Why I’m skeptical housing will become a national political issue

Even as affordable housing is a concern in a number of places in the United States, there is little national political discussion of the issue:

Franzini is joined in this quest by a curious cast of fellow travelers who are committed to raising the political profile of the American housing dilemma. As home prices creep up everywhere from established tech hubs to traditionally inexpensive cities like Boise and Nashville—and as homelessness reaches epidemic proportions on the West Coast—a number of organizations from a diverse array of sectors have recently formed to push for housing policy changes at the highest levels of government. They’re frustrated by the lack of engagement on housing that national political leaders are offering. And they’re finding that, at least for the moment, the first order of business is just educating people about the seriousness of the issue.

Here are four reasons why I believe it will be very tough to have a national political discussion, let alone pressure for the federal government to act, regarding housing:

  1. Housing is local. Americans would like local governments to handle the issue as they prefer, particularly those with more resources, to live in places that can limit others of lesser status from moving in. Residents and smaller governments argue that they should not be forced to build housing that current residents do not desire or give money to less deserving people for housing.
  2. Americans historically do not have much appetite for significant federal involvement in public or subsidized housing even as they like socialized mortgages for single-family homes.
  3. The housing industry has significant influence, from the National Association of Home Builders to the National Association of Realtors, due to the importance of the housing industry for the American economy and particular American ideals about what kinds of housing are preferred. Affordable or cheaper housing might generate fewer profits.
  4. Opponents to federal action will argue that Americans can have cheaper housing if they (a) are willing to move to metro areas that have cheaper housing (and plenty of them exist) and (b) truly take on the local power brokers that usually do not want the working and middle classes to access their wealthier neighborhoods. These arguments are plausible enough (though with issues) for a number of participants in the discussion.

A number of these reasons involve ideas about what should be part of the American Dream as well as perceptions about who can access it (so it involves race and social class).

A lottery for limited affordable housing, part two

A story about a lottery for 95 affordable housing units in San Francisco discusses the technique of using a lottery to award limited goods and how the lottery happens:

Lotteries that allocate scarce resources are not set up to distinguish the neediest from the merely needy. Rather, they reward random chance, which is a distinctly different notion of what’s “fair.”…

For years, San Francisco conducted public lotteries in a bingo drum. But the raffle tickets were always getting stuck in the drum’s crevices. The city also tried a big box. People couldn’t see what was happening inside, however, and tickets got stuck under the lid.

This exercise — rolling the drum, shaking the box, inspecting for trapped tickets and repeating — lasted hours on a building the size of Natalie Gubb Commons. Ms. Torres would bus around town, picking up applications, dropping off applications. Lines would wrap around some developers’ offices on deadline day….

Last year, San Francisco moved the whole process online. Renters can now more easily apply, which means that more do, and the odds have grown longer. But the system is more humane. The parts of the process where it has been most awkwardly apparent that people in need are competing are now less visible. The city still holds public lotteries, but they are primarily pep talks.

Three things jumped out at me about the lottery process and how it is presented:

  1. On one hand, a lottery can seem fair in this situation. How else would would limited public goods be fairly split up? We know that in regular life, having more resources and better connections tends to lead to more opportunities. For people with fewer resources and fewer connections to powerful people, isn’t a lottery fair?
  2. On the other hand, having to go through a lottery for something as basic as an affordable place to live seems crazy. The documentary Waiting for “Superman” used the lottery for a good school very effectively in its plot. By starting and end with the image of honest American families simply trying to get a good education for their kids through a lottery, it all looks absurd. The lottery itself is an excellent argument for why more affordable housing is needed.
  3. The actual mechanics of lottery are intriguing. A public drawing has a lot of potential for drama, both with images of excitement and disappointment. (Again, Waiting for “Superman” played this up.) But, actually having a fair system of drawing names is more difficult than it looks. And how can the applicants be reassured that it is an effective process? The shift to online makes some sense and yet I could imagine the process now looks even less transparent. How do we know the online system isn’t rigged? Is it truly random? What if the algorithm is biased?

I know waiting lists are commonly used for housing spots – and this has the advantage that Americans often like that people should at least have to put effort into getting on the list – but a lottery has both strengths and weaknesses.

A lottery for limited affordable housing housing, part one

Affordable housing is in short supply in numerous American cities and an example of a lottery for 95 affordable housing units in San Francisco illustrates the issue:

Subsidized housing is often rationed this way, by lottery. Many apply, few win, most are disappointed. The process is meant to be more fair than first-come, first-served. But lotteries make literal a deeper unfairness. For homeowners, the mortgage interest deduction is available to anyone who qualifies. For poor renters, there is never enough housing assistance to go around…

Amid all the wealth in this neighborhood, a one-bedroom at Natalie Gubb Commons would rent for around $1,000 to $1,200 a month, a three-bedroom up to $1,700. Apartments next door were three times as much.

That discount is possible through a mix of resources. Mercy Housing, the project’s nonprofit developer, effectively got the land free as part of a city requirement that the neighborhood’s redevelopment include affordable housing. The market-rate developer next door was subsidizing the project, along with city funds. Revenue from the state’s cap-and-trade emissions program helped. And Mercy used the backbone of nearly every affordable housing project in America, federal Low-Income Housing Tax Credits

But the tax bill’s implications for poor renters will be more profound. The odds are likely to grow worse than these: Last year, 53 households applied per each new affordable unit at The Meridian in Los Angeles; 84 for every home at Parcel 25 in Boston; 391 for each unit at Stargell Commons in Alameda, Calif.; 979 for every home at Our Lady of Lourdes Apartments in New York.

This is a reminder of both the acute need for affordable housing in more expensive cities as well as the limited approach to the issue from the federal government. Places that are often held out as the promise of America for their cultural diversity as well as their economic potential – such as San Francisco, New York, Los Angeles, etc. – are often difficult places for those who are middle-class and below.

Additionally, the federal government has never wholeheartedly committed to helping provide housing for all. As the article notes, American housing policy subsidizes single-family homes. This has been an intentional policy choice for decades, beginning before the post World War II suburban boom and then continuing through mass suburbanization as well as into the twenty-first century. It would be difficult to have a direct national political conversation about this since it tends to happen through elected representatives who rarely discuss housing and through various government agencies. Also, it is hard to know whether all those people who have moved to single-family homes in the suburbs have done so because that is what they truly wanted among numerous equal options or they were pushed to some degree by the political and cultural leanings in those directions.

There is another intriguing aspect of this article: both how the lottery is discussed as well as how the lottery is conducted. More on this in a post in a few days.

Fighting homelessness without building homes

A piece at McSweeney’s lists reasons residents do not want to build more housing near them:

Ending homelessness doesn’t mean building more homes because this town is full of homes already, especially mine, which is a single-family mini-mansion on an acre lot that I inherited from my parents and/or managed to purchase with the kind of job and bank terms and economic equality that don’t exist anymore for anyone and only ever really existed for well-educated white Americans. Either that or it’s a magnificent luxury condo with expansive views that I don’t want marred by more luxury condos or — god forbid — affordable housing.

Every room in my Instagram-worthy abode is either filled with clutter or rented out nightly to hipsters from another gentrified, monotone city also suffering from a homelessness crisis — this is a national epidemic, after all. I’m a good person, a generous person, and what made me the person I am is having to work hard for everything my parents gave me, and everything I will, in turn, give to my children.

Listen, I know that the unholy concentration of wealth in America is a big, big, problem, but so is having to constantly say no to people asking for change as I whizz into Whole Foods in my Tesla or Prius (depending on how my startup investments pan out). What’s the point of having all this money if I have to feel bad about it? Also, has anyone actually verified that the homeless people claiming to be veterans aren’t just pulling some elaborate fraud? I’ve never actually met a veteran and I forget for like, decades at a time that the military even exists because the bubble of privilege where I reside is literally impregnable, but I’m suspicious nonetheless.

I know we need more housing, but I was here first and I’m not giving up even one blade of grass on my water-guzzling, pesticide-leaching lawn or a single burner on my twelve-burner Viking range that I never actually use to house another human soul. Tough luck, homeless people. You and your allies can call me names but I won’t hear you over the lushness of my climate-inappropriate rose bushes and the stucco walls I’m paying some desperate immigrant under the table to build for me on the cheap before I low-key call ICE and have them deported.

I’m not sure this has to be tied to addressing homelessness; many communities and communities do not want to support cheaper or affordable housing. The public arguments may be couched a bit differently than what is listed above – such housing could affect the character of the community, lower property values – but one does wonder how much of what is written above is what is really behind the opposition.

Using preservation to maintain affordable mobile homes

One architect and preservationist suggest mobile homes deserve the attention of the preservationist community:

We talk about affordable housing all the time, as we should, but we never talk about mobile homes or mobile home parks—even though they’re primarily used as affordable housing. When we talk about affordable housing and historic homes as preservationists, we really need to start including mobile home parks in those discussions. They fill a critical gap [in housing opportunities], but they’re also endangered…

[Since most mobile home parks are privately owned], they become too expensive to maintain. To keep them affordable, their original infrastructure usually remains in place while their owners [find temporary solutions for repairs] until the entire mobile home park needs to be replaced. They’re sold off because it’s just too expensive to maintain and the owner is no longer making a profit; these are private places and businesses, and that is a legitimate concern.

Sometimes, mobile home parks are zoned out of their city or municipality because they aren’t wanted. That trend began in the 1950s and ‘60s, when suburbs were growing exponentially, and it continues today. When owners don’t want to own their mobile home park anymore, they sell them to developers who would rather build condos or other forms of housing that don’t have limited profit margins…

In preservation circles, I think it’s particularly challenging because mobile home parks don’t meet any current measure of architectural integrity. They are very flexible spaces, and they could be upended at any time. It would be exceptionally difficult to put them in the National Register, the way it’s set up now, but that ultimately opens up opportunities for the future. I think we need to change the way we measure and create historic places.

I have been under the impression that preservation is typically sought for (1) older and (2) architecturally significant buildings. Mobile homes could fit both of these categories: a number of mobile home communities span decades and they are a unique American form of housing. At the same time, I cannot imagine too many neighbors or communities would be thrilled if mobile home parks were given a longer lease on life because of being tabbed for preservation. Using preservation to keep affordable housing units seems to be a delaying tactic; it may protect units in a time when many metro areas need a lot of affordable housing units yet very few places would want even more mobile home units.

This argument gets at bigger issues: (1) what buildings are worth preserving? and (2) who gets to make these decisions? According to opponents, historic preservation can stall normal processes of redevelopment. According to supporters, preservation can protect significant edifices that may be demolished in the name of “progress.”

Polarization: California housing bill does not make it out of committee

It is unclear how California intends to move forward in providing cheaper housing to residents after a YIMBY (“yes in my backyard”) housing bill did not make it out of committee earlier this week:

On Tuesday night, legislators killed SB 827, which would have allowed the construction of apartment buildings up to five stories tall near every high-frequency mass transit stop in the state.

SB 827 sparked a spirited debate about how the state should address its housing crisis. Its lead sponsor, State Senator Scott Wiener, argued that wresting zoning decisions away from local municipalities and forcing communities to build more densely near transit was the best way to both ease housing affordability in cities like San Francisco and help the state hit its ambitious environmental goals. Supporters of the bill—dubbed YIMBYs, for “Yes In My Backyard”—took on residents from wealthier, single-family home neighborhoods, who deployed the traditional NIMBY argument that the bill imperiled neighborhood character and would lead to traffic and parking woes.

The NIMBY side had some surprising allies, among them the Sierra Club and advocates for “Public Housing in My Backyard,” or PHIMBYs, who argued that the law would enrich developers and exacerbate gentrification in low-income minority neighborhoods…

Wiener also acknowledged how ambitious the bill was, and said he was “heartened by the conversation it has started.” Indeed, the bill was much-discussed nationwide. Vox’s Matthew Yglesias called SB 827 “one of the most important ideas in American politics today,” and the Boston Globe’s Dante Ramos said the bill could be “the biggest environmental boon, the best job creator, and the greatest strike against inequality that anyone’s proposed in the United States in decades.”

There are plenty of polarizing issues in America today but few would divide people so deeply than the issue of housing. There are several reasons for this:

  1. It is closely connected to race in the United States. While legally discriminating based on race or ethnicity in housing has been illegal for 50 years, residential segregation by race and ethnicity is alive and well.
  2. It is closely connected to social class in the United States. Those with resources do not want to live near those without resources. This can disrupt groups that commonly stick together, such as Democrats who might generally be more in favor of affordable housing but not necessarily when it means providing more housing in wealthier areas.
  3. Some of these polarizing issues are more abstract for many people but housing is an everyday issue that affects who you interact with, school districts, what kids see as normal, communities, parks, safety, and property values. Those who have choices about where they can move typically want those places to stay “nice.”

If California cannot figure this out at a state level, are there other states that can step up and provide affordable housing?

(Of course, the state level may not be the best level at which to address this. However, if it is left to municipalities, the wealthier ones will simply opt out and leave the issue for other communities to address.)

Comparing “Trickle-Down America” (urban) and “Stagnant America” (rural)

Recent comments from Hillary Clinton praising American “places that are optimistic, diverse, dynamic, moving forward” leads to this comparison between “trickle-down” and “stagnant” Americas:

Over the past 40 or so years, the U.S. has been fragmenting into two parallel societies, which I’ll call Trickle-Down America and Stagnant America. Each one looks upon the other with suspicion and hostility. Trickle-Down America is the America of our biggest metropolitan areas, and it is defined by comparatively high levels of density, diversity, and economic inequality. Importantly, the richest people in Trickle-Down America are typically white, while the service-sector workers who enable them to work longer hours are disproportionately brown and black. Stagnant America can be found in rural regions, small cities and towns, and outer suburbs across the country. This America is largely white and relatively equal, though it too is scarred by poverty, particularly among Hispanics and blacks. America’s most and least educated workers are concentrated in Trickle-Down America, while Stagnant America is home to most of America’s working- and middle-class white voters.

Is Trickle-Down America morally superior to Stagnant America? A good starting point is to reflect on the sources of Trickle-Down America’s wealth. In New York City, my hometown, the local economy has long been dominated by the financial-services sector, which has grown mightily in recent decades. Has the financialization of the U.S. economy been an unadulterated good for the country as a whole? There are many thoughtful people who’d argue otherwise. Indeed, some argue that rents flowing to the financial sector have badly distorted the U.S. economy, and have contributed to the devastation of tradeable sector employment in Stagnant America. Corporations headquartered in America’s cosmopolitan cities have profited immensely from the emergence of a globalized division of labor. Yet many of these same multinationals have pioneered tax-avoidance strategies that have made it harder for the federal government to compensate those who’ve lost out with globalization, all while deploying their considerable influence to get the U.S. government to pressure other countries to adopt intellectual-property protections that serve their interests. And then there is the federal government itself, and its vast, growing army of private administrative proxies—contractors, non-profits dependent on public subsidies, and the like—that has helped make Washington, D.C., and its environs one of the country’s most affluent and educated regions. It’s hard to disentangle exactly how much of Trickle-Down America’s success relative to Stagnant America is a product of straightforward rent-seeking. I certainly doubt that it accounts for all of it, or even most. But surely it accounts for some, and that should give Trickle-Down America’s champions pause.

One important thing to keep in mind is that Trickle-Down America is, overall, characterized by more stringent land-use limits than Stagnant America. These limits have raised housing costs in affluent coastal regions, which has redounded to the benefit of incumbent homeowners. Yet high housing costs have deterred inward domestic migration while driving out large numbers of working-and middle-class residents…

For now, though, Trickle-Down America’s affluent professionals find themselves in a sweet spot, which surely accounts for some of Clinton’s triumphalism. The food is better. Beautiful old houses are being renovated everywhere you turn. An abundance of low-wage immigrant labor adds diversity and dynamism to cosmopolitan cities, yet the noncitizen working class isn’t in a position to press for a more egalitarian social order—one that could prove discomfiting for local elites. Best of all, opposition to Trump is helping to obscure simmering discontent over Trickle-Down America’s business model.

This is a different way of categorizing the stark urban and rural political divides of recent years. Yet, it also highlights a key issue simmering within the leading cities and metropolitan areas that are so important to American life: who really benefits in the major cities? Are the high levels of innovation, growth, development, and cultural excitement accessible to all urban residents or do the spoils disproportionately go to the top?Inequality cuts across multiple strata of society. Certainly there are stark differences within cities as well as between urban and rural areas. I’ll add a third area that complicates the story above (though these are likely lumped in with the Trickle-Down America segment): the inequality present in American suburbs. Even as the majority of Americans live in suburbs and seem to have achieved the American Dream of suburban life, life outcomes can differ dramatically across suburban communities.

What makes this suburban inequality more interesting for the realm of politics is how is affects voting: areas generally closer to the big city or with demographics more like the big city vote Democrat and wealthier communities and areas further out in regions vote Republicans. Will these same sort of voting cleavages arise in rural areas in cities as various inequalities receive more attention?