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Affordable Housing Needs a Reset #OWS

I’m super proud of the latest Huffington Post piece that Alt Banking put out entitled Affordable Housing Needs a Reset. Here’s an excerpt:

We’ve been hearing a lot lately from New York Mayor de Blasio on his affordable housing plan. He says he will “build or preserve” 200,000 housing units, but the plan would only build 8,000 units a year. Unless it is radically changed, the mayor’s plan will squander public assets, enrich real estate developers, but do very little for the record number of people living in the shelter system or at risk of landing there.

Let’s first talk about how the term “affordable housing” is defined and whether it jives with our concept of the kinds of places New Yorkers can actually afford to live in. The mayor’s plan defines an apartment renting for $41,500 a year as affordable because a family of four with $138,435 in income can afford it ― even though that is more than twice the actual New York City median 4-person household income of $63,000. That is, most New Yorkers cannot afford an “affordable apartment” by the mayor’s standards.

The mayor’s plan tracks the pattern New York City has religiously followed for quite some time of trying to “incentivize” private development. The city effectively pays a fortune to private developers to build this kind of stuff. Here is a frightening statistic from the Association for Neighborhood and Housing Development: in 2013, New York City gave private developers a pass on $1.2 billion in taxes in order to stimulate the building of 153,000 units of housing ― just 12,000 of which met the messed-up definition of affordability. Hard to believe we couldn’t have done a lot better by simply collecting those taxes.

Read the rest of the essay here.

Categories: #OWS, economics, news

Mortgage tax deductions and gentrification

Yesterday we had a tax expert come talk to us at the Alternative Banking group. We mostly focused on the mortgage tax deduction, whereby people don’t have to pay taxes on their mortgage. It’s the single biggest tax deduction in America for individuals.

At first blush, this doesn’t seem all that interesting, even if it’s strange. Whether people are benefitting directly from this, or through their rent being lower because their landlord benefits, it’s a fact of life for Americans. Whoopdedoo.

Generally speaking other countries don’t have a mortgage tax deduction, so we can judge whether it leads to overall more homeownership, which was presumably what it was intended for, and the data seems to suggest the answer there is no.

We can also imagine removing the mortgage tax deduction, and we quickly realize that such a move would seriously impair lots of people’s financial planning, so we’d have to do it very slowly if at all.

But before we imagine removing it, is it even a problem?

Well, yes, actually. Let’s think about it a little bit more, and for the sake of this discussion we will model the tax system very simply as progressive: the more income you collect yearly, the more taxes you pay. Also, there is a $1.1 million (or so) cap on the mortgage tax deduction, so it doesn’t apply to uber wealthy borrowers with huge houses. But for the rest of us it does apply.

OK now let’s think a little harder about what happens in the housing market when the government offers a tax deduction. Namely, the prices go up to compensate. It’s kind of like a rebate: this house is $100K with no deduction, but with a $20K deduction I can charge $120K for it.

But it’s a little more complicated than that, since people’s different income levels correspond to different deductions. So a lower middle class neighborhood’s houses will be inflated by less than an upper middle class neighborhood’s houses.

At first blush, this seems ok too: so richer people’s houses are inflated slightly more. It means it’s slightly harder for them to get in on the home ownership game, but it also means that, come time to sell, their house is worth more. For them, a $400K house is inflated not by 20% but by 35%, or whatever their tax bracket is.

So far so good? Now let’s add one more layer of complexity, namely that, actually, neighborhoods are not statically “upper middle class” or “lower middle class.” As a group neighborhoods, and their associated classes, represent a dynamical system, where certain kinds of neighborhoods expand or contract. Colloquially we refer to this as gentrification or going to hell, depending on which direction it is. Let’s explore the effect of the mortgage tax deduction on how that dynamical system operates.

Imagine a house which is exactly on the border between a middle class neighborhood and an upper-middle class neighborhood. If we imagine that it’s a middle class home, the price of it has only been inflated by a middle-class income tax bracket, so 20% for the sake of argument. But if we instead imagine it is in the upper-middle class neighborhood, it should really be inflated by 35%.

In other words, it’s under-priced from the perspective of the richer neighborhood. They will have an easier time affording it. The overall effect is that it is easier for someone from the richer neighborhood to snatch up that house, thereby extending their neighborhood a bit. Gentrification modeled.

Put it another way, the same house at the same price is more expensive for a poorer person because the mortgage tax deduction doesn’t affect everyone equally.

Another related point: if I’m a home builder, I will want to build homes with a maximal mark-up, a maximal inflation level. That will be for the richest people who haven’t actually exceeded the $1.1 million cap.

Conclusion: the mortgage tax deduction has an overall negative effect, encouraging gentrification, unfair competition, and too many homes for the wealthy. We should phase it out slowly, and also slowly lower the cap. At the very very least we should not let the cap rise, which will mean it effectively goes down over time as inflation does its thing.

If this has been tested or observed with data, please send me references.

Categories: #OWS, economics, modeling

A Call For Justice #OccupyCitibank

December 18, 2014 Comments off

In the beautiful words of Cleveland Browns wide receiver Andrew Hawkins:

I was taught that justice is a right that every American should have. Also justice should be the goal of every American. I think that’s what makes this country. To me, justice means the innocent should be found innocent. It means that those who do wrong should get their due punishment. Ultimately, it means fair treatment. So a call for justice shouldn’t offend or disrespect anybody. A call for justice shouldn’t warrant an apology.

Those who support me, I appreciate your support. But at the same time, support the causes and the people and the injustices that you feel strongly about. Stand up for them. Speak up for them. No matter what it is because that’s what America’s about and that’s what this country was founded on.

I think I will take him up on that suggestion, this morning at Citigroup Headquarters, 399 Park Avenue (near 54th Street) at 10:30am, in part inspired by Liz Warren’s speech from last week. See you there!

occupyciti

Categories: #OWS, finance

Join Occupy the SEC in Pushing Congress to Reject Dodd-Frank Deregulation

There’s some tricky business going on right now in politics, with a bunch of ridiculous last-minute negotiations to roll back elements of Dodd-Frank and aid Wall Street banks in the current budget deal. Hell, it’s the end of the year, and people are distracted, so the public won’t mind if the banks get formal government backing for their risky trades, right?

Occupy the SEC has a petition you can sign, located here, which is opposed to these changes. You might remember Occupy the SEC for their incredible work in public comments on the Dodd-Frank bill in the first place. I urge you to go take a look at their petition and, if you agree with them, sign it.

After you sign the petition, feel free to treat yourself to some holiday satire and cheer, namely The 2014 Haters Guide To The Williams-Sonoma Catalog.

Categories: #OWS, finance

Video cameras won’t solve the #EricGarner situation, but they will help

As many thoughtful people have pointed out already, Eric Garner’s case proves that video evidence is not a magic bullet to combat and punish undue police brutality. The Grand Jury deemed such evidence insufficient for an indictment, even if the average person watching the video cannot understand that point of view.

Even so, it would be a mistake to dismiss video cameras on police as entirely a bad idea. We shouldn’t assume no progress could be made simply because there’s an example which lets us down. I am no data evangelist, but neither am I someone who dismisses data. It can be powerful and we should use its power when we can.

And before I try to make the general case for video cameras on cops, let me make one other point. The Eric Garner video has already made progress in one arena, namely public opinion. Without the video, we wouldn’t be seeing nationwide marches protesting the outrageous police conduct.

A few of my data nerd thoughts:

  1. If cops were required to wear cameras, we’d have more data. We should think of that as building evidence, with the potential to use it to sway grand juries, criminal juries, judges, or public opinion.
  2. One thing I said time after time to my students this summer at the data journalism program I directed is the following: a number by itself is usually meaningless. What we need is to compare that number to a baseline. The baseline could be the average number for a population, or the median, or some range of 5th to 95th percentiles, or how it’s changed over time, or whatnot. But in order to gauge any baseline you need data.
  3. So in the case of police videotapes, we’d need to see how cops usually handle a situation, or how cops from other precincts handle similar situations, or the extremes of procedures in such situations, or how police have changed their procedures over time. And if we think the entire approach is heavy handed, we can also compare the data to the police manual, or to other countries, or what have you. More data is better for understanding aggregate approaches, and aggregate understanding makes it easier to fit a given situation into context.
  4. Finally, the cameras might also change their behavior when they are policing, knowing they are being taped. That’s believable but we shouldn’t depend on it.
  5. And also, we have to be super careful about how we use video evidence, and make sure it isn’t incredibly biased due to careful and unfair selectivity by the police. So, some cops are getting in trouble for turning off their cameras at critical moments, or not turning them on ever.

Let’s take a step back and think about how large-scale data collection and mining works, for example in online advertising. A marketer collects a bunch of data. And knowing a lot about one person doesn’t necessarily help them, but if they know a lot about most people, it statistically speaking does help them sell stuff. A given person might not be in the mood to buy, or might be broke, but if you dangle desirable good in front of a whole slew of people, you make sales. It’s a statistical play which, generally speaking, works.

In this case, we are the marketer, and the police are the customers. We want a lot of information about how they do their job so when the time comes we have some sense of “normal police behavior” and something to compare a given incident to or a given cop to. We want to see how they do or don’t try to negotiate peace, and with whom. We want to see the many examples of good and great policing as well as the few examples of terrible, escalating policing.

Taking another step back, if the above analogy seems weird, there’s a reason for that. In general data is being collected on the powerless, on the consumers, on the citizens, or the job applicants, and we should be pushing for more and better data to be collected instead on the powerful, on the police, on the corporations, and on the politicians. There’s a reason there is a burgeoning privacy industry for rich and powerful people.

For example, we want to know how many people have been killed by the police, but even a statistic that important is incredibly hard to come by (see this and this for more on that issue). However, it’s never been easier for the police to collect data on us and act on suspicions of troublemakers, however that is defined.

Another example – possibly the most extreme example of all – comes this very week from the reports on the CIA and torture. That is data and evidence we should have gotten much earlier, and as the New York Times demands, we should be able to watch videos of waterboarding and decide for ourselves whether it constitutes torture.

So yes, let’s have video cameras on every cop. It is not a panacea, and we should not expect it to solve our problems over night. In fact video evidence, by itself, will not solve any problem. We should think it as a mere evidence collecting device, and use it in the public discussion of how the most powerful among us treat the least powerful. But more evidence is better.

Finally, there’s the very real question of who will have access to the video footage, and whether the public will be allowed to see it at all. It’s a tough question, which will take a while to sort out (FOIL requests!), but until then, everyone should know that it is perfectly legal to videotape police in every place in this country. So go ahead and make a video with your camera when you suspect weird behavior.

 

FATML and next Saturday’s Eric Garner protest

December 8, 2014 Comments off

At the end of this week I’ll be heading up to Montreal to attend and participate in a one-day workshop called Fairness, Accountability, and Transparency in Machine Learning (FATML), as part of a larger machine learning conference called NIPS. It’s being organized by Solon Barocas and Moritz Hardt, who kindly put me on the closing panel of the day with Rayid Ghani, who among other things runs the Data Science for Social Good Summer Fellowship out of the University of Chicago, and Foster Provost, an NYU professor of Computer Science and the Stern School of Business.

On the panel, we will be discussing examples of data driven projects and decisions where fairness, accountability, and transparency came into play, or should have. I’ve got lots!

When I get back from Montreal, late on Saturday morning, I’m hoping to have the chance to make my way over to Washington Square Park at 2pm to catch a large Eric Garner protest. It’s actually a satellite protest from Washington D.C. called for by Rev. Al Sharpton and described as “National March Against Police Violence”. Here’s what I grabbed off twitter:

Screen Shot 2014-12-08 at 7.09.31 AM

Categories: #OWS, modeling

White progress

It’s pretty hard to find solace in the Eric Garner situation, but since I have been thinking almost exclusively about this stuff, and since by nature I don’t like to be consistently hopeless (it’s too exhausting), I have come up with some positive thinking around it.

Namely, basically what Chris Rock has been saying: it’s exposing white progress, and it’s been a long time coming. The number of Facebook friends I have, who are very comfortably upper middle class and white, and who are outspoken, ashamed, and disgraced by the Eric Garner decision is meaningful. The protests are widespread and are multiracial. It is not a black person’s problem anymore.

In my Occupy group, which meets weekly on Sunday afternoons, we’ve been talking a lot about white privilege, and whether that phrase is appropriate, and whether we can come up with a better one. Because for the most part, “white privilege” really refers to the rights white people have, which everyone should have, but which not everyone has.

For example, it is my white privilege not to worry about my three sons getting shot by the police. But that’s not a privilege, it’s a right. I’m entitled to that security. Everyone is, but not everyone gets to have it. Maybe we should call it “white entitlement.”

[There’s a problem with that name too, of course, which is that the Republicans stole the word “entitlement” away from us and made it a dirty word. So, Social Security is an “entitlement”, for example, which we should maybe be ashamed of. But not really, since we pay for it. So we should take that word back anyway, so let’s just kill two birds with one stone.]

But every now and then “privilege” is exactly appropriate, and no better examples exist than what we are now seeing on Twitter under the hashtag #crimingwhilewhite, which was also covered in the Times. Examples:

Screen Shot 2014-12-05 at 7.41.26 AM

Screen Shot 2014-12-05 at 7.42.18 AM

So yeah, white progress. I’m looking for a way to be proud to live in this country, and white progress might be the way I can do it.

Categories: #OWS, white privilege
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