“The only way to determine what a home is worth is to know what someone else would pay for it. What if those people were crazy?” — Jim Klinge in “Owned”
Real estate is the most sacred of capital throughout the world in the minds of the dominant narrative. I have rarely met anyone who has advised someone against owning property, and property ownership remains the goal of many people I know. However, with stagnant wages and rising debt, it has become clear that fewer and fewer people will be able to own property. Conversely, it looks as if the majority of the population will lie at the mercy of those who are incapable of sustaining life outside the dominant narrative. The elites seem to keep making the same mistakes as they take over components of existence, but they feel comfortable allowing the majority of the population to be responsible for their mistakes.
As a lover of the outdoors, I have always found solace from trails, walking outside and cycling, and I never thought of myself as particularly unique. However, I have noticed that there are fewer people of color along those same sidewalks, bicycle lanes, and trails than in the past. Austin is notorious for appealing to the wealthy while appearing liberal, so I began a search to see if the addition of outdoor infrastructure raised property value. What I found was that the constantly rising cost of living was effected by people across the nation who had already been censured, but created a loophole to continue their risky behavior.
Anyone who remembers 80s fashion montages will remember the rise of the credit card. Everyone was encouraged to go on shopping sprees and pay later, regardless of their capacity to afford such spending. College tuition began rising exorbitantly from the 70s, so people were holding onto student debt longer than before, especially with dropping wages compared to inflation. Some people started to buy houses, and the urban core—previously reviled as “slum” and “blight”—became popular again, and cost more now that the suburbs had lost their luster. All of this market manipulation caused the banks to fail, similar to the 1929 crash, and that was the Savings and Loan Crisis. Rather than figuring out a way to solve the problem, politicians found a way to keep the party flowing.
The first major hurdle in retaining all of the ill-gotten gains of the crisis was restructuring the law. Beginning in 1986, a group of professional appraisers crafted the Uniform Standards of Professional Appraisal Practice (hereafter “USPAP”), which were the foundation in creating the Appraisal Foundation. While The Appraisal Foundation is a nonprofit, it stands as the most pivotal cog in the real estate industry: this organization sets the standards for real estate valuation in the United States. Again, the “standards” were set by people already appraising real estate, and real estate remains the most powerful capital in the world. With this “nonprofit” in place and the rules crafted by real estate industry leaders, politicians assisted by creating the Financial Institutions Recovery, Reform, and Enforcement Act of 1989 (hereafter “FIRREA”).
It is important to remember that the first three words of FIRREA relate to financial institutions keeping the money they had gotten from the rules they crafted and the politicians they bought. None of FIRREA amounts to ensuring the autonomy of the working class or Black and brown communities, both of whom were devastated by the crisis. The priority of the elite has always been to preserve their elite status, and all people have been made poignantly aware of that fact during the multiple crises of this era. I liken the experience to watching a car wreck while driving versus walking a car wreck while walking. When driving, one is only peripherally aware of a wreck because bottlenecking–looking at the wreck while driving–is illegal. From the sidewalk of quarantine, the entire globe has seen the wreck of society that the elites have been making and all of their mistakes have been coming to a head.
The favorite weapon of the elite has the liberal use of the words “free market,” a magical unicorn that they were sure no one could catch. Marketability is not just a word that people use to rationalize poor behavior. In fact, “market value” is used for appraisal law in all 50 states and territories, and is determined by the USPAP. “Well, that makes sense, because we would want property to be appraised the same way all over the country,” one might say. A more critically thinking person would understand that property is not appraised the same way all over the country, and that there are several external factors that affect property value regardless of the owners or property management. Remember the original question I had about sidewalks, trails, and bike lanes? No single property owner determines whether a sidewalk will be expanded or a trail will commence, because infrastructure is determined by staff of the local government—not the officials. Real estate companies advertise proximity to trails and bike paths all the time, and the Walkability Score was created to track quality of life for pedestrians. All those historic communities of Black and brown people were deemed desirable once financial institutions and real estate gurus realized that they could reframe disparaging, racist descriptors of “slum” and “blight” to “urbanism” and “density.”
What are the USPAP? That is an excellent question, one that can only be answered for $75. Despite the reference to the USPAP in property appraisal law in all 50 states and the territories, The Appraisal Foundation—again, created by appraisers, financial institutions, real estate companies, and politicians—has decided that the rules are proprietary, and should be purchased. These rules change every year, and only if someone has the capacity to purchase can they gain access. This begs the question of how a law can be enforced if it cannot be accessed, almost as if the aforementioned institutions feel entitled to obfuscate the rules. Without transparency, the elite will behave badly, and the country was again shown how reckless they can be with the mortgage crisis that escalated under Bush II.
Instead of being allowed to create universal healthcare in 2009, Barack Obama first had to contend with the fact that several families were being forced out of their homes by adjustable rate mortgage scams, sold by the financial industry. Elizabeth Warren was made popular from telling the president of Wells Fargo that he should go to jail, although he never did. Rather than hold any of the financial institutions accountable, Obama was pressured to alleviate the “burden” of the financial and real estate industries, and the Federal Reserve was commanded to pay $29 trillion to keep the banks from failing. None of the families who lost their homes were refunded for the deception of bad financial tools, and their devalued property was sold to wealthier people, who could then spur the AirBnB and VRBO excitement.
With hidden rules and no consequences, the dominant narrative has demonstrated that marketability is arbitrary, and real estate values are decided on whims and personal preferences of White people. These inappropriate depictions of fake wealth determined by hidden rules have hurt real people, and the government takes no responsibility for the fact that this market manipulation has led to the absolute destruction of communities of color. Marginalized communities have mixed feelings about improvements, because they know that renovation can raise their property taxes or rents. Black and brown people are falsely depicted as hating the outdoors when their real concern is whether they will be forced to move. While elites may feel that $75 is an “appropriate” price, I know from personal experience that $75 can be two months’ worth of groceries or an internet bill. After all, how can people accurately represent themselves in property tax appeals without the guidelines used for appraisal?
In math, all teachers will tell students to show how an answer was obtained, otherwise referred to as “Show your work.” For centuries, the public has behaved as if this rule does not apply to the legal world, and that the elites can say whatever and force the public to “just believe.” Property appraisal is the Holy Grail of maintaining capital, which is why the industry has worked so hard to obfuscate the process. The fact that state law has included this reference without actually including the standards means that there are probably countless other hidden laws, and the government has proven its untrustworthiness. This is not unlike the eminent domain scam: if the government wants to take over property, it cannot then tell the homeowner that the property is worth nothing to reduce its cost. As the government included the fake rules in its statues, the government should be held to those same standards.
Fascinatingly, the dominant narrative has proven its own irrelevance. There is no actual demand for luxury housing with so many unemployed people and stagnant wages, but developers are still trying force everyone to pay high costs by refusing to create affordable housing. All this demonstrates that there is no real way to quantify the cost of land, a realization that is more significant as water has been introduced on the stock market. Land is deemed valuable by the presence of White people and the entitlement of the real estate industry, and this has unfortunately translated into “White people get to play, while Black and brown people have to pay.” Until the appraisal standards are made available free and clear to the public, private industry should be waiving back rent and mortgage penalties during the current multiple crises, and politicians who enable this predatory behavior should stop coming up with baseless reasons to avoid offering relief. No one asked to be prey by these heartless predators.