A Simple Solution to the Housing Crisis
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A Simple Solution to the Housing Crisis
How to lower rents, make homes affordable, and fight White Supremacy.
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There doesn’t seem to be a single city in the United States that isn’t experiencing some degree of a housing crisis. From Wyoming to New York, Americans are increasingly finding more and more of their income is going towards rent, with little to no improvement in their living standards in return.
With the exception of the ultra-wealthy, housing problems impact the entire income spectrum. For middle-income folk looking to buy a house, home prices rose 6% in the last year. For lower-income renters, rent has increased an average of 5.77% over the last half-decade, with the biggest increase being the recent 14.07% rise between 2021 and 2022.
Higher rent prices mean fewer people can afford it, increasing the rate of homelessness. Despite the notion that homeless people are too mentally sick or “lazy” to participate in society, a recent University of Chicago study found that as much as 53% of homeless people were employed, either full or part-time. That would indicate the only reason homeless Americans are living in alleyways and not apartments is that they cannot afford rent.
As these three issues — inability to buy a home, increased percentage of income going to rent, and inability to afford rent resulting in homelessness — stem from the same source of a tight housing market, they can be fixed with the same solution.
The U.S. Government should build apartments and rent them proportional to resident income.
Below is a picture of Ballpark Lofts, an apartment building with 354 units in downtown Denver. It was built and is owned by Cortland, a private development company that seeks to turn a profit.
Despite how complexes such as these are considered “luxurious,” there’s really nothing special about them. The apartments are one, two, or three bedrooms, have in-unit laundry, and shared communal spaces, such as TV rooms, gyms, and sometimes a pool.
There’s no reason such a complex could not be built by the U.S. government. After all, the government constructs and maintains far more complex and expensive buildings, such as courthouses, Governors’ mansions, and thousands of other federal offices, at home and abroad.
I bring this up to illustrate that, like many other issues I’ve written about, the reason our government hasn’t done this already isn’t a lack of ability, but rather a lack of want. Though decades of neoliberal propaganda have brainwashed the public into thinking “governments are too clumsy to do good things,” the truth is much more sinister. The government doesn’t build homes not because it can’t, but because the politicians who run it have been paid to protect the profits of private developers.
Below is a chart of political donations from real estate development groups over the last 32 years. You’ll notice the donations are increasing, with their most *generous* gifts coming during the recent 2020 Presidential election.
And while donations tend to skew towards Republicans, developers and their allies give to both parties, ensuring their interests are protected no matter who wins.
Anyone not currently in the NFL’s concussion protocol knows what these donations are purchasing. In return for their generosity, developers are ensuring the government doesn’t build more homes, preserving the tight supply market that keeps rents and profits high.
Like many issues worsening American life, your rent prices are higher because of the corruption legalized disguised as “free speech” political donations.
The U.S. Government building homes is not novel. There are just under a million public housing units in the U.S. The problem isn’t that the government has never built homes, but rather how these homes have been built and operated.
American public housing is typically placed in impoverished communities lacking adequate education and healthcare resources, subjecting residents to above-average crime rates and below-average quality of life. And to the surprise of no one, public housing programs were created to be explicitly racist, purposefully designed to segregate Black people out of the resource-rich neighborhoods reserved for Whites.
During the New Deal era, in addition to the practice of “redlining” neighborhoods by not issuing mortgages to Black families, The Federal Housing Administration subsidized private developers on the condition they did not sell homes to Black families. The effects of this policy are still felt today, as 48% of public housing residents are Black.
To stop this racist housing snowball from rolling down the hill, the apartment buildings I propose the government build should be mixed-income. This would be very easy to do, as applicant income would be shared when applying for residence.
For example, by setting rent at 5% of a resident’s annual income and reserving units based on relation to the poverty line (1/3 apartments for residents below the poverty line, 1/3 for residents above it, and 1/3 for residents 2x the poverty line), these apartments are guaranteed to benefit Americans of all economic statuses and races. This stands in contrast to the Capitalist model of fixed rent prices, which has only compounded the “soft segregation” created by the legacy of racist public housing programs.
Below, the maps of St. Louis illustrate this problem. As we can see, the concentration of poverty correlates with African American neighborhoods, a direct result of the systemic racism set in motion by redlining and the FHA’s “don’t rent to black people” policy.
Whether the current housing practice is conscious or not, it is a key driver of White Supremacy, as Black neighborhoods are kept impoverished through lack of education, inadequate healthcare, over-policing, and excess labor exploitation.
This article is not an intricate how-to that delves into the finer points of construction costs, blueprints, and rent allocations. Rather, it is a reminder that there are alternatives to the for-profit housing model, which is creating unnecessary economic burdens for all Americans while perpetuating the legacy of segregation.
By increasing the housing supply through government-constructed homes, we’d simultaneously lower the prices of homes, decrease the rent of privately-built apartments, and guarantee affordable (and comfortable) homes for the working class, curtailing homelessness and its shadow problems of crime and drug use. Plus, we’d dismantle the literal walls of White Supremacy.
Sounds like a win-win to me.
Future articles are going to examine how other nations have used public housing to avoid housing crises, delving into the nitty-gritty of funding, construction costs, and tenant allocation. Subscribe if you’d like to read them.
A Simple Solution to the Housing Crisis
Good one, Joe!
I must say, I now hate the typical model where government subsidizes private industry to do something good-- but more if that money seems to go to company profits than to doing good for people directly.