Getting A Piece Of The Rock

Somehow, in between the declaration of a Republican victory on election night and his swearing in a couple of months later, President Bush woke up one morning and decided:

a) The nation faces a crisis in financing social security (a “crisis” that went unmentioned during the campaign), and

b) The solution to said crisis is to reduce the amount of money going into the trust fund by giving young workers the option of playing the stock market with their share instead of letting the money lie there, unexcitingly gathering interest.

I'm sure we'll have many other opportunities in the weeks ahead to revisit this ideologically driven attempt at eradicating the proudest accomplishment of FDR. For now, what I'd like to get at is my disagreement with one tiny aspect of the scheme, the notion that true wealth, true economic security for the future, is built largely by gambling on stock market growth.

The president suggests your future can be secured not by working hard; not by saving carefully; not by creating something with the power to enrich many lives, but simply by buying stocks in large corporations and then watching them rocket to new heights of value (and then, perhaps, precipitously crash a la Enron).

I don't think so. I think there is a much better way to own a piece of the Rock, one without the risk of waking up one morning and discovering your portfolio's value got halved while you slept because some accountant in Houston was finally busted fabricating data.

The best way, I think, for millions of Americans to prepare for their and their families' financial future is a path already chosen by millions—owning their own homes. I don't know why it hasn't played a bigger part in the social security privatization debate, because for most families I know, their biggest investment, the cornerstone for their future plans, is their home.

And in fact that has historically been recognized by the federal government, a strategy encouraged through the very significant subsidy provided by permitting us to deduct the interest paid on home mortgages when computing our federal income taxes.

Of course for any society the advantages of broad-based home ownership are incredible, even if there were no leaps in valuation of the sort that we've experienced in recent decades. It is a key to stable communities, to reducing crime, to improving schools—to practically anything we seek to foster in a country. That it also can serve as a big-time hedge against future poverty is a bonus … and a crucial one.

The problem, however, is that for several decades now, the American middle class has been shrinking. As the economic policies of Dubya are exacerbating the pace of our division into just two classes, it has become harder and harder for low income Americans to make the jump into the middle class, a jump that can almost be defined by status as home owners.

Each year during this period, the gap between the median wage paid to workers in New Mexico and the median cost of a home in this market has grown wider. It is getting harder, not easier, for working New Mexicans to buy a piece of the Rock. It shouldn't be.

The housing construction boom in metro Albuquerque seems to go on and on, with no softening of the market looming anytime soon. Vast tracts of land on Albuquerque's far southwest mesa, out beyond Rio Rancho and even as far south as Los Lunas and Belen, rangeland where previously a few scrawny cattle had trouble surviving, are being converted into a far more lucrative crop: bedrooms for young Albuquerque residents. The burgeoning developments continue to add in excess of 5,000 homes every year.

It would seem unlikely in this set of circumstances, then, that there would be a shortage of housing in this community. But there is a serious one at the lower end of the affordability scale, a fact that is one of the major pressures contributing to Albuquerque's stubborn problem of homelessness.

Ironically, as we knock down seedy motels and dilapidated apartment complexes in our efforts at improving our neighborhoods, and as we construct in-fill projects which will improve the character of older parts of town, we are inadvertently also decreasing the available pool of affordable housing units, those first steps up the ladder from poverty without which there can be no further mobility upward.

What is clear now is that we have lacked a flexible pot of money in this state which could be used to give the little boost which so many families need in order to actually qualify for, or to be able to take advantage of, some of the many private and public programs designed to assist home ownership.

That's where the proposal now before the state Legislature for a $15 million “Affordable Housing Trust Fund” could be so incredibly valuable. Administered by the New Mexico Mortgage Finance Authority, this money could plug holes, add leverage and reach populations that now limit the effectiveness of home ownership programs.

The state is enjoying a bonanza from oil and gas revenues that might not last much longer. This housing trust fund would be a creative way to use current wealth to enable thousands of New Mexico families to start owning a real piece of the rock. We'll all benefit from that.