3 Reasons Why Affordable Housing Isn't Affordable

 Via Verde (2012) in South Bronx is beautiful, but 800 families wanted spots for just 151 rental units. Is this a successful model? (inhabitatnyc)

Via Verde (2012) in South Bronx is beautiful, but 800 families wanted spots for just 151 rental units. Is this a successful model? (inhabitatnyc)

There is a crippling lack of affordable housing in the US. That statement is no surprise for anyone who follows this issue (or reads this blog.) Trying to figure out why and how to fix this problem is incredibly complicated, which is also no surprise. This week Joe Cortright had a good article on why affordable housing isn’t that affordable, focusing on the flawed micro-level issues of subsidizing market-rate housing construction.

Though this is fair criticism, I think it fails to address the larger structural flaws of the democratic capitalist model that we’ve relied on for so long. Challenging at least some aspects of this model remains outside of mainstream housing policy discussions, so I’ll focus on three today (though there are absolutely more that can/should be considered). Until we can reframe the debate around these larger philosophical questions, we are simply not going to solve the crisis.

1. Relying on the Private Market is Bonkers

Matthew Desmond just won the Pulitzer Prize for his sensational book, Evicted, which follows the heartbreaking story of scores of residents struggling to get by in Milwaukee. And it is heartbreaking. But Mr. Desmond’s book most importantly calls into question two deeply flawed pillars of our national housing policy (which altogether lacks a focus on renting): 1. We do not consider housing a basic right 2. We rely on the private rental market to house poor Americans.

We have collectively deemed certain government services worthy of being guaranteed to all citizens or as need-based. But, as opposed to social security or food stamps (or even slightly more abstract “default entitlements” like the mortgage interest deduction), housing is not a guaranteed or need-based government service at any level. This means that only 1 out of 4 Americans that need housing assistance receive any. That’s crazy.

Instead, we have collectively placed the small landlord on the frontline of housing the poor. As Mr. Desmond points out, we can’t reasonably rely on these individuals to handle such an overwhelming burden. Yes, there are some villainous landlords, but many more, as demonstrated in Evicted, are trying to do the right thing by tenants, trying to be fair, and trying to survive themselves.

They stand-in as convenient sin-eaters for the rest of us — politicians, advocates, activists — while the reliance on the private market goes unchallenged at the state or federal level. We can’t honestly address the affordability crisis without challenging this basic assumption. This should be easy since it is clearly failing on such a large scale.

The answer is a concentrated public effort to house the poor. I’ve been a big defender of public housing in this blog and it still shocks me how little traction the idea of returning to large public intervention gets, even from housing advocates.

Yes, there were ample flaws in the New Deal and Great Society approaches to public housing. But we can have the same scale of political and social commitment of those past interventions without the same physical and cultural destruction.

Building on examples like the New York City Housing Authority (NYCHA), where nearly 600,000 (1 in 8 New Yorkers) live in public housing of some kind, we can easily show that the model has quietly been working for 80 years despite systemic neglect and stigmatism. We should be championing NYCHA because it is and always has been a major success.

We have models to work with, we have local stakeholders to lead with — we just need the will to act. There is clearly a groundswell for this type of political realignment. If we finally recognize how much private market fetishization has failed, we can strike a better public-private balance that can affirm the public commitment to housing as a right.

2. Housing is Too Much About Land

Relying on the market also means purchasing land at market rates. Given the fact that most affordable housing is targeted in dense urban centers where land costs are prohibitive, this means that the cost per unit before construction is already an albatross for many developers.

Building farther out from city centers has long been the tried/true answer for affordable housing, and certainly lowers the land cost, but it puts those residents at a severe disadvantage geographically. This system simply can’t work alone.

There are models, like community land trusts, that remove this obstacle. After an initial subsidy to purchase land, it enters a trust that removes it from the market — and from the speculation that can raise its value regardless of the structure on it. The result is permanently affordable housing that doesn’t eat up additional tax dollars annually. This has worked in many areas, even NYC, for decades.

NYC is (sort of) examining the CLT model but has it backwards. NYC Housing Preservation and Development (HPD) is looking for proposals from non-profits that are interested in forming a CLT, but most of these groups can’t realistically afford the land cost and most are on scattered-sites that make them hard to rationalize as a cohesive entity. The city also doesn’t have the funding to help with land acquisition for these groups even if they get that far.

However, NYC does own hundreds of vacant lots that it could easily convert to a city-owned CLT. Mayor de Blasio has recently championed cleaning up the 500th vacant lot as part of OneNYC — but then turns them over to private or non-profit developers (though many of these projects are positive developments). Combining city-owned land — small, scattered sites mostly — into a single CLT would be transformative policy shift with far-reaching implications for other cities.

Every city has similar vacant assets already on the books and, even a decade after the Great Recession (caused in part by real estate speculation), many have foreclosed properties that they are still trying to unload. Stop it! Keep those properties out of the market and create cheap, sustainable housing with them. The net benefit of increased affordable housing supply will offset any property tax losses.

3. We Got Rid of Great Affordable Housing Options

I have a lot to say about the flawed regulatory jumble that has created our failing housing status quo, and, unfortunately, there is a lot of blame to go around by a lot of mostly well-meaning folks. Richard Florida has dubbed some of these actors as the “New Urban Luddites.” But the regulations that have raised the cost of housing the most for certain renters are also the quickest and cheapest to change. They are perhaps the least appreciated — occupancy laws.

NYC, under pressure from neighborhood groups and homeowners, has regulated away thousands of affordable housing units over decades by outlawing single room occupancy, outlawing basement/garage apartments, and over-regulating occupancy laws (like square footage and types of amenities) within apartments.

Most of these regulations were done in the name of public health, but many had more nefarious, even racial motivations. The result is not just a loss of hundreds of thousands of affordable rental units but also the total disappearance of an entire flexible, affordable style of living.

These types of units used to house young singles, seasonal laborers, older family members, and extended family that were willing to sacrifice certain amenities for cheaper lodging. Most of the time these were short-term arrangements as these individuals saved money for more permanent housing.

Particularly in NYC, where many single working people live alone or with roommates, and the overall population is aging, reintroducing this type of housing flexibility would quickly address a lot of housing needs without a huge effort, or a large financial commitment, from the city.

By easing the pressure on the housing market for these types of renters, this could free up units for middle-class or working-class families with children — a portion of the population that the private market (or, frankly, a lot of affordable housing development) is simply ignoring with new construction.

There are many other reasons why affordable housing isn’t affordable, but I chose these three examples to show why it is so important for us to challenge the philosophical and cultural assumptions baked into our market + localized approach to housing policy. Of course the biggest assumption that needs to be challenged is the idea that homeownership should be our national housing policy. We can’t realistically address these other issues without first reviewing the costs and benefits to our society of thinking this way. But even if we determine this is still the best course of action, figuring out how to help people towards that goal will require addressing the affordable housing crisis for renters first.