SOLVING THE HOUSING CRISIS

By Jason Sibert  

The subject of housing should be at the top of the list of priorities for the incoming Biden/Harris Administration.  There is no guaranteeing that it will be a priority, despite the fact that the middle and low ends of the income spectrum are being priced out of both the buying of homes and affordable rental housing. Thousands in our cities, especially the more expensive cities, are homeless, as San Francisco, Los Angeles, and New York all have large homeless populations.  

Radical urban theorist Peter Marcuse, along with sociologist David Madden, penned a book called In Defense of Housing (2016) that provides a wonderful guide to the problems we currently face. The two asked us to rethink our attitude toward housing. The book makes a very important point that should worry any good social democrat: “there is no United States state where a full-time minimum wage worker can afford to rent or buy a one-bedroom dwelling.” This is particularly disturbing because the non-traded domestic service sector employs a great number of the members of the working class, and they make at or near minimum wage. The housing crisis is even worse in the most expensive parts of the country.     

The basic conflict Marcuse and Madden addressed is the struggle between the house as a mode of profit production – real estate – and the house as a home. The housing crisis came about because housing was defined as an investment that outweighs all other claims about it. In Defense of Housing covered the partial decommodification of housing in the 1930s when governments on both sides of the Atlantic invested in public housing, but in the second half of the 20th century, real estate became a global force – the main factor driving our economy. This helped build the fortunes of people like President Donald Trump. This hyper-commodification produced a lot of inequality in a time of stagnating wages.  

In Defense of Housing analyzed how the state uses four ways to reinforce hyper-commodification of housing to make housing an oppressive force. First, the state deregulates mortgage lending, ends rent control and privatizes public housing in the U.S. and the U.K. Second, the state allows financialization of housing such as banks pooling mortgages and selling them as “liquid assets.” Third, the state allows globalization of housing with foreign investors speculating in U.S. housing or buying luxury housing as an investment which were never meant to be lived in. Fourth, the state allows gentrification to increase landlords’ profits with huge rent increases. Mayors often argue that more housing will solve the housing crises, but Marcuse and Madden point out that this will not work if housing is a commodity.  

Housing has sparked activism in our country before. The New York radical immigrant labor movement starting in 1916 created 40,000 units in non-profit cooperative housing. The 1917-1920 New York rent strike terrified the city’s real estate establishment who then allowed the first eviction regulations. During the 1930s and 1940s, U.S. housing activists allied with leftist political parties and won national rent control, national building of public housing, and building maintenance.  One can see something similar brewing today in the growth of tenants’ unions around the country.  

Liberal nationalist thinker Michael Lind also gives us some wonderful ideas on the housing crisis in his story “Why This Man was Prescient (Hint: It has to do with Your Rent).” He points out that spending on rent, as a percentage of income, increases as income goes down. The rule of thumb is that one should not have to spend more than 30 percent of one’s income on rent. However, Lind points out this is not possible for the large number of people who work for low wages.  In addition to public housing, as mentioned in Marcuse and Madden’s book, low-income people are helped in another way. There are housing choice vouchers and the fact that the government gives housing developers tax credits to develop affordable housing units – the Low-Income Housing Tax Credit. Lind cites the bipartisan policy of pushing home ownership instead of renting, including the policy of selling houses to those with no jobs, assets, or income  

In addition, Lind advocates a housing policy that would help the middle-class and poor because universal programs that help large segments of the population are more popular – think Social Security and Medicare! A new housing policy would not discriminate between owners and renters. Lind proposes a universal federal tax credit that would help the middle-class and poor. This would keep political conservatives from pitting the middle-class against the poor in the name of the rich. This tax would be refundable like the Earned Income Tax Credit and the Child Tax Credit, meaning people too poor to pay income taxes would receive checks from the federal government.  

Some form of federal regulation would be needed to keep landlords and home sellers from raising their prices to compensate for the size of the tax credit. Commissions on tax reform have often talked about replacing the current tax credit for mortgages -which helps many middle-class and upper-middle class people buy homes but do little to help the increasing number of low-income people – with a more simple tax credit. In addition, homeless shelters should be constructed for those who have no money at all.  Lind’s ideas provide some concrete steps on how to stop the commodification of housing, the goal of Madden and Marcuse.

I myself penned a story with some relevant ideas in 2013 called “Addressing Housing Affordability Using Cooperatives.”  According to the National Association of Housing Cooperatives (NAHC), cooperative housing is defined as when “people join together on a democratic basis to own and control the housing or community facilities where they live.” Each month those who live in a housing cooperative pay their share of the expenses while sharing the benefits of the cooperative. According to the NAHC, 1.2 million families live in cooperative housing in the United States. I suggested the formation of a Cooperative Housing Authority, with funding from Fannie Mae, that would purchase old houses and turn them into coop housing.  Coop housing could also be built from scratch. Such housing is more affordable to working people because the profit motive is eliminated. Such housing can come in apartment form or in the form of single-family housing.  Some will question the affordability of such a proposal.

But, then again, housing is not the only area where we see hyper-commodification. The defense industry is another area where it is rampant. Defense should be about defending our country, but we cannot have a defense that deforms the society it is trying to defend.  Felix Salmon and Hans Nichols’ story “The Defense Industry Worries About Biden” tells us much about how the defense industry operates.  The story points out that the biggest defense companies – Lockheed Martin, Northrop Grumman, Raytheon and General Dynamics – usually see revenue increases under Republican administrations and that those companies are worried that a Biden Administration will not be as generous to them as the Trump Administration.  The four defense contractors are now collectively worth $304 billion. That is down $70 billion, or 19 percent, from the February 2020 high. These companies are quite naturally pushing an agenda where they draw as much revenue as possible!  

There is little discussion in our country about what type of defense is needed or not needed. The discussion is controlled by the defense companies that provide money for political campaigns and that purchase advertising in our media. What we have is a huge military-industrial complex that produces profits for a few companies and a defense structure designed to fight the Soviet Union in a world where it does not exist. We really need to rethink the meaning of security.

Let us allow ourselves to be inspired by the literature of the New Left. The Port Huron Statement, the document created by Students for a Democratic Society, called for participatory democracy where everyone becomes engaged in issues that affect all people – in civil rights, in political accountability, in labor rights, and in nuclear disarmament. Let us be involved in a movement to bring both housing and defense back to the people!  

 Jason Sibert is the executive director of the Peace Economy Project in St Louis. 

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