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Here’s from a report by the esteemed National Low Income Housing Coalition:

Bill Eliminating the NHTF Passes Financial Services Subcommittee

The House Financial Services Subcommittee on Capital Markets and Government Sponsored Enterprises (GSEs) approved a package of bills intended to dismantle the housing GSEs, Fannie Mae and Freddie Mac, in a Subcommittee markup on Tuesday, July 12. One of the bills, H.R. 2441, introduced by Representative Ed Royce (R-CA), would abolish the National Housing Trust Fund (NHTF) as well as the Capital Magnet Fund. The bill passed by a vote of 18 to 14, along party lines.

In the markup, Mr. Royce said that the NHTF should be abolished because “the money would subsidize lobbying and campaign related activities” by groups such as the now-defunct ACORN. However, the NHTF statute explicitly prohibits the use of NHTF dollars for political activities, lobbying, counseling, outreach, and project administration.

Financial Services Ranking Member Barney Frank (D-MA) participated in the markup to defend the NHTF, even though he is not on the Subcommittee. Mr. Frank referred to the conversation about ACORN as a “red herring” and clarified that nothing in the NHTF statute empowers ACORN. Subcommittee Ranking Member Maxine Waters (D-CA) and Representative Al Green (D-TX) supported this point and asked that the record reflect this fact.

Oh, yes, they did say that!

The Gawker was clear that the real “behind closed doors” argument between President Obama and House Majority Leader Cantor included this possible Republican scenario by Max Read:

Story “A”: Brave and noble House Majority Leader Eric Cantor entered the nefarious Cave of Taxes, the stronghold of Muslim warlord Barack Hussein Obama. “My friend,” Cantor said, “I will never betray the American people by allowing taxes to be raised on the rich. Even so, I am but a humble congressman, and wish only to do right by my constituents. Perchance we could agree on a smaller package of cuts—say, $1.5 trillion—and vote twice to raise the debt ceiling before 2012? Only if you are so disposed of course.” Obama snarled, and spat upon the ground. “Would you speak to your ‘Ronald Reagan’ this way? I’d rather bring down my presidency than shake hands with a white person like you. Never, you dog,” he said, and, rising, stormed out of the meeting with his troop of ACORN-trained Black Panther bodyguards.

Yep.  I’m pretty sure the only thing standing in the way of an ACORN appearance on True Blood is the staging and makeup problem that zombies have.  Unfortunately for ACORN’s hopes at a continued presence on the political scene, zombies always look, how can I say this, so Republican.

New Orleans

Colleagues working in Dharavi, the mega-slum in central Mumbai where ACORN International organizes and has several projects, wrote an eviscerating piece today (http://www.nytimes.com/2011/06/01/opinion/01srivastava.html?ref=todayspaper)  that somehow found its way onto the op-ed pages of the New York Times about another one of these bright light ideas, this one being promoted by the Harvard Business Review of all places to claim concern for the poor.  Seems the Review launched a competition to build a one-room $300 house that they claimed “could improve the lives of millions of urban poor around the world.”  The arrogance and ignorance of the poor and their living conditions is startling, and Matias Echanove and Rahul Srivastava of the Institute of Urbanology can hardly control their contempt though they do a masterful job at it in their piece, so hats off to them.

“The $300 house could potentially be a success story, if it was understood as a straightforward business proposal instead of a social solution.  Places like refugee camps, where many people need shelter for short period, could use such cheap, well built units.  A market for them could perhaps be created in rural-urban fringes that are less built up.   The $300 house responds to our misconceptions more than to real needs.  A better approach would be to help residents build better, safer homes for themselves.  The $300 house will fail as a social intiative because the dynamic needs, interests and aspirations of millions of people who live in places like Dharavi have been overlooked.  This kind of mistake is all too common in the trendy field of social entrepreneurship.  While businessman and professors applaud the $300 house, the urban poor are silent, busy building a future for themselves.”

The authors were actually kinder than they might have been here while trying to be diplomatic.  The urban poor relocation projects in Delhi that have specialized in slum removal and replanting of the poor to the far outskirts of the city at the outer edge of transportation and livelihoods have been a disaster.  Certainly the space provided is in the 150 meter  floor plan that would be similar to the $300 house, but the results have been disastrous.

Even in disaster relief it is hard not to remember the Andres Duany and New Urbanist schemes for “Katrina Cottages” as not simply temporary housing replacements for trailers, but preferable and permanent housing structures in New Orleans.  Duany is a great architect and planner and no doubt a man of good will, but such a notion was DOA from the start.  Supposedly some have been built and used in Mississippi, and they might end up as storage sheds and mother-in-law cottages on some back lots, but as replacement housing in New Orleans, the signature touches that were supposed to recall the city and its distinctive architecture was charades at best.

Businessmen, developers, and promoters understand how to make a fast buck and that’s easily proven but we shouldn’t be confused when they are hypnotized by the glare of a $424 billion market for affordable homes that they know anything about the poor, care anything about poverty relief, or have any interest in understanding either.

Mexico City

So far this seems more of an effort to reframe the housing debate, than fix much of anything.  This is more about politics than it is about finance or markets.

The burn in the housing meltdown was the claim that somehow there had been wild, easy  money thrown at undeserving, hustling families regardless of income and affordability which then sank the market when these poor, working families could keep up with the bills.  There is little factual support for these claims, especially when they are pushing the blame towards lower income and working families.  The facts support an understanding that most of the money moved towards hot housing for solidly middle and upper middle class families who pushed the bubble higher and higher as prices flipped in the same direction and money invested became lower and lower for such families.  Certainly we have found in Arizona and Florida a lot of working families were caught short when the music stopped, but largely because of the overall recession and the slashing of their jobs and income, rather than some kind of excessive liberalism on financing.  Meeting with many families in Phoenxix with Advocates and Actions, it was startling how much money families had lost when they lost their houses.  These were speculators, but homeowners.

In short both the housing interest exemptions and the mortgage support from Fannie Mae and Freddie Mac are by and large huge middle class federal benefits.  In the first case a huge entitlement for everyone, and in the second a low entry support for financial institutions who were able to slide off risk, keep mortgages out of their own portfolios, and therefore allow middle class families to become homeowners more easily.  My bet is that as the clock ticks down on Fannie and Freddie, the Administration will hear the right and the Republicans crying like stuck pigs when the real narrative is a loss of a huge and expensive middle class benefit.  The most ridiculous proposals have been advanced by banks who have suggested that they would jointly own a mortgage finance organization with the feds, basically claiming the rewards, sharing little real risk, and undoubtedly leaving the government holding the bag on any downside.  The various mortgage associations are also screaming because they understand that the middle class has been buying houses and know that this will make it all harder.

Lower income and working families need a real housing program and none really exists now.  The subprime market has been gone (and that is what Geithner is offering the middle class now…a higher interest rate for the same house) and credit scores are through the roof for home financing.  Rental supports are inadequate and are still being developed outside of a few major cities for short term rather than permanent housing.

We will have to wait for HUD Secretary Donovan to announce the real plan.  So far we are just seeing the big politics kick around the housing football and reframe the issue so that heads the President wins (fiscal restraint, debt reduction) and tails the President wins (an eventual compromise continuing to provide some middle class opportunities with benefits from those friends).

Eventually we are really going to have to address the desperate need for adequate and affordable housing for everyone, but it seems now is not quite the time yet.

Marcala          

             We had started the day at eight in a makeshift meeting room in the hotel chapel with many of our union brothers as well as several new companeros from NGOs and the University.  For hours one after another listed the issues in and around San Pedro Sula that needed attention and organizational activity:  water, remittances, housing, public services.   It was a long list delivered in lengthy and passionate speeches listened to respectfully by all interrupted only by the appearance of a Channel 39 TV reporter who had heard the discussion was going on and that I was in town.  At noon we drove through some of the colonias including one fascinating development some of my union brothers showed me where the union had built the houses and the school.  This was only minutes away from a new highrise condo development abutting one piece of a small creek in San Pedro Sula.  Another sign down the road indicated the future would be filled with these luxury developments, the first in the city.  Another five minutes away and we were looking at a squatters development along a larger riverbank where families had been forced after Hurricane Mitch’s devastation in Honduras, as still remained.  Driving away we could see children swimming as their mothers washed their clothes in the calmer pools of the stream

            Next stop was a quick lunch and visit with a woman and her family who had graciously invited us over for pico gallo in the Honduran style with red beans.  The reason in the interconnected world of organizing:  her sister had been a member of ACORN in the Queens.  Anything she could do to help, just ask.

            Though there seemed to be no hurry to the drive, and it was a good thing since construction and 18-wheelers had us parking for long stretches as we crossed the mountains on the good highway from San Pedro Sula to Tegucigalpa, we parked in Marcala in one of the barrios and followed the noise and music into a giant structure just in time for a young political theater company to begin their presentation.  There were several hundred children and a score of adults in the crowd, as the moderator shouted, “Silencio!” over and over to gain attention.  Suyapa explained to me that this was part of a celebration for the women in the community, but the theater company brought much more to it.

            This was a well acted and rehearsed production by a half-dozen enthusiastic late teen or early 20′s actors.  In the beginning a “generalito” – small general – with his lieutenant wanted everything to be gray, gray, gray, and the three citizens, two women and one man, lived in gray huts in fear.  As the play developed to great humor and passion from the actors and increasingly the crowd as they warmed to the theme, the caricature soldiers in the face paint of Batman’s Joker gradually lost control.  Singing and dancing would erupt and pull the people off of their knees to find that they could walk and be happy again.  At the same time their huts turned from gray to white, pink, and green.  A giant bride dressed in white appeared on stilts and danced along as well.  A toy cannon exploded and led the soldier to defect to the people until the generalito was deflated with the air escaping from him like wind from a bag.  More singing ensued.  Children were pulled from the crowd.  Marching and dancing.  My summary doesn’t do the play or the skill and quality of the actors justice for this hour long presentation, but it was one of the few times where one had the feeling people were staying for the action and not the frijoles and tortillas passed out to all of us with plastic cups of weak coffee at the end of the show.

            There may have been a fake election in Honduras to try to rightsize the military coup, but the scars will wear deep among these people.  When the elected president announced on my first day in country that he was agreeing to go into exile in the Dominican Republic there was no celebration about his volunteering to take the first step to “reconciliation.”  It seemed hollow, and this children’s play with its well practiced themes and smooth presentation was hardly designed for this one show, but was traveling around the country.

            All of these things were on our minds as our eyes closed in the dark last night.  We were staying at the unfinished compound organized as a project to support the campesinos in this area. 

            It was an honor and a gift to have lived this day!

Central America

Passing through San Jose, it was interesting to hear and read about the “solidarity tax” or luxury tax on houses over a $172,000 USD valuation.  The tax is modest, about $500 per $200,000 let’s say, but the complexity of paying according to accounts gets the higher rolling, largely ex-pat owners in a penalty zone which can make the payments 10 times the original amount.  This is a new tax and the government of Costa Rica believes it will raise $17.5 million USD, which is dedicated to slum eradication and building low-income housing.  What a great idea!  People with homes that are too posh  pitch in a little bit to make sure that others have homes.  It was easy for me to see why the government called this a “solidarity tax.”  The chart published with the story in the Tico Times, which bills itself as Central America’s “leading English-Language Newspaper,” also  indicates that the tax is graduated costing just a little big more as the housing valuation moves from $172K up past $1 million USD, so that poor housing gets a bit more of a boost.

This may be an idea some of the “executive cities” in North America should consider, if you ask me.