America’s affordable housing crisis is showing no signs of slowing. Our many piecemeal attempts to solve the crisis have over and over again proven ineffective. Politicians continue proposing strategies designed merely to help people cope within our dysfunctional housing system instead of effectively addressing the system’s dysfunction itself.
We need a comprehensive plan that identifies and effectively addresses the many dysfunctional factors of our housing system. What follows is the basic foundational blueprint for federal legislation that will do just that.
The Affordable Housing Forever Act (AHFA) will bring adequate, dignified housing to all people. It will enable all people to own their own homes and to have the housing security and means of building equity that come with home ownership. This will be accomplished by effectively addressing the three major dysfunctional factors driving the affordable housing crisis:
1) Excessive, unnecessary demand;
2) Lack of supply;
3) Excessive inflation.
Excessive, Unnecessary Demand
The rightful purpose of housing is to house people. Ideally the demand for housing would be dictated only by the number of people present. However, the commodification of housing has greatly and unnecessarily increased housing demand by allowing investors, large and small, to purchase housing in excess of the housing they live in. This in turn greatly and unnecessarily increases demand. The AHFA will effectively address this by re-prioritizing the housing of people as the chief purpose of housing and abolishing investing in housing.
Lack of Supply
As wealth inequality has increased, money supply and labor have been diverted away from necessity & sustenance-based housing to luxury-based housing. Restrictive zoning laws and community resistance have thwarted affordable housing supplies across the country. The AHFA will effectively address these issues by redirecting money supply and labor to necessity-based housing and by holding cities effectively accountable when they fail to meet affordable housing requirements.
Housing’s massive commodity-specific money supply, above and beyond the general money supply, has enabled housing units to be sold for much more than they are really worth. This has been a primary driver of housing’s rates of inflation being on the average much higher than general inflation rates. The AHFA will effectively address these issues by regulating home resale prices and credit available to housing that is not necessity-based.
Excessive, unnecessary demand, lack of supply, and excessive inflation are powerful forces when acting alone. When acting together they are extremely formidable, and enable those controlling housing and controlling the money supply to easily take economic advantage of those in need of housing.
The AHFA is a comprehensive plan that effectively walks away from the ongoing dysfunction of our current housing system and moves on to an equitable and comprehensively healthier housing system.
In addition to the above economic factors, the plan is informed by the following principles:
1) Adequate, dignified housing is a human right;
2) The secure, dignified housing of people takes priority over profiteering;
3) Keeping families and communities together takes priority over profiteering;
4) Our current housing system has reached the point that, in the words of Thomas Jefferson, …”it is clear that the laws of property have been so far extended as to violate natural right.”;
5) Taking what one needs and leaving the rest is a cornerstone of sustainability and humane coexistence;
6) Investment income should never be allowed when it isn’t benefiting the collective or when it creates an impediment to the necessities of life for others;
7) A mixed-market economy in which life’s necessities are protected from the free market is a must if we are to successfully solve our most pressing existential issue – climate change.
Phase 1: Initial Prohibition
Upon passage of the AHFA, purchasing housing for investment is prohibited. A housing unit may only be purchased by buyers committed to being occupants. A buyer’s former home must be on the market within six months of the new home purchase date.
Phase 2: Disposition Period
Beginning on the second anniversary of the AHFA’s passage, any housing held as investment must be sold within 10 years, at the rate of 10% per year of the aggregate value of one’s housing holdings, less ones primary residence, at the time of the second anniversary of the AHFA passage. Failure to meet these guidelines will result in the following fines assessed every year:
(the 2nd anniversary value or current value, whichever is less, of all non-primary residence holdings remaining above required sales)*(10%*disposition year).
For those owning 9 housing units or less, the assessment of fines will begin according to the following schedule, with an accelerated fine schedule such that 100% fines will be reached by the tenth year:
8-9 units: end of 2nd disposition year;
6-8 units: end of 3rd disposition year;
4-5 units: end of 4th disposition year;
2-3 units: end of 5th disposition year;
1 unit: end of 6th disposition year.
Multi-unit dwellings will be sold as individual units, with contracts enabling ongoing repairs and maintenance of communal assets required of buyers.
Until a city has fulfilled its affordable housing requirements, any secondary homes in that city will be treated as investment units.
The federal government will undertake construction of new, necessity-based, energy-efficient, non-toxic, weather and disaster-resistant homes that meet guidelines for adequate, dignified housing. The smallest sustenance units will house those who can’t support themselves and would otherwise be homeless. Successively larger units will be available to those who qualify, with the smallest units prioritized to the lowest income earners. Prices will be based on cost. Mortgages will be held by the federal government and will be offered at 0% interest. Mortgage terms will be 10 years. These homes will be forever prohibited from being used to secure a loan for anything other than the purchase of the home itself.
For owners who fall behind on mortgage payments, suitable work programs will be offered. As a last resort, an occupant may be moved to a smaller, economically feasible unit within five miles of the current home. An occupant can never be evicted unless a smaller or sustenance model within five miles of the current home is available to them.
Sales prices of all housing will be limited to purchase price adjusted for general inflation plus fair market value of improvements less depreciation of improvements. Upon passage of the AHFA, a moratorium on non-necessity housing loans will go into effect. This moratorium will be lifted in cities that have met their affordable housing requirements.
For such cities, lending guidelines will be put into place that mandate funding of necessary affordable housing, to be determined yearly by a housing board. This board will be made up of proven housing advocates, elected and employed by the people to represent at least 15 regions of the country, serving four-year terms, and who are prohibited from taking money from donors. Campaign guidelines will go into effect ensuring all candidates have equal media exposure.
This board will determine interest rates for different housing types, with necessity-based housing receiving the lowest rates not to exceed 3% or the current general inflation rate, whichever is less, and luxury-based housing receiving the highest rates. The Federal Open Market Committee will relinquish the duties of setting interest rates and determining availability of money/credit for any and all housing purposes.
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This is the basic foundational blueprint for the Affordable Housing Forever Act, to effectively address the perpetual dysfunction of our current housing system. Of course, other factors also need to be effectively addressed, and many details need to be worked out. These aspects should not be left to politicians. It is crucial that the people themselves contemplate, brainstorm, and engage in civilized intellectual debate in order to identity, bring awareness to, and effectively address the other factors and details.
The AHFA, while necessary to creating a new, equitable, healthy, and functioning housing system, needs to be one component of a larger, comprehensive plan, such as the Green New Deal, that effectively addresses the many other dysfunctional aspects of our current systems, such as climate change, wealth maldistribution, and inequality.
Get involved by spreading the word and putting on your thinking caps…and don’t forget to spend time visualizing the new reality we are in the process of creating. Action informed by knowledge, principle, and vision is unstoppable.