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CLT UPDATE
Thursday, January 14, 2016

Property under attack from "Residential Redistribution"


In Massachusetts, this economic stratification that controls where people live and how they conduct their lives is being exacerbated by two big public policy measures we have put in place: Proposition 2½ and the Community Preservation Act. At a time when income inequality is a topic of frequent and intense debate, it is important that those of us who care about the future of Massachusetts acknowledge the impact of public policies enacted over the past 35 years that result in an ever-increasing division between the haves and the have-nots in the Commonwealth....

Proposition 2½ and the Community Preservation Act help affluent communities thrive at the expense of the less affluent. Less affluent communities simply cannot compete with the affluent communities in the state when it comes to obtaining new businesses, good credit ratings, or grant opportunities, because they just do not have the extra money to invest in themselves that affluent communities do.

Proposition 2½ and the Community Preservation Act are based on good intentions. No one wants to argue against protection of the taxpayer, preservation of historical sites, recreation facilities for youth, or purchasing land for conservation. However, these initiatives have unwittingly exacerbated class segregation in the Commonwealth.

There is enough data in hand for the Legislature to review the merits of Proposition 2½, the CPA, and perhaps other programs. If we seek to address income inequality in Massachusetts, it is best if we start by examining the laws which have been on the books, in some cases, for many decades that are contributing to the problem....

In an era of heightened concern about inequality, it’s time to take a stand against the inequality caused by these two laws.


CommonWealth Magazine
Thursday, December 17, 2015
The downsides of Prop. 2½ and Community Preservation Act
Well-intentioned policies are exacerbating inequality in Massachusetts


This is what you get when you put a community organizer in the White House — he tries to reorganize your community from Washington.

Apparently, President Obama thinks your neighborhood may not be inclusive enough, so he has instructed his Department of Housing and Urban Development to issue a new rule called Affirmatively Furthering Fair Housing, which is designed to force communities to diversify.

According to the Obama administration, in too many neighborhoods “housing choices continue to be constrained through housing discrimination, the operation of housing markets, [and] investment choices by holders of capital.” (Yes, that is a quote from an actual HUD document, not a bad undergraduate thesis on Karl Marx.)

Under Obama’s proposed rule, the federal government will collect massive amounts of data on the racial, ethnic and socioeconomic makeup of thousands of local communities, looking for signs of “disparities by race, color, religion, sex, familial status, national origin, or disability in access to community assets.” Then the government will target communities with results it doesn’t like and use billions of dollars in federal grant money to bribe or blackmail them into changing their zoning and housing policies.

The Washington Post
Wednesday, July 15, 2015
Obama wants to reengineer your neighborhood
By Marc A. Thiessen


Senator Mike Lee has just introduced a bill to defund President Obama’s federal takeover of local government via the Affirmatively Furthering Fair Housing (AFFH) regulation. Lee’s bill is called the “Local Zoning Decisions Protection Act” (it’s too new to have a number). In addition to defunding AFFH, Lee’s bill defunds Obama’s creepy and controlling housing “Assessment Tool,” which could be used as a basis for “disparate impact” suits against your locality. Lee’s bill has a number of co-sponsors, most notably including presidential candidate Marco Rubio. Other co-sponsors are Tom Cotton, Mike Enzi, Jeff Sessions, and David Vitter....

The House campaign against AFFH is being led by Congressman Paul Gosar, who has already carried an amendment to defund AFFH, and who has a stand-alone bill to repeal AFFH as well.

National Review
Friday, July 31, 2015
Lee, Rubio, Cotton, and More Move to Block AFFH in Senate
By Stanley Kurtz


So new Speaker Paul Ryan and the other concessionaires are actually funding unlawful activities by the Obama regime.

Also spared the budget ax is the Housing and Urban Development Department's radical project to subvert local zoning laws in the U.S. through a new regulation called Affirmatively Furthering Fair Housing.

HUD is re-engineering America's neighborhoods to fit the administration's racialist agenda of what it thinks 1,200 communities around the country should look like. Under the new rule, counties and cities that fail to loosen zoning restrictions on low-income housing risk losing million of dollars in federal funding.

Over stern objections from municipalities, the Ryan budget provides the funding to finance implementation of this massive, unconstitutional intrusion into state and local sovereignty....

These establishment types — first Speaker John Boehner, now his successor Ryan — make it very hard for voters to do the adult thing and resist the flame-throwing fringe represented by Donald Trump and others.

What is the point of a Republican majority if they continue to capitulate to Democrats on everything?

Investor's Business Daily
December 21, 2015
Editorial
GOP Fully Funds Obama's Illegal Assault On School Discipline, Local Zoning


Chip Ford's CLT Commentary

Right after my computer's catastrophic crash in early December, in the midst of rebuilding it a report on Proposition 2½ in CommonWealth Magazine was brought to my attention. With my main computer down, I used my old boat laptop (in storage for the winter with the rest of the boating gear) to access the article.  While reading it I recalled a number of other news reports I'd read over the summer, been following, had saved for possible future reference.  The dots immediately began to connect in my head but I couldn't access my saved research, see if my recollection was accurate, until my workstation was up and working again.  Sure enough, the dots are connecting.

The latest assault on Proposition 2½ by Lawrence DiCara and Michael Nicholson fits right into the recent Obama transformational vision, "Affirmatively Furthering Fair Housing," which is defined by Washington Post columnist Marc A. Thiessen:

This is not about blocking housing discrimination, which has been illegal since 1968. It is unlawful for someone to deny you a loan or prevent you from buying a home because of your race, creed or color. Socioeconomic status is — and ought to be — another matter. If you want to buy a nice house in the suburbs, you have to be able to afford it. Apparently, Obama thinks that’s unfair discrimination by the “holders of capital.”

DiCara and Nicholson have asserted:

"The main problem with Proposition 2½ arises from the reality that affluent communities are far more likely to pass override and exclusion votes to fund projects through property tax increases ... People who are in lower-income brackets often settle in low tax/low service communities partly because they cannot afford to pay the taxes in the more affluent communities. There results an economic segregation far greater than prior to Proposition 2½."

"People who are in lower-income brackets . . . cannot afford to pay the taxes in the more affluent communities"?  That's so obvious that the argument makes no sense.  I would think any homebuyer's primary consideration is whether they can afford the cost of more expensive real estate in whatever the community at least it should be.  When it isn't, such encouraged naïveté inevitably delivers a housing market meltdown leading to a Great Recession such as we're still trying to climb out from under.

Property taxes are based on property values.  Proposition 2½ simply puts a cap on the rate at which property taxes can be increased without permission by local voters.  It  has nothing to do with housing affordability other than its limitation on property tax increases thereby making the American Dream of homeownership more affordable, for everyone.

The Washington Post's Thiessen further observed:

Under Obama’s proposed rule, the federal government will collect massive amounts of data on the racial, ethnic and socioeconomic makeup of thousands of local communities, looking for signs of "disparities by race, color, religion, sex, familial status, national origin, or disability in access to community assets." Then the government will target communities with results it doesn’t like and use billions of dollars in federal grant money to bribe or blackmail them into changing their zoning and housing policies.

The last I knew [National Review:  "Affirmatively Furthering Fair Housing: Sleeper Presidential Campaign Issue" and Lee, Rubio, Cotton, and More Move to Block AFFH in Senate] — the Congressional Republican majorities in both the House and Senate appeared sure to kill it.  To my astonishment when reading the Investor's Business Daily editorial — it was fully funded in the recent Omnibus federal spending bill sent to the president, who got everything he wanted so of course signed it with glee.

This brings us to the proposed ballot question for a constitutional amendment, again, for a graduated income tax.  Income redistribution is on the socialists' front burner.  If you have more than someone else — regardless of how you came by it — they're coming to take it from you and give it to someone else.

But income redistribution is no longer enough for them:  Now the socialists are pursuing residential redistribution as well. "Economic Segregation" is their ginned-up phrase — you know, like "common sense" everything they want, imposing their whims "for the children," providing gun "safety" instead of imposing gun control, "undocumented workers" rather than illegal aliens, "climate change" not "global warming" any longer, but never ever utter "radical Islamic terrorism" or you're a racist — and of course their cavalier charge of "racism" against opposition to everything they advocate but find indefensible.

"Economic Segregation" has now been launched.

I call it "Residential Redistribution."

DiCara and Nicholson are the first to publicly assault Proposition 2½ (and the Community Preservation Act) in an attempt to impose residential redistribution:  "In an era of heightened concern about inequality, it’s time to take a stand against the inequality caused by these two laws."

Not to mention that without Proposition 2½ many fewer could afford to own a home — with the onerous property tax situation before it was adopted!

We have challenges and trying times ahead, folks.

Chip Ford


 

CommonWealth Magazine
Thursday, December 17, 2015

The downsides of Prop. 2½ and Community Preservation Act
Well-intentioned policies are exacerbating inequality in Massachusetts

By Lawrence S. DiCara and Michael Nicholson


In his recent book, Our Kids, Harvard political scientist Robert Putnam argues that the American dream of obtaining a good education, joining the workforce, owning property, and being a prosperous citizen has become increasingly skewed during the past half century. A nation that was built upon the concepts of opportunity and social mobility has been replaced by a bifurcated nation. Likewise, a recent book by Bill Bishop entitled The Big Sort confirms that, across America, people are choosing to live in neighborhoods with people like themselves. Sadly, this trend extends to where we worship and with whom we socialize.

In Massachusetts, this economic stratification that controls where people live and how they conduct their lives is being exacerbated by two big public policy measures we have put in place: Proposition 2½ and the Community Preservation Act. At a time when income inequality is a topic of frequent and intense debate, it is important that those of us who care about the future of Massachusetts acknowledge the impact of public policies enacted over the past 35 years that result in an ever-increasing division between the haves and the have-nots in the Commonwealth.

Proposition 2½ and the Community Preservation Act determine how Massachusetts municipalities collect and spend the money they take in from property taxes. Proposition 2½, approved by voters in 1980, limits, with statutory exceptions, the amount of money a municipality can collect from property taxes. The Community Preservation Act, which must be adopted by a local approval of voters in a community, creates a special municipal fund that collects a surcharge on property taxes and then apportions the amount raised for the purposes of purchasing open space, historic preservation, recreational upgrades, or the building of affordable housing units. Both laws may have had good intentions, but there are unanticipated consequences resulting from each which should now merit our attention.

The main problem with Proposition 2½ arises from the reality that affluent communities are far more likely to pass override and exclusion votes to fund projects through property tax increases. It is simple math — the rich have more expendable income than do the poor. The rich can afford the extra tax increases, while the poor cannot. Affluent communities pass overrides regularly; in poor communities, overrides fail frequently. Newton passed an override to approve $11.5 million in spending in 2002. Duxbury passed an override in 2008, that increased the average household tax bill by $108 in order to design renovations for the town’s public pool. North Attleboro, however, voted down an override to increase spending by $4 million ($413 per household) in April of 2015, causing large cuts to be made by municipal officials. In July of this year, residents of Rutland also voted down an override that would increase taxes $135 per household for the purpose of increasing funds for the Wachusett Regional School District.

People who are in lower-income brackets often settle in low tax/low service communities partly because they cannot afford to pay the taxes in the more affluent communities. There results an economic segregation far greater than prior to Proposition 2½.

We looked at three communities of similar size, but with very different demographics.

Since 1990, the town of Marblehead, population 19,808, has collected $5.1 million in additional tax revenues obtained by override votes. The funds gained through these overrides enabled the town to build a new school, repair roads and drainage systems, and provided much needed updates to the town’s infrastructure. In the city of Gardner, in contrast, all eight override ballot questions proposed since 1990 have failed. Gardner’s 20,354 residents simply cannot afford the increased taxes. Where Marblehead was able to build a new school, Gardner’s students are spread among several buildings, the oldest of which was first opened in the same year William McKinley was elected president. In Marblehead, 11.2 percent of the student population is considered low income, while Gardner’s student population is 52.7 percent low income. This tale of two towns causes more affluent families to look to settle in places like Marblehead so that they can provide their children with the best possible education, leaving the less affluent to live in communities more defined by budget cuts, outdated school facilities, and poor bond ratings.

Pembroke is slightly smaller than Gardner, with a population of 17,959. Its population, however, is about the only thing that is smaller than Gardner’s. Pembroke voted to adopt the Community Preservation Act in November of 2006. Since then, it has been able to raise almost $1 million ($951,116) to be used for historic preservation, $39,056 for the creation of affordable housing, $52,000 to build and renovate recreational facilities, and $38,509 for the acquisition of land for open space. Pembroke has also seen a steady population growth, as well as a steady growth in the per capita income of the town.

As some communities begin to be more appealing than others, and give the appearance of investing in their communities, people are more apt to settle in these municipalities. The loss of students from districts because of school choice also reduces the amount of state Chapter 70 funding that school districts receive. This also makes the school district where the student resides pay the school district to which the student transfers the per pupil cost of educating the child. Low-income municipalities simply cannot keep up with the funds that affluent communities have available to them. Those who suffer from this are the students who live in these areas. Having to attend a low-performing school district limits students from low-income communities from being deemed qualified to attend higher-performing colleges and universities and gain a stronger footing in the workforce later on. School fees mean that lower-middle class students often decline to participate in extracurricular activities.

In an article in the current issue of CommonWealth, “Rich-poor divide in high school sports,” [see link below] Bruce Mohl and Hari Patel explain that in lower-income communities high school sports participation is 43 percent below the statewide average due to high participation fees. Meanwhile, in affluent communities it is 32 percent above the statewide figure, as they are able to lower their athletic fees on students and supplement the cost with extra money collected through overrides. This shows that the issue not only causes educational stratification across the Commonwealth, but also creates a bar to student participation in non-academic realms of school. Studies have shown that such extracurricular activities help students learn interpersonal skills and lessons of teamwork that are valuable throughout their adult life.

The same can be said for many art, music, theater, and other programs across the state. Pembroke passed a Proposition 2½ override in the spring of 2015 that allowed the district to keep funding the music programs offered by its schools. In 2010, Gardner had to cut its elementary school band program, three high school ensembles, and many members of the coaching and instructional staff for athletic and music programs, due to budget constraints.

The Massachusetts Community Preservation Act only adds to the inequality fueled by Proposition 2½. The Community Preservation Act is adopted by municipalities through a local ballot initiative. If the community adopts the CPA, then residents receive a surcharge on their property taxes for the purpose of either open space acquisition, historic preservation, affordable housing, or recreation. Communities that adopt the CPA and implement the increase in taxes also receive matching grants from a state account that is funded through a surcharge collected on all deed transfers recorded at the time of a property sale. It is these state matching grants, in particular, that underscore the inequities of the system. Residents from every municipality pay into the fund through the use of the Registry of Deeds, but only the affluent communities that are able to adopt these tax increases are eligible to receive these matching grants from the state. Thus, most of the money deposited in the state trust from the Community Preservation Act is collected at the expense of the less affluent; by providing funds from a state endowment to fund open space land acquisition, poorer communities are funding wealthier communities, which in turn increases their property values and tax rates.

Cambridge has received a total of $45.7 million in state matching grants since it adopted the CPA in 2002. This equates to Cambridge receiving about 15 percent of all state matching funds annually, while its residents only account for 1 percent of the amount of money paid into the CPA fund. Meanwhile, the two largest cities in the state, Boston and Worcester, contribute the most to the state trust fund through their transactions at the registry of deeds about $14.5 million annually but they receive no funds back because their voters have not approved a CPA property tax surcharge. The Community Preservation Act has unwittingly created a system in which the rich are subsidized by the poor.

Another example of the problems that arise from the CPA is that 20 percent of the funds that have been collected through the law have been used to purchase land for open space purposes. This increases the value of all other land in the community and creates an even greater affordability obstacle for anyone seeking to live in these communities.

Proposition 2½ and the Community Preservation Act help affluent communities thrive at the expense of the less affluent. Less affluent communities simply cannot compete with the affluent communities in the state when it comes to obtaining new businesses, good credit ratings, or grant opportunities, because they just do not have the extra money to invest in themselves that affluent communities do.

Proposition 2½ and the Community Preservation Act are based on good intentions. No one wants to argue against protection of the taxpayer, preservation of historical sites, recreation facilities for youth, or purchasing land for conservation. However, these initiatives have unwittingly exacerbated class segregation in the Commonwealth.

There is enough data in hand for the Legislature to review the merits of Proposition 2½, the CPA, and perhaps other programs. If we seek to address income inequality in Massachusetts, it is best if we start by examining the laws which have been on the books, in some cases, for many decades that are contributing to the problem.

While it will only be a start to fixing the problem, we suggest creating a new form of state aid for those municipalities that have not — mainly because of the tight budgets many residents live on — taken advantage of state programs such as the CPA or approved Proposition 2½ overrides. Why not set aside 25 percent of the funds collected for the state CPA account from the fees collected on deed transfers? This could then be distributed to communities that choose to fund CPA-sanctioned projects, but simply cannot afford the tax increase. This would advance the overall economic development of the state by allowing less affluent areas to stand a chance at attracting outside businesses.

Proposition 2½ and the Community Preservation Act have resulted in a new form of class warfare in the Commonwealth of Massachusetts. Home values in municipalities where these tax increases have been passed have risen far more than those in municipalities that have not and cannot pass them. While the rate at which these overrides are being passed has decreased recently, they still have a large effect on municipal policies in Massachusetts.

In Gardner, a house that was worth $118,000 in 1990 is now worth $207,000; a house in Marblehead worth the same amount in 1990 is now worth $298,000. In Fitchburg, a house worth $101,000 in 1990 is now worth $126,500, but in Pembroke, a house of the same value in 1990 is now worth $405,000.

Municipality Home Value in 1990 ($) Home Value in 2015 ($)
Springfield 100,000 215,000
Fitchburg 101,000 126,500
Gardner 118,000 207,570
Orange 105,000 134,300
Brookline 120,000 477,120
Pembroke 100,000 405,000
Marblehead 115,500 297,800

These zip code class wars affect every single citizen of the Commonwealth. In an era of heightened concern about inequality, it’s time to take a stand against the inequality caused by these two laws.

Lawrence S. DiCara, a former Boston City Council president, is a partner at Nixon Peabody. Michael Nicholson is a master’s of public policy student at the Center for Public Policy and Administration at the University of Massachusetts Amherst.


The Washington Post
Wednesday, July 15, 2015

Obama wants to reengineer your neighborhood
By Marc A. Thiessen


This is what you get when you put a community organizer in the White House — he tries to reorganize your community from Washington.

Apparently, President Obama thinks your neighborhood may not be inclusive enough, so he has instructed his Department of Housing and Urban Development to issue a new rule called Affirmatively Furthering Fair Housing, which is designed to force communities to diversify.

According to the Obama administration, in too many neighborhoods “housing choices continue to be constrained through housing discrimination, the operation of housing markets, [and] investment choices by holders of capital.” (Yes, that is a quote from an actual HUD document, not a bad undergraduate thesis on Karl Marx.)

Under Obama’s proposed rule, the federal government will collect massive amounts of data on the racial, ethnic and socioeconomic makeup of thousands of local communities, looking for signs of “disparities by race, color, religion, sex, familial status, national origin, or disability in access to community assets.” Then the government will target communities with results it doesn’t like and use billions of dollars in federal grant money to bribe or blackmail them into changing their zoning and housing policies.

This is not about blocking housing discrimination, which has been illegal since 1968. It is unlawful for someone to deny you a loan or prevent you from buying a home because of your race, creed or color. Socioeconomic status is — and ought to be — another matter. If you want to buy a nice house in the suburbs, you have to be able to afford it. Apparently, Obama thinks that’s unfair discrimination by the “holders of capital.”

Putting decisions about how local communities are run in the hands of federal bureaucrats is an assault on freedom. Local autonomy is essential to liberty. As Milton Friedman put it in “Capitalism and Freedom,” “If I don’t like what my local community does, be it in sewage disposal, zoning or schools, I can move to another local community. . . . If I don’t like what my state does, I can move to another. If I do not like what Washington imposes, I have few alternatives in this world of jealous nations.” Washington has no business imposing decisions about zoning and housing policies on thousands of local communities.

The proposed rule could become an issue in the presidential race. HUD Secretary Julian Castro, the man assigned to implement this new policy, is on everyone’s shortlist to be Hillary Clinton’s running mate. Moreover, as National Review’s Stanley Kurtz points out, collecting all the data will take time — which means decisions about how to use that data will be up to the next president, whoever that turns out to be.

Local communities across the United States will be up in arms over this rule — and rightly so. The federal government should have no say over whether your neighborhood is too Jewish, or too Caucasian, or has too many married couples. But Republicans need to be very careful. Democrats want the GOP to rail against this rule and see it as an opportunity to paint the Republicans as the party that wants to protect the wealthy, white suburbs and keep out poor people of color.

Conservatives need to make this absolutely clear: We believe Americans of all races, colors and creeds should be free to live wherever they want. And we want to help them do so by unleashing economic opportunity for those at the bottom so that more Americans can get better educations and better jobs and ultimately move to better neighborhoods.

Under Obama, those opportunities have been disappearing for Americans at the bottom of our economy. While he talks a good game about inequality, the poor have gotten poorer while the rich have gotten richer on Obama’s watch. During the Obama recovery, Americans in the top 5 percent of households (those with average incomes of more than $320,000) were the only group in the United States to see incomes rise from 2009 to 2013. Meanwhile, those worst hit were in the bottom 20 percent, who saw their real incomes fall by 7 percent on average. As American Enterprise Institute President Arthur C. Brooks explains , “Our putatively progressive president has inadvertently executed a plutocratic tour de force.”

Having Washington micromanage the housing and zoning policies of thousands of local communities is not going to change this. The answer is not to force local governments to build affordable housing in affluent communities. The answer is to restore upward mobility in the United States so that more people can afford housing in affluent communities.


Investor's Business Daily
December 21, 2015

Editorial
GOP Fully Funds Obama's Illegal Assault On School Discipline, Local Zoning


Budget Betrayal: Republicans may not have been able to afford school vouchers for poor kids, but they did manage to continue and even add to funding for President Obama's radical education and housing programs.

The House leadership's omnibus spending bill grants a generous 7% increase in the budget for the Education Department's Office for Civil Rights, which is pressuring school districts across the country to adopt racial quotas in discipline.

The agency sought the $6 million bump to fund its "investigations" — that is, witch hunt — of schools for alleged discrimination. Its radical, out-of-control, race-mongering civil-rights office got every penny it asked for and then some.

The unit is enforcing new national guidelines to assure that black and white students are suspended or otherwise disciplined in the same proportion, even if black pupils commit a disproportionate share of school crime and infractions.

Schools that fail to comply with the new policy and continue to show substantial "racial disparities" in suspensions and expulsions risk losing federal funding.

The policy is wildly unpopular with teachers. Recent polling shows a large majority oppose it, and unions complain that forcing teachers to keep violent kids in classrooms jeopardizes teacher and student safety.

The policy is also illegal. As former Education Department civil-rights attorney Hans Bader points out, Title VI of the Civil Rights Act, under which Obama's racial activists purport to act, prohibits only actual discrimination, not neutral policies that have a disparate impact.

In virtually all cases, Obama's investigators are making up violations out of thin air. They're not enforcing equal rights; they're really demanding equal outcomes.

So new Speaker Paul Ryan and the other concessionaires are actually funding unlawful activities by the Obama regime.

Also spared the budget ax is the Housing and Urban Development Department's radical project to subvert local zoning laws in the U.S. through a new regulation called Affirmatively Furthering Fair Housing.

HUD is re-engineering America's neighborhoods to fit the administration's racialist agenda of what it thinks 1,200 communities around the country should look like. Under the new rule, counties and cities that fail to loosen zoning restrictions on low-income housing risk losing millions of dollars in federal funding.

Over stern objections from municipalities, the Ryan budget provides the funding to finance implementation of this massive, unconstitutional intrusion into state and local sovereignty.


The Republican majority was supposed to use its power of the purse to place a much-needed check on administrative and executive overreach and power abuse by this regime. Instead, it's rewarding the misconduct with massive new funding from taxpayers.

These establishment types — first Speaker John Boehner, now his successor Ryan — make it very hard for voters to do the adult thing and resist the flame-throwing fringe represented by Donald Trump and others.

What is the point of a Republican majority if they continue to capitulate to Democrats on everything?

 

NOTE: In accordance with Title 17 U.S.C. section 107, this material is distributed without profit or payment to those who have expressed a prior interest in receiving this information for non-profit research and educational purposes only. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml


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