Charles Durrett: Organic policy solutions to affordable housing and homelessness
In Nevada County and many California areas, more and more people are unable to pay increasing rents, and even fewer can make a down payment on a home and manage a mortgage, so they face the prospect and reality of housing insecurity and even homelessness.
Well-intentioned, but extremely sparse programs from federal to local governments and nonprofits fund and support various housing solutions to reverse the tide. However, most public and private housing and homeless advocates agree that we cannot solve this conundrum with the paltry resources currently allocated.
In Texas, they have higher property taxes to help with the affordable housing crisis. In Pennsylvania, they reduce the levy on improvements such as homes and buildings and slightly increase the fee on land, which encourages landowners to use their land more wisely and put it to use, which helps affordable housing and increases development.
But we could do a boutique-like Nevada City transfer tax and reap some of the benefits when houses appreciate. Just a 10% tax on the appreciation at resale could easily help us alleviate housing stress for the folks who wash the dishes at the restaurants we frequent. Nobel Prize-winning economist Milton Friedman calls this the “least bad tax.”
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One of the leading causes of homelessness is unaffordable housing. Many cities and countries have lower rates of homelessness than Nevada County, such as Pittsburgh, Cleveland, Australia, New Zealand, Taiwan, Hong Kong, Singapore and the happiest country in the world, Denmark.
How do they do it? Mostly they do it via the will to do it. I lived in Denmark for two years and when I asked people, why do I not see homelessness, the answer was always, “When I look at those folks, I always say to myself, that could be my brother.”
Conversely, in the U.S., people too often say “Chuck, it’s Darwinian.” “Darwinian,” is the exact opposite of “that could be my brother.” In towns across America, towns are striking the practical balance between my brother and Darwin and allowing people to erect self-built tiny villages.
Nevada County, as well as other cities, has to beg the state and the federal government for more money to address homelessness. However, California is currently showing a $6.1 billion surplus. We have the money and Nevada County is wealthy with lots of resources. Nevada County owns properties that have been sitting vacant for 10 years and counting. This property could and should have been sold and/or put to its highest and best use immediately. Nevada County is typical of many cities and counties that can’t seem to find a way to put old buildings and empty lots to better use. Nevada County has a county budget of over $220 million. What better use than to reduce the risk of grave danger to us all by reducing homelessness?
The perspective that is so often missing is the importance of good land stewardship in encouraging the highest and best use of land and natural resources as well as encouraging a productive society. Zoning is not enough, more tax money is not enough, and sometimes not even necessary — what we need is the will. We seem to need additional incentives to use our land and natural resources more wisely.
We need to begin to correct this imbalance. Shifting taxes from improvements to land has the effect of discouraging wasted land. It discourages withholding land for speculative gain later, discourages empty lots or under utilized land and encourages better use of land, better development, building, and housing. It also begins to reverse the relentless rise in the cost of property.
It does this by reducing the cost of improvements, buildings, and housing.
Reducing the tax on the improvements, buildings and houses is a key element of this solution. That will encourage the construction and maintenance of new and existing homes — just what we need to reduce homelessness. It works in other places; it can work in California.
Charles R. Durrett is the principal architect at McCamant & Durrett Architects, The Cohousing Company in Nevada City. Contact him at firstname.lastname@example.org.
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