It’s summer in the Hamptons, that glittering stretch of high-priced real estate and Lamborghini gridlock on the East End. Walk through the quaint downtowns and you’ll pass upscale restaurants, trendy cafes, and real estate companies posting their listings in the windows. For $42 million you can own a six-bedroom on Mecox Bay in Water Mill, complete with staff quarters. Too steep? How about an 11,000-square-foot home on two acres near the heart of Southampton Village for $20 million? It’s not waterfront, unless you consider the pool and cabana. And if budgets are tight, you can still have a coveted Southampton address on one acre for under $1 million. All you have to do is build a house on the lot.
Meanwhile, tonight, tens of thousands of military veterans will be sprawled on sidewalks, under bridges, or in their cars.
We can eliminate this appalling inequity by imposing a requirement that a modest percentage of profits on the sale of second homes above $3 million be used to purchase bonds to build affordable housing for homeless veterans. This is not a tax. In fact, people selling luxury homes will make money on the interest from the bonds.
According to the Department of Housing and Urban Development, about 37,000 veterans experienced homelessness on any night in January 2019. The report notes that “22,740 veterans were found in sheltered settings while volunteers counted 14,345 veterans living in places not meant for human habitation.” Today, when you visit the website for the U.S. Interagency Council on Homelessness page on Ending Veteran Homelessness, and click to read the veteran homeless data, you get this message: “Sorry the page you are looking for does not exist.”
So let’s stipulate that no matter how many homeless veterans we have, we have too many.
The proposal works like this: Let’s say you are selling that $42 million, six-bedroom on Mecox Bay. It’s your second home, and you bought it five years ago for $38 million. One percent of the net gain — $40,000 — would be obligated to purchase Veterans Housing Bonds. The fund would be used to incentivize private-sector developers to build veteran housing, private-sector landlords to rent units, and local veterans groups to free up new funds to address the root causes of homelessness: PTSD and substance abuse. Your bond purchase won’t be taxable, you’ll earn interest, and you can decide whether to cash out or roll the proceeds into new bonds later.
I can hear the grumbling coming from behind the hedgerows: Why shouldn’t everyone contribute to solving this problem? In a progressive income tax system, we pay our share, so why target us for more? In principle, they might be right. But asking middle-class and poor Americans struggling to pay their mortgages and rent to do more while some Americans buy weekend homes worth millions won’t cut it. The good news? A 1% allocation to invest in Treasury bonds won’t put anyone in the poorhouse, and will give you a return on the investment. Rep. Brendan Boyle (D-Pa.) is drafting legislation for a program to create a modest surcharge on expensive second homes and dedicate every dollar to housing homeless veterans.
There should be no argument that those who sacrificed their lives by defending our survival should not be treated like discarded litter. And asking people who have not one, but two multimillion-dollar homes to make a small investment to house homeless veterans isn’t asking for much of a sacrifice.
Steve Israel, a former Democratic congressman from Huntington, heads the Cornell University Institute of Politics and Global Affairs.