“The world is going to end in 12 years if we don’t address climate change.” That’s what congressional newcomer Alexandria Ocasio-Cortez (D-NY) is saying about the latest existential threat to the planet (and the well-being of its inhabitants) – best known as global warming. To back up her claims she recently presented a “Green New Deal” – a modern-day, environmentally friendly proxy for FDR’s Depression-era war on unemployment and poverty. Yet, it’s nothing less than a plan to transform the U.S. society and economy as we know them.
The Green New Deal (“the Plan”) has sparked a nationwide controversy. Maybe it’s for the clever “green” tapestry Ocasio-Cortez has hung on this mix of high-school-like platitudes and warmed-over Marxist ideals. Maybe it’s the outrages, contentious designs or silliness expressed in the Plan, including proposals for federal compensation for even persons “unwilling to work” or to ban jet travel and flatulent cows by the end of the next decade. Maybe it’s controversial because of the resolute defense Ocasio-Cortez – a controversial person herself – and other self-styled socialist Democrats have given to the Plan of late.
The Plan is also controversial for the things it says. Like:
We spend billions every year . . . turning our planet uninhabitable while imposing the greatest harm on communities of color and the poor. The Green New Deal will instead redirect that money to the real job creators who make our communities more . . . sustainable and secure at the same time.
Who are these “real job creators”, we’d like to know, and how are they making “our communities more secure”?
These controversies notwithstanding, the following concentrates just on what the Green New Deal does for the nation’s housing crisis, both indirectly and directly:
First, the Plan’s call for the availability of only renewable energy by 2030 will have a sweeping impact on housing affordability, particularly the Plan’s express prohibition against nuclear power and clean coal. What remains – solar, hydro, geothermal and wind – by most sober estimates doesn’t generate nearly enough energy to power the nation. So, at a minimum, much of what’s on the drawing board for new housing today won’t be viable under the Plan tomorrow.
Second is the profound dislocation of workers currently employed by a company or industry that will soon be forced to shut down due to the Plan’s scarcity of fossil fuels. (Maybe this is partly why the Plan’s cost is estimated to run as high as $93 trillion over the next ten years). And for the U.S., now having achieved the status of net exporter of energy – an important national accomplishment for a lot of reasons – the Plan would make that all but disappear. This one aspect of the Clean New Deal will have an incalculable impact on employment in the country which, in turn, will be extraordinarily damaging to housing affordability.
Third, is the Plan’s answer to this dramatic rise in unemployment: How about 20 million new public sector jobs – all funded by you and me – to close the wound? And, to these job beneficiaries would also go a “living wage”. Not surprisingly, the Plan stays away from determining a “living wage” or what qualifies as a bona fide living expense. Take housing, for example. Does the “living wage” recipient rent or own a home? Or, would a family earning a “living wage” be able to decide what type of housing they dwell in on their own? It seems quite likely this economic uncertainty will have a telling impact on housing markets.
Fourth, requirements of the Plan having a more direct impact on housing affordability are the energy-saving apparatuses – fixed or otherwise – to individual homes of the future. For example, under the Plan, all existing buildings – commercial and residential, both – are envisioned to be physically upgraded to meet new energy standards. That means retrofitting tens of billions of square feet of developed real estate over the next 10 to 12 years. Even if it were possible to acquire the labor and materials to accomplish the task during that period of time, what would be the cost? And, would local governments in California allow those costs to be passed through – in the form of rents – in the five million or so rental properties in the state? What about new housing?
Fifth, since the new energy standards will require rooftop solar systems – much like California’s impending mandate for all new homes – how are the middle-income families living from paycheck to paycheck, barely making their mortgage payments each month, going to afford a dramatic cash hit to the family pocketbook? It’s likely they cannot. Nor can they afford the tax hike that’s sure to come to cover their lower-income neighbor’s higher rent or retrofitting expense when that household can’t pay. What happens to them?
Finally, it’s been speculated that the “social justice” advocates will get the Plan’s framers to include tenant-friendly eviction protections and new rent controls. Who’s covering those costs?
In the end, the Green New Deal will be so disruptive to the nation’s economy – and housing markets – that the trauma will weaken the country and further divide it with hostility and fear. We, the people, don’t need it now or ever.