It doesn’t take a deep dig into the U.S. economy to see which economic class is taking home the winnings these days. Even limited research reveals that middle and low-income brackets were already suffering, with sluggish wages and poor growth prior to the 2008 recession. When the housing bubble burst and the recession hit, however, it wiped out savings and wealth that many low-income families have never since managed to recover.

Senator Elizabeth Warren (D-Massachusetts) is still fighting a 10-year-old war on that recession, having submitted legislation that means to repair the splash damage from 2008, as well as the century of housing discrimination that preceded it.

“Housing is the biggest expense for most working families – and costs for everyone, everywhere are skyrocketing,” Warren said in a public statement. “Rural housing is falling apart and decades of discrimination has excluded generations of Black families from homeownership. My bill would cut rents by 10 percent and give families in urban, rural, and suburban communities more economic security.”

The recession hit minority families particularly hard, aggravating an already onerous wealth gap. Research by the Urban Institute shows that by 2016, the average wealth of white families was more than $700,000 higher than the average wealth of black families and Hispanic families. The disparity between black and white families is generally as high or higher than it was in 1963, back when lynching was still a thing.

Much of a family’s wealth is bundled up in homeownership. A family house can give a child or grandchild the economic boost of not having to pay rent, or provide an equity loan to offset the cost of college. Until the creation of the Fair Housing Act, however, black families missed out on that wealth because racist practices in the U.S. real estate industry discouraged minority home ownership by restricting loans. Much of whatever property minority families did manage to accrue took a tumble after 2008, in part due to disreputable lending agents targeting minorities (whom banks called “mud people”) with sub-prime loans.

Sen. Warren submitted her American Housing and Economic Mobility Act to reverse some of that damage by lowering the cost of homebuilding, so landlords can pass savings down to renters. By building more than three million homes over 10 years, the legislation could theoretically increase the supply of affordable housing, decrease rental demand, and lower rising rent trends.

The senator’s bill also creates a competitive block-grant program available only to communities that ditch land restrictions and zoning laws which keep low-income residents from moving in. Affluent communities commonly lock middle and low-income renters and minorities out of their neighborhoods and good schools by zoning out or curbing the production of rental housing, among other tactics.

To counter the nation’s long tradition of denying mortgages to black families, the bill also provides assistance with down payments, which can put home-buying out of the reach of many minority families with meager savings. It also provides $2 billion to mortgage-owners with negative equity on their mortgages, thanks to the 2008 financial crisis.

Warren said that “after bungling housing policy for decades,” it was time for Congress to “make things right” and pass her bill.

The senator proposes to finance this $500 billion effort with a hike on estate taxes, by bringing them back to the level they were during the George W. Bush administration. While the tax would only affect the estates of 10,000 of the nation’s wealthiest families (the wealthiest 0.2 percent of taxpayers), talk of tax hikes has been anathema to many federal politicians for years.

Experts say discussing taxes is easier in this political climate, however, where the level of poverty is rising to unsustainable levels, and a wave of new voters are willing to trade low taxes for reliable public services.

“The vast majority of people believe that the wealthy should pay more taxes,” Vanessa Williamson, a fellow in government studies at the Brookings Institution, told Grit Post. “You’ll even find tax increases put to state ballots passing 50 percent of the time, which for ballot measures is pretty good. With the estate tax, people can be concerned about it because they don’t like the idea of not being able to give to their kids, but when they find out who it affects, and how it supports the structure of policy they become dramatically supportive of the estate tax.”

“There’s no reason to believe that that policy is a non-starter with the American people,” Williams added.

The legislation is already a hit with Moody’s Analytics Chief Economist Mark Zandi, who said the bill would fully close the gap between U.S. housing and supply — a bold claim in a nation containing real-estate-starved municipalities like Seattle and Miami. The bill has also been embraced by organizations like the National Housing Law Project, the National Alliance to End Homelessness and the National Rural Housing Coalition.

The bill may have a hard fight in the current U.S. Senate, even though Warren argues that it could draw support due to widespread sensitivity to the national housing crisis. Should Republicans ignore the bill, poll numbers suggest a flip in one or both congressional houses, either after the 2018 special election or the national elections in 2020, could herald a more favorable climate for passage.


Adam Lynch is a part-time “word-puncher” in Jackson, Mississippi. Battle with him on Twitter @A_damn_Lynch. He’s also on Facebook, if that’s still a thing.

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