Virtually all housing experts agree that there is a housing crisis in the United States. It is estimated that 600,000 Americans are currently homeless, and something like 3 million individuals or families have experienced homelessness in the last five years. But homelessness is only the tip of the U.S. housing crisis. In 2019 (the last year for which reliable statistics are available) a full-time worker earning minimum wage could not afford to rent a two-bedroom apartment in any American county.
A renter spending 30% or more of their income for housing is considered cost burdened. A renter spending 50% or more of their income on housing is considered severely cost burdened. According to the Harvard Center for Housing Studies, 80% of renters earning $25,000 or less in 2019 were cost burdened, and more than half were severely cost burdened. The COVID pandemic has worsened the housing crisis as well as worsening racial disparities in housing. In early 2021, for example, 14% of all renter households were behind in their housing payments and facing eviction, while 29% of Black households were in this situation.
Although the median wealth of American homeowners is 40 times larger than the median wealth of renters, homeowners are by no means immune to the housing crisis. The median price of single-family homes has been increasing for over a decade, and during this interval the housing price increase has far exceeded the growth of median income.
Moreover, the median price of single family homes is accelerating. In March 2021, home prices increased 13.2% nationally and they have increased considerably more in many Western states, including Colorado. Racial disparities are also evident among homeowners. The median wealth of white households is more than seven times greater than that of Black households. In the first quarter of the current year, 7% of white homeowners were behind in mortgage payments and facing foreclosure, but 17% of Black homeowners were threatened with foreclosure.
What should be done about the United States housing crisis? A comprehensive and radical — but possibly achievable — national housing program has been proposed by People’s Action, one of the largest activist multiracial organizations in the country. The People’s Action housing program, named A National Homes Guarantee, aims to “guarantee safe, accessible, sustainable and permanently affordable housing for everyone.” The program has five interrelated components:
1) Building 12 million social housing units (over 10 years) and eradicating homelessness; 2) Reinvesting in existing public housing; 3) Protecting renters and bank tenants (i.e., homeowners beholden to banks); 4) Paying reparations for centuries of racist housing policies; 5) Ending land and real estate speculation and decommodifying housing.
Social housing is housing that is permanently off the private market. It can exist in various forms, but it is typically 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 this social housing would provide special services for the problems of the chronically homeless. Social housing units would be located to desegregate high-income, primarily white areas. Thus, the program would reduce both income and race segregation. The new social housing would be constructed according to the highest possible environmental standards.
Public housing is often considered to be a failure, but the private housing market has failed on a much larger scale and problems of public housing stem primarily from political neglect. The Homes Guarantee program advocates a recommitment to public housing. Wherever public housing can be preserved or rehabilitated rather than destroyed, it should be. And public housing tenants should have a significant voice in the management of their homes. Affordable and accessible mass transit should be located near all public housing. Moreover, Congress should move the capital and operating expenses for public housing from its discretionary to its mandatory budget.
Forty-three million households in the United States rent their homes and about half of them are cost burdened. Renters are far more likely than homeowners to be women, people of color and of low income. Renters are also more likely to have a disability. The Homes Guarantee program is intended to rectify the power imbalance between renters and landlords. The core of the renter protection program is the following National Tenant Bill of Rights: 1) Universal rent control; 2) Eviction only for good cause and right to lease renewal; 3) Right to counsel in court on housing issues; 4) Right to truly affordable housing; 5) Right to organize renters and to legal enforcement of renter entitlements, and 6) Right to high quality and accessible housing.
In his 2017 book The Color of Law, Richard Rothstein shows how government policy (federal, state and local) contributed decisively to the racial segregation of American society. The Homes Guarantee program cannot undo several centuries of capitalist housing bigotry, but it suggests numerous ways to repair racist housing injustice. One approach involves systematic reduction of housing principal. If the current value of a home is less than what the homeowner owes (i.e., if the homeowner is “underwater”), then the principal owed would be reduced to the current value of the home or even less. Such principal reduction would be especially helpful to Black homeowners who are more likely than white homeowners to be “underwater.”
Speculation involves buying land or housing as an investment vehicle rather than as a place to live. Speculation tends to make housing and rental markets predatory and unstable. It can also lead to housing vacancies, housing blight and tax delinquency. The Homes Guarantee program proposes several forms of taxation to curb land and housing speculation. One possibility would be steep tax (perhaps 70% or more) on profits made via residential speculation.
If good housing is understood as a human right rather than as a privilege to be earned, then housing should be a common possession of the human community rather than a set of commodities to be bought and sold. All housing should be of high quality and allocation of homes should be on the basis of need rather than via income and wealth. This is what decommodifying housing implies. Decommodification of housing is clearly a long-range objective and one that may be unattainable within a capitalist economy.
Just Economics is written by members of the Economic Justice Collective of the Rocky Mountain Peace & Justice Center.
This opinion column does not necessarily reflect the views of Boulder Weekly.