This Land is Whose Land? From NYCHA Housing to Nevada’s Ranches

Was a high wall there that tried to stop me

A sign was painted said: Private Property,

But on the back side it didn't say nothing —

This land was made for you and me.

-- Woody Guthrie, “This Land is Your Land,” 1940

In the summer of 2000, our family rent-a-car emerged from the Grand Tetons and traveled down National Highway 26 into the town of Jackson, Wyoming. As we sped along (the urgent need for pancakes and flat, clear terrain propelling us forward at speeds that would be reckless at best on the I-95 corridor), I stared out the window and watched the cows chewing their weight in grass on federal property (about half of Wyoming is owned by the U.S. Government—see map, below).

Curious about the agreements that allowed for such private use of public property, I asked our waiter at the local diner who owned the cows and how much he/she paid to have them grave on “federal property.” The waiter, already put off perhaps by a New Englander wearing his ever-present Sox jacket, set his pen and paper on the table, looked at me, and declared simply, “That’s our land.”

I was firmly committed to putting pancakes over politics, so I demurred further argument, certain that whoever the “our” was didn’t include me.

This month, a dispute over federal grazing fees charged to Western ranchers once again erupted, with armed civilians taking up positions against Bureau of Land Management rangers who, pursuant to a court order, attempted to confiscate 500 cattle owned by Cliven Bundy, who has been illegally grazing his herd on public land since 1993.

Senate Majority Leader Harry Reid (D-NV) responded by calling the armed vigilantes “domestic terrorists”, while Nevada’s junior Senator, Dean Heller (R), called Bundy’s supporters “patriots.”

Not only is there no agreement on what taking up arms against the federal enforcement of a court order should be called, there isn’t even consensus on the facts underlying the case. Washington Post columnist Marc Theissen decried Reid’s “domestic terrorist” comment, stating that “defending your property against a paramilitary force of armed federal agents is not the equivalent of blowing up a federal building or sending letter bombs” (emphasis added).

Indeed, while Bundy’s abhorrent comments on race and his unwillingness to pay below-market grazing fees to the Federal Government have given him 15 minutes in the national spotlight, what his case and the story of the diner in Jackson are really about is the very nature of property rights—not just in the American West, but across the country.

Indeed, I’ve spent the last week pondering Theissen’s remark, trying to come up with an East Coast equivalent to understand the “ownership” Bundy and people like him feel over land whose title is in our collective name. As it turns out, we have a pretty good analog right here in New York City in how we try to grapple with the difficult concept of “home” as it relates to scarce and precious public housing resources.

This month, NYCHA General Manager Cecil House testified before the New York City Council about the Housing Authority’s “rightsizing” plan. As the wait list for public housing continues to grow (in 2012, NYCHA projected that nearly one in three units (55,000) were “underoccuiped”, while the wait list swelled to 160,000 families), NYCHA has sought to optimize apartment usage by “transitioning families to apartments appropriate for their needs.”

As House stated, “Rightsizing does not only improve the quality of life of current NYCHA residents but also provides housing to more New Yorkers on our waiting list.”

The rightsizing issue has been extremely controversial, largely because its very nature necessitates removing people from their homes and placing them in smaller apartments (particularly older residents whose children have moved out). NYCHA is, after all, a public resource and rightsizing is absolutely needed to ensure that new families can take advantage of the opportunities it provides.

However, if our homes are indeed our castles, it is also understandable as to why ranchers or public housing tenants would feel ownership, the deed notwithstanding.

In situations like these, where emotions run hot and mistrust lurks around every corner, there are few good choices. However, our system of government is rooted in the consistent application of the rule of law, rather than the fallible whims of officials.

Indeed, just as the BLM didn’t attack Bundy for who he was, but for what he did (violate the law by refusing to pay a standard fee), so NYCHA’s rightsizing is not directed at individual residents as punishment, but is instead enforced as part of a contractual agreement entered into by tenants with the Housing Authority.

As long as the system itself is fair and people have the opportunity to argue their case before a neutral arbiter, that’s all we can ask in a Republic. Taking up arms against that effort is an affront to a government of laws itself—a government that is fallible, but far better than the alternative.

Silence Over Sacrifice: Generational (In)Equity in American Politics

“The ultimate test of man’s conscience may be his willingness to sacrifice something today for future generations whose words of thanks will not be heard.”

-- Gaylord Nelson, Senator from Wisconsin (1916-2005)

In February, BSB wrote that one of the “First Principles” of American Politics should be to “assume that present sacrifice for future benefit is the appropriate path,” and that, “The burden of proof should be on those who would take today and pay tomorrow, not the other way around.”

All too often, however, whether the topic is wages, housing, pensions, or the fight to combat the catastrophic effects of climate change, we are quick to sell the next generation short to avoid sacrificing our own benefits/lifestyle.

As Joanna Weiss highlighted in the Boston Globe last week, 26 states currently provide a modified minimum wage for teens, ranging from offering teens 85 percent of the minimum wage and allowing substantially lower wages for short-term work to exempting students from the minimum wage altogether. Weiss concluded, “Who’s to say, based on age, that their work is less valuable than anybody else’s?”

In New York State, teens make the same minimum wage. However, the State recently enacted a tax credit that subsidizes the wages of 16-20 year olds, making the effective wage of a teenager lower (from the employer’s perspective).

As important as wages are to success in New York, perhaps nothing is more closely tied to opportunity than housing. The dreams of youth coming to Gotham—whether from small, rural towns in Massachusetts or metropolises from across the sea—invariably run into the reality of New York’s affordable housing crunch.

Last week, Harry Siegel of the New York Daily News once again noted what many economists across the political spectrum have said for years about New York’s housing market, “the more subsidized housing we have, the more outrageously expensive it gets for everyone not lucky enough to have it.”

And as you would expect given that housing, like wages, is a zero-sum game, older people are vastly overrepresented among subsidized housing units. As shown in the table below from the Furman Center’s 2012 Annual Report on the State of NYC’s Rent-Stabilized Housing, people over the age of 65 are much more likely to reside in rent-regulated, public, and other subsidized housing than the young.

Most acknowledge that the only way out of this conundrum—save for an unwinding of NYC’s rent-stabilized housing program (disclosure: I live in a rent-stabilized unit on Manhattan’s Upper East Side)—is to build more housing. And the only way to do that in New York City is to build up.

However, as Siegel adroitly points out, this solution once again pits the generations against one another, creating, “a fight between those of us already here, protecting what we have, and the needs of those who might join us — between the city’s present and its future.”

A third area where this type of generational clash frequently takes place is government pensions. In 2012, New York recently enacted Tier VI—a new benefit tier for employees entering City/State service after April 1, 2013. Tier VI asks future employees to pay more for fewer benefits than Tier V employees (disclosure: I am a “Tier IV” member), continuing a long tradition of “pension reform” that solves present problems by borrowing from future employees. As the Fiscal Policy Institute found, the average Tier VI employee will receive a pension with a value that is 39.8 percent lower than currently provided under Tier 5.

While some insist that “reliance” on benefits should prevent them from being impaired in any way, that ideological rigidity necessarily assumes that the benefits of future workers/veterans should be sacrificed to maintain the status quo.

Some interest groups have recognized the generational tension in politics and sought a path forward. Common Sense Action and the Bipartisan Policy Center have created an Agenda for Generational Equity (AGE), which seeks to protect today’s seniors and future generations through entitlement reform and investments in education and development that improve mobility and opportunity.

However, while AGE is an ambitious and well-meaning effort, it falls short by failing to use the language of sacrifice, of tradeoffs, in rendering its judgment. Indeed, the AGE appears to want readers to have their cake and eat it to—implying that there is a way forward in which all will be healthier, happier, wealthier, and without any additional burden (tax or otherwise).

It is yet another example of how sacrifice has become a verboten term in American politics. How this came to pass is something of a mystery, particularly given how we have historically revered sacrifice (whether of life, liberty, or treasure) as one of the pinnacles of a democratic society.

On the other hand, concerns about generational equity are nothing new. Nearly 30 years ago, Steven Greenhouse of the New York Times wrote that the very term “Generational equity” was slowly creeping into the political discourse as economists, “assert that the generation in power is blithely passing the bill to its successors.”

No one is blameless in this story—from the politicians who are too scared to level with constituents, to the constituents themselves, who allow politicians to infantilize them by reveling in the fiction that solving problems is painless and that merely saying that nothing is more important than our children is more important than actually backing up that sentiment through collective sacrifice.

In the end, sacrifice shouldn’t be a dirty word in American politics; it should be something to which we all aspire.

Sharing Society’s Burdens: From Appomattox to Westchester

“The natural distribution is neither just nor unjust; nor is it unjust that persons are born into society at some particular position. These are simply natural facts. What is just and unjust is the way that institutions deal with these facts.”

-- John Rawls, A Theory of Justice, 1971

Shortly after the Emancipation Proclamation took effect, on January 1, 1863, Congress passed a new conscription law which placed all male citizens aged 20-35 and all unmarried men between 35-45 into a lottery. However, in addition to not including Blacks (who were exempt on account of their lack of citizenship—though many would fight with honor throughout the war, including the famed Massachusetts 54^th Regiment), the draft law allowed those who could afford to hire a substitute or pay the government $300 to avoid enlistment.

Less than 24 hours after the first lottery took place, New York City erupted into five days of violence that would later be termed the “New York City Draft Riots.” These riots—fueled by deep-seeded racism of working-class white immigrants toward free blacks—not only targeted black New Yorkers, but also directed their destructive ire on property of the wealthy. Over five days, the riots claimed over 100 lives.

The Draft Riots were about a very simple principle—justice. Recent discoveries in evolutionary biology and psychology have shown that humans are born with an inherent sense of fairness. We feel injustice in our core and rebel against it as an affront to our dignity as equal persons.

In the Draft Riots, the idea that mere wealth could exempt a man from doing his part to combat common scourges—slavery and the dissolution of the Union—was too much to bear in silence. Certainly the working class of 1863 knew, as we know now, that wealth “buys” all sorts of advantages in life. However, when that advantage is made manifest in such a brazen manner (you cut a check and you are free to go), it is a recipe for unrest.

150 years after the Civil War, America continues to struggle with how to share common burdens. Some advocates and legislators, including Rep. Charles B. Rangel (D-NY), believe that the draft needs to be reinstated for fairness purposes, since a disproportionate number of low-income Americans choose to enlist in our now all-volunteer armed forces. As Rangel stated, “Reinstating the draft and requiring women to register for the Selective Service would compel the American public to have a stake in the wars we fight as a nation. We must question why and how we go to war, and who decides to send our men and women into harm's way.”

The sharing of society’s burdens goes well beyond the battlefield. It includes contentious questions about how we deal with trash pickup, such as the fight over the 91^st Street waste transfer station down the street from my apartment on Manhattan’s Upper East Side. It includes racially charged disputes about the siting of affordable housing developments, which often are populated by low-income people of color, in wealthier, whiter communities, such as Chappaqua, N.Y. or Wellesley, Mass. And it includes how to ensure that all people can afford quality health care—in part by requiring healthy people to purchase insurance to broaden risk pools and avoid adverse selection problems that would drive up costs for all.

There is immense political pressure at the local level to embrace NIMBY reasoning and foist our fair share of a particular burden onto other neighborhoods/communities. As a result, courts have been forced to step in to establish “fair share” principles. As the New jersey Supreme Court stated in the famed affordable housing case of Mount Laurel, “Almost every [municipality] acts solely in its own selfish and parochial interest and in effect builds a wall around itself to keep out those people or entities not adding favorably to the tax base, despite the location of the municipality or the demand for varied kinds of housing.” Southern Burlington County NAACP v. Township of Mount Laurel, 67 N.J. 151, 171 (1975).

The Court went on to declare, in its second Mount Laurel decision, that “municipalities, at the very least, must remove all municipally created barriers to the construction of their fair share of lower income housing.” Southern Burlington County NAACP v. Township of Mount Laurel 92 N.J. 158, 258 (1983) (emphasis added); see also Berenson v. New Castle, 38 N.Y.2d 102, 110 (1975) (“There must be a balancing of the local desire to maintain the status quo within the community and the greater public interest that regional needs be met”).

Similarly, in Philadelphia v. New Jersey, 437 U.S. 617 (1978), the Supreme Court of the United States struck down a New Jersey law which prohibited the importing of any solid or liquid waste which originated or was collected outside the State. The Court declared that a State may not, “isolate itself from a problem common to many by erecting a barrier against the movement of interstate trade.” Id. at 628.

Ultimately, in order to determine what is right, what is good, what is just, John Rawls’ seminal “veil of ignorance” approach provides ample guidance. Recognizing, as Rawls does, that so much of where we are in life is on account of accident of birth—i.e. luck—we must not only accept that we need to do our part to solve society’s most pressing problems, but we must affirmatively celebrate that effort as a means of building strong social bonds between communities.

The Real "Third Rail": New York's Affordable Housing Crisis

http://www.nytimes.com/2014/02/08/opinion/new-yorks-affordable-housing-shortage.html?hp&rref=opinion

Today’s lead editorial in the New York Times focuses on NYC's ongoing affordable housing crisis. New York City has endured a “housing emergency” (now defined in state law as a vacancy rate under 5 percent) since World War II. The “emergency” has led to the creation and perpetuation of a regulated housing market where over 60 percent of NYC units are either rent-controlled (< 2 percent), rent-stabilized (~48 percent), or part of New York City Housing Authority “public housing.” (full disclosure: I live in a rent-stabilized apartment).

I’ll discuss NYC's housing crisis from many angles in this space, but today I want to focus on one of the prime contributors to the lack of affordable housing in the five boroughs: New York City's backward property tax and what continued inaction on property tax reform says about the state of politics in America.

The Times writes:

"One big hurdle to more development is the state property tax on rental property, which discourages housing development by saddling the city’s rental buildings with some of the highest tax burdens in the nation."

While novels have been written about what Crain’s New York called the “Alice in Wonderland” world of the NYC property tax, suffice to say that there are two significant flaws:

1. Disparate treatment of rental property (categorized in “Class 2” of NYC’s 4-class scheme) and owner-occupied properties (whether 1-3 family homes (“Class 1”) or co-ops and condos, which are in Class 2 but are the beneficiaries of a longstanding “abatement” that brings their effective tax rate (“ETR”) close to that of Class 1.

As data from the New York City’s Independent Budget Office shows (see chart, left), by FY 2007, rental buildings were paying an effective rate 5.5 times that of co-ops and condos and close to 8 times that of 1-3 family homes.

2. A property assessment system that woefully underestimates the value of luxury housing.

State law requires New York City’s co-ops and condos to be valued by income rather than sales price. As a result, instead of using sales prices of apartments in a building to determine market value, the City selects “comparable” rental buildings as to assess the values of co-ops and condos. These “comparables” often include rent-regulated units, even if the co-op or condo building in question includes no rent-regulated units at all. 

For instance, 740 Park Avenue (36 units, 1930), perhaps the most prestigious residential building in the City (if not the World), is officially “comparable” to 1493 York Avenue (250 units, 1956) and 303 East 83rd Street (263 units, 1977), two buildings that, while nice, are much less valuable.

As a result of this assessment system, the Furman Center at NYU recently identified 50 individual co-ops were sold for a higher price than the Department of Finance assessed market value FOR THE ENTIRE BUILDING.

If the property system is so backward—simultaneously stacked against the majority of New Yorkers (renters) and in favor of owners of the most valuable residential real estate in the City—why hasn’t anyone done anything about it?

The common refrain is that property taxes are the “Third Rail” of NYC politics. This phrase—which infects debates on everything from Social Security and the Pentagon Budget to small town issues like streetlights and noise ordinances—is a devastating commentary on the state of our politics and the lack of trust between our leaders and the people they govern.

Indeed, the idea of the “Third Rail” has become so ubiquitous that practically any policy that has even short-term negative effects on some individuals is considered toxic. Instead, we all too often talk a big game about how nothing is more important than our children, only to turn around and reject sacrifices necessary to protect the planet (carbon taxes, a rational toll system, parking reform) or safeguard our future fiscal health (tax reform and streamlined services).

What is so desperately needed in American politics today are leaders willing to seize upon the “Third Rails” and trust the public not to flip the proverbial switch; leaders who treat voters as adults who grapple with difficult decisions every day and must understand that government faces similarly-challenging choices; leaders who are motivated to tackle the grand problems of our time, “not because they are easy, but because they are hard.”

Sochi 2014 and Boston 2024

http://www.bostonglobe.com/magazine/2014/02/02/boston-should-stop-chasing-its-olympic-dreams/iVMbbRfIwUE6vcQxzGCknL/story.html#

On the night of the Opening Ceremonies of the Winter Olympics in Sochi, I want to take a look at Boston’s bid for the 2024 Summer Olympics and push back against some of the claims made by Shira Springer of the Boston Globe.

Springer lays out the same argument made by many observers of the Olympic Games: namely, that they are very expensive and offer too little in terms of long-term economic development.

However, Springer—like others who denigrate the economic effect of the Games—fails to understand that the lasting legacy of well-run Olympics (like London 2012) is not empty stadiums (London’s Olympic Stadium will soon be filled with a team from the Barclay’s Premier League, its aquatics center is now a world-class community facility, and several of its other arenas have been packed up and sent to Rio de Janeiro for use in 2016). Rather, the lasting legacy is the infrastructure—specifically, transportation and housing—that is built for the participants in and spectators of the Games.

Springer notes that London spent $15 billion on the Games. But what if I told you that nearly $12 billion of that sum was spent on transformative, permanent improvements to London’s transit network, including:

·      Four new or renovated subway lines

·      Dedicated express rail connections between Heathrow Airport and Central London

·      High-speed rail links between East London and Continental Europe

·      Dozens of new bike/pedestrian routes (which paved the way for London’s version of the HubWay to take off in 2010)

These investments—which will support London’s economy for generations to come—would not have been made had London not hosted the Games.

In Boston, we look at our rickety old subway system and wonder if we will ever be able to build out a true 21^st century transit network in the Hub. The fact is that plans for subway expansion in Metro-Boston—from the Blue Line to Central Square-Lynn (first discussed in a 1926 report) to the quixotic effort to build a Silver Line subway (first discussed in 1948)– have gone nowhere for 25 years—since the last Red Line stations opened from Harvard Square to Alewife and the Orange Line extended to Forest Hills.

The Olympics would be a catalyst for those investments, as well as improvements at North and South Stations (including the ever-elusive connection between the two hubs), spurred on by the need to move visitors between venues (such as the TD Garden and the Olympic Stadium—which would be perched on the waterfront).

Boston’s Olympic legacy wouldn’t end with transformative transportation projects. Rather, just as London has used the Olympic village to boost affordable housing, so Boston—desperately in need of additional housing stock—would benefit from thousands of units build for the world’s greatest athletes, but intended for Boston’s families.

Lastly, let us not discount the great civic pride that comes with hosting the world for a fortnight. Londoners of all stripes volunteered with spirit to welcome people from all corners of the Globe to their City.

So it would be in Beantown, where baseball’s cathedral would host soccer; the ancient polo fields in my hometown of Hamilton would be the showcase for equestrian (with the Romney’s attendance an essential component); the Charles River, always packed with rowers in October, would host the world’s best sculls; the ancient stone horseshoe of Harvard Stadium would be lit up by world class field hockey; the windy waters of Marblehead as the perfect setting for sailing; the brilliant sand of Singing Beach in Manchester for beach volleyball; and the 26.2 miles from Hopkinton to Copley Square providing the backdrop to the greatest Olympic Marathon of all time.

So here’s to Sochi 2014…and Boston 2024.