affordable housing crisis

Comptroller Stringer: NYC’s Housing Plan Isn’t Helping 582,000 Low-Income Households (Via Data For Progress

Not even close (homeBodynetwork)

Not even close (homeBodynetwork)

This article originally appeared in Data for Progress

On Thursday, City Comptroller Scott Stringer published a startling report on the affordable housing crisis in New York City that shows a significant gap between the housing needs of extremely low-income New Yorkers and the targets of Mayor de Blasio’s Housing New York 2.0 Plan. The report also proposes a couple of intriguing progressive ways to address it.

In total, 585,000 New York City households with very-low to extremely-low incomes face severe housing pressure, representing nearly 20% of the city’s population. Looking into the numbers a bit closer, an estimated 515,000 New York City households face severe rent burdens and overcrowding. Two-thirds of these households make less than $28,000 per year and are paying a staggering 74% of their monthly income towards rent.  

Chart 1: Income Distribution and Rent-to-Income Ratios of NYC Rental Households 2005 - 2016

Chart 1.png

More disturbingly, a record 60,000 New Yorkers are living in homeless shelters, despite a third of them having jobs. There are 5,000 families with children that have been living in shelters for over a year and another 2,000 that have been there for two years. In just 4 years, the city’s spending on homeless services has doubled to nearly $3 billion. (Chart 2)

Chart 2: Growth in Spending on Homelessness and Average Shelter Population

That’s a daunting amount of need, but the mayor’s housing plan has barely attempted to target it. The plan, which Stringer acknowledged was the most ambitious since the Koch Administration, calls for the preservation or construction of 300,000 affordable housing units by 2026 at a cost of $83 billion (up from 200,000 and $43 billion when the plan was introduced in 2014). To date, 75,285 units have been preserved and 34,482 new units have been constructed, which puts the plan at just over one-third of the way completed.

Chart 3: The Need vs. Housing New York Plan 2.0 Targets

Screen Shot 2018-11-29 at 5.45.09 PM.png

However, as you can see from Chart 3, only 25% of the 300,000 units have been allotted for very-low to extremely-low income households, despite those households representing 88% of the most severely distressed in the city. To put it in context, even if the plan is successful, it will have built 75,000 units to service a population of 515,000 households.

Groups like Real Affordability for All have criticized the mayor’s housing plan for ignoring low-income households before, but Comptroller Stringer’s report is less a criticism and more of a suggested pivot. It includes three proposals for the city to realign the existing housing plan towards these low-income households.

First, it suggests committing the remaining target of 85,000 new construction units to extremely-low income households. Second, it suggests raising the percentage of units set aside for homeless families from 5% to 15%.  Third, and most radically, it proposes a new operating subsidy for landlords for preserved units that go to extremely low-income households to help landlords.

Those won’t be cheap. According to the report, targeting extremely-low income households for the remaining 85,000 new construction units would require an additional $370 million per year, while the operating subsidy would be $125 million per year. Both numbers deserve more scrutiny, particularly the operating subsidy, which has been suggested on a larger scale by some notable presidential hopefuls but has come under harsh criticism.

For progressives, the most interesting aspect of the report is how it proposes creating new sources of revenue to cover the costs.  Comptroller Stringer first turns to his long-held support for creating a Land Bank to give city-owned vacant lots to non-profit developers and community land trusts, vastly reducing the cost of new construction. His office estimates that the 1,000 plus current inventory of vacant lots could produce close to 40,000 units. These units would have the benefit of being permanently affordable and locally-owned.

More significantly, he proposes a progressive change in how to tax home purchases. Currently, a potential buyer who pays in cash pays less tax than a buyer financing through a mortgage. This quirk exists because the city and state tax the purchase price through the Real Property Transfer Tax (RPTT) and the mortgage through the Mortgage Recording Tax (MRT), which effectively double-taxes people who can’t afford to pay in cash.

This is backwards for two reasons. Obviously it makes it even more expensive for middle class and working class families to buy homes in the city. It also grossly under taxes high-dollar cash transactions made almost exclusively by anonymous high-wealth individuals, foreign investors, and private equity firms. The report highlights the fact that in 2016, 80% of Manhattan condo purchases over $5 million were all cash.

Chart 4: Current and Proposed NYC Transaction Tax Rates on NYC Property

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The report suggests eliminating the MRT altogether and installing a new, progressive rate schedule for the RPTT, as seen in Chart 4. Although still relatively low compared to other global cities like London or Singapore, the tax could potentially create $400 million in new revenue (while reducing the tax burden on a middle-class buyer). Even if a higher tax lowers the volume of sales, scaring off the speculative frenzy enveloping the city would be welcome on its own.

Comptroller Stringer suggests that this tax would more than cover the cost of the report’s proposals. He also suggests that if enacted, the proposal would likely reduce spending in other areas, particularly around homeless services.

That may be the case, but the political path forward remains murky. Like a lot of progressives in the city, Comptroller Stringer is banking on the new Democrat majority in Albany being open to his proposals, but that line is long and loud. The City Council has been sitting on a land bank bill for several years and might not be eager to support a potential rival for 2021 (He notably doged any discussion about running for mayor). Most importantly, Mayor de Blasio is never eager for outside input into his administration, let alone on his signature policy.

Regardless of the politics, this report outlines a city in dire need for bolder action to address the affordable housing crisis while there is still time. The city’s government has become over reliant on skyrocketing real estate prices fueled by faceless investors and foreign entities while ignoring the lived experience of everyday struggling New Yorkers. That might be easier to ignore when the economy is growing overall, but it will be impossible to forgive when it inevitably goes in the other direction.

5 Reasons to Support Universal Rent Control

(stoprebnybullies)

(stoprebnybullies)

Election Day is here and, depending on your perspective and persuasion, our country will be saved or doomed. Maybe both, maybe neither. On a personal note, I’m proud of playing a small part in a cycle that has seen the emergence of a progressive left as a growing electoral force.

In the spring, I started hearing about a young woman running for Congress in the Bronx, and it was a single tweet from her talking about housing as a right that hooked me. It was something I believed, but never thought would become an actual rallying cry in American politics.

Since then, over the last 6 months, I’ve knocked on countless doors across 4 of the 5 boroughs (sorry Staten Island) for Alex Ocasio-Cortez, Julia Salazar, and for many other progressive candidates that believe the same thing.

I’ve met amazing, committed activists of all ages and backgrounds that have come together to talk about important issues, promote great ideas, and elect amazing candidates. For a housing nerd like me, I’ve especially been inspired by the community of housing organizers that I’ve come to know.

There were a lot of important issues that got people fired up this cycle. However, universal rent control is one of the most exciting movements that has started to come into focus. It is an opportunity to radically change the political landscape in Albany, but has a long way to go, even if things go right on Election Day.

I wanted to make one final pitch to voters about what universal rent control means, why its so important, and why supporting the candidates who believe in it is so important. Here are 5 reasons to support universal rent control:

1. It’s the first step in breaking the rigged the political system

Everybody complains about how corrupt Albany is, but it really is, and real estate is the reason why. REBNY (The Real Estate Board of New York), one of the major political arms of big real estate developers, spends like crazy every election cycle on politicians from both parties and gets its members to spend even more.

It’s money well spent. It gets its members generous tax incentives, weak tenant protections, and a stable, predictable political landscape that favors developers. Then they take advantage of extreme gerrymandering, lax campaign finance laws, and voter suppression measures to keep their preferred candidates in power and to keep voters out of the process. (Many of the candidates they back also block other progressive issues in Albany.)

This means that renters, the homeless, small landlords, and low-income communities across the state are blocked from expressing meaningful political power. There are just enough politicians speaking for these groups to give the appearance of a fighting chance, but the supremacy of the status quo is undeniable.

This election cycle is challenging the status quo. During the Democratic primary in September, pro-tenant progressive candidates beat a slate of establishment Democrats, including 6 out of the 8 state senators of the now defunct Independent Democratic Conference (IDC).

These candidates (and even candidates from other parties) all ran on a platform that rejected real estate money and most embraced universal rent control. These candidates are pro-tenant, but as importantly they are pro-democracy. By taking rightful power from a tiny group of wealthy developers and giving it back to the broader population of New Yorkers, we can start to solve the deeper political crisis in our state that is fueling the housing crisis.

URC is the first and biggest opportunity to turn this momentum into law, just as our current rent regulation laws are set to expire in 2019.

2. It’s the only immediate way to slow down rents

Universal rent control will apply to every renter in New York state and is designed to block extreme rent increases, prevent unfair evictions, and eliminate perverse incentives to kick out tenants. This is the only way, right now, to protect tenants from increasing rent pressure. When half of all rentersare already burdened, help is needed fast.

URC will improve on the existing rent regulation protections in two critical ways. First, it will apply to all renters. Current laws apply to less than half of all renters in NYC and a tiny fraction outside of the city, so the benefits are not widely shared and understood. Second, it will remove the many loopholesthat allow landlords to raise rents in regulated units and to remove units from regulations altogether.

By closing loopholes and spreading protection to all renters, the housing market in New York will change dramatically. Every renter will gain meaningful protections against the type of stress and abuse that have become typical for too many.

It is a blunt tool for sure, and it must be part of other large reforms in land use policy, property tax law, and occupancy requirements, among others. But on its own, right now, it will help protect tenants from the onslaught of the housing crisis and show them that political change is possible if they remain united.

3. It’s the best way to stop the homelessness crisis from getting worse

There are a record 89,000 homeless New Yorkers across the state, 62,000 of them are in NYC. A large portion of them are families. Many of them are veterans. Lots of these adults are working. This is happening while our economy has been “booming” for ten years.

This is a moral failure. If that’s not enough for you, then it’s also a policy failure. The number one reason for the spike of homelessness is a lack of affordable housing. People can’t afford to stay in their homes and can’t afford to move and/or secure new housing.

New York spends millions of dollars trying to fill the gap with shelters and supportive housing, but we should be working on keeping people in their homes to begin with. Eviction prevention is a proven method to improve outcomes for housing insecure individuals and is a substantially more cost effective policy for taxpayers.

URC includes the expansion of eviction protections currently underway in NYC like right-to-counsel and anti-harassment measures, but it can also include a streamlined system for short-term rental assistance before eviction proceedings start. Many of the existing rental assistance programs at the state level are difficult to navigate and apply to a narrow pool of applicants. Federal programs are even worse.

Simplifying and expanding these programs under a URC platform will be a net benefit for these New Yorkers and for the state. Ending homelessness is a choice and one that we can do with a relatively small operational lift.

4. It will spur competition and innovation in housing construction

URC is a drastic intervention in the housing market and flies in the face of every 101 econ class lesson, but it is also necessary and justified because the housing market in New York, and especially NYC, has always been broken. It might be counterintuitive, but URC can actually fix this.

In a classic market simulation, perfect competition between rational actors creates an equilibrium between supply and demand cancelling out profits. No capitalist actually wants that and, historically, capitalists have worked very hard to prevent that from happening. Our current form of late capitalism has perfected this.

This is especially true in the housing market. Simply put, the market doesn’t build enough quality affordable housing because it isn’t interested in doing so. It only does so with expensive public subsidies. Every activist agrees that we need a greater supply of housing, but our reliance on this method has produced few affordable units relative to need at truly astronomical per unit costs. The only winners here are developers.

As much as developers complain about it, the cost and complexity of building in NYC benefits them because it prevents new developers (big or small) from entering and competing. A restricted supply and complex regulatory landscape raises profits and limits competition, leaving a small, wealthy community with a lot of power and incentive to maintain the status quo, which is what REBNY does well.

This hardly makes for a healthy market. Tenants don’t have corresponding market power because they don’t have the power to “vote with their feet” to change this status quo. Without a “pure” market (never gonna happen) to even the playing field for tenants, the argument for URC becomes obvious.

URC would remove the worst predatory actors from the market by restricting rents, but if it includes complimentary reforms that create more competition, (things like reforming occupancy laws, zoning restrictions, property tax law, but there are many ideas to pull from) it could spur a renaissance in construction practices and productivity that have been slow to materialize under the current status quo.

We need to encourage more innovation and competition within the development community to add housing more responsive to the public’s changing needs. This includes more use-specific options for seniors, special needs individuals, families, and young singles, as well as incorporating more sustainable construction and energy-use methods.

URC is a rejection of the current structure of the housing market, but that doesn’t mean it can’t be a vehicle for innovation. By establishing Housing for All as the goal of the housing market, URC is challenging who gets to compete and what ideas get to compete.

5. It will stop displacement and encourage local ownership

The post-recession emergence of foreign and institutional investors at the high-end and the growth of house flipping platforms at the low-end have created unprecedented competition for real estate in many corners of the state. These forces have particularly targeted low-income communities of color, triggering levels of displacement that we are only just starting to understand.

It’s no surprise that large scale investors have turned to single-family properties and small multi-family portfolios in cities like NYC. They are safe, highly privileged assets in American tax law and are the benefactor of the larger trend of people preferring to live in urban environments. High debt levels and stagnant wages have further increased the demand of rental housing for younger and older Americans. The prospect of weakening already leaky rent regulation laws only creates more interest in these buildings.

URC will obviously change the calculation on rising rents. This will in turn have a potential impact on the attractiveness of housing as an investment asset overall. Removing the speculative value of housing will lower the costs not only for renters, but for local landlords and community groups to take on ownership.

If URC gets passed, making it easier for these types of local actors to own the land and buildings in their community will prevent displacement and retain prosperity within these communities. The same coalition could support alternative equity models like community land trusts to further empower community-led ownership.

The fight is just beginning

I am too burned from 2016 to want to hear, let alone, make predictions about Election Day. But at the local level in New York, there is a real chance that progressive change can take hold in Albany after the election. If the Senate flips, there is a credible chance to enact universal rent control.

But the fight will be brutal. REBNY, RSA, and high-influence developers were clearly caught off guard by the rebellion in the primaries, but they have considerable structural advantages in Albany. Governor Cuomo will be a particularly vexing wild card.

Whatever happens on Election Day (I may update this as needed) I hope that voters, long-time or first-time, continue to stay involved with other activist groups. The coalition for universal rent control is still in its early stages, but the housing rights and tenants rights communities have been around for a long time. Channeling the experience of these groups with the energy of newly engaged local voters could produce some truly remarkable change in 2019. Here’s hoping.


Universal Rent Control is about more than tenant power, it’s about reestablishing democratic power over the market


As election day approaches, the stakes keep getting higher and the political environment keeps getting scarier. It was inevitable that the President would turn to imaginary fears and blatantly false claims to poison the climate, partly because he sees the grave risk in “losing” the midterms, but mainly because that’s who he is. It is disheartening that so many other Americans seem to share his darkest impulses. It might not be enough to prevent Democrats from retaking the House, but we’ve seen that song and dance before. 

The real question for me is: how much will change if the Democrats win? The battle in New York for Universal Rent Control is a good place to consider what needs to change, what could change, and what might not change within the Democratic Party.

(Honestly, this blog got away from me and is more about the political process around URC than specific policy proposals, but feel free to check out something I wrote about it here for more details. I will be following up this article with more about URC.)

Now, of course things will change considerably for the President if Democrats take back the House. There will be actual oversight of the administration. There will be meaningful roadblocks to the Republican agenda on the hill. There will be some reaffirmation of some democratic checks and balances. This is all great.

But, look, we’re still in a bad way. The faith in our democratic institutions has eroded because the institutions themselves have eroded. The faith we have in each other as a whole has eroded because our vision of each other as a whole has fractured. The faith we have in the American Dream has eroded because our economic reality is a world away from it. Most disturbingly, the faith we have in our climate security has eroded because our planet is clearly in grave trouble and we’re failing to face it.

None of this changes if the Democrats take back the House

It won’t change and it’s not for the obvious reasons that they might still lose the Senate, don’t control the White House, and don’t control the Court. It’s the same reason why even taking power back in New York might not result in real change.

It’s because the Democratic Party doesn’t have any real answers for these problems. They haven’t for decades. Just look at this recent interview with Rep. Nancy Pelosi (starting at 2:58.) Seriously, what the hell is she actually talking about? They are nowhere near the nihilism of the Republican Party, but that’s not hard or virtuous. 

As the party continues to make commendable strides in promoting diverse candidates that better reflect the 21st century American experience, it has been notably less successful at promoting ideological diversity. They have allowed candidates to run to the right, but have mostly isolated those that run to the left. 

It’s obvious why: Democrats have been corrupted by the same system that has corrupted the Republican Party, only in slightly different ways, by only slightly different actors. And that system isn’t working.

For decades, both parties fully embraced neoliberalism as the end of history ideology

Privatization, deregulation, and globalization have been the name of the game for 40 years in America and both parties have become beholden to the moneyed interests that wanted it, benefit from it, and jealously guard it.

To be clear there is nothing inherently wrong with a competitive private sector, a proactive regulatory regime, or a deeply connected international world. In balance these elements can make us all safer, richer — financially and culturally- and healthier. But neoliberalism hasn’t delivered that world. There is no balance. 

There is something inherently wrong with “trusting markets.” 

The obvious point is that neoliberalism by definition doesn’t trust or value democratic control of power. It’s central belief dictates that power will be competitively dispersed between rational economic actors and that that competition will inevitably produce better outcomes for society. 

Those are some major leaps of faith to build a global society on:

  • It assumes that economic actors are rational (which is far from true for individuals, firms, and even states) and discounts the consequences of when they aren’t rational, which is most of the time. 

  • It assumes that competition between these actors will be honored rather than crushed, which is what always happens (either by brute force or collusion) and is unprepared for the fallout. 

  • And it assumes that all of this will produce a better society, while it has clearly ignored the toll it takes on the planet and on vulnerable populations.

What neoliberalism has left us with is a vastly unequal and unparalleled concentration of wealth and power that we can barely see let alone hold accountable. It has left us with a wake of destructive exploitation of human populations and natural resources that we can’t prevent or replenish. It has left us with severely compromised democratic governments that can’t represent or protect us. And it has put the very-near-future of our planet in peril. 

This is because the hallmark of neoliberalism is illiberalism, a fake democracy. It’s a term that we’re starting to hear used more about countries like Turkey, Russia, and Poland, but we have been experiencing it here for a long time. The structural flaws within the Constitution, the shameful voting suppression efforts in many states, and the corruptive flow of money across all levels of politics and media have warped our government far from any definition of “self.” Neoliberalism requires this. It’s a really raw deal for most of us.

How Democrats went from the New Deal to Neoliberalism matters for how we get them out

The Democratic Party is complicit in this. The party abandoned its New Deal commitment to democratic control over the economy, to public investment and ownership, and to sharing the benefits of prosperity evenly across society with an ever wary eye towards the future.

The New Deal represented a clear, unifying theory of self-governance forged from the trauma of the Great Depression: a strong interventionist state to create and spread wealth. It became the bedrock for the greatest sustained civic growth and wealth creation in the history of the world and it kept Democrats in power for 50 years. It remained the de facto organizing principle for decades because not only was it a powerful narrative, but it did what it said it would do. People believed in it because it did make life in America better.

Mostly for white Americans. That commitment wasn’t perfect and its fatal flaw was its reliance on actively preventing other groups, domestically and internationally, from partaking in it, often violently. 

By the 1970s, the world was starting to catch up with the US economically or resist it’s influence militarily and at home the civil rights and gender equality movements, plus opposition to the Vietnam War, began to fracture the coalition. Tragically, it could not adjust to these new voices and realties. 

For the first time, many people felt that the American pie was as big as it was going to get and that it was necessary to fight over and protect your piece of it and prevent others from getting close to it. The right started exploiting these tensions to further crack the coalition with growing success. Nixon’s infamous “Southern Strategy” worked twice and has remained the Republican Party’s default playbook ever since. It has only been more naked with Trumpism.

When the New Deal seemingly ran out of answers to expand the American pie, it created a vacuum that neoliberalism filled.

Racial appeals and resentment were powerful subtext, but a movement needs actual text to rally around. Neoliberalism was a powerful narrative answer, especially in the hands of President Reagan. It was cloaked in Cold War rhetoric and spoke about expanding freedom throughout the US and the world. The way to expand the pie was to end communism and open up the world’s markets. It seemed very American.

But, unlike the New Deal, neoliberalism hasn’t done what it said it would do. Or, perhaps more accurately, it has done exactly what it was intended to do, but its supporters who said otherwise were either villains or fools. It has seized political power from popular representation and given it to a small amount of corporations and wealthy individuals. 

There is nothing “American” about enriching a tiny portion of stateless oligarchs and firms by turning people against each other, by robbing the public of our own social and economic capital, and by selling out future generations even as the current population’s slice of the pie is actually getting smaller. But that is what has happened under neoliberalism.

Although President Reagan was wildly popular and enacting neoliberalism created an air of revolutionary spirit, it never did kill the New Deal coalition. Democrats remained in control of Congress all during this period and voters remained wary of calls to totally deconstruct the welfare state (at least for white people.) 

But Democrats killed the New Deal Coalition. Bill Clinton killed the New Deal Coalition.

Though many old guards held out, a new generation of party leaders eagerly accepted the premise that the New Deal was failing, that America had turned right and that it was advantageous to go with them. Rather than try to challenge corporations’ and wealthy individual’s power, they wanted to channel it.

In the wake of several presidential losses (though, again, Dems held Congress each time) Clinton became Nixon essentially in 1992 and ushered in a Democratic machine that relied on big donor money and cosy relationships to corporations and Wall Street while distancing itself from “the era of Big Government” as though it hadn’t worked for the majority of Americans all along. Tough on crime, tough on welfare, tough on unions looked like “Serious People Making Serious Decisions” but was really slow moving betrayal of the New Deal coalition. 

The party has remained in the Clinton image ever since. President Obama included. It hasn’t been able to counter Republicans slow turn to the right because it has largely accepted their worldview and has been left arguing over degrees.

Ironically, Republicans realized the neoliberal game was up first

Despite pulling a Weekend At Bernies with the corpse of Ronald Reagan for years, it has been clear for a long time that Republicans have largely abandoned neoliberalism and replaced it with an ethno-nationalism that is really just zero-sum oligarchy with a bunch of racism and fanaticism to scrape out electoral victories.

The Democratic Party, at the national level, but also at local levels, has been left in the awkward and clearly untenable position of half-heartedly defending neoliberalism. Sure, compared to the nihilism of the Republican Party, protecting the status quo seems appealing and even noble, but it isn’t. 

Neoliberalism in the first place was a betrayal of the modern Democratic Party’s New Deal ethos and hasn’t worked for most Americans anyway. The American pie is getting bigger for the wealthy (many of which aren’t American) but fewer people are getting slices at all.

Forget #theresistance and resist the Democratic Party’s continued dereliction of duty

At all levels of the Democratic Party, the reliance on big donors and corporate coziness has killed its ability or desire to counter this and to address the issues facing our country in meaningful ways. Big, sweeping visions of societal change are anathema to these interests and thus the party has turned to bland incrementalism and technocratic insularity to keep muddling along. 

It is obvious that this has failed as a political strategy, particularly at the state level where Democrats have lost over almost a 1000 seats since 2008. But it has failed as a moral imperative. 

We need big thinking to turn things around. We need big actions to save the country and the planet. We need big ideas to overcome the cultural decadence and civic rot fueling all of this, which was encouraged by the individualist consumerism that neoliberalism requires.

That’s why the Senator Bernie Sanders 2016 campaign was so important, even if it fell short. It started much needed and much unwanted soul searching within the party because it was about big ideas. It was about what kind of country and what kind of world we can create if we control it. 

It offered a glimpse of a 21st century version of a New Deal coalition that has had a powerful impact on the party, despite every effort to resist it. It shows that there is a hunger for taking back democratic control over the economy and the environment from the market that neoliberalism trusts exclusively.

It has been slow and will continue to be, but the successes of leftist social-democrats like Alexandria Ocasio-Cortez (full disclosure: I volunteer for her on housing policy), Ayanna Pressley, and Rashida Tlaib at the national level means there will be more voices in Congress speaking for more people that have been voiceless there and within the Democrat Party for too long. This is an important development, regardless of who wins control of the House on November 6th.

Universal Rent Control is one of many local fronts in the fight for the soul of the Democratic Party

Wrestling back democratic control of the Democratic Party at the national level will be a multi-cycle project. There are, however, a lot of opportunities to impact the party’s future where you live. The real fight for the soul of the Democratic Party is happening locally as we speak over issues like Universal Rent Control.

In New York City, Ocasio-Cortez’s upset victory swept national attention and has made her an instant rockstar on the left, but she will be the first to say that she is part of a ground-up grassroots movement that is bigger than any one candidate or office.

That was on display in many New York Senate primary races on September 13th where 5 of the 6 NYC members of the infamous Independent Democratic Conference (IDC), who voted with Republicans in Albany, all lost to left-leaning candidates. All of these candidates ran on an unapologetically social-democratic agenda that includes universal rent control. They and others need help to win in the general election.

There is a real chance that despite severe gerrymandering, and real estate lobby money, Democrats will win the Senate in Albany for the first time in decades (the Assembly has long been in Democratic control) on the strength of this social-democratic agenda.

Democratic control of Albany doesn’t mean social democratic control — or that Universal Rent Control happens

If that happens, we’ll see just how much of a battle taking back the Democratic Party will be and why neoliberalism has such deep roots in Democratic politcs. The IDC and Republicans are an easy target to blame for the lack of more progressive policy in New York state, but the truth is more complicated. 

Many New York Democrats, notably Governor Cuomo, who is the poster boy for cynical Third Way Clintonism (he was HUD Secretary in Clinton’s second term after all), are skeptical of progressive policies and have deep ties to the real estate industry that make up the base of the traditional big donor interests in Albany.

Will these traditional Democrats listen to their constituents and the grass-roots movement trying to save the Democratic Party? How many Democratic voters recognize how much of the problem lies within the Democratic Party itself? The primary results show that there is real momentum, but the activists fueling this rise need to rally more Democratic voters to the cause, and it means talking about big ideas again.

URC and every progressive fight must be framed as taking back democratic control over our economic and environmental destiny

Universal rent control is a big idea. At heart, it is a series of policy proposals that aim to protect all renters in New York state from harassment, displacement, and homelessness. It’s a completely justifiable policy proposal given the structural nature of the housing crisis that cries out for more tenant protections. Half of all renters in New York are rent-burdened and there are over 89,000 homeless New Yorkers in the state. On top of this, the city and state are not ready for climate change, which will effect many of these low-income communities first.

Universal Rent Control has been and will continue to be attacked by the real estate lobby, most economists, and many members of the media as a foolish, self-destructive fantasy. That’s horseshit.

“Highest best use” has been the religion defining neoliberalism’s economic and political policy for decades, even as it has enriched faceless corporate entities at the expense of local communities and popular representation. The principles of efficient allocation of resources appear to be agnostic and empirical, but they are still subjective assessments of fundamentally moral arguments about what a society should be and whom a government should serve.

That’s why URC must be understood as being the head of a larger political spear aimed at fighting the illiberalism at the heart of neoliberalism. It is about taking back power from the high priests of the market. The goal is to give power back to the people through democratically elected leaders and popularly supported laws. 

Illiberalism has been on displace within New York State for years: blatant gerrymandering, terrible voting laws, and endless amounts of anonymous money (much of it coming from the real estate lobby) make New York’s government a truly anti-democratic institution. Only popular movements like URC can finally end this system.

To be clear, the point isn’t to suggest that ‘the people’ will agree on every issue. The point is to reestablish democracy as a forum where all sides felt heard, all views are addressed, and as much consensus is reached as possible. Only then will our self-government live up to its definition. Only then will it have legitimacy and buy-in, even if the results are compromises. That’s the whole point.

This is all a moral failure. Let’s keep calling it that.

Democrats have long abandoned the sense of morality that was the foundation of the New Deal coalition’s success. I’m not suggesting that the Democratic Party is devoid of morality. They have adopted moral language rhetorically for certain vulnerable populations and on the environment. Some of this language has resulted in real, meaningful action. 

But most hasn’t. As a result it falls into the lose-lose situation of being lambasted for its overly “PC” rhetoric and focus on identity politics while not actually taking legislative stands for those issues, harming those constituencies.

Democrats don’t need to try to revive the New Deal coalition per se. 40 years of increased diversity and increased economic burden has greatly expanded what this coalition should and could look like. But to do so will require reviving the moral clarity and civic purpose that it represented. If the New Deal came out of the Great Depression, the next version should come out of the Great Recession. 

It is a message that already polls well with Americans from all political spectrums. There will be political victory if the Democrats do, but that will pale in comparison to saving the country and the planet. The only way to do that is to wrest control back from the markets.

Let’s start with calling out the immorality of our housing policy. 80,000 of our fellow New Yorkers should not be homeless. Half of all renters should not be burdened. So many seniors should not be so close to housing disaster. Communities shouldn’t be displaced for the sake of private equity profits. 

These are choices that have been made without our consent. Universal Rent Control is the first step in taking control of these choices and fixing them. That means greater public investment and ownership of housing. That means holding the private sector accountable as a partner, not as a master. It means redefining what our society should value and who should get to debate and ultimately define that.

For all of us as individuals, this means getting out there and supporting movements and candidates that want to take control of these choices. There is still time before November 6th to get involved, but the work won’t end there. It won’t end if Democrats win or lose in Albany or DC. We must keep shaping the fight for the soul of the party and keep making it clear that this is about saving our shared future.

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2020 Democratic Presidential Hopefuls Shouldn't Focus on Lowering Rents - Here are 3 Other Things

Frenemies at the gate (usnews)

Frenemies at the gate (usnews)

Along with every housing activist, I have been beating the drum for more attention to housing at a national level for several years now, so on one hand, the recent focus from Senators Kamala Harris and Cory Booker is a welcome development. Both senators have proposed similar housing bills that would aid renters nationally. On the other hand, neither of the bills, which are very similar, would solve the affordable housing crisis and would likely feed it in other ways. It goes without saying that both bills are largely rhetorical devices for shoring up progressive cred leading up to 2020 and won’t go anywhere, but let’s take them both at their face and see why they don’t excite me.

First, it’s important to point out that the affordable housing crisis is a crisis of late capitalism. In our current era, wealth and opportunity are concentrating in a narrowing pool of individuals, firms, industries, and geographies. Housing costs are skyrocketing in the select few environments where many of these factors overlap and housing costs (and values) are going down in the many more environments where few or none of these factors exist.

That is to say that there is no national housing policy that alone can address those forces AND there are no national economic or social policies that are currently up for debate that come close either. I believe we can absolutely craft smart housing policies at the national level that can help millions of Americans, but the larger crisis of late capitalism must be addressed to end the factors that fuel the housing crisis. That will take big change.

I don’t see Senator Booker or Senator Harris acknowledging the larger fatal flaws in our current iteration of capitalism (though they may have to if they want the nomination). Both have made their careers supporting this system and supporting those who benefit from it. No amount of social progressiveness can erase their explicit endorsement of this economic system even if they say otherwise. If either of them did, these bills wouldn’t look the way they look.

Instead, both senator’s plans aim to treat — or really, manage — the symptoms. That doesn’t mean that either plan lacks good ideas. There are some good ideas and good intentions, which should be acknowledged. Although there is virtually zero political courage behind either of these, so I don’t give either that much credit. The bigger issue is that they accept the basic economic and political premise that the market must drive the solution. That’s just not true or viable in the face of our present reality.

Senator Booker’s plan differs slightly from Senator Harris’s in that it proposes tying community development block grants to efforts to increase density in local jurisdictions. Basically, its a soft diplomacy effort to remove local land-use regulations (things like parking requirements, height limits) while encouraging more construction (density bonuses, as-of-right development). 

Both of these are admirable and necessary policy goals. But it’s a too-cute way to get around the vast limitations the federal government has on local land-use policy and that’s where it ultimately falls apart. The carrot isn’t that great and there is no stick. HUD currently ignores existing Fair Housing laws, so they aren’t going to care about this bill even if it did pass. 

It would take much more political courage to argue that the Fair Housing Act empowers the federal government to supersede restrictive local zoning and create an Eisenhower Interstate Highway System-esque system of federally-funded local development systems (or even just enforcing Further Affirming Fair Housing efforts at the late end of the Obama Administration) but the Senator from New Jersey (of Mount Laurel fame, no less) did not take that opportunity. 

Like Senator Booker’s plan, Senator Harris’s plan proposes a set of interventions that include discounting rents above 30% of income even for six-figure income households up to 150% of HUD’s Fair Market Rent calculations. By covering the difference as a tax credit, it would sort of work like the Mortgage Interest Deduction and would help some low-income families in high rent geographies and even middle-income families. 

That’s also an admirable policy goal. But the MID is a terrible waste of public money (that mostly gets to wealth households) while inflating the value of homes, so doing that for renting is arguably worse since we should know better. It would clearly create an inflated market as landlords would just raise rents even more. It also doesn’t help people outside of the usual suspects of coastal cities with high rents, so it’s impact would miss the vast majority of renters.

Both plans rely on the market with some subsidization. This isn’t a surprise since that’s how housing policy has (not) worked for 80 years. That this doesn’t work seems to have gone unacknowledged. But there are more creative ways to pursue a market-based solution and there are other non-market solutions that should also be included. (I have written about how any housing policy needs to fundamentally remove the advantage of homeownership, so I won’t touch on that for this particular article, though its obviously important.)

Here are three broad areas where the federal government can address the housing crisis right now. These are by no means the only areas or the most detailed analysis of them, but they are great starts:

Build the best public transportation systems in the world

It’s obvious that public transportation is an afterthought in the US. Post-war policy makers bet on homeownership and car ownership and socially engineered our modern landscape around them. That makes it particularly hard for people to get back and forth within most American cities commuter sheds 

Just as a small example of this, even for a transit rich city like NYC, it is a pain in the ass to get to Hoboken, NJ from where I live in the East Village (a 3-mile trip) because it involves two different transit systems (the MTA and the PATH). It would go from a roughly 30-min multiple-seat (and ticket-swipe) trip to a 10-min single-seat trip if they extended the L train into NJ (which has been proposed at various times, to no avail.) Christof Spieler in Houston writes a lot about this particular problem and I highly recommend you check out his stuff and upcoming book.

The more interconnected a commuter shed, the bigger the housing market. High rents are partially a product of land-use regulations and land scarcity in certain markets. But rents are high because people want to live close to things and there are huge cost increases the further out you go. 

If we developed deeper, more frequent rapid transit systems that cut down on time and cost of commuting, we would make surrounding areas more viable. It’s been done before in the US. Look at how the Bronx was developed in the 1920s and 1930s when the subways reached the area. Even if you can’t make the argument for more public intervention in housing in the Senate, you can get transportation networks built.

Fund public housing and expand what it can include

I write a lot about how we need more public housing. It works when the necessary tools and processes are put in place. There is no reason to subsidize private landlords when we can build and manage publicly owned homes directly. 

Most people think of towers-in-the park megablocks that fell into disrepair and became crime riddled. That did happen in many areas, but it also didn’t happen in many public housing complexes, particularly in NYC. Committed funding, competent management, and empowered tenants have been the winning formula for many years with NYCHA even as its funding gap has eroded that in more recent years to tragic results. The playbook exists, however.

There are also new ways to think about public housing. Instead of building new developments, we can preserve exiting communities by converting housing into municipal land trusts. This is already happening in Houston’s Third Ward. The city owns the land and removes it from the speculative market and a community board of elected officials and residents runs it. This would address many of the concerns of displacement and affordability. It would take federal funding to maintain, but would that be as much as subsidizing rent or a massive building program? Definitely not.

Stop wasting public money on dumb shit

The final point is much larger than a few paragraphs, but it warrants repeating. We give away too much public money to powerful, private interests — at all levels of government. We can absolutely afford to address the housing crisis if we stop subsidizing these interests.

We spend trillions of public dollars on our military and national security complexes - enriching contractors, arms manufacturers, and many other private actors. These things murder lots of people, erode our civil rights, and generally keep us permanently afraid. 

We spend billions of public dollars on local pet projects like stadiums, casinos, and privately-owned mixed-use developments — that in most cases turn around and charge us to use them.

There are laws on the books that are supposed to manage these costs or outright prevent them from happening and yet our money keeps getting hoovered up on policies that the majority of us don’t support. Until we hold our elected leaders accountable for spending our public resources on priorities we do support, this will never change. (I have no time for people who think we shouldn’t spend public money in general.)

That goes back to my earlier point. The housing crisis is a crisis of late capitalism. We can’t fix housing without fixing our economy and our politics. That means rejecting the premise that the market is the sacred end all be all that we all must slave away for. It means rejecting the idea that the accumulation of wealth is the best and highest use of our labor and our resources. 

It is encouraging that Senators Harris and Booker are moving in the right direction, even if these bills are dead on arrival and flawed on their face. They are creatures of this system and even the smallest acknowledgement from them that it is failing is reason to be optimistic that our political process can evolve to fix it.

Late Capitalism is coming for the last pillar of the American Dream

Bullseye (nationalrealestateinvestor)

Bullseye (nationalrealestateinvestor)

Today the Wall Street Journal and its dizzying “everything is fine” tone explored the booming sector of home-buying. We’ve built our entire economy and political cultural around homeownership in the US, so you can see why this could be a good thing. But it is not. It is a terrible thing.

That’s because the people buying these homes aren’t people at all. They are “sovereign-wealth funds, insurance companies, hedge funds, pensions, [and] asset managers” and they are buying bundles of single-family homes with the clear intention of renting them for the long-term. In fact, many of these groups are raising billions of dollars to expand their portfolios. 

I’ve written about how Wall Street is becoming a lot of peoples’ landlord, and how it exposes how fraudulent US housing policy is, but the trend is only getting bigger and scarier. The biggest players in this new market own thousands of single-family homes, mostly in markets like Atlanta, Phoenix, or Nashville where populations are growing. They are squeezing out many potential homeowners in the process.

The economics are clear and deeply cynical. Mega-financial institutions are taking advantage of the average American’s inability to buy a home because of high debts and low wages on the household-side and higher mortgage rates/prices and leaner inventories on the market-side. 

If that wasn’t bad enough, these institutions still reap all the government-subsidized benefits of homeownership that were designed to be passed along to families. I’ve written about the $134 billion the US government spends a year on subsidizing homeownership, most of which goes to wealthy home-owners already. It’s insanely wasteful and deeply unfair. But does anyone want a hedge fund to get tax breaks for owning a home and renting it out to a cash-strapped family?

Homeownership policy is broken. Housing policy is broken. Our economy is broken. Nothing screams this more than late capitalism’s calculated lunge towards single-family homes, the final pillar of the American Dream. Wall Street and the investor class get how broken our economy is and respond by exploiting it. And they aren’t even pretending to care about optics:

‘“The American dream no longer includes homeownership,” said Jordan Kavana, chief executive of Transcendent Investment Management LLC, a south Florida firm that has been a big acquirer of rental homes. “You will earn your equity in other ways, not your home.”’

I’m not sure where Mr. Kavana assumes this new source of equity will come from, but given that few Americans own stock and most draw their wealth from their homes, the options appear to be limited. But that’s your problem.

The new, frightening (and baffling) development is that many of these cash-rich entities are building new housing expressly for foreign owners — expressly as rental/investment properties. Mr. Kavana goes on to say that these investors “Get that this [homeownership] is the lynchpin of the American economy.”

The paradox of identifying (correctly) that homeownership is the lynchpin of the economy while actively subverting it goes unaddressed in this article, but it gets to the core of this market play. 

These institutions know that the game is up for most Americans. They know that many young Americans can’t (and won’t) afford to buy homes and many baby boomers will eventually be forced to sell. They know that special interests have frozen any ability to politically address the structural deficiencies in housing policy or for that matter the American economy. They know that at best politicians from both parties are going to pound their chests about homeownership, perhaps offer some empty new incentives around the margins, declare victory, and move on. They know that they can continue to reap the rewards of homeownership subsides while sitting on ever-increasing housing prices as the housing crisis grinds on.

They know that this is a cash cow for their shareholders and will be for a long time.

We should all be sounding the alarm at this outrage. It’s outrageous on the face of it as this new normal goes against everything that 80 years of bi-partisan domestic policy was created to foster (as flawed and racist as it was), but its even more outrageous given that we are only 10 years removed from the damage caused from the Great Recession — damage caused by many of these same actors under these same structural realities in housing. For many Americans, my generation included, we will never recover from it.

The Great Recession may have ultimately been triggered by the exotic and fraudulent nature of mortgage-backed securities, but it really happened because people couldn’t afford their homes.

That is even more true today: household debt is $13.2 trillion, which is half a trillion dollars higher than the previous record set in 2008. Real wages for the majority of Americans have barely moved in forty years. Wealth inequality has skyrocketed over that same period. Generational wealth passed though home equity is the only path for most first-time homebuyers, furthering racial and demographic wealth gaps.

What happens when the next downturn comes? Sure, it may actually benefit some families who don’t own their homes — these institutions can in theory weather it better than individual homeowners (or get bailed out before a homeowner would). They could lower rents to keep some cash coming in. In turn that could give families more flexibility and mobility. But somehow I don’t think the average American family will be that much better prepared than last time.

Housing policy rarely gets the attention it deserves, which is maddening and disheartening. There are certainly many fires and leaks spreading across the land, but it all starts with home. If our entire economy and political structure is built on the fundamental concept that you will own a home, then we are entering unchartered water if that stops being the case. There could be benefits for our economy moving away from homeownership, but simply turning it over to hedge funds and foreign investors could further destabilize our fragmented country while only benefiting a tiny sliver of the super-wealthy.

The investor class has taken nearly all of the wealth created over the last 30 years and gotten away with it. Now it’s coming for our homes and appears to be getting away with that too. If we lived in a healthier political climate with a clear moral north star, this would be met with bi-partisan condemnation. But if we’ve learned anything about late capitalism, it’s that no one is coming to save us. We must do it on our own.

We should all be worried that the housing market is so bad while the economy is so 'good'

Amen. (s.h.a.r.p.)

Amen. (s.h.a.r.p.)

 

Last week, The Join Center for Housing Studies at Harvard released their 30th annual report on the state of housing in the US. With a few exceptions, the picture is bleak. At every corner there are major red flags about the present and future of housing in the US for owners and renters alike. What is clear, a full decade after the foreclosure crisis, is that the housing market is at best exacerbating wealth inequality and at worst sowing the seeds for an even more destructive economic downturn. This is all happening while the national economy is allegedly roaring along. And that should scare all of us.

Let’s start with the most important point: for a lot of Americans, there is simply no evidence that the economy is doing well. Sure, the stock market is up and unemployment continues to fall.

These data points have long been two popular shorthands for talking about our economy’s health, but it’s hard to believe that it is healthy when 40% of adults don’t have $400 on hand to cover an emergency. The ‘millennial’ generation is already 34% poorer than previous generations at the same age. Clearly, if we think this is a good economy, how we measure it and how we talk about it are deeply flawed.

Who cares about the stock market when half of Americans don’t own stock and the richest 10% of Americans own 84% of them? Who cares about a low unemployment rate when wages aren’t increasing and most job creation is in low-wage, high-insecurity positions? Who cares about how well the economy is doing if the richest 1% captured 82% of wealth created last year while the bottom 50% captured none?

The crooked nature of our housing market is making this all worse, perhaps for generations to come. The JCHS report reflects this widening wealth gap and its impact on housing in the US with some startling stats. It breaks down into troubling dichotomies between renters vs owners, wealthy vs everyone else, old vs young, white vs not-white. It’s worth picking out some quick ones and related stats:

  • 38 million American households (owners and renters) are cost burdened
  • Half of all renters are cost burdened (which has doubled over the last 50 years) and a quarter are severely burdened
  • Rents and home prices have risen 20% and 41% respectively over inflation in the last 30 years
  • Homeowners have on average 46 times the net wealth of renters
  • Overall, since 1960, wages have gone up 5% while rent payments have gone up 61%
  • Minority homeowners have half the net wealth as white homeowners and their homeownership rate is falling
  • Since 2000, the number of Americans living in poverty has increased by 28%t to 12.8 million
  • During the same period, the number of high-poverty census tracks grew by 53%
  • 51% of blacks and 44% of latinos live in areas of concentrated poverty, compared to just 17% of whites.
  • In 2016, 1.4 million people (including 175,000 families with children) were homeless at some point during the year
  • 56% of homeless live in the highest cost metros
  • 83% of homeless families experience it acutely as a product of eviction

This is during 9 years of continued growth that has little historic precedent.

The report highlights a couple of under-appreciated factors causing these stresses: the aging population of the country, the decrease in immigration, and the concentration of economic opportunity in fewer geographies, industries, and individuals. These all represent “new normals” that so far have failed to be acknowledged at the national policy level.

One factor that the report covers in great detail is obvious: we aren’t building enough homes, anywhere. Most urban centers, and virtually all of them in coastal regions, are not building enough housing to meet the economic growth (and concentration, relative to other regions) they are experiencing. That’s partly why mobility, an actual sign of economic and social health, has collapsed in the US.

Some of this is the problematic regulatory regimes of individual cities, but largely its the cost of land, labor, and materials, which has gone up across the country. The lack of productivity gains in the construction industry, whether for single-family or multi-family, is a major problem and doesn’t get nearly enough attention from the media, academics, or policy makers. While many industries are slowly starting to see gains from the IT revolution (while others are shrinking), construction hasn’t.

That’s not hard to understand. The industry was built on cheap labor and cheap land — those are not inputs that demand innovation. Add in 80 plus years of massive government subsidies either from financial guarantees or infrastructure spending, and what you get is a cartel of mostly local/small groups of very profitable players that have never needed a culture of innovation. Instead, they have formed a culture of protection that has largely manifested in spending millions to support their local political status quo.

Today cheap land and cheap labor are harder to come by, but, for the most part, public subsidies are still available. So we have in place a perverse system where an already-outdated industry has little ability or incentive to adapt that is matched with an equally outdated and inflexible policy regime. That’s a recipe for a disaster, which is what we are living through.

This is all to say that, of course our housing market isn’t providing enough housing (except at the top, where it is producing too much). But it is operating in a state that our policy makers can’t seem to recognize reflects a larger political failure. None of these problem are going away. They are, in fact, going to get worse.

That’s because, inevitably, the economy will sputter again. So what happens when it does? 10 years ago it meant the greatest economic crisis since the great depression. I’m not suggesting we are due for another foreclosure crisis, but at the same time, we haven’t fixed the underlying problems people have that caused it. Primarily, those problems include people not making enough money, having too much debt, and not having a lot of flexibility if the economy tightens suddenly. That has gotten worse since the great recession. Remember, 40% of Americans don’t have $400 on hand for an emergency.

People are barely getting by right now during a ‘good’ climate, but what about the government?

You can make a lot of complaints about how President Bush and President Obama handled the crisis ten years ago. (It is clear that both administrations focused on the financial system at the expense of the individual household. There were more options on the table than that and we’ve been suffering from what ended up being a blanket immunity for the financial industry ever since.) But they both worked together during the transition and both drew from a deep well of experts with steady hands and public trust. It could have gotten a lot worse, but it didn’t. As flawed as the process ultimately was, that’s what we expect of our government.

Nobody in their right mind can say that the current administration has steady hands or public trust. Obviously, the President clearly doesn’t understand economics and doesn’t know what he is doing other than exploiting racial animus. But look across the cabinet — HUD Secretary Carson thinks poor people should have a harder time and doesn’t know what he’s doing. Commerce Secretary Ross is spewing conspiracy theories about soybeans and doesn’t know what he is doing. Treasury Secretary Mnunchin either doesn’t understand the tax cut or is still lying about it and doesn’t know what he is doing.

Does anyone expect the Trump administration to handle a downturn well or honestly? Have they shown any ability to think strategically on policy? Or to even execute a policy well? The inevitable downturn will cause pressure on this administration that we have no reason to believe it can handle.

Even if we had a more predictable political landscape than we do today, we have fewer policy tools available to deal with a significant downturn. The government is starved for revenue and will get worse over the life of the tax cut. Republicans plan to come for the safety net next. Even the Fed, though in steady hands for the most part, has fewer policy tricks up its sleeves than last time even if it somehow remains insulated from political pressure or partisan erosion that has crippled other institutions in the Trump Era. Will it still be immune when a crisis hits?

It’s not hard to see what has to change. Fundamentally, the public needs to claw back a large portion of that 82% of wealth created in the last year (and over the previous decades) in order to raise our collective standard of living. We need to reject the money-fueled political status quo at the federal and local levels that have killed long-term planning and prevented big ideas from entering the public discussion. And we need to reboot our social and economic contract that currently makes education, healthcare, and childcare/elderly care prohibitively expensive.

Fixing the housing market can go along way to starting this process. Housing is a right and should be the baseline for any public or private policy goals. We need a robust private sector to support housing, but we need to incentivize innovation by shaking up the tired regulatory and subsidy process. Public goals for the private sector should move towards equitable access, community ownership, and sustainable affordability. Public ownership of housing (which was not even covered in the JCHS report) must be expanded with direct ownership of housing and direct ownership of land.

It’s not hard to see what has to change, but it is hard right now to see how or where that change begins. The last great opportunity to have this conversation occurred during the great recession and it was ultimately squandered. It is hard to see how we even weather the next downturn in whatever form it comes let alone how we begin a massive reboot in housing. That might be the best we can hope for, but it is not what we need.

Public housing works, it can help the housing crisis, but The New York Times isn't helping

This Richmond Barthe sculpture near the Johnson Houses contrasts the image of intended residents (white families) with the current racially diverse demographics of NYCHA residents, which is part of why support for public housing has vanished. That must change. (homebodynetwork)

This Richmond Barthe sculpture near the Johnson Houses contrasts the image of intended residents (white families) with the current racially diverse demographics of NYCHA residents, which is part of why support for public housing has vanished. That must change. (homebodynetwork)

Over the weekend, the New York Times came oh-so-close to writing a fair, nuanced story about NYCHA. Most of the time, the paper of record ignores the 80-year old agency, the 2,500 buildings it manages, and the 400,000 New Yorkers who live there. When the paper does write about it, it is almost always in the context of failure, scandal, and waste. There’s plenty of that to go around, which is fair game, but there are many other positive facets of the agency’s story that remain, at best, alluded to while the core problem fueling these issues — federal abandonment — is only referred to passively.

The paper’s approach to public housing does a disservice to NYCHA residents and the agency, but it also does a disservice to public housing in the US in general. The simple truth is that public housing works and should play a larger role in solving the affordable housing crisis. In order to leverage public housing’s vast potential, we must first change how we talk about it.

I find this particularly frustrating because at the same time, there are elements within the Times that are (slowly) changing the conversation around housing. It published Matthew Desmond’s work on how the federal government spends $134 billion a year subsidizing $1million dollar homes across the country. Emily Badger and Quoctrung Bui wrote a devastating series on the eviction machine in much of America.

These provide important context to the affordable housing crisis, but public housing never seems to get that same coverage. The paper certainly doesn’t put all of these elements together to show why public housing (and other models like community land trusts) need to be part of the solution.

The problem with the Times coverage on public housing can be captured almost entirely in the title: “After Years of Neglect*, City Public Housing Is Poised to Get US Oversight.” Two problems jump right out.

(*The online edition appears to have replaced “Neglect” with “Disinvestment” after I started writing this. The print edition’s title is “US is Expected to Get Oversight of City Housing”. In either case, the problems remain obvious.)

First, it is bizarre to refer to impending federal oversight of a domestic government agency as “US oversight.” This might strike you as nitpicking — and I’m not blaming writers for editor’s decisions — but this falls into the much longer problematic history of how the Times (and the media at-large) adopts colonialist language when writing about housing in the US. Think of every real estate section story about mostly white “urban pioneers” moving to neighborhoods that…have been lived in by (mostly non-white) New Yorkers for decades.

Framing the built environment like this completely warps the public discourse around housing, specifically on gentrification and displacement. These are complex topics with significant policy trade-offs, but we aren’t presented with equally-weighted narratives to consider them responsibly.

This may be because the press, at any given level in an organization, is uninterested, only partially informed, or even ideologically opposed to public housing (its hard to see how corporate media would be inclined to support it). As much as the press gets labeled “left wing” or accused of having a “liberal bias,” public housing is a good example of that simply not being the case.

So much of the media adopts a real estate-centric language that the public conversation has already been shaped to internalize the virtues of market outcomes exclusively. (This is also true because poverty barely gets written about in the press. And that’s because poor and/or minority writers are absent from pressrooms.)

When minority communities speak about feeling like they live in occupied territory, particularly in the context of excessive-force by the police, this type of real-estate centric language is also what they are referring to. It either erases existing communities or otherwise “others” them into feeling like they are part of some imperial conquest that views them as an inconvenience. This language has real world impact and the Times should know better by now.

It should also be noted that no NYCHA residents were interviewed for the article. It quotes Ritchie Torres, the councilmember from District 15 in the Bronx and chair of the committee that oversees NYCHA, who grew up in public housing. Not for nothing, he suggested, correctly, that NYCHA should sue the federal government for neglect.

That brings us to the second problem with the title — where is the blame for neglect placed? And what neglect is actually being referenced? Just reading the headline makes it seem that the city is to blame. Even within the article, it largely frames the neglect as failures of the agency. That. Isn’t. True. For all of the many flaws that NYCHA is guilty of, they are not guilty of neglect (nor is the city.) They are obviously trying to manage their buildings. But they are doing so under untenable and inexcusable circumstances.

The true neglect, as Councilmember Torres pointed out, comes from the federal government. The federal government helped fund the creation of NYCHA and public housing for the first 30 years of its existence but (as it became less-white) subsequently abandoned it and demonized it (and its residents).

In NYCHA’s case, since 2001, the federal government has cut an estimated $3 billion in operational funding. This is a catastrophic loss. Out of NYCHA’s $3 billion annual operating budget, almost 2/3 comes from the the federal government, either from direct federal budget support (29%) or Section 8 subsidies (30%). These are existential cuts that compound quickly across such a large and old system. When the premise of public housing is based on continued federal funding, it doesn’t work when that funding dries up. Pretty simple.

The article dutifully mentions these cuts but frames it as background on the agencies’ problems rather than central to them. While the failures of NYCHA are presented as direct fact from the writer, the funding cuts are presented as “city estimates” and even the issue of racial prejudice is mentioned in a quote by a professor. Those are apparently not facts. This may be unintentional (the Times and much of the media generally shies away from calling something “racist” or “a lie”) but it means the narrative of this story (like every other NYHCA story) misses the more salient point.

The real story is the federal government slowly abandoning thousands of Americans. Adding in the fact that these Americans generally aren’t white deepens the scandal, but not much more.

Just as problematically, this narrative absolves the federal government from responsibility for fixing NYCHA and presents the only real solution implicitly or explicitly as privatization. That’s been the editorial board’s position for some time.

This article, despite its detailed analysis, is no different. It mentions the city and state squabbling over increased funding but also says (accurately) that neither can fill the gap in funding. It discusses some of the public/private options being explored (which also won’t cover the gap) but doesn’t entertain the idea that the federal government could return to previous funding levels, let alone why it should. What is the solution other than the slow death of public housing?

It matters when no one at the paper of record is explicitly defending the idea of public housing. It’s not a reporter’s job, but they should at least be covering the many people who are. Ignoring the argument for it robs the public of the full housing policy landscape.

It matters further because most Americans, including many well-meaning liberals and even housing advocates, are guilty of holding decades of media-fueled negative stereotypes of public housing that harm residents and harm our prospects of solving the housing crisis: Public housing equates to scary looking, crumbling brick towers by the highway. Crime and rodent invested buildings. Poor and lazy minorities. A well-meaning but failed experiment from another age. A poorly run government program that should be privatized. But these images are bullshit.

There’s a more accurate way to think about public housing’s legacy and future. A civic treasure that has provided affordable homes for 80 years. A collection of buildings that have held up remarkably well and just need proper maintenance. A refuge for a population that the government and the market has otherwise ignored or exploited. A well-meaning but failed promise that should be renewed. A solution to a failed market that will always fail to provide enough housing. A vision for a more equitable republic.

The biggest tragedy of NYCHA’s recent history — which has included federal investigations for fraudulent lead inspections, boiler failures in the dead of winter, the slow selloff of assets, the unfortunate resignation of its Chairperson, Sholya Olatoye (who wasn’t exactly set up to succeed), and now a cynical state takeover — is that its viewed as a failure at all.

Its frankly remarkable that NYCHA is standing with such gaps in funding, indifference from the public, and flagrant neglect from the federal government. In a city where there are over 60,000 homeless and the average rent in Manhattan is over $4,000, the average rent in NYCHA is $509. That’s incredible. NYCHA is a success story. (The article points out that NYCHA is a “relative success” compared to other housing authorities.)

The truth is that NYCHA has been a victim. One that is as resilient as it is flawed. It has been a victim of federal neglect but it is also a victim of terrible federal policy, which is why the affordable housing crisis exists and persists. Without making the story about the federal government failing in its responsibility to fund public housing (while giving away billions of tax dollars to wealthy homeowners) nothing will improve for public housing or for the housing crisis.

Housing advocates should place more effort on making the case that public housing works and call out the media for lazy tropes that keep it off the political agenda. Even more importantly, they should help the already highly organized tenants groups within NYCHA have the reach they deserve to improve their homes.

Finally, we should all outline what public housing could look like in the 21st century if we force the federal government to return to its basic responsibility. We should then make the case that a reboot of public housing can help Americans all over the country have secure affordable housing.

The real estate section shouldn’t be the only place the average American reads about housing issues. And failures shouldn’t be the only thing they read about public housing. As the paper of record, the Times must do better.

What startups can teach community land trusts about narrative

You just need to sell it to people (neweconomyproject)

You just need to sell it to people (neweconomyproject)

Recently, Grounded Solutions Network, which is the national umbrella organization for community land trusts, received $1 million from Citibank’s development arm to form an accelerator to launch more CLTs. As a housing advocate, a startup founder, and a tech educator who runs an accelerator, I’m excited. I’ll talk about the accelerator in a moment, but I’m particularly excited because it finally gives me a chance to talk about all three through the power of narrative. Forming a strong narrative is drilled into startups from the get-go, but the housing community, so far, has failed to appreciate its importance, or at least how to do it right. That might be changing.

A bit of background first. I got involved with the community land trust movement 6 years ago to help solve the foreclosure crisis in Brooklyn. As part of a grad school studio at Columbia, we were contracted by the New Economy Project (they were NEDAP at the time) to come up with a way to protect minority homeowners from losing their homes or to regain their lost homes from the particularly heinous predatory lending practices that laid waist to many majority-minority communities. (The foreclosure crisis has never endedin these communities, by the way.)

While working with visiting professor Jeffrey Lowe and the legendary Peter Marcuse, we were able to study the CLT model in great depth. I visited and researched the Lake Champlain CLT in Burlington, VT (the biggest CLT in the country) and Dudley Street Neighbors Initiative in Boston, MA (the first community group to be granted powers of eminent domain).

I was and remain enamored by the story of these organizations and the people that made them possible. The CLT model changed the destiny of these communities. It created permanent, community-controlled affordable housing in places largely abandoned by the public and private sectors. These people showed how working together against unbelievable odds could make something big happen.

Their stories made me believe that CLTs could happen in NYC. By the end of the studio, we began crafting a vision for how the model could work and how it could help these homeowners and communities who had been sacked by the financial industry. It was a very exciting time.

However, most people in city government had no idea what a CLT was or flat out laughed at a bunch of lefty grad school students and community groups for suggesting that it could work in the real estate capital of the world (that is slowly changing). This is despite the presence and decades-long success of Cooper Square, the first CLT formed in NYC. Even in the wake of the foreclosure crisis, when the city was taking over hundreds of properties, the model never found an audience. In retrospect, we put a lot of work into research and policy, but failed to appreciate how crafting a good narrative could get people’s attention.

At the same time, on an entirely unrelated note, I was launching my first startup company, Brightbox. (Going to grad school for urban planning and building a tech company confused a lot of people -including my parents- at the time) Brigthbox is a secure cellphone charger for bars, nightclubs, and restaurants that allows people to charge their phones when they need to. My good friend Adam Johnson came up with the idea while we were bartenders in NYC’s Meatpacking District dealing with this problem every night. Our experience as scene-y bartenders gave our product two key insights —highlight security and sexiness. Through some grit, dumb luck, and smart luck, we got funding and began the Quest to Scale into other markets and sectors with some notable ups and downs.

Along the way, there was one key lesson that we could always come back to for guidance — no matter who we worked with, whether it was a dive bar or Disney, as much as they liked seeing the product, they loved hearing the story about how we were bartenders. We saw an everyday problem first hand and did something to solve it. It is a great story.

To this day, it is clear to me that the power of that narrative — simple, plucky, aspirational — is what took Brightbox from a literal cocktail napkin idea to a business with hundreds of kiosks across the country and world. (One of my former coworkers just shared a Facebook memory from Internet Week 2012, where Brightbox shared a small booth in the back corner of an event with Uber. We obviously didn’t learn how to scale compared to them.)

Telling a good story is the foundation for growing a startup company (or a campaign or a religion). It’s what attracts users, talent, and investors that ultimately help build the product and the business. I have kept that lesson with me as I have started my second company, homeBody, and we drill it in to my students at CUNY Startups: Everything is built on the power of your unique narrative. There’s a big problem a lot of people have. But there’s an elegant solution. You’re the one who can make it. You’re the one who can get it to people. A lot of people. And it’s going to change everything.

This urgently needs to happen with the affordable housing crisis. The crisis is massive and painful, but housing advocates have not been able to craft a narrative to solve it that captures the nation’s attention. Coincidentally, as I worked on this blog this week, Citylab had an article about the nonprofit agency Public Interest who is trying to make an “Inconvenient Truth” type doc about the crisis to do just that. I hope they do it.

That’s why I’m so excited about Grounded Solutions CLT accelerator. It shows that a powerful narrative is forming about how to solve the housing crisis: communities taking control. First, the fact that Citibank is investing in it shows that at least some major financial institutions are coming around to the model. I have no love for the financial industry or its role in creating the housing crisis, but there is no way to solve it without them playing some role either. Second, creating a formal structure to grow more local CLTs spreads the model to more organizations and more communities. The more people hear about CLTs, the more they like them. The more they get started and succeed in one place, the more they will get started and succeed in other places.

The Ground Solutions accelerator isn’t like a traditional startup accelerator, but calling it that shows a willingness to adopt a startup vernacular, which is an important signal to the public (and press) that there is something cutting edge going on in the housing crisis. I hope that insight is embraced within the accelerator as well — Leveraging technology to form and manage CLTs; Adopting branding and growth hacking techniques to gain support; telling a compelling story to secure stakeholders in the community.

I’m excited to see the beginning of a convergence with my startup experience and my housing experience. Of course there are unique complexities in trying to scale a community-based model of housing that don’t compare to scaling a hardware startup, but there is at least one major similarity. It’s a heck of a story.

There is a massive, wide spread problem (phone batteries die, housing is too expensive) with a really simple, elegant solution (secure phone charger, community-owned housing.) As the accelerator gets off the ground, I hope that Grounded Solutions, their local partners, and other housing advocates continue to embrace the tools startups use to craft their narrative. The CLT model can be a game changer in the housing crisis if more people hear its story.

3 Reasons Local Landlords Should Support Stronger Tenant Protections

(@homebodynetwork)

(@homebodynetwork)

Cynthia Nixon, the former actress and longtime public education advocate who is mounting a primary challenge to Governor Cuomo, announced a progressive housing plan that continues her disciplined assault on the governor’s dismal track record from the left. The plan, called Rent Justice for all, outlines many long-sought after reforms to protect renters across the state. A few real estate publications, including the Real Deal, have been quick to point out that landlords won’t like it.

I think this is partially true. Some landlords will absolutely hate these proposals and many of those landlords are quite powerful. However, I’m here to argue that I believe there are other landlords that should welcome stronger tenant protections — the majority of landlords, in fact.

Small, local landlords own more than half of the 2.18 million rental units in NYC and most have very little in common with bigger developers, publicly traded property management companies, or private equity firms that have flooded parts of the NYC market. However, small landlords don’t come close to having the same political power, which often means their interests are ignored or actively subverted.

Despite this contradiction, these more powerful interests continue to successfully flatten the perception that all landlords are the same homogenous blob (buffered by the generally uncritical real estate press in NYC). This narrative is obviously false, but big developers and Governor Cuomo trade in it freely. For example, the Governor’s Affordable New York plan does nothing for small landlords and gives away millions of public dollars to major developers (while failing to provide enough actual affordable housing).

This narrative maintains the strict landlord vs tenant political divide that feeds the toxic decades-old political status quo in New York: A small contingent of highly dedicated tenant groups fight to maintain tenant protections while the affordable housing stock slowly disappears. Small landlords get squeezed. Big developers get more tax concessions and rezoning opportunities. And the affordable housing crisis continues on unabated.

Breaking this toxic political status quo is the first step towards addressing the affordable housing crisis on a meaningful level. Housing advocates can start by rejecting the narrative that all landlords have the same shared interests and recognize that small, local landlords are hurt by this dynamic too.

We must do more to convince small landlords that they have more cause to work together with tenants. There is no meaningful solution to the affordable housing crisis that doesn’t incorporate small landlords and doesn’t make it easier for them to operate. As Matthew Desmond points out in his Pulitzer Prizing winning 2016 book Evicted, 3/4 of all affordable housing in the US is provided by small, local landlords. We must make the argument that these landlords will benefit from stronger tenant protections.

In previous blogs, I have written how I think a universal rental control could work, but to sum up quickly, I stress that it would not represent a simple extension of the current system (to be clear, I support the measures in Ms. Nixon’s proposals but think they must go further). It would be an entirely new system that would also need to offer more diversity in housing options (from co-living to senior living) and would absolutely involve trade-offs that no doubt would appear to be painful, particularly for some older rent controlled tenants. Measures to protect these tenants would have to be included (preferably with federal aid). Clamping down on the small minority of tenants that abuse the current system would also be a necessary step as part of a new system. This is no small task and I understand that many readers will be skeptical of even engaging in this discussion.

That being said, the first step in a larger reform is making the easy argument that small, local landlords will have more success by working with tenants rather than bigger landlord interests. Here are three reasons why I think this is true:

1. Simplifying compliance reduces costs and hassle

It is no secret that managing multiple classes of tenants makes compliance more challenging for small landlords. Many of these types of owners are landlords as a second source of income and are not professionally trained or resourced. This invites a lot of mistakes that can turn into costly problems that hurt both parties.

Having all renters fall under the same level of protection would remove a number of the steps that most small landlords trip over. Rather than having to follow every evolving law, loophole, MCI exemption, or annual RGB guideline and see how that impacts certain units, both sides would know exactly what to expect and what is required under a universal system.

A system where protections are offered across the rental landscape for every unit would potentially alleviate a lot of the tensions between rent stabilized tenants and landlords, particularly on fixing infrastructure within units. Much of the distrust that arises between both parties comes from a landlord’s reasonable need to make upgrades to a unit and a tenant’s reasonable fear that this will trigger a rent increase that may lead to a larger decontrol. Without the fear (and perverse incentive) of vacancy decontrol and bonus, both sides can operate in good faith.

It could also offer tenants more options. In many cases right now, landlords and neighbors change while a rent stabilized tenant remains. In a classic example, a tenant might age while their neighbors get younger. This might not be the ideal environment for that tenant, but moving to a better-suited location is virtually impossible financially. Knowing that a system is in place that could provide a similarly priced unit (again, presumably with some federal or state aid) with similar long-term protections could make moving more attractive.

2. More tenant protections mean fewer expensive eviction processes

Eviction is an ugly, painful process for all parties involved. However, the loss of shelter is simply nowhere near the loss of rental income. Greater tenant protections mean more resources to keep tenants in their homes — and to keep the rent checks coming to landlords.

This is already happening in NYC. Mayor de Blasio signed a Right to Counsel bill last year that guarantees tenant legal aid in housing court. These resources mean that fewer disputes will lead to evictions (which could save the city $320m a year). Intervening earlier in the cycle gives the tenant more opportunity to receive the necessary help to maintain good standing with their landlord.

No doubt there are bad actors in real estate (more on that later) but for the most part, small, local landlords aren't; they don’t have the resources for a lengthly eviction fight and don’t want it to get to that point. Landlords also generally don’t want to kick people out of their homes outside of the most extreme cases. They want peace and quiet.

More resources for tenants means a greater ability to intervene at critical junctions when a tenant may be at risk of falling behind on rent payments. Every landlord can support a process that appeals to their humanity and their bottomline.

3. Discouraging bad actors from the market opens up space for more local landlords

One of the biggest, if perhaps abstract, benefits of universal tenant protections to small, local landlords would be the shift in the market that would transpire over time.

The vast commodifcation of the American housing market caused the Great Recession. Instead of solving that crisis by reducing the incentives to speculate on homeownership, the economy has morphed into exploiting rental housing.

Large investment companies, private equity firms, and foreign capital all compete on small-scale properties in NYC. It’s difficult information for the casual observer to find, but, particularly in neighbors facing displacement concerns, these entities are forcing out small landlords who are often local, community-connected operators (which is why I have been stressing the ‘small, local’ modifier.)

The idea that the best, highest use of capital is virtuous on its own merits doesn’t hold up when you see the practical implications of this trend in housing. In many neighborhoods across NYC, poorer residents (many of them minorities) are being replaced by wealthier (largely whiter) residents. (This is a particularly shocking reality in California as well.) Many of these properties sit vacant as investment shields or as Airbnb cash cows.

NYC is already one of the most economically stratified cities in North America. Continuing this trend (which mirrors other trends of disinvestment in public institutions and local infrastructure) is simply not sustainable. The long-term viability of the city, let alone a given neighborhood, is at risk if it is simply closed off to all but a select wealthy population.

NYC is a city of immigrants, entrepreneurs, and artists — many of them start out poor. Many of them start out renting from small, local landlords. This can not end.

I will continue to advocate for more public housing and alternative forms of ownership, but I also believe that the private market must play a central role in property management in NYC. But this must be in the form of local landlords. New Yorkers should be able to cycle into ownership and renting in their communities. As housing advocates, we must acknowledge the importance of local landlords and reach out to them as allies.

The Fight Over SB-827 Shows Why We Need a Massive National Plan for Housing — Again

The Williamsburg Houses (1938) still provides 1,630 homes for 3,121 New Yorkers. (nycarchitecture)

The Williamsburg Houses (1938) still provides 1,630 homes for 3,121 New Yorkers. (nycarchitecture)

This week in California, public hearings have begun on SB-827, the bill (which is a series of bills actually) proposed by State Senator Scott Weiner from San Francisco which calls for a radical realignment of housing policy away from single-family car-centric development to multi-family transit oriented development. It didn’t take long for it to get ugly. The battle lines for and against the bill have skewed the typical partisanship we’ve come to expect in American politics, pitting NIMBYists (homeowners, many of whom would otherwise lean progressive) against YIMBYists (a wider range of pro-market and even anti-market interests). It will absolutely get uglier.

That’s because the stakes couldn’t be higher. Along with California, the entire nation has been locked in an unprecedented affordable housing crisis and to solve it someone has to lose — big. Until that reality is faced, this crisis has no end in sight. 

The housing crisis won’t end until we stop calling it a housing crisis and start calling it what it is — a crisis of capitalism in housing. 80 years of housing policy that viewed it as a form of wealth creation has severely damaged our communities and our economy. It has racially stratified our society and left millions behind. It has ecsaserbated our climate’s instability. 

If we want to “fix” the housing crisis we need to fix capitalism. In the long run that means changing how we view — and finance, build, and use — housing. That obviously won’t happen over night. But we can start by looking at how we solved previous housing crises in the US. 

When has the market solved a previous housing crisis? Never. 

The scale and length of the current housing crisis is unique in American history, but housing shortages are not. What is also unique today is the lack of national policy initiatives to fight it. 

Many people (including many supporters of SB-827) will argue that we don’t need national policy. We justt need to unleash the free market to match supply with demand. That’s a nice idea, but we’ve tried that before.

New York City is the perfect example of what happens when you rely on the market. From 1890 to 1920 the city’s population grew from 2.5m to 5.6m due to a massive wave of immigration. The unregulated housing stock at the time was already overwhelmed and hellish (the tenement-dominated Lower East Side was the one of the densest areas on earth) but it couldn’t keep up with such a huge population increase. Even as the city physically expanded and private development sprung up further from lower Manhattan, adequate, affordable housing was hard to find the majority of the population.

There was minimal government intervention in housing at the time — this was pure market. It was before land use, occupancy, or even fire safety regulations let alone government sponsored housing. The city did however finance rapid transit, thereby indirectly subsidizing the construction of new housing on vast tracks of cheap green development in the boroughs— yet at no point was the private market willing or able to create enough affordable housing for the growing city. Expensive slums still persisted.

It should be noted that the federal government did build public housing during the tale end of this period in other parts of the US. During World War I, a massive influx of labor around war time production put a severe burden on port and industrial cities’ housing supply, causing inflation and price spikes. (A large part of this influx was the beginning of The Great Migration, which saw over 6 million African-American families move from the rural south to the urban north and west.)

The federal government built thousands of housing units for workers — although many of them were purposefully constructed as temporary to avoid angering local real estate interests who lobbied against the effort even during wartime. The market was and never will be interested in meeting demand.

How were previous crises solved? The federal government.

The housing crisis in NYC continued even in the boom years of the 1920s and came to head during the Great Depression. Millions of Americans lost their homes (whether they owned or rented) and were forced into dangerous tenements or shantytowns known as “Hoovervilles.” The market ceased to exist in any conventional sense.

Famously, President Roosevelt was able to enact the New Deal, which was a set of legislation that radically changed the relationship between the federal government and the economy. The two housing bills of 1934 and 1937 were, ultimately, a mixed blessing.

On the positive side, the scale of the Depression obliterated the ideological arguments against intervening in the housing crisis and spawned the first wave of public housing construction across the country. In conjunction with local governments, the federal government sponsored thousands of modern, clean housing complexes — in cities and in more rural parts of the country. Millions of Americans — the majority of which were middle or working class — received access to affordable housing never seen before.

On the negative side, the New Deal legislation racially segregated public housing and in fact displaced many communities of color to build public housing for white residents.

Even more damaging in the long the run, this was the beginning of massive subsidies for single-family housing. Originally conceived as a construction industry bail-out, the Federal Housing Administration would set the precedent of backing mortgages (for whites) that evolved into Fannie Mae and Freddie Mac.

These policy decisions have shaped the physical definition of America and the social and economic destiny of all Americans. It is no stretch to say that these polices set the country on a course that would inevitably lead to our current crisis. 

This time must be different. 

It’s fascinating and heartbreaking to think about what could have been different. Had the federal government intervened with public housing sooner, at the beginning of the 20th century, would it have demonstrated its value in different, smaller scale models that could have gained more political currency? Could the federal government have intervened by creating more mass transit and denser suburbs before the advent of the automobile? Could the it have avoided the racism that doomed a large segment of Americans and cities for generations?

Could we have avoided the tragedy of building our national and personal economic prosperity on homeownership? 

These questions are important to ask because we must learn from the past if we are to truly solve this housing crisis. The short answer for all of these are yes, if we valued the public good over private interests. If we valued democratic outcomes over market outcomes. If we valued shelter before wealth. If we stopped equating the market with virtue or even basic efficiency.

It starts by learning the lessons from the fight over SB-827. Homeowner interests can not come before the public interest. Local towns can not implicitly segregate themselves through down-zoning — at least near public transit (and extend that publicly-funded highways.) Special interests can not kill the democratic process.

Next, it means avoiding the failed lessons of relying on the market with minimal regulation from the early 20th century and avoiding the failed lessons of the New Deal focus on homeownership and slum clearance as national policy goals. We need more public housing in addition to more density. This is the only way to ensure that displacement doesn’t ruin another generation of low-income families chances of mobility. 

It means addressing the bigger problems inherent in our choice to make homeownership a priority because it drives wealth creation. There is nothing wrong with promoting homeownership, but doing so by warping the true cost of it is irresponsible. We learned that during the Great Recession and then quickly forgot it. We must finally address this at the national level. 

Finally, we must address the larger errors within capitalism that have warped what a home is. We can’t allow homes to be speculated on by private equity firms, international investors, or even flipping enthusiasts. Homes are for living in, not extracting profit from. 

We can’t allow homes to be the sole or majority source of a household’s wealth. It’s no wonder that homeowners freak out about potential risks to their home values — for too many Americans their perceived value is their only economic security. That is absurd and will likely trigger another major economic crisis in the years ahead. 

The only way to do all of this is for the federal government to intervene with the resolve of a national emergency. We must push for our elected officials to make the difficult decisions and political sacrifices to ensure that Americans can find affordable housing everywhere. The stakes are clear. The costs of inaction are clear. The way forward remains unclear.

Why Tenants Everywhere Should be Excited About the California Housing Proposal

The status quo must change, and maybe it is (mercurynews)

The status quo must change, and maybe it is (mercurynews)

Recently, Scott Weiner, a California state senator from San Francisco, proposed several truly radical housing bills. One would remove local land-use controls and establish density minimums around transit, one would create more worker-specific housing, and another would reshape how local data gets used to determine housing allocations. All three would basically do the opposite of what California has done over the last half century and represents a truly exciting reboot for housing policy with implications beyond the state.

Of course, radical change brings lots of resistance, especially from homeowners. Without being familiar with California politics, I can’t speak to the chances of these bills passing, but in a very important way, it doesn’t matter. At this stage in the affordable housing crisis, the fact that such a radical bill has entered the discussion in California should have tenants everywhere excited.

That’s because the most important part about these bill proposals is how radical they are. Housing advocates need to reject the housing policy status quo. Namely, we must evolve away from deferring to the market worship that frames every discussion (which needlessly creates economic and political winners and losers that harm the public interest) and instead embrace larger principles like housing as a right, which creates a shared vision that strengthens the public interest.

You do this by actually proposing huge, far-reaching visions for housing and outlining simple, clear goals that can achieve them. Senator Weiner has made an important contribution to this effort and, perhaps, has shown the way for more state leaders to follow. Here are three key ideas:

  1. Rolling back the power of homeowners

The first bill, SB-827, would supersede any local development restrictions about height and density close to public transportation centers. I’ll talk about the transit next, but the most important aspect of this bill is creating the precedent to override the power of local homeowners to block development in their cities or towns in the interest of creating more affordable housing.

I’ve written a ton about how policies favoring homeownership have been adisaster for the US. They were demonstrably based on racism; they created shocking economic and social inequalities; and they have caused lasting environmental damage that has also paralyzed our built environment.

All of these problems have manifested into the repressive, anti-democratic power that homeowners have to prevent development near them, which hurts all non-homeowners (and some less connected homeowners). Nowhere has this been worse than in California, where low-density single-family housing still dominates most of the state, especially in economically productive places like Silicon Valley.

Because we treat housing more like an asset than a consumable good, homeowners are incentivized to protect/promote the value of their property. This almost always means restricting what gets built around them out of fear that it would lower property values. And this almost always means passing highly-restrictive land-use policies that go far beyond their original intent of protecting people from pollution, noise, or other nuisances.

These policies typically favor ownership over renting, low-density over high-density, and restricted development rights over as-of-right development. Often they are presented as benign intentions towards preserving the character of the neighborhood, controlling traffic and road safety, or maintaining neighborhood control. But, at its core, they are about protecting or enhancing the wealth of a few incumbent property owners.

The end result is homeowners, through pliable or aligned local governments, are allowed to veto development (public or private) and to block other people from living in their communities. Especially in places like Silicon Valley, thiskills the economic and social mobility that has defined American opportunity in previous generations.

SB-829 will be the biggest political fight of the three bills because it attacks the largely-accepted concept that homeowners have the divine right to dictate development in their towns or cities. But overcoming this misguided and abused view is the first dragon that must be slain to change the housing debate in the US.

2. Combining housing policy with transportation policy

In addition to overriding local land-use control, SB-827 creates a proper incentive (indeed, a mandate) to build close to public transportation. Under the proposal, developers can build tall buildings, denser streetscapes, and fewer parking options as-of-right within 1/2 mile of transit stations or 1/3 mile of frequent bus routes. In fact, the proposal has mandatory minimums for heights and density in these zones.

This has an obvious virtuous cycle. Public transportation is designed to support high-density populations. The more you can build around it, the more people will use it, and the more an area will prosper (see NYC). This creates a more diverse housing stock which allows a more diverse group of people and businesses to cluster in more parts of the state. It’s estimated that the proposal could create an additional 3 million units in these zones across the state. That would almost single-handedly solve the affordable housing crisis in California.

As much as California is portrayed as a car-crazy, traffic-inundated dystopia, this bill rightfully recognizes that many major urban centers already have extensive transit systems or at least the foundation for them. However, ridership on the Metro, BART, and Caltrain, are all declining. This is because the lack of density near lines and stations severely limits these systems’ viability for many residents. If you have to drive to a transit station, you might as well just keep driving to your destination.

With this bill, more people could live closer to these already-functioning stations. Increased ridership and development would create more incentive to invest in and expand these systems across the state. The environmental and social benefits of reduced car dependency would have its own virtuous cycle.

The importance of thinking about housing policy and transportation policy together is the larger principle articulated in this bill and it should be central to all housing advocates’ arguments. Whether you are making a moral argument or an economic argument for housing, transportation should be central to it.

3. Helping every type of tenant and holding every type of town accountable

SB-827 is getting a lot of attention, but the other two bills both have far reaching implications for building more housing for more types of tenants. SB-829 allows farmers to use parts of their land to develop worker housing as-a-right. SB-828, changes the standards for how each city/town collects data required for affordable housing allotment. In both cases, this shows that a comprehensive housing vision can help all constituencies, especially under-represented tenants.

Agriculture makes up a huge part of the California economy. (It shouldn’t, but this isn’t the time/place for that argument, see Cadillac Desert). This requires a considerable amount of low-income, seasonal labor that falls on immigrant (and in some cases, illegal) working populations that deserve, safe, affordable housing too. Many rural communities resist worker-housing for the same NIBMYist reasons (and in some cases, racist reasons) that bigger cities resist density. Senator Weiner is showing a crucial, broad commitment to higher principles of affordable housing that aims to reach all tenants.

SB-828 goes a step even further by changing how housing goals are determined for each city and town through the Regional Housing Needs Assessment (RHNA). Currently, this system is easily gamed by many wealthier towns that get lower allotments while poorer, less connected cities or towns get a higher allotment. This allows some towns to escape development, while raising displacement pressure on others.

The bill would create a streamlined, consistent data collection and analysis process that would create more equity in development across the state. Development can’t just happen near transit centers and can’t just happen near easily-displaced populations. It must be spread across all communities, especially in wealthier ones.

I hope that these bills get serious consideration in Sacramento. There are many reasons to support them and many allies in the state to help do so. Even if they fall short right now (which is no sure thing) they have begun the bigger process of reframing the housing debate in the state that might be suffering the worst from the affordable housing crisis. The rest of us should take noticeand start forming similar plans in our own backyards.

3 Anti-Market Victories for NYC Affordable Housing in 2017

Tenants and advocates had real success this year (ANHD)

Tenants and advocates had real success this year (ANHD)

For affordable housing advocates in New York City, 2017 was a sum-of-all-fears kind of year. The affordable housing crisis continues to touch all corners of the city (and America) leading to a shocking increase in homelessness, foreclosures, and rent burdens. The election of Donald Trump and the placement of Dr. Ben Carson at HUD have expedited the federal retreat from housing aid and removed the possibility of national solutions for affordable housing (and for helping NYCHA.) Finally, the squabbling of Mayor de Blasio and Governor Cuomo has nearly paralyzed efforts for reform and relief at the state level.

But it hasn’t been all doom and gloom. Largely through the tireless efforts of local tenants and advocates, the cause has seen several key victories at the city-level. 

Further more, these three victories show that even modest tweaks to the existing political and legal framework can lay the foundation for the type of profound change that we need to address the crisis at a structural level. Namely, we need to reject the market ideology that has caused the crisis and continues to exploit it.

1. Community Land Trusts have arrived as a powerful affordability tool

Any reader of this blog knows how important homeBody thinks community land trusts are to ensuring permanent affordable housing in the city. CLTs separate the value of the land from the value of the structure on it by placing the property in a trust, permanently removing it from speculation. After many years of organizing by NYCCLI and New Economy Project, it finally seems that NYC gets it too.

In July, the Department of Housing and Preservation announced a request for information on CLTs for the first time and has partnered with Enterprise Community Partners NYC to offer $1.65 million for the formation of three new CLTs in the city: Interboro CLT, El Barrio, and a brand new coalition CLT through NYCCLI.

Just last week, the City Council passed a law recognizing CLTs in the city’s administrative code, which opens them up to working with city agencies on a more formal basis.

These are modest steps, but incredibly important ones in helping the model take off in the city. The fact that it has taken almost a decade for these measures to happen, shows what a slog it has been. But it also shows how quickly things are starting to happen.

Building off of Cooper Union (the first and longest tenured CLT in the city), the newest CLTs have a long way to go to grow, but the necessary roadmap, administrative tools, and advocacy groups now in place will help to do so.

The hope now is that other community organizations will become aware of the model and have the tools to go forward with their own CLT. I also hope that the city beings to think seriously about turning over city-owned land to CLTs or even forming a municipal land trust as quasi-public housing.

Either way, introducing a model that removes speculation on land values in the city is a major win for affordable housing and sustainable communities.

2. Right-to-Counsel will prevent evictions and reshape housing court

In August, the city radically reshaped its housing court structure by becoming the first city in the US to guarantee legal representation for low-income tenants in eviction fights. For a relatively modest $155 million over 5 years in legal aid, tenants that were previously outgunned in housing court now have a greater chance of avoiding eviction altogether. As of 2015, 90% of landlords had legal representation, while only 10% of tenants did. This rebalancing will have a profound impact on the cost to families facing homelessness.

With the homeless population now exceeding 60,000 people in NYC, keeping families in their current homes also becomes the most important homeless policy tool for the city. Right-to-counsel will reduce the cost of providing homeless services by an estimated $320 million and will hopefully alleviate some of the political pressure associated with homeless shelters and clustering that is crippling the city’s ability to meet the sadly growing homeless population. Keeping families in homes is the key.

The larger hope with this move is to alleviate the equally crippling pressure on the housing court division. There were over 350,00 filings last year for only 50 judges. This backlog locks thousands of landlords and tenants in slow proceedings that ultimately undermine the ability for the city to ensure transparency and accountability. The rule of law is only as good as a government’s ability to enforce it and creating more balance on the tenant side will hopefully recalibrate this dynamic for the better.

3. No Harassment Certification is a small step towards decommodifying housing

The other big development on enforcement occurred at the end of November, when the City Council passed the Certificate of No Harassment (CONH) legislation, largely through the efforts of ANHD. This law, along with the larger Stand for Tenant Safety package also passed this year, aims to stop the common and pernicious practice of landlords harassing rent-regulated tenants out of their units in order to increase profits.

With the skyrocketing value of property across every borough, there is large incentive for speculators to buy a building and force out rent-regulated tenants. The goal in many cases is to either demolish a building or increase the rent-roll in order to flip it. This practice has been difficult for tenants and the city to prevent.

The CONH is intended to disincentivize this speculation by putting the pressure on landlords to prove that they are not harassing tenants. Buildings that fall into certain categories of risk (related to speculation) must receive this certificate if they are to begin construction projects or otherwise impact the quality of life of existing tenants.

It is ultimately still just a speed bump rather than a roadblock against speculation, but it shows that tenants and advocates fighting back against more powerful financial interests can win. Removing the worst actors from the housing market by raising the risk and cost of harassment is a necessary first step in radically reforming the property landscape in NYC.

 

I don’t want to suggest that these three events were the only “victories.” There are other events this year that I could have spoken about, such as Mayor de Blasio’s Housing 2.0 plan for his second term, or Governor Cuomo’s new housing budget.

However, I chose them because these three items speak to the larger hope that we can reduce the suppressive power that “the market” has over our housing discussions. Market solutions have their place in any affordable housing policy discussion but only after we reposition the basic premise of housing as a basic right.

Speculation destroys cities by devouring neighborhoods and dehumanizing housing. It really is that simple. Treating housing as an asset-first policy has led us to the affordable housing crisis and has scarred many communities in NYC, perhaps permanently.

If enough people force the discussion on housing to return it to shelter-first, we absolutely can find practical and lasting solutions to the affordable housing crisis. As many tenants and advocates have shown this year, it is also absolutely possible.

The Coming Budget Will be a Disaster for Housing, but Housers Are Part of the Problem

"The Marriage of Real Estate and Money" (Tom Otterness, 1996)

"The Marriage of Real Estate and Money" (Tom Otterness, 1996)

Republican-controlled Congress passed a major hurdle in their plan to radically reshape the nation’s tax code last week by narrowly passing a budget for 2018 in a close 216-212 vote.  The narrow spread included 20 Republican defections, which is a clear signal of the considerable challenges that lay ahead.  Regardless, this process will be a disaster for housing policy – affordable housing or otherwise.  The fact that this process is proceeding in rapid, secretive, and reckless fashion barely registers anymore shows how far our legislative process has come apart. It also shows how little the housing community can do to prevent this damage and how little it understands the changing landscape of national politics.

I have written extensively about three major threads since the beginning of the Trump Era (although they originate well before) that continue to dominate housing policy discussions. This budget (which is not law yet and is still largely unknown as policy) reflects these trends. The response the housing community has to each also shows how much it needs to change its approach and fight for a simple, clear cause: housing as a right.

1. Down with Public Housing

First, President Trump, despite his incoherencies, has been steadfast in his utter indifference to affordable housing, especially public housing. Given other mounting evidence, it seems more likely that he holds the people (or those people, more aptly) that rely on it in contempt. 

Appointing Secretary Carson has worked out exactly as the President had hoped and as housing advocates had feared.  HUD will face devastating cuts whether the Secretary understands them or not. The 13% across-the-board cuts long-promised by the administration are starting to take form and no one suffers more than the poor Americans who rely on housing vouchers, community block grants, and of course, public housing. 

Public housing authorities across the country will be further starved of funding and will likely turn increasingly to measures such as the Obama-era program Rental Assistance Demonstration (RAD) that provides upfront funding by turning public housing into privately-leased Section 8 units.  Seen as a necessity, or even as a progressive fail-safe by many housers, this program will only weaken cash-strapped public housing authorities and undermine their broader mission. Housers who support RAD will live to regret those decisions instead of rallying around a robust defense of public housing on its merits.

Saying Secretary Carson is unqualified or simply dumb doesn't change the narrative on public housing.  Saying the President doesn't support or respect poor Americans' struggles won't change the support most Americans have for public housing.  Making the case that public housing - and greater federal involvement in affordable rental housing - is good for the country and good for everyone - city or suburb - is the only way to effectively fight the Trump administration.  Right now, the playbook is wracking up losses. It's time to change it.

2. Up With LIHTC

Second, Congress continues to gaslight the housing community about the effectiveness of the main national affordable housing policy – the Low-Income Housing Tax Credit (LIHTC).  Enacted after the last major tax overall in 1986, it has created over 3 million housing units representing 90% of all affordable units built during the period.

That’s seen as a success by many well-meaning actors in housing despite the fact that it is has demonstrably failed to provide the volume of units our country needs.  99% of US counties are in an affordable housing crisis. When the only policy explicitly designed to address affordable housing is failing that broadly, it is irresponsible to defend the status quo. But that is largely what is happening at the moment.

The legitimate fear from this proposed tax cut plan - I won't pretend it's some nebulous "tax reform" - is that lower corporate rates will dramatically weaken the incentive to partake in the LIHTC program. What will be left unsaid is that relying on the private sector to build affordable housing through tax incentives is inherently and obviously flawed.

Instead of arguing for a larger policy shift, many housers will try to defend LIHTC and, by extension, the status quo of federal housing priorities. When, inevitably, both parties do offer some type of carve out for LIHTC to remain attractive, this will be hailed as a victory. We should know better by now. We should be arguing for more policies like community land trusts that offer the same type of decentralized, local control that many communities want, while rejecting the speculative component that largely dictates development today.

3. Upside Down on Homeownership

Third, we have learned nothing from the 2008 mortgage crisis.  Not only have we failed to address the dangers of increased financialization of the housing market, or the more fundamental challenges of slow wage-growth, rising debt, and geographic inequality that is crushing the housing market, but we have never rectified that promoting homeownership for 80 years has been a disaster for our country.

Homeownership has undoubtedly pushed millions of Americans into the middle class but it has also prevented millions more from doing so.  Wealth inequality across racial lines has increased in recent decades.  Racial segregation has increased in recent decades.  The environmental and social costs of single-family suburban sprawl will only get worse as a generation of baby boomers age and realize no one is coming to buy their homes at what they think they are worth.  Nobel-prize winning economist Robert Schiller has long debunked that houses automatically appreciate in the US. In fact, on average, they haven't at all since the 1940s. That's only going to get worse in many parts of the country.

The only minutely (unintentionally) progressive element of the tax cut plan currently under consideration is reducing the mortgage interest deduction, which disproportionately benefits wealthier Americans. This is being met with fierce resistance by the housing industry. It's not hard to see why homeowners and housing developers wouldn't want to support massive tax cuts for corporations and the top percent of earners.  Reducing the MID to pay for tax cuts isn't what many housing reformers had in mind, but it shows how hard it will be to try such a thing under any circumstances.

This is because treating housing as a tool of wealth creation as opposed to one for shelter provision is the definitive policy choice of 20th century America.  We have built a nation on this principle (along with car ownership, which of course is directly tied to housing.)  There are many ills facing our society today and our housing policy explains a lot of them.

To truly change this, we must first accept a blatantly obvious reality: treating housing like an asset has failed.  We have commodified it, securitized it, and speculated on it like it’s something less important than a basic human right.  Many elements of our country have profited handsomely from this.  Indeed, go to any real estate conference now and there will be a technocratic consensus that “the market is doing well” while ignoring the larger truth: our society is not doing well.

Housers must recognize the opportunity that we have to dramatically change the discussion on housing by rejecting the 20th century concept of housing.  Millions of Americans are hurting and are angry.  Ideas that might have once been considered 'radical' by some people - even many housing advocates - are now entering the conversation and public policy. Most Americans recognize that the old way we constructed our politics isn't working. 

We must extend that realization to the built environment and offer a positive, actionable vision for a better future.  Housers have to stop accepting a failed premise and fight to establish a new one. It starts with saying simply, proudly, and forcefully that housing is a right. 

PE Firms Renting Homes Proves How Fraudulent Federal Housing Policy Is

Since when is this a thing? (cnbc)

Since when is this a thing? (cnbc)

 

New York Magazine had a truly scathing article about the Department of Housing and Urban Development under Secretary Carson last week and it’s worth reading. He is as disinterested and unaware of housing policy as many feared, but surprisingly, to me anyway, he is also as prone to incompetence, nepotism, and cronyism as his boss. I could go on about how bad things are at HUD and why that is terrible for the affordable housing crisis, but one person who played a minor role in the story deserves more focus: Maren Kasper.

Ms. Kasper’s presence in government offers a chance to talk about the significant growth of private equity firms in the single-family housing market and why it confirms how fraudulent the federal government’s stated policy of encouraging homeownership truly is. It also shows that addressing the affordable housing crisis is not a priority of the federal government under either party.

Before I get to Ms. Kasper, let’s quickly review what happened during the foreclosure crisis in 2007–2008. The long-held bi-partisan focus on promoting homeownership in the US created a policy apparatus that over decades became a two-headed monster that was bound to devour itself and us along with it.

On the one side, through massive Government Sponsored Organizations (GSOs) like Fannie Mae and Freddie Mac, the federal government subsidized homeownership by backing mortgages and allowing them to be securitized and traded on secondary markets. Over time, mortgages were bundled and unbundled, divided and combined, sold and resold to the extent that it was hard to know where they originated. The largest, most powerful banks in the country traded in this profitable and increasingly complex system, which became a main engine of the American economy.

On the other, in the interest of raising homeownership rates, government policies created incentives for banks and other mortgage lenders to offer increasingly absurd or pernicious mortgages for traditionally unqualified buyers — the most infamous example being the sub-prime mortgage. Millions of Americans took out mortgages that they could not realistically expect to support based on willful ignorance, carelessness, and outright criminality from the industry.

You know the rest. Inevitably, the system collapsed on itself and caused the greatest economic crisis since the Great Depression. An estimated 10 million Americans lost their homes and 30% of all homeowners were underwater in their mortgages. The financial system was bailed out and Fannie and Freddie came under government receivership, where they remain today.

Some banks like Wells Fargo, Bank of America, and Goldman Sachs were forced to pay millions in fines and one or two low-level people went to jail. Some lending policies were tweaked and financial regulations were added in Dodd-Frank. Some people continued to lose their homes or remain underwater. The country and the press largely moved on.

But the crisis never really went away. That’s because the underlying roots of the crisis were never honestly accounted for or discussed at the policy level. The bigger problem is that Americans can’t afford basic goods and services anymore without taking on huge amounts of debt. 

Rather than address ways to increase Americans’ incomes and purchasing power, or to control the costs of important needs like housing, education, and healthcare, we’ve encouraged increasingly exotic financial instruments to fill the gap.

That’s what our federal housing policy actually is — a series of exotic financial instruments. On the surface, it provides a means for Americans to buy homes, but look deeper and it is in fact a giant wealth transfer for financial institutions. 

By allowing housing — the land, the structure, and the mortgage — to become a commodity (through the policies that I mentioned earlier, but just as importantly, through the tax code) they’ve increased the incentive to speculate on housing just like any other traded good.

In the immediate aftermath of the crisis, this naturally led to a rush of private equity firms into the housing market, buying up thousands of foreclosed homes on the cheap. 

The government could have helped keep families in these homes, could have kept ownership of them, or could have sold them to non-profit housing groups. Instead it allowed speculators to dominate this vulnerable market, flying in the face of what the goals of housing policy were supposedly intended to do.

That brings us to Ms. Kasper, who worked at a west coast startup company called Roofstock before she entered the Trump Administration. The company is a platform that helps investors buy single-family homes with the intention of renting them. Roofstock offers a chance for smaller investors to compete with PE firms in the same speculative game.

The space for renting single-family homes is rapidly expanding, thanks to the government. Just this month, Blackstone merged with Starwood Waypoint Homes to form one of the largest landlord entities in the country, with over 80,000 homes under management. The NY Times had a detailed article about the new focus and it’s worth checking out. 

In 2015, when Blackstone originally announced it was spinning-off its business into a publicly traded home rental company, it also quietly announced that Fannie Mae was backing $1 billion of its mortgage debt.

If it seems counter-intuitive for a single-family home to be owned by large private equity firms, you’re right. If it seems counter-intuitive for the federal government to support private equity firms — or investor platforms like Roofstock — in owning single-family homes, you’d also be right. But that’s exactly what is happening.

So let’s be clear: it has been federal policy to encourage homeownership for the average American family for 70 years to create an ownership society, to promote economic development and strengthen civic commitment (with decidedly mixed results). The government has spent trillions of dollars subsidizing the industry as a result. Now, that policy directly supports the opposite. How does that make any sense?

It doesn’t. The truth is, secure housing for Americans may have been the initial goal of federal policy (for white Americans, anyway) but by the 1970s the true goal was to enrich private interests through the commodification of housing. 

The move to subsidize private equity firms as they rent out homes just shows that this reality no longer has to be hidden from the public. This contradiction doesn’t factor in to policy discussions — at all. Who in either party is willing to talk about this? Who is willing to question if this is good for the country?

It’s also clear that this trend is making it harder for Americans to afford homes, particularly at the lower-end of the market and in hotter secondary markets. First time buyers are competing with these investors for the same housing, but often don’t have nearly as much cash on hand for the deposit. In many cases, they instead get to rent those homes for increased rents. The federal government has increased the cost of shelter for Americans.

It is clear that affordable housing will not be a central goal in the Trump Administration. HUD is in serious trouble under Secretary Carson. Massive budget cuts are expected to further weaken the agency’s mission. Tax reform threatens the only (flawed) federal affordable housing policy, the Low-Income Tax Credit. And the desire to deregulate the financial industry further only speeds up a future crisis.

As a coda, Ms. Kasper, the only visible member of the administration with even a modicum of housing experience, is now working at Ginnie Mae, which like Fannie and Freddie, backs mortgages. She will likely pursue more support for private investors to enter the single-family housing rental market.

If this doesn’t show how bad federal housing policy is, I don’t know what will. We have learned little from the Great Recession and we have no new ideas at the federal level for the ongoing affordable housing crisis that doesn’t rely on the same flawed market thinking. Until either party is confronted with the flawed logic of our housing policy, the cycle of crisis will continue.

Bipartisan Support for LIHTC Doesn't Mean Either Party Really Cares About Affordable Housing

The consensus is: ¯\_(ツ)_/¯(cnbc)

The consensus is: ¯\_(ツ)_/¯(cnbc)

Last week the Senate Finance Committee held a hearing on a proposal to “improve” the Low-Income Housing Tax Credit (LIHTC), which is the only federal program expressly dedicated to the construction of affordable housing. The program has funded 90%  (around 3 million units) of any such projects over the last 30 years. Part of its touted success is how it has maintained broad bipartisan support in Congress over that period, which is also true of the bill being considered at the moment.  In an era where “bipartisan support” is a seen as a bad thing in many circles if it’s seen at all, this is no small feat. However, don’t confuse support for LIHTC with support for affordable housing.  Both parties are failing to address the affordable housing crisis.

I want to be clear, despite my many concerns with it, the LIHTC is mostly a fine program for what it is designed to do – encourage construction of new low-income housing by subsidizing developers’ costs.  The proposals to update the program, made more urgent by the potential for large tax reform that could undermine the program, are also fine, as far as they go.

The bigger problem is that LIHTC is basically the only federal affordable housing policy (Section 8 vouchers is a much smaller program), which is very bad.  99.9% US counties don’t have enough affordable housing. 11.4 million Americans are severely rent burdened.  75% of Americans who qualify for housing assistance don’t receive any.  Several million Americans are housing insecure or homeless.  The drain on our economy and the stress on our society are staggering.

 If LIHTC has been the only program at the federal level that addresses affordable housing construction, and we’re in the midst of a crippling nation-wide affordable housing crisis, then the program is obviously failing by a wide margin. That shouldn’t be a controversial statement.

But no one is saying it.  The testimony at the Senate Finance Committee was from a wide range of developers, advocates, and policy wonks.  They all spoke passionately and knowledgeably about the affordable housing crisis and about how important LIHTC is to addressing it. I don’t doubt the sincerity and expertise of anyone involved in the process. But the narrow focus of this hearing ignores the larger questions that we should be asking these experts and advocates.

There is a slow moving unnatural disaster in our country and our bipartisan answer is not actually an answer.  Even if the new proposal is enacted, it is estimated that it will create about 1.3 million units over 10 years (an addition of 400,000 units).  We need 7.4 million units just for extremely low-income Americans.  How does anyone think LIHTC is working if that’s the known and accepted gap?

What else could we be doing? Could we suggest radically expanding LIHTC or radically redesigning it? Could we be radically expand and rethink Section 8 vouchers or mandate that they must be accepted everywhere? Could we also expand public housing funding rather than keep undermining it? Could we be introducing alternative models like community land trusts and SROs at the national level?

The urgency and relentlessness of the crisis demands bold thinking and honest self-assessment.  Accepting the premise that LIHTC is the best answer that only needs a few marginal tweaks is a failure of public duty and intellectual honesty.  Our representatives need to represent all ideas that could help the affordable housing crisis. Housing experts and advocates need to take advantage of a rare opportunity like a Senate hearing to challenge every premise and assumption. That wasn’t what happened this week.

It is a simple truism in politics that when both parties own an issue, no one owns it.  By creating a large program like LIHTC that accepts basic market-principles but has an ostensibly low-income focus, both parties can sign off on it comfortably.  When housing comes up as a political issue, which is rare, both parties can point to their support of LIHTC to show that they are “good on housing” even though the program falls well short in practice.

This political reality is why no one challenges the premise that LIHTC is a great policy tool or that it can address the affordable housing crisis alone.  The truth is, neither party has an answer for the affordable housing crisis. Instead, they both have accepted the same flawed market premises about housing as an asset rather than a basic right. 

Both have also so thoroughly bought into the myth of promoting homeownership that neither has a policy infrastructure or donor constituency outside of that (it will be fascinating to see if rumors of reducing the Mortgage Interest Deduction will actually materialize during the tax reform debate).  It is much easier to hold up the LIHTC to show that you are doing something and shrug about how it’s the best you can do under the circumstances.  It is much harder to admit that LIHTC is not working and that he accepted policy framework on housing is not enough.

On that last point, I’ve had conversations with folks that defend the program by saying it’s not intended to be the only solution.  But again, where are the other solutions? The oxygen in housing policy gets sucked up by LIHTC and until that changes, we’ll keep accepting that this is the best we can do.  We’ll keep allowing both parties to point to an obviously inadequate policy and let them off the hook. We’ll keep boiling in the affordable housing crisis by accepting a deeply flawed premise about the nature and purpose of housing.  This is not good enough.

4 Reasons To Be Excited for Community Land Trusts in NYC

Cooper Square CLT shows they already work in NYC (urbanomnibus)

Cooper Square CLT shows they already work in NYC (urbanomnibus)

This past week marked an exciting development in affordable housing policy in NYC.  HPD has announced that it will give $1.65m through a grant program from Enterprise Community Partners to four groups to develop or expand community land trusts around the city.  Though it is a small amount of money, it is a giant step for the city and could serve as a larger evolutionary step in housing policy.  What happens next with these groups will be important, but undeniably a new policy tool has entered into the housing debate.  There are many reasons to celebrate this and I’ll outline four today.

A Community Land Trust is an alternative form of ownership that separates the value of land from the value of the shelter on it. It does this by placing the land in a community-controlled trust that removes it from the private market permanently.  This separation removes the speculative nature of real estate from the cost of shelter, maintaining a consistent level of affordability. 

CLTs have been around, notably in Burlington, Vermont, for decades, but have had limited support and awareness in NYC.  One of the groups receiving funding is Cooper Square, the only current CLT in the city.  Its success over several decades has played a considerable role in getting the city to believe in the model.

Along with Cooper Square, the other three groups are Interboro CLT, a new partnership of organizations, East Harlem/El Barrio, a brand new tenant CLT, and the NYC Community Land Initiative, the long-running regional group dedicated to helping groups form CLTs.  These groups, along with the New Economy Project, have been working on getting to this point for years.

I’ve always believed CLTs could work in NYC (and worked with NEP back in 2012 on a CLT project) because there are so many opportunities with the right combination for success: organized community groups and lots and lots of small, existing properties.  Given how the Mayor has put such a priority on affordable housing and has tried to frame it as a vehicle for community control and inclusive growth, community land trusts are a no brainer. Let’s turn to why.

1. They are Really Cheap

As an affordable housing tool, CLTs are really inexpensive because they rely on existing housing stock (but can still create new development), which is always going to be cheaper than new construction.   The basic model would include a single, upfront subsidy provided through an agency like HPD, or potentially a non-profit like ECP, to purchase a parcel or parcels of land to turn over to a CLT.  After that contribution, CLTs are effectively self-sustaining. (There are legitimate questions about how much subsidy is needed in addition to land costs to make individual units even more affordable, but these are best left to individual cases.)

Compare this model with our current reliance on market-based solutions that cost hundreds of thousands of dollars per unit.  As I mentioned in last week’s blog, the mayor’s plan relies on tax incentives that make each new “affordable housing unit” come in at between $400,000-$600,000.  Spending billions of dollars on building new units at that cost just doesn’t make sense and will never produce the number of units the city needs.

So much focus has been put on new development and the need to create more density that we forget that preserving existing units in many neighborhoods accomplishes the same affordability goals for a lot less money and in a shorter time frame.  It’s estimated that over the next few years, 100,000 affordable housing units will be lost to deregulation and vacancy decontrol.  Think of what a difference putting those units into CLTs would make for overall affordability and think about how quickly and cheaply that could be accomplished. It is stunning.

2. They Prevent Displacement

Another complimentary feature of CLTs in NYC is that they are likely going to be most effective in neighborhoods that are on the brink of gentrification but haven’t seen new development or upzoning yet.  The land will still be affordable in most cases, keeping the subsidy cost low.

More importantly, establishing a CLT will allow existing residents to remain in their communities.  The logistics of converting a market-rate, or even rent-stabilized building, into a CLT is seamless and doesn’t involve tenants moving. 

New construction generally means displacement when an old building is torn down, with very little likelihood of those tenants returning. New construction also begets more new construction, which drives the speculative nature of real estate into new neighborhoods. Very few existing residents benefit under this dynamic (although its complicated.) Even building on empty lots under the current model makes it difficult for existing tenants to have access to new “affordable” units. 

By allowing existing residents to remain in their homes, especially renters who don’t have the benefit of equity gains as neighborhoods gentrify, even low-income residents have the opportunity to benefit from the positive aspects of growth and new development.  Rather than continue with a generally zero-sum development pattern, CLTs allow neighborhoods to have more inclusive growth.

3. They Provide Community Control

Along those lines, CLTs are the ultimate tool for community control.  They allow residents to have a larger say in their neighborhoods through the voice of the CLT.  Renters in particular are generally underrepresented as stakeholders in an area, but as members of a CLT, they become more powerful advocates.

To be clear, I don’t see this as a NIMBY/YIMBY issue.  Community control doesn’t mean community resistance to change.  The dynamic now, and why so many neighborhood groups do resist any change (although with limited success in reality), is that development doesn’t help existing residents.  Who would want to allow massive disruption in their neighborhood that will probably result in having to move at the end of it?

When long-term residents have the ability to be part of the long-term change in their neighborhood, when they can rightfully envision their futures’ there, then it becomes less about resisting and more about shaping.  The end result is a more economically, socially, and politically dynamic neighborhood which is what the whole city should look like.

4. They Compliment Private Development

A big point of supporting CLTs that I want to make clear is that they are a complimentary piece in a larger policy toolkit.  I don’t think they are a panacea or even appropriate in every instance.  But having them as a pillar or at least an option creates more space in housing policy for community control and non-market solutions.  This can eventually allow more resources to go into new construction of private or public housing with government assistance.  It’s all connected.

If we can create a policy frame work for CLTs that allows a significant number of units to be preserved at a very low cost, that leaves more room and potentially more money to drive new development in more targeted ways.

I’d rather see some of those billions of dollars the Mayor has allotted to subsidize private development used to improve the subways and buses.  A better transportation network extends the housing options for all New Yorkers.  I’d rather see it go towards supporting NYCHA, which houses over 400,000 New Yorkers. Pubic housing has been a vastly successful government program that should continue to be a priority. Finally, I’d rather see our public funds going towards building working class and middle-class housing where it is needed rather than subsidizing luxury construction in glitzy parts of Manhattan.

The total amount is modest and the details of how the model could work in NYC still need time to develop, but trying community land trusts in NYC should excite everyone concerned about affordable housing and the future of NYC.  Provided with the right support and deployed in the right areas, CLTs could be a major evolutionary step for the city as it struggles to solve the affordability and homelessness crises.

The Mayor’s Housing Progress Shows Why Relying on Market Isn’t Enough

But is the Mayor listening? (propublica)

But is the Mayor listening? (propublica)

As Mayor de Blasio gears up for his re-election campaign, he has been touting his progress on his signature policy initiative, affordable housing.  In an Op-Ed for The Daily News last week, he highlights how his $41 billion plan to create or preserve 200,000 affordable housing units over 10 years is on budget and on schedule.  In the last fiscal year, nearly 24,00 such units have been allotted, the most in a single year since 1989 (for a total of 78,000 since 2014). 

The administration’s focus on affordable housing has been commendable and real progress has been made, but the larger picture is less sanguine.  The affordability crisis and the homelessness crisis in NYC (which the Mayor appears to treat as a separate issue here) will not be solved by market-based solutions alone. We need much deeper federal government intervention on a number of fronts.

The Mayor’s affordable housing plan relies on several key premises (which mirrors the national focus of the LIHTC). First, it calls for attracting private development to drive construction.  Second, it requires those developers to include a certain percentage of affordable housing units with each project.  Third, it incentivizes that private development with tax breaks. The second and third premises have been highly controversial, while the first one has not been as much. 

Starting with the second premise, in 2016, the Mayor passed his Mandatory Inclusionary Housing and Zoning for Quality and Affordability laws which require developers to set aside a percentage of units for “affordable housing” and continues a general trend to upzone new neighborhoods in the city.  These were both met with heavy resistance from neighborhood groups worried about displacement and new development, but ultimately passed the City Council.  That it takes so much political capital to create a basic environment for more development is disheartening and, despite his plan’s flaws, the Mayor deserves credit for recognizing this and following through.  However, it’s not surprising that residents would be wary of private development based on other experiences in the city.

The third premise has also run into controversy, though of the political variety.  The Mayor’s plan relies on tax incentives, notably the toxic 421a program. Governor Cuomo stunned many people when he allowed the program to expire and used it as a political football to undermine the mayor’s plan. The Governor claimed he had a better plan himself (which never really materialized) and the program has been rebranded as Affordable New York.  A recent article estimates that the subsidy costs NY taxpayers $400-600k per unit  - while not producing nearly enough units (or in some cases any affordable units, due to lax oversight). Somehow this is "just how it works."

This brings us back to the first premise, which is the original sin of all of these policies.  Relying exclusively on the private market to create (and to a lesser extent preserve) housing units is an expensive, inefficient, and inequitable way to create affordable housing.

To state the obvious, it is incredibly expensive to build in NYC.  Land, labor, materials, planning, and design – all of these things are expensive and, for the most part, there are no secret shortcuts around them.  The lack of productivity gains in the construction industry in recent decades is a fascinating sideshow to this larger conversation, but the important point is that these costs are largely fixed for any type of developer.

Once you accept this, the only way to really build cheaper is to have the federal government involved.  First, it can borrow money for a lot less than the private sector, which keeps costs down (we’re missing a golden opportunity to improve our infrastructure as a result). And second, it doesn’t have to turn a profit.  This means it can build the housing that NYC needs rather than what the market rewards. All of the tax incentives in the world will not cover the difference between what is good for the bottom line of a private company and what is good for the public interest in the housing market. 

Relying on the private sector also crowds out alternative models of housing and ownership. The Mayor isn’t staffing people with this experience, isn’t listening to housers with this experience, and isn’t drawing political contributions from people with this experience. Large-scale co-living spaces, community land trusts, or (heaven forbid) more public housing all get ignored as policy tools or goals when a market-based approach runs through planning. This is a missed opportunity to consider new ways to use existing funds and assets under city control.

A truly transformative housing approach would include market-based and non-market based solutions because the goal would be simply to lower the cost of shelter.  The goal for the mayor’s housing plan includes this, but also includes keeping powerful real estate developers happy and at least keeping neighborhood groups and homeowners from openly revolting politically.  It also internalizes a hostile Albany and an indifferent Washington.

I don’t envy the Mayor’s need to balance these political realities, but clearly a bolder vision is not only necessary, but could be very popular with voters, and serve as a rallying point to change the nature of housing policy in the US. 

Mayor de Blasio was elected on a progressive platform not seen in the city for 20 years, which remains popular (perhaps even more so after 2016). He doesn’t appear to have any major rivals despite constant badgering from the press (not entirely undeserved). And yet 27,000 arguably affordable units is the best we can get? It is under a market mindset. 

We have been tinkering with neoliberalism for the better part of 40 years at the national and local levels and it demonstrably isn’t working for 80% of the country.  Voters want new ideas.  Many technocrats want those new ideas to come from local city governments given the paralysis at the national level.  So far the Mayor has passed on matching his progressive rhetoric with progressive reforms in housing.

It’s a shame because there are lots of good ideas - some old, some new, but hardly any that are radical - that the mayor should be willing to explore. Many of them can be tried without Albany or Washington.

But the truth is the Mayor de Blasio needs the state and particularly the federal government to take on a larger role in the affordable housing crisis. There are too many macro economic forces at play with the affordable housing crisis, which is why over 99% of US counties are suffering from it. Only a stronger federal commitment to housing, to wealth equality, and to tax policy can make a difference on that level.

The Mayor can be more helpful in forcing Albany and Washington to change the status quo on housing.  NYC is the biggest city, the most powerful real estate center, with the largest public housing population in the country.  If you want to change the conversation on housing, NYC is the place to do it. That change must include thinking about housing outside of the narrow, flawed lens of the market.  The Mayor needs to think bigger and I think he would be rewarded for doing so.

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.

5 Arguments to Help Change the Debate on Public Housing

A beautiful day at Mill Brook Houses (homebody)

A beautiful day at Mill Brook Houses (homebody)

Despite the unprecedented affordable housing crisis across the country, there is seemingly no popular support for more public housing. President Trump instead reflects the general sentiment in Congress by outlining a budget that would cut billions of dollars from housing assistance for millions of low-income Americans. Though many residents, housing groups, and elected officials are speaking out against these cuts, they are hobbled by a lack of national attention. Frankly, I believe it’s because their message “#nocuts” is hardly a battle cry, as important as it is.

If we are to prevent these draconian cuts from becoming law this year, we must put as much pressure on Congress as we can. It’s likely that some of these programs will be saved if we do. But simply reducing the cuts or saving certain programs is not enough to help the millions of Americans struggling to find affordable shelter.

We must fundamentally transform the discussion about housing in the US and we must once again create a national effort to support, build, and maintain public housing on a significant scale. In the spirit of “#nocuts” I have outlined 5 hashtags that describe where I believe we can succeed in doing so.

1. #HousingIsARight and Denying it is a Crime

We live in a deeply segregated country. This is not an accident. This was not an organic result of natural clustering or preferences. As Richard Rothstein has pointed out in detail in his book The Color of Law, it was the result of direct, explicit federal and local policy decisions to favor white Americans over all other types of Americans. The US Government made housing a de facto right for white people and denied it to black people and other minorities. The consequences have been devastating.

A lot of people, including the Supreme Court, do not know or accept this. This can no longer be tolerated. Just as we are finally taking down statuescelebrating an armed insurgency based on white supremacy and slavery, we must also face the blatant suppression that has been staring us in the face for generations every time we drive from a suburb to an inner-city core. The geography of our built environment must finally be accounted for with proper historic context.

Only by recognizing that housing is a basic human right and a basic obligation of our government, will we ever truly reconcile with and change the accepted narrative that downplays the scale of suppression. The God’s honest truth can tear down more than just statues in this country.

2. #RealTakers and Subsidizing Wealthy Homeownership

Once we accept how awful our housing policy was in the 20th century, we can then take a critical eye to how terrible our current housing policy is in the 21st. The specter of racism undoubtedly hangs over our current policies by the sheer scale of previous decades. However, today the true outrage is more about class.

As Matthew Desmond, author of Evicted, has recently written about, the federal government spends $134 billion a year — more than the entire budget of the Education, Justice, and Energy Departments combined — subsidizing homeownership, particularly through the Mortgage Interest Deduction. About 60% of that money goes to wealthy homeowners. The 7 million households that make over $200,000/year receive a larger share of that savings than the 50 million households who earn less than $50,000/year.

This is far from “free market” principles and in fact inflates the housing market to the benefit of wealthy homeowners. It’s estimated that removing such programs could reduce housing prices across the country by 13–17%, making it far easier for many people to purchase a home if they chose.

When a record number of Americans are rent burdened, and over 600,000 Americans are homeless, the fact that we subsidize these homes is a national disgrace. By placing a hand on the scale (again, for explicitly racist purposes) the housing market has exacerbated the economic inequality ravaging all quarters of the country.

Let’s start calling these households what they actually are: takers. Let’s remove the moralizing and euphemisms around how some politicians use that term currently and instead, by placing basic logic and fairness on it, aim it towards those who are actually taking the most from all of us.

3. #PublicHousingWorks and Has Always Worked

Despite decades of discriminatory policies favoring white homeownership (and now more general wealthy homeownership) and systemic neglect against everyone else, we can still point to an obvious truth: public housing works.

During the brief period when there was popular support for public housing and federal intervention in general, the US government built thousands of units. Though some, like Pruitt-Igoe, became shorthand for crime and neglect, the larger truth is that many more continue to be wonderful homes. And the complexed that did fail, failed because the federal government let them fail due to systemic neglect and more racial discrimination.

NYCHA is by far the largest public housing authority in the country, housing nearly 400,000 people across thousands of units. It is a bigger city than Miami and Las Vegas. Despite a rapid retreat of federal funding and larger demographic shifts that decimated NYC in the 1960s and 1970s, NYCHA has endured. Even today, as it faces billions in capital budget gaps and millions more in potential cuts in Trump’s Budget, residents are happy with their communities and the agency. And only 13% of residents receive public assistance.

The idea that Public Housing is a wasteland where people want to get out of, or where they should be encouraged to get out of, has never been true. As Affordable Housing in New York shows repeatedly, even in the hardest times when crime was high and many facilities were in poor shape, these communities survived and in some cases thrived.

NYCHA residents should be proud of where they live. Employees of the agency, past and present, should be proud of the work they did and continue to do to keep it going when no one could or would help.

Public housing residents shouldn’t be pitied or demonized and they don’t need to be romanticized either. They are normal Americans who happen to be part of something bigger than any one person or one building. Their experiences represent just how much the republic can achieve if it follows its values and how many it can fail when it abandons them. We should be telling this story everywhere to everyone.

4. The #FutureOfPublicHousing Will Not Look like the Past

There were many flaws in the design and support of public housing in the US during the 20th century that caused many complexes to fail outright or fail for a period of time. Early generations of complexes were sterile and anti-social. Many of the funding sources were fleeting and easily diverted. Sociological assumptions in design were flawed and discriminatory.

No one is suggesting that we go back and do this over again. Throw out the idea that public housing means tall brick towers isolated from neighborhoods. Instead, we should articulate a new vision for the 21st century that reflects lessons learned from the past and a broader mission for the future.

Instead of building new residential towers on superblocks, repurpose older infrastructure and combine multi-use functionality within existing city and town fabrics.

Instead of designing uniform apartments or complexes with rigid specifications, allow for innovative construction techniques like pre-fab units, modern SROs or shared living arrangements that strive for different, locally desired outcomes.

Instead of subsidizing homeownership (especially for wealthy Americans), invest those resources in community land trusts and land banks to give local communities more agency and sustainability. Take the speculation out of (at least parts) of the housing market by tipping the scale towards affordability.

We should simplify yet broaden HUD’s mission based on housing as a right. Set its goals and budget around lowering the cost of shelter across the country in whatever forms that shelter is needed for local conditions. Make HUD about providing Public Housing whether it’s apartments or a single-family home.

The possibilities of future Public Housing are almost endless when you shed the vision of the past. Let’s start showing the country what the future could look like and how it could help everyone, whether you live in a city, a suburb, or the country.

5. #RebootTheUS Can Start With Public Housing

The polarization of our politics has increasingly bled into all corners of our public policy discussions, crippling our ability to address the challenges facing our rapidly changing nation and planet. The polarization of our economics, in the form of runaway income inequality, has also poisoned our broader civic life and national identity. We were in crisis long before President Trump and will remain so long after him unless we can do what America has always done best — reinvent itself.

As when the Gilded Age spawned the Progressive Era and the Great Depression spawned the New Deal, we must lay the seeds now for a great rebirth of national promise and purpose. We must embrace the core values and aspirations of our republic — freedom, justice, and the public interest — and shed the rot of late capitalist values of commodification, exploitation, and greed. In the digital age, no term better represents what I think we need than a great “reboot.”

And there’s no better place to start than with public housing. Committing again to a massive nation-wide effort to provide affordable housing in many forms not only addresses the moral urgency of our current situation, but it also addresses the economic urgency as well.

Public Housing is infrastructure. Its creation means jobs and economic activity on a scale unseen in decades. Its existence means more take-home income for millions of Americans who are rent burdened or underwater in their mortgages. Its location means more mobility for families and individuals in economically productive regions.

What other effort could so thoroughly demonstrate the power of a great national reboot to inject economic and civic purpose into a country that should never have to sacrifice either. We don’t need to abandon the experiment of national government to do so. We need to reinvigorate our civic intellect as well as our institutions. We start by showing how a focused federal effort in housing can promote our values, help our citizens, and share our prosperity.

None of these ideas are new or radical. They reflect an obvious truth about contemporary America: what we have now is not working. We are ultimately presented with two options. First, we can continue on with our late capitalistic doctrine that we are all consumers on our own or, second, we could revitalize our identity as citizens and recognize that we are in this together. One leads to a brutal, empty society. The other leads to something much stronger and fulfilling.

Secretary Carson as Useful Idiot

But don't let him, or us, off the hook (housingwire)

But don't let him, or us, off the hook (housingwire)

When Dr. Ben Carson was announced as the nominee for HUD Secretary, it was pointed out that he had never worked in government and had no experience in housing.   When he took questions before the Senate, it was pointed out that he barely mentioned anything to do with housing (and was barely promoted to).  And when he went on his listening tour shortly after becoming Secretary, it was pointed out that he praised the results of programs that would likely be cut or eliminated by his boss.  Now that the budget is officially here, and does include devastating cuts to HUD, it’s safe to say that Secretary Carson is as bad as housing advocates feared.  But truthfully, he has been everything the Trump Administration wanted him to be.  The implication for our country is disheartening.

I know it’s harsh to refer to Secretary Carson as a “useful idiot” but he is the literal definition of the term.  President Trump is cynically using Dr. Carson to go along with policies that the doctor (and, frankly, the President) doesn’t fully understand for purposes he may also not fully appreciate.  Dr. Carson seems quite content with the arrangement.

It is unlikely that Secretary Carson was consulted or even notified of the budget cuts outlined for HUD.  I’m not entirely convinced he knows what is in the budget. Not that the department is even staffed enough to have anyone around to tell him. Despite Dr. Carson’s testimony during the nomination to defend the mission and programs of his department, he has done nothing of the sort and never intended to.

This was all from the White House.  The department faces cuts of 15%, or $7.4 billion, which would include the elimination of bedrock programs like the Community Development Block Grant, the Housing Trust Fund, HOME investment partnerships, capital funding for public housing, and many other regional rental assistance programs.  Hundreds of thousands of poor, young, old, disabled, or otherwise vulnerable Americans would lose housing assistance in the midst of the affordable housing crisis.

Secretary Carson has still been useful by putting a genial face on what is a dark, cruel vision of public policy that has emerged as the only through-line in the Trump Administration.  Secretary Carson has made national headlines for two statements that reflect the naked truth of the Trump Administration but spares the President of having to say them himself: Fuck the Poor.

First he said that public housing, or presumably any subsidized housing, shouldn’t be “too comfortable” for residents because they won’t be motivated to find other housing.  Second (and not for the first time) he called poverty a “state of mind."

These comments are horrifying and stupid for several reasons. 

Let’s look at the first statement.  The logic that public/assisted housing should only be temporary was abandoned decades ago by HUD because it never made sense to begin with.  Providing permanently affordable housing for low-income families is a worthy public investment because it creates more economic opportunity for individuals and communities, reduces public spending in other supportive services, and maintains a mixing of income (and by extension, racial) groups that is fundamentally necessary for the health of our civil society.

If residents have the opportunity to move up the economic and housing latter, then great, American mobility is working.  But, more accurate to today, if they have to stay economically, or want to stay socially, they shouldn’t be punished with Spartan accommodations. Where are the good jobs and opportunities in our economy today? Decades of terrible economic policy have trapped millions of Americans in all corners of the country.  The idea that this housing shouldn’t be “too comfortable” is not only cruel and condescending, it is ignorant and classist.

Which brings us to Secretary Carson’s second statement about poverty being a state of mind.  This statement is so utterly wrong on its merit, so astonishingly ahistorical, and so morally debased that in a healthier society, we would have demanded and received his resignation. 

Our brand of American exceptionalism has always had a darker tone when it comes to poverty.  We romanticize the idea that anyone can do anything if they work hard enough, and point to any number of anecdotal stories to show this kind of success.  However, this allows us to ignore the larger structures in our society that have exploited the poor and vulnerable from the founding of our republic to present day – from Native Americans to slaves, to immigrants, to women and children, to veterans and foreign workers.

It’s why our national consciousness remembers the wagon trains of western expansion more than the violent removal and murder of Native Americans to achieve it.  It’s why we recall the great industrial expansion during the Gilded Age through the mansions of the robber barons without remembering their violent suppression of labor strikes at places like Tompkins Square in 1874 or on Grand Street in 1886. Its why we gloss over MLK's true message of economic justice for a waterer-down version of inclusiveness.

Dr. Carson’s views on poverty are no doubt shaped by his own exceptional life story (which, unlike the President, he achieved on his own.)  He has made a lucrative second career as a writer and motivational speaker by telling willing audiences that he overcame poverty and achieved greatness, reaffirming this great narrative of America by personifying it himself.

But is everyone blessed with Dr. Carson’s brain? How many other poor young men and women – who likely had equally strong and dedicated mothers - were unable to achieve even modest economic prosperity?  For every Dr. Carson, there are a hundred anonymous poor who, if even acknowledged by our broader society, are blamed for their condition. 

That this blame is also leveled by a man like Dr. Carson, who should know better given his background, his stated religious beliefs, and his position in government, shows everything that is wrong with our country today.

We can debate the likelihood of the cuts in the president’s budget actually passing and take some hope in knowing that many won’t.  We can hide behind the fact that Dr. Carson is simply inexperienced and overwhelmed in government. We can tell ourselves that the economy is doing well, that it could even improve, and that anyway it’s only a small portion of people impacted by these cuts.

But this thinking would let us all off the hook.  We can’t turn away from what is staring right in front of us.  Our society is growing crueler.  Our government, and even President Trump, is only a reflection of this. Our illness runs much deeper.

We are looking at the challenges posed by globalization, coming automation, and climate change with tax cuts for the wealthy and program cuts for everyone else. We are blaming the poor for their condition and excusing the mega rich for theirs.  We are lying about the past, ignoring the true problems of the present, and betraying the future - for nothing. 

Yes, we can start by demanding Secretary Carson step down.  We can continue by blocking the president’s housing agenda (and general agenda) and voting him out (if it comes to that). But we must acknowledge that the cruelty running through our society is a much larger plague that must be eradicated. 

We must discover a new civic spirit and a new commitment to our shared republican values of liberty, justice, and peace. We must acknowledge that these values are only viable when every citizen has access to them.  We must create a government that reflects the supremacy of collective effort and shared benefit over exploitation and selfish gain.  We must reject the ideology that says we are on our own.  That has never been anything but an excuse for the bigger fish to eat the little ones.  America is greater than that.