To Hell With Poverty

To Hell With Poverty

In his new book, Matthew Desmond argues that abolishing poverty will require an ambitious moral undertaking.

Poverty, by America
by Matthew Desmond
Crown, 2023, 304 pp.

One of the most revelatory sections in Matthew Desmond’s new book, Poverty, by America, focuses on housing. Excluding truly elite zip codes, such as those in parts of Manhattan, Desmond shows that it often pays more to be a landlord to the poor than to the rich. Working with MIT professor Nathan Wilmers, Desmond “found that landlords in poor neighborhoods earn roughly $300 a month per apartment unit after regular expenses are deducted from rent. Landlords in middle-class neighborhoods take home $225 a month per apartment unit, and landlords in rich neighborhoods take home $250 a month per unit after regular expenses.” The maintenance costs are not very different, and neither are the rents charged. Comparing middle-class sections of Indianapolis to areas of concentrated poverty, the median monthly rent for a two-bedroom apartment was $991 versus $816.

Landlords can charge high rents for bad quality housing because our society has made the poor into a captive consumer base. The waiting time for government-subsidized housing can be many years long, which creates a pool of renters with limited options. In addition to being more likely to face racial prejudice and the stigma of being a single parent, “poor renters often have eviction and conviction records, bad credit or no credit at all, and no access to cosigners who appear on paper as safer bets.” And unlike wealthier movers, the poor often relocate in a moment of crisis. This forces them to accept what they can get, which is usually an apartment that takes so much of their income that they cannot save for something better.

The obvious beneficiaries of this arrangement are, of course, the landlords, but many others benefit as well. The lack of affordable housing inflates demand for less affordable housing, increasing property values for homeowners, which in turn provides a store of equity that has been essential to the accumulation of middle- and upper-class wealth since suburban life became appended to the American dream. And by excluding the poor from more affluent neighborhoods, those living in the oasis hoard for themselves the amenities that a robust tax base buys: good schools, parks, and the psychic benefits of beauty and safety.

Desmond opens his book with a simple question: “why is there so much poverty in America?” His central argument is that those of us who are not poor are the beneficiaries and authors of that poverty. We are the exploiters. Desmond argues these dynamics play out not just in the housing market, but in employment, banking, and tax policy. “Poverty isn’t simply the condition of not having enough money. It’s the condition of not having enough choice and being taken advantage of because of that.�...