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.

Black Lives Matter "Goes North" with Focus on Housing

MLK in Chicago (austinweeklynews)

MLK in Chicago (austinweeklynews)

Last week members of the Black Lives Matter (BLM) movement organized a small but long protest outside of City Hall in Cambridge, MA.  Four members of the movement chained themselves to the front door for hours resulting in their eventual arrest.  Rather than protesting police brutality however, they were protesting the lack of affordable housing in the city. Dominated by Harvard and MIT, housing in Cambridge has become a major issue for residents and students alike.  The protesters posted 4 demands for affordable housing in the city during their protest.

On a broader level, this shows what I believe to be a natural and hopeful extension of the BLM movement into addressing other forms of systemic racism.  As I have written before, I believe our housing policies are the most dramatic and far-reaching form of systemic racism evident at all levels of government. We must address this legacy as a nation.

Any reasonable person can see that the justice system has severe racial disparities and that the police in many communities have mistreated non-white residents.  Coupled with the increased exposure to police violence captured on video and shared through social media, it made sense for BLM to emerge over this issue. There was a moral imperative to take action against such crimes, whether state-sanctioned or not.  It’s not that any of these crimes are particularly new, but technology and the BLM movement have forced the nation to face up to them.

You can argue over the efficacy of tactical decisions made by individual BLM movements and certainly some have been more effective than others, but that is to be expected in a broad, loosely linked social cause.  In some cases, they have organized political candidates and voter-registration drives, in others, they have alienated presumed allies.  At times it has been messy and even counter-productive, but I’m not here to discuss tactics or process in regards to the BLM’s actions, even in Cambridge.

What interests me is the strategic shift that the Cambridge BLM protests represents.  It’s a shift that I hope gets more attention in the press and gets more replication in the movement on a national level.  I say this as an observer of the movement, one conscious of not claiming to speak for it, but I believe that BLM has always been about something larger than protesting police violence against communities of color, as important as that issue is, and this appears to be a pivot towards a larger vision of racial justice. To be clear, I don't know how much these particular activists have coordinated with other chapters, maybe they haven't, but I certainly hope that this is a signal of a new focus. 

What happened in Cambridge is an important and necessary step in the evolution of the movement. Just as Martin Luther King and his Southern Christian Leadership Conference “went north” to Chicago with the civil rights campaign in 1966 (with a particular focus on housing) perhaps BLM is having a similar expansion of its scope.

There is no way for us to address racial injustice without addressing decades of housing discrimination.   I have written about discrimination in housing before and want to quickly restate two concepts that I previously covered:

1. Suburban sprawl was a form of white supremacy.

2. Gentrification is just sprawl by another name.

Many Americans still don’t realize that the great suburban expansion begun after WWII was a massive government-sponsored program, not an organic evolution of supply and demand.  The US Government effectively placed two bets on the post-war economic prosperity of Americans – homeownership and car ownership.

They ‘stacked the deck’ on these bets by paying for the construction of thousands of miles of interstate highways and local roads and by securing cheap gasoline through subsidizing domestic production and forging international alliances with Saudi Arabia and other oil-producing nations through billions of dollars in military aid.

Just as consequently, they subsidized the housing industry by creating federal agencies to guarantee mortgages (Freddie Mac and Fannie Mae), which radically reduced the risk to banks and the cost to buyers. It was literally cheaper to buy a brand new house in Levittown, NY than to keep renting an old apartment in Queens.

The new face of BLM? (facebook)

The new face of BLM? (facebook)

With the cost of constructing and buying a house radically reduced, and the cost of traveling to and from that house radically reduced, it’s no wonder millions of American’s moved to the suburbs.  It was an economic no-brainer.

And it was virtually unavailable to Americans who weren’t white. Most white American’s don’t realize that either.

Racial exclusion was at the very core of the federal, state, and local policies that created sprawl.  Whether it was allowing banks to “red-line” predominantly black neighborhoods, thus preventing blacks from obtaining home loans, or whether it was allowing local ordinances to ban non-whites form purchasing homes, the result was the same: white flight and blacks being blocked (Add in the racist overtones of Urban Renewal, and even stable black neighborhoods in the inner-city weren’t safe from destruction and forced removal.)

The resulting economic and social isolation have spanned generations and caused long-lasting damage to many minority communities. The impact of sprawl is so ubiquitous that we can’t even see it. For example, the demographics of urban American changed in unprecedented ways.  In 1950, Detroit was the nation’s fifth largest city at 1.8 million people.  At the time it was 84% white, 16% black.  As of the 2010 census, it has lost 61% of its population.  It’s now 10% white and 83% black (and 7% Hispanic).  As the motor industry and whites left Detroit, black residents were left behind.

The racial discrimination in law enforcement that BLM protests today has its roots in sprawl from this period.  It wasn’t an accident or moral failing that the many black Americans became concentrated in poor, inner cities. They weren’t allowed to leave. (Although in many cases, including Detroit, many blacks were fleeing worse conditions in the Jim Crow South.) Even as the populations of these cities turned predominantly non-white, most law enforcement agencies retained their predominantly white makeup.

That brings us to gentrification and the protests in Cambridge.  Even though the ‘great urban migration’ is a bit of a myth, there are still a number of coastal cities experiencing a rapid shift in racial and economic characteristics in certain previously poor, minority-majority neighborhoods.  A limited housing supply has run up against the concentration of certain high-growth jobs in these cities creating huge pressures on poorer residents and middle class residents to keep up.

Although actual displacement is hard to measure in gentrifying neighborhoods, the simple truth is that most pre-existing residents of these neighborhoods are not benefiting from these changes - and most of these residents are minorities.  Sprawl has found its way back into the city.

Boston (Cambridge is just across the river) is a prime example.  With firms like General Electric relocating to be closer to where workers are and where they want to live, there is huge pressure on the housing supply in greater Boston. Housing costs have skyrocketed over the last 5 years by more than 50% and now a single-family home in Cambridge costs over $740,000 and a one-bedroom rental is $2300.

Affordable housing is a moral issue, one steeped in racial injustice. And though this clearly informed the Cambridge BLM protest, the group outlined detailed if modest goals, perhaps surprising to some given the coverage over the protest itself.  The group wants the City Council to require any developer to set aside 25% of units for affordable housing; to allow MIT to build more student housing to relieve pressure on the market; to use public land like parking lots for affordable housing construction; and to establish a rent-to-own program. 

This chapter of BLM clearly has a deep understanding of the housing needs of the city and the political realities surrounding the major educational institutions that anchor it.  If this represents the beginning of a broader effort by the movement to address housing discrimination and affordable housing policies, then it is as thoughtful as it is exciting.

MLK’s northern campaign in Chicago should serve as both a positive example and a cautionary tale for BLM.  The SCLC was able to secure meaningful commitments from Mayor Daley over more public housing construction and more access to mortgages for black homebuyers. These were significant victories that had a direct impact on the passage of Fair Housing Act two years later (but after MLK's assassination) that formalized many of the same policy goals on a national level.  However, as the Vietnam War began to take center stage in the nation’s political consciousness, the movement was unable to retain focus and cohesion on many issues.  The violence and poverty that has gripped much of Chicago today (which has inspired a strong response from community members and the BLM alike) attest to the work that was left undone.  Hopefully there is another opportunity emerging to continue the work against racial discrimination in all facets of American life.

Gentrification Is Sprawl By Another Name

Actually, that's not too far off. (post-modern pamphlets)

Actually, that's not too far off. (post-modern pamphlets)

I have been meaning to write about sprawl for a while now and, as luck would have it, a recent article by Daniel Hertz at City Observatory provides a great introduction to explain how I see the topic.  Mr. Hertz's article was a solid stab at an increasingly important question in America: how do you measure the cost of sprawl? His article studied commute times across the 50 major US metros and developed a formula for  a 'sprawl tax'  that is worth reading. He puts the cost at $107 billion a year, or about $1400 per commuter.

That being said, I actually won't get into his particular approach, but rather I'll use it as a launching pad to the larger discussion about what I believe sprawl actually is, how it has happened, and to whom. This will hopefully show what I think to be the full cost of sprawl which the current measurements that I'm aware of, Mr. Hertz's included, fail to capture.  

For a general definition of sprawl, I turn to the one provided by Smart Growth America, which has been a leading researcher on sprawl.  Their first report, published in 2002, defined sprawl as the process in which development across the landscape far outpaces population growth.  They define four factors specifically to measure it: residential and employment density; neighborhood mix of homes, jobs, and services; strength of activity centers and downtowns; and accessibility of the street network.

We are all familiar with this definition of sprawl: tracts of cookie cutter single-family homes, culs-de-sac (only a suburban kid would know the proper plural form!), and strip malls are staples of the landscape.  It's been a sub-genre of American art for over 50 years and at this point is cliche.

We are also increasingly familiar with some of the costs of sprawl, particularly as it relates to how auto-dependent the majority of the country is. This is what Mr. Hertz has attempted to measure. We can measure these congestion costs because there are tangible data points to gather - we know how expensive gas is and how many hours we sit in our cars going to work.  We are less certain about how to measure the environmental costs of sprawl because the number of variables and assumptions are obviously more complex than measuring gas consumption.  Many anti-sprawl advocates also speak to the social costs of sprawl, but generally have not produced much compelling data behind it to date.

Despite all of this, I think we still don't even come close to the true cost of sprawl because we only think it happens in the suburbs. As a result, we only attempt to measure it there.  This is because the definition of sprawl from Smart Growth America (and the popular understanding of the term) fails to appreciate the larger economic and political forces that drive sprawl. If we expand the definition of sprawl to fully capture those forces, we can start to see how high the cost actually is.

What's important to understand is that sprawl isn't an organic process. (Nothing in the built environment is organic.)  It didn't just happen because millions of Americans suddenly wanted to live in the suburbs after WWII.  It's not to say that Americans were 'tricked' into something that they didn't want, but they were absolutely steered towards certain economic decisions because they were no brainers for most families.  However, it was also clear that only white Americans were being steered towards those decisions. Everyone else was being blocked.

No exit. And for some, no entry. (jonathan becher)

No exit. And for some, no entry. (jonathan becher)

As a result, the more comprehensive way to describe the evolution of sprawl is that it was the outcome of various interconnected policy decisions that disproportionately rewarded capital investments in home construction and car manufacturing for certain corporations and for certain Americans; it also created a self-reinforcing effect of encouraging more capital (and more jobs) to relocate to the suburbs, again only benefiting certain Americans while leaving others behind.

Looking at it this way, the physical nature of sprawl as we are familiar with it is really more of a by-product of those forces rather than the central feature. The central feature of sprawl was the coordinated political and economic policy of racial exclusion. Therefore, I think that a better definition of sprawl would be the process by which capital asserts a white supremacy over a pre-existing landscape.  

The pairing of 'white' and 'supremacy' might seem needlessly provocative to some people. I included the indefinite article 'a' just as purposely because, while I think it is impossible to look at sprawl without considering race, I also want to make it clear that I don't at all think it was the product of White Supremacy or some evil racial conspiracy. Nor do I think that everyone who designed the policies, executed them or partook in sprawl were racially prejudiced. But it is clear that sprawl was the product of a collection of conscious and subconscious prejudices that ultimately created a system of prejudice with horrific longterm consequences. 

We can see where my definition of sprawl still generally aligns with the traditional sense of the word in terms of the redevelopment of farmland into suburban housing tracts all over the US starting 70 years ago. The landscape wasn't 'developed' but it obviously existed and was owned and operated by someone (to be fair, probably a white farmer in many cases), albeit with less profit than development could earn.  

But we can also see where my definition of sprawl diverges from the traditional definition in some urban places like Brooklyn, Oakland, and DC. Over the last 20 years in these areas and others, many minority residents and homeowners have been pushed out or, more accurately, squeezed-in.  We don't usually view these two scenarios as related, but they clearly are.  We typically call the urban-form of sprawl something else: 'gentrification'.  

Viewing 'gentrification' separately from 'sprawl' misses the opportunity to look at the history of development in the US comprehensively and obscures the obvious link between capital investment and racial exclusion. To be clear, many people have written and studied this link, so I'm not trying to say this is a new observation.

Gentrification is itself a highly complex topic, as I have discussed in previous blog posts.  In those discussions, I've used the definition provided by the Furman Center which calls it the process of rapid rent increase in low-income neighborhoods over the last 20 years.  As the Furman Center's report shows, some existing residents do benefit from gentrification, some are forced out, many just remain while their costs slowly increase.  It can be a very loaded term (and I'm not suggesting we toss it out altogether) but as complex as it is, it fits very easily into the story of sprawl.

Economically speaking, there really isn't much of a difference between building Levittown on green farmland on Long Island in the 1940s and flipping brownstones in Brooklyn in the 2010s.  The relative amount of capital it took to invest in each was wildly different of course, but the return on each investment was similarly high enough to warrant both. They were both high margin opportunities.

Levittown, NY: White streets, white houses, white faces. (instant house)

Levittown, NY: White streets, white houses, white faces. (instant house)

Levittown is considered the birthplace of American sprawl and the model for owning an affordable home in the suburbs. Houses were under $10,000 and many working class families could afford that. But it was also a crazy cash cow given the low costs of land and construction (and how the Federal government further subsidized it by constructing highways to it).  William Levitt, who built Levittown and over 160,000 homes all told, became one of the richest men in America by the late 1960s with an estimated fortune of over $100 million at the time.  He may have tapped into the mythical American Dream and helped create, or at least popularize, a way of life for many Americans, but he did it because larger forces came together to encourage him to and because he could print money doing it.  

A person or, more likely, a company, can still make a lot of money in home construction today even after the Great Recession to be sure.  There just aren't the same level of returns compared to past eras because the formula of buying cheap land near a city and building thousands of cheap, small homes isn't readily available (and isn't popular). If you have a decent chunk of capital and you're looking for a high-return opportunity now, buying property in booming urban centers like NYC is the better bet.  Property values have gone up in some parts of NYC by over 100% in just the last 10 years and most of that explosive growth has been in 'gentrifying' neighborhoods. Capital goes where the returns are, and they are higher in gentrifying neighborhoods than the suburbs.

It's also clear how both types of development were/are impacted by racial exclusion. Post-WWII sprawl was not intended for anyone but white Americans.  Levitt prevented blacks from buying homes and even prevented whites from re-selling homes to blacks. (Levitt, a Jewish man, also prevented Jews from buying homes.) Though this was entirely legal for decades, his policy was almost unnecessary given how hard it was for black Americans to secure mortgages from the Federal Housing Administration.  Red-lining has become a well-known, notorious policy from that era because it prevented hundreds of thousands of black families from participating in the home-owning boom, which was the primary source of wealth creation for middle-class Americans. As capital was flowing into the suburbs, it was drying up in the inner-city, trapping generations of minorities into neighborhoods that lacked economic and social opportunity.  

This is the true cost of sprawl.  As much as measuring congestion costs and environmental costs matter and should be expanded, we must include the untold costs of decades of racial exclusion as well.  They manifest in every conceivable part of our society. Whether it's the cost of the Drug War, the cost of our huge prison population, the crisis in public educationrunaway income inequality - every time we discuss problems typically associated with urban America, we are discussing the costs of sprawl. Taken as a whole, that cost is overwhelming and heartbreaking.

There is a tragic irony to the current generation of sprawl as it spreads to many inner-city neighborhoods.  The very people sprawl left behind for decades are now feeling major pressure to survive in places that it willfully ignored but now values - while suffering the indignity of having new, white residents referred to as 'urban pioneers' in major publications. This has led to increased tension in many neighborhoods as existing residents aren't able to participate in the economic gains occurring around them. It has also led to another irony - the unprecedented growth of poverty in America's suburbs - a fact that would have simply been impossible to imagine 60 years ago - as many minorities are being priced out of major cities altogether.  But, again, that is largely the point of sprawl. 

Until we acknowledge the true cost of sprawl and the singular role it has had in creating a highly divided, frankly still-segregated country, we can't begin to undo the damage or avoid the same mistakes.  If sprawl is allowed to continue to shape-shift into an equally exclusive urban form, the same problems that it created - which dominated the urban landscape in the 20th century -  will merely shape-shift into the suburban landscape. Not only is the suburban landscape's design woefully unprepared for this, but we would miss the more important opportunity to address fundamental questions of access and opportunity that we should demand of development in this country.