Monday, April 14, 2008

Brad Pitt. . .where to work most effectively


What follows is a letter from Andre F. Shashaty, Editor of Affordable Housing Finance, a trade journal of affordable housing developers and financeers. The catchy title got my attention. The essay is vastly more important, and the advice he gives Mr. Pitt is priceless.

No one can criticize Brad Pitt for what he has been doing in New Orleans. The only problem with his approach is that it simply isn't enough. While private, personal and group charity will always play an important role in community renewal, the scale of our problems in New Orleans and in every other urban center in the nation demand much, much more.

We need change in the worst way in terms of a national housing policy.

After you've read the letter, let me know your reactions.


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Who needs Brad Pitt?
BY ANDRE F. SHASHATY
AFFORDABLE HOUSING FINANCE • MARCH 2008

NEW ORLEANS—Visiting this city for the first time since Katrina, I was not that shocked by what I saw. After all, I’m from Youngstown, Ohio, which suffered a storm of its own, only an economic one.

In the Lower Ninth Ward, where actor Brad Pitt says he plans to build 150 homes, I felt New Orleans had a slight advantage over my hometown. It had the Army Corps of Engineers on hand to tear down all the dangerous hulks that used to be homes.

The problems this city faces are not that different than those of Cleveland, Youngstown, Detroit, or other cities that have been facing decay and decline for years. And if the home mortgage foreclosure disaster keeps getting worse, as it appears it will, other recently healthy urban areas will soon join this unfortunate club.

Sure, presidential candidates and congressmen are playing at housing policy as they realize the economic impact of the housing market slump, but they are tossing out possible solutions like baseball mascots tossing Cracker Jacks into the bleacher seats.

A year or three ago, those of you in the tax credit business could stick to your knitting and ignore the huge gaps in American housing and urban policy. Many of you wrote off the Department of Housing and Urban Development (HUD) and stopped dealing with that hellhole years ago.

But guess what? Your comfort zone is no longer a safe hiding place. Tax credit deals have been getting harder to put together for a while, but now we are reaching a critical phase as equity repricing continues for a second year and costs and allocating agency mandates keep increasing.

It’s time to wake up and smell the formaldehyde. We are at a crisis point in housing and urban affairs in this country. It’s no longer about complaints that our progress is too slow. Rather, as former Enterprise Chairman Bart Harvey told me, we are at risk of watching much of the progress we have made over 20 years disappear.

In 10 months, a new president takes office, and he or she will have a thousand things to worry about. We all know the fundamental nature of the nation’s housing woes and how an effective housing policy could help the economy, our children’s health and education, our transportation systems, and on and on.

But we also know that the folks in Washington and the folks advising the president-to-be have no idea what to do about any of this. It’s our job to tell them.

You have fought on the front lines of housing development. You’ve confronted NIMBYism. Now it’s time to go out and fight on the political front lines to elevate housing to be a key election-year issue and a top priority for the first 100 days of the next president’s term.

I wish Mr. Pitt good luck in his venture, but if he really wants to help New Orleans, he’d be in Washington, not the Ninth Ward.

He’d recognize that what’s needed is a new national housing commitment, and he’d lead a march on Washington. Imagine what might happen if he traveled across the United States, stopping at troubled neighborhoods and highlighting the scope and breadth of our housing and community development problems, arriving in Washington just in time for the inauguration of the next president.

Maybe that is too much to hope for, but we have to think big and act boldly to make the need clear. There hasn’t been a chance like this since the Tax Reform Act of 1986, and it’s up to us to take advantage of it. Read our story on what the next president needs to do about housing on page 24. And then get out there and take political action.

The time you invest in the next 12 months will determine what happens to this industry and the people it serves for many years to come.

[For more, visit http://www.housingfinance.com/.]


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10 comments:

Chris said...

"I wish Mr. Pitt good luck in his venture, but if he really wants to help New Orleans, he’d be in Washington, not the Ninth Ward."

I would support a new national housing commitment, but I won't support the idea that we should criticize people for taking immediate and direct action.

Why wait on Washington, when you can get started working on a problem now? Washington is not the only way to "really" help New Orleans. Alone, Pitt will never solve the problems of the Ninth Ward and neither will Washington.

Here is an interesting commentary on a new generation of 'do-gooders.' I'm more sympathetic to the proposed idea of government as a social 'investor' than social 'provider.'

http://www.nytimes.com/2008/03/21/opinion/21brooks.html?_r=1&oref=slogin

dmowen said...

In this case I wholeheartedly agree with Chris's post. In my opinion direct action by individuals is a far more appealing approach than "march on washington" style thinking. Obviously at some point government could be involved in providing funding to scale up successful projects, but I think the main function of government should be to provide the right set of legal and economic (tax) incentives to guide human nature (market forces) in the direction you want things to go.

Charles said...

I like Brooks' proposal - funding entrepreneurs to try out new ideas is probably cheaper than experimenting within the bureaucracy. His approach to scalability is intriguing, although public-private blends often generate the worst of both worlds.

But note that even the conservative Brooks needs government in some fashion for scalability. If Brad Pitt could lend his publicity and efforts as 1% of an effort to bring about a government program to rebuild just 15,001 homes, that would be more useful, as Brooks' dataheads would agree.

And the letter does seem overly negative towards a fairly great individual effort. I like that Brooks' plan encourages both individual efforts and government implementation of proven practices.

Robert Guest said...

I'm looking at my US Constitution and I can't find the terms "affordable housing" anywhere. Do I not have the have the most current version?

Maybe if we didn't so heavily tax the corporations that build homes, then tax the income of those who wish to buy homes, then zone and regulate every aspect of housing, and finally tax the property itself- maybe then housing would be affordable.

Finally, can we quit building homes below sea level? How hard is that to figure out.

Chris said...

Robert,

Will the Declaration of Independence work? Interpretation is dependent upon one's value system, but for me, 'affordable housing' is integral to "life, liberty, and the pursuit of happiness."

I personally value shelter enough that ideally I wish everyone could afford it. Tax me if it can help make it happen.

I do have to agree with you about building below sea level. I was looking today at some maps of how rising sea-levels will drastically change the Gulf Coast. If I were in real estate, I wouldn't be investing in New Orleans or any place else with a similar geography.

Robert Guest said...

DOI doesn't produce rights. Positive rights destroy freedom.

Volunteering to be taxed for your favorite cause is phony altruism. If you really believe in giving your money away for housing then do it. Don't use th state to take your neighbor's money.

If government could provide housing, education, and health care better than free people we would have lost the cold war.

There is no charity in using the government to give away housing to some, while the same government taxes people out of their homes.

Larry James said...

Sorry, folks, but the scale of the problem facing the urban poor--something that has nothing to do with the tax code as it relates to the poor--requires a public commitment. The essay simply argues that individual action without public involvement will just never get the job done. This has been our experience in Dallas.

Robert Guest said...

Larry,

The plight of the urban poor has a public commitment. There are programs at every level of government. I think what you mean is "my programs need more tax money".

Have you ever considered that your faith in government as the transformative force for good is misplaced?

After all the urban poor spent at least some time in socialized education, and most receive some sort of entitlement benefits. If government could solve all problems then China would have no urban poor. Is a newer better government really the answer?

Anonymous said...

"Is a newer better government really the answer?"

Yes! Next question?

Anonymous said...

All private philanthropy targeted at the poor taken together does not equal 1% of government funds targeted in the same direction. The simple fact is that without government intervention, we would have a multitude of people so desperately poor that widespread rioting or revolution would be a real and constant threat. So, realistically, we're only arguing about the details of what that government funding should look like. Arguments that government has no role to play are wholly unrealistic.