Coastal Post April 23, 1991
Joe Sixpack And The ESOPs
BY DWAYNE HUNN
Recently Coastal Post reporter Patrick Holland analyzed the potential benefits and pitfalls of the Marin City development. A couple of friends of mine actually read his pieces at Don Deane’s pub—probably because that was the only paper stocked both in and Out of the johns. After tipping quite a few at the bar, the fellow to my left, Nick Kelso, myself and my buddy Joe Sixpack started exchanging ideas.
“So wha da ya do?” said Joe to Nick.
“I do up ESOPs,” replied Nick.
Joe stared hard at the guy, leaned over to me and asked, “Did dat punk say he’d do me up because I’m an SOB?”
“No, Joe, he said he does ESOPS—Employee Stock Ownership Programs. It allows employees to invest in their companies and reap the benefits of being a stock holder.”
“Yes, that’s what I do. My father Louis Kelso felt that every American should be a capitalist. Owning capital allows one to become a two-income household— from wages and from return on your ownership of capital.”
“It was one of the means by which Mr. Kelso felt you could eradicate the need for poverty programs and get people to work better and harder at their jobs which then increases profits,” I added.
“If you own part of where you work, you’ll take care of it, make it work better and doing so will allow you to accumulate capital just like rich people.”
“Yeah, well dis guy in the Coastal Post says dees rich people are about to come to Marin City and in time they may drive the poor people out of their homes. Can you do an ESOP for dem?”
“Come on, Joe. Think about what Northbay Ecumenical Housing (NEH) does. Think about NEH’s CASA (Community Assisted Shared Appreciation) and how that’s like an ESOP.”
“The reporter says after that spanking new Marin City development is built someone will come in and want to “condomize” those not so pretty apartments on the hillside. Then all the poor people won’t be able to afford dem and be moved out.”
“They won’t be able to own because they have never been capitalists—have never owned cai3ital and participated in its appreciation and tax benefits and been able to accumulate wealth by doing so,” chimed in Nick. “Yeah, in other words, der poor,” clarified Joe. “And der ain’t many ways to get capital when yen poor.”
“Your friend is right. If you don’t own capital, it is almost impossible to accumulate wealth,” said Nick. “Little disagreement, Nick. But Joe, when his forehead isn’t bleeding from crushing 13 beer cans against it and glugging its contents down his throat, knows there are other sources of capital other than one’s business. He knows our CASA program gets people out of welfare dependency by assisting people gain that capital foothold. Come on Joe, explain CASA to Nick.”
After slapping the side of his head a couple time and washing his eyes with my glass of water, Joe said, “Dees guys at NEH raise, or maybe steal is the better word, money mostly from developers. Then they beg foundations and dis County, who some years ago gave them a few pennies and put it into der Affordable Housing Frust Tund. Dey den take dat money and fill the gap between what these low/moderate income households can afford to pay for a home.”
“What do you mean ‘fill the gap’?” Nick said.
“Hey, ain’t you an economist type” Ain’t you ever heard of second mortgages? Silent or sleeping second mortgages? Dees guys at NEH have the poor come up with the largest down payment they can, get the highest first mortgage they can, and they pay the difference with their silent second money. Dey don’t even collect on the sleeping second until and unless dose folks sell da home. Den dey each share propotionately in da appreciation.”
Well, in Marin I expect that if those families hold onto their unit for a few years it will appreciate substantially and they will become ‘capitalists.’ They will have accumulated wealth and never again need to depend on government assistance. That is a fine example of an ESOP for people shut out of home ownership! It must a wonderful, exciting program!”
“Yeah, well if my friend were smarter, he’d work less hard at it and drink more wid me. Developers are the only ones who seem to understand it in a reasonably quick manner—and they can’t develop projects to do it in Marin. Ya know, like 65 percent of the units at Hamilton could’ve been CASA ESOPs. But some environmental lady said they didn’t want those low lifes out der. Foundations and the government say they have no money for helping poor own their homes, they prefer to give der money to keep them rentin’.
“And da poor people are so busy trying to make ends meet that they don’t have time to learn about the CASA program and raise hell to get it happening… I keep tellin’ dem, get more people off that rental beast. Drinking the yeast, barley, and hops ofownership is better than eating rental crow for ever. Too much crow ain’t good for anyone.”
“Let’s get outta here before we have to pay for dis last round. I feel like the CASA second—I oughta (hiccup) be sleeping,” said Joe.