Real estate, risks, economics, & more: links & commentary for April 18, 2019

Home sale prices in Opportunity Zone jump 25%:

Critics of the program still worry it will only benefit wealthy developers in gentrifying and up-and-coming areas that happen to be in Opportunity Zones, and that the truly distressed communities will be ignored.

The political analysis in the article is wrong. It’s behind the times.

Modern Monetary Theory, explained:

Warren Mosler, a hedge funder who’s helped popularize MMT especially within the finance world, has argued that the government doesn’t need to levy any taxes to pay for Medicare-for-all. Laying off the millions of people doing health care administration for private insurers and hospitals would be a major deflationary event, he argues, so if anything, the government should offer a tax cut or another spending increase to “pay for” Medicare-for-all in inflation terms.

Many people don’t believe me when I tell them that there are those who believe capitalism is right and democracy is wrong.

He [Stephen Moore] also “repeatedly said he believed capitalism was more important than democracy,” ….

The People should decide via pure democracy exactly how much and where and when they want to allow capitalism or public ownership. The People should democratically decide the mix, the ratio. It is absolutely wrong to leave it up to historically continuous elitists making such choices over the People’s objections.

This could help tenants pay the rent.

Congressional Dems Are Backing A Tax Plan That Would Actually Help Poor People:

Last week, Sens. Sherrod Brown (D-OH), Michael Bennet (D-CO), Ron Wyden (D-OR), and Richard Durbin (D-IL), introduced legislation to expand the EITC for parents and significantly boost it for the childless — increasing the maximum amount a childless worker could get from $529 to over $2,000. It also allows recipients to access up to $500 ahead of tax time, which would hopefully provide families relief throughout the year, not just in one lump at tax time, so they don’t have to turn to payday lenders or go into debt when emergencies arise. The bill has garnered support from nearly every Democrat in the Senate.

In 2017, Brown and then-freshman Rep. Ro Khanna (D-CA) put forward a plan that would have expanded the EITC even more for a poor family with two children, increasing it from the current maximum of about $5,700 to more than $10,000, while childless workers would see their credit grow six-fold. The two lawmakers, along with Rep. Bonnie Watson Coleman (D-NJ), resurfaced the idea in February and extended it to students and people caring for young children, aging parents, and other relatives — none of whom are currently eligible.

Will we survive the next financial crisis?:

If the regulatory system had been less Balkanized and more capable of addressing the risks, if crisis managers had been empowered all along to use overwhelming force to avoid financial collapse, and if there had been mechanisms in place from the start to ensure that the financial system would pay for its own rescue, the fire would have been less intense, and the firefighting would have seemed less inconsistent and unfair.

A DECADE LATER, the vital question to ask is whether the United States is better prepared today. We believe the answer is: yes and no.

LA takes a stand against SB 50:

As of last year, the city had produced less than one-quarter of the low- and very low-income units needed to satisfy its 2021 targets, according to the California Department of Housing and Community Development.

“We need to build more affordable and workforce housing, but we need more tools to do this,” said Ryu.

SB 50 would require cities and counties without certain affordable housing requirements to include affordable units in buildings with more than 10 units. In buildings with more than 351 units, for example, 25 percent would have to be set aside for low-income tenants.

“It doesn’t do enough to stop displacement,” said councilmember Mike Bonin. “It has to do a hell of a lot, a hell of a lot more, to get us a lot more affordable housing, and have real significant protections in there to protect what exists now.”