On the Housing Crisis, Don't Blame Landlords, Blame Legislators

 Work dumber, not harder (syracuse.com)

Work dumber, not harder (syracuse.com)

This week the Low-income Housing Coalition released a stunning report that shows that a person making minimum wage can’t afford a one-bed room apartment in 99% of counties in America. If you think we can address the affordable housing crisis by blaming landlords, this report should be sobering, but helpful.  As preverbal landlords of Congress and our State Houses, we should be kicking out our legislators for allowing this mess to happen in housing and in the economy in general.

The basic numbers are grim.  The wage per hour to afford the average one-bed room apartment in the US is $17.45, but the average wage per hour is $16.45.  (The federal minimum wage is $7.45/h but 29 states have a higher min. wage.) That means that you can’t work a 40-hour week and afford a place without being rent-burdened in all but a handful of counties.

It’s easy to blame landlords for rising housing costs and in some cases speculative greed is the culprit.  But landlords aren’t driving the crisis.  They don’t have enough power to do that. And by that logic, they also don’t have the power to help the crisis either.  

As Harvard’s Joint Center for Housing Studies housing report shows, despite the fact that housing construction has recovered from the recession, the private market is not building or maintaining nearly enough housing to meet demand and lower rental costs. 11 million Americans are still rent burdened, paying over 30% of their monthly income towards housing.  I’ll get to why local policies impact that later, but even in areas where costs are lower, housing isn’t getting built.  If the market could solve the housing crisis, it would have solved the housing crisis.

The larger problem is that only ¼ Americans who qualify for housing assistance receive it, which means that we rely on private landlords to service ¾ of Americans who are struggling with housing costs.  That’s an absurd outcome and it’s the result of poorly-considered political choices made at the local and federal level that have nothing to do with the actions of individual landlords.

At the local level, particularly in New York, I have covered many issues (tax laws, zoning laws, occupancy laws, and rent control laws) related to housing that create a needlessly complex and expensive housing environment.

At the federal level, I’ve explored the deeper problem with promoting homeownership and its racial, social, and environmental consequences.  This has calcified conversations on public housing, rental housing, and alternative methods for affordable housing construction.

But for all my focus on housing policy, I think legislators are guilty of a much larger sin: letting market ideology replace republican values as the main driver of our society.

How we organize ourselves economically is a means to a greater end, not an end of itself.  Our country was not founded on the ideals of capitalism; it was founded on the ideals of self-determination, justice before the law, and support for the public interest. 

When channeled properly, capitalism has been an undeniably superior tool in furthering those aspirations.  But when it isn’t properly channeled, it dominates our society and wreaks havoc on millions of people.

It is clear that we are in such a period and have been for some time.  It is equally clear that our state and federal legislators have abandoned their responsibilities to channel capitalism and in turn have abandoned their responsibilities of defending and supporting the republic’s larger purpose.

Forty-odd years of neoliberal economic policies of deregulation, privatization, and globalization supported at all levels of government by both parties have not unleashed the power of a rational market to address the problems in our society as promised.

Instead, they have transferred untold wealth to a tiny, nearly stateless pool of individuals while allowing our physical infrastructure to rust, our institutional capacity to rot, and our civic identity to recede.  

All while poverty is increasing dramatically and becoming highly concentrated.  Nearly 48 million Americans live in poverty, up from 34m just 15 years ago and over half of those live in high poverty neighborhoods (up from 43% in 2000.)

Rather than making the hard choices and sacrifices that are required to support and nurture our republic today and into the future, our period of late capitalism has been marked by short-termism that borders on nihilism.

As a result, the top 1% of earners has accumulated a self-reinforcing amount of economic and political power to continue this situation.  But it would be impossible if not for many more willing participants.  As Annie Lowrey points out in Citylab this week, the top 20% (households with an income greater than $112,000) have co-signed much of this new social contract.  The upper-middle class has surpassed the bottom 80% in health, education, income, family stability, and longevity at a stunning pace over the same period.

The implicit assumption guiding all of this is that America is now a zero-sum game. As Tyler Cowen points out in his recent bookThe Complacent Class: The Self-Defeating Quest for the American Dream” this is backed up by declining mobility, competition across industry, and firm creation. The type of positive-sum thinking that allowed America to continually reinvent itself has been stymied.  If there are only so many resources to go around, you’d better worry about getting enough for yourself and your family.  This is what the power of the market has wrought.

Until we hold our legislators accountable for this larger sin, we can’t realistically expect better policies at the ground level on things like housing.  It starts by rejecting the premise that we are in a zero-sum game or that our city/state governments and federal government can’t do more to break up the stagnation at the top of our economic and political ladder.  It starts by rejecting the premise that the market is more important than the republic. 

Eleven million renters are struggling to stay in their homes because too many legislators think the market is the end all be all.  If it were, we wouldn’t be in this mess. 

We need our state and federal governments to stop working for the top 20% of income earners exclusively and focus on everyone collectively. This means considering metrics beyond GDP and the stock market to measure the health of our economy.  It means considering metrics beyond economic growth to measure the health of our republic.  It means creating more dynamism in our politics, our economy, and our society.  If our legislators can’t or won’t remember their duty to the public interest – both the present and the future – then we should kick them out and find new tenants who do.