Posted on 07/27/2007 10:51:47 AM PDT by WayneLusvardi
The Double Taxation Problem of Inclusionary Housing in a 'Push-Down/Pop-Up' World
The Pasadena Pundit - July 27, 2007
A whole new paradigm for understanding affordable housing and homelessness in the greater Los Angeles area is needed rather than the distorted welfare-economic model propagated widely in the local media by such low income and inclusionary housing advocates as Dr. Peter Dreier, and former Mayor of Pasadena now Ventura City Manager and self-anoinited urbanologist, Rick Cole - See here: On Peter Dreier - see here: http://www.commondreams.org/views05/0703-23.htm On Rick Cole - see here: http://www.latimes.com/news/opinion/la-oe-cole23jul23,0,552998.story?coll=la-opinion-rightrail
Historically, flophouses and cheap motels and hotels once served to house most of the homeless in Los Angeles County. They have largely disappeared due to our unmentionable social policy of turning over our old, small, and cheapest housing stock in the inner ring of neighborhoods around Los Angeles to economic migrants who work in the wholesale markets close to the L.A. Central Business District - the wholesale produce, flower, toy, and clothing markets together with the tourist hotel districts.
This phenomenon can also be found in inner ring suburbs like Pasadena for economic migrants to work in restaurants in its upscale Old Town and in its tourist hotels and museum venues.
Likewise, older inner ring districts and suburbs of Los Angeles once provided smaller, older, "fixer" single-family homes to first time buyers to get on the first rung of the housing equity escalator. That bottom rung of the housing ladder has been mainly taken over by economic migrants who pump up rents by doubling up.
Young family home buyers are thus pushed out to the outer ring suburbs to find affordable housing at the second or third rung up on the housing affordability ladder; which only further inflates housing prices and congests our freeways and pollutes our air. The homeless, being the most vulnerable, are pushed out onto the streets.
This Push-Down / Pop-Up phenomenon in real estate markets turns the Marxist welfare economic view of the housing problem upside down, because it is the Proletariat who are inflating housing costs by a process of "rentrification," not the stingy or pushy Bourgeouisie by "gentrification."
And if a working class family should decide to move back to the City core or to an inner ring neighborhood or suburb by buying a new condo or renting a new apartment, they will pay a hidden tax imposed by the Inclusionary Housing law in Los Angeles and Pasadena. About every four buyers or renters of new condos and apartments in the many new mixed use developments in downtown Los Angeles, and places like Pasadena's "urban village," must subsidize the price or rent of one inclusionary housing unit. Needless to say, this only further inflates housing costs.
Thus, to lessen our traffic and pollution problems by moving closer in to the job centers one must pay an inclusionary housing tax to house low income people who ironically may have pushed you out to the suburbs in the first place. And if you put your children in a private school equivalent in quality to the schools in the outer suburbs, you will suffer from double taxation again by paying property taxes to public schools and tuition to a private school. Meanwhile, owners of single family homes have no such double Inclusionary Housing tax imposed on them. The housing affordability cognoscenti conveniently avoid telling us the double taxation realities of inclusionary housing.
In a market-driven real estate market native working and middle class buyers should be able to push low income economic migrants out to the outer ring and "edge cities." But a whole host of social policies have been devised to make economic migrants into a protected class in the inner ring of older neighborhoods surrounding Los Angeles which comprise the most affordable housing stock. Eviction courts, anti-discrimination laws, laggard code enforcement, anti-deportation laws, threats of urban riots, high property crime rates and graffiti, court decisions, religious sanctuaries, and the bully-pulpit of Leftist newspapers deters home bred buyers and renters from outbidding low income economic migrants for housing.
What all this means is that there is no moral high ground in a "push down/ pop-up" world where advocating low-income housing near jobs centers merely pushes workforce housing out to the far suburbs and edge cities; or double taxes only those that choose to live close in to job centers in new condo and apartment projects. Paraphrasing economist Tom Sowell, "there are no affordable housing solutions, only tradeoffs."
It is time we quit blaming greedy developers, rich gentrifiers, or even economic migrants (God bless them) for our housing affordabilty and homeless problems. It is our elected policy makers and their housing affordability cognoscenti who have not told us the ramifications of our population and migration policies, especially the double taxation aspects. And it is we who have fallen for the propaganda about mostly politically symbolic housing and homeless programs, inclusionary housing laws, and "smart growth" policies which mostly shift the problems around or worsen them.
Unless we can see our housing problems clearly, including the Inclusionary Housing law's double taxation problem, we can hardly devise sound policies for their remediation. Comment: Charles Warren - San Francisco Good points. Redevelopment deserves a mention here. I mean, what was in the downtown area before high-rises? Flop houses (and bars, corner groceries/liquor stores, laundromats, storefront churches, martial arts studios...). redevelopment yields union construction jobs, and buyouts for political contributors. it costs cheap housing.
But, eventually, "urban pioneering" is a search by the middle class for cheap housing combined with short commutes. you buy cheap house cost and short commutes at the expense of old houses with problematic structures and systems, bad schools and street crime. in the last generation gentrification has often, but not always, yielded good capital gains.
And, yes, anybody paying market is going to also pay taxes. Lots of them. did i tell you about my theory of San Francisco taxing its 'migrant labor', the commuters who don't vote in the city, to support its idiotic politics?
What the hell are “economic migrants”? Illegals?
Since about 1965.
That's it; a new paradigm will fix anything.
Double taxation? Somebody is only being double taxed? I’m pretty sure I’m being at least triple taxed
If you read the article carefully you are being triple taxed - taxed once by long commuting costs, twice by inflated condo and apartment costs caused by inclusionary housing laws, and third if you have children you have to put in a private school and still have to pay property taxes to public schools.
Fourth, by increased real estate taxes on the housing costs increased by inclusionary housing laws.
Your’e right, a “new ‘Push-Down/Pop-Up’ Paragigm’ won’t fix anything - it will just expose what we have been told about inclusionary housing as propaganda and a sham which covers up double and triple taxation.
Anyone want to count the phantom tax called inflation that erodes your savings and the purchasing power of your paycheck?
I think if you add in your share of section 8 and other subsidies for low income, including the EITC you are more than double taxed, and unfortunately they are still poor.
It is time to declare either victory or defeat in the 40-year old “War on Poverty”.
Either way, cut off all funding for this 40 year war and the policies it sprouted ! If they can’t stand on their own two feet by now, they never will. It’s time for America to pull out the troops and stop the spending in this war.
Welfare for the poor to balance some of the welfare for the well-connected:
Zoning laws and license laws that reduce the supply of naturally cheap, innovative, and free enterprise housing and businesses.
Sports stadiums.
Tax abatements for developers with clout.
Subsidized infrastructure for the in crowd at city hall.
Eminent domain for the right people.
“I’m pretty sure I’m being at least triple taxed”
At least : )
Don’t for get the “Happy Tax”
Anyone want to count the phantom tax called inflation that erodes your savings and the purchasing power of your paycheck?Ha! Shows how much you pay attention.
There is no inflation, or at least it's held in check...unless you happen to buy those frivolous items like food and energy that they choose to not figure into their calculations because they're too "volatile"....
Those huge dips VS huge spikes in prices of food and energy are just too much to keep track of.
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