US Rep. Earl Blumenauer Argues for a Reset & Reevaluation of Federal Housing Programs

Congressman, you’ve just released a report, “Locked Out,” which addresses the federal government’s role in the housing crisis of our time. Elaborate on your thesis. 

Earl Blumenauer: Every successful city in the West—Los Angeles, Portland, Seattle, San Francisco and many around the country—are facing a housing crisis of really dramatic proportions. As I’ve been looking at this, I see the convergence of a variety of forces. First and foremost, there is a result here of over a century of blatant racial discrimination by the federal government.

I was aware of some of the redlining problems, unequal implementation of anti-discrimination, and the problems faced particularly by African-Americans. But the more I got into this, I was just stunned at how deep, pervasive, and pernicious the federal government’s role was—especially with the New Deal. President Roosevelt cut a deal with the Devil by holding back federal housing assistance for African-Americans to placate the congressional barons and be able to move other pieces of his legislation through; but, it persisted. 

This to me is one of the most jarring aspects of what we‘ve had for over a century. African-Americans were systematically denied access to the escalator of homeownership to create generational wealth. This is in addition to the blatant, ongoing problems of discrimination, the federal government systematically underinvesting in housing for those who are most in need, and it all comes together to compound the crisis that we have. 

I have been struck for some time about how we provide lots of federal support for housing, but it goes to people who need it the least. Even the home mortgage interest deduction—which has been somewhat curtailed—provides far more benefit to upper-income people, particularly in the top 5 percent, who would have housing without it. We’re still subsidizing second homes for heaven’s sake!

At the same time, the federal government has been cutting back on housing assistance for those who need it the most. I sincerely believe that we need to reverse those priorities and get the federal government back into the game, because no community—in California or otherwise—can afford to do everything that’s needed to deal with this multifaceted housing crisis. The federal government needs to be there.

The Report forcefully asserted that the federal government has never had a comprehensive vision to provide a range of affordable housing. Could you elaborate?

Providing for the housing needs of 325 million Americans in a variety of communities, there are different challenges that people face. One of the fundamental challenges is dealing with extremely low-income citizens. These are people who have learning disabilities, physical or emotional problems who are never going to be a position to provide for their own housing. Many of them need special help to be able to live in housing by themselves. The federal government has systematically reduced its involvement in the provision of public housing, shifted its priorities, and cut back on new construction. We don’t have that foundation for the extremely low-income people. 

Second, I mentioned how the subsidies are upside down. People making hundreds of millions of dollars a year get great benefit from the mortgage interest deduction, but lower and middle income people who would benefit from it the most receive only a token amount. And, there is nothing for a large and growing number of people who rent. 

I happen to be a proponent of homeownership for those whom it makes sense. It does build generational wealth and the sense of being anchored in the community. For many people, they’re going to be renters and, for many of them, it’s a rational choice in terms of how they use their capital. But people who rent do not get the benefits; tax benefits flow to investors and landlords. 

We want to be able to help bridge that gap for lower income renters to be able to keep as many renters as possible below that 30 percent threshold of spending an already inadequate income on housing.

Resetting these policies appears to be your ambition for the federal government. One such policy problem most metropolises are experiencing is the growth in their homeless populations. Share the national homeless policies enumerated in your plan that would offer local jurisdictions much needed assistance? 

Part of it is in the other elements of the plan that includes renter relief and helping people be able to be in their own home. Help people from drifting into homelessness and having that foundational effort for extremely low-income people where public housing is available.

There are other things that the federal government can and should be doing. In concert with local authorities, we ought to make it easier for people to have access to housing. If you look at programs—for the homeless, for people with special needs, for people suffering or recovering from addiction, and for people comi­­ng out of incarceration—around the country, people often face hurdles and have to jump through hoops before they can qualify. These are people who really need help coping in the first place. 

By forcing them to go through qualifications that seem, from a distance, rational for average Americans—like being sober and following the rules—the problem is that for most people, being able to organize their life and follow the rules requires having stable shelter. If you make the rules and regulations a precondition, they’re not going to be able to do that. If they have a stable living environment where they can shower, have an address, sleep safely, store their goods, and have interaction with people who run the facilities, they’re more likely to get help. It becomes easier to provide them the counseling and support that they need.

Once they are stable, the savings and benefits are extraordinarily significant. I’ve seen studies that if you release somebody from treatment for substance abuse out into the community without stable housing, those people are going to end up having $15,000 to $20,000 a year in medical expenses or more. Those medical expenses are not paid by those people, they are picked up by the public. We pay that.

Being able to make entry into housing easier and more direct makes it more likely that they will be successful without the hoops and preconditions, rather than less. We need to assist people to prevent them from being homeless in the first place, and part of that is providing people with legal assistance to protect their rights they exercise as tenants. If you have access to legal counsel, you’re much less likely to be summarily evicted. You’ll be able to negotiate, make changes, and we need to have the federal government step up and be a part of that. 

We’ve got efforts to try and coordinate for homelessness—and we’ve had some success with homeless veterans—but the federal government needs to accept this as a primary responsibility rather than as has it has been done. We must look at it primarily, not as a local or state problem, but a national challenge. We have national programs that can help. 

Before being elected (& many times re-elected to Congress), you spent 20 years in local government in Portland, Oregon. What do local officials truly want from the federal government to address the housing challenges identified in your “Locked Out” report? 

We worked with our local elected officials and advocates here in the Portland area to look at the big picture. They are uniformly supportive of an enhanced federal partnership. In Portland, we have had remarkable success in terms of getting some local resources and building new housing. We’ve had the private sector step up with emergency services, and people are being very supportive of agencies that provide assistance to the homeless or others that are at risk. But again, they can’t do it by themselves. 

The federal government needs to be involved with a partnership and a framework that’s trying to deal with the population holistically. You’re doing some remarkable work in California, but it’s catch up. There’s innovation taking place in terms of the way we plan and zone; we all agree that housing supply needs to be increased. 

And, candidly taking a hard look at what drives up the cost of low-income housing, because it’s extraordinarily expensive. Some of that is rules and regulations and some of it is the development hoops that are required. Local government would be much better off if the federal government was there with policy and funding to deal with the population that has severe special needs. 

This is bigger than one community, city, or state; there’s a profound social and economic dynamic, and we need to have everybody participate. The federal government does invest lots of money on housing, but it flows primarily to people who need it the least. They’re involved with things like healthcare, but these are after the fact. If we have a comprehensive approach—for a federal partnership with the state, local, and private sectors—we’ll get more value and do it faster.

In the quest for appropriately scaled federal housing program, does the nation need the equivalent of what the GI bill after World War II provided returning veterans? 

It’s extraordinarily difficult in this era to do something on that massive scale, but the pieces that I’m talking about—in terms of affordability, converting the mortgage interest deduction into a tax credit, and building 5 million units of public housing for low- and moderate-income people—will be groundbreaking by prioritizing people who will need it most. 

This is a theme for me throughout the reassessment of our housing policies: directing the time, energy, and most importantly financing for those who are most in need and most at risk.

Many of the recent Planning Report interviews we’ve published were pitched as bold and transformative solutions for addressing housing and homelessness. That’s not apparently the ambition of your congressional office’s report. 

I want to establish the conditions so we can go forward. I think it’s going to take a reset and reevaluation. I would like to see greater investment faster, but the things we’re talking about here that deal—for example—with renter relief, would help more people more broadly. Doing the public housing investment for the extremely low-income people, the private sector is not going to meet those needs. I do recommend an investment fund for equitable homeownership, a restorative justice home loan guarantee program, that would help people in communities that have been discriminated against—especially African Americans. 

These are all elements we could put in place as a comprehensive approach, and I’m open to people who want to carry it further. I want—at least the people in my part— to take a comprehensive approach to housing policy with this report and have it be a cornerstone of what we’re taking to the voters; hopefully some of it moving in this Congress, but certainly in the 2020 election. I want housing to be a critical point. 

I did a lot of work with the infrastructure for transportation in the last election cycle. We didn’t really regard housing as a fundamental part of that infrastructure, and I think that was a mistake. I’m trying in a small way to remedy this with a different vision. The other thing that is going to have to get more attention is the role that doing housing right is going to play in solving the climate crisis. 

We have policies inconsistent with planning, zoning, and transportation; in our community we’re actually seeing affordable housing being priced away from transit. These areas are more desirable, so the private sector is bidding up the cost, negatively affecting ridership. We need to be looking at how we connect these as part of our initiative to reduce greenhouse gases.

With your experience in authoring Portland and Oregon’s groundbreaking land use laws ,  what has happened in the two or three decades since that informs your work on infrastructure investment and now housing at the federal level?

 It’s been a mixed experience for me. I was in the Oregon legislature when we implemented a program to deinstitutionalize people with mental problems. As a 20 or so year old legislator who is much smarter now than he was then, it made perfect sense; we’d get them out of the institutions, we’d save money, and we’d have resources—counseling, medication, medical care—to give them. As luck would have it, by the time this hit, we ran into a recession in Oregon. I was in local government and I watched my formal colleagues in the Oregon legislature cut back on the resources needed to make deinstitutionalization a success. That started us on the way.

I was Portland’s Commissioner of Public Works when we embarked upon the Central City Plan; some breathtakingly effective and bold community planning processes. They were faster and more successful than was anticipated. But we didn’t work with the people whose neighborhoods were gentrifying to help capitalize on the increased value in their property. Many people came in and flashed more money than people thought they would see, but a fraction of what they’d benefit from keeping the property if they refinanced. 

Many of these people had subprime loans even though they could have supported conventional loans. We didn’t really understand that dynamic or how fast it would occur, and so there has been more displacement than there should have been. That troubles me, and is part of what I hope we can correct now in terms of targeting the benefits of the program for people who need it the most and being sensitive to the impacts. All while understanding that doing housing policy right is one of the most powerful things we can do to bridge the wealth gap, get people on the escalator of wealth accumulation, and make sure fewer people are rent burdened.

We found that we weren’t prepared for our plans to succeed as rapidly as they did, and we didn’t take the time to equip the impacted community to take advantage of it rather than have it roll over them.

Having for decades championed livable communities, housing affordability and climate action, would you agree that state action that upzones residential property likely increases the property value of the underlying land and accelerates the gentrification and displacement. Opportunity Zone equity is available to invest in housing, are you not concerned that gentrification and displacement will accelerate exponentially?  

It does. As I mentioned, we did not deal with these in a comprehensive fashion and there were unintended consequences. Part of what is going on in terms of how people are living today and what happens in terms of attracting people to walkable, transit-oriented communities is that—unless great care is expended—you can end up making some of these problems worse.

We have a modest rent regulation effort in Oregon, but it’s certainly a reversal of decades of policy where rent controls were perceived as attacking housing supply. If these things are not done carefully you can end up making things worse, which is why I want to make sure the federal government is fully engaged.

We are working hard to have more tools for people to stay in their communities and—in terms of redevelopment—that there are people who have the right of first refusal or the right to come back; that we share some of the upside in terms of value increase that local governments and developers capture from that value, and make it available to people who were previously in that community. 

We don’t have to have the benefits of increased value flow to just a fortunate few; this has been a historic problem. If the federal government would have retained the ownership for the exit property and intersections around the interstate freeway system, that appreciation of value would have paid for the entire interstate freeway system without any gas tax. I think we need to be more creative, and some of the things that are going on now with the tax code and development can make it worse.

Let’s conclude with your assessment of the degree of difficulty of resetting federal public policy and bold new directions in today’s hyper-partisan Congress. 

Particularly in recent days, at times it seems almost impossible. As a practical matter, not everybody is caught up in the latest Trump drama, whatever it might be. There are men and women in both parties that would like to accomplish something, and there’s an opening looking at infrastructure broadly, investing in our communities, and dealing with resilience. These are areas that are actually going to save us money if they’re done right.

There is an appetite for some change; there is a realization that we have made mistakes in the past and that we need to make sure that we aren’t leaving anybody behind; this one of the reasons we released the report. We did a great deal of groundwork in there talking about past mistakes. People need to understand that the current housing crisis and the discrimination was purposeful, and they are the result of the choices we’ve made to benefit some and exclude others.

The sooner we recognize that and think about ways to expand the winners’ circle. We’ve seen around the country—and you’ve helped point the way in Southern California—transportation initiatives that have broad buy-in from the public that recognize diversity and doesn’t leave people out, making it inclusive. That has enabled you to have some really remarkable success at the ballot box. We need to do the same thing with housing; we need to be patient and strategic, and the federal government needs to be your partner.