Democrat presidential candidate and Vermont Senator Bernie Sanders is tackling housing costs with a proposed 25 percent tax on “house flipping,” which he claims will stop gentrification.
But is he really setting up an attack that could take out surging competitor Elizabeth Warren.
A “Housing For All” plan released by the Sanders campaign promises if elected President, he will “Place a 25 percent House Flipping tax on speculators who sell a non-owner-occupied property, if sold for more than it was purchased within 5 years of purchase.”
“(C)orrupt real estate developers are gentrifying neighborhoods and forcing working families out of the homes and apartments where they have lived their entire lives,” Sanders claims. “(D)evelopers and speculators must not reap profits from these neighborhoods without reinvesting in the existing community.”
On its face, it seems like a plan intended to appeal to the growing socialist and urban vote in the Democrat primary, among whom Massachusetts Senator Warren is surging.
But it may be setting up a line of attack on Warren that could doom her.
Notorious for exaggerated claims, like her attempts to portray herself as Cherokee, Warren’s biggest vulnerability is a lack of authenticity about who she is.
She’s avoided political damage from that among Democrat primary voters because, so far, she hasn’t misrepresented her liberal beliefs.
But years before she was a left-wing crusader against “greedy speculators,” Warren was a real estate speculator who made hundreds of thousands of dollars buying homes from struggling people and flipping them for huge cash profit.
One of the homes Warren flipped was bought from an elderly widow who suffered a stroke. Warren convinced the woman to sell her the house for a fraction of what it was worth, leaving the woman’s family wondering if their mother was mislead by Warren.
In 2015, National Review reported:
“Nearly two years after Veo Vessels died, her daughter, 70-year-old Mary Frances Hickman, decided to sell the home her mother had left to her. A sprawling brick house in Oklahoma City’s historic Highland Park neighborhood, it was built in 1924, just a year after Mary’s birth.
“It was really, really nice,” says Hickman’s granddaughter, Andrea Martin. That’s part of the reason she’s so surprised her grandmother sold the home in 1993 for a mere $30,000. Despite a debilitating stroke, Martin says Hickman remained sharp, and she had always been business-savvy. As an Avon saleswoman, she had at times ranked among the top ten in the country. “So I don’t know why,” Martin says. “Maybe she just wanted out from underneath it, but to sell it for such a low number — I don’t know. Maybe she got bad advice, maybe she was just tired.”
The home’s new owner: Elizabeth Warren, today a Massachusetts senator who has built a political career on denouncing the sort of banking titans and financial sophisticates who make a buck off the little guy. Five months after purchasing Veo Vessels’ old home, Warren flipped the property, selling it for $115,000 more than she’d paid, according to Oklahoma County Property Assessor records…
… Hickman’s granddaughter Martin says of the home flip: “I don’t think it’s right, but I don’t really know much about it. . . . You flip houses to make a profit, so I can’t really fault [Warren] much.
Warren bought one foreclosed home for only $4,000. She then transferred it to her brother and sold it for a 650% profit.
“Even excluding the property sold by her brother, Warren and her husband have made at least $240,500 flipping homes (before deducting the unknown sum they invested in remodeling),” National Review notes.
The Boston Globe notes the revelations “don’t seem to square with her public statements about the latest real estate boom and bust.”
It can’t be a coincidence that as Sanders watches his voting base leave him for Warren, he releases out of nowhere a tax plan aimed at the very business in which Warren made hundreds of thousands of dollars, often off people forced out of homes they could no longer afford.
Keep an eye on the Sanders campaign in coming weeks, because he may be getting ready to try and take out a surging Warren.