the red states with “red” now not referring to the color of a map on election night, but instead standing for the blood draining out of these states’ dying people.

Furthermore in the CBO score, they reject the argument that Republicans have made that such miserly benefits will bring happy days with lower premiums and therefore more participation. The CBO flatly argues that the Republican House plan will end up with higher prices, especially because of the Medicaid cuts, and will collapse insurance markets because of the reduction of subsidies. Young people will get cheaper insurance though that will only be good news in the flower of youth, because if, and when, faced with any healthcare needs, young people will be as screwed as everyone else.

The CBO also totally dismissed the Republicans’ argument that “risk pools” would cover take care of Americans with preexisting conditions. If you read between the lines the CBO believes they will pretty much die as soon as they run out of money, and it won’t take long. The “risk pools” are inadequately funded in their view, and they have never worked. The dustbin of history is calling, but the House Republicans are determined to sell the scam. At least they are if they can keep their tempers when asked to defend their votes in favor of this trash, which wasn’t the case for the Montana Republican Congressional candidate facing a tough contest, who decided to body slam a British reporter for the nerve of asking him about his vote.

Some Senate Republicans might notice that one of the groups being slammed the hardest is older people. The New York Times analysis noted that “The cost of insurance for a 64-year-old earning about $27,000 would increase to more than $13,000, from $1,700 under the Affordable Care Act, even for states that pared back insurance rules.” Bad news, these folks actually vote and even with diminishing basic math skills, all of them will figure out that their bill would be almost half of their income.

There are some winners though, but in the Republican plan that’s the folks with the fatter wallets, especially if they are neither old nor poor. The Times reports, that “The bill makes big cuts to taxes on payroll and investment income for those earning more than $200,000, and provides more subsidies to buy insurance for people earning between about $50,000 and $150,000.”

There is no irony here, though their could be. Fewer subsidies for the poor, but more for wealthier families? How can anyone rationalize that? There’s a clue to their thinking though. Perhaps they are channeling HUD Secretary Ben Carson, and want us all to believe that health insurance is like poverty, “just a state of mind.”

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Technology in the Service of Social Change

Santa Cruz   I drove over the mountain, as they say in this area, and ended up on the top of a hill with a dramatic view of the valley and water, while visiting the stunning campus of the University of California at Santa Cruz. I was there to talk to students who are part of the Everett Program there, where ACORN is new partner, along with other nonprofits. My other motivation was an effort to get a better grip on what the program was all about, as a rookie to the enterprise.

I had gained some sense of the operation over the last year through a series of Skype calls and emails. We are fortunate to have three of the Everett Program students working with our organizers in Bengaluru, India this summer to help create a CiviCRM database for ACORN’s 35,000 member hawkers union there, so this also offered the opportunity to meet the interns face-to-face and shape the effectiveness of their upcoming two months in India with us.

The background I learned from the director, Chris Benner, and veteran staffer and organizer, Katie Roper, indicated that it had been a program for several decades at UC Santa Cruz, but has recently been expanding. Every fall, they begin with about 100 students and by the end of the spring quarter they have about 30 ready to embed in various projects. Historically a lot of the efforts have been California-based, so ACORN is a beneficiary of their growth and expanding vision. Being on the ground I was able to do an early pitch for a team in 2018 to work out of New Orleans to support the tech needs of our organizing both domestically and internationally, which was a nice piece of lagniappe.

Most interestingly was the opportunity to talk to the students for a minute and more importantly to hear their questions and get a feeling for what they were thinking. Spoiler alert: they have a foreboding sense of the world and how it views change and organizers who are part of that process.

Over the years I’ve talked to a lot of classes and groups of young people, but now in the Age of Trump and hyper-polarization,  I was still surprised when the first question asked me whether or not I had ever been threatened in the work and how frequently organizers were assaulted. Later in the session, another young woman asked a question that went to the heart of whether or not a young person in their early 20’s could even play a role in the work and whether or not it was worth the risk to jump into the struggle. At one level, this is encouraging. Young people are taking the temperature of the times, and learning that it’s not pretty out there with love, flowers, and constant applause. If these kinds of questions are any true sampling, they are less naive, and therefore will be better prepared, if they take the leap into the work, to weather the constant storms and flying brickbats. On the other level, it is worrisome whether in these beautiful, redwood towers, people might feel intimidated and fearful of taking the plunge to work in the hardscrabble countrysides and mean streets of the city.

We need an active army of organizers and people ready to work in the allied trades, and that was my message: there’s a role for all of you, but everyone has to put their shoulder to the wheel and help to win the fight in this struggle. I hope they heard me. We need their help.

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Vision Rent-to-Own “Buyers” Meet and Find Out Every Deal is Different

San Francisco  The first organizing meeting in Detroit of the Home Savers Campaign had spirited discussion when families discovered that they only had one thing in common in the contracts they had signed with Vision Property Management or its subsidiaries: the contract itself. When it came to the terms, to everyone’s shock and anger, everyone had a different deal!

The differences were not simply where we might expect to find them in the price of the houses they were hoping to buy or the number of years to term. In fact the prices were all very close to each other. As the campaign has come to expect from visiting so many families in Pittsburgh, Philadelphia, Akron, Youngstown, and now Detroit, some families attending the meeting were still shocked to find out that in seven years they would not own the home as they expected, but simply face wrenching choices between balloon payments, long term agreements, or walking away from extensive investments in money and labor in repairs.

The differences in the contracts were huge. Excitedly talking about their contracts, they found for example that in some contracts as little as $14 of their monthly payment was going to principle on the purchase while in others as much as $150 was being applied. That was often the case when the payments were virtually identical. In several cases, they discovered they had not been clearly told how much of their payment was going to principle at all. Even when the purchase price of the houses were roughly equivalent, families were finding that the amount of their monthly payment being applied for insurance was often different.

Looking at the question of tax payment which is especially freighted with concern, since nonpayment of taxes to the county could lead to loss of the property on tax delinquency sales. Only one family could determine from their payment the amount that was supposedly being paid to taxes, while the other families at this first organizing meeting became worried that since there was no indication, Vision might not be paying their taxes at all. Even in the one case where the tax level was stated at $150 per month or $1800 per year, there was skepticism that the house valued so modestly really was sustaining such a relatively high cost compared to true value.

Many of the people at the meeting were also on their second contract with Vision. The first had given them up to 45 days to make good on their payments, while the more recent gave Vision the right to void their option to purchase if they were late on the payments at all, making the contracts essentially no more than rental agreements, despite the fact that this was a triple-net lease with the “buyer” paying everything including thousands and thousands in repairs. One family was livid having invested over $50,000 in repairs, yet still debating whether or not they should walk away. Everyone at the meeting shared stories of about the “fishing” Vision’s representatives did with them over the phone to try and suss out the amount families had invested themselves in repairs, presumably for the company to guess whether the property might have been fixed off enough for them to seize the first opportunity to evict and flip.

People were happy to meet, but that was the only happiness in the room once the members and organizers cleared the fog away that hung over the legalese of the agreements. There was anger and plans for quick action. On the question of fight or flight, people were ready to fight. Powered by people, the campaign now begins in earnest.

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Trump’s Budget Wants USA to be Kansas, Meanwhile Reality Calls

Oakland   The devil is in the details, not on Saturday Night Live, and his footprints are becoming clearer as the top notes become louder on the Trump Administration’s true plans for the country as revealed by their more detailed budget proposal. Tremendous cuts are being proposed for entitlements, some $800 billion over ten years in Medicaid, because, hey, they have to take money from poorer Americans in order to propose huge tax cuts to richer Americans and cut down taxes for corporations now enjoying record profits. Food stamps, which are now called SNAP, will have forced work requirements. States will be given more flexibility to lard on other impediments to receiving actual benefits and making the process of accessing benefits even more draconian. Hardest hit may be people on SSI disability payments. Trump promised not to cut Medicare or Social Security, but SSI for some reason seem like fair game to them, even though these payments are lifelines for many. Early, rough estimates are that 10 million poor people will be hammered by the budget, if it actually emerges in this form.

What’s the rationale? Well, if corporations and the rich are given carte blanche then supposedly jobs will be created and that will solve everything.

Where have we heard that recently? Yes, Kansas, which is on most lists in the USA of what counts as a “failed state.” Former Senator Brownback became governor of Kansas several years ago and with a whooping, red state legislature, cut state taxes to the bone with the same rationale. Jobs were going to grow in like wheat in Kansas and the volume of new jobs and business would replace the lost revenue. We can only wish that President Trump and his people had looked at how this had worked out in Kansas. State revenue plummeted. Cutbacks to public education forced one court action after another with the state legislature now under court order by the Kansas Supreme Court to come up with the money to fund the schools under constitutional mandate or face the consequences. People are being hurt in Kansas and the economy is a wreck, but “message to the men from Mars,” there is a political backlash. Some legislators who touted the plan have been defeated. Even Republicans are wary of Brownback’s proposals, and the rare Democrats in the state of Kansas are in resurgence. There are lessons that could be learned in Kansas, if anyone at the White House bothered.

But, there are also lessons that could be learned everywhere, if the President and his people, actually talked to people in the neighborhoods. Yesterday, our Home Savers Campaign team was again on the doors in Detroit. We were focusing on Vision Property Management, and the visits were grim. A Latino family had bought a Vision rent-to-own next door to where they lived for their mother to live in. They were now coming to decision point on the agreement where they have to either make a $15,000 balloon payment, sign another long term extension of their agreement, or walkaway. They were unsure where to go next. Another family had successfully negotiated a change with Vision from rent-to-own to a land contract, but then the roof had collapsed on them within months after they signed and they were also uncertain. Other families had no clue what was in their agreements.

These are all working families with jobs trying to find affordable housing, and often depending on SSI, food stamps, subsidized school lunches, and the expansion of Medicaid under the Affordable Care Act. Why are their lives not as valuable as the rich? Why can’t they get a break?

***

Please enjoy Oxford, MS from Davy Knowles. Thanks to KABF.org.

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Assembling the Facts on the Ground about Land Contracts in Detroit

Oakland   The back of the envelope figures from three days on the doors, based on reports logged into the database by our teams in Detroit, indicate that of more than 125 doors hit, half of the properties are abandoned. That’s not good for neighborhoods, the City of Detroit, or the future prospects of building viable communities there. We increasingly began to question how good this level of abandonment of land contract and rent-to-own properties is even for the companies that specialize in this seamy side of the housing market in urban areas.

As a business model that fits snugly in the category of what a reporter for the New York Times termed the dominant modern “flagrant exploitation economy,” the companies operating within this most predatory segment of the housing and rental market face challenges. By process of elimination of usual factors, an economist speculating on principal cause of the 2008 real estate collapse is now arguing that there was an irrational psychology that almost spread virally that vast sums were to be had by “flipping” real estate, which like the tulip craze in Holland and so many other bubbles of the previous centuries, led to the unsustainable inflation of prices until the crash. Detroit Property Exchange is still pushing that myth in lower income communities with its signs that urge potential customers to call 888-FLIP to connect with the company.

Certainly the lease and contract documents starting from “as is” and including the company’s rights to evict the “buyer” immediately for even a single missed payment at any point in the term of the agreement, lead one to believe that these companies are making their money by flipping the contracts from one “sucker” to another, as an on-line Detroit magazine called the Bridge, writing about our campaign described the buyers. We are not convinced that theory translates into facts on the ground from our doorknocking. Additionally, Professor Josh Akers shared with us an overview of research he and a colleague are soon publishing on land contracts in Detroit over the 10-year period from 2005 to 2015. The largest dozen contract sellers were involved in almost 7500 acquisitions, which was less than 10% of the over 80,000 properties in Detroit that had been acquired through tax auctions or REO’s from various governmental foreclosures. In that period contract sellers had gone through eviction procedures for about 1 out of every 3 properties, but evictions with specific properties acquired by all buyers involved eviction procedures at the ratio of 1 out of every 4 properties, which is not a world of difference. Over a 10-year period that doesn’t translate into a constant churn, likely because there is tepid demands that these practices have inevitably created in these neighborhoods.

Because there is not a robust market for these properties from stories the Home Savers Campaign is hearing on the doors, it seems that tenants wanting or willing to stay in these properties are able to negotiate a fair amount of forbearance even when missing payments because the sellers realize there isn’t a line waiting to open the door behind them. It also explains stories we have heard from several buyers where they are able to negotiate shorter terms when they are willing to take over the properties.

One reason may be the fact that many of these companies are not forwarding payments made by the buyers to resolve tax payments nor are they disclosing past liens on the properties. Lawsuits like those filed against Harbour Properties and Vision Property Management in Cincinnati to collect back taxes, fines, and penalties for their properties in that jurisdiction reveal a business model of nonpayment that seems to typify this part of the industry. That’s a ticking time bomb for the tenant-buyer for sure, especially given the rigid collection and delinquency procedures of Wayne County, and we have heard cases falling into this bad basket every day in Detroit, but it also seems to be leading to shorter term contracts and more negotiating opportunities if the campaign could engage the parties successfully.

We’re finding the handles, but we are not convinced yet that people want to grab them, given that many still see themselves as renters, rather than potential owners. That’s the puzzle we still need to find, even as we are understanding more and more about the market and these companies exploiting it.

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The Confounding Contradictions of Detroit’s Land Contract Houses

Detroit   It was a rough day on the doors in Detroit. One team recorded 14 abandoned houses out of the 17 on the walk list. Remember that these were all homes according to all available records that are owned by one of the big three land contract companies operating in the city: Harbour Portfolio, Vision Property Management, and Detroit Property Exchange, the only local outfit. Another team had eight on its list, and we had six on ours. The math is unsettling and profound, meaning that more than half of the houses these companies owned were abandoned and therefore open wounds bleeding on their blocks, neighborhoods, and community.

There were three dumpsters in the driveways of the abandoned houses our team visited and a trailer at another with a couple of bags of trash on it, but no signs of workers or work being done at these locations. At one location that we marked as “not home,” because the neighbor across the street told us that there were people going in and out of there and work being done, who knows what the story might have been, but the impression from the other locations on our list, left me wondering if these were dumpster “decorations,” rather than construction sites. We were roughly, and it was often rough, in central Detroit, if there’s such a thing, while one team was on the East Side and another was on the West Side. They reported no dumpsters and signs of construction on the abandoned houses on their lists. Don’t get me wrong, the land contract houses were absolutely not the only abandoned houses, and we saw abandoned houses on our route that were not not on our list but had signs offering them for sale, if one could call it that, or auction, with come-on’s hawking $400 a month down payments and lures advertising opportunities to flip the homes or rent-to-own more cheaply that buying. Once we were back at the offices of the historic and giant Ford Motor based UAW Local 600, which had opened their doors to the Home Savers Campaign for this project, we discovered, to no one’s surprise at this point, that both of the names on the signs we saw were simply other eye-candy LLC’s that were part of Detroit Property Exchange.

rent-to-own signs from Detroit Property Exchange subsidiary

Visiting with people, the contradictions are confounding. Our first visit was a woman with had just completed a contract with DPX as locals call Detroit Property Exchange, though her house had been listed under their French Sirois subsidiary. She had been in the home for 12 years and dutifully paying off a mortgage, until two years ago. She was informed then that DPX had bought her home by purchasing a $6000 tax lien. She had being paying everything in the usual bundle to her mortgage servicer, who had gone bankrupt and not paid her taxes, so Wayne County had put her in play without any notice. DPX gave her a contract to buy back the house for $20,000 while paying $750 per month as part of a lease to live there. She was happy because she had managed to pay them off in 18-months, partially by taking advantage of two “matching” opportunities, one at income tax refund time, where they had matched her $2500, and another a month or so later when they matched her $1000. She was proud of herself for getting them off her back and saving her house, but the math still adds up to street-side robbery. She had paid DPX $16,500 on the contract plus another $13,500 in rent, or whatever you might want to call it, so they had $30,000 from her in a year-and-a-half by stealing her house from the taxman when her mortgage servicer went belly up. The day before another team had stumbled onto a similar case, so this woman’s story is, tragically, too common.

Vision Property Management lockbox on abandoned hous

All of these contracts are predatory, though and people were being ripped off right and left, but one home we visited we talked to the brother on the porch, who was apologetic that he had not gotten his act together to buy a house, while both of his sisters had just done so, though we knew this sister was on a rent-to-own contract with Vision Property Management and suspected that was the case with the other as well. Earlier in the morning, I had briefly addressed more than 50 people in the regular meeting of the Detroit Action Commonwealth at the Capuchin Soup Kitchen. People there knew about land contracts, and they knew ACORN, so I was in good company. After a brief explanation of what the Home Savers Campaign was there were questions flying from the crowd. One caught me up short and has left me thinking more and more about these contradictions. A young man said he was on SSI payments of $750 per month. His question: how could he get one of these rent-to-own houses?

Detroit Action Commonwealth Meeting

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