Category Archives: Financial Justice

The Good and Bad of Declining Home Ownership

New Orleans       Home ownership rates are declining globally for the first time in one-hundred years, while tenancy is rising.  I have mixed feelings about these trends.

On the one hand, I hope that greater numbers of tenants equals more power in the bargains with landlords, and look to Germany and the rent freezes in Berlin with particular interest.  The optimist says that more tenants means that there will be accelerated construction of decent and affordable units providing better units.  Sadly, I see no sign of that in either Canada, the United States, Ireland, or the United Kingdom.  Construction seems geared to higher income tenancy and condominium purchases, not something that benefits low-and-moderate income tenants and their families caught in the cost squeeze of higher rents.  The Economist touted co-living spaces as an alternative for such families, even as they celebrate the decline in homeownership, but too much of co-living sounds like the familiar marketing strategy for singles-only apartment complexes, except that co-living lacks the swimming pool and your own kitchen.  The price might be right, but I’m not feeling the love.  In the small sample of our 30s-aged organizing staff in England, two have moved to buy a home when they thought they had the chance, and their relationships were stable.

On the other hand, as I worry about the decades long emphasis that ACORN made for families to achieve ownership and the rightness of our emphasis from cooperative spaces in New York City to single-family homes in Phoenix and Houston, I worry that I don’t see any other asset class that allows long-term, multi-generational security and citizen wealth that could serve as a replacement for ownership strategies.  Rent-controlled apartments in New York City offer some of that, but that’s the exception not the rule.  I joked last year with a talented former organizer who bolted our staff in Philadelphia decades earlier when a rent-controlled unit came available in the building where he was raised in NYC, but I understood fully.

Depressingly, I recently finished reading Saving America’s Cities, the story of urban renewal chief Ed Logue in New Haven, Boston, and the Bronx in the heyday of government and foundation financing for housing and development projects for low-and-moderate income communities.  In that brief window of the 60s and 70s before Republican block grants and CDBG funds, housing was built, but at a price.  The author Lisbeth Cohen notes that HUD insisted that buildings be segregated by income.  Logue and his team, despite their personal progressivism, populated their projects at 70% white to 30% minority, worshiping on the alter of stability for these rental developments.  Redlining was curtailed in homebuying but slips into publicly supported housing developments.

You have to have a horse to beat a horse, and as much as we push and demand for more and better rental units, we have to have something that provides potential security for families to compete against the goal, and increasingly the dream, of home ownership.  As the news again heralds more Trump efforts to reduce what’s left of the safety-net, it seems we are forcing people to believe in a broken-down nag, when we need a thoroughbred to win the race.


Choking on the Doughnut Hole

Little Rock      Driving through Mississippi back and forth on my regular route from New Orleans to Greenville to Little Rock and then back again, when I hit the long rural stretches since we belong to the noncommercial radio religion, I listen often to Mississippi Public “Think” Radio.  On Wednesdays, I’ve come to know their lineup well in these stretches from McComb until I pick up the WDSV signal near Greenville.

First, there is the Fix-It show, where I learned how to get vermin out of the attic and walls by using peppermint essential oil, not peppermint extract they were clear, and spraying it there.  Then there’s the tech show where we got a good explanation on how the hardware syncs up with the software when you turn on your computer and sometimes an update can make it all go haywire.  And, Jimmy Stewart comes on who I sometimes tell mi companera is my doctor with his call-in show on medical questions.  He’s a doctor and professor in Jackson, and pretty much can take on all comers and their questions.  This show he helped me understand why your hands sometimes fall asleep when you’re asleep.  Another time he advised all of us to brush our tongues along with our teeth, because they are germ factories.  He’s a fount of great medical information!

The last show took a hard turn though.  He got a call from an elderly woman that blew up the phone lines with various suggestions.  She was caught in the doughnut hole on her Medicare Part D coverage.  It would cost her $500 a month that she didn’t have for a critical heart medicine.  Another caller chimed in from deep in the doughnut hole about the cost of insulin that she had to have, and why it was so expensive when the patent should have been long gone and generics should have replaced the high drug prices.  Other callers lamely suggested writing to the drug companies and begging for help or various funds.  Dr. Jimmy didn’t handle it well.  He tried, as always to be empathetic, but it came off as if he was defending both the hole and the drug companies even while admitting that this was an inexcusable mess.  Trust me, he’s better on medical advice that political wisdom.

The doughnut hole in Medicare drug coverage is a case study on the callousness and ineffectiveness of the crazy ideological Congressional process and the power of drug lobbyists.  Basically, there is a lapse of coverage once a beneficiary has paid their deductible and hit a threshold of coverage.  She is then forced to pay 100% out of pocket up to several thousand dollars until coverage begins again.  This has been going on since 2006.  Supposedly, the gap has been closed or is closing since January of this year, but as the callers indicate, the pain persists and given the percentage payments for some of the higher priced drugs, people can’t climb out of the hole still.

Now, after you hit $4020 in a year, a Medicare patient will be paying 25%, so as it’s not a hole, but it’s a big hit, and it takes money to get there that people don’t have.  As the Times pointed out recently, the new policy will take longer to climb out of as well.  In 2019, catastrophic coverage kicked in at $5100 of your out-of-pocket costs, now in 2020 it will be $6350, which they correctly call “a big jump.”  Furthermore, out-of-pocket costs are never capped, but require an ongoing 5% of the total – which adds up! – throughout the year.  This is not a solution to the doughnut hole but a continuing shift of the costs, all of which fall on the elderly poor patients, like Dr. Jimmy’s callers, and not on the Congressman trying to make the drug companies and the lobbyists happy and pretend they are fixing something that is broken.

Why give people this darned doughnut, when they really need an apple fritter that fills the gap, tastes great, and actually includes some delicious fruit along with the flavor of the fry?


Please enjoy Logan Ledger – (I’m Gonna Get Over This) Some Day

Thanks to WAMF.