new urban crisis

5 Reasons We Need More Federal Intervention in Housing

The United Cities of America (wired via garrettdashnelson)

The United Cities of America (wired via garrettdashnelson)

This past week, Urban Institute released a report on the dire state of the affordable housing crisis.  Put simply, every county in the country has a significant shortage of affordable rental housing.  Every. Single. County. This report focuses on extremely low-income (ELI) households (which make 30% of average median income) and shows that there are only 21 market-rate units for every 100 ELI renter households. The number climbs to 46 units with federal programs.  On it’s own, this report shows why federal intervention in housing is so important to this population, but taken in a broader context, it shows why we need to re-embrace the type of large-scale federal intervention that we saw from the 1930s-1960s. Here are five reasons.

1. Localism Makes Things Worse

“Localism” is a call for more local autonomy that acknowledges the deep geographical divisions that have paralyzed our federal government. Frenemies Richard Florida and Joel Kotkin have come together to make a compelling argument for why the only way to overcome this is to essentially admit defeat, avoid relying on the federal government, and let local preferences control tax dollars/policy. 

As I explained in last week’s blog, though both scholars, coming from different ideological perspectives, present solid reasons for supporting this idea, there are two practical problems that would potentially make the housing crisis worse.

First, we already have localism and it stinks.  As Matthew Yglesias pointed out recently about Palo Alto, localized planning policy has skewed political outcomes for one constituency – the connected present – at the expense of the non-connected present (and the future). These local groups in these select economic areas are suffocating the entire national economy. Right now.

Second, the history of NYC before the dawn of federal intervention in the 1930s shows that in many cases, even at the local level, the interests of “financial power” and “voting power” rarely align and at best create a corrupt status quo that serves only the leaders of each faction.  We wouldn’t likely see a return to political machines, but can we assume that contemporary “financial power” and “voting power” have similar political goals? Or can they find political strategies that both sides buy into?

Whether its local planning policies that prevent growth or deeply divided local political interests, our current reliance on localism is counterproductive. Removing the small federal power that exists now would only make these issues worse. We need to supersede these local interests as a nation.

2. Regionalism Has Too Many Boundaries

A counter-argument presented to localism is regionalism.  Amy Liu wrote about several areas – Chicago, Denver, and Seattle – where local municipalities are working together, across city-lines, to create equitable development.  Though these examples are encouraging, they show the larger political conundrum of planning this way.

Regions, let alone cities, are not recognized in the Constitution, which poses fundamental challenges to cooperation and coordination at the sub-state level. You only need to look at the dysfunction in North Carolina over Charlotte’s bathroom policy to show that the partisan divisions at the federal level are just as toxic, if not more so, at the state level. Cities and regions are not powerful enough to overcome bad state-level planning.

Even worse, NYC shows the challenge of interstate coordination.  Hundreds of thousands of commuters are stuck in perma-hell over the deteriorating train tunnels under the Hudson River, partly because NY and NJ have bickered about who pays for what. Forget Bridgegate, Governor Chris Christie's legacy will be scandalized for canceling ARC.

State boundaries in many cases do not reflect the larger economic and political cohesion of a commuter-shed and instead have the affect of pitting residents of the same region against each other or putting residents in one state under the whims of politicians in another. The only recognized power to overcome these obstacles – to get cities, states, and regions to work together - is the federal government.

3. There Already is Intervention - Just the Wrong Kind

The US is a majority suburban, majority homeowner society.  Why? Because the government decided that we should be. More specifically, the US federal government decided to promote white homeownership and car ownership as the bedrocks of the post-war American economy by building free highways, underwriting mortgages, and segregating neighborhoods.

There is nothing organic or market-driven about how our communities are organized in America.  These were political choices that tipped the scales decidedly towards certain outcomes that were not pre-destined and were certainly not universally accessible.

Over the last 80 years, the US government has spent trillions of dollars subsidizing the suburban expansion of our country.  Even today, 60% of government spending on housing (over $100b) goes to subsidizing homes for wealthy Americans.  We don’t think of this as a ‘handout’ in the classic sense, but it absolutely is and it has had immeasurable consequences to our society.

If we acknowledge that the federal government has always played a central role in our economy, we can get over the childish ideologies that continue to harm our country.  Instead, we can focus on how we want the government to intervene.

Do we really want to spend billions of dollars subsiding the homes of wealthy Americans when we can spend a fraction of that on providing guaranteed, affordable housing to all vulnerable citizens? This isn’t a crazy, ideological question.  It’s a value judgment first and foremost, but it also makes more economic sense on top of that.

If the economy is moving towards innovative jobs clustered in urban areas, we need to build more housing in those communities to encourage spillover affects for all workers. The federal government has picked housing winners for 80 years - we just need it to pick different ones now.

4. Late Capitalism is Eroding Our Civil Society

Late capitalism is an increasingly mainstream term to describe the inevitability of the economic and political malaise we have been in (depending on how you measure it) for decades.  We are in a sustained period of inequality, inopportunity, and insecurity that shows, demonstrably, that something is deeply wrong with our economy and the politics organizing it. The person who ignores this is a fool and the person who defends it is a villain.

Just as I outlined in the previous section, this is no accident.  The federal government over the last 40 years has tilted the economic playing field towards stateless globalization, corporatist monopoly, and sanctioned corruption. The logical conclusion of this unabated trend is social collapse. Maybe that sounds hyperbolic, but the populism seen on both ends of the political spectrum in the US and across much of the western world is a direct response to late capitalism and another step towards this frightening possibility. How (and if) this anger can be channeled constructively is the great political question of our time.

However, as we’ve seen during other eras of extreme political and financial inequality, that anger can be channeled positively at the federal level.  The legislation passed during the Progressive Era, the New Deal, and the Great Society were all far-reaching attempts to address massive, system-level problems (obviously with uneven results.)  Just as federal policies are the cause of many of these current problems, they can and must be the solution too.

5. It’s the Environment, Stupid

All of this comes back to the ghost at the feast: climate change.  Sorry Bret Stephens, but there is no debate about the danger this poses to our society.  Sure, scientists don’t know exactly how, where, or when these changes will manifest as an existential threat, but it’s not an academic question.  We are experiencing this all over the world right now.

The simple, unsexy truth is that our development history – sprawl – has been terrible for the environment overall and terrible for the health of many people specifically.  (One area where HUD Secretary Ben Carson has shown some potential is this connection between housing and health.)

Creating denser communities where housing and jobs are walkable and connected to public transit isn’t some liberal fantasy for its own sake.  It’s a proven form of addressing inequalities and inefficiencies harming our environment and our collective health. 

Localism and regionalism can’t address the dangers of climate change if some localities “want” to maintain sprawl.  Decades of federal intervention in homeownership and car ownership that cause climate change can’t naturally be reversed. The ills of late capitalism that have damaged the physical and political health of our society won’t fix themselves.

The federal government is the only entity strong enough and ultimately legitimate enough to adequately address all of these problems.  Giving up on this idea, as academics or advocates, is giving up on the American experiment itself.

Rather than abandon the idea that the federal government can help, we must commit ourselves to a national “reboot” of political, economic, and social priorities.

Starting with housing seems like the logical place to begin this process.  The moral urgency of the housing crisis calls for big, bold national ideas.  The economic and social benefits of committing the nation to housing-as-a-right are self-evident.  Where and how we build that housing may just be the difference between a sustainable future or something far darker.

The Urban Crisis in Late Capitalism

We can crop him out before posting, right? (elianlindt)

We can crop him out before posting, right? (elianlindt)

It’s purely a coincidence that the startling footage of a paying customer being dragged off of a United Flight by airport police went viral the same week that Richard Florida’s latest bookThe New Urban Crisis” came out, but I think the two events demonstrate the same problem.  As individual consumers, as cities, or as entire regions, we are experiencing the long building, negative consequences of “late capitalism.”  It is a force that has not only dehumanized many aspects of our society, but it has also failed to deliver its promised shared prosperity.  How we address this problem, or if we are even able to, will take more than zoning reform or affordable housing funding.

Late capitalism as a term has its origins in Marxist critiques of capitalism from 100 years ago, but has generally been applied to capitalism post-1945.  As I’ll explain, I think the term works better when focusing on the post-Cold War period.  In any case, it is meant to describe our current period of development as a limited stage of evolution as opposed to a permanent state. Eventually, as the theory generally goes, the extreme concentration of economic and political power will undermine and potentially destroy the stability of the larger society.

This is certainly a provocative way to understand what has been almost a century of relative global economic growth and stability.  No generation is fully aware of its place in broader historical cycles, but particularly after WWII, our period sure feels unique.  Famously, Francis Fukuyama published an essay, then book, called “The End of History and the Last Man” in 1992 about how liberal democracy (which is how I’ll describe our model for this blog) might represent the endpoint of human social and economic evolution.  How could such triumph be described as “late” to imply that it won’t last?

Fukuyama has at times been misunderstood (he didn’t think liberal democracy would go unchallenged or wouldn’t experience set-backs) but his belief that the economic and social model of western democracy would be the default setting for human evolution has been criticized by some as historically naïve or culturally biased.  History doesn’t “end” obviously and many systems have looked stable and enduring until they aren’t.

Fukuyama also assumed that the liberal democratic model “worked,” inherently. There are lots of metrics to point to about how much peace-and-prosperity the world has enjoyed post-1945. Of course there are also many metrics that point to this peace-and-prosperity being a zero-sum game that relied on denying peace-and-prosperity to a considerable amount of the global (and domestic) population. 

More importantly to this idea, though, is that liberal democracy produced the most peace-and-prosperity at least compared to communism. That’s the big catch to all of this.  As Churchill famously stated (or restated) about democracy, it is the worst system of government except when compared to every other form of government.  For most of the post-1945 world order, we had the Soviet Union as a competing model to compare to.  And it’s pretty easy to see which system was ‘better’ relative to the other.

However, over the 25 years since the fall of the Soviet Union and the end of the Cold War, it’s harder for us to remember just how much of our foreign and domestic policy was based on competing with communism. The US Government wanted and needed to show the world, let alone its own citizens, that liberal democracy created a better life than communism.

The New Deal coalition that emerged from the Depression to dominate domestic politics for most of the post-1945 period was based partly on the existential fear that Americans might want an alternative system if there was one to compare with. If capitalism were more brutal than communism, as it certainly appeared to be during the Great Depression, maybe the American model would fall.

This real tension served as a check against unfettered capitalism and produced public and private institutions that ensured prosperity – and power - would be shared on a large scale. This check is what allowed the greatest wealth creation in the history of the world to expand in America.

That check is gone.  (It started to breakdown before the end of the Cold War certainly.) Our politics have enshrined the supremacy of the market and our culture has so sufficiently demonized “government intervention” as ‘socialism’ that we have allowed many of those public and private institutions to be gutted or removed entirely.

Whether it’s the loss of unions or anti-monopoly agencies, the march of stateless, shareholder corporatism has continued unabated for decades.  It is no wild-eyed conspiracy to say that big, global corporations are the dominant actors in our society.  It seems like a quaint formality that it was even necessary to give them the same constitutional rights as citizens (without many of the same responsibilities.)

Many people will point to the wealth creation and job creation of these corporations (along with the cheap goods and services they create) as a clear public good.  No doubt there is some public good there.  But the cost of this concentration of power at the same time as it recuses responsibility has a clear public cost.  Wages have stagnated, health outcomes have declined, economic mobility has flatlined, and our environment continues to deteriorate at a frightening pace.  We have no mechanism politically to make those corporations pay these costs.  The public – present and future - does instead.

And, after the Cold War, there is no external pressure on our system to keep corporations and the capital behind them accountable. The idea that our system has to ‘compete’ with another system to maintain its legitimacy is laughable now.  Capitalism won. 

It shouldn’t be laughable.  Long before the 2016 primaries and election, it has been clear that many Americans across all political spectrums simply don’t believe in the legitimacy of our model.  This anger has, regrettably, manifested in different forms with different villains depending on the constituency you’re looking at, but the message is clear and universal.  Our form of liberal democracy isn’t producing the type of economic prosperity or social progress that we’ve been trained to expect as Americans. 

The social contract has broken down and been replaced by one-sided terms and conditions.  The joke is now on us, whether we fly Untied or not. That is late capitalism.

This is where the "new urban crisis" and Richard Florida’s book comes in.  Mr. Florida famously coined the term “creative classes” in his first book 15 years ago that showed how the concentration of knowledge economy jobs in cities was driving the urban revival that was destined to benefit all of humanity.  That optimism might sound hyperbolic but Mr. Florida and many urban boosters championed this in earnest and for sincere reasons. (I also believe urbanism is a better way of organizing society.)

However, late capitalism was always going to create a winner-take-all urbanism. Smaller (mostly non-coastal) cities have been gutted while larger (mostly-coastal) cities have been gilded.  The poor and working class suffer in both scenarios, but the very wealthy are the only ones benefiting from this urban revival. 

Mr. Florida has undergone a commendable self-correction. He acknowledges that the great urban revival hasn’t happened.  Outside of a few ‘superstar cities,’ too many places in America haven’t benefited from the ‘creative class.’ Even the gains made in those cities haven’t been shared and haven’t led to an expansion of opportunity for others. As a result, Most Americans still live in the suburbs or want to move there eventually. Poverty in the suburbs is in fact exploding as a result of some of these trends in cities. Cities aren’t part of the solution. If anything, they are exacerbating the problem.

Mr. Florida has also come to recognize the larger structural issues facing cities around class and race that were neglected in his original work.  Building tech and young-friendly neighborhoods with great amenities and transportation networks doesn’t help existing working-class or poor residents and makes it too expensive to attract new ones.  Too many of the benefits are going to a small pool of affluent, educated residents that are mostly white.

Mr. Florida outlines several city-level and state-level policy suggestions about how to mitigate some of these stratifying elements.  Some are worthy of support, others are not as comprehensive.

But more importantly, he acknowledges that these are larger questions that we must address as a society.  He hedges on criticizing capitalism overtly (and as far as I know has never commented on late capitalism) but it is refreshing for someone with such passion for cities and experience studying urbanism to challenge our assumptions about our liberal democratic model. More of this is needed.

The urban crisis is not a problem for technocrats.  This isn’t the fault of urban planning.  It’s the inevitable consequence of economic nihilism.  It is a political problem and a values problem.  These require value-based solutions (as opposed to ideologically-based ones) and political changes that our current model refuses to entertain or acknowledge.

As it stands now, it is likely that the unfortunate United passenger is going to get millions of dollars in a settlement.  Maybe the airlines relax some of their overbooking policies.  But the structure of the airline industry – the oligopoly – is enshrined in our laws and culture, which won’t change anytime soon.  Most passengers won’t have the option to refuse to fly United.  As consumers, we have lost the fight in late capitalism.

The urban crisis is more complicated (indeed, crisis isn't really the right word), spanning many industries, many political interests, and many stakeholders.  There is no single incident to go viral (or maybe there are too many) to galvanize the nation and there are no simple, populist solutions that can quickly satisfy it.  But there can be change. Frankly, there must be change. As citizens, the fight against late capitalism must begin. It is our only way to define what comes next.