cawacko
Well-known member
Admittedly I haven't had a chance to real the full article but I read enough to get the gist. Do board home owners want to see it removed?
How Homeownership Became the Engine of American Inequality
An enormous entitlement in the tax code props up home prices — and overwhelmingly benefits the wealthy and the upper middle class.
he son of a minister, Ohene Asare grew up poor. His family immigrated from Ghana when he was 8 and settled down in West Bridgewater, Mass., a town 30 miles south of Boston, where he was one of the few black students at the local public school. “It was us and this Jewish family,” Asare remembered. “It was a field day.” His white classmates bullied him, sometimes using racial slurs. His father transferred Asare when he was 14 to Milton Academy, which awarded Asare a scholarship that covered tuition and board. His parents still had to take out loans worth about $20,000 for his living expenses. But the academy set Asare up for future success. He and his wife, Régine Jean-Charles, whom he got to know at Milton, are in their late 30s. She is a tenured professor of romance languages and literature at Boston College, and Asare is a founder of Aesara, a consulting and technology company.
Two years ago, the couple bought a new home. Set on a half-acre lot that backs up to conservation land in Milton, Mass., the 2,350-square-foot split-level has four bedrooms, three bathrooms, an open-concept kitchen and dining area, a finished basement, hardwood floors and beautiful touches throughout, like the Tennessee marble fireplace and hearth. It cost $665,000. “This is the nicest house I’ve ever lived in,” Asare told me.
Asare and Jean-Charles have four children and earn roughly $290,000 a year, which puts them in the top 5 percent of household incomes in the country. After renting for the first years of their marriage, they participated in a home buyers’ program administered by the nonprofit Neighborhood Assistance Corporation of America. The program allowed Asare and Jean-Charles to purchase their first home in 2009 for $360,000 with a 10 percent down payment, half of what is typically required. In 2015, they sold it for $430,000. There is a reason so many Americans choose to develop their net worth through homeownership: It is a proven wealth builder and savings compeller. The average homeowner boasts a net worth ($195,400) that is 36 times that of the average renter ($5,400).
Asare serves on the advisory board for HomeStart, a nonprofit focused on ending and preventing homelessness. Like most organizations, HomeStart is made up of people at various rungs on the economic ladder. Asare sits near the top; his salary exceeds that of anyone on staff at the nonprofit he helps advise. When Crisaliz Diaz was a staff member at HomeStart, she was at the other end of the ladder. She earned $38,000 a year, putting her near the bottom third of American household incomes. A 26-year-old Latina with thick-rimmed glasses, Diaz rents a small two-bedroom apartment in Braintree, Mass., an outer suburb of Boston. Her two sons, Xzayvior and Mayson — Zay and May, she calls them — share a room plastered with Lego posters and Mickey Mouse stickers. Her apartment is spare and clean, with ceiling tiles you can push up and views of the parking lot and busy street.
When Diaz moved in four years ago, the rent was $1,195 a month, heat included, but her landlord has since raised the rent to $1,385 a month, which takes 44 percent of her paycheck. Even with child-support payments and side jobs, she still doesn’t bring in enough to pay her regular bills. She goes without a savings account and regularly relies on credit cards to buy toilet paper and soap. “There’s no stop to it,” she told me. “It’s just a consistent thing.”
Diaz receives no housing assistance. She has applied to several programs, but nothing has come through. The last time Boston accepted new applications for rental-assistance Section 8 vouchers was nine years ago, when for a few precious weeks you were allowed to place your name on a very long waiting list. Boston is not atypical in that way. In Los Angeles, the estimated wait time for a Section 8 voucher is 11 years. In Washington, the waiting list for housing vouchers is closed indefinitely, and over 40,000 people have applied for public housing alone. While many Americans assume that most poor families live in subsidized housing, the opposite is true; nationwide, only one in four households that qualifies for rental assistance receives it. Most are like Diaz, struggling without government help in the private rental market, where housing costs claim larger and larger chunks of their income.
Almost a decade removed from the foreclosure crisis that began in 2008, the nation is facing one of the worst affordable-housing shortages in generations. The standard of “affordable” housing is that which costs roughly 30 percent or less of a family’s income. Because of rising housing costs and stagnant wages, slightly more than half of all poor renting families in the country spend more than 50 percent of their income on housing costs, and at least one in four spends more than 70 percent. Yet America’s national housing policy gives affluent homeowners large benefits; middle-class homeowners, smaller benefits; and most renters, who are disproportionately poor, nothing. It is difficult to think of another social policy that more successfully multiplies America’s inequality in such a sweeping fashion.
Consider Asare and Diaz. As a homeowner, Asare benefits from tax breaks that Diaz does not, the biggest being the mortgage-interest deduction — or MID, in wonk-speak. All homeowners in America may deduct mortgage interest on their first and second homes. In 2015, Asare and Jean-Charles claimed $21,686 in home interest and other real estate deductions, which saved them $470 a month. That’s roughly 15 percent of Diaz’s monthly income. That same year, the federal government dedicated nearly $134 billion to homeowner subsidies. The MID accounted for the biggest chunk of the total, $71 billion, with real estate tax deductions, capital gains exclusions and other expenditures accounting for the rest. That number, $134 billion, was larger than the entire budgets of the Departments of Education, Justice and Energy combined for that year. It is a figure that exceeds half the entire gross domestic product of countries like Chile, New Zealand and Portugal.
Recently, Gary Cohn, the chief economic adviser to President Trump, heralded his boss’s first tax plan as a “once-in-a-generation opportunity to do something really big.” And indeed, Trump’s plan represents a radical transformation in how we will fund the government, with its biggest winners being corporations and wealthy families. But no one in his administration, and only a small (albeit growing) group of people in either party, is pushing to reform what may very well be the most regressive piece of social policy in America. Perhaps that’s because the mortgage-interest deduction overwhelmingly benefits the sorts of upper-middle-class voters who make up the donor base of both parties and who generally fail to acknowledge themselves to be beneficiaries of federal largess. “Today, as in the past,” writes the historian Molly Michelmore in her book “Tax and Spend,” “most of the recipients of federal aid are not the suspect ‘welfare queens’ of the popular imagination but rather middle-class homeowners, salaried professionals and retirees.” A 15-story public housing tower and a mortgaged suburban home are both government-subsidized, but only one looks (and feels) that way. It is only by recognizing this fact that we can begin to understand why there is so much poverty in the United States today.
When we think of entitlement programs, Social Security and Medicare immediately come to mind. But by any fair standard, the holy trinity of United States social policy should also include the mortgage-interest deduction — an enormous benefit that has also become politically untouchable.
The MID came into being in 1913, not to spur homeownership but simply as part of a general policy allowing businesses to deduct interest payments from loans. At that time, most Americans didn’t own their homes and only the rich paid income tax, so the effects of the mortgage deduction on the nation’s tax proceeds were fairly trivial. That began to change in the second half of the 20th century, though, because of two huge transformations in American life. First, income tax was converted from an elite tax to a mass tax: In 1932, the Bureau of Internal Revenue (precursor to the I.R.S.) processed fewer than two million individual tax returns, but 11 years later, it processed over 40 million. At the same time, the federal government began subsidizing homeownership through large-scale initiatives like the G.I. Bill and mortgage insurance. Homeownership grew rapidly in the postwar period, and so did the MID.
SARAH PORTER Homeowner
LOCATION Milton, Mass.
OCCUPATION Chief operating officer for Victory Programs, a nonprofit organization that helps drug addicts and the homeless.
DWELLING TYPE Two-family home
BEDROOMS Four (two per unit)
OCCUPANTS Three (Porter and her daughter, Grace, 9, in one unit, and Porter’s mother, Susan, in the other)
PRICE OF HOME $554,500, in 2015
DOWN PAYMENT Porter paid $80,000; her mother paid $160,000.
TOTAL HOUSEHOLD INCOME $109,000
MONTHLY MORTGAGE PAYMENT $2,185 (Porter pays $1,485, and her mother pays $700.)
AVERAGE MONTHLY EXPENSES $3,300 (including child care)
PORTER SAYS: ‘‘My grandfather left me a Barracuda in pristine shape, and I sold it and used the bulk of the money for a down payment on my one-bedroom condo in Boston. That neighborhood boomed, and I sold it for way more than what I paid initially. I don’t worry about making my mortgage payment, but I feel like it should be easier than it is. I don’t know how people do it on half of what I make. It’s just so hard.’’
DAMON CASAREZ FOR THE NEW YORK TIMES
By the time policy makers realized how extravagant the MID had become, it was too late to do much about it without facing significant backlash. Millions of voters had begun to count on getting that money back. Even President Ronald Reagan, who oversaw drastic cuts to housing programs benefiting low-income Americans, let the MID be. Subsequent politicians followed suit, often eager to discuss reforms to Social Security and Medicare but reluctant to touch the MID, even as the program continued to grow more costly: By 2019, MID expenditures are expected to exceed $96 billion.
“Once we’re in a world with a MID,” says Todd Sinai, a professor of real estate and public policy at the University of Pennsylvania’s Wharton School, “it is very hard to get to a world without the MID.” That’s in part because the benefit helps to prop up home values. It’s impossible to say how much, but a widely cited 1996 study estimated that eliminating the MID and property-tax deductions would result in a 13 to 17 percent reduction in housing prices nationwide, though that estimate varies widely by region and more recent analyses have found smaller effects. The MID allows home buyers to collect more after-tax savings if they take on more mortgage debt, which incentivizes them to pay more for properties than they could have otherwise. By inflating home values, the MID benefits Americans who already own homes — and makes joining their ranks harder.
The owner-renter divide is as salient as any other in this nation, and this divide is a historical result of statecraft designed to protect and promote inequality. Ours was not always a nation of homeowners; the New Deal fashioned it so, particularly through the G.I. Bill of Rights. The G.I. Bill was enormous, consuming 15 percent of the federal budget in 1948, and remains unmatched by any other single social policy in the scope and depth of its provisions, which included things like college tuition benefits and small-business loans. The G.I. Bill brought a rollout of veterans’ mortgages, padded with modest interest rates and down payments waived for loans up to 30 years. Returning soldiers lined up and bought new homes by the millions. In the years immediately following World War II, veterans’ mortgages accounted for over 40 percent of all home loans.
But both in its design and its application, the G.I. Bill excluded a large number of citizens. To get the New Deal through Congress, Franklin Roosevelt needed to appease the Southern arm of the Democratic Party. So he acquiesced when Congress blocked many nonwhites, particularly African-Americans, from accessing his newly created ladders of opportunity. Farm work, housekeeping and other jobs disproportionately staffed by African-Americans were omitted from programs like Social Security and unemployment insurance. Local Veterans Affairs centers and other entities loyal to Jim Crow did their parts as well, systematically denying nonwhite veterans access to the G.I. Bill. If those veterans got past the V.A., they still had to contend with the banks, which denied loan applications in nonwhite neighborhoods because the Federal Housing Administration refused to insure mortgages there. From 1934 to 1968, the official F.H.A. policy of redlining made homeownership virtually impossible in black communities. “The consequences proved profound,” writes the historian Ira Katznelson in his perfectly titled book, “When Affirmative Action Was White.” “By 1984, when G.I. Bill mortgages had mainly matured, the median white household had a net worth of $39,135; the comparable figure for black households was only $3,397, or just 9 percent of white holdings. Most of this difference was accounted for by the absence of homeownership.”
This legacy has been passed down to subsequent generations. Today a majority of first-time home buyers get down-payment help from their parents; many of those parents pitch in by refinancing their own homes. As black homeowners, Asare and Jean-Charles are exceptions to the national trend: While most white families own a home, a majority of black and Latino families do not. Differences in homeownership rates remain the prime driver of the nation’s racial wealth gap. In 2011, the median white household had a net worth of $111,146, compared with $7,113 for the median black household and $8,348 for the median Hispanic household. If black and Hispanic families owned homes at rates similar to whites, the racial wealth gap would be reduced by almost a third.
Racial exclusion was Roosevelt’s first concession to pass the New Deal; his second, to avoid a tax revolt, was to rely on regressive and largely hidden payroll taxes to fund generous social-welfare programs. A result, the historian Michelmore observes, is that we “never asked ordinary taxpayers to pay for the economic security many soon came to expect as a matter of right.” In providing millions of middle-class families stealth benefits, the American government rendered itself invisible to those families, who soon came to see their success as wholly self-made. We forgot because we were not meant to remember.
Proponents of the mortgage-interest deduction often claim that the benefit is a big help to middle-class homeowners. Vincent Wisniewski Jr. is one of them. Wisniewski, 35 and white, with brown hair down to his shoulders, worked with Diaz at HomeStart, but as a program manager. He and his wife, Kelly Kristof, an emergency-room technician, make about $79,000 a year, roughly the median household income for families in the Boston metro area. They live with their 9-month-old son in a 985-square-foot condominium that Wisniewski bought three years ago for $190,000.
Set on a quiet street in Winthrop, a community hemmed in by Logan Airport on one side and the Atlantic on the other, the condo features two bedrooms, a square kitchen with white cupboards, a television room and “the quiet room,” with hanging plants, guitars mounted on the wall and a large bay window. From the small back patio, the ocean is close enough to smell. The mortgage and property-tax bills are about $915 a month, and the monthly condo fee is $368, which includes expensive flood insurance. Even counting utilities, Wisniewski and Kristof spend about 22 percent of their combined income on housing costs. With what’s left over, they buy items for their son, take vacations and enjoy local restaurants. “We definitely feel comfortable,” Wisniewski told me.
https://mobile.nytimes.com/2017/05/...equality.html?referer=https://t.co/v6j5aLFTCn
How Homeownership Became the Engine of American Inequality
An enormous entitlement in the tax code props up home prices — and overwhelmingly benefits the wealthy and the upper middle class.
he son of a minister, Ohene Asare grew up poor. His family immigrated from Ghana when he was 8 and settled down in West Bridgewater, Mass., a town 30 miles south of Boston, where he was one of the few black students at the local public school. “It was us and this Jewish family,” Asare remembered. “It was a field day.” His white classmates bullied him, sometimes using racial slurs. His father transferred Asare when he was 14 to Milton Academy, which awarded Asare a scholarship that covered tuition and board. His parents still had to take out loans worth about $20,000 for his living expenses. But the academy set Asare up for future success. He and his wife, Régine Jean-Charles, whom he got to know at Milton, are in their late 30s. She is a tenured professor of romance languages and literature at Boston College, and Asare is a founder of Aesara, a consulting and technology company.
Two years ago, the couple bought a new home. Set on a half-acre lot that backs up to conservation land in Milton, Mass., the 2,350-square-foot split-level has four bedrooms, three bathrooms, an open-concept kitchen and dining area, a finished basement, hardwood floors and beautiful touches throughout, like the Tennessee marble fireplace and hearth. It cost $665,000. “This is the nicest house I’ve ever lived in,” Asare told me.
Asare and Jean-Charles have four children and earn roughly $290,000 a year, which puts them in the top 5 percent of household incomes in the country. After renting for the first years of their marriage, they participated in a home buyers’ program administered by the nonprofit Neighborhood Assistance Corporation of America. The program allowed Asare and Jean-Charles to purchase their first home in 2009 for $360,000 with a 10 percent down payment, half of what is typically required. In 2015, they sold it for $430,000. There is a reason so many Americans choose to develop their net worth through homeownership: It is a proven wealth builder and savings compeller. The average homeowner boasts a net worth ($195,400) that is 36 times that of the average renter ($5,400).
Asare serves on the advisory board for HomeStart, a nonprofit focused on ending and preventing homelessness. Like most organizations, HomeStart is made up of people at various rungs on the economic ladder. Asare sits near the top; his salary exceeds that of anyone on staff at the nonprofit he helps advise. When Crisaliz Diaz was a staff member at HomeStart, she was at the other end of the ladder. She earned $38,000 a year, putting her near the bottom third of American household incomes. A 26-year-old Latina with thick-rimmed glasses, Diaz rents a small two-bedroom apartment in Braintree, Mass., an outer suburb of Boston. Her two sons, Xzayvior and Mayson — Zay and May, she calls them — share a room plastered with Lego posters and Mickey Mouse stickers. Her apartment is spare and clean, with ceiling tiles you can push up and views of the parking lot and busy street.
When Diaz moved in four years ago, the rent was $1,195 a month, heat included, but her landlord has since raised the rent to $1,385 a month, which takes 44 percent of her paycheck. Even with child-support payments and side jobs, she still doesn’t bring in enough to pay her regular bills. She goes without a savings account and regularly relies on credit cards to buy toilet paper and soap. “There’s no stop to it,” she told me. “It’s just a consistent thing.”
Diaz receives no housing assistance. She has applied to several programs, but nothing has come through. The last time Boston accepted new applications for rental-assistance Section 8 vouchers was nine years ago, when for a few precious weeks you were allowed to place your name on a very long waiting list. Boston is not atypical in that way. In Los Angeles, the estimated wait time for a Section 8 voucher is 11 years. In Washington, the waiting list for housing vouchers is closed indefinitely, and over 40,000 people have applied for public housing alone. While many Americans assume that most poor families live in subsidized housing, the opposite is true; nationwide, only one in four households that qualifies for rental assistance receives it. Most are like Diaz, struggling without government help in the private rental market, where housing costs claim larger and larger chunks of their income.
Almost a decade removed from the foreclosure crisis that began in 2008, the nation is facing one of the worst affordable-housing shortages in generations. The standard of “affordable” housing is that which costs roughly 30 percent or less of a family’s income. Because of rising housing costs and stagnant wages, slightly more than half of all poor renting families in the country spend more than 50 percent of their income on housing costs, and at least one in four spends more than 70 percent. Yet America’s national housing policy gives affluent homeowners large benefits; middle-class homeowners, smaller benefits; and most renters, who are disproportionately poor, nothing. It is difficult to think of another social policy that more successfully multiplies America’s inequality in such a sweeping fashion.
Consider Asare and Diaz. As a homeowner, Asare benefits from tax breaks that Diaz does not, the biggest being the mortgage-interest deduction — or MID, in wonk-speak. All homeowners in America may deduct mortgage interest on their first and second homes. In 2015, Asare and Jean-Charles claimed $21,686 in home interest and other real estate deductions, which saved them $470 a month. That’s roughly 15 percent of Diaz’s monthly income. That same year, the federal government dedicated nearly $134 billion to homeowner subsidies. The MID accounted for the biggest chunk of the total, $71 billion, with real estate tax deductions, capital gains exclusions and other expenditures accounting for the rest. That number, $134 billion, was larger than the entire budgets of the Departments of Education, Justice and Energy combined for that year. It is a figure that exceeds half the entire gross domestic product of countries like Chile, New Zealand and Portugal.
Recently, Gary Cohn, the chief economic adviser to President Trump, heralded his boss’s first tax plan as a “once-in-a-generation opportunity to do something really big.” And indeed, Trump’s plan represents a radical transformation in how we will fund the government, with its biggest winners being corporations and wealthy families. But no one in his administration, and only a small (albeit growing) group of people in either party, is pushing to reform what may very well be the most regressive piece of social policy in America. Perhaps that’s because the mortgage-interest deduction overwhelmingly benefits the sorts of upper-middle-class voters who make up the donor base of both parties and who generally fail to acknowledge themselves to be beneficiaries of federal largess. “Today, as in the past,” writes the historian Molly Michelmore in her book “Tax and Spend,” “most of the recipients of federal aid are not the suspect ‘welfare queens’ of the popular imagination but rather middle-class homeowners, salaried professionals and retirees.” A 15-story public housing tower and a mortgaged suburban home are both government-subsidized, but only one looks (and feels) that way. It is only by recognizing this fact that we can begin to understand why there is so much poverty in the United States today.
When we think of entitlement programs, Social Security and Medicare immediately come to mind. But by any fair standard, the holy trinity of United States social policy should also include the mortgage-interest deduction — an enormous benefit that has also become politically untouchable.
The MID came into being in 1913, not to spur homeownership but simply as part of a general policy allowing businesses to deduct interest payments from loans. At that time, most Americans didn’t own their homes and only the rich paid income tax, so the effects of the mortgage deduction on the nation’s tax proceeds were fairly trivial. That began to change in the second half of the 20th century, though, because of two huge transformations in American life. First, income tax was converted from an elite tax to a mass tax: In 1932, the Bureau of Internal Revenue (precursor to the I.R.S.) processed fewer than two million individual tax returns, but 11 years later, it processed over 40 million. At the same time, the federal government began subsidizing homeownership through large-scale initiatives like the G.I. Bill and mortgage insurance. Homeownership grew rapidly in the postwar period, and so did the MID.
SARAH PORTER Homeowner
LOCATION Milton, Mass.
OCCUPATION Chief operating officer for Victory Programs, a nonprofit organization that helps drug addicts and the homeless.
DWELLING TYPE Two-family home
BEDROOMS Four (two per unit)
OCCUPANTS Three (Porter and her daughter, Grace, 9, in one unit, and Porter’s mother, Susan, in the other)
PRICE OF HOME $554,500, in 2015
DOWN PAYMENT Porter paid $80,000; her mother paid $160,000.
TOTAL HOUSEHOLD INCOME $109,000
MONTHLY MORTGAGE PAYMENT $2,185 (Porter pays $1,485, and her mother pays $700.)
AVERAGE MONTHLY EXPENSES $3,300 (including child care)
PORTER SAYS: ‘‘My grandfather left me a Barracuda in pristine shape, and I sold it and used the bulk of the money for a down payment on my one-bedroom condo in Boston. That neighborhood boomed, and I sold it for way more than what I paid initially. I don’t worry about making my mortgage payment, but I feel like it should be easier than it is. I don’t know how people do it on half of what I make. It’s just so hard.’’
DAMON CASAREZ FOR THE NEW YORK TIMES
By the time policy makers realized how extravagant the MID had become, it was too late to do much about it without facing significant backlash. Millions of voters had begun to count on getting that money back. Even President Ronald Reagan, who oversaw drastic cuts to housing programs benefiting low-income Americans, let the MID be. Subsequent politicians followed suit, often eager to discuss reforms to Social Security and Medicare but reluctant to touch the MID, even as the program continued to grow more costly: By 2019, MID expenditures are expected to exceed $96 billion.
“Once we’re in a world with a MID,” says Todd Sinai, a professor of real estate and public policy at the University of Pennsylvania’s Wharton School, “it is very hard to get to a world without the MID.” That’s in part because the benefit helps to prop up home values. It’s impossible to say how much, but a widely cited 1996 study estimated that eliminating the MID and property-tax deductions would result in a 13 to 17 percent reduction in housing prices nationwide, though that estimate varies widely by region and more recent analyses have found smaller effects. The MID allows home buyers to collect more after-tax savings if they take on more mortgage debt, which incentivizes them to pay more for properties than they could have otherwise. By inflating home values, the MID benefits Americans who already own homes — and makes joining their ranks harder.
The owner-renter divide is as salient as any other in this nation, and this divide is a historical result of statecraft designed to protect and promote inequality. Ours was not always a nation of homeowners; the New Deal fashioned it so, particularly through the G.I. Bill of Rights. The G.I. Bill was enormous, consuming 15 percent of the federal budget in 1948, and remains unmatched by any other single social policy in the scope and depth of its provisions, which included things like college tuition benefits and small-business loans. The G.I. Bill brought a rollout of veterans’ mortgages, padded with modest interest rates and down payments waived for loans up to 30 years. Returning soldiers lined up and bought new homes by the millions. In the years immediately following World War II, veterans’ mortgages accounted for over 40 percent of all home loans.
But both in its design and its application, the G.I. Bill excluded a large number of citizens. To get the New Deal through Congress, Franklin Roosevelt needed to appease the Southern arm of the Democratic Party. So he acquiesced when Congress blocked many nonwhites, particularly African-Americans, from accessing his newly created ladders of opportunity. Farm work, housekeeping and other jobs disproportionately staffed by African-Americans were omitted from programs like Social Security and unemployment insurance. Local Veterans Affairs centers and other entities loyal to Jim Crow did their parts as well, systematically denying nonwhite veterans access to the G.I. Bill. If those veterans got past the V.A., they still had to contend with the banks, which denied loan applications in nonwhite neighborhoods because the Federal Housing Administration refused to insure mortgages there. From 1934 to 1968, the official F.H.A. policy of redlining made homeownership virtually impossible in black communities. “The consequences proved profound,” writes the historian Ira Katznelson in his perfectly titled book, “When Affirmative Action Was White.” “By 1984, when G.I. Bill mortgages had mainly matured, the median white household had a net worth of $39,135; the comparable figure for black households was only $3,397, or just 9 percent of white holdings. Most of this difference was accounted for by the absence of homeownership.”
This legacy has been passed down to subsequent generations. Today a majority of first-time home buyers get down-payment help from their parents; many of those parents pitch in by refinancing their own homes. As black homeowners, Asare and Jean-Charles are exceptions to the national trend: While most white families own a home, a majority of black and Latino families do not. Differences in homeownership rates remain the prime driver of the nation’s racial wealth gap. In 2011, the median white household had a net worth of $111,146, compared with $7,113 for the median black household and $8,348 for the median Hispanic household. If black and Hispanic families owned homes at rates similar to whites, the racial wealth gap would be reduced by almost a third.
Racial exclusion was Roosevelt’s first concession to pass the New Deal; his second, to avoid a tax revolt, was to rely on regressive and largely hidden payroll taxes to fund generous social-welfare programs. A result, the historian Michelmore observes, is that we “never asked ordinary taxpayers to pay for the economic security many soon came to expect as a matter of right.” In providing millions of middle-class families stealth benefits, the American government rendered itself invisible to those families, who soon came to see their success as wholly self-made. We forgot because we were not meant to remember.
Proponents of the mortgage-interest deduction often claim that the benefit is a big help to middle-class homeowners. Vincent Wisniewski Jr. is one of them. Wisniewski, 35 and white, with brown hair down to his shoulders, worked with Diaz at HomeStart, but as a program manager. He and his wife, Kelly Kristof, an emergency-room technician, make about $79,000 a year, roughly the median household income for families in the Boston metro area. They live with their 9-month-old son in a 985-square-foot condominium that Wisniewski bought three years ago for $190,000.
Set on a quiet street in Winthrop, a community hemmed in by Logan Airport on one side and the Atlantic on the other, the condo features two bedrooms, a square kitchen with white cupboards, a television room and “the quiet room,” with hanging plants, guitars mounted on the wall and a large bay window. From the small back patio, the ocean is close enough to smell. The mortgage and property-tax bills are about $915 a month, and the monthly condo fee is $368, which includes expensive flood insurance. Even counting utilities, Wisniewski and Kristof spend about 22 percent of their combined income on housing costs. With what’s left over, they buy items for their son, take vacations and enjoy local restaurants. “We definitely feel comfortable,” Wisniewski told me.
https://mobile.nytimes.com/2017/05/...equality.html?referer=https://t.co/v6j5aLFTCn
