housing is a right

What the Fight for Universal Rent Control in New York Can Learn from Prop 10’s Defeat in California (Via Shelterforce)

We’ll find out soon (homeBody)

We’ll find out soon (homeBody)

This article was originally published in Shelterforce

Voters in New York have spoken, and they want relief from the affordable housing crisis. Last week, they handed control of state government over completely to Democrats, most of who ran on progressive, pro-tenant platforms. Particularly in the state senate, which flipped for the first time in years, many first-time candidates beat pro-developer incumbents by rejecting real estate money and instead embracing the call for universal rent control.

This doesn’t mean that voters will get relief, however. With current rent regulation laws set to expire early next year, voters have set up an unprecedented fight between progressive housing groups and real estate interests. It will be a brutal fight. For proof of this, housing advocates in New York need only to look at California.

National real estate groups spent $80 million successfully defeating a rent control ballot initiative known as Prop 10.  These groups, as well as powerful local groups like the Real Estate Board of New York and Rent Stabilization Association, won’t blink at spending lots of money to fight universal rent control in New York. (One of the biggest is Blackstone, which owns Stuyvesant Town in the East Village where I live.)

California and New York have extremely different political contexts, so making direct comparisons has limited value. However, there are several important lessons that New York housing advocates can take away from Prop 10’s defeat.

  1. Define Universal Rent Control clearly

Prop 10 didn’t stand a chance as a ballot initiative, partly because of the money aligned against it, but equally because it was confusing. It was not a “Yes/No” vote on rent control. The language of the proposal was about repealing the state’s Costa-Hawkins Rental Housing Act that prevented local cities or towns from enacting any kind of new residential rent control.  

That left a lot undefined for voters. They were asked to vote on repealing something—and many did not have a specific sense of what repealing it would mean for their city or town, or for them personally as renters or homeowners. Even with millions of dollars from tenant groups and the AIDS Healthcare Foundation, this dynamic made it easy for well-funded real estate interests to fill in the gaps and define it how they wanted to. This clearly cost Prop 10 a lot of should-be voters.

That is less of an issue with Universal Rent Control in New York. Although the scope of the proposal is still being worked out, the broad goals are clear and who benefits is clear: every rental unit in New York state will become protected (it’s less than half now.) Every loophole that allows landlords to raise rentsevict tenants, or deregulate units will be removed. Every renter will have new eviction and harassment protection.

Though URC is easier to understand than Prop 10, it is important that activists and progressive legislators work together quickly to define the specific proposals around universal rent control before real estate interests start flooding the air with advertisements against it. This will make it easier to rally the broad spectrum of renters that stand to benefit from the plan, particularly market rate tenants that must be brought on board to pressure other legislators in the Democratic Party.

  1. Seize the new political landscape in Albany

Pressure is key. California, just like New York, is blue, but that hasn’t translated into progressive housing legislation. This pattern cost them with Prop 10, which first died in a Democrat-controlled committee before reappearing as a ballot initiative. There are not enough Democrats in office in California with the stomach to challenge the real estate industry and their wealthy homeowner constituents to enact the type of far-reaching reforms necessary to fight the housing crisis.

That had been the case in New York before the November election, but now Democrats control all three branches of elected government and have a rare window to challenge the status quo. Democrats have dominated the Assembly for years, but the big difference is the Senate, where Democrats took control for just the third time in more than fifty years, fueled by an aggressively pro-tenant wave of first-time candidates.

Housing Justice for All rally on Nov. 15, 2018. Photo Credit: Pete Harrison

The wildcard will be New York’s Governor Cuomo, who ran to the left because he was pushed there by a spirited challenger. He has been a big friend of the real estate lobby for as long as he’s been in politics. He is now in uncharted territory, but it appears that he can no longer hide behind New York’s long standing closed-door dealdynamic.

Unlike in California, having complete control of state government should mean that universal rent control would get considerable attention from legislators. The severity of the crisis along with the significant shift away from real estate money in elections should keep pressure on the Governor and other members of the Democratic Party who might otherwise be wary of angering the real estate industry. 

Defining the proposals for URC quickly and keeping activist groups engaged throughout the process will hopefully be enough to turn the electoral momentum into firm legislative action.

  1. Debunk classic economic arguments against rent control

In California, the real estate lobby spent the majority of its money on television ads harping on the classic Econ 101 arguments against rent control. These arguments are not as strong as they appear. The reality of the housing market has always been more complicated than simplistic models suggest and it is critical to push back on them.

First, studies that claim rent control harms the creation of new housing or the quality of existing housing fail to properly account for the more demonstrable variables that limit supply in tight and densely populated markets like New York, San Francisco, or Los Angeles like natural geographic barriers, social preferences of land use, the limited extent of transportation networks, and even a desire to limit competition among developers.

Second, they tend to underplay how decades of (federal and local) government policies have privileged real estate and empowered financial markets to commodify housing.  The housing market ‘s priority is enriching investors instead of meeting the overwhelming demand for affordable shelter. That explains how the Low Income Housing Coalition estimates that the U.S. is missing 7.2 million affordable housing units, yet 250,000 units sit empty in New York City alone.

Third, they ignore the bigger problem with the housing market: rent-seeking behavior. There’s only so much land, particularly in desirable markets like New York where it’s value has skyrocketed over the last 20 years as more people and firms want to move here (for better or worse). This has made city landowners incredibly wealthy.

The pay-to-play nature of our political process means that they also have a disproportionate amount of power over things that impact the housing market like property taxes, zoning, and affordable housing policy. This almost always harms the public while driving up property values. It helps explain everything from why so many commercial spaces are empty to why it costs so much to build new affordable housing and homeless shelters.

When we acknowledge that the housing market in reality encourages rent-seeking behavior and show how much it corrupts public policy, rent control becomes a legitimate and necessary intervention to empower tenants and the broader public against economic and political exploitation.

Prop 10 was ultimately a bad presentation of a compelling and urgent public policy choice. Even if real estate interests hadn’t spent so much money distorting it, it failed to capture the general public’s attention or imagination.

That doesn’t have to be the case in New York, where Universal Rent Control has already done that for many renters and voters. Now that it has a shot in Albany, California’s experience can help it get over the finish line.

CityViews: Why Quibble Over Who's 'Homeless'? We Can Afford Housing as a Right for All. (via CityLimits)

(dod/citylimits)

(dod/citylimits)

(This article was originally published in CityLimits)

What does it mean to be homeless? Does it mean that you live on the street or can it mean you live on someone’s couch? Is the homelessness rate going up or going down? As with all public policy matters, the devil is in the definitions. There’s a bill moving along in Congress called the Homeless Child and Youth Act that’s trying to expand the definition of ‘homeless,’ which is causing an interesting, if distracting, debate within the housing community. (Rachel Cohen has a good recap at CityLab.)

This debate matters a great deal to a lot of homeless people that need help. Just exactly how many people are homeless depends on what you consider homeless. There is a finite amount of federal funding for homelessness services and where we send these funds impacts a lot of peoples’ lives. 

The bill is designed to expand the definition of homelessness to capture people, particularly children, that don’t live on the street or in shelters, but don’t have their own reliable or safe homes (maybe they are doubling up, maybe they live in an abusive home). Right now these people are not considered homeless by HUD standards (although other federal agencies do consider them homeless) and are therefore not eligible for assistance (more on this later.)

The debate comes down to who do you help with limited resources: the truly, chronically homeless that might take a longer-term intervention or the housing insecure that might just need a short-term intervention? It’s a Sophie’s Choice type trade off that all sides of the political spectrum with a dog in this fight can debate in good faith.

I’ve been a longtime volunteer for the HOPE count, which is the main federal effort to count unsheltered homeless, so I care a great deal about this debate too. But I’m more interested in where the sausage is made: the nature of politics that surrounds public policy . Often times in America, our politics frame public policy debates in strikingly narrow terms that shroud the values that should be expressed, leaving us with false choices masked as hard-fought compromises. 

Housing as an issue suffers a lot from this and the current debate over the definition of homelessness is a perfect example. Of course no one is “pro-homelessness” but the accepted scope of the debate has the practical effect of making everyone pro-homelessness. Why? Because the debate isn’t about ending homelessness. And it should be. Because we can.

Let’s start with a simple premise: we are the wealthiest nation on earth. We can afford our public policy goals. The federal budget is $4 trillion. That is plenty of money.

However, our political system has spent about $5.6 trillion on war over the last 18 years and another $2.3 trillion will be spent on a tax cut over the next 18 (give or take.) These are choices our political system has made. 

Similarly, millions of Americans still don’t have affordable healthcare and 38 million American households are considered “rent burdened” (which is another important and arguably flawed definition). Just as going to war in the Middle East and cutting taxes for corporations are choices, so too are these. Our political system has decided not to provide basic needs.

Not because we can’t afford them. Don’t ever believe that bullshit. Of course we can afford them. Holy Shit. Obviously. None of this is new.

This brings me back to the homelessness bill. It is politics framing, frankly distorting, a public policy issue that should be very simple — end homelessness. Anyone that needs housing assistance gets it. 

Make housing a right. It is that simple.

It’s scandalous that we would rather blow up homes (and you know, people) in foreign countries than supply them to anyone who needs them in ours. We could probably still afford to do both, but the scandal scandal of is our war-making. Of course this opinion is rarely taken seriously by “serious” people, which also shows how broken our political premises are. I digress.

It’s scandalous because we should feel the moral obligation to provide shelter, but don’t. It’s scandalous because we have the means to do so, but choice not to. It’s scandalous because there are countless sound economic arguments that providing guaranteed housing reduces long-term public spending in other things like healthcare, unemployment, and even criminal justice.

This bill accepts all three terrible premises. Sure, naming something after children makes it easier to build political support for the homeless, but it shows that our definition of the deserving poor continues to narrow and excludes adults suffering with disabilities, addiction, or just poverty. Even children aren’t doing it for a lot of people anymore.

Sure, expanding the definition of homelessness could mean reaching more people who need assistance, but it still accepts that only 1/4 Americans who are even eligible (under any definition) get any. Even if some programs have seen an increase in funding, others haven’t, and most people don’t get help.

And it doesn’t raise the most obvious and scandalous point: that we are already fine guaranteeing housing assistance, but for wealthy people. Every homeowner is eligible for the mortgage interest deduction and the American taxpayer pays around $70 billion a year providing it. We spend $134 billion overall on subsidizing homeownership. Remember that when politicians say we can’t afford to end homelessness.

It is clear that our politics are broken. Our public and civic health have continued to deteriorate as a result. Bills like this are important in their own right, but its low ambition betrays a lack of moral vision and energy that should shock any American. 

But there is hope. There are many candidates, notably NYC progressives Alex Ocasio-Cortez at the Congressional level and Julia Salazar at the State Senate level that are running on housing as a right. Even Senator Kamala Harris is belatedly getting in further on housing more than traditional Dems have (ironically based on similar work by Rep. Joseph Crowley). 

Politicians who support housing as a right get what many activists get: the only way to fix our politics is to reject the premises that they rest on. Activists have noticed, but more importantly, everyday people have noticed. It’s not enough to write bills yet, but, for the first time in a long time, it sure feels like that vision and energy might be on the way.

Demand Housing as a Right, then Fight the Tax Plan

 
Mitchel Houses in The Bronx and the rest of NYCHA should be celebrated (homeBodynetwork)

Mitchel Houses in The Bronx and the rest of NYCHA should be celebrated (homeBodynetwork)

 

As the details emerge from the Congressional Republican tax cut plan, housing is one area where there appears to be considerable bi-partisan anger.  The home construction industry and affordable housing advocates both adamantly oppose to the plan, but for wildly different reasons. However, the former is vastly more powerful than the later and has much more of a chance to extract compromises from the final tax plan, which it surly will.

This is because the affordable housing community continues to accept the broken premise that the market is the best way to supply affordable housing.  It isn’t.  Until housing advocates rally around housing as a right as an organizing principle, tax plan after tax plan will chip away at even the limited market-based programs mildly supporting ‘affordable housing’ - and Democrats will keep allowing it.  Only by changing the debate can we change the underlying fundamentals causing the affordable housing ever-crisis.

 

Housers are stuck defending an already failed market-based policy

I don’t make a lot of friends shitting on the Low-Income Housing Tax Credit. The truth is, it’s just not a great policy and allows Congress to gaslight Americans on the affordable housing crisis.  Formed after the last big tax policy change in 1986, the LIHTC works by giving tax credits to developers who build a certain percentage of affordable housing units  (which is a dubious term to begin with) who then pass them on to investors (mainly banks) who fund the projects.

The program has maintained popularity with both parties because Republicans see it as a market-based solution (it isn’t) and Democrats see it as an affordable housing solution (it isn’t).  Defenders of the program on either side of the aisle will point to the 3 million units created under the program (which represent 90% of all affordable housing units built in the US over the last 30 years) as a point of success.  Some will cite the number of jobs supported in the construction industry or the estimated $100 billion injected into the economy through the program.  On the face of it, these are entirely fair points to make.

But none of these arguments hold up to the other glaring numbers to consider:

  • In 99.9% of US counties, someone making minimum wage can’t afford the cost of a 1-bedroom house. 
  • 75% of American households who qualify for housing assistance don’t get any
  • 11.2 million Americans are severely rent burdened
  • We are missing 7.4 million needed affordable housing units

Many thoughtful housers with good intentions will argue that LIHTC and associated private activity bonds are good programs and shouldn’t be blamed for these complex issues. They are all working very hard at protecting LIHTC, which is under threat if corporate tax rates go down (offsetting the incentives for the program.) The feeling is, “this is the best we’ve got, we must protect it.”  I get it.

But when you only have one program designated to create affordable housing and the country is mired in a devastating affordable housing crisis, how can you not question LIHTC? How can you not question the underlying premise that allows LIHTC to retain bi-partisan support in the first place? Who actually cares about actual affordable housing in Congress? What the hell did $100 billion over 30 years actually get us?

 

Even the one potentially cool, progressive change in this tax plan suuuuux

Many housing advocates and conservatives agree that the mortgage interest deduction (MID) is a terrible policy that unfairly favors wealthy homeowners.  They are right. 

  • Through MID, the American people spend $134 billion a year (remember, LIHTC did less than that in 30 years) on subsidizing middle class and upper middle class homes
  •  60% of all federal dollars spent on housing policies goes to homeowners making over $100,000.
  • 7 million American households that make over $200,000 receive more federal funding for housing than the 50 million who make less than $50,000

Getting rid of the MID would undoubtedly correct a lot of injustice in the tax system (and in our disastrous support of a homeownership society).  But that’s not why Republicans are limiting the deduction from $1m to $500k.  They are doing it to offset lower corporate and estate taxes.

That’s right. This plan takes money from wealthy homeowners and gives it to even wealthier corporations and rich heirs. The only way something as egregious as the MID was even on the table was because Republicans want to give tax cuts to wealthier, more powerful donors.  When confronted with this giveaway, few Americans seem to support this plan, but Democrats are fighting it because its Trump - not because they have ever supported transferring MID revenue to affordable housing.

 

Reject the premise, change the debate, and make housing a right

I would also argue that few Americans would support the MID in the first place, since it effects so few of us (which is one of the defenses given by Republicans for the plan.) This goes to show how warped the conversation on housing is in this country.  We have been fine subsidizing wealthy housing for generations, but refuse to assist the poor and working class secure affordable housing.

Much of that blame lies with housers letting the Democratic Party off the hook. By accepting the premise that market-based programs are the only viable solutions at the federal level (this in the face of a massive effort to subsidize the top end anyway), they have surrendered the intellectual and moral weight that would otherwise frame the debate on housing as a basic human right.

It must also be said that the Democratic Party implicitly fake-fights the far-reaching racism that has underpinned this “market approach” for 80 years.  When public housing and vouchers became synonymous with urban poor brown and black people, the party abandoned the solid and still-relevant arguments for public housing and housing assistance that defined the New Deal and Great Society eras. 

Rather than fight for these ideas because they are right, because they work, and because they breakdown racial injustice, the party focused on homeownership.  The fear of alienating white homeowners was too strong to fight for principles that would still ultimately benefit them too. Housers have nowhere to go, but haven’t kept Dems honest.

It’s not radical to question the virtue of giving away $135 billion a year on wealthy homes when so many Americans are suffering to afford one (whether they own or rent).  It’s not radical to question the virtue of LIHTC when nearly all of the country is mired in a never-ending affordability crisis.  It’s not radical to question why 75% of Americans who need help affording basic shelter aren’t getting anything.

There is enough wealth and there are enough good ideas to guarantee affordable shelter for every American in this country if we want it.  There are enough Americans from every age, race, and region who are suffering and will continue to suffer to change the political landscape if we want to do it.  And there are enough good people in housing who have the knowledge and passion to lead the way if they want to. Frankly, we need them to.

 

homeBody is the free communication tool for landlords, tenants, and neighbors.

We believe housing is a right and so should you. 

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.