Category Archives: Poverty & income gap

Energy Omnibus III: Race, Poverty and Justice

By Steve Haner

Unfortunately, there is nothing new about the Virginia General Assembly passing an energy development bill which overrides the authority of the State Corporation Commission or usurps its role in planning utility resources.

Where Governor Ralph Northam’s new clean energy transition legislation breaks ground is its immersion into questions of race, poverty and environmental justice.  Should it pass and be implemented, the large electric utilities will be charging means tested rates, exempting low income ratepayers from some charges entirely, submitting their construction plans to an environmental justice council and engaging in preferential hiring for at least some construction projects.  Continue reading

Energy Omnibus: What it Does, How it Costs You

What will Virginians see due to the Virginia Clean Economy Act? “Lots and lots of solar,” said the patron, Del. Richard Sullivan, D-Arlington. Higher bills, added the State Corporation Commission.

By Steve Haner

The General Assembly adopted Governor Ralph Northam’s clean energy package Tuesday, with party-line votes in both the House of Delegates and Virginia Senate. Two House Democrats joined the Republicans in opposing the House version.

House Bill 1526 and Senate Bill 851 appear identical but amendments were being adopted at the last minute. Now that they have crossed over to the other chamber, they likely will become identical.  And expect furious efforts to recruit some Republican votes in favor, as this new vision for Virginia’s energy economy will be disruptive, expensive and politically explosive.

Using the House version as it passed, here is a tour of some (not all) highlights, with line references so you can follow on this PDF version of the engrossed bill. If you want to see it without line numbers, but with highlighting of the new language instead, look here. For that I’ve used the Senate bill.

The bill overrides State Corporation Commission authority to look out for consumers in too many places to count, but you’ll find the clearest and most important example of that on line 1399 of the House bill.  Continue reading

More Data on Why Students Don’t Complete College Degrees

by James A. Bacon

The biggest reasons students take college courses but fail to complete a degree are work-related, according to a Strada Education Network survey of more than 42,00 adults nationally with some college but no degree. Seventeen percent cited “work-related” reasons for ceasing their studies. The second mostly commonly cited reason was financial pressure, followed closely by life events/personal problems.

When people rack up thousands of dollars in student loans without obtaining an educational credential that will enable them to qualify for a better job, it is both a personal setback and a waste of social resources. The Strada study is important because it helps identify the reasons why many students fail to get degrees, and it provides lawmakers and colleges guidance in how to address the college dropout issue.

Governor Ralph Northam has budgeted $145 million to make community college tuition-free for low- and middle-income students pursuing jobs in high-demand fields. He cited numbers from Reynolds Community College showing that full-time students who dropped out before completing their degrees “usually had earned a 3.1 grade point average when they left school.” If they didn’t leave for academic reasons, the Governor surmised, they must have left for a lack of money.

After checking the Reynolds data, I found that conclusion was unwarranted. Although the data ruled out low GPAs as a reason for at least 40% to those who did not return for a second year of study, it did not address what their motivations were. I suggested that one other reason might be because they had found a job. There could have been other reasons.

However, the Strada data provides some evidence in support of Northam’s position. Continue reading

A PIPP of an Idea: Electricity Transfer Payments

By Steve Haner

Green energy advocates never tire of telling us that accomplishing their zero-carbon electricity supply will lower our costs. If so, why does their dream bill include a new income transfer entitlement program for low-income customers?

It is called the Percentage of Income Payment Program with a handy acronym PIPP. It first appeared in Delegate Lamont Bagby’s House Bill 1483. The Henrico County Democrat saw his bill pass the House Labor and Commerce Committee February 4, but for good measure it is now enshrined on lines 1828 through 1909 of the omnibus clean energy bill revealed February 6, House Bill 1526.

B. The monthly electric utility payment of any person participating in PIPP shall be capped at six percent, or, if the participant’s home uses electric heat, 10 percent, of the participant’s household income. A participant may further reduce his monthly electric utility payment through a conservation program incentive. Under this program incentive, if a participant lowers his monthly electricity usage below his historical baseline average, the participant’s electric utility bill for such month shall be reduced by 50 percent of the monetary amount by which such participant lowered his usage.

…Participants who transition to a budget billing system in accordance with this subsection shall be forgiven of any arrearages on electric utility bills accrued prior to participation in PIPP upon making timely and full PIPP payments to the electric utility provider for 12 consecutive months; all other PIPP participants shall be forgiven of arrearages accrued prior to participation in PIPP after making timely and full PIPP payments to the electric utility provider for 12 consecutive months.

Continue reading

Plundering the Middle Class

by James A. Bacon

To get a handle on how progressive (to be clear, I use “progressive” as a synonym for “leftist”) Governor Ralph Northam’s proposed two-year budget is, consider the following.

If Northam’s agenda is adopted, Virginia’s middle class will pay higher gas taxes, higher cigarette taxes, higher income taxes, and higher electric rates. That doesn’t include higher charges resulting from a new hospital tax last year, nor does it include higher college tuition, any of the proposals (such as an inheritance tax) proposed by emboldened Democrats in the legislature, higher who-knows-what-else is squirreled away in the budget, or ideas just hanging fire like the Transportation Climate Initiative.

What will the middle class get in return? Virtually nothing, unless you count expenditures on programs meant to benefit the public at large such as the environment, rural broadband, education, and workforce development. The majority of spending programs are targeted to help lower-income Virginians — and various Democratic Party constituencies who mask their self-serving agendas as benefiting the poor.

Going down the list of initiatives listed in Northam’s State of the Commonwealth address, we find: Continue reading

Another Tool in the Search for Affordable Housing

Jeff Bourne

by Dick Hall-Sizemore

This is going to be an interesting session; probably a nightmare for Republicans. Much of the public attention has been on gun legislation, but there are other areas in which Democratic initiatives have been bottled up in the past and now will have a much better chance of being enacted.

One of these areas is housing. In an earlier blog today, Jim has highlighted one proposed piece of legislation dealing with “middle” housing. There is another bill that I had heard about earlier, which I think also addresses a housing issue that we have discussed on this blog. That is HB 6, introduced by Del. Jeff Bourne. D-Richmond. The bill would forbid someone from refusing to rent or sell a dwelling on the basis of the source of income or payment by the person seeking to rent or buy. In effect, it would prohibit landlords or property sellers from refusing to accept housing vouchers.

Bourne introduced this legislation in the 2019 session. It died in a House committee, without even being given the consideration of being referred to a subcommittee to be heard. Continue reading

Samirah Bill Inspires Debate Over Residential Zoning

Ibrahim Samirah

by James A. Bacon

Suburban Virginians were the key swing voters who gave Democrats majorities in both houses of the General Assembly. It will be interesting to see if Democrats now manage to alienate them.

Del. Ibraheem Samirah, D-Herndon, has submitted a bill, HB 152, that would require zoning ordinances in localities across the state to allow “middle housing” — duplexes, townhouses, cottages and other structures — in neighborhoods zoned for single-family dwellings.

Samirah characterizes the mandate as an “affordable housing” initiative.  He quite accurately says that residential zoning restrictions restrict the supply of new housing construction by limiting housing units to one per lot. But rhetorically he goes off the rails. Describing suburbs as “mostly white and wealthy,” he implies that people wishing to live in safe, peaceful neighborhoods are guilty of racial discrimination.

“Because middle housing is what’s most affordable for low-income people and people of color, banning that housing in well-off neighborhoods chalks up to modern-day redlining, locking folks out of areas with better access to schools, jobs, transit, and other services and amenities,” he wrote on Facebook (as quoted by the Daily Caller, a conservative web publication). Continue reading

At Last: Zoning Restrictions on “Middle Housing” Are Coming Under Scrutiny

A neighborhood of detached single-family dwellings in Arlington.

by James A. Bacon

Arlington County plans to study the “missing middle” in its housing market: homes that fall between apartment-sized units and single-family dwellings — in its housing market.

Ninety percent of the county’s residential land is zoned for detached, single-family houses. The median housing price in the county falls between $530,000 and $640,000, and the arrival of Amazon is likely to drive prices even higher. A big part of the problem, says Richard Tucker, acting coordinator of Housing Arlington, is restrictive zoning. WAMU summarizes his thinking:

Too much single-family zoning is leading to a proliferation of teardowns, Tucker says. In neighborhoods throughout the county, property owners are bulldozing smaller single-family homes to make way for mansions that swallow up entire lots. Teardowns are common in neighborhoods where zoning is restricted to single-family construction, Tucker says, but they’re expensive to build and own, so they don’t contribute affordable housing to the county. They also take up a lot of land that could be used more efficiently, he says.

If owners had the option to build duplexes and triplexes instead of McMansions, Tucker says, maybe they would. “What we hope to do is identify other options for these property owners,” the planner says.

Continue reading

How to Fix Virginia Schools: Mo’ Money vs. the Bristol Model

by James A. Bacon

In thinking about what ails Virginia’s K-12 public schools, perhaps we should give some consideration to the state’s schools of education and what Virginian teachers are taught. To get a sense of the quality of scholarship and thought that comes out of our teaching academies, we might consider an op-ed penned nine days ago for the Washington Post by Robert C. Pianta, dean of the University of Virginia’s Curry School of Education and Development.

Here is the thesis of his piece: “The perception that education is in crisis has contributed a fundamentally distorted view of the system that ignores the biggest problem plaguing U.S. public schools: a lack of resources.”

Sadly for Mr. Pianta, the op-ed now bears a correction at the top, which reads as follows: “An earlier version of this piece stated that, adjusting for constant dollars, public funding for schools had decreased since the late 1980s. This is not the case. In fact, funding at the federal, state and local levels has increased between the 1980s and 2019.” Continue reading

Another Brain-Dead Housing Initiative

Foreclosed house on the market in Richmond for $103,587 — 1,434 square feet of living space. Source: Zillow.

by James A. Bacon

Broadly speaking, there are two ways to create a supply of affordable housing in Virginia. One is to loosen zoning restrictions so developers and home builders can build more houses and apartments, thus relieving scarcity and putting a downward pressure on prices across the board. The other is for the government to arrange for the construction of lower-income housing. Governor Ralph Northam is doubling down on the latter strategy.

Yesterday the Governor announced that his proposed budget will include $92 million in new funding to address housing affordability, eviction rates, and housing for the disabled. Of that sum, $63 million will go to the Virginia Housing Trust Fund, which provides financing for affordable housing.

Here’s the irony. In the Richmond region, the cost for the Richmond Redevelopment and Housing Authority to build new “affordable housing” units runs as high as $250,000 per unit. The median home value — half of the houses on the market are more expensive, half less expensive — in the Richmond market is $223,400, according to Zillow. In other words, it costs government more to build a unit of low-income housing than for the private sector to provide middle-income housing. Continue reading

Northam Proposes Another $145 Million Giveaway

by James A, Bacon

The spending avalanche keeps building. Governor Ralph Northam now is proposing to spend $145 million in the next two-year budget to make tuition-free community college available to “low- and middle-income” students who pursue jobs in high-demand fields.

The Governor’s “Get Skilled, Get a Job, Give Back” (G3) program would cover tuition, fees and books.

“Everyone deserves the opportunity to get a good education and a good job, no matter who you are or how much money you have,” Northam said in a statement. “This is an investment in equity and our economy — by helping Virginians get the skills they need, we’re building a world-class workforce while ensuring all Virginians can support themselves, their families, and their communities.”

There is so much sloppy thinking in this proposal that it’s hard to know where to begin. But I’ll try…. Continue reading

Two Medicaid Updates: Work Requirement, PBMs

By Steve Haner

Medicaid Work – Training Requirement Dead

Disappointing many, thrilling many, and surprising nobody, the Governor of Virginia has openly broken his 2018 promise to couple expanded Medicaid coverage with a work or job training requirement for able-bodied recipients. Moving people out of poverty is no longer the goal.

Governor Ralph Northam was quoted in posted story by the Richmond Times-Dispatch saying:

“Virginians made clear they want more access to health care, not less. Given the changed makeup of the General Assembly and based on conversations with new leadership, it is unlikely Virginia will move forward with funding a program that could cause tens of thousands of Virginians to lose health care coverage.”

To which outgoing Speaker Kirk Cox responded:

“The Governor and I made personal commitments to each other on this long-term public policy agreement. There wasn’t an asterisk that said, “unless my party wins the next election.” It’s a sad reflection on the value of integrity in modern politics.”

Continue reading

The Inherent Flaw in “Opportunity Zones”

Map credit: Econ Focus

by James A. Bacon

The City of Norfolk is gearing up to take full advantage of tax breaks contained in the 2017 Tax Cuts and Jobs Act. City Council has designated the St. Paul area, home to three 50s-era housing projects, as an “opportunity zone.” Plans call for demolishing the three projects and replacing them with mixed-income development. The city will receive $30 million in Housing and Urban Development funds to jump-start redevelopment, but the bulk of investment is expected to come from the private sector.

More than 8,700 such opportunity zones have been designated across the country; about 10% are located within the 5th Federal Reserve Bank district, which includes Virginia. Through a mix of incentives, investors in opportunity zones can defer, reduce or in some cases eliminate capital gains taxes in the zones.

While the tax breaks may prove effective at channeling investment capital into the designated zones, it is an open question if it will actually help the poor people living there, writes Jessie Romero in the current issue of Fed Focus, a publication of the Federal Reserve Bank of Richmond.

The size of the potential tax break is what could lure new investment, but it depends on how profitable the investment is — which depends in part on rising property values and rents. So some observers fear that in many places, the opportunity zone designation will create or hasten a process of gentrification to the detriment of lower-income residents who don’t own their homes and instead are forced out by rising rents.

This strikes me as a legitimate concern. Indeed, the criticism goes to the heart of almost every government-subsidized redevelopment project. The more successful a project is commercially, the more likely it is to displace the very people it is meant to help. Continue reading

A War-on-Poverty Success Story

by James A. Bacon

Homelessness in the Richmond metro area has dropped by more than half since 2007, from about 1,158 homeless people to less than 500 this year. It is one of the great anti-poverty success stories — one of the few anti-poverty success stories — of our time. This dramatic improvement results from a dramatic shift in homeless policy from a model that sheltered families for as long as two years to a “rapid rehousing” model that gets them out of shelters and into permanent housing as quickly as possible.

As a national movement, rapid rehousing began in earnest with a Housing and Urban Development demonstration project in 2008. It has contributed to significant gains in communities across the country, but few have embraced the new paradigm with the enthusiasm of the Richmond region. To see the philosophy in action, I visited the Hilliard House shelter, in eastern Henrico County, operated by Housing Families First.

The Hilliard House is a solid brick housing complex with private rooms, a communal dining room, shared living space, and a cloistered courtyard. It is a clean, safe place where homeless families can regroup. Thanks to generous community support, when families leave, they are given linens, kitchen implements and cleaning supplies to help them set up house. Continue reading

The Issue of Guardianship and the Contribution of a Newspaper

Ora Lomax with a picture of her husband, William, who was committed to a nursing home against her wishes. Photo credit: Richmond Times Dispatch

On Sunday, the Richmond Times-Dispatch ran a remarkable article. It was remarkable both in the amount of space the newspaper dedicated to it, 5½ whole pages, and its subject, guardianship, a subject about which little is known by the public, but that could affect anyone.

The publishing of this series of articles illustrates the continuing value of newspapers. The RTD invested a lot of resources into this story. It was a year-long investigation in which staff combed through the records of hundreds of guardianship cases originating in the Richmond circuit courts. They examined all the public documents related to those cases. They created a database with all the relevant data from those cases. They also looked at some guardianship cases filed in Henrico and Norfolk circuit courts to see how such cases were handled in different jurisdictions. They interviewed dozens of people and attended guardianship hearings. No other media for the general public could, or would, dedicate this amount of resources to a single topic. Continue reading