Regarding the June 1 news article “Rising rents and home prices could be key to the election”:
I agree that President Biden will most likely lose Nevada because of housing costs. The programs he has already proposed to increase housing supply make sense, but they move too slowly to have an immediate impact and will not be meaningful to ill-informed and desperate voters who see only high rents and mortgages and want someone to blame. I don't understand why his campaign is not relentlessly criticizing the current situation, which allows and actually encourages Wall Street and real estate investment trusts to buy up houses and apartments, drive up rents, and strangle supply.
People are so desperate and outraged that Donald Trump's ridiculous “solutions” have real emotional “blowout” appeal. Attacking Wall Street and real estate funds (such as those run by Jared Kushner's family firm) who are profiting from the worsening housing shortage would counter Trump's bombast with a sincere and powerful emotional appeal of its own.
President Biden and his administration also continue to boast about the strong U.S. economy, as Katherine Rampell wrote in her Wednesday, May 29, opinion piece, “Almost Everything Americans Think About the Economy is Wrong.” While everything Rampell and the president say is technically correct, their claims ignore the broad swath of Americans who live on fixed incomes or whose net incomes over the past three years have not kept up with inflation.
Regardless of your political stance, these people are forced to choose between putting food on the table and buying the prescription drugs they need, and are facing eviction due to rising rents. We urge Biden to use his empathetic rhetoric to assure these citizens that he understands and feels their pain, and to promise to make their plight a top priority for his administration. This demographic may determine the outcome of the November election.
BK Krueger, Ellicott City
I listened to the May 22 “Impromptu” podcast, “Is Homeownership a False Dream for America?” From my perspective, the potential economic risks and benefits of homeownership are more complicated than the views expressed by a Washington Post commentator during the episode.
I've owned five homes in 70 years. Some of them were great investments, some were not. On the one hand, my ex-wife and I lost a lot of money on our Denver home when the oil business went bust in 1986 and I lost my job at Big Oil. On the other hand, I bought a home in the Austin suburbs five years ago and my monthly mortgage payment is 45 percent less than my millennial neighbors' monthly rent. I noticed that most of my millennial neighbors are buying fancy new cars, eating out a lot, and not having kids. They're not making the choices I would, but if that's what they want to do with their life, that's fine. I'm so glad I bought my home five years ago.
Ralph Carr Jr., Leander, Texas
Realizing the American Dream
Regarding Lee E. Ohanian and James A. Schmitz’s May 29th op-ed, “How Affordable Housing Failed”:
Ohanian and Schmitz correctly recognize the important role prefabricated housing plays in helping to alleviate the nation's housing shortage. It's unfortunate that they were so dismissive about the type of housing they wanted to defend. To be clear, prefabricated homes are safe and highly regulated. Last week, Acting Secretary of Housing and Urban Development Adrienne Todman touted the strict building requirements for prefabricated homes in a speech on the National Mall. The decision to change federal law to allow prefabricated homes to be built with or without a chassis was intended to broaden the scope of prefab home designs to better fit communities across the country.
Allowing prefabricated homes to be built without a permanent chassis provides a new option, not a replacement, to the homes the industry currently builds. Today's prefabricated homes are the only housing type subject to strict federal compliance and quality assurance regulations for health, energy efficiency and durability, including strict engineer-approval rules that take wind zones into account and construction and installation that adheres to HUD codes. Our consumer research consistently shows how much people love living in our homes, and we're excited to make prefab homes available to more people who need high-quality homes at an affordable price and with design features that fit today's lifestyles.
In contrast to many of the dilapidated homes available for sale or rent, prefabricated homes offer consumers modern design, attractive finishes, smart features and energy efficiency, with an average purchase price of $125,000.
Our industry supports the repeal of federal chassis requirements to allow prefabricated homes to be more flexible, realize their full potential, and allow our industry to continue to innovate.
This would require the Department of Housing and Urban Development, in consultation with the Manufactured Housing Agreements Board, to establish construction requirements for homes that are not built on a permanent chassis, and state law would need to be amended to reflect the new definition so that lender and consumer rights are not unintentionally undermined.
We all agree that increasing the supply of manufactured homes will strengthen homeownership opportunities and give renters new options.
The author is CEO of the Manufactured Housing Association.
In a May 29 Metro article titled “New Tax Hikes in Budget Proposal,” The Washington Post reported that the D.C. Council is proposing to tax interest on out-of-state municipal bonds to close a budget shortfall in fiscal year 2025. City officials have praised the new budget for not raising income taxes, but such claims ignore the impact that one of these proposals in particular would have on the city's seniors.
Since 1973, Washington DC has exempted local bonds issued in other states from local taxes because it has issued so few bonds compared to other states. During financial crises, there are usually proposals to eliminate this exemption. This proposal was made in 2011, but was defeated because statistical evidence showed that the tax unfairly targeted retirees and other elderly people.
Those who see municipal bonds as a tax loophole for the wealthy are ignorant. These securities are popular primarily with people on fixed incomes because they are relatively safe and reliable. Municipal bonds have no growth potential, but they offer a means of protection from stock market fluctuations. In exchange for tax-exempt status, investors accept a lower rate of return. Many Washington DC residents, most of whom are elderly and middle-income earners, buy out-of-state municipal bonds, believing they will be exempt from Washington DC taxes. The proposed changes would significantly increase their tax burden, potentially devastating for some. They cannot switch to lower-tax investments without paying large fees and risking losing principal. The imposition of this tax would completely upend many carefully considered retirement plans.
Also, unlike 2011, the current budget proposal does not have a provision to exempt existing investments, which means bondholders could be taxed retroactively on interest they have already earned.
This tax would deny DC investors an opportunity that all other US taxpayers enjoy. They would not be able to diversify their risk by investing in DC bonds (which are rated lower than Maryland and Virginia bonds). They also would not be able to invest in tax-exempt single-state bond funds because DC cannot support them. DC would have the dubious distinction of being the only city in the US whose residents pay taxes on all municipal bonds issued outside of the state.
Finally, this tax revenue is likely to be less than expected because it does not take into account the reaction of DC taxpayers. Many taxpayers are likely to turn to still-favorable alternatives, such as stocks that pay qualified dividends. Some may even relocate to other jurisdictions.
The Mayor and City Council should find other ways to address budget shortfalls that don’t unfairly target seniors and retirees.
This unprecedented tax on municipal bonds from a jurisdiction outside of Washington, DC, would be a huge blow to me and thousands of other seniors who have held municipal bonds for many years.
This tax has never been discussed in advance, as far as I know. Citizens had no opportunity to have a say in this tax. This seems like a very unfair way to do business and a very unfair tax. If I lived anywhere else in the country, I could invest in diversified mutual funds that are exempt from local and federal taxes. DC already has the highest income tax rate in the country and is one of only 12 states that also imposes an estate or inheritance tax. If the city now adds a municipal bond tax, it will drive many of us seniors out of here to more friendly jurisdictions.
Martha Walters, Washington
