The Impending Housing Crisis and How to Fight It

by Beau Monast and Elisabeth Wichser

A resurgent coronavirus is raging across the country. For some, it’s a question of when they can return to gathering with friends or finally put an end to monotonous Zoom meetings, but for a startling number of Americans, it’s a constant worry as to whether (and for how long) they can remain in their homes. 

According to a study published by the Aspen Institute in August, 30-40 million Americans were at risk of eviction in the months to follow, prior to the eviction moratorium implemented by the Centers for Disease Control in September and set to expire on January 1st. More recent data published by the Center on Budget and Policy Priorities in November puts the number of renters currently behind on rent payments at 13.4 million, or one in five nationwide. Among homeowners, 10 million adults are behind on mortgage payments. 

These sobering statistics make clear that capitalism will always put profits over people, especially in times of crisis, as the COVID-19 pandemic has only served to accelerate already existent downward trends. Nowhere has this been more apparent than in the nation’s growing housing crisis, which is set to explode by the start of the new year.

The pandemic has certainly exacerbated issues related to housing, but these issues were already brewing under the surface. A study published this year by Harvard’s Joint Center for Housing Studies identifies several trends detrimentally impacting housing affordability in the US. An explosion in the number of high-income renters in recent years (an increase of 3.2 million between 2010 and 2018), coupled with a lack of new affordable housing construction (units renting for under $600 fell by 3.1 million between 2012 and 2017), has caused rents to skyrocket nationwide. At the same time, increasing income inequality has left the working class unable to keep up with rising rents. According to the study, over the past 30 years, “the average real income of the top fifth of renters rose by more than 40 per­cent…while that of the bottom fifth fell by 6 percent…[and] the income disparity between the highest- and lowest-income renters grew from 12 times to 18 times.” 

The squeeze that this has put on working-class renters is enormous. The Harvard study further notes that, in 2018, 10.9 million renters spent more than half of their income on housing, leaving fewer additional funds for other basic necessities, and that the “number and share of cost-burdened renter households remain near record highs, with no meaningful relief in sight.” Yet there are many homes and rental units available for rent. However, they sit empty because landlords and banks would rather have them unoccupied than provide them for a reasonable cost (therefore lowering their profit margins). 

Given capitalism’s demonstrable failure to provide for even basic needs, a socialist approach is necessary to tackle the issues posed by this crisis. The 2008 housing crisis, for example, was a clear opportunity to implement rent and mortgage freezes, build affordable housing, and sufficiently regulate the banks, yet the Democrats in power at the time did none of these things. We need a movement of working people to win real change in housing. In the short term, immediate measures must be taken to stem the wave of evictions set to hit at the start of the new year. The first step in this effort should be to extend the moratorium on evictions and foreclosures through at least the end of 2021 and that all missed rent/mortgage payments be forgiven, not deferred. Vice-Chair of the Federal Reserve Board Richard Clarida recently said it would likely take years for the economy to fully recover from the pandemic, and the notion that tenants currently behind on rent will suddenly be able to come up with what they owe once the calendar hits January 1st is simply untenable. Landlords know this and are already hard at work scheduling eviction cases for the start of the new year. 

Housing is a human right, especially now during the pandemic when people are being urged to quarantine in their homes. Those in charge of housing decisions, like developers and banks, don’t care that we’re facing a housing crisis in the middle of a pandemic. We must take control of housing policy from cities and big banks via democratically elected committees that can defend and extend our rights as tenants and homeowners. The federal government will not intervene strongly on behalf of tenants, so these organizations are critical in ensuring that we have the unified power to assert our rights. For every person experiencing homelessness in the US, there are 6 empty homes yet the number of luxury housing developments has skyrocketed. This is one of the clearest examples of the contradictions of capitalism: though we are surrounded by resources, they are hoarded from the working-class to benefit the top 1%—building luxury apartments, driving up rent, building oversized and overpriced homes instead of affordable housing—these all harm the working class while boosting the profits of the capitalist class. By nationalizing empty buildings and turning them into safe and affordable public housing, we could end homelessness. 

Several steps must also be taken to curtail long-term trends and lift the working class out of persistent housing insecurity. First among these is an immediate, massive increase in new affordable housing construction. Affordable housing means rent would be no more than a quarter of monthly net minimum wage based on the federal minimum wage. But affordable housing also entails other protections like rent control, public housing, anti-eviction measures, and rent and mortgage subsidies. Capitalist developers see little to no value in expanding affordable housing, preferring instead to cater to high-income renters and buyers at the expense of working-class families. In this case, as in so many others, the capitalist profit motive must be eliminated to protect the working class. By the same token, an increase in affordable units needs to be paired with both a three-year rent freeze and an increase in the federal minimum wage to $20 per hour. We need an emergency government plan to immediately build and renovate a huge amount of public housing, paid for by increased taxes on the big corporations and the super-rich. These measures would be an integral part of closing the income/affordability gap, but we can’t stop there. In order to put the working class in a position to thrive, rather than simply survive, we need socialism, where working people can democratically control the economy, including housing, healthcare, and jobs, for our benefit.The major challenges related to housing in the US have been ignored by the corporate political parties for years. The COVID-19 pandemic has turned up the heat significantly, and much work needs to be done to ameliorate the damage. That being said, as with so many of the issues facing the working class, the challenge ahead of us is not to simply turn back the clock but, rather, to organize around this wake-up call and push hard for lasting, comprehensive action to get rid of the capitalist system and use that momentum to fight for a socialist world.

Image Credit: Joby Elliot via Flickr // CC BY-SA 4.0