New Berlin Irony

By now, I am sure most of you have heard about the New Berlin settlement with MSP Real Estate to allow construction of 102 tax-credit units in a condo format.  Key point of irony:

The development is smaller in scope than the 80 affordable residences, termed workforce apartments, and 100 senior apartments that the City's Plan Commission approved in May 2010 and then rescinded two months later after public opposition erupted over MSP's plans.

It was never the senior apartments that the people objected to, even though parking issues was used as one of the rationales for the rejection.  So all that the protesting and moaning accomplished was a net increase in 22 "workforce housing" units.  Precisely the kind of units they found so objectionable.

What was it that David Letterman used to say? Ah, yes.  How do you like them apples?

Produce & Health

Matthew Yglesias' intern points to an initiative by First Lady Michelle Obama who is working with a number of supermarket chains to bring fresh food options to what are called "food deserts."  Food Deserts are places-typically inner-city-that has no easy access to grocery stores, and thus, no healthy options such as fruits & vegetables.  Often the only access is either a long trip or the local gas station or corner store.

He wonders if simply bringing those options to areas will result in actual improvements in the number of produce consumed.  I had similiar thoughts; after all, studies (that I'm not going to bother trying to find and link to) have shown that as matter of economics, especially for low-income people with a limited budget, food typicaly found in the middle aisles of a grocery store make more sense financially than fresh produce.  Not only is a Mac & Cheese cheaper, it's more filling compared to a similar cost in produce.  And it's nowhere as perishable. 

Fortunately, he was able to find a study that indicates that, yes, having easy access to grocery stores does result in better food outcomes.

After controlling for confounding variables, easy access to supermarket shopping was associated with increased household use of fruits (84 grams per adult equivalent per day; 95% confidence interval).  Distance from home to food store was inversely associated with fruit use by households. Similar patterns were seen with vegetable use, though associations were not significant.

Oconomowoc Urgent Needs Fund

Nice article by Donna Frake about a new fund put together by concerned people in Oconomowoc area to help those who are experiencing housing problems.  It's nice seeing a community recognizing a problem and working toward a solution.

More on Mortgage Interest Deductions

A favorite blog post of mine is one I wrote in response to the New Berlin & MSP fracas in which many people were moaning about how horrible subsidized housing is.  I pointed out that the biggest housing subsidy is the mortgage interest deduction.

I just wanted to make sure we're all on the same page here. Homeowners receive a total subsidy nearly three times larger than renters does, just from the mortgage interest deduction. Throw in the other tax preferences & we're talking' real money.

 

Later I pointed to a Kevin Drum blog on who benefits from this mortgage interest deduction.  the answer seemed to be higher-income groups who probably don't need it, rather than low-income homebuyers who presumably would need that incentive.

 

Via Kevin Drum, we have an answer to this question as he calculates that the benefit comes to about 2% of the income, no matter what the income level.

 

So why is the mortgage interest deduction so popular? Because homeownership is pretty widespread even at low incomes and the amount of the deduction is about the same for everyone as a percentage of income. $283 may not seem like much, but to someone with an income of $10-20,000, it's as valuable as $2,856 is to someone with an income of $100-200,000. Result: everyone loves the mortgage interest deduction.

 

The actual dollar disparity remains as the upper-income groups benefit disproportionately, but as a percentage, everyone's pretty much pleased.  Except for the renters, of course, who don't benefit.  This makes reform tricky as many people will have a financial stake in it, even the lower-income groups who might benefit more from the reform.  People often prefer to stick with a proven benefit rather than an unproven idea.