How to Save American Houses and Lives
A bold new idea.
by Rich Herschlag
Beyond the Resistance
Whether we like it or not, we all bear at least some responsibility for the election of the wannabe tyrant. It’s commendable that presumably neither you nor I voted for him and that for what will soon be a thousand haunting days we’ve been vocal about the slow motion train wreck that is the executive branch of government. But with 2020 now in focus as its very name suggests, we have a duty to push ourselves beyond reprisals and toward some sort of light. Clearly an America where we simply expect others to wrestle with underlying causes and fundamental issues does not work.
In the coming months and starting today, I’ll be developing at least a half-dozen short policy pieces based on personal out-of-the-box thinking intended to advance that entity known as the United States of America. There will be no name calling, no axe to grind, no partisan politics, and no left or right strategic approach per se. It’s going to hurt a little, but not nearly as much as watching my native land slide into the abyss. Who knows—maybe bits and pieces of these ideas will work their way through the ether and into the broader public forum without having to pay Facebook.
America’s Housing Problem
A hundred and fifty years ago if you wanted a house you very well might have built one. Today, with national wealth and technology beyond the wildest dreams of Civil War-era America, a house of one’s own is beyond the fantasies of the majority of young Americans. For many, unfathomable student debt—$1.5 trillion and climbing—has caused deferment of onetime basics like marriage and home ownership to a point well beyond a swiftly receding horizon. Ironically and tragically, nearly mandatory two-earner households thwart their very formation. Long term wage stagnation is for many the final, excruciating nail in the coffin.
Meanwhile, well over a million houses in the U.S. sit vacant due to foreclosure, property tax arrears, or abandonment. Since 2014, Detroit alone has demolished on the order of 20,000 houses. If a young American single person or couple can somehow steer their way to a mortgage, because of how mortgages are structured the chance of actually owning much more than, say, ten percent of the house after five or ten years is minimal. Homeownership is glorified property rental with the bank and municipal government as co-landlords. There is no real freedom in America without equity, and for many millions of Americans equity has never been more elusive.
Mentoring to Save Homes
While buying, gutting, and renovating old dilapidated houses for rental by the seat of our pants these last few years, my wife and I came up with the concept for Mentoring to Save Homes (MESH). MESH applies the traditional concept of sweat equity to the modern dilemma of homeownership and utilizes a market-based framework.
Under MESH, a municipality designates a pool of vacant homes as blighted. An experienced, older tradesperson (mentor) takes stewardship of the home through a competitive bid. The bid may comprise both traditional dollars and a parallel currency known as MESH-bucks,
The mentor is assigned one or more apprentices. Both the mentor and the apprentices are paid a modest prevailing wage in dollars and a secondary wage in MESH-bucks. While conventional dollars may, of course, be spent anywhere, MESH-bucks may be redeemed only within the MESH system. It is within that system that sweat equity becomes real equity.
Economic and Other Incentives
For both mentor and apprentice, toiling away rehabilitating a given property for months or longer, there are at least four distinct rewards. At the most abstract level there is the satisfaction of personally rejuvenating both urban and rural America. For the mentor there is the satisfaction of passing down valuable but often overlooked skills—selective demolition, carpentry, drywalling, plumbing, electrical work, project management, etc. These rewards are mirrored on the apprentice side, where generations worth of skill are absorbed—skills just as valuable now as a century or more ago. The third reward is the conventional pay—not a windfall but steady and respectable.
Last and far from least are MESH-bucks. MESH-bucks may be applied as a down payment on any completed home within the MESH system—which includes any state, county, or municipality participating. An internet based listing system provides a complete and continually updated inventory of all such properties and their market based prices.
The administering agency redeems MESH-bucks and issues more or less standard mortgages to both mentors and apprentices. Following a minimum of three years’ resident ownership, the owner may sell the property on the open real estate market, with the administering agency recouping principal owed as would any lender.
Goals and Challenges
Obviously MESH brings with it numerous challenges. The administering agency requires an endowment for initial property acquisition, materials, labor, insurance, and professional services outside the mentor’s skill set. An in-house staff is necessary for regional project oversight, contract administration, and real estate portfolio management. Incubation time for a significant number of complete housing units to establish a real market is probably on the order of several years.
The eventual hope for MESH is that it will be self-sustaining as a not-for-profit entity. At that time, but possibly well before it, MESH has the potential to unleash vast amounts of dormant American talent while renewing neighborhoods that traditional markets have left behind. Most important of all, MESH enfranchises the chronically disenfranchised and provides Americans what they have long been denied—a piece of America.
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