Thursday, March 12, 2020

How White Urban Planners Created the Black Community

The Racist Origins of Zoning Ordinances, Covenants, Housing Projects and Suburbs


Sources: Racially Restrictive Covenants, Corrigan v. Buckley 271 U.S. 323 (1926), How FDR Promoted Racial Segregation, FHA Mortgage Insurance Requirements Utilize Redlining, The Racial Origins of Zoning in American Cities, Separated By Design: How Some of America’s Richest Towns Fight Affordable Housing, Connecticut Zoning Initiative, Working Homeless Population Grows in Cities Across the U.S.

There is no part of American real estate history that is not violent and racist even in the present. As I noted in A Land Value Tax is The Only Right Way to Pay Reparations, two key Supreme Court decisions have all but obliterated property rights for the average joe.

The Supreme Court’s decision in the 1954 case Berman v. Parker set a precedent for allowing cities to use eminent domain for private development by perverting the doctrine of public use into “public purpose.” The Court’s decision in the 2005 case of Kelo v. City of New London put the final nail in the coffin of property rights interpreting public purpose to now mean “public benefit” which could be any purported financial windfall such as increased tax revenue or claims of job creation

And as expected these new expanded police powers to take property from one private citizen and sell it to another private citizen has disproportionately conveyed real estate from poor and mostly minority communities to affluent and mostly white communities, even into the present day.

The Institute for Justice conducted a demographic survey of 184 communities where eminent domain was used to take property for private development and found that 58% of the residents in these communities are minorities (non-white), half of the residents earn less than $19,000 annually, 25% of the residents live at or below the federal poverty line and typically have less than a high school education. In comparison, only 45% of the residents in surrounding communities not targeted for condemnation are minorities, half of residents make more than $23,000 annually, only 16% live below the federal poverty line, and a greater percentage of residents have a high school diploma and some college education.

How American communities became segregated on the basis of race is another narrative cloaked in myth and just so stories. Of course, we understand how the south became segregated through Jim Crow legislation or at least the limited hangout version we are taught in school. De facto segregation in New England and the West Coast is considered somewhat of a mystery. The prevailing theory, among those who care about the issue, is that white people simply relocated whenever too many minorities moved into their neighborhood (white flight) or that banks took it upon themselves to not underwrite mortgages in areas with too many minorities (redlining). Progressive narratives tend to either downplay or completely ignore the role public policy, at all levels of government, had in segregating non-southern cities. Perhaps these public policies are omitted for ideological reasons so blame can be pinned on a non-existent free market boogeyman rather than turn of the century Progressive politicians and idealist who wanted to mold society according to their racist and eugenicist beliefs. The first endeavor to segregate metros at the turn of the century was through racially restrictive zoning ordinances.

The Racist Origins of Zoning

The first zoning ordinances not only separated commercial and residential land use but also designated white and colored blocks or zones within residential areas. Baltimore was the first city to adopt these measures in 1910. Soon after, every major metropolis south of Baltimore adopted zoning ordinances that segregated white and black residential areas until such laws were shuddered by 1917 Supreme Court decision in Buchanan v. Warley. However, this was not the end of racial zoning. After the Buchanan decision, southern cities turned to professional northern planners to help craft zoning ordinances that segregated neighborhoods by race without explicitly mentioning race. Cities like Richmond, VA began to designate certain areas as ‘negro and white residential areas’ without using their police power to enforce the designation; instead, the designations were used as guidelines for public and private development. This was coupled with comprehensive race based planning that provided public services previously denied to black communities. In 1925, the city of Birmingham, AL enacted a new set of zoning ordinances ‘to protect the property holders against manufacturing plants and comer grocery stores which tend to spring up promiscuously about the city and to restrict the Negroes to certain districts.’ The city used its police power to issue or revoke building permits to prevent housing set aside for blacks being built in tandem to a white neighborhoods. Charleston, SC hired planning consultant Morris Knowles to devise a plan that delineated separate residential districts for blacks and whites without mentioning race in the official zoning nomenclature. Knowles' plan created an old and historic district with the goal of removing several thousand black residents who still lived there in 1931. Most southern cities abandoned racial zoning in the 1930’s and looked for other means of enforcing segregation. Southern cities began to use street and highway planning to erect physical barriers between communities in the 1920s and started creating public housing projects legally designated for blacks.

As Black Americans began to migrate North, city planners there began to adopt measures that circumvented the restrictions imposed by the Buchanan decision. For example, many neighborhoods in Boston and other New England cities began to enforce racially restrictive covenants. The covenants were legal agreements, enforced by neighborhood associations or real estate boards that prohibited all current and future owners of property within the covenant from selling or leasing to black people and other people of color on the penalty of forfeiting the property.

…hereafter no part of said property or any portion thereof shall be…occupied by any person not of the Caucasian race, it being intended hereby to restrict the use of said property…against occupancy as owners or tenants of any portion of said property for resident or other purposes by people of the Negro or Mongolian race.

This practice was upheld by the 1926 Supreme Court decision in Corrigan v. Buckley. Afterwards, it became so popular nationwide that by 1940 80% of residential properties in Chicago and Los Angeles were tied down in racially restrictive covenants.

The Origins of Redlining

Municipal and corporate land policies weren’t the only forces keeping communities segregated. Federal housing policy, starting with the FDR admin, financed the creation of racially segregated housing projects and suburbs during the great depression. Before the depression, state and federal law prohibited banks from making long term mortgages for more than half the value of a house so banks required homeowners to make a down payment equivalent to at least a quarter of their home value and pay down the mortgage in six years. During the depression, FDR heightened federal oversight of the real estate industry to reduce foreclosures and resolve a severe housing shortage in urban areas. In 1933, FDR replaced Hoover’s Federal Home Loan Bank with the Home Owners Loan Corp that financed some $3 billion in mortgages for Americans who fell behind on their payments. To supposedly minimize risk, the HOLC adopted an older NYC practice of assessing mortgage applications by rating the socio-economic characteristics of the residents in an applicant’s neighborhood, including the race of the residents, instead of the applicant’s personal credit history. Neighborhoods were marked A through D and given a color code on maps. Recently constructed suburban neighborhoods where white professionals lived were denoted as “A” neighborhoods, considered the most credit worthy, and outlined in Green. Inner city neighborhoods with older construction and black residents were denoted “D” neighborhoods, not considered creditworthy, and outlined in red. Thus, the practice of redlining was spread across the nation through federal policy. The FDR admin also created the Federal Housing Administration, in tandem with the HOLC, to provide up to $20,000 in mortgage insurance, per household, to banks that loaned money to FHA approved properties. Like the HOLC, the FHA underwriting manual also used race and ethnicity as eligibility criteria.

980 (3). Recorded restrictive covenants should strengthen and supplement zoning ordinances and to be really effective should include the provisions listed below. The restrictions should be imposed as a blanket encumbrance against all lots in the subdivision, and should run for a period of at least twenty-five to thirty years. Recommended restrictions should include provision for the following:
  • a. Allocation of definite areas for specific uses such as single or two-family houses, apartments, and business structures
  • b. The placement of buildings so they will have adequate light and air with assurance of a space of at least ten feet between buildings
  • c. Prohibition of the re-subdivision of lots
  • d. Prohibition of the erection of more than one dwelling per lot
  • e. Control of the design of all buildings, by requiring their approval by a qualified committee, and by appropriate cost limitations or minimum square foot ground floor areas
  • f. Prohibition of nuisances or undesirable buildings such as stables, pig pens, temporary dwellings, and high fences
  • g.Prohibition of the occupancy of properties except by the race for which they are intended
  • h. Appropriate provisions for enforcement.

Thus, both the HOLC and FHA heavily subsidized the development of homogeneous, white single family home suburbs while simultaneously denying the same mortgage assistance to black and minority communities in the inner city until they made an about face with the passage of the Fair Housing Act of 1968. By then government enforced racial discrimination had already been deeply entrenched in the real estate industry so much so that there are still remnants of it today. Single family zoning and minimum lot size requirements for multifamily housing are holdovers from this era that have precipitated the current affordable housing crisis. In pull the ladder up behind you fashion, many upper and middle class suburbs, that would not exist without the New Deal welfare state, use their zoning boards to stifle low income housing.

Only 19 cities or towns allow housing with three or more units to be built without requiring special permits, according to a 2013 review by Trinity College’s Cities, Suburbs, and Schools Project and the Connecticut Fair Housing Center. Twenty-five municipalities explicitly prohibit such housing and 123 require a special town permit.

Even towns that allow the development of multifamily housing, without a special permit, make it financially infeasible by requiring 20 to 70 acres of land and limiting the number of units and bedrooms that can be built. As a result, lower income and mostly minority residents of Connecticut are relegated to towns with the worst schools and public services and some end up homeless as a result of policies that create rackrents

Ashana Cunningham, a 33-year-old mother of three, lives 9 miles from Westport’s posh downtown. Each workday, she takes a bus from a homeless shelter in Bridgeport, where she lives with her family among a landscape of abandoned factories, run-down houses and trash-lined streets to her job in a suburban cornucopia a few miles away. She tends to children from privileged families at a pricey day care in Fairfield. Two days a week she works a second job at Family Dollar. This is not the life Cunningham imagined. She earned an associate degree to become a medical assistant but has never made more than $14 an hour. She and her wife struggled to pay $1,200-a-month rent for a small Bridgeport apartment, and then her wife became disabled and could not work. A car crash further complicated their lives. Cunningham was injured and left without transportation — and, ultimately, out of a job. By the time she found the daycare job, which pays $12.50 an hour, the family was living in the shelter, where the smell of bleach lingers and bachata music from a neighbor’s apartment pulses through the walls. Her second job as a cashier pays $11 dollars an hour.

Ashana and her family aren’t alone in this predicament. A growing portion of the homeless population are coming from the ranks of those employed. Research by the Urban Institute estimated that about 25% of the homeless population is fully employed and between 40% and 60% are between full-time and part time gigs. In Washington state, an estimated 22% of homeless single people and 25% of homeless adults in families are gainfully employed. In NYC, an estimated 34% of homeless families in the city’s shelters have at least one employed adult. The shortage of low income housing and hyperinflation of urban real estate prices means that being gainfully employed is no longer a guarantee of even meeting your basic needs. We are quickly approaching a breaking point where people are growing privy to the lie of meritocracy and the truth of political patronage.

Thursday, February 20, 2020

'Stop and Frisk' is Unconstitutional, Inaccurate, and Racist

Sources: New York Civil Liberties Union, NYPD Officers Stop-and-Frisk Teen for Being a Fucking Mutt

Stop and Frisk, which should more accurately be called suspicionless detention and harassment, was a gun control and drug war policy implemented by the Bloomberg Admin in 2002 and which is continued to a much lesser extent by mayor Bill De Blasio. Reasonable suspicion is the prerequisite for detaining an individual under the 4th amendment. The vast majority of residents that NYPD detained, questioned, and molested were black or Latino (or both) residents under the age of 25, which does not in itself constitute reasonable suspicion of a crime. The vast majority of residents detained were also found innocent; at its height in 2011, 88% of the 685,724 New Yorkers that NYPD detained on a hunch were found innocent. Suspicionless detention has improved in accuracy as far less residents have been detained in later years but the vast majority (68%) are still innocent. Bad faith arguments, mainly on the right, presume that NYPD officers were ‘just trying to save lives’, but the record suggests racism played a much more pivotal role than imagined benevolence. When police don’t know they’re being recorded their true nature tends to come out as one NYC teen, who was detained for being ‘a fucking mutt’, found out the hard way at the height of stop and frisk. Of course, these unconstitutional abuses of police power aren’t limited to New York City. As a recent story relayed through the Free Thought Project revealed, you can be detained and harassed even when you’re explicitly obeying the law if you happen to have a suspicious phenotype. Ace Perry was pulled over by a Sampson County North Carolina Officer for driving 65 mph in a 70 mph speed limit. Perry was driving a rental car at the time, which is not reasonable suspicion of a crime, and also happens to be a black male, which is also not reasonable suspicion. The officer gave him a written warning for driving 5 mph under the speed limit. The speed limit means the maximum speed you’re allowed to drive not the exact speed you have to drive. I’m sure there were plenty of drivers exceeding the speed limit at the time, but the pig decided to detain Perry of all people. In a similar incident that occurred a few years before, a black man was harassed by police for legally open carrying in Bridgeport, Connecticut. Police followed DonTrell Brown around town demanding to see his permit even though they could not articulate any reasonable suspicion that he was involved in or was about to be involved in a crime. Under Connecticut state law no gun owner is required to show an officer their permit unless they are detained, which requires reasonable suspicion, or if they are the victim of a crime. However, this fact did not stop Bridgeport Police from harassing Brown even to the point of following him into a Subway. It seems ignorance of the law is no excuse unless work for the gang in blue, and if you’re the wrong color you might get more backlash for exercising your rights.

Wednesday, February 12, 2020

Why War Doesn't Boost the Economy

Sources: DOD cost of war, Oversight of U.S. spending in Afghanistan, Human costs of the post 9/11 wars, Department of Defense Contractor and Troop Levels in Iraq and Afghanistan: 2007-2018, Boeing Overcharged Army up to 177,000% on Helicopter Spare Parts, 20 Companies Profiting the Most From War, Interest on The National Debt and How it Affects You, Interest on National Debt Could Top $1 Trillion, The Fed’s Lower Rates are Increasing Inequality

The notion that war time spending boosts the economy is obviously false in light of the fact that the U.S. was involved in 2 wars, more extensively than they are now, and oil prices were at their peak right before the great recession, but this example does not do it complete justice. The broken window fallacy, as first described by classical French economist Frederic Bastiat, is the notion that destruction can stimulate the economy. In the parable, broken windows are presumed to be good for the economy because they give the glazer business and provide him with disposable income to purchase other goods and services. However, the bystanders don’t take into consideration that the broken window has decreased the disposable income of the man who purchased the glazer’s service and that the cost of a new window does not represent the provision of a new good, but merely a maintenance cost (presumably because the demand for windows is inelastic); thus, no net wealth is added by breaking windows. Of course, macroeconomics is much more complex than the example given in this parable, but the basic principle remains the same, especially in clear cut examples like wars and natural disasters. Both involve the destruction of wealth. Any rebuilding done in their aftermath is merely maintenance costs. This may not be obvious to Americans since war hasn’t been waged on American soil since the 19th century, but it holds just as true for wars waged abroad. After a region is bombed it has to be rebuilt. Congress has spent $126 billion rebuilding Afghanistan since 2002. This exceeds the cost of the Marshall Plan, foreign aid given to rebuild Europe after WWII, even when adjusted for inflation. The Marshall Plan cost $12 billion at the time or $100 billion in today's dollars but was committed to rebuild an entire continent after a world war instead of some podunk Eurasian country after a counter-insurgency. Over the course of the past 18 years, the state department has not created $126 billion in additional wealth, but $126 billion in maintenance costs redistributing resources from this country to Afghanistan. This isn’t the entire maintenance cost though. It does not include the estimated $750 billion spent on military operations since the invasion, or the $87 billion spent training Afghan security forces who are still unable to fend off the Taliban, or the $10 billion spent on a counternarcotics program that has somehow increased the supply of opium from that country, or the $24 billion spent on economic development that has still left 25% of Afghanis unemployed, or the $500 billion in interest payments added to the national debt or the $350 billion spent on medical and psychiatric care for veterans of the war. It also does not include the cost of 2,400 American lives and 38,000 Afghani lives which do not have a price tag.

’The normal profits of a business concern in the United States are six, eight, ten, and sometimes twelve percent. But war-time profits -- ah! that is another matter -- twenty, sixty, one hundred, three hundred, and even eighteen hundred per cent -- the sky is the limit. All that traffic will bear. Uncle Sam has the money. Let's get it.’
- Major General Smedley Butler, War is a Racket

The military industry is a rent-seeking industry; while it does deliver profits to shareholders it does not grow the pie. History has repeatedly shown that war simply redistributes income and resources from the private sector to the public sector or to certain private industries dedicated to the construction and maintenance of military equipment as well as the oil industry. For instance, during WWII consumer goods were rationed, Americans were encouraged to buy war bonds as a counter inflationary measure, and the national debt increased six fold rising to a record 113% of GDP. While the war effort may have reduced unemployment it did not create additional wealth (i.e. new or improved goods and services) but merely redistributed them from the private to the public sector. The same principle holds true for today’s war on terror. The profits of the Defense Industry are directly the result of congressional appropriations, which thus far has squandered $6.4 trillion on wars in Iraq and Afghanistan including $1 trillion in care for veterans of these wars and over 200 billion in contracts in Iraq and Afghanistan between 2007 and 2018. About 17% of this cost, or $925 billion, has been borne out in interest payments on the public debt accumulated through DOD and State Department spending over the past two decades. Annual net interest on the national debt ,which currently stands at $479 billion (over 10% of the 2020 budget), is the fastest growing category of spending. It is projected to increase 186% over the next decade, while GDP (real wealth) is only projected to grow 53% over the same period, and exceed $1 trillion annually by the year 2030 eclipsing and crowding out all categories of discretionary spending, including defense spending by 2025. In other words, interest on the national debt will grow faster than real wealth is created, causing public debt to surpass resource constraints (which is when the MMT crowd says we have an inflation problem), and consume an ever larger portion of the budget. The Federal Reserve’s response to higher levels of stimulus spending since the great recession of 2008/2009 has been to keep interest rates, for banks, artificially low through QE which has had the perhaps intended effect of exacerbating wealth inequality. Since stock and bond prices are inverse to the federal fund rate, and since these assets are almost exclusively owned by the affluent, rich investors have gotten richer. Poor workers, on the other hand, have seen very few benefits from lower rates since lower fed rates have had very little effect on credit card interest rates and mean lower savings rates relative to inflation in consumer goods. Real estate prices too have soared as a result of lower borrowing costs which has been profitable for homeowners and landlords at the expense of renters who are mainly people on the lower end of the income distribution.


Monday, December 16, 2019

Why Wages Should Not Be Taxed

Wages are Zero-Sum

We can only earn wages by sacrificing our time i.e. 8 hours at work is 8 hours we don’t have for leisure or self-improvement. We can’t get this time back; thus, any tax assessed on our wages is time we are forced to work for free. If the notion of “wage slavery” has any valid meaning, apart from the poorly conceived labor theory of value, then it is being forced to work for free to pay withheld taxes. Taxes on wages also reduce our standard of living by leaving us with both less disposable income for say paying the rent, which is not tax deductible or paying for car repairs.

Federal Taxes Don’t Fund Congressional Spending

The common retort is that federal taxes like the FICA tax and income tax fund programs
that will benefit us in the future. The truth is that congress doesn’t extract money from us to fund their budget anymore than the Federal Reserve extracts money from private banks to buy treasury bonds during QE; both institutions are the issuers of new money. The real purpose of federal taxes is to curtail inflation. Just as the Federal Reserve sells treasury securities back to the banks it bought them from congress also taxes to reduce the amount of money in circulation.

The moral argument

If we are entitled to keep anything it’s the product of our labor or the equivalent earnings in our paycheck or profits for the self-employed. Although we don’t legally own the money in our paycheck or bank account in the same way we own a car or house, it is nevertheless the only form of credit we can use to buy necessities and pay for these other forms of property.

Alternatives

How would we fund (i.e. fight inflation) congressional spending without a personal income or social security tax? Tax revenue would come from duties on imports, user fees for public infrastructure (e.g. highways, bridges, ports etc.), excise taxes, severance taxes on extraction industries (e.g. oil, gas, mining etc), royalties for federal land leases, royalty income from patents and copyright, or just tax the banks. Of course, all of these forms of taxation already exist. States and municipalities that do need taxes to literally fund spending could replace income, sales, and property taxes with a land value tax, which I have described in lengthy detail in previous posts (see Real World Examples of Land Value Taxes part 1 and 2.

Monday, November 25, 2019

CIA Backed Terrorists Torturing and Murdering Civilians With Impunity

Sources: Ghastly night raids turn into nightmares for Afghans, Clandestine operations and CIA-backed forces endanger peace in Afghanistan

Even as civilian casualties continue to fall in the never ending war in Afghanistan, deaths caused by American and Afghan government forces have exceeded those attributed to the Taliban for the first time. This year, 305 civilian fatalities were attributed to American and Afghan forces, a 39% increase over the previous year, while only 227 were attributed to the Taliban and other insurgent groups. Of course, by American and Afghan forces the mockingbird media really means the CIA and their terrorist militias such as 02 Unit and the infamous Khost Protection Force. Similar to the moderate rebels in Syria, these militias are known to target civilians in their raids, under the pretense of fighting the Taliban, as well as kidnap and torture journalists or anyone who may expose their criminal activity. Sometimes they have killed entire families in their counter-terrorism operations, which usually take place at night.

Masehur Rehman, a 38-year-old refugee laborer returned home in July from neighboring Iran, to see his entire family blown-up in one such dreadful air raid in Maidan Wardak province.With obvious agony and powerlessness evident in his exhausted eyes, Rehman told Anadolu Agency his quest for justice continues. “I lost my whole life, my entire family, my wife, four daughters, three sons and nieces in an air raid by the security forces in July." Rehman said residents in his village are still haunted by the memories of the deadly night raids. All of these victims were minors, below 18 years of age, he said.
Similar to KPF operations, the 02 unit regularly kills civilians during its operations, as has happened many times during recent months.First, they attacked us with bombs. Then they entered the living room and started to shoot around,Jamal Khan, a local from Nangarhar's Rodat district, told me.They didn't care about who they were killing. They killed my uncle and his nine-year-old son. His wife and his other child were injured.The operation took place last October when the unit in a single night raided three different houses. By the end, 13 civilians were dead, including at least four children. Shortly after the raids, the Afghan government claimed that only Islamic State fighters were killed.

According to a UN report this year, “pro-government” forces killed 145 civilians in 43 drone strikes between January 1st and March 31st of this year. Like the various “pro-government” militias terrorizing Afghans during night raids, the drone program is also controlled by the CIA.

Wednesday, November 6, 2019

FBI Conducting Warrantless Surveillance of Americans? Who Would Have Thunk it?

Source: New York Times

To no one’s surprise, unless you live under a rock, the FBI was found to have used section 702 of FISA to search through the emails of American citizens in a secret FISA court ruling that was declassified by Trump Admin recently. As I’ve already explained in a previous post, our “private” telecommunications and tech companies are little more than agents of the state for conducting dragnet warrantless surveillance on the American people. The FBI is notorious for violating constitutional law since its inception and they have many ways of doing this. The FBI also uses so called National Security Letters to obtain the communications of American citizens without even going through a secret court. Moreover, even when they do decide to obtain a warrant they can use one to conduct an indefinite number of searches and search the computers of people who aren’t even part of their criminal investigation. This NYT write up is a limited hangout of what is really going on behind the scenes in Washington. Don’t think for a second that this is being done in pursuit of justice or counterterrorism or whatever bullshit ad hoc alibi they decide to use. Historically, the purpose of any secret police, which the FBI certainly is, is to crack down on political dissent. During the civil rights movement and Vietnam war protests of the 60’s and 70’s it was COINTELPRO. In the early 2000s, the FBI used their new surveillance powers to spy on and harass anti-war protestors, animal rights activists, environmentalists, and anyone who vaguely harbored anti-government views. Today, the FBI considers anyone who talks about conspiracy theories (like COINTELPRO) to be a domestic terrorist threat.

California Court Destroyed Case Files of Criminal Cops

'The liberties of a people never were, nor ever will be, secure, when the transactions of their rulers may be concealed from them.’
- Patrick Henry
Source: The Appeal

This report details a court in Alameda County (Oakland, CA) using a state statute to destroy the case files of criminal cops charged with drug trafficking, soliciting prostitutes, making false arrests, planting drugs on suspects, and molesting women in the early 2000's. Some criminal cops, like those named in the infamous Riders case, got off scotch free while others, like officer Valerga who molested several Asian American women, received lenient sentences given the nature of their crimes. California state law only requires courts to retain misdemeanor criminal files for five years or three years if a case is dismissed. The statute in question potentially comes into conflict with the Brady rule (Brady v. Maryland) should any of these criminal cops be rehired in another precinct and repeat their criminal behavior. It is not uncommon for cops who were fired for misconduct in one department, and even criminally charged, to be reinstated or hired by another department. Of course, this also undermines police accountability in particular and government transparency in general since the public is precluded from knowing about these cases apart from old news articles. And citizens that are ignorant of the corruption and criminality of their public officials cannot be citizens in any meaningful sense.

Wednesday, October 9, 2019

A Land Value Tax is The Only Right Way to Pay Reparations

Sources: Torn From the Land, Chicago Tribune, Citymetric, Victimizing the Vulnerable: The Demographics of Eminent Domain Abuse, Eminent Domain and African Americans, The Loss and Persistence of Black-Owned Farms and Farmland

The 2020 Democratic primaries has brought social justice into the mainstream and one of the common issues appears to be racial disparities in wealth, especially the wealth gap between black and white americans. The consensus on the left is that the wealth gap between white and black Americans is wholly a result of the legacy of slavery and jim crow. Their ready made remedy of course is reparations. While the democrat’s proposal to pay Black Americans reparations for slavery appears absurd on its face and is based on the false premise that white Americans today financially benefit from an institution that was abolished 150 year ago it does contain, like Marxism, a modicum of truth. While all of the wealth appropriated through slavery was destroyed during the civil war, other unlawful institutions were errected to give whites an economic advantage over blacks. Several of the post civil war black codes restricted former slaves from working in certain occupations, freely traveling, conducting business or owning property all which are essential to build wealth. However, like slavery, these too are long gone and have very little barring on the wealth created today. A more cogent answer is to be found in how land and its rents have been redistributed throughout American history. As I explained in The Myth of Original Appropriation, the basis for land tenure in the United States, and the rest of Western world, is the doctrine of discovery; in a nutshell, the federal government extinguished aboriginal title, a power they still possess, and claimed the land for white settlers moving west. However, American Indians are not the only minority group that was dispossessed of land. Land has also been taken from black families and communities and redistributed to white families and communities in the past, through a combination of mob violence, crooked judicial proceedings, forced partition sales, property tax foreclosures and eminent domain seizures. Much of the apparent wealth gap between white and black Americans is actually due to the appreciation in land values (which is not technically wealth). The case for reparations isn’t to be found in the legacy of slavery or jim crow, both of which are dubious, but in the legacy of land theft. Unlike those two institutions, private land ownership is still around and has a clear and measurable value.

Dispossession of Rural land

In 1910, Black Americans owned 15 million acres of agricultural farmland in the south. Today black americans own only 1.1 million acres of farmland and partially own another million. In 2001, the Associated Press investigated 107 documented land takings in 13 southern states. The investigation, combing through thousands of public records and interviews, discovered that 406 black landowners had been dispossessed of 24,000 acres of farm and timberland as well as 85 stores and city lots since reconstruction. These properties have since been transferred to white landowners or corporations. In some instances, black families were driven off their own property by violent mobs or the klan. The full extent of black land ownership may never be known as some deeds have been lost in courthouse fires. In many instances, black families were dispossessed by state courts in rigged proceedings. Most black families held their land under a tenancy in common wherein each heir had an undivided ownership over the entire property. This ownership arrangement often led to forced land sales either because a non-family member bought a share and forced a partition sale or for unpaid property taxes. White landowners often used forced partition sales to assume ownership over the adjacent parcels of black families. Since no individual heir had a clear title to the land they could not use it as collateral to secure a loan, which made it difficult and often impossible to efficiently develop the land and raise enough income from it to pay their county’s property taxes. When heirs could not pay the property tax, the country foreclosed on their property and sold it to pay off their tax debt. These problems were compounded by the fact that black farmers were often precluded from USDA programs or received less money from them than their white counterparts. In 1997, the civil rights action team within the USDA found a consistent pattern of discriminatory behavior against black farmers such as loans arriving after planting season, arbitrary reductions in loan amounts requested, and a much higher rejection rate for loans than white applicants. Discriminatory implementation of USDA programs often stems from the fact that black farmers are not represented on the local committees that implement them.

Dispossession of Urban land

Even in the present, Black Americans are disproportionately stripped of their homes, businesses and communities through eminent domain takings. Perhaps the most infamous case is the creation of Central Park in New York City, which was the location of Seneca Village prior to the mid 19th century. The majority of the inhabitants were freemen of color, half of whom owned land within the village. In the 1850’s the city condemned their property and razed their community to provide a public space for affluent white families to have picnics. In the mid 20th century, urban renewal, authorized by the Federal Housing Act of 1949, displaced one million people in almost a thousand cities over the course of 24 years (1949-1973). Two-thirds of those displaced and dispossessed of homes and businesses were Black Americans who were confined to the “blighted neighborhoods” targeted by urban planners through previous redlining, exclusionary zoning and other instruments of racial segregation. Urban renewal projects razed 400,000 housing units and only replaced them with only 10,760 housing units that the residents of the condemned properties could afford. Instead of affordable housing, the condemned “blighted properties” were replaced with structures that catered to the wealthy upper class, what is called “higher uses” such as luxury condos and shopping malls. Eminent domain seizures of businesses were rarely followed with fair compensation that covered total losses incurred such relocation costs and profit losses. Of course, they didn’t just lose land and buildings; they also lost a community and without the community that had supported them most of these businesses failed in new locations. The loss of community didn’t just affect businesses either; many former residents of condemned neighborhoods found it difficult to cope with the loss of their community. With very few affordable housing options, most were crammed into subpar public housing that was eventually torn down.

The eminent domain abuse that redistributes land from the poor minority communities to the wealthy majority white communities did not end in 1973. The Supreme Court’s decision in the 1954 case Berman v. Parker set a precedent for allowing cities to use eminent domain for private development by perverting the doctrine of public use into “public purpose.” The Court’s decision in the 2005 case of Kelo v. City of New London put the final nail in the coffin of property rights interpreting public purpose to now mean “public benefit” which could be any purported financial windfall such as increased tax revenue or claims of job creation. Even in contemporary times, eminent domain is disproportionately used against lower class and minority homeowners. The Institute for Justice conducted a demographic survey of 184 communities where eminent domain was used to take property for private development and found that 58% of the residents in these communities are minorities (non-white), half of the residents earn less than $19,000 annually, 25% of the residents live at or below the federal poverty line and typically have less than a high school education. In comparison, only 45% of the residents in surrounding communities not targeted for condemnation are minorities, half of residents make more than $23,000 annually, only 16% live below the federal poverty line, and a greater percentage of residents have a high school diploma and some college education. While we cannot read the minds of city officials and private developers who collude to rob people of their property it is easy to understand why they disportionately target poor and minority communities. Like any other predator, predatory government preys on the weak and vulnerable. Not only is the land cheaper in these communities, the people who reside there have little means to defend themselves in civil court much less get a fair price for their property. Private developers can easily buy up the land and low ball the property owners knowing they probably can’t afford an attorney to fight for fair market value. As I’ve noted in a previous post on eminent domain, what courts determine to be “just compensation” is completely subjective and more often than not depends on whether a property owner can afford to litigate. Given the fact that minority communities tend to have less wealth and lower incomes than white communities it is not surprising that eminent domain for private development would have an adverse impact on them.

Reparations Rightly Done

As the author of Reparations - Going All the Way succinctly points out, the best and most just way to implement reparations isn’t to pay restitution to a specific minority group for a specific past injustice, but to pay restitution to all groups and individuals harmed by both past and present injustices. The most accurate way to measure the harm done to them, and thus the compensation due to them, is to appraise the value of the land they have been dispossessed of and excluded from. Any material advantages derived from past injustices, whether it be slavery or racial segregation, is ultimately concentrated in the government granted monopoly in land. Since land has historically appreciated in value (with the exception of recessions) it is the only institution remaining from these past injustices that can be conclusively shown to financially benefit its heirs. A land value tax would not only achieve the left wing goal of reducing racial (and overall) disparities in wealth it would also serve as a superior substitute to the myriad of taxes currently levied on people’s earnings including the so called wealth tax and carbon tax proposed by leading democratic presidential candidates.

Monday, September 23, 2019

DMVs Are Selling Your Information to Third Parties

Sources: Motherboard, EPIC

State DMVs across the country are selling driver’s license and vehicle registration information, for a profit, to legitimate businesses such as insurance companies and towing services as well as to third parties with more dubious intentions such as private investigators, bounty hunters and consumer credit reporting agencies. DMVs establish agreements with requesting third parties called memorandums of understanding that allow them to remotely access personal information from driver’s licenses and vehicle registration either through bulk data collection or targeted searches of specific citizens. A little known law ironically called the Driver’s Privacy Protection Act provides loopholes that allow DMVs to sell drivers’ information, without the permission of the driver’s themselves, to private investigators and other authorized third parties. These loopholes provide exemptions for market research and surveys, insurance activities and licensed investigators or security services. This information can include a person’s name, address, zip code, date of birth, phone number and email address. With these loopholes in place, DMVs can reap windfalls from selling drivers’ information. The Wisconsin DMV has MOUs (memorandums of understanding) with over 3,000 private entities, including two dozen private investigative firms, and collected over $17 million in additional revenue from selling driver data. The Florida Department of Highway Safety and Motor Vehicles made a staggering $77 million selling driver data in 2017 alone.

Sunday, September 22, 2019

Housing First: A Simple But Radical Solution to Homelessness

Sources: Relevant Magazine, Lincoln Land Institute, Housing First Feasibility Study for the Liverpool City Region, The Economic Round table, Department of Corrections Institutional costs, Permanent Supportive Housing: An Operating Cost Analysis

While numerous risk factors and contingencies shape homelessness only one thing is common in each case: a lack of stable housing. Throughout most of Europe, homelessness is on the rise even in the presence of massive welfare states. In the UK, it has risen 7% over the last year. In Germany, it has risen 35% over the last two years, and in France, homelessness has risen 50% over the same time period. Exacerbated by the migrant crisis, homelessness has risen in all but one EU country. Finland has managed to reduce their homeless population by 35% over the past decade and completely eliminate unsheltered homelessness by unconditionally providing stable housing to homeless individuals before tackling any of the mental health or substance abuse problems they may have. The Housing First approach has not only been found to be more effective at reducing homelessness than approaches that prioritize treatment of underlying disorders or, alternatively, doing nothing, it has also been found to be more cost effective. Cities can either pay for homelessness on the front end or the back end and the latter is much more expensive. For instance, in Los Angeles County, criminalization and hospitalization costs about $5,100 more per homeless person and $10,800 more per chronically homeless person compared to those with stable housing. For chronically homeless persons, healthcare costs can be four to five times higher than the non-homeless population while criminal justice costs can be as much as seven to nine times higher. In Washington State, incarcerating an individual can average anywhere between $2,364 to $4,272 per month or $28,370 to $51,264 annually. In contrast, permanent supportive housing and affordable housing is much cheaper, coming in between $6,180 and $5,567 per unit annually.

The Problem with City Shelters

While emergency shelters are usually the go to solution for alleviating homelessness they do not provide stable housing needed to prevent chronic homelessness and exemplify the tragedy of the commons problem. The New York City shelter system, which accommodates 95% of the homeless population there, furnishes a case study in how overcrowded shelters can quickly fall into disrepair and become practical bio-hazards. An investigation conducted by a homeless advocacy group found that shelters often become contaminated with mold and infested with rats and insects. Shelter bathrooms have routine sanitary problems with mold and plumbing problems with clogged toilets and showers that do not work. Shelter staff exacerbate these problems by providing insufficient portions of food and failing to provide laundry services, leaving many residents to wear dirty clothes.

Housing solution for Single Homeless Persons: Tiny House Villages

Roughly two-thirds of the national homeless population is single people. A unique housing solution that many cities have begun to experiment with is allowing the construction of tiny house villages. Local non-profit organizations, churches and community volunteers in Seattle have built some 250 tiny houses, within 8 tiny house villages, on a combination of public and private land. The housing units measure between 100 and 120 square feet, the size of a small bedroom, and cost between $2,200 and $2,500 to produce, which is funded through donations and the Low Income Housing Institute, a local non-profit organization. Cities such as Austin, Denver, and Portland have begun to conduct similar experiments in tiny house production. Most residents of tiny house villages are gainfully employed and, unlike city shelters, these self-governing communities provide homeless persons with independence, reduce their reliance on social services and their burden on the criminal justice system, and most importantly allow them to escape homelessness. Municipal governments could help establish tiny house villages through land banking. Public land as well as vacant and abandoned lots could be rezoned and appropriated to build villages, ideally by private charities and non-profit organizations, while the municipality provides all of the necessary utilities.