A Colorado non-profit whose stated mission is to make housing more affordable for low-income families has unfortunately strayed into the realm of overt racism, potentially dragging local governments and the State of Colorado along with it. Elevation Community Land Trust (ECLT) will now offer a down-payment assistance program, Doors to Opportunity, targeted specifically at those “ who identify as black, indigenous, Latinx, Asian/Pacific Islander, or other person of color.”
ECLT operates a land trust that seeks to keep the houses on its land perpetually accessible to families with below-median incomes. It does this by owning the land, but leasing it to the homeowner under a 99-year lease. The homeowner owns the house, and can make whatever improvements he wants. At the time the house is sold, the homeowner receives 25% of the equity appreciation, with the trust receiving 75%. The homeowner also receives 100% of the mortgage equity he has paid in, and 100% of the value of any improvements he has made.
Under the Doors to Opportunity program, borrowers would be eligible for up to $20,000 in assistance for a house that is already part of the trust, and up to $50,000 for a house that isn’t. The latter would become part of the trust on purchase.
Now, the trust’s structure, along with a potential ballot initiative could entangle taxpayers in a mission that has become overtly racialized. ECLT requires that part of its initial acquisition of a property be paid for by a government, even if that payment is only in the form expediting the approval process. So far, both Denver and Aurora have helped ECLT acquire houses for its portfolio. Those houses could now be bought using down payment assistance that was issued based on racial qualifications.
Initiative 108, currently gathering signatures, would set aside 0.1% of state corporate and individual income tax revenue for affordable housing programs. Among the qualifying programs are land trusts. The state government would not have to establish a land trust of its own, it would be able to contribute to an existing one, and there’s every reason to believe that ECLT would be an attractive candidate.
ECLT’s press release makes the argument that such a racially-biased program is necessary because of the racial wealth gap. But a racially-neutral program would presumably help people in proportion to that gap. And while ECLT says that it will not make any effort to ascertain the race of an applicant – looks can be deceiving, after all – applicants are required to self-identify, and only then will they be steered to additional information about the program.
Make no mistake – historical racial housing discrimination was real, either through overt segregation or discriminatory lending practices. Such practices, though long discontinued, made it harder for blacks and other minorities to own their own homes, one of the surest ways of securing intergenerational wealth. But it’s only one contributing factor to ongoing racial wealth disparities; the worst contributors are race-conscious policies, those that substitute government for family and community in the first place, and those that decrease social mobility.
Progressive planning policies, designed to limit single family housing and eventually even private home ownership, increasingly create a two-tier economy and society. There is every reason to fear that they will disproportionately trap minoritiess on the wrong side of that split. And when progressives deliberately limit the size of the pie, people’s natural response is to make sure their group gets its collective slice.
The solution isn’t targeted programs that eventually involve the government in actively encouraging racialist thinking – it’s to increase supply to make housing more affordable for everyone. Stop trying to cram people into apartments over light rail stations. Stop limiting housing stock by putting perfectly useful land off-limits to development. Let people gently increase housing density in urban areas, without destroying the character of the neighborhood.
In other words, if you want everyone to have food on their plate, grow the pie.
Joshua Sharf is a senior fellow in fiscal policy at the Independence Institute, a free market think tank in Denver.
