Congressman Earl Blumenauer doesn’t consider himself naive. He’s been in politics most of his life, from the Portland City Council to serving Oregon’s 3rd Congressional District for more than two decades in Washington, D.C.

But this summer, he experienced an awakening of sorts – spurred on by this year’s 400th anniversary of U.S. slavery – about how much our national housing crisis is rooted in systemic racism.

“It’s taken me recent months to come to grips with the scale of government-sanctioned segregation, closing people out of programs, how pernicious it has been and the compounding effect,” Blumenauer said in an interview at Street Roots’ office. “It’s a scandal. ... When you look at the big picture in terms of what happened to African-American veterans, what happened with New Deal projects, and more recently with redlining and sundown laws – these are all government-sanctioned discrimination against significant portions of the population.”

Democratic U.S. Rep. Earl Blumenauer represents Oregon's 3rd Congressional District.

His research on the issue and his proposals for solving the nation’s housing crisis makes up a new report by his office titled “Locked Out: Reversing Federal Housing Failures and Unlocking Opportunity.” Blumenauer was in Portland on Thursday to talk about the report and his plan for ways the federal government can address public-housing shortages, homelessness, skyrocketing rental prices, homeownership inequity and discrimination.

Shelter and housing, he told Street Roots, is a fundamental human right, along the lines of nutrition and health care, making it worthy of federal support, not neglect. However, what federal support there has been has historically and deliberately favored white homeowners and discriminated against communities of color.

“We spend lots of money on housing,” Blumenauer said. “We spend billions every year. But it just tends to be concentrated on those who need help the least, and we shortchange those who need help the most. It’s long overdue that we acknowledge it.”

FURTHER READING: Oregon’s biggest housing subsidy goes to top earners (January 2017)

Blumenauer’s report is part policy map and part history lesson. It looks back to the roots of the nation’s housing programs, from the theft of Native American lands to the subsidized housing built cheaply for white settlers by enslaved Africans.

Owning property quickly became the chief source of wealth in the new country, and for centuries it was reserved almost exclusively for white people.

Even after the turn of the century, with African-American workers providing the labor during World War I, housing was substandard. Discrimination existed legally when it came to securing home loans or benefits from the Veterans Administration, the report notes.

And local governments freely mandated segregated housing developments. The GI Bill, with its guaranteed housing loans, was a vehicle of wealth for white veterans buying new homes in the suburbs. But banks wouldn’t loan to black veterans for homes in black neighborhoods, and housing covenants and racism kept them out of white communities.

The federal government was investing significantly in housing during this time. In 1934, Congress passed the Housing Act, creating the Federal Housing Administration and providing loans for housing and home improvements. “These loans helped subsidize neighborhoods built entirely for whites, with explicit requirements that none of the homes be sold to African Americans,” according to the report.

Subsequent programs in the ’40s and ’50s continued to push housing development in white communities and deny access to African Americans. “African Americans would continue to be denied access to federal programs as well as the right to buy homes in white neighborhoods, even if they could afford it. If they were able to buy a home in a white neighborhood, they faced fierce opposition and sometimes violence,” the report states.

In 1969 – only 50 years ago – Congress passed the Fair Housing Act that prohibited discrimination in the sale, rental or financing of housing based on race, color, religion, national origin, sex, familial status or ability. It called for the federal housing administration to prevent segregation and discrimination based on race and ensure housing is available to all. “Many developers and public housing authorities blatantly ignored the law and continued to discriminate for decades,” the report notes.

Blumenauer doesn’t buy the argument that the solution should be left to a free market, not government.

“The private sector has had dramatic assistance from government,” Blumenauer said. “What’s happened with exclusionary zoning programs, what’s happened with the loan programs, what’s happened with the tax system. There’s no free market for housing in this country. You’ll look in vain. And we need to acknowledge that.”

Robbed of wealth-building tools for generations, progress was slow-moving under the Fair Housing Act. But homeownership rates did improve among black households, approaching 50% at one point. But that progress has receded. In 2018, the black homeownership rate nationally was just 43% – nearly 30 percentage points below white ownership.

In his report, Blumenauer provides 22 ideas to correct the nation’s housing crisis, but chief among them is ramping up investments in housing for extremely low-income renters, which necessitates public housing. That means repealing the Faircloth Amendment.

That amendment prohibits public housing authorities from constructing new public housing if it would create a net increase in public housing as of October 1999. Over those 20 years, public housing stock has declined, with an estimated $35 billion shortfall in investment for maintenance and construction and a wait list totaling 1.6 million people nationally, Blumenauer said.

“One of the things that drives me crazy is we’re prohibited from investing in public housing,” the congressman said. “That’s the only way we can help people with extremely low incomes is by federal investment. The private sector cannot support them, won’t support them and can’t afford to support them – and doesn’t want to.”

One way to finance that investment is to change the mortgage interest deduction, a $30 billion national subsidy to homeowners tiered to benefit the wealthiest Americans most – even on second homes. Blumenauer wants to end the deduction on second homes and restructure the deduction into a tax credit capped at 15% of interest paid, which would apply to all taxpayers, not just the small fraction who itemize their tax returns.

He would also create a renter’s tax credit so low-income renters wouldn’t have to pay more than 30% of their income toward rent, the percentage the federal government considers affordable.

According to the report, more than half of all renters pay more than 30% on rent. In Multnomah County, approximately one out of every four renters is paying more than 50% of their household income on rent. For renters with extremely low incomes, three out of four are paying above 50%.

Blumenauer is also calling on the federal government to enforce the anti-discrimination laws already on the books and establish targeted loan programs for populations that were discriminated against for generations. Blumenauer proposes a new “Restorative Justice Home Loan Guarantee Program” to support homeownership for first-time homebuyers living in formerly redlined or segregated areas. He would also reinstate the first-time-homebuyer credit, which was in place between 2008 and 2011.

Other initiatives include doubling homeless assistance funding, increase funding for eviction prevention, providing federal incentives for statewide caps on rent increases, and expanding Section 8 Housing Choice Vouchers to cover everyone eligible. Currently, only about one in every four applicants receives a voucher. According to the report, there are 2.8 million families waiting for Section 8 Housing Choice Vouchers.

Blumenauer returned to Washington this week after the August recess with plans to shop his proposals among lawmakers for policy action, and he hoped the context of our current housing crisis would help drive change.

“I do not underestimate the power of knowledge and understanding,” he said. “The more people understand how we got to where we are now, and how we disadvantaged certain populations, particularly African Americans and Native Americans, we can help flip the script a bit. I hope to have people understand that we have an obligation to help people who have been suffering from these policies for generations (and) to understand that we’re paying a tremendous price right now for failure.”

Email Executive Editor Joanne Zuhl at joanne@streetroots.org.

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