Rebuilding Wealth Through Home Ownership

Photo Courtesy: Pixabay

Hilbert Morales


The “Rebuilding Wealth Through Homeownership” happened Friday, December 9, 2016 at Microsoft’s Conference Center, Mountain View, CA. This event was organized by former CA Assemblymember Joe Coto. This topic is of great interest to the general public who needs to know that in Silicon Valley, it takes an annual income of $88,000 just to get by and $35,000 down payment is needed to purchase a very modest home. Rents are rising due to the lack of an adequate supply of housing. No wonder the County of Santa Clara has 6,500+ homeless individuals, some of whom are single moms with children.

Wouldn’t it be a good Christmas gift for all these homeless to have their own residence. This alone would mitigate many mental health issues such as anxiety and stress. Gentrification issues are involved which disrupt long established urban communities.

GENTRIFICATION was formerly a slow process which has recently been accelerated by the extraordinary success of high-tech and internet corporations such as Microsoft, Google, Facebook, Twitter, YouTube, etc., coupled with smart phones.

This conference reminded me of the ‘education system’ where PTA leaders, teachers, Principals, and Superintendents’ meet and confer about education program issues, but leave out parents who are legal guardians of children. There is a need to include representatives of “Homeowners Associations” and Neighborhood Associations.

Here are two anecdotes which have some influence to this conference’s content: 

A) Corporate Human Resources Departments per policy award $15,000 per year bonus to any employee who resides within 10 miles of their corporate site (Facebook’s borders East Palo Alto, Menlo Park, & Redwood City). This enables a Facebook employee to pay $1,000 per month more than a long-term resident (who happened to be the surveyor I employed). His rental lease was terminated by the homeowner who now received $1,000 per month more in rental payments. The social costs not included are the surveyors family relocation; kids being transferred to a different school district; finding new church; new friends, new health care clinic, retail stores, etc. All are part of this gentrification process not borne by Facebook. 

This is what GENTRIFICATION is all about. This surveyor moved his family to Sonoma County & now commutes. 

B) East Palo Alto City Council recently turned down two developers (300 new homes) because NO RELIABLE POTABLE WATER SUPPLY could be assured to the future homeowners. Potable water supplied in adequate reliable quantities is essential. 

Who has the contacts & ability to tell Mark Zuckerberg, Facebook billionaire, to make a deal with City of East Palo Alto; to front the money to build a DESALINIZATION PLANT at East Palo Alto and/or Alviso (San Jose) using the SF Bay as the source of ocean water. Solar panels and wind turbines could generate the electric power needed. Enticing EPA residents to place solar panels on their roofs eliminates need for a ‘solar panel farm’. Then back feeds electric power generated using existing electric conduits. This approach would make EPA and San Jose independent of naturally produced potable water plus address the reality that before 2050 this approach will be needed to supply potable water for the growing CA population estimated to be 50 million by 2050. (In all instances, the technology and best practices already exist & are being used in the Mid-East and cities such as Santa Barbara & San Diego.) 

As a visionary I believes that CA could make itself independent of Global Climate Change and eliminate potable water shortages by going ahead with the construction of strategically located desalinization plants along its Pacific Ocean coast from SF to San Diego. This eliminates the need to divert Sacramento River water ‘SOUTH’ using those twin tunnels favored by Governor Brown. So why not ask billionaires (Bill Gates and Mark Zuckerberg) to make the investments needed to build that desalinization plant needed by East Palo Alto and Alviso? 

Our business community and governance agencies need ethicists to develop a decision making paradigm which is not solely based on “the bottom line”; which needs to include ‘civic stewardship’ and define a reasonable profit margin. Presently a lot of profiteering goes on unabated resulting in inequitable distribution of wealth as well as gentrification which breaks up established communities where everyone knows your name…and what you do….and who you are.

WHAT IS REALLY NEEDED IS A STATEWIDE HOUSING PLANNING AUTHORITY AND THE NEED TO TAKE ON A PROJECT TO UPDATE PROPOSITION 13. Corporations have taken advantage of Prop 13 especially now that the US Supreme Court’s Citizen’s United case defined corporations as ‘individuals’. Property taxes supporting public schools has diminished since Prop 13 was adopted. 

This conference offered no discrete action plan crafted to address one or two of the many challenges to having more folks own their homes which facilitates becoming ‘well off’. A discrete project would be to include legal protections possible which home mortgage holders need. This would include 1) ability to pay interest only on mortgage principal due (needed to avoid default when a serious illness or loss of income suddenly happens; 2) Any home equity accumulated by the mortgagee needs to become ‘legal property’ of that mortgagee. During the 2007 mortgage meltdown, too many ‘homeowners’ lost the only ‘equity wealth’ accumulated. Simply stated, current mortgages protect lenders, banks and real estate agents. Let’s transition to a home ownership system that meets the housing reeds of all residents. The future ‘housing authority policy’ must effectively monitor the future system throughout and perpetrators of wrongful acts will be prosecuted, lose licenses and are imprisoned following appropriate due process.