"Almost a decade removed from the foreclosure crisis that began in 2008, the nation is facing one of the worst affordable-housing shortages in generations. The standard of “affordable” housing is that which costs roughly 30 percent or less of a family’s income. Because of rising housing costs and stagnant wages, slightly more than half of all poor renting families in the country spend more than 50 percent of their income on housing costs, and at least one in four spends more than 70 percent. Yet America’s national housing policy gives affluent homeowners large benefits; middle-class homeowners, smaller benefits; and most renters, who are disproportionately poor, nothing. It is difficult to think of another social policy that more successfully multiplies America’s inequality in such a sweeping fashion...
...As a homeowner...the biggest being the mortgage-interest deduction — or MID, in wonk-speak. All homeowners in America may deduct mortgage interest on their first and second homes. In 2015, Asare and Jean-Charles claimed $21,686 in home interest and other real estate deductions, which saved them $470 a month. That’s roughly 15 percent of Diaz’s monthly income. That same year, the federal government dedicated nearly $134 billion to homeowner subsidies. The MID accounted for the biggest chunk of the total, $71 billion, with real estate tax deductions, capital gains exclusions and other expenditures accounting for the rest. That number, $134 billion, was larger than the entire budgets of the Departments of Education, Justice and Energy combined for that year. It is a figure that exceeds half the entire gross domestic product of countries like Chile, New Zealand and Portugal...
...Recently, Gary Cohn, the chief economic adviser to President Trump, heralded his boss’s first tax plan as a “once-in-a-generation opportunity to do something really big.” And indeed, Trump’s plan represents a radical transformation in how we will fund the government, with its biggest winners being corporations and wealthy families. But no one in his administration, and only a small (albeit growing) group of people in either party, is pushing to reform what may very well be the most regressive piece of social policy in America. Perhaps that’s because the mortgage-interest deduction overwhelmingly benefits the sorts of upper-middle-class voters who make up the donor base of both parties and who generally fail to acknowledge themselves to be beneficiaries of federal largess.
“Today, as in the past,” writes the historian Molly Michelmore in her book “Tax and Spend,” “most of the recipients of federal aid are not the suspect ‘welfare queens’ of the popular imagination but rather middle-class homeowners, salaried professionals and retirees.” A 15-story public housing tower and a mortgaged suburban home are both government-subsidized, but only one looks (and feels) that way. It is only by recognizing this fact that we can begin to understand why there is so much poverty in the United States today.
When we think of entitlement programs, Social Security and Medicare immediately come to mind. But by any fair standard, the holy trinity of United States social policy should also include the mortgage-interest deduction — an enormous benefit that has also become politically untouchable.
The MID came into being in 1913, not to spur homeownership but simply as part of a general policy allowing businesses to deduct interest payments from loans. At that time, most Americans didn’t own their homes and only the rich paid income tax, so the effects of the mortgage deduction on the nation’s tax proceeds were fairly trivial. That began to change in the second half of the 20th century, though, because of two huge transformations in American life. First, income tax was converted from an elite tax to a mass tax: In 1932, the Bureau of Internal Revenue (precursor to the I.R.S.) processed fewer than two million individual tax returns, but 11 years later, it processed over 40 million. At the same time, the federal government began subsidizing homeownership through large-scale initiatives like the G.I. Bill and mortgage insurance. Homeownership grew rapidly in the postwar period, and so did the MID...
...By the time policy makers realized how extravagant the MID had become, it was too late to do much about it without facing significant backlash. Millions of voters had begun to count on getting that money back. Even President Ronald Reagan, who oversaw drastic cuts to housing programs benefiting low-income Americans, let the MID be. Subsequent politicians followed suit, often eager to discuss reforms to Social Security and Medicare but reluctant to touch the MID, even as the program continued to grow more costly: By 2019, MID expenditures are expected to exceed $96 billion.
“Once we’re in a world with a MID,” says Todd Sinai, a professor of real estate and public policy at the University of Pennsylvania’s Wharton School, “it is very hard to get to a world without the MID.” That’s in part because the benefit helps to prop up home values. It’s impossible to say how much, but a widely cited 1996 study estimated that eliminating the MID and property-tax deductions would result in a 13 to 17 percent reduction in housing prices nationwide, though that estimate varies widely by region and more recent analyses have found smaller effects. The MID allows home buyers to collect more after-tax savings if they take on more mortgage debt, which incentivizes them to pay more for properties than they could have otherwise. By inflating home values, the MID benefits Americans who already own homes — and makes joining their ranks harder.
The owner-renter divide is as salient as any other in this nation, and this divide is a historical result of statecraft designed to protect and promote inequality. Ours was not always a nation of homeowners; the New Deal fashioned it so, particularly through the G.I. Bill of Rights. The G.I. Bill was enormous, consuming 15 percent of the federal budget in 1948, and remains unmatched by any other single social policy in the scope and depth of its provisions, which included things like college tuition benefits and small-business loans. The G.I. Bill brought a rollout of veterans’ mortgages, padded with modest interest rates and down payments waived for loans up to 30 years. Returning soldiers lined up and bought new homes by the millions. In the years immediately following World War II, veterans’ mortgages accounted for over 40 percent of all home loans.
But both in its design and its application, the G.I. Bill excluded a large number of citizens. To get the New Deal through Congress, Franklin Roosevelt needed to appease the Southern arm of the Democratic Party. So he acquiesced when Congress blocked many nonwhites, particularly African-Americans, from accessing his newly created ladders of opportunity. Farm work, housekeeping and other jobs disproportionately staffed by African-Americans were omitted from programs like Social Security and unemployment insurance. Local Veterans Affairs centers and other entities loyal to Jim Crow did their parts as well, systematically denying nonwhite veterans access to the G.I. Bill. If those veterans got past the V.A., they still had to contend with the banks, which denied loan applications in nonwhite neighborhoods because the Federal Housing Administration refused to insure mortgages there. From 1934 to 1968, the official F.H.A. policy of redlining made homeownership virtually impossible in black communities. “The consequences proved profound,” writes the historian Ira Katznelson in his perfectly titled book, “When Affirmative Action Was White.” “By 1984, when G.I. Bill mortgages had mainly matured, the median white household had a net worth of $39,135; the comparable figure for black households was only $3,397, or just 9 percent of white holdings. Most of this difference was accounted for by the absence of homeownership.”
This legacy has been passed down to subsequent generations. Today a majority of first-time home buyers get down-payment help from their parents; many of those parents pitch in by refinancing their own homes. As black homeowners, Asare and Jean-Charles are exceptions to the national trend: While most white families own a home, a majority of black and Latino families do not.
Differences in homeownership rates remain the prime driver of the nation’s racial wealth gap. In 2011, the median white household had a net worth of $111,146, compared with $7,113 for the median black household and $8,348 for the median Hispanic household. If black and Hispanic families owned homes at rates similar to whites, the racial wealth gap would be reduced by almost a third.
Racial exclusion was Roosevelt’s first concession to pass the New Deal; his second, to avoid a tax revolt, was to rely on regressive and largely hidden payroll taxes to fund generous social-welfare programs. A result, the historian Michelmore observes, is that we “never asked ordinary taxpayers to pay for the economic security many soon came to expect as a matter of right.” In providing millions of middle-class families stealth benefits, the American government rendered itself invisible to those families, who soon came to see their success as wholly self-made. We forgot because we were not meant to remember.
Proponents of the mortgage-interest deduction often claim that the benefit is a big help to middle-class homeowners. Vincent Wisniewski Jr. is one of them. Wisniewski, 35 and white, with brown hair down to his shoulders, worked with Diaz at HomeStart, but as a program manager. He and his wife, Kelly Kristof, an emergency-room technician, make about $79,000 a year, roughly the median household income for families in the Boston metro area. They live with their 9-month-old son in a 985-square-foot condominium that Wisniewski bought three years ago for $190,000.
Set on a quiet street in Winthrop, a community hemmed in by Logan Airport on one side and the Atlantic on the other, the condo features two bedrooms, a square kitchen with white cupboards, a television room and “the quiet room,” with hanging plants, guitars mounted on the wall and a large bay window. From the small back patio, the ocean is close enough to smell. The mortgage and property-tax bills are about $915 a month, and the monthly condo fee is $368, which includes expensive flood insurance. Even counting utilities, Wisniewski and Kristof spend about 22 percent of their combined income on housing costs. With what’s left over, they buy items for their son, take vacations and enjoy local restaurants. “We definitely feel comfortable,” Wisniewski told me...
...Before moving into his condo, Wisniewski rented an apartment in urban Somerville for $1,500 a month, splitting it with a roommate. If he had continued to rent, Wisniewski would have had steeper monthly payments that would have only accelerated in subsequent years; and none of that money would have contributed to his young family’s nest egg.
In 2015, Wisniewski deducted $4,789 of mortgage interest, which means he saved $39 a month. (He didn’t take the deduction for 2016 because once he was married, the standard deduction was larger.) That’s a pittance compared with what Asare and Jean-Charles saved, for an obvious reason: They claim a bigger deduction because they have a bigger mortgage. And they could get a bigger mortgage because they have a bigger income. This is one reason taxpayers on the coasts, where incomes and property costs are higher, typically benefit much more from the MID. The per capita MID claim for residents of Maryland and the District of Columbia, for example, is three times what it is for families living in West Virginia and Mississippi.
There is another reason most MID benefits accrue to the top, even among homeowners: You have to itemize your deductions to claim it. Most taxpayers don’t bother because they don’t make enough money to justify the hassle. In 2014, 1.5 million households earning between $40,000 and $50,000 a year claimed the MID, receiving an average benefit of $14 a month. That same year, 6.5 million households with earnings above $200,000 claimed the MID and enjoyed an average benefit of $391 a month. What this means in aggregate is that households with at least six-figure incomes receive more than four-fifths of the total value of mortgage interest and property-tax deductions.
Wisniewski benefits from the MID, but it didn’t help him buy his condo. The biggest barrier to buying a first home is saving enough for a down payment, a problem the MID does not solve. Wisniewski’s parents pitched in $5,000, and he secured additional financing through ONE Mortgage, a program offered by the Massachusetts Housing Partnership for first-time home buyers. Wisniewski didn’t really consider homeowner tax breaks when shopping for his home. Defenders of the MID began arguing that it encouraged homeownership after the benefit was popularized, but numerous studies have found no support for this claim. For example, a 2002 paper by the economists Edward Glaeser and Jesse Shapiro showed that while the value of the deduction had fluctuated significantly with inflation since 1960, homeownership rates had remained more or less unchanged. “The home mortgage interest deduction,” the authors write, “is a particularly poor instrument for encouraging homeownership since it is targeted at the wealthy, who are almost always homeowners.” Glaeser later confirmed unequivocally that these patterns hold true today.
So why do we keep this “poor instrument” around, if the overarching goal of American federal housing policy is to create a nation of homeowners? Perhaps because the MID enjoys entrenched, unyielding support from a powerful real estate lobby. We often discuss the influence of the gun and pharmaceutical lobbies, but the real estate lobby has spent much more than either group. According to the Center for Responsive Politics, the National Association of Realtors spent $64.8 million in lobbying efforts in 2016, making it second only to the U.S. Chamber of Commerce in terms of dollars spent. And to 1.2 million Realtors, the mortgage-interest deduction is nonnegotiable. The association calls it a “remarkably effective tool that facilitates homeownership.” Jerry Howard, the chief executive of the National Association of Home Builders, refers to the MID as “one of the cornerstones of American housing policy.” Of course, industry groups have a responsibility to their members, who enjoy profiting from a government subsidy that increases the prices of homes they build and sell...
...before being confirmed as Treasury secretary, Steven Mnuchin announced that the new administration hoped to “cap the mortgage interest.” But when Trump released his tax plan last month, the MID was untouched. Trump did propose to double the standard deduction (to $24,000 from $12,600 for married couples, for example) which would make the MID irrelevant for a vast majority of homeowners, whose mortgage interest would be less than the increased exemption, giving them almost no reason to itemize. But wealthy families living in expensive homes would still cash in. If anything, doubling the standard deduction simply exposes the MID for what it really is: a generous public-housing program for the rich. Diane Yentel, the president and chief executive of the National Low Income Housing Coalition, believes that in the long run this will make the MID “untenable to retain.”
...Capping the MID at $500,000 would have virtually no effect on homeownership rates. And according to the economist Glaeser, it would have only “modest effects on home prices” in supply-constrained cities like San Francisco and virtually no effect in cities with plenty of available land, like Houston. “Most homeowners wouldn’t even feel it,” Glaeser says, pointing out further that encouraging homeownership typically means moving people from multifamily buildings to single-family homes, which increases traffic congestion and pollution. But capping the MID at half a million dollars could cause properties in the $625,000 to $1.25 million range to drop in value.
Would we be O.K. with that? Would we support reform that provided desperately needed housing relief to millions of low-income Americans if it meant that the net worth of those who owned expensive homes took a hit? The answer is almost certainly no, at least for owners of houses valued north of $500,000. Wealth granted by a bizarre government subsidy is still wealth, and once people have it, they’d prefer to keep it. When it comes to public housing for the rich, it becomes hard to break the cycle of welfare dependency. It’s why some Democratic leaders who represent districts with high housing prices, like Representative Nancy Pelosi (San Francisco) and Senator Chuck Schumer (New York), have been outspoken critics of MID reform, even if they are consistent backers of other equality-promoting initiatives...
...We tend to speak about the poor as if they didn’t live in the same society, as if our gains and their losses weren’t intertwined. Conservatives explain poverty by pointing to “individual factors,” like bad decisions or the rise of single-parent families; liberals refer to “structural causes,” like the decline of manufacturing or the historical legacies of racial discrimination. Usually pitted against each other, each perspective serves a similar function: letting us off the hook by asserting that there is a deep-rooted, troubling problem — more than one in six Americans does not make enough to afford basic necessities — that most of us bear no responsibility for...
...Trump’s preliminary 2018 budget includes a 13.2 percent reduction to the Department of Housing and Urban Development and the elimination of the Interagency Council on Homelessness, cuts that will almost certainly result in the loss of hundreds of thousands of housing vouchers and leave more families rent-burdened and homeless. President Barack Obama’s 2017 budget proposal estimated that it would take $1 billion a year over the next 10 years to eliminate family homelessness in America — not decrease it or slice it in half, but end it. That’s less than 1 percent of what we currently spend on homeowner subsidies. And yet a bill designed to provide every child in America with a home was pronounced dead on arrival in Congress. Up to this point, bills proposing modest reforms to the mortgage-interest deduction have met the same fate.
Poverty and homelessness are political creations. Their amelioration is within our grasp and budget. But those of us most likely to vote and contribute to political campaigns are least likely to support MID reform — either because it wouldn’t affect our lives or because it would, by asking us to take less so that millions of Americans could be given the opportunity to climb out of poverty. It’s just that we usually don’t dial our elected officials when our less-fortunate neighbors are hurting, because we are not...
...And yet over the course of our history, there have been times when Americans embraced a politics of sacrifice. During World War II, families volunteered to pay more taxes, ration food and give blood to serve a higher purpose. And even today, in what can feel like an age of insecurity and self-preservation, some Americans have shown a willingness to take a personal financial hit to promote social mobility and equality. Take the people of Seattle: For 36 years, they have agreed to be taxed more to raise revenue for affordable-housing programs. Last August, 70 percent of Seattle voters agreed to the largest housing levy yet, one expected to raise $290 million over the next seven years. Contributions to the levy are based on home values; a family living in a $480,000 home (the city’s median value in 2015) pays an additional $122 a year in taxes. With that money, Seattle will fund emergency rental assistance, loans to first-time home buyers and the construction of housing units that must remain affordable for at least 50 years. Previous housing levies have generated over 13,000 affordable apartment units and enabled 900 low-income families to buy homes. The 2016 Housing Levy will do more because the residents of Seattle decided to invest in economic diversity and residential stability, sacrificing a pinch to help those in need...
...Studies have found that evicted families lose not only their homes but their jobs, possessions and neighbors too; they relocate to substandard housing in distressed communities; they have higher rates of depression and suicide. Even if poor families avoid eviction, they still suffer, because so much of their money goes to housing costs, forcing them to buy fewer school supplies, clothes, books — and food.
In some markets, there are virtually no affordable units left. The median annual rent for a two-bedroom apartment is currently $39,600 in Boston, $49,200 in New York City and $54,720 in San Francisco. Families priced out of large cities have moved to smaller ones, and now those cities are experiencing some of the steepest rent increases in the nation. The poor used to live on the other side of the tracks. Now they live in different towns and counties entirely.
And yet we continue to give the most help to those who least need it — affluent homeowners — while providing nothing to most rent-burdened tenants. If this is our design, our social contract, then we should at least own up to it; we should at least stand up and profess, “Yes, this is the kind of nation we want.” Before us, there are two honest choices: We can endorse this inequality-maximizing arrangement, or we can reject it. What we cannot do is look a mother like Diaz in the face and say, “We’d love to help you, but we just can’t afford to.” Because that is, quite simply, a lie".
"Of all the ways market logic has colonized our thinking, the way it has distorted our understanding of the housing market has to be one of the most dangerous. The notion that housing is naturally like any other market has not only informed the way we think about the houses we rent and the mortgages we can take, it’s led us to believe that the city itself wields a kind of economic instrumentalism in how it sorts those who inhabit it. People naturally end up where they are most productive and useful, and any housing problems will be both quickly and smoothly rectified by the market.
This is a lie. Markets are not natural but created, and this is especially true of housing. It takes the violent disruption of expulsion for this to become clear. Two new books dive deep into housing expulsion to illuminate the social creation of these markets...
...A central premise of markets is that people who can afford to pay the price will end up where they belong. According to this assumption, eviction is simply a correction made by the market, one where people simply end up in a cheaper house that’s better suited to their income. But this is not what happens. One important reason is because there are very small rent differences across the poorest and richer parts of the Milwaukee. “A mere $270 separated some of the cheapest units in the city from some of the most expensive,” writes Desmond. In the poorest neighborhoods, median rents for a two-bedroom were only $50 less than in the city overall. Meaning, people who are evicted aren’t automatically reshuffled by the market to cheaper housing, because such housing simply isn’t always available.
This is because prices don’t determine who ends up where, landlords do. Desmond writes, “landlords were major players in distributing the spoils. They decided who got to live where.” No matter what else the poor have in common, “nearly all of them have a landlord.” Rather than a facile notion that people end up where they best belong, we see that people’s respective power dictates where they end up, and in poor neighborhoods, landlords have the power.
Landlords make decisions heavily informed by race. White and black families live at opposite ends of Milwaukee, but they might as well live in different galaxies. The black families can’t find any landlords willing to work with them in the white parts of the city, rendering false the idea that they could simply move if they so wished. The white families, for their part, refuse to look in the black ghetto at all, and receive a location dividend based on their race.
The way landlords choose to screen tenants reshapes the housing market in fundamental ways. Having kids, for instance, usually means an instant rejection. This is particularly tough on single moms, who are often already in difficult economic situations, and the children themselves. Eviction means school connections and deeper community roots, essential for children, are impossible to sustain.
Landlords also reject prospective tenants based on a combination of poverty—including a record of previous evictions—and criminality, based on previous felonies. Excluding people who have both means that buildings where poor people go are buildings where people engaged in criminal activity go. The choices of landlords do more to intertwine poverty and criminality than any vague “cultural” explanation.
This is also how gentrification works. According to researchers, gentrification isn’t really about newer, richer residents pushing out established residents. What really causes neighborhoods to change so dramatically is that poorer residents can no longer afford to move into gentrifying areas. Poorer families are cut off from that mobility, with open housing going to richer families. Evicted shows how this kind of exclusion is vicious for those in desperate need of housing, and how it can thoroughly rework the demographics of neighborhoods.
The state plays an essential role in this process. It’s not just responsible for the violence deployed by the courts and sheriffs, who create and implement the terms under which people are forced out of their homes and the subsequent penalties they suffer. It’s also not just how the rapid increases in policing and mass incarceration have turned landlords into agents of those trends. “Nuisance property ordinances,” for example, penalize landlords for their tenants’ behavior. So when responding to 911 calls, for instance, police pressure landlords to evict the tenants in question, something that is particularly devastating for households suffering from domestic violence.
It’s that the state also determines how property itself is structured. The landlords Desmond follows gather at a special, Department of Justice–funded “Landlord Training Program” where, in addition to learning the maximum fees they can charge, they close by chanting “this is my property” over and over again. Yet for many of them, this wasn’t strictly true—each of their properties was safeguarded by a separate corporation that owned itself, a process created by the state to shield landlords from the liability of ownership, so they can maximize profits by driving their properties into the ground.
For many of the landlords, it is simply cheaper to deal with the costs of an eviction than to try and reduce rents, or even to maintain their properties. For Sherrena, a landlord Desmond follows, her worst properties were the biggest profit centers. As the fines on the properties for lack of upkeep piled up, Sherrena would simply stop paying taxes and let the city take the property in the tax foreclosure. The corporate structure shielding the property ensured her own liability was limited. The city would often just demolish them, in turn reducing the property stock further, and assuring competition for Sherrena’s other properties. Milwaukee has around 1,200 properties go into foreclosure this way each year.
Experts assume that there’s a simple tradeoff between housing conditions and costs. If the costs of a rental apartment are too high, people simply live in worse conditions. Desmond shows that the logic of slumlords ties these factors together: worse properties, by being driven into foreclosure and then taken off the market, can ultimately drive up, rather than down, housing costs.
The landlords we meet in Evicted do bad things to people in the pursuit of profits. Liberal commentators are already peppering their reviews of the book with elaborate hand-wringing over a poor person buying lobster with food stamps. Virtually none have mentioned the main landlord encouraging mentally and physically disabled people whose credit scores she helped rapidly increase to buy her properties through the Federal Housing Administration at the height of the bubble, only to watch them fall into distress later.
But one thing that stands out is the way that Desmond’s landlords seem like low-wage employers, and the case for rent control comes to resemble the new case for the minimum wage. One important reason why minimum wage increases don’t lead to higher unemployment is because low-wage employers have a tiny bit of monopoly power over jobs. Because of the difficulty workers have searching for jobs, and their desperation to find subsistence work, employers are able to set the price of labor rather than simply accept the price determined by the market, which gives them more power. A higher minimum wage pushes against this power.
The same logic applies to housing. Searching for housing is very difficult; some of the families Desmond followed looked at ninety properties before finding somewhere they could live. Sherrena notes how she can capture part of the value of housing vouchers by charging higher rents when they are used. This is similar to how employers capture part of the Earned Income Tax Credit wage subsidy, something that a minimum wage helps push back against.
A simple story tells us all we need to know about the power of landlords. Sherrena sees one of her tenants waiting for UPS to deliver a computer for his daughter. The landlord immediately laughs, “I got ’em. The rent’s going up . . . I don’t care. He can move.” Being able to raise rents simply because you think your tenant can pay more and you know they won’t just find another place without additional expense, is what economists call “economic rents.” Or what regular people just call 'exploitation'".
"Oxford academic David Adler, who conducted the research, believes the rise in evictions is a result of landlords wishing to sell their properties rather than continue to let them when they have increased in value.
When house prices fell after the 2008 recession, so too did the number of evictions. House prices began to rise again in 2009, and since 2010, the number of evictions has tripled.
"These findings demonstrate that house price inflation not only makes homeownership harder to access, but undermines tenants’ security in their current home," Adler said.
"When house prices are low and the economy is performing poorly, landlords may not be able to find another tenant or a buyer, so they are forced to negotiate with existing tenants, and rents fall.
"When house prices are rising, evictions allow landlords to free up their property for sale or raise their rents to a new tenant, and rents then rise.”
The study showed that when house prices rise by 10%, there is a 60% knock-on increase in people being evicted by landlords, who do not need to give a reason.
Campaign group Generation Rent is calling on the government to introduce greater protections for tenants who find themselves facing "no-fault" evictions when there has been no breach of contract, but the tenancy has reached its end and the landlord does not wish to renew it.
Under Section 21 of the 1988 Housing Act, a landlord is able to ask tenants to move out with two months' notice, without giving a reason, after the fixed period of a contract has ended. This is known as "accelerated eviction," and a tenant has no defence against it.
With assured shorthold tenancy agreements in the UK typically lasting as little as six months to a year, this leaves many people faced with the prospect of finding a new home on a relatively regular basis.
In 2015 there were 16,441 "accelerated evictions", compared with 4,963 in 2009. Generation Rent's research found that 1 in 4 private renters have had to move for reasons not of their choosing.
During the same period, the number of people failing to pay their rent has fallen. Generation Rent's findings also come as the number of families living in rented accommodation is at its highest. More than 1.5 million rented properties are homes to children, according to the English Housing Survey.
“A tenant can pay the rent on time every month and otherwise behave impeccably, and yet still be asked to leave with two months’ notice, with no appeal and no help," Betsy Dillner, director of the housing campaign group said.
She believed that the correlation between a rise in house prices and a rise in the number of evictions proved that tenants were not adequately protected, and that more needed to be done to deter landlords from choosing to evict tenants.
“Private renting is the only option for growing numbers of families and people on ordinary incomes," Dillner continued.
"By making it as easy as possible for a landlord to cash in their property, our outdated law is inviting hobbyists to house them, instead of professionals.
'As long as the government prioritises the interests of amateur landlords, renters cannot expect a stable home'".
"Where he runs into trouble is in listing a series of correlations that don’t necessarily mean what he takes them to mean, which he offers as evidence of the many benefits of ownership compared with renting.
First, he equates the decline of ownership in some neighborhoods with an increase in poverty. While the decline in ownership, and the loss of wealth that came with it, certainly contributed to increases in poverty in many neighborhoods, it does not follow that increasing ownership is a solution to that poverty. Most, if not all, of these neighborhoods were already struggling long before the housing market crash as a result of decades of deindustrialization, disinvestment, and more recently, displacement. When the recession hit, these vulnerable communities of renters and homeowners alike, were hit hardest. The decline in ownership simply reflects much deeper problems that ownership did not, and will not, address.
Low-income communities and communities of color were disproportionately targeted by predatory lenders in the run up to the crash. The unprecedented rise in homeownership and wealth in these communities over the past 20 years was real but precarious. It is unclear how a new round of ownership expansion, under the same racially biased market model would lead to any difference in outcome years or decades from now.
Second, Mallach argues that homeownership is good in its own right because of the many studies showing correlations between ownership and positive social and economic outcomes. To see how misleading the implication here is, consider its opposite: renting, to sample from his list, is correlated with higher rates of juvenile delinquency, fewer positive child outcomes, less involvement in neighborhood activities, and less readiness to become involved in tackling the neighborhood’s problems, such as crime or disorder.
True? Perhaps. But does renting cause these outcomes? Unlikely. Renting simply is more prevalent in communities that struggle with these issues, and for reasons that boosting rates of homeownership don’t address, and may even worsen. Increasing rates of ownership, for example, raises property values and can contribute to gentrification and renter displacement.
My primary concern with Mallach’s commentary, though, is that in presenting misleading information about the benefits of ownership, he indirectly, and I’m sure inadvertently, contributes to the continued stigmatization of renters. His list of ownership’s virtues frames renters as bad neighbors and evokes an old but still powerful narrative, rooted in 1920s anti-communism, of homeowners as models citizens. I see the power of this narrative every day in my own work, in the dismissive attitudes of many local governments and others towards renters, who are often treated as second-class citizens. In one recent example, a local Realtors association here in Silicon Valley, where housing costs are unsustainable for most of the population, made the exact same argument that Mallach does in attacking rent control in a local paper. I responded to his argument here.
The bias toward homeowners extends beyond local discrimination. In the wake of the housing market crash, for example, the state of California passed a Homeowners Bill of Rights. No such concern has been shown to renters by the state, which has in fact limited, rather than extended, protections for renters in recent years. The bias is firmly embedded in federal policy as well. Federal spending supporting homeowners has at times outstripped spending on affordable rental housing at a rate of 4:1, and disproportionately benefits more affluent households.
Mallach is right that the decline in ownership is a problem, but he mistakes a symptom for the cause. Low- and moderate-income households, renters as well as homeowners, face multiple pressures that undermine their own tenure security as well as community health and stability. The obsession with ownership obscures more comprehensive solutions to the crisis of housing insecurity, solutions that must embrace rather than fret over the rise of renter households across the country. There is no reason renters cannot be a foundation of strong communities, as an examination of renters in societies where social policies don’t systematically undermine them reveals. Renters must be at the center of any genuine solution to the housing crisis and to broader efforts to address the deep social and economic inequalities that have come to define the country."
"Social scientists tend to study the “underclass,” but they pay much less attention to the 'overclass'...
...Poverty is the flip side of super-wealth. The solution is shared prosperity, and that never happens without strong rules that limit market forces. It requires government—and government run by people who believe in the power of laws and rules to change human behavior, institutions, and society.
Few social scientists, foundation staffers, or policy-makers ask the kinds of questions that would address these broader issues: What are the consequences of living in areas of concentrated wealth? Who studies the lives of people in our wealthiest communities where the 1 percent (or, more accurately, the .01 percent) lives? Why don’t foundations fund more research about the overlapping networks of corporate board members and the decisions made by top executives that have devastating impacts on the entire society, including middle-class and low-income people and their communities? Why don’t more social scientists explore the “culture of the rich” to learn how their daily lives and routines make most (though not all) of them immune to understanding (or caring about) the consequences of their corporate decisions on the lives of the poor and middle class? During the past two decades, when advocacy groups were warning about the consequences of bank deregulation, why wasn’t there more research about the decisions of top Wall Street executives who caused financial havoc, recession, layoffs, the epidemic of foreclosures, and the harsh reality of millions of Americans still drowning in debt with “underwater” mortgages?...
...The explosion of low-wage jobs is not the result of workers having inadequate education or skills. Over the past two decades, both education levels and skills have improved, but incomes have nevertheless stagnated. This troubling trend is due, for the most part, to the declining bargaining power of America’s employees, a result due in large part to the explosion of union-busting by big corporations and the decline of labor union membership....
...We need to redefine a “healthy business climate.” It shouldn’t just mean higher profits for developers and other businesses. It should mean overall prosperity shared by working people—a more enlightened view of business’s responsibility to the broader community. Some business leaders get it, but business lobby groups keep spouting the party line, even though it is bogus. Activists, academics, and policy-makers have to be unafraid to challenge business’s scare tactics. That’s why, several years ago, I joined with a number of scholars to found the Cry Wolf Project to document the many corporate-sponsored “job killer” lies and myths that shape our thinking about economic policy. We need foundations to fund organizations that mobilize people to cha<llenge corporations that pay low wages, spew pollution, engage in predatory lending, and profit from slum housing.
Predictably, when activists propose policies to raise wages, increase taxes, or regulate business practices—like the Community Reinvestment Act, or inclusionary zoning laws, efforts to require companies to reduce spewing of dangerous toxics into the environment, or paid family leave—corporate lobbyists and their hired consultants warn that these policies will scare away private capital, increase unemployment, and undermine a city’s tax base. In the 1990s, these groups warned that local “living wage” laws would kill jobs. Now, they’re saying the same thing about municipal minimum wages.
Why aren’t foundations funding research to challenge the propaganda campaign waged by big business against policies that would require corporations to be more socially responsible?
America is now in the midst of a new Gilded Age with a new group of corporate Robber Barons, many of them operating on a global scale. Like its predecessor, this new Gilded Age is characterized by a frenzy of corporate mergers, widening economic disparities, a proliferation of low-wage jobs, and deteriorating social conditions. America today has the biggest concentration of income and wealth since 1928. Meanwhile, the American Dream—the ability to buy a home, pay for college tuition and health insurance, take a yearly vacation, and save for retirement—has become increasingly elusive.
The obvious question confronting America is what role, if any, government should play in setting standards and rules for those corporations and their stockholders, taming their abuses; stimulating the economy to boost and sustain private economic growth; providing or helping people afford education (both K-–12 and college), health care, child care, and retirement savings; and protecting the environment and public health from the damages of pollution by the corporations that profit from our dependence on fossil fuels?
America seems to be holding its breath, trying to decide what kind of country we want to be. We seem to be at one of those crossroads moments when attitudes are rapidly shifting and significant reform is possible. Americans are upset with widening inequality, the political influence of big business, and declining living standards. Public opinion is generally favorable toward greater government activism to address poverty, inequality, and opportunity. But public opinion on its own doesn’t translate into public policy. It has to be mobilized".
"Yet the most remarkable aspect of Uber’s calamitous staff meeting was not necessarily Bonderman’s misogynistic remark, or even the findings of the review led by the law firm of the former US attorney general Eric Holder. It was a subject that was barely mentioned at the meeting: the increasingly frustrated and demoralised workforce of Uber drivers – some of whom, like Dante, have been rendered homeless.
To some labor activists, the major ethical failing that should be inspiring bold promises of change at Uber is not so much the treatment of its well-paid tech workers, but the plight of its impoverished drivers, who are earning low and unstable wages in a job without security or benefits, or struggling to pay off loans for their Uber cars – debts that some have equated to dodgy subprime mortgages.
Classified as contractors, the drivers have little recourse to deal with a litany of workplace challenges and hazards, including wage cuts by the company, harassment and sexual assault by passengers and a rating system that some say is plagued by racial biases. It is well-known that Uber has done battle with labor organising efforts and traditional taxi regulations in markets across the world.
What is only now starting to become more apparent, however, is how Uber’s aggressive global expansion and alleged neglect of its workforce has left at least some of these workers with no option but to live in parking lots and on street corners. Including in LA, one of Uber’s most successful cities, and the place where Kalanick was born...
...Like many Silicon Valley companies propelled by the personality of their founders, Uber’s culture seemed moulded around that of its abrasive leader, who famously used the term “Boob-er” to encapsulate his desirability among women and bemoaned the fact that, as CEO, he could not sleep with any of his employees.
In March, he was caught on camera berating an Uber driver who raised with him the subject of declining wages and the profound financial struggles of drivers, prompting Kalanick to shout back: “Some people don’t like to take responsibility for their own shit.
Critics argue that a dismissive attitude toward drivers is embedded in the company’s current business model, which is dependent on cheap labor. Yet Uber’s recent public discussions of reform have barely broached the issue of its relationship with drivers, which is often tested when workers are put in vulnerable positions.
Casmir Patterson, 32, found early on in her Uber-driving career that she preferred to work late nights, when the LA traffic was more tolerable and when she could provide rides to women looking for a safe way to get home. But on 13 June 2016, during her last ride of the night, three intoxicated men entered her vehicle in West Hollywood and she quickly sensed trouble.
One of her passengers sounded like he was going to vomit in her car. She pulled over and asked the trio to leave. They refused, and then dragged her into her backseat where they started punching her. “I thought I was going to die,” she told the Guardian.
The men eventually fled, but not before kicking the outside of her car and running off with her keys.
Patterson called police and reported the incident to Uber in the hope that the company could track down her attackers and help her with medical bills. But the criminal investigation went nowhere, and Uber, she said, did little to support her. LA police did not respond to repeated inquiries.
A week before the incident, Patterson had signed a lease through Uber’s vehicle loan program, known as Xchange. She was required to pay weekly fees of about $146. As a result, Patterson had no choice but to keep driving for Uber, despite suffering from post-traumatic stress stemming from the attack as well damaged vision in her right eye.
“I just felt like I was trapped, like I was an Uber slave,” she said, noting that she could barely drive enough hours to make the car payments. Unable to keep up with her bills, she ended up living out of her leased Uber vehicle for about a month until, running of options, she moved back home to Chicago, where she fell further into debt before her car was repossessed. “It’s just been a domino effect,” she said. “It’s really ruined my life”...
...Patterson is just one of several women driving for Uber who have come forward in recent months to share stories of assault and harassment. But despite all of its promises of corporate reform, there appear to be few if any substantive changes that enhance the rights of victimized drivers...
...That may be because Uber does not see its drivers as its future. Part of the company’s sky-high valuation stems from an assumption by investors that Uber will do away with its human workforce, and the company has invested hundreds of millions of dollars in a bid to lead the race for self-driving car technology...
...Uber views its human drivers as a stopgap, a prelude to a roboticized and thus far more profitable era. In the meantime, Uber appears to be adopting sophisticated psychological tricks to manipulate its drivers into acting with the kind of efficiency it would expect from machines.
The New York Times recently reported that Uber’s social scientists and data scientists have tried techniques from video games, like incentivizing them to work longer hours with quirky – but worthless – digital achievement badges, even when it is not in their best interest. Some male Uber managers even adopted female personas when communicating with drivers, because they found it boosted the response rate.
Meanwhile the company has cut drivers’ wages and recently admitted to underpaying them by millions in New York City. Uber has also confessed to using smartphone sensors to monitor its drivers.
Often lost in the debate, however, is the poverty that can afflict Uber drivers, sometimes exacerbated by programs that the company created ostensibly to be of service to them.
Although there are no official statistics, there have been anecdotal cases documented across the US of Uber workers overnighting in their vehicles because they cannot afford to live where they drive.
Parking lots in LA reveal an even darker reality – drivers who have become homeless and live full-time in their cars. This is part of a larger trend. During this year’s count of homeless people in LA county, just over 2,000 cars were doubling as makeshift homes. The figure is 50% higher than in 2016...
...LA is known for its low fares and high cost of living. One 2015 estimate put LA drivers’ take-home pay per ride at almost $2 below the national average, and drivers said Uber’s repeated readjustments and changes to the pricing system nationwide mean fares have only gone down since then.
“Sometimes it’s really bad,” said Dante, “because after gas, it’s like, I literally make $8 or $9 an hour.” The minimum hourly wage in Los Angeles is $10.50...
...Uber, which reportedly has a very high turnover rate for drivers, has worked to find creative ways to attract enough drivers to support its rapid growth. That includes its Xchange leasing program, which offers short-term leases to drivers, taking payments directly out of their wages. The leases are expensive and even predatory, according to experts quoted in a Bloomberg investigation, which suggested the agreements resemble subprime lending programs that target risky borrowers with poor credit.
“Families end up homeless, because they literally cannot make enough money to pay for their vehicles and to fulfill any of their basic living needs,” said Veena Dubal, an associate law professor at the University of California, Hastings, whose research has involved interviewing Uber drivers...
...About 20ft away, Gordon Swan stood alone outside his car, a black Grand Prix.
He recounted the winding series of events that has led to him living in the car that he’s driven for Uber for seven years – a greedy property management company upping his rent; a falling-out with his sister; the creeping realization that he could not afford $75 a night for a hotel".
"In the ‘highest income region of the universe’, people trying to make ends meet face a ban on vehicles from parking in the same spot for longer than 72 hours.
In a Silicon Valley town where the median home value is $2.5m, next to a university with a $22.5bn endowment, not far from a shopping mall with Burberry and Cartier outlets, they present an eye-popping sight: dozens of run-down RVs and trailers parked in a line along a main road...
...The number of RVs in this part of Palo Alto has spiked this year, and no wonder. For Aldama and others like him, the city feels like a respite. Crime is minimal. Some trailers face groves of oak and eucalyptus trees, others look onto playing fields where parents cheer children playing soccer. But their toehold here has begun to feel tenuous.
Amid complaints from residents, Palo Alto has announced it will enforce a rule that bans vehicles from parking in the same spot for longer than 72 hours. The RV dwellers must accede – they have few other options. Silicon Valley was recently ranked the second most inaccessible region in the country for low-income workers trying to find a place to live. Palo Alto’s minimum wage is $12 an hour, but someone would have to earn $42.69 an hour to rent a two-bedroom apartment while having enough left over for other necessities...
...RV dwellers are often local, said Brian Greenberg of LifeMoves, an organization that helps homeless people move into housing. 'There’s this myth that we attract people from all over the place, and it really is a myth. Most of the people are what I’d say are our people – they graduated from local high schools on the peninsula, in Silicon Valley. People aren’t as mobile as one would think'...
...Palo Alto’s decision to implement the 72-hour rule was prompted partly by complaints, though the intention is not to banish people living in vehicles, said city spokeswoman Claudia Keith. The city rescinded its ban on inhabiting cars and RVs several years ago. Instead, the goal is to remove vehicles that are abandoned or used as storage, and Keith suggested that the ordinance is relatively toothless. “They have to move half a mile according to the law, so potentially they could drive around the block, I suppose, and re-park,” she said.
Stanford, for its part, has “noted the additional parking of RVs” on its borders, said spokesman EJ Miranda by e-mail. “This is a reflection of the very challenging economic circumstances faced by many people in this region,” he said. He did not respond to a question about whether the university supported the move, but said that the city was acting in accordance with the law".
"In a patch of scrubland across the road from the Facebook headquarters in Silicon Valley, a woman named Celma Aguilar recently walked along some overgrown train tracks. She stopped where a path forked into some vegetation, just a few hundred yards from the tourists taking photos by an enormous image of a “Like” icon at the campus entrance...
...The campsite is one of about 10 that dot the boggy terrain, and are a striking sight alongside the brightly painted, low-slung buildings housing the multi-billion-dollar corporation. The contrast epitomizes the Bay Area wealth gap...
...As a whole, California is one of the lowest-ranking US states for the availability of affordable housing, and has one-fifth of America’s homeless population. Irrespective of the utopianism that imbues Silicon Valley culture, the tech campuses are not immune to these broader social problems".
"California has faced housing and land shortages multiple times and has changed its regulatory regimes in response. I’m going to start with two histories from the state’s first Gilded Age and post-war era.
In the first Gilded Age, the concern was over land monopolization by a handful of large-scale owners and how that crowded out and impoverished labor. In the postwar period, California leveraged the automobile and federal subsidies to unlock previously inaccessible land and create a golden age of cheap housing and suburbanization.
This boom period ended in the 1970s as the state’s flat, developable coastal lands were built out and the oil crisis made sprawl more expensive. That’s when housing shifted from being perceived as a consumable good to an investable asset.
Since then, a new generational land cartel has emerged with Californian Baby Boomers protecting entitlements and higher property values for themselves in the form of land-use restrictions and Proposition 13. Global capital has been subverting and taking advantage of these favorable legal and taxation protections on real estate in a extremely low interest-rate world. All of this has come at the cost of the state’s working and middle class and its future workforce".
"While the technology industry and its compensation practices have increased the region’s income inequality over the last generation, taxing businesses, wealth or investments alone for affordable housing funds won’t solve the housing issue.
Dumping hundreds of millions of dollars of public or philanthropic capital down a badly designed property system will not get you very far because it will drive land values even higher, producing an unearned windfall for property owners".
"Keep in mind that California also already has the most progressive income taxation system of any state in the U.S. because it also has some of the lowest property tax rates, especially on properties worth more than $1 million. The downside of being extremely reliant on income and capital gains taxes and having low property taxes is that the California state government’s revenue structure is highly volatile and predictably goes into steep deficits during recessions.
So while you could go down this route — and there are interesting conversations about progressive equity, tech executive compensation and carried-interest loopholes — you’d have to do it in addition to land-use and property taxation reform to have any real impact on housing affordability".
"An economic downturn may soften pressure on local housing markets, but it will not fix this problem. The Bay Area’s housing market tends to rise and then plateau; this is a function of how local land markets work.
Even though developers tend to get pilloried in the public process, it is the land owners that get egged on by local brokers to sell at the absolute highest price. Because there is no structural disincentive to sitting on underutilized land because of property tax caps, land owners can just sit a weak cycle out, withhold their land from the market and wait for the next upswing.
While there are quasi-public institutions that sustain mortgage and home-buying demand through weak parts of the economic cycle, there isn’t really an equivalent on the construction financing side. When markets turned in 2008, project financing evaporated, which left the city without a decent construction pipeline until it was too late in the up-cycle. The same thing may happen in the next downturn".
"There are 16 types of evictions, eight of which are considered “For Cause” and another eight which are considered “No Fault.
The Ellis Act is one of these. While it’s hard to fight a surge in other kinds of no-fault evictions like “Owner Move-In” evictions, the tenants movement has a stronger moral upper hand with the Ellis Act.
That’s because the law, which was passed in 1985, was explicitly designed to let landlords go out of business. Tenants activists say that the Ellis Act is instead abused by real estate speculators, who evict their tenants, turn these rent-controlled apartments into tenancies-in-common and sell them at a profit".
"For more than a century, the Bay Area’s housing, transit infrastructure and tax system has been haunted by the region’s fragmented governance.
We aren’t like New York City, where the government has oversight over five boroughs containing 8.4 million people.
For the 7 million people of the San Francisco Bay Area, it’s every city and county for themselves. While there is a council of city governments called the Association of Bay Area Governments that was started in 1961, it’s not sufficiently powerful.
That means NIMBY-ists in every city try and shove the housing issue onto someone else.
That means it’s a race-to-the-bottom on business taxes.
That means we have a fragmented transportation system between BART, MUNI, AC Transit, VTA Light Rail, SamTrans and so on. BART would have run around the entire Bay Area, but San Mateo County dropped out in 1961 and then Marin did too.
Not only is transportation down the peninsula fragmented between all of these different systems, the suburbs have also blocked many denser housing developments along the Caltrain stations that would have supported workforces for companies like Google and Facebook".
"In San Francisco, demand for housing is based in significant part on political decisions. Politicians and developers for years have sought to attract “jobs” – which almost never means jobs for unemployed people who live here. It means projects that will attract new workers who move here from someplace else.
That makes no planning sense at all: You approve projects that will ensure thousands of newcomers will arrive needing a place to live, but you have no place for them to live.
In theory, if the Nimbys would just get out of the way, Econ 101 would work, and the Magic of the Market would solve the problem, as private developers simply built to meet the need. That hasn’t happened in SF in at least half a century.
Why? Because the market is what the more advanced textbooks would call “irregular.” Developers build not to meet the market demand but to meet the demands of their investors. In San Francisco in the 1980s and 1990s, it was highrise office space, not housing, that brought the highest returns to investors (often the newly deregulated Savings and Loans, that were speculating wildly in real estate, ultimately causing a huge crash that costs the US taxpayers more than $100 billion)...
...Today, investment capital gets higher returns with luxury condos. So that’s what is getting built. It’s not Nimbys, or Mayor Lee, or zoning policy that is driving the gold rush of housing for the very rich: It’s international speculative capital...
...Oh, and let’s not forget international demand for high-end housing as a place to park cash. That’s not in the textbooks, either. But it sucks up a huge amount of housing inventory...
...fighting unemployment in cities. One of the things they talk about is something called a labor-pool study, which isn’t that complicated: You want to lower the unemployment rate? The first thing you need to do is figure out which existing residents are unemployed. Then you look at what their job skills are. Then you talk about creating jobs that pay a decent living wage and fit with existing job skills – and you talk about training people who lack the skills for jobs that are part of your economic future.
In the case of this tech boom – which started when the mayor said he wanted to fight unemployment – San Francisco did none of that. Instead we created high-paying jobs for people who didn’t live here, with much-heralded spinoff jobs that pay people too little to afford the inflated rent caused by the boom. So: Displacement. Unemployment goes down because the unemployed leave town and are replaced with others".
"The symptoms of housing crisis are everywhere in evidence today. Households are being squeezed by the cost of living. Homelessness is on the rise. Evictions and foreclosures are commonplace. Segregation and poverty, along with displacement and unaffordability, have become the hallmarks of today’s cities. Urban and suburban neighborhoods are being transformed by speculative development, shaped by decisions made in boardrooms half a world away. Small towns and older industrial cities are struggling to survive...
...Nationwide, nearly half of all renting households spend an unsustainable amount of their income on rent, a figure that is only expected to rise. This is not only a big-city issue. Around 30 percent of rural households cannot afford their housing, including nearly half of all rural renters...
...It has been estimated that globally there are currently 330 million households — more than a billion people — that are unable to find a decent or affordable home. Some research suggests that in recent decades, residential displacement due to development, extraction, and construction has occurred on a scale that rivals displacement caused by disasters and armed conflicts. In China and India alone in the past fifty years, an estimated one hundred million people have been displaced by development projects.
And yet if there is broad recognition of the existence of a housing crisis, there is no deep understanding of why it occurs, much less what to do about it. The dominant view today is that if the housing system is broken, it is a temporary crisis that can be resolved through targeted, isolated measures. In mainstream debates, housing tends to be understood in narrow terms.
The provision of adequate housing is seen as a technical problem and technocratic means are sought to solve it: better construction technology, smarter physical planning, new techniques for management, more homeownership, different zoning laws, and fewer land use regulations. Housing is seen as the domain of experts like developers, architects, or economists. Certainly, technical improvements in the housing system are possible, and some are much needed. But the crisis is deeper than that.
We see housing in a wider perspective: as a political-economic problem...Most immediately, there is a conflict between housing as lived, social space and housing as an instrument for profit-making — a conflict between housing as home and as real estate.,,
,,,Critics, reformers, and activists have invoked the term “housing crisis” for more than a hundred years. The phrase once again became pervasive after the global economic meltdown of 2008. But we need to be careful with this usage of the concept of crisis.
The idea of crisis implies that inadequate or unaffordable housing is abnormal, a temporary departure from a well- functioning standard. But for working-class and poor communities, housing crisis is the norm. Insufficient housing has been the mark of dominated groups throughout history.,,
...For the oppressed, housing is always in crisis. The reappearance of the term “housing crisis” in headlines represents the experiences of middle-class homeowners and investors, who faced unexpected residential instability following the 2008 financial implosion...
...Discrete moments when housing crises become acute tend to be interpreted away as exceptions to a fundamentally sound system...Housing crisis is a predictable, consistent outcome of a basic characteristic of capitalist spatial development: housing is not produced and distributed for the purposes of dwelling for all; it is produced and distributed as a commodity to enrich the few. Housing crisis is not a result of the system breaking down but of the system working as it is intended...
...We do not seek to defend the housing system as it currently stands, which is in many ways indefensible. What needs defending is the use of housing as home, not as real estate. We are interested in the defense of housing as a resource that should be available to all.
Housing means many things to different groups. It is home for its residents and the site of social reproduction. It is the largest economic burden for many, and for others a source of wealth, status, profit, or control. It means work for those who construct, manage, and maintain it; speculative profit for those buying and selling it; and income for those financing it. It is a source of tax revenue and a subject of tax expenditures for the state, and a key component of the structure and functioning of cities.
Our concern is squarely with those who reside in and use housing — the people for whom home provides use values rather than exchange value. From the perspective of those who inhabit it, housing unlocks a whole range of social, cultural, and political goods. It is a universal necessity of life, in some ways an extension of the human body. Without it, participation in most of social, political, and economic life is impossible...
...Housing is the precondition both for work and for leisure. Controlling one’s housing is a way to control one’s labor as well as one’s free time, which is why struggles over housing are always, in part, struggles over autonomy. More than any other item of consumption, housing structures the way that individuals interact with others, with communities, and with wider collectives. Where and how one lives decisively shapes the treatment one receives by the state and can facilitate relations with other citizens and with social movements.
No other modern commodity is as important for organizing citizenship, work, identities, solidarities, and politics".
"Part of the problem is how we talk about housing. Many of us still use abstract market language: housing is imagined as “units,” not homes with people living in them, making it easier to accept eviction and displacement and treat people as a secondary concern.
This framework also assumes that the free market, unencumbered by political red tape, can provide enough housing for all who need it. But we need only look at New York City, where up to a third of luxury housing units in certain areas of Manhattan are unoccupied, to see that many housing units are built to supply a demand for investment, not housing.
Urban renewal projects have been displacing working people since the late 1940s to make way for services desired by the elite. Today, the same cities whose exclusionary zoning, redlining, and housing covenants disenfranchised communities of color are now advancing policies to “revitalize” blighted areas, often deepening gentrification pressures in the process.
Instead of working for the public interest, elected officials often act as real-estate proxies, amplifying displacement within and from their communities. Sometimes, the effect is subtle, but even when the poor are not directly displaced by a new transit line or sports arena, their inability to pay inflated rents means they will eventually be forced out, and the new amenities will serve those who can pay...
...One important way to do this is through rent control and “just cause for eviction” policies. Rent control limits annual rent increases, helping to stabilize neighborhoods and leave tenants with more money to spend in the local economy. Just cause for eviction laws prevent the arbitrary eviction of tenants and go hand in hand with rent control.
If housing is about people, rent control is about protecting those people, respecting their fundamental dignity, and allowing them to develop and maintain roots within the community without constant fear of displacement.
Conservative ideologues and liberals both like to argue that rent control doesn’t work — that it holds down property values, disincentivizes repairs, and hey, aren’t San Francisco and New York City two of the most unaffordable places to live despite having rent control? But these arguments overlook how outside factors shape rea-estate markets, and the ways in which rent control has been implemented. Rent control in San Francisco and New York applies only to buildings built before the mid to late 1970s, so the current housing boom is not governed by rent control. San Francisco’s rent control laws are also subject to the Ellis Act, meaning landlords can evict their tenants in order to sell a building or convert the units to condos.
Instead of dismissing rent control, we need to view it in a new light. Poor people are losing the little access they once had to affordable housing close to job opportunities. New housing is prohibitively expensive, with only a small percentage set aside as “affordable.” Uniformly applied rent control would force contemporary developers to play by the same rules as longtime landlords, and remove the incentive for landlords to evict tenants through flipping or condo conversion.
In the San Francisco Bay Area, the need for stronger rent regulation and tenant protections is sparking an organized regional response. Multiple cities there are facing an unprecedented challenge to housing affordability resulting in racialized resegregation largely driven by a burgeoning tech industry, a powerful real estate lobby, and unaccountable political actors.
Because the market is failing those it was never meant to protect, Bay Area tenants and advocates are sharing scalable strategies and advancing policies like rent control and just cause for eviction to challenge a dominant theory of trickle-down gentrification that suggests we can build our way out of this crisis. After years of solidarity and movement-building across jurisdictions — and a lack of local political will — six Bay Area cities are going to the ballot for the first time in more than thirty years this November to take up rent stabilization.
Ultimately, however, rent control preserves a paradigm in which private individuals and corporations profit from rents. It is one of the best harm-reduction strategies in this paradigm, but our transformative demand must be housing and land that is owned by the people, through large-scale public housing and community land trusts.
After years of appropriation and displacement, control must be returned to residents, with the profit motive subordinated to the universal right to housing.
Community land trusts are a viable way to create long-term housing affordability, but there has yet to be a substantial public investment in this strategy. The Movement for Black Lives platform, released this summer, promotes cooperative land ownership as a way to build wealth, stability, and power in black communities. The platform calls on the federal government to “use public resources — funds and land — to implement fair development, prioritizing community-based cooperative entities governed by traditionally excluded communities and community members.”
To achieve these objectives the state must be front and center: the federal government must invest in building and maintaining public housing for people of all incomes throughout the country, seeing shelter not as a commodity but as a basic need. We should pursue a policy of “full housing,” just as we talk about full employment.
When a substantial portion of the population lives in government-subsidized housing, the ability of private landlords to extort, harass, or evict is greatly reduced, and tenants gain increased power within their communities. As David Madden and Peter Marcuse argue: “the balance of power between tenants and landlords, or between real estate owners and communities, cannot be determined in a neutral, apolitical way.” Quality public housing will require the state to actively shift that balance toward those currently marginalized by our housing market...
...Building movements for rent control, public housing, and the right to remain in our communities is vital to preserving multiple levels of security for us all. It’s time to take bold positions that not only react to or reform bad policies, but lift up the demands of people who are already imagining another world".
"People’s lives are affected intimately by changes at the neighborhood level. Gentrification and displacement impact mental health, education, and income. Although a resident displaced from a particular neighborhood by new development might be able to move to a different, more affordable neighborhood, they will lose access to jobs, social-support networks, and public transportation, among other things. Our cities are experiencing a public health crisis because of the increase in evictions and displacement. Any philosophy that accepts this trade off — displacing existing residents in order to spur a small regional decrease in housing prices — is deeply flawed.
The idea of filtering, as well as the premise that new construction will bring down rents, means little when housing can be, and often is, used as an investment. Boosting the number of housing units doesn’t necessarily mean people who need homes will get them. Increasingly, what we see in so-called “global cities” is a proliferation of housing as a global commodity, not a basic necessity...
...Ultimately, YIMBYism is an exhortation to unleash unfettered market forces to remedy the housing crisis, despite the evidence that the profit motive is what caused the affordability crunch in the first place. Mortgage lenders realized they could make more money selling subprime loans and defrauding home buyers than they could by ensuring homeowners long-term stability. As a result, many former homeowners have joined the renter nation, competing for an increasingly unaffordable rental-housing supply.
YIMBYs argue that zoning and other restrictions on development prevent the market from meeting people’s housing needs. But the housing market has never met the needs of the poor — in fact, while the latest housing crisis was caused by the mortgage market’s collapse, working people have been overpaying for substandard housing since at least the mid-nineteenth century, well before New York City pioneered zoning restrictions in 1916".
"Huge profits are made on the backs of the poor — not only by landlords, but also by pawnshops, loan sharks, and moving and storage companies. This drive for wealth exacerbates poverty, as the evicted become even more vulnerable to predation...Or, to put it differently, poor people aren’t simply excluded from American prosperity: prosperity comes at their expense".
"...while it’s not desirable to just freeze our current cities and neighborhoods as they are, it’s unreasonable to simply dismiss the desire for stability out of hand".
The November 2016 national election results were a shock to many, but an additional blow was felt by renters and their supporters in San Mateo County when Measures Q and R failed to bring about protections from unstoppable rent increases and unjust evictions.
That election year saw an overwhelming amount of money come into our county from state and national Realtor and landlord organizations to defeat the measures. In mailers and commercials, the California Apartment Association and San Mateo County Association of Realtors portrayed owners of apartment buildings as poor mom-and-pop investors and renters as criminals and squatters to be feared. Homeowners were smothered in propaganda and persuaded that the best option was to reject the measures and instead build a lot of affordable housing. The landlord and Realtor organizations swore to actively work with and support local cities to get affordable housing, and councilmembers promised that affordable housing would be their number one priority, if only renter protections were defeated at the ballot box.
Well, over a year later, renters not only have lost hope in gaining affordable housing, but our elected representatives cynically maintain that this is the only solution to our crisis. They know better, yet they celebrate construction that allocates paltry percentages of affordable units. Many align themselves with residents who want neither renter protections nor affordable housing. Renters are routinely ignored and protections never agendized; the numbers of displaced people go uncounted; Latino and black communities are decimated; grassroots housing groups are marginalized; and county supervisors and members of city councils continue to open their doors to the special interests, while closing them in the faces of renters when it comes to immediate remedies.
On Sept. 25, more than 60 renters filled a City Council meeting in Redwood City. Thirty people turned in slips to speak. Then-mayor John Seybert announced that only 15 minutes would be allowed in total, leaving each person 30 seconds to present their comments. In the end, most of the renters gave up their time so that five speakers spoke for three minutes apiece. The fact that 30 residents of Redwood City wanted to attend and speak at a council meeting should be cause for celebration of how we want our local democracy to work. Instead, these people were silenced, rejected and dismissed by their own elected officials.
One San Mateo, a community group of renters, and their supporters have struggled to gain renter protections. They have worked diligently to keep renters from losing their homes, and gained nothing from their City Council in the way of effective measures to stop the bleeding of displacement. In October 2017, OSM held a candidates forum, and more than 100 people attended to ask the candidates about their views on housing and renter protections — a large, visible representation of the community’s ongoing concerns.
In Burlingame, advocates have pleaded for years for renter protections to be put on the agenda so a dialog can begin. Instead, they have been met with silence, avoidance and inaction. In fact, when Measure R was placed on the ballot, the council unanimously wrote the argument against it, ignoring their own commissioned report that negated almost all their arguments. After three years of waiting, the promised affordable housing in Parking Lot F remains stalled and its delays have been shrouded in mystery. Incredibly, at a study session, two councilmembers asked aloud how a homeowner could sell their home, shelter their assets and qualify for affordable housing. There are no affordable units at all in Burlingame, and a 30-year old law prevents the city from requiring affordable units in new construction. The city only now is starting to do outreach to residents to inform them about what affordable housing is, and why it is needed.
Over a year later, not one city in the county has seriously discussed, let alone passed a just cause eviction ordinance. Not one city, or the county, has attempted to count the displacement or stop the enormous rent increases. Working people, the elderly, and children remain in unstable housing, and have no protections or representation. Renters are embittered and disgusted by local government.
Homeowners who have high property taxes and mortgages are beginning to understand how the new federal tax plan may affect their pocketbooks. Sadly, some may lose their homes and be displaced. Renters know well the realities of housing insecurity; they also know how it is to be disrespected and dismissed by their own elected leaders.
In this new year, we need leaders who are independent, respectful of people more than money, with foresight, and the guts to do the right thing. Otherwise, as Will Rogers once said, “Last year we said, ‘things can’t go on like this,’ and they didn’t, they got worse.”
Cynthia Cornell is a member of Housing for All Burlingame.
"Developers have responded with an apartment building boom. But since renters tend to have higher incomes than in years past — households making more than $100,000 a year accounted for a third of the growth in renters over the past decade — many of the newer units are in the pricey glass and steel buildings that have sprouted in downtowns across the country...
...at the upper end of the market, where vacancies are rising and rents are falling. Still, low-income housing remains undersupplied. About half of renters pay more than 30 percent of their income on housing, and a quarter pay more than half...For now, there is little to suggest the rental burden will get better anytime soon. Over the next decade the younger half of the millennial generation will move into their 20s and 30s, adding to the pool of renters. Over that same period, more than a million units of affordable housing financed by low-income housing tax credits and other government programs are set expire and shift to higher rents, according to the Joint Center.
One result of the surge in higher-income renters is that units that policymakers politely refer to as “naturally occurring affordable housing” — run-down buildings where lower-income residents can afford an apartment without subsidy — are being pulled toward the higher end of the market.
In Redwood City, on the peninsula between San Francisco and the heart of Silicon Valley, private equity firms have been snapping up buildings that house lower-income service workers and repositioning them for higher-income tech workers. The pitch to investors is straightforward: With housing scarce and demand rising, there are returns to be made buying old buildings, marketing to new tenants, and steadily increasing the rent.
That has put a squeeze on tenants like Ms. Hernandez, a 41-year-old holding down two low-wage jobs, one cleaning houses and another at an elder care facility. She has spent a decade waiting for a subsidized rental apartment to open up.
Jesshill Love, an attorney for the investors who now own Ms. Hernandez’s building, said that with demand exploding, the rents could have actually been raised even more. “The decision was made by the property management company not to raise the rent to full market value in an effort to minimize the impact upon the families,” he said.
The backlash has been fierce. Rent-control measures have popped up in cities across the Bay Area. Last week, Ms. Hernandez and other tenants in her building gathered at the offices of Redwood Landing, the building’s management company, chanting things like “Hear our cry, rent’s too high,” while holding signs that read “Stop Displacement Now.”