A Better Housing Policy Is Possible

A Better Housing Policy Is Possible

Momentum is growing behind an approach to development that can balance the need for more housing with stability and affordability for low-income communities.

Protesters gather in Long Island City to say "No" to the Amazon "HQ2" decision on November 14, 2018. (Don Emmert/AFP/Getty Images)

The safety, affordability, and profitability of houses and apartments are among the core concerns of virtually every American, but housing policy has remained on the margins of the national conversation since the mortgage industry collapse gradually left the front pages a decade ago. Yet after years of housing costs racing ahead of wage growth, housing issues are bubbling up more and more on street corners, in election strategy meetings, and tech boardrooms. Sensing the shift, several Democratic presidential candidates have rushed out housing platforms: Senators Cory Booker and Kamala Harris propose a renter tax credit that would at least be a small step toward evening the playing field with the mortgage interest deduction, which favors wealthy homeowners and contributes to increasing economic inequality. Senator Elizabeth Warren has gone further, outlining a program that would focus on countering housing discrimination and target assistance to neighborhoods previously subjected to racist federal housing policies.

Meanwhile, rent control, after shrinking under landlord-friendly policies for years, has surged back into the national conversation with mobilizations in six states to either implement or expand existing programs that cap rent increases and extend eviction protections. In February, grassroots coalitions and tenant organizations pushed through the country’s first statewide rent control policy in Oregon. A new Democratic state legislature is preparing to strengthen New York City’s rent-control system, the largest in the country until now, for the first time in years, possibly reversing its slow decay under the weight of loopholes and lax enforcement.

Nowhere was the urgency around housing affordability more apparent than in the mobilization against Amazon’s proposed new headquarters in Queens. The resistance that scared off Amazon demonstrated how public priorities are shifting: the economic development logic—build the tax base at all costs—that has governed the city’s approach to urban planning for generations was outmaneuvered by grassroots groups that made displacement concerns the heart of the debate. The shiny, luxurious Hudson Yards development, which received billions of dollars in tax benefits and just opened in midtown Manhattan after fifteen years of construction, provides an odious counterpoint—a project forged through the business logic of the administration of former mayor Michael Bloomberg, with little concern for affordability or the housing needs of the many. New Yorkers weren’t ready to let Amazon create another Hudson Yards in Long Island City.

While the struggle for safe and affordable shelter is certainly not new, at no point since the Second World War has it been so acute as now. The proportion of renters nationwide that are considered “cost burdened” by the federal government has risen for decades. When rents eat deep into families’ budgets, it makes saving difficult. And, according to several studies, a lack of affordable housing prevents workers from moving to the most economically productive cities, dragging down those metro economies and deepening income inequality and racial segregation in the process.

A coalition of economists, real-estate developers, young professionals, and elected officials have begun coalescing around a solution: allow for the development of more housing in order to let supply catch up to the demand. Lower rents and more accessible home prices will follow, the argument goes. They point to Tokyo and Houston, where permissive development laws have kept rents and home prices from skyrocketing as they have in the preservation-oriented metropolises like San Francisco and Paris. Once promoted primarily by developers, construction unions, and wonks like Harvard economist Edward Glaeser, there are now YIMBY (Yes in My Backyard) activists affecting state and local politics in cities like Boston, New York, and Seattle. The influence of the YIMBYs’ supply-side approach can be seen in SB 50, a controversial 2018 bill in California that would have mandated that cities allow for more development around transit stops, and in 2018 proposals by Senator Warren and HUD Secretary Ben Carson—policymakers not usually on the same side of an issue—to incentivize local governments to reduce barriers to housing growth through federal funding sticks and carrots.

The NIMBY (Not in My Backyard) is the natural enemy of the YIMBY. White homeowners are the traditional source of resistance to new development on the grounds that big new buildings will take away parking, crowd schools, and reduce home values. This argument takes on race and class undertones when neighborhoods mobilize against rental housing that would bring in poorer, often non-white renters.

However, another brand of resistance has risen to meet the pro-density advocates; these resisters are just as often people of color as white, and more often low-income than the typically middle-to-upper-class NIMBY. Marginalized neighborhoods have a long history of resistance to government-led redevelopment projects, but today’s resisters focus on a new formulation of the problem: more development brings gentrification, which brings displacement. In New York City, communities have risen up against Mayor Bill de Blasio’s plans to boost the housing density in several neighborhoods, despite de Blasio’s commitment to new below-market-rate housing in each rezoned neighborhood. Amazon’s plans to expand in New York City fell in the face of displacement concerns, as did SB 50 in California.

Planning policy, and especially zoning policy, has thus become the nexus of three-way conflict: the YIMBYs (pro-development, pro-affordability), the NIMBYs (anti-development, without much to say about affordability), and the anti-displacement movement (anti-development, pro-affordability). At least two of these factions, the YIMBYs and the anti-displacement movement, ostensibly share the same goals. They both hope to see a more affordable city. But their conflicts are flaring up more and more, threatening to perpetuate a dangerous status quo in which meager wage increases and soaring rents create dystopian cities only accessible to the rich.

Too often, battling stakeholders talk past each other because of a critical difference in the way they frame the housing affordability problem. While the YIMBYs typically view the issue as a problem afflicting a metro area, or at least an entire city, anti-displacement activists tend to focus on the immediate threat to their communities and their neighborhoods—or even to their individual blocks and buildings.

Economists tend to embrace solutions that would increase supply and lower the median rent for the metro area. The anti-displacement movement looks at the same proposal and asks if we can bear the gentrification that the increased supply will bring to a particular neighborhood. Individuals don’t experience median rents at the metro area; they experience their own rent, which might behave quite differently from the metro median if there is a new luxury condo built across the street.

A recent paper studying the impact of planning policy in Chicago found that upzonings (zoning changes that allow for more housing) around transit stations, in the name of increasing supply and thus affordability, resulted in increased housing prices in the surrounding area. Researchers at University of California, Berkeley, have come to a similar conclusion, finding that market-rate development may decrease rents in the long term, but increase them in the short run, contributing to displacement pressures.

My own research on the neighborhood rezonings executed in NYC under Bloomberg found that rezoning aimed at increasing housing supply accelerated rents at the neighborhood level in comparison to surrounding areas. The city blocks subject to these rezonings lost Black, Latinx, and low-income residents in the following years while real estate values soared. Incomes in these neighborhoods rose as high-earning whites replaced low-income people of color. Bloomberg City Planning Commissioner Amanda Burden famously mused about her rezoning strategy, “I had believed that if we kept building in that manner and increasing our housing supply . . . that prices would go down.” Yet “the price of housing didn’t go down at all.” Even thoughtful advocates for market-rate construction are increasingly forced to conclude that “new market-rate housing is necessary but not sufficient” to creating affordable neighborhoods.

Beneath the recriminations and contentious community meetings, a quiet consensus is forming (even if there is no consensus that there is a consensus): we need more housing of all kinds to address the affordability crisis, but we need to add that housing in a way that does not exacerbate displacement of vulnerable city dwellers. The academic literature is extremely wishy-washy on what that entails. Require more givebacks from private-sector developers? More vouchers so poor families can find their own housing? More thoughtful placement of subsidized housing? None of these measures can help address the scope of the problem.

Fortunately, momentum is growing behind an approach to development that can balance the imperative of more housing with the need to prioritize stability for low-income communities. The approach emphasizes the importance of removing property from the speculative market by putting it in public control or in democratic community ownership. It flies in the face of forty years of neoliberal housing policy that stressed the replacement of public housing with for-profit ownership and the transfer of publicly owned land to the private sector.

This approach—in need of its own handy moniker but growing out of political and economic strategies like economic democracy, the urban commons, and democratic socialism—favors entities like community land trusts (CLTs), a form of hybrid homeownership in which a democratically governed nonprofit owns the land under homes and commits to ensuring their permanent affordability and upkeep. A CLT can shelter housing from gentrification and carve out a place for low-income families in changing neighborhoods. There are over two hundred CLTs across the country, and dozens more are taking shape in cities with the most acute affordability crises.

Maintaining (even expanding) our public housing stock is another way to increase housing supply without fueling displacement. Major federal investments will be necessary, but we know from places like Hong Kong, Singapore, and Vienna that a well-maintained public housing stock can be a powerful force for equalizing social opportunity.

There are also a suite of measures our federal, state, and local governments can take to prioritize public or community ownership of housing by treating housing as shelter for human beings rather than as a financial asset: rent control, pied-a-terre taxes, anti-speculation strategies like the home-flipping taxes proposed in New York City and Boston, and reform of the income tax benefits that flow from property ownership via the mortgage interest deduction and a slew of loopholes used by savvy real-estate developers.

Together these measures can reorient our housing toward meeting the universal need for safe shelter within reach of job opportunities. Public and community ownership of housing means that the value created by an upzoning or new housing complex flows to the public, rather than to private property owners who will raise rents, displacing those who cannot pay.

The polarization of debates over development policy and increasing mistrust between stakeholders poses a significant hurdle to increasing housing supply under a public ownership framework. There is also the problem of the growth machine political alliance, which tightly binds progressive mayors with for-profit real estate interests, the former seeking property tax revenues to fund their social service programs while the latter hunt profits. Reorienting housing production away from an asset-market framework will not sit well with the growth machine, so new political formations are necessary.

As daunting as that is, advocates for rent control and the Green New Deal are already doing the work, and powerful left coalitions are growing at the local level. Fortunately, prioritizing the social ownership of housing does not need to wait for a dramatic turn in national politics or for the next housing market collapse. Instead, we have dozens of local experiments to draw on—an anti-real estate speculation law here, a growing CLT there—to show us what works and what political conditions have made it possible.

Leo Goldberg is a researcher living in Brooklyn.