Podcast: US election special #3 – the housing crisis (part 2)
In the latest ourVoices documentary, we explore how social movements are reshaping the political discourse on housing in the context of the 2020 US election.
ourVoices is a new podcast from openDemocracy's ourEconomy section which explores the crisis of our economic system – and promotes intelligent debate about what should replace it.
The podcast brings together some of the most exciting thinkers from around the world, and gives a voice to those who are putting new economic ideas into practice from the ground up.
This episode is the second part of our documentary on the US housing crisis. In part one, we explored the history of discrimination and privitization that has shaped federal housing policy since the 20th century.
In part two, we consider the failure of existing policy frameworks to deal with the crisis, and examine how popular movements are proposing radical new policies that are reshaping the political discourse on housing in the US.
This unprecedented public health emergency has stopped the global economy in its tracks – sparking a downturn on a scale not seen since the Great Depression.
In the last six months, the US economy has seen its sharpest decline since records began – with over 57 million Americans filing for unemployment relief.
Amidst the wreckage of this crash, America’s housing crisis is more immediate and real than ever.
As millions are laid off around the country, there is not a single US state where the number of affordable homes to let matches the number of low-income people looking to rent.
Where people can find shelter, three quarters of all extremely low-income families pay more than half their income in rent.
With eviction moratoriums now lifting across the country and Congress stalling over a new relief package, recent reports suggest that up to 43 million Americans could face eviction in the coming months.
In part one of our documentary podcast on the US housing crisis, we explored how racial discrimination is a foundational theme in the history of US federal housing policy, and examined the negligence of Trump’s tenure in the context of decades of disinvestment and privatization by successive administrations.
In part two, we’ll consider the failure of existing policy frameworks to deal with the housing crisis, and examine how popular movements are proposing radical new policies – reshaping the political discourse on housing in the midst of the 2020 US election cycle.
[Clip: Trump at Davos (source)]
Freddie Stuart: Even before the coronavirus hit, the US housing crisis was one of the worst in the developed world. On any single night during 2019, over half a million Americans were without a home; nearly 200,000 people slept rough on the nation’s streets.
In the face of this humanitarian crisis, the existing policy frameworks have fallen woefully short.
The Section 8 system for housing vouchers (as amended by the 1974 HUD Act) is still the major program tasked with providing shelter to tenants in a chronically unaffordable rental market.
Also known as the Housing Choice Voucher program, Section 8 assists households by distributing subsidies to private landlords, incentivizing them to rent their properties to qualifying low-income occupants.
If participants are approved, selected and succeed in finding an apartment or house, their local housing authority then starts sending payments directly to the relevant landlord.
Despite being touted as the major program to support renters, these housing vouchers are only intended to assist those classified as “extremely low-income”.
And even amongst this bracket, less than a quarter actually receive support.
Before the pandemic tipped the US economy into an unprecedented recession, Section 8 assistance was being administered to around 2.5 of the 11.8 million people deemed “extremely low-income”.
Underfunded and flooded with demand, a report by the National Low Income Housing Coalition in August 2019 revealed that the median wait for a tenant on the list for housing vouchers was around 1.5 years, with some people waiting over 7 years to receive support.
The same report also found that over half of all local waiting lists had been closed to new applicants.
Whilst Section 8 vouchers are failing to provide affordable rents on an adequate scale, the system for actually constructing new low-income housing units has been consistently outsourced to the private sector.
Since the “welfare reforms” of Bill Clinton’s second term, the Faircloth Amendment has limited the total number of government-owned public housing units, by law, to its 1999 level.
Instead, severely dilapidated public housing has been demolished via the Hope VI program, and sold off to private developers through the more recent Rental Assistance Demonstration (RAD) system.
With only 2 million units of legacy public housing remaining, in a country of 330 million people, successive administrations have turned to government subsidies to “incentivize” low-income construction in the private sector.
In this regard, Reagan’s system of Low Income Housing Tax Credits remains the dominant policy – encouraging banks and investors to build affordable housing through billions of dollars dolled out in financial aid.
This dependence on private partners has proven radically insufficient.
In 2017, federal tax credits provided just $8 billion across the country as a whole – nowhere near enough to make a significant contribution to the housing market.
Even as demand for housing has intensified, the number of new units actually created under the LIHTC scheme has fallen - from over 70,000 per year in 1997 to less than 60,000 by 2014. Over the same period, the public cost of the program has increased by 66%.
With the federal government’s ability to expand public housing blocked by law, the Low Income Housing Tax Credit program has become an egregious corporate giveaway to select housing developers via an extensive network of DC lobbyists.
Whether it’s Section 8 attempting to stabilize unaffordable market-rate rents, or the LIHTC scheme funding major developers, the neoliberal policies deployed by successive administrations have consistently failed to address the dire crisis in US housing.
Aaron White: Despite President Trump’s initial attempts to downplay the virus, it became evident through the early months of 2020 that the United States faced both a public health crisis, and a crippling economic collapse.
With the World Health Organization formerly announcing Covid-19 as a worldwide pandemic at the beginning of March, Congress rushed to pass two early bills to combat the spread of the virus.
On March 6th, the day that worldwide cases surpassed 100,000, Trump signed into law an $8 billion bill – including $3 billion for private healthcare companies to conduct vaccine research.
Five days later, the Families First Coronavirus Response Act was introduced in the House, providing funding for paid sick leave, increased Medicaid and free COVID testing – as well as expanding food assistance and unemployment benefits.
[Clip: Pelosi on the CARES Act (source)]
On March 25th, with the US fast becoming the epicenter of the pandemic worldwide, Congress reached a bipartisan agreement to sanction the largest “stimulus package” in American history.
The Coronavirus Aid Relief and Economic Security Act included $300 billion in one-time cash payments to individuals and an additional $260 billion in unemployment relief. It also created the Paycheck Protection Program, providing forgivable loans to small businesses, and setting aside a $500 billion fund for large corporations.
With the US housing system already in a state of emergency, the CARES Act also allocated money for the department of Housing and Urban Development, in an attempt to assuage an unprecedented tidal wave of evictions.
A moratorium on foreclosures for those with federally-backed mortgages was introduced, alongside a short-term eviction ban covering the roughly 28% of renters in federally-assisted homes.
In addition, CARES also gave those with federally-backed home loans the right to request forbearance – deferring or reducing payments for up to a maximum of 180 days.
[Clip: Pelosi on the HEROES Act (source)]
With the ban on mortgage evictions lifting at the end of August, and the moratorium on federally-assisted rental homes already expired, Congress has since stalled over the introduction of new measures.
In May, the Democrat-controlled House of Representatives passed its own legislation, the Health and Economic Recovery Omnibus Emergency Solutions Act (HEROES), which set out the potential expansion of existing moratoriums – extending them for up to a year, and widening the bracket to cover all renters and homeowners.
Denounced by Republicans as “unrealistic”, and by many progressive Democrats as insufficient, the $3 trillion HEROES act was killed in the Senate under the auspices of majority leader Mitch McConnell and President Trump.
Now, with the Senate adjourned in a pro forma session until after Labour day on September 7th, there is little immediate chance for relief for desperate tenants in an increasingly precarious market.
The $600 weekly unemployment checks provided under the CARES Act ended on July 31st, and as over 30 million people on jobless benefits now await new, reduced, assistance via executive order – the threat of mass evictions is mounting.
While America’s wealthiest 12 individuals have increased their wealth by over $283 billion since the start of the COVID outbreak, millions of people are struggling to make ends meet.
Freddie Stuart: As America is plunged into the worst economic and eviction crisis since the Great Depression, there has been a resurgence of grassroots activism demanding a systemic overhaul of federal housing policy.
Following decades of government programs that intentionally prevented the renovation and erection of public housing – grassroots activists and their political allies have increasingly located the commodification of housing for profit at the heart of the current crisis.
In the wake of the 2008 financial crash, international social movements such as Occupy, introduced wealth inequality and structural critiques of our economic system into the political discourse.
Daniel Cohen, an assistant professor of sociology at the University of Pennsylvania, and co-author of the book A Planet to Win: Why We Need a Green New Deal – explains how these movements demonstrate a clear response to material insecurity and inequality in urban centers.
Daniel Aldana Cohen: You have Occupy Wall Street, you have the Arab Spring, you have the Gezi Park uprising in Turkey, two or three years of the Movement of the Squares and in many ways they were revolts against inequality and the declining quality of life in urban spaces that bring together a broad of tent – of what outside the US and Latin America and elsewhere we think of as the popular classes.
I think it would be correct to see these protests against financialization, protests against the increased cost of living, and movements for a more egalitarian, higher quality of life, of more collective wellbeing in urban spaces. These are profoundly urban movements. This made a huge impression at the time, The Economist Intelligence Unit released a report saying that these protests were systematically diminishing the quality of life in the world's biggest cities, which I think these movements can take as a badge of honor.
And that cycle of protests ended, but the underlying conditions which are really driven the financialization of housing and of urban land which makes it impossible to have sufficient park space, sufficient social care and sufficient housing – those underlying conditions did not change. And so now what you see with this new wave of urban explosions is the politics are somewhat different, but fundamentally the demands are very similar.
If you look at what sparks Gezi Park, the destruction of a park; if you look at Chile, 30 cents too many; that looks a lot like the bus protests in Brazil, although in Chile with an even more progressive character right now; I think what you see is that the movement of squares confined to two or three years was wrong. They are just movements of greater and lesser intensity in the struggle for common space in cities.
Freddie Stuart: As the banks that practiced criminal behavior and foreclosed on millions of Americans were bailed out (without a single executive going to jail), the burgeoning populist rage became directed not just at an unfettered capitalist system – but the political insiders pushing corporate interests, especially those with close ties to the real-estate industry.
Speaking directly to grassroots movements on the ground, progressive candidates refusing corporate PAC money, have been competing in local and national elections – running on platforms that explicitly call for transformative changes to housing policy.
We spoke to Samelys López, a Bronx housing activist with the Democratic Socialists of America and former congressional candidate in New York’s 15th district:
Samelys López: There are a lot of children that are homeless; there are a lot of predatory tendencies in the real estate developer community – and we basically need to decommodify this whole system.
One of the conversations that needs to be had, that we're having on our campaign, is the importance of taking big money out of politics, and challenging people that are running for office to say, if you are running a race that's for the community, then you’re not going to accept certain kinds of donations. And right now in this race in particular, there are a lot of corporate democrats that are taking huge sums of money from real estate developers, from the pharmaceutical industry, from corporate PACs.
It's time to put an end to that because this congressional district is experiencing a very dire gentrification and displacement crisis that's threatening to clean out this borough and we can’t allow that. It's not only one candidate that's taking this money, it's many different corporate Democratic elected officials running in this race, that either have had histories of taking this money in the past, or are taking that kind of money now, and we need to fundraise in a way that centers the needs, values and perspectives that directly impact the community – and that's not it. We need to put the community first, not the donors.
Another member of DSA and prominent figure head of the housing activist movement is the current New York State Senator, Julia Salazar.
In 2018, Salazar prioritized guaranteeing affordable housing-for-all in her campaign for office – focusing in particular on policies to expand state rent control.
Julia Salazar: There are some on the Left, who in this national political moment will say that we can only make minimal demands. That we need to compromise our values and our vision in order to be effective. But as socialists, we don’t buy that. We don’t buy that, because we don’t operate on a vision of scarcity, we operate with a vision of abundance. We know that when people’s rights are under attack, we need to be making maximalist demands. That’s why I support universal rent control. (source)
Freddie Stuart: In the wake of these recent local successes, activists are pushing for rent control to be adopted on a federal level.
Currently, “36 states preempt local governments from adopting rent regulation laws” and as of 2019, only five states (California, New York, New Jersey, Maryland, Oregon) and the District of Columbia have localities in which some form of residential rent control is in effect.
If adopted nationwide, 42 million households could see their rents stabilized.
Samelys López: I think that we need a national rent control. And we also need to explore national commercial rent control, to preserve the small businesses in our community. So I'm definitely on board. And that's a key element of the Homes Guarantee platform as well.
I'm grateful to the leadership of people like Julia Salazar. She held herself accountable to a movement because the rent regulations that were passed this spring was a movement, activists on the ground that got together, mobilized and made countless trips to Albany to make their voices heard. And it was people like Julia Salazar, part of this new progressive political class of New York State senators, that paved that path. So it demonstrated that when you have a movement on the ground that's supported by the right political environment, that is willing to be held accountable to movements on the ground, there's no telling what we can do together as a community. And that was an example of what can happen when politics meets a movement.
Freddie Stuart: Whilst an important component in addressing America’s housing affordability crisis, rent control does not solve the basic issue of undersupply.
In the face of this reality, many locally elected officials have focused on raising funds for municipal governments to address the homelesness crisis, by taxing the wealthiest members in their community.
Kshama Sawant, a socialist member of the Seattle City Council, was first elected in 2013 on a mandate to tax the city’s largest corporations – such as Amazon – to expand affordable housing:
Kshama Sawant: We recognized that Seattle has been the construction crane capital of the country four years in a row, in other words, construction is booming. You can’t walk a few blocks without running into those giant cranes, but at the same time housing has become less affordable and rents have skyrocketed. Which in other words, shows you how the capitalist for profit market system does not build for affordability, it builds to maximize profits at the top.
So we need an alternative to the for profit market in the first place. That’s why we have put forward a proposal to raise $300 million every year just by taxing the largest 3% of corporations. So 97% of businesses – small and medium sized – will not be paying; non profits will not be paying; government employers will not be paying; but only the wealthiest corporations will be. In other words, it will be the wealthiest people that will be paying so that we can raise $300 million per year so that we can address seriously the homelessness crisis, start building green built, union built social housing, and also some of those funds will be reserved for the Green New Deal.
Freddie Stuart: Following activist politicians like Senator Salazar in NY and Councilmember Sawant in Seattle, DSA and other progressive organizations have endorsed a slate of candidates in the 2020 Democratic primary cycle.
Running on platforms that explicitly critique the real-estate lobby, these candidates are championing a bold new agenda for federal and local housing policy – the “Homes Guarantee”.
[Clip: We Need a Homes Guarantee (source)]
Aaron White: The Homes Guarantee begins with the simple premise: that housing is a human right.
Launched by People’s Action, a national network of grassroots organizations, the Homes Guarantee was constructed by a team of 100 people “who are directly impacted from the housing crisis”.
As the official policy brief states, “the private market has failed to meet the needs of the people, as have the government interventions pursued to date.” In a departure from the neoliberal desire to privatize public goods, the movement is demanding that “social housing.. be permanently off the private speculative housing market.”
On a scale not seen since the original New Deal, the Homes Guarantee calls for building 12 million social housing units over the next 10 years, and reinvesting $30 billion annually over five years to repair crumbling housing stock.
Peter Gowan, a researcher at the Democracy Collaborative and policy advisor to the Homes Guarantee program, explains how the growing Homes Guarantee movement is organizing to influence mainstream political debate in Washington.
Peter Gowan: So I think that it’s going to take the emergence of a mass social movement of workers and tenants fighting against the exploitation that exists in the housing market. It’s not going to come out of one president alone; it’s not going to come out of one candidate certainly alone; if a president gets elected on a transformative platform and they don’t have a movement behind them that’s willing to back them up, that’s willing organize on a local, on a state, federal level for the things that we need to see, then we’re not going to get the kind of change even if the people voted for it.
But, if you do have this mass movement. I think that the scale of the exploitation, the scale of the crisis, provides an opportunity for the president to really mobilize their supporters, and to mobilize the people who are being affected by this crisis to fight back, and that’s going to involve things like created Tenant’s Unions on a citywide basis who can organize and push back directly against the corporate landlords in their city, but also to mobilize people to push for political changes. It’s going to involve people organizing on a national level to pressure their senators and representatives to vote for the kind of legislation that we need to see. And it’s going to generally involve a higher level of political consciousness among people of the roots of the crisis, in the profit motive and the housing market. And if we’re able to educate and organize people for that, then there is really no limits to what we can achieve.
Aaron White: The impact of this movement is already becoming evident in DC, particularly amongst the leading figures of the progressive movement in Congress.
Representative Ilhan Omar has been one of the staunchest allies of the Homes Guarantee. In November of 2019, Omar introduced a Homes for All Act, which would construct 12 million units of social housing. The act repeals the Faircloth Amendment, which has disallowed federal government investment in new public housing since the late 1990s.
[Clip: Rep. Omar introducing Homes for All Act] (source)
In addition to focusing on building millions of units of public housing, Representative Omar’s bill and the Homes Guarantee recognizes the climate crisis as the greatest displacement threat.
Another newly elected member of the Congress, Representative Alexandria Ocasio-Cortez, has built upon the momentum of People’s Action, proposing massive public investment in social housing in line with the Homes Guarantee and the Green New Deal.
In the first piece of legislation proposed following the Green New Deal resolution (cosponsored by herself and Massachusetts Senator Ed Markey) Representative Ocasio-Cortez and Senator Bernie Sanders, co-sponsored a Green New Deal for Public Housing.
[Clip: Rep. Ocasio-Cortez announcement Green New Deal for Public Housing (source)]
The bill aims to commit $172 billion over 10 years to upgrade and retrofit 1.2 million federally administered homes. Prioritizing frontline and minority communities, the bill addresses systemic environmental racism and the housing crisis.
As the legislation notes, buildings have a tremendous carbon footprint: responsible for over ⅓ of carbon emissions in the US.
Daniel Aldana Cohen, a key proponent of the Green New Deal for Public Housing, outlines his vision for social housing within the context of a zero carbon equitable society in his recent co-authored book on the Green New Deal.
Daniel Aldana Cohen: So if you’re thinking, what are we trying to do here in terms of the built environment, is we’re trying to create physical landscapes, broadly understood, which enable public affluence. We’re trying to rebuild, physically a world, in which you can walk to the childcare center; you can walk to work; or take a bus or ride a bike feasibly. We want to make cities that have serious public recreation in them. We haven’t had a burst in public recreation since the original New Deal. We want to have more of that, and we want to have the possibility of wild spaces beyond cities that people can access in a no carbon way.
At the very center of this vision, of no carbon landscapes of public affluence, is housing. Because our vision of social housing is that social housing includes some essential services; it is physically located close to other desirable parts of the city (jobs, recreational, and social services); it absolutely decommodifies the bare necessarily of life, so instead of having to work hours and hours to pay for your housing, that housing is at an extremely low cost, and if you don’t have an income it’s free; and I think that housing incarnates a vision of the world which is a density of freedoms – and your home is the foundation of a free relationship to the rest of the world.
Aaron White: There is precedent, both internationally and domestically – outlining tangible ways that public housing can be constructed in a way that is not stigmatized but applauded as “temples of public luxury”.
One of the leading inspirations for this model comes from Red Vienna. Under the Social Democratic led municipal government in power since the Second World War, the city has invested heavily in public infrastructure. As part of this project, social housing complexes were built that were designed as more than just “shelter”. They included child care centers, nursing homes, libraries, schools, gyms, pools and cultural programs.
Today Vienna hosts some of the nicest public housing in the world – enjoyed by the majority of its residents. Three in five people reside in homes “owned, built or managed by the municipal government.” And those participating in the private housing market are protected from exorbitant rates through locally enforced rent caps.
Daniel Aldana Cohen: If you compare the US model on housing because of the 1937 Wagner Act, basically in the US it is illegal to build public housing that would compete with middle class housing. Public housing is last resort housing that makes it very easy to stigmatize, to confine the most stigmatized people to that housing, and to never even keep it up. It actually had really great potential, but it was treated very badly.
An alternative vision is a vision that you have in Vienna, and in other parts of Europe as well, that public housing is fantastic housing – temples of public luxury. And in places that have done that, like in Vienna, or where you are now seeing retrofits of housing in that spirit like in France, you have really beautiful housing, extreme energy efficiency, it’s very healthy, and it actually advances the technological frontier of housing in general.
And even now in the US, you’re starting to see, and in New York you’re starting to see that who are really pushing the frontier of multifamily development, are affordable housing developers, because it saves money in the long term and because it is something that is way more exciting to people. So we can have way more of that. We can use the social housing construction to augment the skills of workers and to develop the technology for no carbon luxury for everybody.
Aaron White: Other notable examples, cited by those proposing a bold social housing agenda in the US use the Swedish model to outline what is possible. In the 1960s, Sweden was facing a severe housing shortage. In the middle of the decade, the Social Democratic Government outlined an audacious goal: building 1 million new homes in a decade. This was an ambitious task as the existing housing stock consisted of 3 million units in the entire country.
Financed by the state via city owned housing authorities and housing cooperatives, the Swedish Million Homes Program succeeded in reaching its intended goal.
Freddie Stuart: Drawing inspiration from these historic successes abroad and Roosevelt’s New Deal at home, the new movement for a Homes Guarantee and a Green New Deal has tabled a set of radical policies that are beginning to influence mainstream political debate in Washington DC.
These demands have become a central policy pillar of housing activists on the street, and insurgent progressive candidates in the 2020 election cycle.
Peter Gowan, explains how the growing movement has influenced the political discourse over housing policy during the 2020 presidential cycle.
Peter Gowan: One that I’ve really been excited by is Bernie Sanders who has endorsed the principles of a Homes Guarantee. Which is a campaign which has seen a lot of support down the ballot, and was developed by People’s Action network around housing, a lot of tenants unions – community organizations around the country had their leaders come together and develop principles for how to decommodify, stabilize and address the core issues around housing in this country. And the Bernie Sanders campaign plan endorses principles, it doesn’t endorse every single one of the specific measures that were in the policy document that myself and a bunch of other people produced in close collaboration with those grassroots leaders. But it does endorse the basic principles of it, and we’re happy to have him on board that train.
[Clip: Bernie Sanders’ speech on housing (source)]
Freddie Stuart: During the 2020 Democratic primary, Senator Bernie Sanders released one of the boldest housing plans ever by a presidential candidate.
Taking direct inspiration from the Homes Guarantee platform, Sanders called for an investment of $2.5 trillion to build 10 million affordable housing units and end homelessness.
Also in line with the Homes Guarantee, and its “National Tenant Bill of Rights”, Sanders' plan set to “limit rent increases to 1.5 x the Consumer Price Index, or 3% (whichever is lower)”.
This platform garnered significant popular support, and combined with a resurgence of tenant activism, has helped shift the political discourse on housing in the progressive wing of the Democratic Party.
The last presidential primary candidate to actually release a plan for housing was the now Democratic nominee Joe Biden – who revealed his agenda shortly before the South Carolina primary.
Extending the policies of the Obama administration, Biden’s approach to affordable housing returns to many of the central tenants of the neoliberal era.
Alongside an expansion of LIHTC and Community Development Block Grants, Biden’s platform lays out a vision for fully funding Section 8 – ensuring that every eligible extremely low income individual receives a voucher – and none pay more than 30% of their income in rent.
It also proposes a new renters tax credit to cover rent and utility costs over 30% of income for families that “make too much money” to qualify for Section 8 – and creates a permanent, refundable $15,000 tax credit to help first-time homebuyers make a downpayment on a home.
[Clip: Joe Biden on housing (source)]
In a pivot toward the popularity of the Green New Deal, Biden’s plan also directs $10 billion for energy efficiency retrofits to existing affordable housing, and pursues equitable zoning to make Americans’ home and transportation choices more affordable and less carbon intensive.
But while policies such as extending housing vouchers and a renters tax credit do provide significant housing market stabilizers, Biden’s housing agenda does not consider an expansion of rent control, nor does it address the fundamental undersupply of affordable units.
In his official policy brief, there is no mention of repealing the Faircloth Amendment or expanding the US public housing stock.
At its core, Biden’s plan falls back on updating the existing policy frameworks – utilizing the tax credits and market nudges typical of the neoliberal era and continuing to outsource the responsibility for affordable housing to the private sector.
In this way, the Democratic Party establishment remains a far cry from the demands of tenant activists and the growing movements on the ground.
[Clip: Zohran Mamdani ad (source)]
Aaron White: Within the context of the current coronavirus pandemic, and a potential wave of mass evictions – the movements pushing for systemic changes to housing policy have seen major electoral successes in down-ballot elections across the country.
In city’s hardest hit by the virus, such as New York, champions of the Homes Guarantee and the Green New Deal have been elected to both the state legislature and congressional seats.
With Biden and the Democratic establishment returning to the market-based policies of the neoliberal era, these activist politicians now represent the best hope for those on the frontlines of the crisis.
In demanding a break with the failing policies that have marked successive bipartisan administrations, popular movements have created an opening for radical change.
In the next episode in our series on the US election, we’ll examine how many of these movements calling for housing as a human right, are extending their bold economic agenda to the education sector – tabling new demands that are shifting the policy framework in the context of the 2020 US election.
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