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While an announcement that borrowers of federal school loans will have their outstanding balance cancelled—or at least will get $50,000 forgiven—is still hoped for by many, work has started on deconstructing the existing federal school loan system to assist those who have qualified, or should have qualified, for cancellation of their debt but never made it across the finish line.

One measure now being taken promises—finally—to enable people who took public sector and nonprofit jobs and dutifully made 120 monthly payments to have their outstanding debts written off, as Congress envisioned when it passed the Public Service Loan Forgiveness (PSLF) Act in 2007. Over 500,000 individuals could benefit.

Of course, this is just one step in the process of dismantling a dysfunctional system of paying for higher education—not as a public good, but rather as a private consumption expenditure backed by individual student debt. While pundits debate which students merit forgiveness, the reality is that the entire system is broken.

For example, borrowers are often encouraged to defer payments in their early post-collegiate years, only to learn, for example, that the $17,000 they once borrowed for school is now $65,000, due to $48,000 in accumulated interest. Where did I come up with those numbers? Truth be told, those numbers tell the story of my own student debt, and the rise in debt occurred even though I did not miss a single payment.

Add my case to those of another 43.2 million student loan borrowers, and the debt load for students nationwide has grown to $1.7 trillion, with $1.57 trillion of that debt held by the federal government.

NPQ has been covering the federal college loan program for years. Borrowers were told that they were making solid investments in their futures by taking out student loans to enhance their own human capital.

Loan servicers are profiting. Student loan borrowers—not so much.

The results of the nation’s current federal student loan regime can be seen everywhere in diminished lives. Among the documented social impacts of student loan debt are delays in marriage, reduced entrepreneurship, reduced homeownership, depressed retirement savings, and overall increased economic instability.

Demographic data reveal that women take on more education debt than men and the American Association of University Women reports that Black women owe 22 percent more than white women. Black Americans owe an average of $25,000 more than white college graduates. That debt affects women’s, especially Black women’s, economic standing into their future; the ability to repay the loans is hampered by gender wage and racial wealth gaps. When payments are slower, interest accrues to the point that women now hold almost two-thirds of the outstanding loans.

A further hindrance to the economic wellbeing of the borrowers is that at least 18.6 percent of those borrowers are over 50 years old. Student loan debt can delay retirement at the very least. The older students are the nontraditional ones—those students who go to college later to improve their employment possibilities, when they have fulltime jobs and families. If they become disabled in the meantime, opportunity exists to cancel the federal student loans, but that program has been broken as well.

People with disabilities were the first category that President Joe Biden’s administration took on its effort to fix the dysfunctional federal school loan program in incremental piece-by-piece fashion. Those borrowers who had documented permanent disabilities, an estimated 323,000 people, had their school loans cancelled en masse in August. With this first step in deconstructing the federal student loan system, $5.8 billion in student loans for disabled borrowers were cancelled.

Addressing the failure of the PSLF program, created in 2007, is the second major step taken by Biden’s team. According to the law, student debt should be cancelled after 120 timely payments if the individual had been employed at a nonprofit; as a teacher; or at a federal, state, local, or tribal government agency. In 2019, it was reported that 99 percent of those applying to have their debt cancelled were denied.

The major cause of PSLF disqualification has been due to borrowers choosing the “wrong” loan product. In the first three years of the program, loans had to originate as direct government loans. A change was made in 2010 that made all federal student loans directly from the Education Department. Then there were four repayment plans, but only two qualified for PSLF, and this is where many borrowers slipped up. For many borrowers, the fact that they had selected a nonqualifying payment plan was often only discovered after ten years of payments had been dutifully made.

With this phase of student loan changes, the US Department of Education will now offer a waiver for those who used ineligible payment plans. There will be an appeal process for those who were denied, and federal employees, along with members of the military, will now be eligible for PSLF automatically. It should be noted that military personnel, who can put their payments on hold if they are deployed, will now have that period of temporary forbearance count towards the 120 months.

“This is a good day for teachers, nurses, service members, and millions of workers serving on the front lines of the pandemic,” said Seth Frotman, a former student loan ombudsman for the Consumer Financial Protection Bureau. Frotman now runs the nonprofit Student Borrower Protection Center. “For too long, those who give the most to our communities and our country have been given the runaround and forced to shoulder debts that should have been canceled.”

One other development, which provides an opportunity for big changes—but which could also be a source of enormous complication—is that the company that handles the federal student loans and loan forgiveness program is not renewing its contract. Pennsylvania Higher Education Assistance Agency (FedLoan) will be phasing out its contract with the feds over the next few months because the program has become “too costly.”

Another servicer, Navient, which has had a problematic history with student loans that includes charges of misleading students that has resulted in multiple class-action lawsuits, is also getting out of the federal student loan servicing business. The US Department of Education has not found a replacement to date.

The federal policy change is a very good thing for PSLF participants. But forgiveness is not automatic. Those who hold federal student loans and qualify must still do the following two things:

• Print out (and download) your entire loan payment history, both PSLF and TEPSLF (the temporary forgiveness category that covers payments made under the “wrong” plans). As the loan servicer changes, FedLoan has promised that records will be transferred intact. But be sure you have copies just in case there are inevitable computer crashes.
• Borrowers must submit a new Public Service Loan Forgiveness (PSLF) & Temporary Expanded PSLF (TEPSLF) Certification & Application form by October 31, 2022. But fill it out and submit it now, while FedLoan is in place, and keep a copy.

Serious note: when you open the link on FedLoan and start to enter information, it will display that you have “0” qualifying loan payments, even though in your account summary on a previous page you can find how many payments were qualifying. Why it displays a zero is a mystery. After you pick yourself up off the floor, complete the online portion and print it out. Send in the signed form as soon as possible!

As federal officials search for a new student loan servicing company, perhaps they should look for a nonprofit, along the lines of a federal credit union. And then—maybe, just maybe, it’s time to unwind the entire system of financing education through private debt.

The author was an older nontraditional student and at 65 is paying off a student loan for her doctoral degree. She is in the Public Student Loan Forgiveness program—six years in PSLF and has 21 payments that are TEPSLF [temporary expanded PSLF program] because she was making payments on the “wrong” plan.

This article originally appeared in the Nonprofit Quarterly. See the original article here.

“Every human society must justify its inequalities … in today’s societies, those justificatory narratives comprise theories of property, entrepreneurship, and meritocracy.” So begins Thomas Piketty’s Capital and Ideology, a 1,000-page-plus tome. Piketty’s new book has faded a bit into obscurity, in part the victim of bad timing. Early reviews appeared in the Guardian, the New York Times, and the New Yorker in March 2020, just in time to be overshadowed by the coronavirus pandemic.

Piketty’s 2020 tome is, at any rate, hardly the bestseller his 2013 book, Capital in the Twenty-First Century was. That book, just shy of 700 pages, examined why inequality has tended to rise over time in capitalism. (To grossly oversimplify, this is the result of returns to capital typically exceeding economic growth).

For Piketty, the 30 years after World War II when economic inequality fell was the product of an unusual period marked by strong labor unions and social democracy (or the New Deal in the US); the Great Depression; and two world wars. These developments created political space for higher taxes on the wealthy that paid for what became known as the welfare state.

The last four decades, however, saw the tax burden shift away from the wealthy to the working class, with wealth inequality reaching astronomical levels. To prevent further wealth concentration, Piketty proposed a global wealth tax. Coming on the heels of Occupy Wall Street, Capital in the Twenty-First Century helped provide an intellectual foundation for, among other things, the presidential campaign of Bernie Sanders in 2016.

Piketty’s 2020 book might not be a blockbuster, but it merits attention. Capital and Ideology traces the evolution of economic inequality across the centuries and across national borders, while offering a policy framework for a more equitable society. The book’s scope is ambitious and broad, including long chapters on India and post-Communist societies that I will not even attempt to cover here.

It is fair to say that Piketty falls short of his lofty goal to set the foundations for what he labels “a new participatory socialism for the twenty-first century.” Nonetheless, his book offers a comprehensive examination of economic inequality, including detailed data that informs both our historical understanding of inequality and contemporary policy debates around economic policy, ownership, and reparations.

Unmasking the Myth of Liberal Equality

The French Revolution of 1789 was made in the name of liberty, equality, and social solidarity (liberté, égalité, fraternité). Before the French Revolution, Piketty estimates that in 1780 the top one percent owned 50 percent of property in French society. It did drop a little at first; by 1800, the top one percent’s holdings in France had fallen to about 45 percent of property.

Yet by 1900, the top one percent owned 55 percent of property (p. 128). Great Britain and Sweden had even greater inequality than France—in Great Britain, the top one percent in 1900 had 70 percent of property (p. 195); the United States had high, but relatively less inequality at the time, with the top one percent’s holdings peaking at roughly 45 percent of all wealth as of 1910. To get a sense of how extreme these numbers are, today the top one percent in the US own roughly 40 percent of all wealth (p. 423)—a level that marks the highest in US history since the Great Depression.

The French Revolution, in short, might have reduced the land holdings of the nobility and clergy, but in the end it reinforced inequality. As Piketty observes, “On the key question of ownership … the failure of the French Revolution is clear” (p. 113). The pre-World War I so-called belle époche, he notes, “was belle primarily for those who owned property … especially if they were white males” (p. 2).

One factor behind this failure is what Piketty calls “proprietarian ideology”—proprietarian being Piketty’s choice of language to describe 19^th-century liberalism and present-day neoliberalism. As Piketty points out, this ideology bestows “quasi-sacred status on existing property rights, regardless of origin or extent,” with potential “inegalitarian and authoritarian” consequences” (p. 120). A great weakness of this sacralization of property rights, Piketty observes, is that property rights’ establishment, often by force, raise “serious questions of legitimacy” (p. 124).

Slavery and Colonialism: Engines of Extraction

It is hard to overstate the historical significance for the development of Western economies of the colonial extraction of resources, including through genocide and theft of land from Indigenous peoples, and the enslavement of Africans in Brazil, the Caribbean, and what would become the United States. Piketty observes that, “The most extreme case of inequality for which we have evidence is that of the French and British slave islands in the late eighteenth century” (p. 258). As of 1790, Piketty notes that seven percent of French gross domestic product (GDP) was from its colonies, three percent of GDP from Haiti alone (p. 276).

The 19^th century was the century when slavery worldwide ended, but abolition did not reduce wealth inequality. As Great Britain and France ended slavery, “reparations” were on the agenda—but not for the enslaved, but rather for former enslavers. In Great Britain, for instance, when slavery was abolished between 1833 and 1843, the government paid 4,000 enslavers the modern-day equivalent of €30 million (about $35 million) each (p. 208). This, Piketty explains, amounted to about five percent of British GDP—roughly 10 times what was being spent annually on public education at the time.

France’s most remunerative colony in the 18^th century was Haiti. A revolt among the enslaved in 1791 led by François-Dominique Toussaint Louverture led to Haitian independence in 1804. But France refused to accept this, until Haiti signed a compensation agreement with France in 1825. The cost of the settlement was 150 million gold francs or the equivalent of €40 billion euros ($46 billion) today. The effect was “to extract an average of five percent of Haiti’s national income between 1849 to 1915,” and Haiti’s “bill” for French recognition of independence was not fully paid until the 1950s. The logic of slavery and colonialism is “related to the logic of proprietarianism,” Piketty observes (p. 219).

Around mid-century, France followed Britain, abolishing slavery in its island colonies of Martinique, Guadalupe, and Réunion. Once again, at issue was how to compensate the enslavers. Some contended that payment should come from the public treasury. Others argued that people freed from slavery should contribute their labor to compensate their former enslavers.

Alexis de Tocqueville, a “moderate” best known in the US for his book Democracy in America, offered a compromise solution. Specifically, as Piketty explains, Tocqueville proposed that “half the indemnity be paid to [enslavers] in the form of government annuities …and the other half by the [formerly enslaved] themselves, who would work for the state for ten years at low wages.” Such a solution, Tocqueville argued, would be “fair to all participating parties.” Effectively, when the French parliament passed an abolition law in 1853, the law largely followed the structure of what Tocqueville had advocated a decade earlier (pp. 221-223).

Later in the 19^th century, while slavery was gone from the colonies of the leading European imperial powers, a new round of colonization commenced, with Britain and France seizing large parts of the African continent as territories. The wealth extracted was astonishing. Piketty writes that at the eve of World War I, net British foreign assets totaled 190 percent of GDP, while net French foreign assets totaled 120 percent of GDP. In 1912, more than one franc in five of Parisian elite wealth was held in the form of foreign (meaning primarily colonial) assets (p. 277).

Great Depression, War, and the Rise of Social Democracy

As noted above, prior to the Great Depression, economic inequality, especially in Europe, had hit extraordinary levels. The “middle class”—at least as the term is conventionally used in the US today—was at best a sliver of society. But in the first two thirds of the twentieth century, this changed. As Piketty explains, the top one percent, “which in 1900-1910 owned 55 percent of all private property in France, 60 percent in Sweden, and 70 percent in the United Kingdom, owned no more than 15-20 percent in any of these countries by the 1980s before rising to 20-25 percent (and perhaps, in reality, a little higher) in 2000-2010.”

What caused this shift? Piketty leans heavily on the work of Karl Polanyi, author of The Great Transformation, published in 1944. Polanyi examined how crises within capitalism generated social movements (especially the labor movement), which in turn led to the rise of a social welfare state. The policies advocated by labor unions and left-of-center political parties—the New Deal in the US, for example—made a marked difference.

Critically, however, two other factors combined were responsible for about two thirds of the decline in inequality. One, writes Piketty, involved “expropriations and nationalizations and, more generally, policies aimed explicitly at reducing the value of private property and the powers of property owners over the rest of society (for example, rent control and power sharing with worker representatives of firms).” The other, Piketty notes, had to do with the mechanics of war financing. As Piketty puts it, between 1914 and 1950 returns to capital fell “largely because much of private saving was lent to government to pay for the wars, in return for bonds which lost most of their value due to inflation and other forces” (pp. 432-433).

In short, much as Piketty wants to emphasize social democracy (p. 468), the impact of two world wars in facilitating its rise is hard to ignore. Beforehand, the US had less economic inequality than Europe; afterward, even as inequality fell in both places, the US had far more. Surely this had something to do with the disproportionate impact of the two world wars in Europe.

The Rise of Inequality Today

Piketty is less clear on why economic inequality is rising today. Effectively, he offers three driving factors (p. 486), summarized below:

• The weakness of codetermination (worker representation on corporate boards) and its limited reach to just a few countries (notably Sweden and Germany).
• The persistence of unequal access to higher education even as such access becomes increasingly vital to livelihoods.
• The failure to design “transnational federal forms of shared sovereignty” to constrain the impact of globalization.

To these he adds, as a fourth, the demise of the Soviet Union in 1991, which “inaugurated a new period of unlimited faith in private poverty from which we have not yet completely emerged” (p. 513). Colorfully, Piketty remarks that present-day ideology acts as if “Bill Gates, Jeff Bezos, and Mark Zuckerberg single-handedly invented computers, books, and friends” (p. 713).

How have left-of-center parties responded to these changes? Piketty spends many pages demonstrating that left-of-center parties have shifted from representing working-class voters to highly educated, often higher income, voters. The result, Piketty contends, is that “the structure of political conflict in the Western democracies in 1990-2020 no longer has much to do with that of the period 1950-1980” (p. 869).

For example, over 60 percent of US voters among the poorest 50 percent voted for Democrats in 1948, while less than 20 percent of the top one percent did. In 2016, low-income voters still voted majority Democratic, but so did 59 percent of voters in the top one percent, with middle-income voters backing Republicans (pp. 811-812). Class, in short, no longer is the main dividing line. Education levels are. For example, in the 2020 elections in the US, voters with a postgraduate education favored Joe Biden over Donald Trump by a two-to-one margin (67 percent vs. 32 percent); by contrast, voters with a high school education or less favored Trump over Biden by a 56 percent to 41 percent margin. Similar patterns prevail in Europe too.

The shift’s existence is undeniable. The causal mechanisms are less clear. Piketty contends that party elites abandoned working-class voters, rather than working-class voters abandoned left-of-center parties. At best, this explanation is partial. It doesn’t explain, for example, why left-of-center party elites shift their preferences to seek the votes of college-educated voters.

Piketty’s Vision for a “New Participatory Socialism”

Piketty writes of “transcending” (p. 972) capitalism. Yet his “participatory socialism” looks a lot like a revived social democracy, leaving a corporate market structure in place. Discussion of the climate emergency is also limited. In this regard, Piketty endorses a variant of a “cap-and-dividend” scheme to redistribute carbon tax proceeds to protect people with limited incomes (pp. 1004-1007). Little, however, is said about crucial public planning questions—such as how to shift resources to dramatically reduce carbon emissions.

Perhaps the most important contribution here, however, is Piketty’s notion of three tracks for shifting ownership. One is public ownership—a strategy used heavily after the second world war. The two other paths are what Piketty labels “social ownership” and “temporary ownership.”

By social ownership, Piketty means changing firm governance, both by giving workers half of board seats and limiting the shares held by any single owner of firms with over 100 employees to 10 percent (pp. 973-974).

By “temporary ownership,” Piketty refers to measures that tax the wealthy (via income, inheritance, and wealth taxes) and recirculates that wealth to ordinary citizens. Piketty notes that “with revenues on the order of five percent of national income from the property and inheritance taxes, it’s possible to pay for an endowment of approximately 60 percent of average adult wealth to be given to each young adult at age 25” (p. 983). Piketty also calls for an income-tax-funded guaranteed minimum income level of 60 percent of average after-tax income (p. 1002). Piketty estimates these payments would support about 30 percent of citizens and cost about five percent of GDP annually.

Piketty also advocates other measures—including education funding (pp. 1007-1012); an idea similar to “democracy dollars,” where political campaigns would be financed by vouchers that each citizen would get to allocate to the political party of their choosing (p. 1018); and the creation of transnational democratic institutions to address global issues such as the climate emergency (pp. 1025-1026).

Oddly, after making a powerful case for reparations, Piketty fails in Capital and Ideology to follow his own argument to its logical conclusion. In the wake of George Floyd’s murder, however, Piketty wrote in Le Monde that “Haiti is now requesting that France refund this iniquitous tribute (30 billion Euros today, which does not include the interest) and it is difficult not to agree with them.”

How Does Transformation Occur?  

For an economist, Piketty has remarkably little to say about how the overall economy would look if his proposals were adopted. He offers even less on his theory of change, noting only that change is likely to involve a combination of short-term crises and ideological struggle—or, as Piketty puts it, “the interaction of the short-term logic of events with long-term intellectual evolution from which come a wide range of ideas that can be drawn on in moments of crisis.” This is surely correct, but also deeply unsatisfactory. Few social movement activists are likely to use Piketty as their guide.

Despite the flaws, however, Piketty’s deep dive into inequality is invaluable. We face, Piketty writes, an “inequality trap.” Until World War I, Piketty notes, British and French elites refused to address inequality, a refusal that “rested on sophisticated ideological constructs, as is also the case in the United States today.” It is, Piketty observes, “only when social and political struggle converges with ideological revival,” when liberation becomes possible (pp. 546-547).

This article originally appeared in the Nonprofit Quarterly. See the original article here.

This article is the fourth in our series—Community Development: National Leaders’ Visions—that NPQ, in partnership with the CEO Circle, an informal network of BIPOC community economic development leaders, is publishing in the coming weeks. The series focuses on identifying what is required to address key transformational challenges and to help the field of community economic development better accomplish its twin missions of racial and economic justice.

Access to safe and affordable housing is a key pillar in reducing intergenerational poverty and homelessness, and it’s undeniable that having an affordable place to live can improve families’ quality of life. But producing more housing is not enough.

More housing alone often fails to advance economic justice and mobility for Black and Brown families. This is true because where we build (our land use policies and the location efficiency of what we build) is just as important as what we build. New or rehabilitated housing built in the wrong places can sometimes reduce economic mobility and impede economic justice in Black and Brown communities. We have huge obstacles that stop us from building where we should build. Clearly, not everyone has the chance to live in the places where we’re building the right things.

As Smart Growth America—the group I lead—documented in a recent joint report with Brookings titled The Great Real Estate Reset, the US has become increasingly segregated by race and income, both in urban and suburban environments. Today, roughly 80 percent of low-income Black Americans and 75 percent of low-income Latinxs live in “low income” communities. By contrast, less than half of low-income white people live in a low-income community. It is well documented that there is social and economic value to living in mixed-income neighborhoods, and that truly mixed-income neighborhoods are rare. What the data show is that few low-income people of color get to live in the limited number of mixed-income neighborhoods that do exist.

How Geographic Segregation Fuels Economic Injustice

This persistence of geographic segregation by race and class is not just a social problem but an economic justice problem. According to a report from the Urban Institute and Chicago’s Metropolitan Planning Council, Black people in racially segregated areas have lower incomes, and Black and white people in segregated areas both have lower educational attainment and lower levels of safety.

Racial segregation also creates the conditions that can lead to wealth extraction from Black communities—Dr. Andre Perry and his colleagues at Brookings found in a groundbreaking analysis that homes in predominately Black neighborhoods were consistently devalued, and estimated that the aggregate cumulative financial loss to Black homeowners to total $156 billion. Our land use policies must be re-directed to reduce segregation, or we may not see the wealth building and economic mobility effects we seek.

Racial segregation also exacerbates and calcifies the effects of racist land use policies and funding throughout our history—those racist land use policies are well-documented in the Color of Law, the Color of Money, and other books. This past has routinely led to racially segregated suburbs, and today’s suburbs are now experiencing both increasing rates of poverty and continued segregation.

This has led people of color in suburban areas to suffer from a double whammy of reduced opportunities due to segregation and bad land use policies. For example, suburban housing that is affordable to people with lower incomes tends to be very far from jobs. One study found that residents in low-income suburban neighborhoods with access to transit can only reach about four percent of metro area jobs with a 45-minute commute. People of color disproportionately use transit, and another study found that fewer than 10 percent of Americans currently live within walking distance of frequent transit.

Land Use’s Impact on the Climate Crisis

Housing built in dumb places—smart growthers, see what I did there?—can also exacerbate climate change and reduce climate resilience in Black and Brown communities. We all know that the more miles we drive in gas-powered cars, the more greenhouse gases we emit into the atmosphere, and the more we power climate change. We can mitigate some climate change by driving electric vehicles (“EVs”) instead of internal combustion engine automobiles. But the automobile’s connection to climate resilience rather than mitigation is more a function of whether folks are driving than a function of what they’re driving.

Land use decisions that promote sprawling, car-oriented communities are the biggest reason residents are obligated to drive. Our land use and zoning history has relegated many Black and Brown residents to communities where accelerating climate change disproportionately causes more intense storms that happen more frequently, more extreme flooding, and more extreme heat, and Black and Brown residents end up fleeing their communities during these events. In these same communities, driving is the only option to get to safety, to get to shelter, or to get necessary supplies before, during, and after an extreme weather event.

You’ve seen the pictures of Black and Brown communities ravaged by the latest 100-year storm spurred by climate change. They end up funneled into choked and impassable highways. This is an example where electrification of vehicles may help decelerate climate change but will not necessarily improve climate resilience. If you are stuck in a traffic jam in your electric car during a flood or extreme weather event and can’t get to shelter or essential services, you’re still stuck in a traffic jam. Your vehicle didn’t protect you from the land use decisions that caused you to be in the traffic jam in the first place. EVs won’t help the thousands of Black and Brown community members who really need better mass transit, pedestrian, and other options to be more climate resilient and have alternative forms of mobility during climate events.

I’d be remiss if I didn’t mention that many environmental justice and climate resilience challenges for Black and Brown communities are often the direct result of interstate highways being disproportionately run directly through them during the build-out of our nation’s Interstate Highway System. The racist placement of many of those highways weren’t just transportation decisions. They were land use decisions!

Where highways were placed quite obviously affected what land uses could remain, what land uses could remain viable, and what value would be attributed to the land.  This is also true in reverse—if a community tears down a highway, that is also a land use, not just a transportation, decision. The tear-down creates new possible land uses, changes what land uses are viable, and changes the value attributable to the land. The tear-down becomes a wealth building and economic development opportunity for the adjacent community because of the effects on the use of land going forward. When we in the community development field are exploring revamping land use policy, we need to keep an eye on transportation policies and practice too—those decisions are often de facto community land use decisions that community residents need to control and oversee.

Why Community Development Must Address More than Housing

So, what can we do? For decades, community development as a field has tended to focus on housing units built, not land use policies. This focus has often been for good reason, since there’s no single, overarching federal land use policy that governs how much housing gets built and where. It’s time to expand and revamp our approach.

We need a national campaign that builds out a 50-state strategy focusing on fundamentally and consistently revamping land use policy across the country with the priority goal of improving the health, wealth, and opportunities of Black and Brown communities. We need a campaign where national and local/regional organizations collaborate with—and help build power and capacity in—local frontline groups. The campaign will be backed by data, research, communications, and organizing strategy that mounts a movement to change local land use policy, planning, and practice on a consistent basis throughout the country.

It must be 50-state campaign because we cannot rely on the federal government alone to save us. As an example, even when the White House and legislators include in the proposed infrastructure bill a great concept like reconnecting communities torn apart by highways, they give the idea relatively small dollars with the left hand but then hand out much larger funds with the right hand that can be used to make the same mistakes again. True racial and economic equality through better land use must be operationalized at the state and local level—and it must focus or revamping land use policy, planning, and practice.

Policy. The campaign will mount a ground game that helps to eradicate local zoning laws that were passed with historic racist intent. These include mandatory single-family zoning, minimum lot sizes, regulations antagonistic to mixing uses, and other racially inequitable zoning laws. Those policies would be replaced with more use-flexible, context-sensitive but not context-beholden zoning rules that have racial equity and wealth building in Black and Brown communities as their intent. (Need I remind anyone that land use policy has been routinely used to create inequity and to build wealth in white communities throughout US history?)

Planning. The campaign will create a minimum platform and set of principles for effective, consistent, and upfront resident input and power in community planning.  This will require reframing the goal of a lot of planning and planning processes from increasing who is at the table. This approach will focus not just on who’s at the table, but who owns the table—and put more power to make decisions in the hands of the people.

Practice. The campaign will also seek to mandate more racial equity-focused practice in the implementation of land use decisions, including transportation and infrastructure decisions that often exacerbate existing racial and income-based disparities in communities. One goal will be to have every land use policy, investment, or decision be analyzed to see whether it will create more racially equitable outcomes, and whether it will decrease racial disparities in wealth, health, and opportunity. Ultimately, there is no middle ground and no neutral policies, decisions, or investments—either the policy will catalyze a racially equitable outcome, or it will exacerbate an existing racial disparity. If the effect of the investment isn’t wealth building, it’s wealth extraction. And yes, policymaker, you did know what was going to happen. There are no unintended consequences, just unexplored ones.

The feds are not the cavalry. More housing is necessary but not sufficient. Electric vehicles alone will not be enough. We must take a more strategic and coordinated approach that creates state-to-state, city-to-city, and door-to-door activists who are fighting for the same changes to land use policy, planning, and practice. We need a movement led by catalysts for change that have federal air support and a local ground game. The land use policy, planning, and practice changes that they collectively seek must center racial equity and economic justice as their key goals. Only such a 50-state, movement-based approach will ensure that land use decisions promote racial equity, improve climate resilience, and support economic betterment in Black and Brown communities—and ultimately all communities—nationwide.

This article originally appeared in the Nonprofit Quarterly. See the original article here.

As NPQ readers may suspect, we get a lot of press releases. But one last month grabbed my attention.

“I wanted to get this over to you,” the email began.

The writer went on, “As you may know, last month, The House Ways and Means Committee approved the tax provisions of President Biden’s Build Back Better Act (the ‘Act’) which is a major step toward these provisions being made law and bringing sweeping changes for the estate planning community. If passed, significant restrictions will impact how estate planning experts can help high wealth clients.”

Fortunately, the PR rep informed me that an attorney was at the ready to help the beleaguered one percent, one who “has been on the phone seven days a week at all hours of the day with clients who are concerned about these potential tax revisions and next steps.” Apparently, what Chuck Collins has referred to in an NPQ podcast earlier this year as the wealth defense industry is hard at work.

But how much help, really, do the wealthy need?

According to testimony earlier this year to Congress by Charles Rettig, the Internal Revenue Service (IRS) commissioner, the wealthy in the US evade an estimated $1 trillion in taxes a year or, to do the complicated math, $10 trillion over 10 years. Recall that the entire Biden bill, if passed as originally submitted, would have cost $3.5 trillion.

In other words, lost tax revenue owed under current law is nearly three times greater than the cost of all the social benefits that President Joe Biden’s bill originally offered: you know, the same legislation that has been hacked away at in Congress because allegedly the nation cannot afford the price.

Most of the discussion of the Biden bill has been on the social spending side, but the legislation also includes some tax increases on the well-to-do. This could affect, the PR rep wrote, “many of the ‘tools in the toolbox’ that estate planning practitioners utilize for higher net worth clients in pursuing estate planning strategies.”

What to do? Well, given this was on behalf of an estate attorney, it’s not surprising the advice was for the top one percent to update their estate plans.

As it happens, the rich had little reason to worry about their estates. Just as proposed social investments have been pared back, so too were the tax provisions.

One change that had been considered was to lower the exemption on the estate tax to a little over $6 million per individual from the current level of $11.7 million. For context, as recently as 2003, the exclusion was $1 million.

On top of that, at one point, legislation was being floated to restrict some ways to evade that limit, including limiting the use of “grantor trusts.” In other words, if the $11.7 million exemption is not large enough—which, by the way, is doubled to $23.4 million if it is the estate of a couple—then there is the “grantor trust” workaround where, in effect, you can transfer assets to your heirs early but retain the use of those assets (such as a home) for many more years. Mechanisms like this help explain why only an estimated 1,900 estates paid any tax to the federal government in 2020.

These grantor trusts have all sorts of fun names, like GRATs (annuity trusts), GRITs (interest trusts, typically used for homes), and GRUTS (unitrusts, an annual payment that varies depending on the trust’s value at the time of payment). These function similarly to a charitable remainder trust, with the difference being that the remainder doesn’t go to charity but the estate’s heirs. A recent ProPublica article indicates that these mechanisms have cost the US Treasury an estimated $100 billion over the past 13 years.

Another estate law tweak once floated, explains the legal publication JD Supra, would have ended “valuation discounts” that reduce an estate’s value by gifting heirs minority shares of business assets using a family limited partnership or similar entity.

It’s not clear how many wealthy households this fall rushed out to create GRATs, GRITs, and GRUTs—or other mechanisms for securing their exclusions and evading any (possibly) coming tax changes. But writing in Forbes, tax attorney Alan Gasman writes that, “For many of us, it was beginning to feel like loading people into life rafts on the Titanic, because there were many more families and assets than there were resources, such as lawyers and hours in the day, given the many thousands of Americans whose families would become subject to a 40-percent federal estate tax, if they did not act promptly enough.”

The metaphor of the Titanic is illuminating, amid a crisis in which millions of Americans and people around the world really are sinking. The top one percent, by contrast, don’t have it so bad. After all, the Dow Jones stock index just crossed the 36,000 marker—a new record, and an astonishing 35-percent increase over the past 12 months.

As it happens, each of the feared estate tax changes were pulled from the compromise bill that Biden is now advancing. The grantor trust rush proved to be a needless panic of the elite (albeit a good source of income for trust attorneys). The text of the latest version of the 1,684-page “Build Back Better” bill is available here.

As Alan Rappeport in the New York Times explains, income tax rates are slated to increase from 37 to 42 percent for income between $10 million and $25 million and to 45 percent for any income earned above $25 million. Loopholes are closed to make sure that businesses earning more than $400,000 are not exempt from a 3.8 percent Medicare tax. There is a provision to create a minimum corporate tax and increased funding for IRS audits. And there is one measure that would place a one-percent tax on company stock buybacks.

Combined, these measures may raise as much as $200 billion a year if Biden administration estimates prove accurate. That’s enough to preserve about half the benefits that were contained in the original legislation.

But for wealthy Americans seeking to avoid taxes, it is still possible for many who earn more than $10 million to shift compensation to stock and borrow against their stock holdings if more cash is needed. And family dynastic wealth can continue to build.

In the meantime—Americans continue to be sold a bill of goods that the federal government cannot afford basic social benefits like 12 weeks of paid family leave and free community college, even though most governments of nations of similar wealth to the United States provide far more. The money to pay for these benefits may be there, but it will require sustained movement organizing to secure them.

This article originally appeared in the Nonprofit Quarterly. See the original article here.

Design theorist Tony Fry warns us that one of the key things we have to reorient around as we design for social change now is our concept of time. In Design as Politics, he writes,

No matter the differences of our circumstances as individuals, cultures, or nations, we now share a time that is new. We all share a continual moment of the diminishment of time. The actual finite time of our life on the planet (and the life of much else) is being reduced by our own destructive actions as a species. (49-50)

He notes that, at most, we have 30 years—not to turn things around, but to create a new order that adds time, or life, back in. We need to design in time; that is, design with a sense of how much time we actually have in which to make social change. He calls this new, life-giving order Sustainment.

Fry adds that, “The most overt sign…will be the hundreds of millions of environmental refugees created by climate change as the century rolls on.” (50)

We are already starting to see both our failure to design in time and the effect of climate refugees. Recent news stories illustrate this.

CityLab’s Linda Poon writes about what data from relocations in the US between 2004 and 2014 as a result of Hurricanes Katrina and Rita are telling us about future migration patterns. Lead researcher Bistra Dilkina, an engineering professor at the University of Southern California, says, “A lot of cities not at risk of sea level rise will experience the effect of it. This will require an adjustment in terms of the [increased] demand on the cities’ infrastructure.”

So, while the worst-case scenario has the East and West coasts, as well as the Gulf of Mexico, under water, cities close to these areas, “and that aren’t typically attractive destinations for newcomers,” will see an increase of migrants. The study finds that “people tend to move to familiar places nearby, where they might already have friends, family, or some support network.” They may also “flock to major urban centers like Dallas and Houston…and drive up the pace of urbanization.”

The first impact cities may feel is a housing crunch. Chico, California started experiencing this after the 2018 wildfires, becoming a boom town overnight, with home sales doubling and prices jumping 21 percent. This may, in turn, increase displacement and even homelessness for local populations, a phenomenon called “climate gentrification.”

Further, those with means will start relocating, many perhaps to the suburbs of the Midwest, “where the model shows a larger-than-average influx of migrants compared to historic trends.”

Another major effect of climate change, besides sea level rise, is heat waves, which the study’s model predicts will drive migration in the US northward “and could make cities like Duluth and Buffalo ‘climate havens.’”

The study hopes that the message that will get across is that significant numbers of people will be on the move, socioeconomic factors will play a role in how people move and where, and policymakers need to start designing this into current infrastructure investments.

For example, Jesse Keenan, a climate adaptation expert at Harvard University, asks, “So if we’re going to build a road, is this for today’s population or is this for tomorrow’s population?”

This is exactly what Fry means when he tells us we have to start planning backwards from the future, say, the year 2050.

Not only is an increase in mass migration, which globally already totals 20 million people a year, likely, but the people migrating will be not just plural (that is, living with difference) but post-national. Fry expects increased conflict and a new human psyche in response to increased risk. How we go depends on our ability to design for the future we want. New ways of being and being together will be necessary for the scale of change needed. This is the hardest part of the work.

Fry started out as a sustainability designer, but quickly saw that his projects were beyond designing toward a more ideal, sustainable, state. They were about massive relocations of cities and towns. In this video, in which he describes this work, he says that the technical part is the easiest. The hardest part about migration is giving people a reason to move and creating a social and political order in the new place.

Another City Lab article, Jeremy Deaton’s “Will Buffalo Become a Climate Change Haven?,” is an excellent in-time example of the aforementioned. When SUNY Buffalo State climate scientist Stephen Vermette set out to study climate change in Buffalo in 2016, looking at weather patterns back to 1965, he found that, while temperatures had “risen a little more than 2 degrees Fahrenheit over that time, roughly consistent with the rest of the Lower 48…climate change has left western New York mostly untouched.”

He found no evidence of increased rainfall or heat wave; “the breeze off of Lake Erie acts like a natural air conditioner, helping to keep the city cool.”

At first, Vermette thought there was an error, but then he realized he’d accidentally found a climate haven.

Deaton writes, “Buffalo is unusually well-insulated against climate change…Experts say the region’s cool climate and ample fresh water could make it an attractive destination as the planet heats up.”

And, he observes, “These facts have not gone unnoticed. In his 2019 State of the City address, the mayor dubbed Buffalo a ‘Climate Refuge City.’ Civic leaders are hopeful that the coming wave of climate refugees will revive Buffalo, filling its vacant lots and abandoned storefronts.”

He continues,

Notably that speech included no mention of what the city was doing to prepare for the expected influx of climate refugees — no new blue-ribbon committees, no new policy announcements.

“I heard that line, and I was waiting for something else to come out of his comment, and there was nothing,” Vermette said. “There is no initiative by the city. There is no embracing what we’ve done here. It was just a thing to say.”

Deaton asks, “As Buffalo becomes a more appealing place to migrate, can it remain a haven for refugees like [Maria] Robles [a recent climate migrant from Puerto Rico], who come in search of affordable housing and a decent job? Or will Buffalo become a cold-weather haven for the professional class?”

So far, he observes, ““They’re frustrated because they can’t figure out how to get this square peg called ‘equity, equality, justice’ into this round hole called ‘the market.’” And, like Fry, he warns us, “It won’t happen naturally. We’ll have to fight to make that occur.” And yet, as Fry points out, Sustainment “cannot be attained without equity.” (82)

This article was originally published on March 10, 2020.

This article originally appeared in the Nonprofit Quarterly. See the original article here.