Of Forests and Finance

In one of the most ironic twists of logging booms over the past couple decades, many people still believe that the end result was construction of homes to satisfy the needs and dreams of ordinary people. There’s only one problem. The popular perception is wrong.

The consequences of this mistaken perception are still not widely reported. But they’re certainly no secret. By 1995, for example, Winton Pitcoff could write a penetrating analysis of America’s housing crisis for March/April issue of Dollars & Sense. Pitcoff reported that, “Thirty years ago the nation boasted a surplus of housing affordable to low income people. Today there is a shortage of more than four million units.”

This loss was a matter of public record. By 1995, the U.S. Census Bureau’s American Housing Survey would report a “43 percent decline over the last two decades in the number of low-rent units in the private housing market.” At the same time, out in the forests, many species were seeing their own homes wrecked by reckless logging that fed a boom in building bigger, more energy-guzzling, and more un-affordable houses.

This mutual decline continued under Democrats as well as Republicans. Pitcoff explained that the supply of affordable housing declined by 900,000 units just from 1996-1998 alone.” The Clinton administration was in power then. Despite endless and widespread claims that forest conservation would interfere with meeting legitimate human need, wild species and ordinary people alike were going increasingly homeless, or scarcely managing to hang on.

Meanwhile, Congress and successive administrations backed tax breaks that were subsidizing large and expensive homes for buyers in the top fifth of America’s income distribution. Tax allowances under the Mortgage Interest Deduction let extravagant homebuyers deduct up to a million dollars (!) in costs of borrowing for homes, including vacation homes that may sit empty most of the year.

These tax breaks, according to Dollars & Sense magazine, amounted to $82 billion in 1999 alone. This boon to the prosperous tapped forests while poor people were priced out of market after market. And the device near the heart of the matter is written into the American tax code as the Mortgage Interest Deduction. Cushing Dolbeare, founder of the National Low Income Housing Coalition, was cited in a Dollars & Sense interview saying, ” If we were willing to spend as much on low and middle income housing as we do on the Mortgage Interest Deduction, we’d have more than enough to solve the housing crisis.”

It’s not that Congress had not passed law to offer housing for the nation’s unrich. Indeed, the Federal Housing Administration was set up for that purpose. FHA even had an insurance fund to cover banks, losses if poorly paid borrowers couldn’t meet their loan payments.

However, in June, 1990, Associated Press business reporter John Cunniff disclosed that the program had been twisted to reward those who didn,t need it and deny loans to those who did. That twist, according to official records examined by Cunniff, was causing ” incredible losses” for the program’s insurance fund. It turned out that 100 percent of the government-insured loans intended for the needy were going to the well-off.

And the bigger the loan, the more likely it was to end up in foreclosure. An expert Cunniff contacted for an explanation told him that, while the government might lose money on these bad loans, the brokers who set up financing made more money on the larger ones than they would on smaller loans needed for the nation’s poor.

During booms, the Wall Street Journal would report in early 2000, homes get bigger. Like Americans, waistlines, the Journal observed, the new American home was getting much bigger, and more extravagant. While affordable housing was uncomfortably rare for the Americans who most needed it, the fortunate were demanding homes with “more bedrooms, more bathrooms, and more flourishes than ever before.”

Architects and even the builders of luxury homes were noticing the trend. An architect told the Journal that the trend was “appalling.” He said that the bigger-is-better trend was about showing off to neighbors. In his opinion, people buying luxury homes were saying, “I can be a 1920s tycoon like anybody else.”

One homebuilder interviewed by the Wall Street Journal was quoted as saying,” Does anybody need all this? No.”

Indeed, the Journal observed, ” Need is hardly a consideration these days.”

It would be hard to find a forest conservationist who would disagree.

Right now, the media hum with stories of Americans vulnerable to foreclosure on the energy-guzzling homes they could neither afford to buy or to heat. But another major problem may lie on our near horizon. If the nation ever does get around to building homes for people who really need them, the public forests no longer have the capacity they once had for meeting this need, thanks to lending/logging/construction booms that have already removed millions of acres of wild trees of every age. Any undercapacity of our forests in the face of new demand is an unrecognized cost — or an opportunity cost, as economists might state it — of the logging boom.



Right now, the media are all abuzz about need to reform America’s financial system. Well, yes, there’s plenty of reason to argue in favor of reckless lending. But homes are not built of money alone, and the needed reforms must extend to the forests too.

Gifford Pinchot, the first Chief of the U.S. Forest Service, would likely agree. “The rightful use and purpose of our natural resources,” Pinchot wrote in 1947, ” is to make all the people strong and well, able and wise, well-clothed, well-housed, with equal opportunity for all and special privilege for none.”

Back then, America’s political leadership was listening, and was responsive to ordinary needs and dreams. In 1949, America passed its Housing Act, which stated that it is the policy of the United States to provide ” a decent home and suitable environment for every American family.”

That was then.

Forests have kept falling so that buildings will go up, but luxury kept trumping ordinary needs and dreams all the way from wilderness to the city. And the nation’s financial and forest systems are left in equal disrepair because of it. To date, though, the major media are all but clueless when it comes to connecting the dots that so clearly link reckless lending and reckless logging, and the proposed new regulations only cover half the crisis.

LANCE OLSEN is Project Director of the Missoula, Montana-based Cold Mountain, Cold Rivers. This article is an adaption of an earlier one published by Progressive Populist, the Great Bear Foundation’s Bear News, and the Southern Appalachian Biodiversity Project’s Wild Mountain Times. It may be freely distributed for non-profit purposes if no changes are made in the text.. He can be reached at: lance@wildrockies.org

Copyright (c) 2007 by LANCE OLSEN. All rights reserved by the author.




Lance Olsen, a Montana native, was president of the Missoula, Montana-based Great Bear Foundation from 1982-1992. He has also served on the governing council of the Montana Wilderness Association and the advisory council of the Alliance for the Wild Rockies. He was previously a college teacher and associate of the American Psychological Association and its Division on Population and Environmental Psychology, and the Society for the Psychological Study of Social Issues. Now retired, he runs a restricted listserv of global scope for climate researchers, wildlife researchers, agency staff, graduate students, and NGOs concerned about the consequences of a changing climate. He can be contacted at lancolsn@gmail.com