Pricing the Neighborhood with Ely Fair

In this episode of Money on the Left, host Billy Sauce speaks with Eli Fair, a UMKC economics PhD and visiting instructor at Knox College, about the structural inequality embedded in U.S. housing markets, particularly through the lens of racialized urban development in Kansas City. Fair draws on 13 years of granular data from UMKC’s neighborhood observation project to demonstrate how the maintenance level of neighboring homes directly impacts property values—creating a self-reinforcing cycle of decline in under-resourced, predominantly Black neighborhoods. He critiques mainstream neoclassical economics for treating housing markets as perfectly efficient, ignoring transaction costs, imperfect information, and the long-term social consequences of concentrated poverty. Instead, Fair advocates for a heterodox, MMT-informed approach that empowers municipalities to intervene through targeted, community-based solutions such as labor-based public works programs and tax-driven complementary currencies. He details innovative models like a municipal labor tax that could mobilize underutilized community labor for home maintenance, while navigating legal constraints around non-competitive local currencies. The conversation also touches on Fair’s historical research into the Freedmen’s Bank, where he calculates that if the bank had been properly managed, it could have generated billions in restitution for descendants of formerly enslaved people—offering a politically feasible, data-driven path toward reparative justice. The episode concludes with a call for imaginative, staged policy experimentation that balances legal safety with transformative potential. Key takeaways include: 1) Neighborhood decline is not inevitable but driven by feedback loops where under-maintenance lowers property values, discouraging further investment; 2) Municipalities have broad legal authority to shape housing through zoning, code enforcement, and labor mobilization, yet often underutilize these tools due to fear of market failure; 3) Complementary currencies can be designed to avoid legal risk while mobilizing slack labor and redistributing wealth without requiring massive federal funding; 4) Historical injustices like the collapse of the Freedmen’s Bank can be reimagined through data-driven restitution models that are politically viable and emotionally resonant; 5) The most effective interventions are not grand job guarantees but staged, low-risk pilots that build public trust and civic participation.