Progressivism Hurts the Poor

ORIGINALLY PUBLISHED IN

By Tim Nerozzi

Progressive policies hurt the poor and minorities, according to a professor at one of America’s top business schools.

Michael Jacobs, professor at the Keenan-Flagler Business School at University of North Carolina Chapel Hill, says liberal policies on a range of issue from the environment to education often end up hurting the people liberals say they are trying to protect.

“Progressive policies designed to achieve social, environmental and education goals have raised the cost of living, resulting in an exodus of middle class and African-American families from Chapel Hill,” Jacobs said during a recent presentation at the John Locke Foundation, a Raleigh, think tank. “There’s unintended consequences.”

Local governments find themselves smothering their most vulnerable citizens with well-meaning but suffocating policies – essentially killing them with kindness.

Using the university town where he had lived for years, Chapel Hill, N.C. as an example, Jacobs showed how efforts to protect small farms and rural areas make land and housing less affordable. Attempts to block chain stores such as Wal-Mart from encroaching on local merchants have reduced the city’s affordable shopping options, making it harder for poor resident to purchase cheaper goods. It has also limited sales tax revenue, forcing the city to raise property taxes, which also raises the price of houses and rents.

As a result, Chapel Hill is one of North Carolina’s richest, most expensive, most highly taxed and unequal cities. Its progressive policies, Jacobs said, have helped make the area prohibitively expensive to live in, forcing out low-income households and minorities.

Orange County, which includes Chapel Hill, and Buncombe County, which includes the liberal enclave of Asheville, are the only two growing counties in North Carolina that have lost significant minority population over the last decade. Progressive policies, misguided public works funded through local taxes, and a lack of attention to the rising cost of living may be to blame.

Jacobs, a former U.S. Treasury official, as well as the CEO of his own “boutique investment bank,” Jacobs Capital, said he was alerted to the issue several years ago when he received property tax bills for his two North Carolina homes.

“I had two houses — one in Chapel Hill, one in Wilmington worth the same amount of money. And I got my property tax bills, and I thought there was a typo, Jacobs said at the John Locke event last month.

Jacobs was bewildered. He had moved to Chapel Hill in order to be closer to his students, having become more serious about his teaching position and devoting more time to his career as a professor.

Staring at both statements, he couldn’t make heads of tails of where the numbers were coming from.

“So, I said to my wife, I don’t know which one of these is wrong, but one of these is definitely wrong because one is more than twice as much as the other, and the houses are worth the same. Turns out, there wasn’t a typo.”

Jacobs assembled a team to find the answer. His research discovered that Chapel Hill has the highest property tax in North Carolina, sitting around 52.4 cents per $100 of value in 2017. It has the highest sales tax in the state as well. Efforts to conserve water have also given it the highest water rates in the state, he said, adding significant financial burdens to the poor.

Owning a house or land in Chapel Hill, compared to the rest of North Carolina, is financially irresponsible.

However, it’s not malice or neglect that is squashing the middle- and lower-income households. In many cases, Chapel Hill residents are hurt by the very government projects meant to ease their financial burdens.

The town of Chapel Hill, located in Orange County, infamously boasts a “rural buffer” – more than 30,000 acres of land off limits to urbanization or development. The land is zoned for low-density housing, small farms, and small businesses. The citizens of this rural sanctuary do not have access to city services such as water or sewage.

What was intended to be a barrier against unwanted development and urbanization now looks more like a barrier against affordable housing and low-income neighborhoods. With the 30,000 acres protected from unwanted development, previously inexpensive land for housing projects sits unused.

Meanwhile, one of the largest issues affecting low-income households, specifically minority families, is the astronomical cost of housing.

The buses that run throughout the town are free to use, and can transport bicycles, wheelchairs and boast other accommodations for riders. The buses are directly funded, however, by local taxes. Hybrid buses, GPS trackers for convenience, and articulated models have been rolled at varying intervals, producing a bouquet of novelty vehicles for the public.

These state-of-the-art buses do not seem to be satisfying the public demand, however, as Orange County is currently pursuing a light rail system servicing Chapel Hill and Durham in order to “ease congestion” on local bus routes and other public transit systems. This project, originally priced at $1.8 billion, has since jumped to $3.3 billion and continues to approach its genesis. Construction is expected to start in 2020.

These public utilities and grandiose gestures of public good mean nothing if the taxes required to fund them cripple the very citizens they are meant to help. Well-intended or not, the progressive policies instituted across the county are perhaps killing its citizens with reckless kindness.

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