Eight (unlikely and unpopular) policy options for addressing housing issues

After a recent conversation with colleagues prompted by reading together the sociological work Evicted as well as my own thinking about residential segregation, I wanted to put together a blog post summarizing possible policy solutions to housing issues. I am not optimistic but here are the possible options I see at multiple levels:

  1. Provide incentives for developers and builders. This is a common strategy across different government levels: builders and developers are given access to choice properties or are able to build higher-end housing if they build cheaper housing or provide monies that could be used for cheaper housing. A number of major cities, including Chicago, have such incentives. However, it does not seem to have made a major dent in the amount of affordable housing that is needed. I have heard that argument that governments have simply not offered big enough incentives – there is a tipping point where this could really push builders and developers to construct cheaper housing. I don’t think I buy this argument. Even though there is clearly a market right now for cheaper housing, why would builders and developers not try to build the priciest stuff they can to bring in more profit?
  2. Other market-driven solutions beyond incentives. I’m on the record here as skeptical that free markets can address issues of residential segregation and housing. Vouchers have their supporters since they theoretically would allow poorer residents to access areas of the housing market they otherwise could not. At the same time, introducing vouchers leads to other issues such as inflated prices/rents and negative reactions to those with the vouchers.
  3. Local government action. Municipal officials have a good amount of control over what can be built within their boundaries. However, they are constrained by (1) local residents who want to protect their community (examples of NIMBY in action here and here) and (2) limited budgets and revenues so they are typically trying to maximize property and sales taxes while minimizing use of social services. The biggest tool municipalities have are local zoning guidelines that often constrict what can be built (see recent suburban non-housing examples here and here). One way that wealthier areas exclude those who are not so wealthy is to not allow multi-family housing or set guidelines requiring larger lot sizes.
  4. Metropolitan action. Housing is really an issue that spans municipalities as the majority of people live in one place and commute to another for work (plus drive elsewhere for other amenities). Yet, metropolitan governance does not exist on a large-scale in the United States. Outside of a few regions, this is not a viable option: people in different communities do not have ways to collaborate nor would they necessarily want to. This is particularly true of wealthier communities. Residents would argue that this is the purpose of local government: local residents should get to make decisions about their own communities rather than handing off money and/or control to an outside body that wishes to damage their quality of life. See examples of how this can play out regarding affordable housing in one region and another involving transportation across a whole region.
  5. State governments. States could decide to impose regulations and guidelines but then they would have to overrule municipalities. This is difficult. For example, Illinois in 2004 an affordable housing guideline where every community was supposed to have a certain percentage of their housing stock within affordable limits. The guidelines could have been useful but they had no teeth and what counted as affordable was loosely defined. As this 2015 Chicago Tribune article suggests, wealthier communities did not submit to the guidelines and “Lee acknowledged that the agency has no authority to enforce the mandate if municipalities do not submit affordable housing plans.” Nothing really changed – and I’m guessing this was intentional.
  6. Federal government. Even though the United States has public housing, it was difficult to get off the ground and is not viewed favorably by many. That whole single-family homes fights communism thing plus the American ideal is everyone owning a home. Even if public housing had some successes, on the whole federal efforts have promoted white suburbs mortgages for single-family homes are subsidized. Results for federal initiatives involving vouchers, such as Moving to Opportunity, are mixed as many of the residents end up in similar poor neighborhoods and it is not clear if certain long-term outcomes such as education and employment are positively affected. Federal efforts consistently draw negative responses from conservatives. Operators in the housing industry – the National Association of Home Builders, the National Association of Realtors, lenders, and others – mobilize to protect the mortgage interest deduction and single-family homes. American Apartheid suggested we lack the political will to enforce the 1968 Housing Act and thus we still have discrimination in housing (from mortgages to real estate agents to landlords and more).
  7. The court system. Given the relative lack of action by local and state officials, housing and zoning cases do occasionally make it to state and federal courts. I argued a few years back that I could envision the Supreme Court approving inclusionary zoning (I’m not sure I still think this given the current makeup of the court). They can indeed take action and compel other governmental bodies to address issues. Some famous cases include the Gatreaux case in Chicago where a court ordered scattered-site housing and the Mount Laurel cases in New Jersey combating exclusionary zoning. The problem with these is that they require taking legal action in the first place, they can take a long time to litigate, and while the results may be compelling, they are still often viewed unfavorably and putting the changes into action are not easy.
  8. Non-profits and religious groups. Either sets of groups have limited resources – housing is a very expensive proposition on a large scale – or are more interested in other concerns. Groups like Habitat for Humanity may do good things but they can only build so many houses and not all communities or neighborhoods are welcoming to their projects. Churches, particularly big ones, could access a good amount of resources but housing is more of a structural issue that many conservative Christians may not want to get into.

All of these options are difficult to implement. On the whole, many wealthier suburbanites and urban residents do not want any kind of cheaper or subsidized housing in their neighborhoods or community.

If I had to pick two levels that provide the best opportunities, I might go with local government and the courts. Zoning guidelines are often developed by average citizens sitting on local committees. Get named to such committees and you can influence this process. The courts are a way to get around the unpopularity of introducing cheaper housing as such measure are unlikely to find broad support. At the same time, as noted above, the court route has its own challenges.

Perhaps the most daunting option in my mind is trying to influence the federal level. Does any political party talk seriously about housing? After all, one journalist captured this quote:

The former governor of the Bank of England, Mervyn King, told me this: “Most countries have socialized health care and a free market for mortgages. You in the United States do exactly the opposite.”

It will be hard to alter an entire system based on providing socialized mortgages for the middle-class and above.

My prediction: courts and SCOTUS would rule in favor of inclusionary zoning

Opponents to inclusionary zoning laws are hoping their case makes it to the Supreme Court:

Developers in California are taking their fight against the state’s inclusionary zoning laws to the U.S. Supreme Court, just as cities across the nation are increasingly committing to similar laws to address affordable housing shortages. The California Building Association opposes the soon-to-kick-in law mandating that developers discount a percentage of units in new housing projects for low-income families. They claim it constitutes an illegal “taking” of private property by the government and hope that SCOTUS justices will agree with them

California’s Supreme Court rejected this argument in June, pointing to an affordable housing crunch of “epic proportions” as the compelling reason for the law. The supply of housing that families of modest income can actually afford is so low that advocates in San Francisco are considering suing the suburbs to intensify density.

But the California developers say that forcing them to build below-market-rate units as a condition of obtaining building permits amounts to extortion. Developers in Chicago are also making this argument, and have similarly filed a lawsuit against the city’s inclusionary zoning laws. In California, the homebuilders are also challenging the idea that there is a connection between new housing construction and affordability. In an interview with CityLab earlier this month, Steve Joung, CEO of Pangea Properties, a company that rehabs old buildings into new moderately priced housing, said there is a connection—but not the one that inclusionary zoning proponents would favor…

If SCOTUS agrees to review the California case, however, it could slow momentum around such plans. And if SCOTUS ends up agreeing with the developers, it could drastically change the current calculus around how to increase the supply of affordable housing.

Though it is hard to know whether this would actually reach the Supreme Court, I predict the developers will lose in court. I anticipate this result due to two reasons:

  1. The United States has few other mechanisms for addressing affordable housing even as it is a pressing issue. The free market clearly does not work. The federal government doesn’t want to provide much housing. Non-profits or community groups can only provide so many units. For decades, there has been little incentive for developers or communities to provide cheaper housing. In contrast, they can make more money with more expensive housing units and promote and/or protect a higher social status.
  2. Prior court cases have determined that developers can be made to provide other things to local governments in order to be able to build. For example, Naperville was a pioneer in the 1950s in having developers pay for some infrastructure (sewers, roads, etc.) and then several decades later asking for donations of land or cash to help build schools. Both decisions were fought in court by developers and the courts ruled in favor of the municipality. Additionally, other decisions have gone against exclusionary zoning practices that try to promote bigger lots and more expensive housing units.

This will be interesting to watch.

How to get wealthier communities to accept affordable housing

This article discusses two tools to promote affordable housing in wealthier communities: regulations and lawsuits.

But Massachusetts has a work-around: A state statute, called 40B, allows developers to get around exclusionary zoning and build affordable housing in communities where only a small percentage of units are considered affordable. (A few other states have similar policies.) The statute, passed in 1969 and upheld by the state’s Supreme Judicial Court in 1973, has led to the construction of 1,300 developments throughout the state, containing a total of 34,000 units of affordable housing, according to Citizens’ Housing and Planning Association, or CHAPA.Projects built under 40B are almost always controversial: The statute was enacted in the first place because most communities outside of big cities didn’t permit multi-family housing, said Ann Verrilli, the director of research at CHAPA. Even with the statute, communities often spend millions of dollars in legal fees to try and stop the projects, Verrilli told me…

The experience of developers trying to build affordable housing in Massachusetts takes on added significance now, as housing advocates wait for a decision on a landmark case in front of the Supreme Court that concerns where low-income housing projects are placed. The case, Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, arose when a nonprofit housing group sued Texas, arguing that the state primarily distributed tax credits for low-income housing projects in minority-dominated areas. Inclusive Communities argued that doing so perpetuated segregation and violated the Fair Housing Act, which was passed in 1968 to prevent landlords, municipalities, banks and other housing providers from discriminating on the basis of race. The Supreme Court case centers on whether this discrimination has to be intentional in order to be illegal, or whether the Fair Housing Act also seeks to prevent policies that may not be intentionally discriminatory, but that have a “disparate impact” on minorities…

Many affordable housing units in the suburbs are a direct result of court cases, and even enforcement of those programs are lax. In 2009, Westchester County in New York signed a desegregation agreement and agreed to build and market hundreds of apartments for moderate-income minorities after a court found it had misled HUD by applying for funds that it said it would use to integrate housing, and then did the opposite. Four years later, the county had not complied with the provisions.

The shift from discriminatory race-based housing policies to economic ones in the 1960s and 1970s was an important one. I suggest reading David Freund’s Colored Property: State Policy and White Racial Politics in Suburban America. This is the logic still used today: better off residents argue that they worked hard to get to their higher quality of life and that others should have to do the same. But, since race/ethnicity and social class are inextricably linked, keeping out the lower classes through big lots, expensive properties, a lack of apartments, and other methods leads perpetuates residential segregation.

Two other relevant points from this article. First, affordable housing in the suburbs can be done well through good design and not high levels of concentration. Second, given the resistance to such projects as well as design guidelines that are helpful, still nowhere near enough affordable housing has been constructed. In one sense, the foot draggers of wealthy communities are winning because they have slowed down a process started by the courts in the late 1960s (the Gautreaux case) and 1970s (the Mount Laurel case). Plus, the wealthy can move easily if their properties are threatened.

Oddities in St. Louis County that led to tensions: significant revenues from fines, permissive incorporation laws

Radley Balko points out some interesting features of St. Louis County, Missouri that contribute to racial and socioeconomic disparities:

Some of the towns in St. Louis County can derive 40 percent or more of their annual revenue from the petty fines and fees collected by their municipal courts. A majority of these fines are for traffic offenses, but they can also include fines for fare-hopping on MetroLink (St. Louis’s light rail system), loud music and other noise ordinance violations, zoning violations for uncut grass or unkempt property, violations of occupancy permit restrictions, trespassing, wearing “saggy pants,” business license violations and vague infractions such as “disturbing the peace” or “affray” that give police officers a great deal of discretion to look for other violations. In a white paper released last month (PDF), the ArchCity Defenders found a large group of people outside the courthouse in Bel-Ridge who had been fined for not subscribing to the town’s only approved garbage collection service. They hadn’t been fined for having trash on their property, only for not paying for the only legal method the town had designated for disposing of trash…There are many towns in St. Louis County where the number of outstanding arrest warrants can exceed the number of residents, sometimes several times over. No town in Jackson County comes close to that: The highest ratios are in the towns of Grandview (about one warrant for every 3.7 residents), Independence (one warrant for every 3.5 residents), and Kansas City itself (one warrant for every 1.8 residents)…

Sales taxes are the primary source of revenue in most St. Louis County municipalities. Wealthier areas naturally see more retail sales, so the more affluent towns tend to be less reliant on municipal courts to generate revenue. In recent years a state pool was established to distribute sales taxes more evenly, but existing towns were permitted to opt out. Most did, of course. Perversely, this means that the collection of poorer towns stacked up along the east-west byways are far more reliant on municipal court revenues. That means they face much stronger incentives to squeeze their residents with fines, despite the fact that the residents of these towns are the people who are least likely to have the money to pay those fines, the least likely to have an attorney to fight the fines on their behalf, and for whom the consequences of failing to pay the fines can be the most damaging…

“Until only relatively recently, the state of Missouri had almost no rules for municipal incorporation,” Gordon says. “In just about every other state, when a new new subdivision would spring up in an unincorporated area, the state would say, ‘If you want public services, you need to be annexed by the nearest town.’ In Missouri, you didn’t have that.”…

“The state’s one requirement before giving you the power to zone was that you had to incorporate and draw up a city plan,” Gordon says. “That plan could be as simple as getting an engineer to slap a ‘single family’ zone over the entire development. Your subdivision is now a town.”

Some interesting individual cases – of both individuals penalized and municipalities acting badly – interwoven throughout the piece. But, a complex maze of issues: a number of communities with limited tax bases which leads to a heavier reliance on fines, hitting residents with multiple penalties, and incorporation laws that led to a lot of small communities that can set up their own systems and struggle (or if wealthier, thrive) on their own.

While it might be temping to these issues as separate and important issues in their own right, I was struck that this is the sort of system that arises when white and wealthier residents are determined to keep poorer and non-white residents out. This goal was widespread in the American suburbs after World War II but it sounds this mix of communities outside of St. Louis was able to put together a potent system for keeping blacks in other suburbs. Even with civil rights legislation, there are still plenty of “legal” means to limit or harass non-white residents in such a way to keep them out of white and/or wealthier suburbs.

San Francisco the country’s “largest gated community” because of limits on development

San Francisco is an expensive place to live and as one writer argues, this is due to intentional housing policies:

Or consider San Francisco, one of the least-affordable major cities in the United States. San Francisco’s population is about 825,000. If it had the same population density as my hometown, New York City, it would instead have a population of 1.2 million. Note that I’m referring to the population density of all five boroughs of New York City, including suburban Staten Island and the low-rise outer reaches of Brooklyn, Queens, and the Bronx. A San Francisco of 1.2 million would not be a Blade Runner–style dystopia in which mole people were forced to live cheek-by-jowl in blighted tenements. San Francisco at 1.2 million people would still be only half as dense as Paris, a city that is hardly a Dickensian nightmare.

One of the many benefits of allowing for more housing in a city like San Francisco is that it would likely lead to sharp reductions in carbon emissions. San Francisco is among the greenest cities in the United States, thanks largely to its superb climate. The same goes for San Diego, San Jose, and Los Angeles. The economists Edward Glaeser and Matthew Kahn have estimated that a San Francisco household spends one-fourth as much on electricity as a comparable household in Houston, as coastal Californians have far less need for air conditioning. To be sure, California does face serious environmental challenges. For example, that California’s water resources are stretched thin. But redirecting water resources from agricultural to residential uses would make an enormous difference, as would pricing water resources more intelligently. The environmental upside of supersizing San Francisco and other coastal California cities far outweighs the downside.

So what exactly is the problem? Well, the idea of a much denser San Francisco strikes many residents as appalling, not least because they fear that new development would threaten the city’s distinctive architectural character and the gorgeous views afforded by its stringent land-use regulations. While I love quirky Victorian houses as much as the next bobo, aesthetic considerations can’t justify the fact that San Francisco has become an oversize gated community. Rents in San Francisco are three times the national average, and they are rising at a fearsome clip. The housing crisis is even more severe in booming Silicon Valley, where the housing stock has barely increased over the last decade, despite the fact that the region has become a magnet for tech professionals from around the world. When skyrocketing demand meets stagnant supply, the predictable consequence is that housing costs soar and low- and middle-income families find themselves displaced…

In The Gated City, Ryan Avent observed that high housing costs in America’s most productive cities had forced large numbers of middle- and low-income households to either accept long, costly commutes, which eat into the ability of families to work and save, or to move to low-cost, low-productivity regions. Over time, this greatly impairs the ability of working- and middle-class Americans to climb the economic ladder. Moreover, when you move large numbers of people from high-productivity, high-wage regions to low-productivity, low-wage regions, you lower the productivity of the entire country. In other words, the rich homeowners who are fighting development in San Francisco and throughout coastal California are actually making America poorer. That’s not cool.

Thus, a gated community with economic gates rather than physical structures intended to keep people out. This is a similar story to that of many suburbs where exclusionary zoning practices intentionally limit development and push up prices to guarantee only certain kind of people can live there. Nothing is done explicitly in the name of class or race but an ongoing set of policies ensures housing availability only for some people.

The irony here is that this is notable in San Francisco, a city many might think would be attuned to these issues. This is also lurking behind the recent animosity between the buses sent by tech companies to take their employees to work and local residents. Yet, these concerns plague many important cities whether labeled with the terms gentrification or affordable housing or right to the city: how to balance or adjudicate the interests of powerful corporations, residents, and politicians versus those of average residents who are just trying to get by?

Continued lack of affordable housing in Chicago’s northern suburbs

Affordable housing is a problem throughout the Chicago region but here is a closer look at the current state of affordable housing in Chicago’s North Shore suburbs:

Under the law, the Illinois Housing Development Authority in 2004 identified 49 communities where less than 10 percent of the housing was deemed affordable. At least nine of them are on the North Shore, including Winnetka, Wilmette, Highland Park, Deerfield, Northbrook, and Lake Forest.

Reactions to the law varied in those communities. Highland Park aggressively pursued ways to make affordable housing available. Northbrook took a more casual approach and set general goals. In Winnetka, after years of heated debate, officials voted in 2011 to just stop talking about the issue…

But over the last ten years, the affordable housing that has been added “is a drop in a bucket,” she said.

“The economy is bouncing back, but a lot of these communities are still catering to the rich,” said Schechter.

A significant barrier for affordable housing in the North Shore is the lack of undeveloped land and the high price of properties, said Richard Koenig, executive director of the Housing Opportunity Development Corporation.

It doesn’t look to me like much has changed. The 2004 Illinois law hasn’t done much as many communities already met the requirements (based on a formula that may then be too lax), it has little ability to enforce anything, and there are still continuing issues of affordable housing. I think there is also some disconnect about who the affordable housing is supposed to serve. In my experience, when suburbs like those on the North Shore talk about affordable housing, they are more willing to do something when they are talking about public servants, like teachers, police officers, and firefighters, or people who have been in the community before, like kids who grew up in the suburb or retired residents, who have difficulty living there on limited incomes. These suburbs are not thinking as much about the retail or service industry or laborers that might work in their communities.

This shouldn’t be too surprising: given the opportunity, most wealthier suburbs will zone land in such a way that the housing prices and options cater to a wealthier crowd. Affordable housing is an issue that should be taken care of by other suburbs, such as more working- or lower-class communities.

Sociologist James Loewen continues to educate about sundown towns

Sociologist James Loewen has made a career of instructing Americans about the real racial history of the country. He continues to educate people about his findings laid out in Sundown Towns:

By not parrying the South’s attempts to further racism, the North placated the South. In fact, the South began building memorials because, in philosophy, they did win the Civil War. One reason northern states withdrew their efforts was the fact that they were already ridden with Sundown towns, especially in the Midwest. As stated before, Sundown towns gained their reputation from attempting to drive out their black population by dark.

“More than half of towns in the Midwest were Sundown towns,” Loewen said.

In fact, the reputation of former Dearborn mayor Orville L. Hubbard, whose statue stands in front of City Hall, comes from his dedication to maintaining a Sundown Town in Dearborn.

Remnants of Sundown Towns in Detroit are observable today in former residences such as the Orsel McGhee household located at 4626 Seebaldt Ave. The Orsel Mc-Ghees were an African-America family that attempted to moved into a segregated, white neighborhood of Detroit in 1944 but were forced to move after a lawsuit was brought against them.

Another case was the Ossian Sweet case, where Sweet, a black doctor, attempted to defend his home against a white mob that sought to drive him out of a white segregated community on Sept. 9, 1925. A 1985 Dearborn ordinance, passed by an overwhelming white majority vote, made city parks off-limits to non-residents, a measure created to prevent black would-be homeowners from moving in. Loewen also spoke about Anna, Ill., circa 1909. White residents, with the help of local government officials, began to force out blacks and Anna became an acronym for “Ain’t no N Allowed.”

One fairly recent, yet baffling, example that Loewen presented was the case of Villa Grove, Ill. Until 1999, Villa Grove sounded a siren every day at 6 p.m. to warn blacks to leave the city. Similar problems were prevalent in the 1970s despite the Supreme Court’s “Shelley v. Kraemer” ruling stating that state courts could not enforce a restrictive covenant. In this context, a restrictive covenant is a clause in a deed that limits to whom a property can be leased or sold.

Not too many communities are interested in sharing these parts of their history. Loewen’s findings are all the more shocking when he makes clear that this was common across northern communities, places that many Americans learn and think were more open to blacks than Southern communities.

Even though sundown towns are no longer with us, sociologists argue these more formal rules have been replaced by more informal means of keeping minorities and lower class residents out of suburbs. One common technique is exclusionary zoning, a practice where communities only allow larger and more expensive homes to be built. Without much affordable housing, employees in lower income jobs, ranging from municipal workers to retail and service jobs, often cannot live near their suburban jobs and then must also maintain a car, an expensive proposition in itself.