Tag: Housing Policy

How We Use Resources

How We Use Resources

Posted on by jabittan
One critique of housing first policies is that it would be too expensive for us to provide public housing to everyone in the nation who is currently homeless and needs affordable housing. The nation has too much debt and there are too many homeless people. Those who are homeless or on the brink of homelessness need to step up to support themselves, because we don’t have enough resources to help everyone. The way to end homelessness, this argument suggests, is not to house everyone, but for everyone to take more personal responsibility for their situation.
Matthew Desmond believes this argument if wrong (to put it nicely).
In his book Evicted Desmond writes, “housing-related tax expenditures far outpace those for housing assistance. In 2008, the year Arleen [A low income tenant he profiled] was evicted from Thirteenth Street, federal expenditures for direct housing assistance totaled less than $40.2 billion, but homeowner tax benefits exceeded $171 billion. That number, $171 billion, was equivalent to the 2008 budgets for the Department of Education, the Department of Veterans Affairs, the Department of Homeland Security, the Department of Justice, and the Department of Agriculture combined.” For some additional figures, the total for federal expenditures in 2008 was $2.983 trillion, total revenue was $2.524 trillion, and the deficit was $458.6 billion. The $40.2 billion in housing assistance was 1.3% of the federal expenditures, 1.5% of federal revenue, and 8.7% of the deficit. $171 billion in federal tax subsidies for homeowners was equivalent to 5.7% of total expenditures, 6.7% of revenues, and 37.3% of the deficit. What these numbers suggest, and what Desmond argues, is that we simply don’t prioritize housing assistance. We prioritize giving people who already own their homes a break on their taxes, at a greater financial cost to society, than what we are willing to provide to those who need homes in order to keep their lives on track.
Desmond continues, “most federal housing subsidies benefit families with six-figure incomes. If we are going to spend the bulk of our public dollars on the affluent – at least when it comes to housing – we should own up to that decision. … If poverty persists in America, it is not for lack of resources.”
Yes, our country has a large deficit. Yes, our country carries what seems like an astronomical amount of debt. But that doesn’t mean we cannot help the poor and homeless. Our willingness to accept huge tax exceptions for homeowners paying interest on mortgages demonstrates our willingness to live with the debt and deficit we have. It shows that our fiscal and budgetary concerns are not exactly authentic, and suggests they may be an excuse to avoid doing more for the homeless who are not seen as deserving of our aid and energy. Resources exist to allow us to do much more to ensure that every American has a basic home and doesn’t have to rely on charitable shelters and limited public housing assistance. We have resources, we just don’t use them wisely.
Housing Markets, Rent, and Workers

Housing Markets, Rents, and Workers

Posted on by jabittan
I don’t necessarily think that heavy handed government control of the provision of goods or services is the best way to organize our society and our resources, but I do think government intervention has a place. I think markets are great mechanisms for providing goods and services efficiently, but I think it is also clear that markets leave out some individuals and even well functioning markets have their points of failure. I also don’t believe there is some sort of dichotomy between government provided services and markets that cannot be breached. I think there is a need for government action when markets break or where markets fail to address people’s needs. Housing in particular seems to be one of those spaces.
There is not much incentive for landlords to provide low rent housing options to low-income renters. In his book Evicted Matthew Desmond shows how this leads to a limited supply of low rent housing options and how that low supply artificially inflates the cost of those options. Low rent, poor quality housing often isn’t actually that much cheaper than more expensive, nicer units which makes life for those in poverty unbearable. The standard advice to middle income renters or homeowners is to avoid spending more than 30% of your monthly income on rent or a mortgage. For the lowest income people in our society, that idea can be laughable.
Desmond also shows that simply raising wages for low-income individuals is not enough to avoid the high cost of rent. The limited supply of affordable housing options doesn’t exist in isolation. It exists within larger markets and forces, and will respond to other factors in the economy. Desmond writes, “when the American labor movement rose up in the 1830s to demand higher wages, landed capital did not lock arms with industrial capital. Instead landlords rooted for the workers because higher wages would allow them to collect higher rents. History repeated itself 100 years later, when wage gains that workers had made through labor strikes were quickly absorbed by rising rents.”
This dynamic between landlords and the wages of renters demonstrates a market failure. Rents can soar to absorb an increase to a worker’s income. People need a place to live, and even if the conditions are terrible, they cannot pass up housing. But as rents take larger and larger shares of their income, they have less to spend on groceries, utilities, and other necessities or enjoyments of life. The government does help people with food and some utilities, but people can hardly engage in our capitalistic society if an overwhelming amount of income is directed toward rent. Government provided low-income housing seems to be a necessity to correct for these market failures. Clearly large, densely crowded housing projects were not the right solution, but when we look at housing across the country we see a lot of different approaches to housing. Dense housing structures are not the only option, and other alternatives for reasonable and affordable government provided housing need to be attempted to help make the housing market work for more people and avoid eating any increase in wages that people earn as they try to escape dilapidated housing.
Foundation in the Home

Foundation in the Home

Posted on by jabittan
For Matthew Desmond the problem of evictions is not just a problem that impacts a few unlucky people here or there. It is not even a problem for just the poorest among us or the most derelict and destitute members of American Society. Eviction is a problem of the nation, because the foundation of the nation, Desmond would ultimately argue, is the home.
“What else is a nation but a patchwork of cities and towns; cities and towns a patchwork of neighborhoods; and neighborhoods a patchwork of homes?” writes Desmond. Homes establish the foundational units which collectively come together to create a nation. Without places to live, people don’t have places to come together and create a society. A nation relies on individuals living together and forging their communities, cities, and nations jointly.
In this way, an eviction is not isolated to just a tenant and a landlord. In a direct sense, police, storage companies, and shelters are impacted by eviction. And in a broader and more indirect sense, local businesses, politicians, and eventually the entire society is impacted by eviction, especially as one eviction turns into multiple evictions and builds into an eviction epidemic. Evictions, being tied to the foundational building block of the nation, impact all of society.
I believe that for Desmond this is what drove him to do the research for Evicted and to share the stories of those directly involved in the eviction epidemic in America. By describing the people facing eviction, the landlords kicking them out, and the entire housing and economic systems that allow for such high rates of eviction, Desmond is helping us better understand the realities and costs of eviction. We have to have a full picture of eviction to appreciate its impact on our nation and to move forward in a way that better supports and integrates the poorest members of our society. We have to support the homes in order to support our communities, cities, and our nation as a whole.
Cheap Houses, High Rents

Cheap Houses, High Rents

Posted on by jabittan
Throughout the book Evicted, Matthew Desmond shows how the market for low-income renters is stacked against them in many ways that are unfair and often exploitative. Without a strong system to ensure that everyone who needs housing is able to access basic and reasonable housing, the bottom of the market for renters becomes a scramble for a small number of dilapidated and overpriced units. Low-income renters cannot walk away from properties that they find unacceptable, because the alternative is reliance on overcrowded and stressed homeless shelters. In the end, this allows landlords to disinvest in their rental properties while maintaining high rental rates.
Desmond writes, “the same thing that made homeownership a bad investment in poor, black neighborhoods – depressed property values – made landlording there a potentially lucrative one. Property values for similar homes were double or triple in white, middle-class sections of the city; but rents in those neighborhoods were not.”
Unfortunately, our nation’s history of redlining and lingering structural racism has created dense minority ghettos in our country. Black people are limited in where they can look for housing, with landlords in white and middle-class parts of cities tacitly refusing to rent to minorities. Desmond shares a story of two black roommates who were showed a rental unit, only to have the landlords suddenly receive a phone call from a tenant accepting a rental agreement, removing the property from the market. In the only instance of the book where Desmond deliberately interfered with the subjects he was studying, he contacted the landlord after he told the black roommates the property was no longer available posing potential renter and was told the property was available [Author note: Desmond is a white male]. Black people are still to this day stuck in areas where local governments and businesses have disinvested, depressing the property values.
As Desmond shows, this creates a situation where landlords can purchase properties cheaply and rent to residents who can’t find housing outside of these disinvested areas. Since black and brown people can’t go elsewhere to find housing, where the rent is equivalent but the properties are nicer, they have to accept high rents for dilapidated units. Poor minority renters are taken advantage of by landlords who purchase cheap houses and charge high rents. This system reinforces structural racism and inequality for the lowest income minority renters in our nation.
Housing Vouchers - Joe Abittan - Matthew Desmond - Evicted

Housing Vouchers

Posted on by jabittan
Housing vouchers have been a major political win for landlords and realtors. Matthew Desmond’s book Evicted is about the real negative consequences of America’s high cost of housing, and he addresses housing vouchers which have been one of the main forms of public assistance for low-income renters. Our country likes market, or near-market, mechanisms to provide aid and assistance. Housing vouchers represent that preferred market mechanism, especially when compared to government provided, low cost housing. However, housing vouchers are not necessarily the most efficient way to provide assistance to those who cannot afford a place to live.
Desmond writes, “In Milwaukee, renters with housing vouchers were charged an average of $55 more each month, compared to unassisted renters who lived in similar apartments in similar neighborhoods. Overcharging voucher holders cost taxpayers an additional $3.6 million each year in Milwaukee alone – the equivalent of supplying 588 more needy families with housing assistance.”
Housing vouchers are taken advantage of and abused by landlords and the companies managing apartment complexes. If an individual with a voucher is not facing the full cost of the housing unit, then they don’t have the same market pressures to find alternative housing options. The result is that higher rent can be charged, with that higher rent absorbed by the voucher. Money and aid is ultimately wasted, and families who could receive help do not receive it.
The extra money that can be made by overcharging voucher holders is a windfall for landlords and realtors, and unsurprisingly, both groups lobbied for voucher systems rather than government provided housing. Desmond writes, “Landlords and realtors saw government-built and -managed buildings offered at cut-rate rents as a direct threat to their legitimacy and bottom line.” If the government could provide housing at reasonable rates, then renters wouldn’t have to put up with high rent and lousy living conditions in slums. Contrasting a voucher program that encourage rent seeking behavior, those who profit from vouchers would lose money under a system bolstered by public housing and would have to lower rents or improve property to compete against government housing that didn’t have a profit motive.
It is easy to say that government-built and -managed housing has failed in the United States and that vouchers are clearly the superior way to provide housing assistance, even if they are inefficient. But I don’t think that is a truly valid argument, and I don’t think Desmond would find it a compelling argument either. Massive housing projects in the United States were built in a way that clustered poverty, creating dense units of low-income individuals. Research from Raj Chetty has shown that economic integration and mixing is important for social and economic success, and the experience of those living in dense housing projects supports Chetty’s research. Housing projects were also constructed at a time when cities and local governments were disinvesting in inner cities, before lead abatement programs had taken hold, and when the nation had not yet begun to reckon with its racist past. In some ways it seems as if these approaches to government housing projects were intentionally designed to fail.
I don’t see any reason why government-built and -managed housing could not be successful today if built in a more dispersed manner, if designed to integrate poor, and constructed to be responsive to the racists history of housing, drug, and incarceration policy of our nation. Of course this would require real investment from the government, contrasting the disinvestment that mass housing projects once witnessed. Political considerations are the real barrier, as realtors and landlords would surely seize upon the history of failed housing projects, and stoke fear of crime and dereliction that many American’s likely harbor around public housing. Unfortunately, our unwillingness to imagine a new form of government housing means that we are stuck with inefficient housing vouchers, lobbied by (and potentially doing more to benefit) landlords and realtors than the people who are the intended recipients.
Skipping Eviction Court

Skipping Eviction Court

Posted on by jabittan
“Roughly 70 percent of tenants summoned to Milwaukee’s eviction court didn’t come. The same was true in other major cities. In some urban courts, only 1 tenant in 10 showed,” writes Matthew Desmond in Evicted. An inherent power dynamic exists between the poorest renters in our nation and the landlords who rent to them. There are more poor people who are desperate for even the worst quality housing than there are low-rent units available for rent. This means that poor individuals are at the mercy of landlords as they compete for the worst of the worst housing units. As Desmond’s quote above demonstrates, eviction courts end up being another avenue through which landlords exercise unequal power over tenants.
Desmond continues, “Some tenants couldn’t miss work or couldn’t find child care or were confused by the whole process or couldn’t care less or would rather avoid the humiliation.” For a variety of factors, eviction court is harder to attend for those getting evicted than for those doing the evicting. Landlords who don’t work a typical 9 to 5 have more time and flexibility to attend court hearings than low-income renters who work strict schedules. Landlords have more ability to learn the eviction court process, familiarizing themselves with the right procedures and arguments to win cases if a tenant were to show up. Eviction court often doesn’t end up serving as an aid or a protection to low-income tenants who hit an unlucky spell or who had to face unreasonable living conditions due to landlord neglect. Instead, it reinforces the power dynamics that exist between landlords and low-income renters.
I understand that being a landlord to low-income renters is not easy. I recognize that landlords are property owners and need to make money on their rental investments. I can understand how frustrating it would be to have tenant after tenant fail to pay their rent, continuously providing excuses for why they need a break, and to deal with damage to rental properties that barely provide a profit. However, the power dynamics backed by legal structures like eviction court often set poor renters back and prevent them from ever finding stable footing. If the rental market is so terrible for landlords and creates such deep problems for  renters, then is it worthwhile to find a different mechanism, other than markets, to ensure low-income individuals have stable housing?
Clearly dense housing projects are not the answer, but something outside of slumlord arrangements needs to be done. Lacking stable housing makes it harder for the poor to work, harder to raise their children without their kids facing adverse childhood experiences which make their life outcomes worse, and harder for them to be functioning members of society. Skipping eviction court, Desmond argues, is a symptom of the broken down system for low-income market provided housing. One way or another, we have to innovate to help our poorest find some stability from which they can begin to live better lives without the humiliation and threat of constant eviction.
The Incredible Cost of Housing in the United States

The Incredible Cost of Housing in the United States

Posted on by jabittan
I live in a town that has experienced a major housing boom in the last 5 years. By car, we are only four hours away from San Francisco and by plane it is only an hour hop to the bay. Reno, Nevada is also located next to Lake Tahoe, one of the most beautiful alpine lakes in the world (if you don’t mind my little brag), and offers a lot of great hiking, skiing, and other outdoor activities. The city has become an attractive place for people in San Francisco, Oakland, or Sacramento who want to buy a more affordable home and have more space for families and outdoor living.
Unfortunately for many people in Reno, what is considered an affordable home to someone who has lived in the Bay Area or Sacramento is not what has traditionally been considered an affordable home to long-time locals and their families. The median price of homes in Reno has soared to over $500,000, placing homes out of reach for many long-time residents. However, with median prices for homes in the Bay Area being over $950,000, homes in Reno are somewhat of a steal.  The end result in Reno is a growing population, a housing supply that hasn’t kept up, and increasing housing costs.
I personally know people who have been renting apartments for roughly the same monthly rate as what I have paid for mortgages on houses. This soaring cost of rents is pushing people in the city into unstable housing situations, and for many, into homelessness. Reno is a great example of the challenges of sudden housing cost increases, but it certainly isn’t the only place where this is happening.
In his 2016 book Evicted, Matthew Desmond writes, “Families have watched their incomes stagnate, or even fall, while their housing costs have soared. Today, the majority of poor renting families in America spend over half of their income on housing, and at least one in four dedicates over 70 percent to paying the rent and keeping the lights on.” For close to a decade the cost of housing in many cities and regions of the country has been soaring at a time when many people were not seeing wages increase. This pushed people to have to decide between working more, moving, going into debt, risking homelessness, or sacrificing time with family, comforts, and necessities.
It is not possible to tell everyone living in a place where rent and housing costs are soaring to move to South Bend, Indiana where homes are more affordable. It is not reasonable to tell everyone to take on a second job, to get more roommates, and to simply downsize into smaller and more affordable places. The problem has to do with the amount of housing being constructed, limits placed on housing construction, and the increasing concentration of economic opportunities to large coastal cities. There are many factors and trade-offs that influence the decisions that are made with regard to new housing construction and zoning regulations, but we should remember that one outcome from failing to provide enough quality housing is homelessness. Homelessness can be temporary, cyclical, and chronic, and it has tremendous costs on society and the environment, and if housing costs can’t be brought down to a level where people are not spending half their income on rent, then it will persist and worsen.

Providing Meaningful Integration Opportunities for Our Youth

Posted on by jabittan
In The Complacent Class, Tyler Cowen writes about a decline in people moving in the United States. Rates of people moving across state lines, from one city to another, or even just across town seem to be on the decline. People seem to be less willing to take risks and put themselves in new places. As a result, we have fewer people from diverse backgrounds meeting each other and getting to know each other. For children, this means they are more likely to grow up around other children like themselves, and are not as likely experience different cultures, communities, and families. They are not likely to meet other kids from different racial, socioeconomic status (SES), and cultural backgrounds.

 

Cowen identifies one counterexample to this trend in his book, but notes that it is more of a temporary departure from the trend rather than a clear reversal. Writing about young college educated couples, Cowen describes a movement back toward cities, often living in artistic neighborhoods with interesting homes and fun opportunities to engage with city life. This gives cities new life and creates pockets of diversity, but only until the children of these young couples reach school age.

 

“When they have children and it is time to send the kids to school, they often move to the suburbs, or to a more expensive part of the same city, or to a different city altogether. The integration is a kind of temporary experiment in white lives, to be reversed once the next generation comes along. It is good that so many people are willing to make this temporary experiment but bad that it doesn’t have greater staying power or turn into a means of integrating young children.”

 

I have not spent a lot of time focused on housing policy or urban planning, but I think part of Cowen’s lament can be explained by a failure in both areas. I currently live toward the outskirts of Reno, Nevada, and live in a rather diverse neighborhood. Our home prices are not as out of control as other areas in Reno, and as a result we have a racially diverse set of people in our small out of the way neighborhood. However, it is hard to get to where we live. There are a only few main streets which all get very backed-up with traffic. We also don’t have a good park in our neighborhood, lack good sidewalks, and don’t have a lot of street lights. These factors diminish the attractiveness of the neighborhood and reduce the sense of (or opportunity for) community among the homeowners and renters here.

 

My wife and I are looking to move to part of town that is more accessible and easier for our work commutes. We hope to have a place with nice sidewalks for walking the dog and some open spaces for picnics or more dog activities. We have been looking into parts of town with higher home prices, which will likely result in us living in a more appealing, yet less diverse part of the city.

 

The failure of housing and urban policy is in the way we set up neighborhoods to encourage homogeneity. I understand from a housing developer that it is easier to have 3 or 4 relatively similar track-homes, however this creates a neighborhood where all the residents will have roughly the same income. Lower income individuals who cannot afford one of the houses will be pushed to less desirable neighborhoods and those who can afford to buy into the homogeneity will do so. Repeat this process enough times and you end up with the type of segregation Cowen described in the quote above.

 

I don’t want to approach the issue by saying that we will all benefit by making our neighborhoods more diverse. I don’t want to just accept that this is how things are and that “not-in-my-backyard” (NIMBY) sentiments are too strong for us to make changes. Instead, I want to be able to start a conversation that encourages us to live up to our belief that everyone deserves an equal opportunity.

 

Right now, there are children in my neighborhood who face a long commute if they want to be socially engaged with sports, music, or other extracurricular activities. These kids don’t have great places to go to play outside, and don’t have opportunities to connect with people near them to build connections to help them later in life. As a contrast to their experiences, I grew up in a neighborhood with ample space to play outside and be active, and I had neighbors who had connections that have helped me. If we truly believe in the idea of equality of opportunity, we need to find better ways to integrate young children and reverse the failures of our housing and urban development policies. These children deserve opportunities to maximize their lives and shouldn’t be locked out of opportunity simply because they grow up in parts of a city that don’t offer the same access to resources as children in other parts of the city.