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Is it really a ‘Wonderful Life?’

The holiday classic offers lessons for today’s trying times.

Thomas Mitchell, Mary Treen, Charles Williams and Jimmy Stewart in a scene from “It's a Wonderful Life.”
Thomas Mitchell, Mary Treen, Charles Williams and Jimmy Stewart in a scene from “It's a Wonderful Life.”
Liberty Films

Unlike the popular holiday movie, “It’s a Wonderful Life,” there are few happy endings in the current housing market.

The film, most often remembered for a guardian angel, Clarence, was filmed in 1946. It portrays the life of George Bailey (played by Jimmy Stewart), who gives up his dreams in order to run his father’s savings and loan –  which helped lower-income citizens of the fictional Bedford Falls buy affordable homes.

It was not a popular movie when it was released, but it became a holiday standard years later. Everyone should watch it somewhere between Thanksgiving and Christmas. Dated and un-woke as it is, it is one of the kindest treatments of affordable housing in our world of endless streaming opportunities.

In the movie, George, unhappily tied down at the “building and loan,” is miserable. In anger, he lashes out at his family – after giving up his dreams of travel and adventure. However, George seems happiest when he and his partner, Mary (played by Donna Reed), are moving poor immigrant families into their new homes.

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Like many holiday movies, the story moves us away from any sense of reality into a dream world of good deeds and a caring community, with more than a few bumps along the way. George and Mary embrace the immigrants moving into affordable homes financed through their building and loan. Clarence, George’s guardian angel, appears when financial problems develop.

Henry Potter, the foreclosure-happy banker in the movie, is determined to destroy George Bailey’s building and loan to maximize the outlandish rents charged for his decrepit shacks – in “Pottersville.” That portrayal struck a nerve in the corridors of power. In 1947, the FBI issued a memo warning that movies like “It’s a Wonderful Life” might be a communist trick to undermine a well-intentioned upper class. More than 40 years later, the film was reassessed and selected for preservation by the National Film Registry and celebrated at the Library of Congress.

In our new millennium, unfolding many decades after the movie was made, housing is associated with mind-boggling debt, high prices, limited availability, and a preoccupation with high-end luxury apartments and mansions. As a result, homelessness is measurably worse in 2022 than in 1947. And those who advocate for a vital government role in addressing housing issues are likely to be called communists by the congressional Freedom Caucus, now preparing to take over the House of Representatives in the new year.

Unfortunately, it is routine for extremist Republicans to call Democrats socialists and communists for almost any reason. And, of course, their leader infamously said a group of immigrants are rapists and criminals. No wonder hate crimes are soaring in this political environment of maliciousness and vitriol.

“It’s a Wonderful Life” has become “it’s a Good Time to Hate Poor Immigrants, Your Local Librarian and Anyone Affiliated with the Voting Process.” I can’t wait to see that movie – wait, I’m living in that movie.

In the meantime, housing costs significantly increase inflation, and homeownership dreams are becoming nightmares of lost opportunities and crippling debt. But the mansion market is doing very well, thank you. Sadly, for most of us, housing is a headache at best and unattainable at worst.

Our political leadership should watch “It’s a Wonderful Life” over the holiday season and reconsider our housing policies.

The mortgage interest deduction (MID) was always a farce – it subsidizes mansions and hurts housing affordability. The MID tax subsidy favors the wealthy and does very little to help homeowners with severe housing cost burdens.

Section 8, a rental assistance program for the poor, is underfunded – it only serves one in four eligible families. Section 8 also decreases geographic mobility for many receiving the subsidy. And finding housing units that will accept the voucher can be problematic. The program needs substantial increases in funding and a lot of streamlining. Unlike the mortgage interest deduction available to millionaires, Section 8 is rarely user-friendly.

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The housing policies of the United States primarily serve the wealthiest among us. In current housing markets, trickle-down stops when it gets to those with the greatest housing needs. For too many, tents are becoming the only affordable option.

Tax cuts for the rich (of which there have been many) pour more money into the accounts of people who already have more than they know what to do with. So, they stick their largely unearned gains into diversified portfolios. Those portfolios seek balance, so they invest a portion in real estate. Private equity firms buy properties and acreage to satisfy the need for these ever-growing investments. Over time, the wealthy own more and more properties in a wide variety of housing markets.

Keith Luebke
Keith Luebke
The result: the rich get richer (and own more property), and the poor get poorer (and own less property).

State governments must do all they can to create affordable housing, but most of the problems lie in Washington, D.C.

In the meantime, George Bailey, Mary, and the “building and loan” are dead. But Henry Potter is alive and doing very well.

That will not change until we radically alter federal housing policies – to serve people who work for a living rather than people who invest for a living.

Happy holidays to everyone in Pottersville. Sorry, no Clarence in sight.

Keith Luebke retired from teaching nonprofit leadership courses and has several decades of experience directing nonprofit organizations.