You & Mortgage Disclosure Feedback

The Consumer Financial Protection Bureau (CFPB) is tasked with the duty of protecting American families from unethical lenders, banks, and other financial institutions.  The CFPB is currently working on an improved disclosure form for home mortgages.  You have an opportunity to provide feedback on which of the two forms work better.

I think it's a significant step in improving how American homebuyers understand what they are getting into.  Will this be the last step?  Of course not.  At the moment of closing, the average family has already made arrangements to leave the former residence into the new home, and very often feel trapped when there are unexpected changes or details.  They're hardly in a position to protest or simply walk away.  But at least with this, they'll have better information earlier.

Poverty is Not a Contagious Disease

I am a proponent of more integrated approaches to housing, believing that integrating people with disabilities is beneficial to them and to society as people get to live near their families, friends, etc. as well as having better outcomes. For instance, studies have shown that people with mental illness have better recovery and stability when integrated in the community. 

I also extend this belief of integration and inclusion to people with low income, regardless of disability status. Creating "ghettos" of concentrated low-income populations is never good policy.  This results in what is called concentrated poverty with additional problems.

I was pleased to read yesterday of a study that apparently came out last fall regarding the benefits of integrating low-income population into higher income areas, rather than deliberately using policies that exclude them such as zoning requirements.

The study in Montgomery County (MD) looked at two approaches taken by the county and the resulting educational impact on the children.  Montgomery County poured resources into some of the elementary schools in high-poverty areas, resulting in smaller classrooms, specialized instruction, etc. in an attempt to improve them.  But at the same time, Montgomery County also took advantage of the inclusionary zoning policies that were passed in 1970s to offer housing options for low-income families in higher-income neighborhoods.

The result?

• By the end of elementary school, students in public housing who attend more-affluent green zone schools through the inclusionary housing program cut the achievement gap with non-poor students in the district by one-half in math, and by by one-third in reading.

• Despite the district’s extra investments in its most disadvantaged (red zone) schools, by the end of elementary school, children living in public housing who attended lower poverty (green zone) schools far outperformed their public housing peers in red zone schools. The size of the effect from attending a low-poverty (green zone) school for children living in public housing in math was 0.4 compared with attending a higher-poverty (red zone) school. This low-poverty effect is quite large relative to other educational interventions, where research has often identified an effect of approximately 0.1 on student test scores.

• The educational benefits of socioeconomic integration are significant, but they take time. Only after four years in the district did public housing children in low-poverty schools notably outperform public housing children in the district’s moderate-poverty schools.

Now think about the metropolitan area in Milwaukee.  There is a stunning economic disparity as a short drive along North Avenue will bring you from some of the worst parts of the city to some of the best neighborhoods in the metropolitan area. There are numerous census tracts with very high poverty levels and a struggling school district located in the City of Milwaukee resulting from the economic and racial segregation in the metropolitan area.

From Washington Post:

"Today, 95 percent of education reform is about trying to make high-poverty schools work," said Richard Kahlenberg, senior fellow at the Century Foundation, a progressive think tank based in New York that published the report. "This research suggests there is a much more effective way to help close the achievement gap. And that is to give low-income students a chance to attend middle-class schools."

Ideally, there would be policies which allows families to more easily move into higher-income census tracts even as the high-poverty areas undergo some degree of gentrification as higher-income households move into the neighborhoods. 

We see the latter approach used by the City of Milwaukee and community development groups as part of an effort to revitalize neighborhoods, particularly with the use of tax credits to provide moderate income and mixed-income housing.

But it's the first part that is lacking.  There are zoning policies in many communities that make it difficult to create affordable housing, especially without some sort of assistance to the occupant or to the developer.  Neighbors banding together to fight proposed affordable housing developments.  Poverty is regarded as a contagious disease by many, subject to quarantine and isolation.

The region has to see poverty as a solvable problem.  But instead, there seems to be a state conspiracy to increase Milwaukee's woes and to take away tools that are available to the city.

Clean Safe Drinking Water

Clean Safe Drinking Water apparently is something in need of deregulation.

The Assembly has passed AB 23, which would, unless mandated by federal law, end a DNR requirement that municipal water systems be continuously disinfected.

Passed by an Assembly with short memories.  The Assembly rejected 21 Democratic amendments including those requiring disclosure.

...

More details in this JSOnline article, which also shares the sorta relevant fact that the clean water standards that this bill rejects aren't actually in place yet.

The Department of Natural Resources advanced regulations in 2009 that would have required municipalities to disinfect water by Dec. 1, 2013....A study by the Marshfield Clinic Foundation tested water in 14 communities between 2005 and 2007 and found that 34 of the 36 wells tested positive for viruses. None of the communities chlorinated their public water systems.

Also:  remember my post yesterday about the proposal by the Joint Finance Committee to reduce the state subsidy for sewer projects?  I said that it "might" lead to better zoning policies.  But in light of the following sentence from today's JSOnline article, perhaps not such a good idea to shift the cost to local municipalities.

Most of the communities in the study were in northern Wisconsin. Borchardt traced the likely sources of the viruses to leaking sanitary sewers. People who got sick tended to contract gastrointestinal illnesses.

Sewers & Housing Policies

Via The Political Environment, I see that the state is proposing to reduce the state subsidy of sewer projects in the clean water fund.  This brings up two issues I'd like to point to. 

Very often what a government unit calls cost-reducing or budget-cutting is really a matter of cost-shifting to a different party.  In this case, state "budget cuts" shifts the cost to local municipalities.

Wisconsin municipalities building sewers or expanding sewage treatment plants in the next two years would pay up to $59 million more in interest costs to repay loans through the state's clean water fund, under a proposal approved last week by the Legislature's budget committee.

This just might actually lead to better zoning and policies if communities try to limit the cost of new sewer pipes to new subdivisions.  Nearly a year ago, I commented on a study on actual costs of development which found that very often there are hidden costs (such as sewers and other services) to new subdivisions that municipalities may not realize exist.  With higher costs, municipalities might be taking a closer look at issues such as density and sprawl.