VVirtually all housing experts agree that there is a housing crisis in the United States. An estimated 600,000 Americans are currently homeless, and some 3 million individuals or families have experienced homelessness in the past five years. But homelessness is just the tip of the US housing crisis. In 2019 (the latest year for which reliable statistics are available), a full-time worker earning minimum wage couldn’t afford to rent a two-bedroom apartment in any U.S. county.
A tenant who spends 30% or more of their income on housing is considered to have a financial burden. A tenant spending 50% or more of their income on housing is considered to be heavily costly. According to the Harvard Center for Housing Studies, 80% of tenants earning $ 25,000 or less in 2019 were overcharged, and more than half were heavily overcharged. The COVID pandemic has exacerbated the housing crisis as well as racial disparities in housing. At the start of 2021, for example, 14% of all renter households were behind on their housing payments and threatened with eviction, while 29% of black households were in this situation.
While the median wealth of U.S. homeowners is 40 times the median wealth of renters, homeowners are by no means immune from the housing crisis. The median price of single-family homes has been increasing for more than a decade, and during that time the rise in house prices has far exceeded the growth in median income.
In addition, the median price of single-family homes is accelerating. In March 2021, home prices rose 13.2% nationwide, and they rose significantly more in many western states, including Colorado. Racial disparities are also evident among the owners. The median wealth of white households is more than seven times that of black households. In the first quarter of this year, 7% of white homeowners were in arrears with mortgage payments and threatened with foreclosure, but 17% of black homeowners were threatened with foreclosure.
What to do about the housing crisis in the United States? A comprehensive and radical – but perhaps achievable – national housing program has been proposed by People’s Action, one of the country’s largest militant multiracial organizations. The People’s Action housing program, called A National Homes Guarantee, aims to “ensure safe, accessible, sustainable and affordable housing for all”. The program has five interrelated components:
1) Build 12 million social housing units (over 10 years) and eradicate homelessness; 2) Reinvest in existing public housing; 3) Protect tenants and tenants of banks (ie landlords accountable to banks); 4) Pay reparations for centuries of racist housing policies; 5) Put an end to land and real estate speculation and reduce housing.
Social housing is housing that is definitely outside the private market. It can come in a variety of forms, but it is usually rental housing, provided at below market rates and operated by municipal governments or non-profit housing associations. The construction of 12 million social housing units would be a federal project financed by taxes. At least 5% of these social housing units would offer special services for the problems of chronically homeless people. Social housing would be located to desegregate high income, predominantly white areas. Thus, the program would reduce both income segregation and racial segregation. The new social housing would be built to the highest possible environmental standards.
Public housing is often seen as a failure, but the private housing market has failed on a much larger scale and public housing problems stem mainly from political neglect. The Homes Guarantee program advocates a re-engagement in social housing. Wherever public housing can be preserved or rehabilitated rather than destroyed, it should be. And tenants of public housing should have an important voice in the management of their housing. Affordable and accessible public transport should be located near all social housing. Additionally, Congress should move public housing capital and operating spending from its discretionary budget to its mandatory budget.
Forty-three million households in the United States rent their homes and about half of them are overburdened with costs. Renters are much more likely than landlords to be women, people of color and low income. Renters are also more likely to have a disability. The Homes Guarantee program aims to correct the power imbalance between tenants and landlords. The core of the tenant protection program is the following National Tenants Bill of Rights: 1) Universal Rent Control; 2) Expulsion only for valid reason and right to renewal of the lease; 3) Right to a lawyer in court on housing issues; 4) Right to truly affordable housing; 5) Right to organize tenants and the legal enforcement of tenants’ rights, and 6) Right to quality and accessible housing.
In his 2017 book The color of the law, Richard Rothstein shows how government policy (federal, state and local) has contributed decisively to the racial segregation of American society. The Homes Guarantee cannot undo centuries of capitalist housing fanaticism, but it does suggest many ways to right racist housing injustice. One approach is to systematically reduce the housing principal. If the current value of a house is less than what the owner owes (that is, if the owner is “underwater”), then the principal owed would be reduced to the current value of the house. or even less. Such a major reduction would be particularly useful for black owners who are more likely than white owners to be “underwater”.
Speculation consists of buying land or housing as an investment vehicle rather than a place to live. Speculation tends to make housing and rental markets predatory and unstable. It can also lead to vacant housing, housing degradation and tax crime. The Homes Guarantee program offers several forms of taxation to curb land and real estate speculation. One possibility would be a high tax (perhaps 70% or more) on profits made from residential speculation.
If good housing is understood as a human right rather than a privilege to be earned, then housing should be a common possession of the human community rather than a collection of goods to be bought and sold. All housing should be of high quality and the allocation of housing should be based on need rather than income and wealth. This is what the decommodification of housing implies. De-commodification of housing is clearly a long-term and perhaps unattainable goal in a capitalist economy.
Just Economics is written by members of the Economic Justice Collective at the Rocky Mountain Peace & Justice Center.
This opinion column does not necessarily reflect the views of Boulder Weekly.