California’s housing crisis seems likely to soon become significantly more complicated – and quite possibly worse for poor residents who rely on federal help. That’s because President Trump’s proposed 2017-18 budget both undercuts and targets many programs that are part of the traditional government approach to providing affordable housing.

Trump’s goal of cutting corporate taxes from the present 35 percent to 15 percent has already led companies to lose interest in using tax credits for construction of low-income housing that have been in place for three decades. The Los Angeles Times and the Boston Globe have both reported on the chaos this has caused with pending projects whose financing has either disappeared or gotten much shakier because corporations expect a much-diminished tax burden from Trump and the GOP-controlled Congress.

Trump’s proposal to cut the Department of Housing and Urban Development’s budget from $46 billion to $40 billion would eliminate the $3 billion Community Development Block Grant program, which has been used to upgrade and restore decrepit housing stock and to fund shelter for the homeless.

Since most of the HUD budget goes to housing assistance, such efforts would be pinched. Trump hopes to end the HOME program, under which federal funds are used to help first-time homeowners with their mortgage down-payment. While Trump’s budget only calls for a reduction of $300 million – from $19.6 billion to $19.3 billion – in the federal budget for Section 8 housing vouchers for poor people, the actual effects of his budget on the program could be dramatic. Rep. Karen Bass, D-Los Angeles, told The Los Angeles Times that she expects thousands of Californians will lose access to the vouchers.

The Washington Post reported other federal subsidies would be much harder hit than Section 8 and that funding for major repairs at public housing would be cut 32 percent.

Like Gov. Brown, new HUD chief wants to ease housing regulations

Advocates for traditional federal housing programs denounced the HUD cuts as mean-spirited and unjustified. But the HUD budget cuts reflect both Trump’s campaign promises to reduce domestic spending and HUD Secretary Ben Carson’s view of government assistance programs as making Americans dependent on government and reducing their initiative to improve their lives.

In Carson’s testimony in his Senate nomination hearing, the retired neurosurgeon also sounded strikingly like Gov. Jerry Brown in decrying the idea that government-first approaches were a good way to tackle housing shortages.

“Overly burdensome housing regulations are bad for everyone and are increasing income inequality,” Carson told the committee, noting that home-ownership in the U.S. was at a 50-year low. “Complex webs of covenants and zoning ordinances across U.S. cities — in particular for low-density development — superimposed on already highly segregated neighborhoods have slowed integration.”

Last year, Brown called for a sharp reduction in the obstacles that local governments and local activists could put on new housing construction. He wanted projects that met certain conditions in providing less expensive housing and followed general zoning rules to have “by right” authority to build.

Like New York Mayor Bill de Blasio, Brown says housing costs will never come down as long as demand is high and supply is limited. Rents double or more the national average are common in California’s coastal cities, even in relatively poor neighborhoods.

The problem appears to be accelerating in the Golden State’s most populous region. “Rent increases in five Southern California counties are outpacing inflation at the fastest pace in 30 years,” the Orange County Register reported in October

But Democrats in the California Legislature blocked Brown’s proposal and appear more committed than ever to using government-built housing and rent voucher programs to help poor people afford shelter, introducing more than 100 bills this session that follow this general playbook.

Labor unions and environmentalists – key players in the Democratic coalition – opposed Brown’s proposal, which would have weakened the sweep of the California Environmental Quality Act. The landmark 1970 state law is often used by unions and environmentalists to win concessions from developers or to block projects outright.

But old assumptions that Brown’s main foes would be environmentalists and trial lawyers have been undercut repeatedly in recent weeks. Instead, perhaps his most formidable obstacles to making the Golden State more hospitable to new construction are local officials eager to maintain control over what their communities look like. Across California, they’re preparing or considering ordinances that require local voter approval of projects of a certain size or density or otherwise put hard limits on certain types of development — measures that would block key provisions of Brown’s plan.

A recent Voice of San Diego article noted such efforts in Del Mar, Costa Mesa, Los Angeles, Santa Monica, El Dorado County, Cupertino and Gilroy. Among the requirements that those communities may impose: requiring voter approval of most new construction higher than two stories and creating zones in which any construction required ballot OKs.

NIMBYism popular in many communities

Critics claim this would worsen the California housing crisis, not help it. But in city after city, officials say they are responding to local sentiment.

This gets to a key weakness of Brown’s strategy: While there is a growing understanding that the best way to relieve California’s housing crisis is by adding more stock, people are often only enthusiastic about the idea in the abstract. When it comes to one’s own community, enthusiasm usually wanes as part of a “not-in-my-backyard” attitude.

A classic example of this NIMBYism is now playing out in Millbrae, just south of San Francisco, in the region with the highest housing costs in California. A proposal to build 300-plus homes with office buildings and retail space next to a Bay Area Rapid Transit station — a prototypical “smart growth” project — is facing growing opposition.

The project would be on 116 acres already owned by BART. It complies with local housing policies and comes after years of complaints from area residents that their children can’t afford to live near them.

But at a July 12 City Council meeting, residents jammed the chambers to warn the project would worsen crime and traffic and harm quality of life. According to a local newspaper account, one resident even said the BART effort amounted to a criminal enterprise — “like the Wild West for outlaws to come and take stuff.”

Former San Francisco mayor touts status quo

That same day, the San Francisco Chronicle printed an op-ed by former Mayor Art Agnos blasting Brown’s housing proposal and offering a defense of the status quo of strong regulation. Agnos challenged the idea that adding more housing stock is the best way to bring down housing costs and said “rent stabilization” — i.e., rent control — should be an option for every city.

Agnos also called for more government funding for affordable housing programs that critics say amount to lottery programs which only help a relative handful of families.

From 1993-2001, Agnos was the western regional director for the U.S. Department of Housing and Urban Development. On his personal website, he depicts his efforts to help poor people find housing in San Francisco with government subsidies as a rousing success story.

Agnos doesn’t mention this claim in the Chronicle op-ed.

“Secretary Julian Castro will be in Los Angeles on Tuesday to meet with Mayor Eric Garcetti, City Council members and county supervisors, HUD spokesman George Gonzalez said,” according to the Los Angeles Times.

Hoping for cash

Despite the crisis, which has drawn unfavorable media attention amid L.A.’s recent boom in homeless-heavy areas like the city’s downtown, expectations were set low. “No major announcement was expected to come out of the meeting. Gonzalez said it was intended as an ‘exchange of ideas’ on the state of homelessness in Los Angeles,” the Times added.

City leaders hope the agency’s concern could manifest in additional funds to fight what Mayor Eric Garcetti has declared a public emergency around homelessness, as Los Angeles city and country governments both prioritized the issue. As the New York Times reported last month, the announcement marked the first time a U.S. city had made such a proclamation. “National experts on homelessness say Los Angeles has had a severe and persistent problem with people living on the streets rather than in shelters — the official estimate is 26,000,” noted the Times.

Uncertain goals

After announcing his initiative, Garcetti said, “he received a call from Castro, who had toured Skid Row earlier this year,” as the Los Angeles Daily News reported.

“The focus on homelessness came after a count conducted this year by Los Angeles Homeless Services Authority showed that the number of homeless people in the county increased by 12 percent since 2013. More than 44,000 people are homeless in Los Angeles County and about 70 percent of them live on the streets, in vehicles or in make-shift encampments.”

Questions remained as to what exactly Castro intended to accomplish through his visit. “He did indicate several times that HUD approved of the way that local elected officials were tackling homelessness,” Southern California Public Radio observed; in remarks, Castro noted that “more than anything else, I’m here […] to listen,” while insisting that “criminalizing homelessness is not the best approach. That is something that HUD has recognized very firmly.”

Despite the focus on L.A.’s significance to the Department of Housing and Urban Development, city officials appeared to place their funding hopes in the Federal Emergency Management Administration. Although former Secretary of Labor and current L.A. Supervisor Hilda Solis recently invoked the agency, the Daily News observed, its spokesman for the area covering Los Angeles threw doubt on the idea. “For homelessness, I’ve never heard that as a cause of an emergency because that’s a local social issue that would generally be handled at the city or county or state level,” he said.

A big pledge

In the interim, Los Angeles has pledged to allocate substantial sums to curbing homelessness, which has become an especially galling problem among veterans. “Members of the City Council say they are working on a $100 million plan to combat homelessness,” SCPR reported. “County supervisors this month voted to boost spending on homelessness to $100 million for the year. Earlier, Mayor Eric Garcetti had said he would release a blueprint to end homelessness in August.”

Garcetti’s priorities around urban issues have not been without their critics. At a recent speech in South Los Angeles, the mayor was confronted by Jefferson Park protesters, some of whom pounded on his vehicle and demanded the resignation of the current Los Angeles Police Department chief Charlie Beck. “I am disappointed that our conversation was cut short when there is so much work for us to do together to make our neighborhoods stronger and safer,” Garcetti later remarked, according to CBS Los Angeles. “I believe in our city and my commitment to our shared concerns continues stronger than ever.”

What’s the definition?

First, look at HUD’s mission:

HUD’s mission is to create strong, sustainable, inclusive communities and quality affordable homes for all.

HUD is working to strengthen the housing market to bolster the economy and protect consumers; meet the need for quality affordable rental homes: utilize housing as a platform for improving quality of life; build inclusive and sustainable communities free from discrimination; and transform the way HUD does business.

Last week HUD proposed new rules requiring counties and other entities receiving federal grant dollars to “affirmatively further fair housing” in the suburbs for minorities. Grantees who fail to comply will be denied federal funding.

Calling the plan “A better bargain for the middle class,”  President Barack Obama and HUD Secretary Shaun Donovan said, “It’s time to turn the page on an era of housing bubbles and taxpayer bailouts, and build a new housing finance system that will provide secure homeownership for responsible middle class families.”

A Better Bargain for Responsible, Middle Class Homeowners:

* Help responsible families save $3,000 a year by refinancing while mortgage rates are still low

* Take executive action to cut red tape so responsible families can get a mortgage

* Fix our broken immigration system to increase home values

* Rebuild communities hit hardest by foreclosure

* Create and preserve affordable rental housing by passing a bipartisan Senate proposal

Never mind the federal government is largely responsible for manipulating the last housing meltdown. California’s real estate market is only just now starting to show signs of improvement. What better way to weaken it again?

According to HUD, long-term solutions to usher in “fair housing barriers,” include “helping people gain access to different neighborhoods and channeling investments into under-served areas.”

And, HUD will be pressuring suburban neighborhoods and landlords to take the federal low-income Section 8 housing chits.

Social justice, social engineering

“In what may be the most ambitious social-engineering project undertaken by the federal government, the administration is mapping every neighborhood in America by race,” Investors Business Daily reported. “The stated purpose is to use the data to compel local officials to loosen zoning laws and build more public housing, thereby offering more poor inner-city minorities better opportunities for housing and education.”

And the purpose of this ridiculousness is forced racial integration.

If passed, HUD would direct local governments to “overcome historic patterns of segregation, … and foster inclusive communities for all,” through zoning ordinances and planning commissions using data on “racial and economic disparities” in their communities.

At the same time, HUD is pressuring suburban landlords to accept Section 8 housing vouchers. Any home for rent, in any neighborhood, could be targeted by county officials on behalf of HUD for Section 8 housing.

How will the feds accomplish this?

“First, there are steps we can take right now that could help immediately strengthen the housing market and make sure that no homeowners or communities are left behind by the housing recovery,” HUD’s Donovan said. “This includes helping more responsible homeowners save money by refinancing their mortgages, cutting red tape so responsible families can get a mortgage, helping hard-hit communities rebuild, and preserving access to affordable rental housing.”

“Second, President Obama put forward a plan to reform the housing finance system, centered on four core principles:

* Put private capital at the center of the housing finance system.

* End Fannie Mae and Freddie Mac’s failed business model so taxpayers are never again on the hook for bad loans and bailouts.

* Ensure widespread access to safe and responsible mortgages like the 30-year fixed rate mortgage in good and bad economic times.

* Support affordability and access to homeownership for creditworthy first-time buyers and access to affordable rental housing for middle class families and those aspiring to be.”

These are decisions and plans by people with ideological axes to grind. Sadly, people are just the pawns of these ideologues.

“We have got to shape a future where ladders of opportunity are available for all Americans,” Donovan said. “For African Americans, this is critically important.  Historically, for this community, the rungs on these ladders have been too far apart -– making it harder to reach the middle class.”

By forcing a victim mentality on everyone, we all lose. Welcome to an America where it no longer pays to work hard to get ahead.

This is just one of the many ways the government is destroying the hard working  middle class.

By Katy Grimes

The state of California is pushing welfare and food stamps very hard. They constantly advertise on the radio and television, and must have a huge public relations budget… paid for courtesy of taxpayers.

Here’s one ad for the “Women, infants and children” program:

Welcome to the WIC Show!
The show about WIC, for WIC and by WIC!

On our channel you’ll find five half-hour episodes made up of different segments that will interest everyone, especially parents of young children and pregnant women. 

The shows are designed to reinforce California’s Women, Infants and Children (WIC) education programs, highlight WIC service while at the same time entertain WIC clients.

Once you are in these programs, you get hooked into other programs: county health care, housing, school, daycare. Eventually, the government runs everything in the lives of those on government assistance. It’s no wonder President barack Obama got reelected.

CalFresh

The WIC ad says, “the food program is not a welfare program,” but you have a state case worker.

We can’t even call welfare what it is.

Food-stamp benefits usage is at an all time high. 46 million Americans are on welfare and use food stamps. One-third of all welfare recipients are in California.

The name of the California welfare food stamp program was changed to “CalFresh,” to take the stigma out of using welfare benefits. Recipients are given a debit card so they look like every other shopper when purchasing their items.

In Los Angeles County, more than one million people are signed up for the food stamp and welfare benefits, ranging from $200 to $1,500 a month.

In 2011, the federal Department of Food and Agriculture went all out on a national media awareness program. Here is a schedule of media buys in just L.A. County.

This was done because in some areas, welfare agencies believed that communities were “under served.” In Sacramento County, the Board of Supervisors even got involved, allowing the Sacramento Hunger Coalition to drive a campaign to expand the number of recipients.

“The Sacramento Hunger Coalition was founded in 1989 and now resides as a project of the Sacramento Housing Alliance’s Coalition on Regional Equity (CORE)’s food justice work,” the website says.

What a clever way to expand government. But welfare has become a giant ponzi scheme.

Even more interesting, is the list of publications below from the Sacramento Hunger Coalition… the links go nowhere. But this was what the entire hunger in Sacramento campaign was based on.

Hunger Hits Home 2012: Understanding & Combating Hunger in Sacramento County

A Primer on the Restaurant Meals Program in California: Preventing Hunger Among the Elderly, Disabled & Homeless in the Golden State

Homeless Nutrition Education Toolkit: A Resource for Nutrition Educators and Emergency Food Providers

Hunger and Homelessness in Sacramento: 2010 Hunger & Food Insecurity Report

I finally found one of the reports on hunger in Sacramento – I hope no one got paid to produce this.

Other government advertising

I hear government paid radio ads for bullying, FEMA, flood insurance,  Homeland security disaster preparedness,  the CA Earthquake Authority insurance, and ads about housing discrimination, paid for by the federal Housing and Urban Development department.

What a scam, all paid for by taxpayers.

By Chriss Street

The American taxpayer is about to be saddled with another multi-billions bailout of subprime mortgage loan losses  from the stealth Federal Housing Authority lending program that has been offering ultra-low 3.5 percent down payments since 2009.  Delinquency rates are already at 9 percent in California and expanding rapidly across the United States.

Subprime lending drove the U.S. housing bubble from 1998 until its collapse beginning in 2007.  Since that time, real estate prices have fallen by 35 percent across the United States.  Subprime was first hailed for its expansion of the number of people who could qualify for a mortgage.  But many of those borrowers fudged on their income and net worth levels in order to borrow more than their true incomes would allow them to repay.

Since the bubble burst and many sub-prime borrowers defaulted, the U.S. government has provided bank bailouts, a deficit-spending stimulus that will double the national debt from $9 trillion in 2007 to $18 trillion next year.

A Rasmussen poll taken just after the recent JP Morgan Bank derivative fiasco reported that 71 percent of Americans say the government should let banks that get into financial trouble be required to fail.  Banks are still blamed for causing the housing crash by lowering traditional mortgage loan requirements of 20 percent down payment and a 680 FICO credit score.

Taxpayers liable

Unfortunately, taxpayers are about to learn they are increasingly liable for another multi-billion-dollar subprime bailout.  The U.S. Department of Housing and Urban Development website trumpets: “FHA Loans Help You.”  In smaller print, that help is described as insuring your loan so your lender can offer you mortgage down payments of 3.5 percent of the purchase price that includes closing costs and fees in the loan.  And the FHA will allow you to buy a home, remodel and refinance your existing home or convert your equity into cash through a reverse mortgage if you are 62 or older.

All this FHA hoopla sounds a lot like subprime lending, because it is subprime lending!

Any bank that made this type of loan on its own would be required by regulators to classify the loan as a non-conforming investment and reserve approximately 25 percent of the amount of the loan in cash as protection against a potential subprime borrower default.  But the beauty of the FHA insured loan program is that banks collect fees for the risk-free processing of loans, and then sell the loans to Federal National Mortgage Corporation (Fannie Mae) or The Federal Home Loan Mortgage Corporation (Freddie Mac) for another profit.

Of course, both of these government sponsored enterprises have been operating in conservatorship (nice word for bankruptcy) since September 6, 2008 as a result of subprime loan losses.  Then-Treasury Secretary Henry Paulson said the next day:

“I attribute the need for today’s action primarily to the inherent conflict and flawed business model embedded in the GSE structure, and to the ongoing housing correction.”

That correction has resulted in 5 million completed foreclosures and another 8 million mortgages that are more than 30 days delinquent or in foreclosure.

Down payments

The Center for Responsible Lending, founded by ACORN, recently published a study reporting that requiring a 20 percent down payment would prevent 60 percent of all FHA borrowers from qualifying for a residential mortgage.  To analyze what it would take for a typical FHA borrower to qualify for a traditional mortgage, CRL selected an average family household led by a police pfficer, a teacher and tirefighter.  Relying on the Department of Labor Occupational Employment wage scales, assuming the average family could dedicate half of their 5.2 percent average savings toward a down payment on a 6 percent loan for an average hous,.  CRL estimated the typical American family would have to save for 14 years to afford a traditional 20 percent down payment loan.

Real estate experts have warned for years about the potential dangers of FHA mortgages because the 1 percent loan fee, 0.5 percent insurance costs and 6 percent real estate sales commission are all rolled into a 3.5 percent down payment.  Lenders refer to this as “hiding of the pickle,” because the borrower already has 4 percent negative equity when the mortgage is funded.

Falling prices

As home prices have continued to fall since 2009, most FHA borrowers are now saddled with mortgages that are substantially greater than the fallen value of their homes.  Many of these FHA borrowers are public-sector police officers, teachers, firefighters and others who expected to enjoy lifetime employment.  But local governments have cut 482,000 jobs since the beginning of 2009 and public sector layoffs are accelerating in the nation’s weakest real estate markets of California, Florida, Illinois, New York, Texas and New Jersey.

The Obama administration’s Office of Management and Budget estimated in October 2011 that  FHA’s $4.7 billion capital reserves will be wiped out this year, forcing the FHA to seek at least $700 million bailout from the U.S. Treasury.  Americans are justifiably angry at being required to bailout the banks’ irresponsible subprime lending.  Think how angry they are going be this election season, when they have to bailout the government’s irresponsible subprime lending.

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Chriss Street’s latest book: “The Third Way,” now available on  www.amazon.com