by Angus McFarland
The housing crisis is still with us. House prices are near their all-time high with the Federal Reserve Bank raising interest rates, making it wildly unaffordable for many working people to make monthly mortgage payments. Apartment rents are still sky-high while wages have remained well behind inflation, meaning a real-dollar pay cut for most of us, with a big percentage of our take-home pay going towards rent and utilities.
These conditions mean misery and deprivation for many who remain housed and disaster for the increasing numbers who cannot keep up. The increase in homelessness is obvious in most urban areas including in smaller cities where it wasn’t seen as much in the past. Millions of working people live one paycheck away from homelessness. The capitalist commodification of housing cancels the human right to shelter.
Some service organizations attempt to relieve the homelessness crisis, while corporate political parties enact laws meant to hide it. While official government stats show small increases in homelessness, schools are often better at seeing the housing situation in real-time, and they are seeing that it’s bad and about to get worse. Student housing insecurity increased by 60% over the rate of the previous five years, according to The Maine Department of Education (DOE). It will only get worse when the pandemic relief programs that schools use to help with rent and utilities for the most at-risk families expire next year. Across the country, pandemic-related programs ranging from eviction and foreclosure moratoriums to emergency funds are being taken away, and we have not yet seen the full fallout.
The rising cost of housing is largely driven by big investment firms that buy up buildings where people live, jack up rents and neglect maintenance to increase profits, and sell the buildings at a higher price to others who will often do the same again. They are also sitting on vacant buildings in neighborhoods where housing prices are rising because holding them as an investment is more profitable than letting them be used. These practices became more prominent after the financial crisis of 2007-8 when the government incentivized them. These companies make ever-higher profits by raising workers’ cost of living and forcing them out of their homes.
Another factor is the boom in luxury housing. Mansions for the super-rich provide a better short-term return than housing that ordinary people might be able to afford. As a result, investment and resources have disproportionately gone to this type of building in recent years.
The profit-maximizing motive extends to smaller landlords as well. Short-term rentals like Airbnb create much higher returns than traditional monthly rents, reducing the available housing stock and further inflating the rental market.
There have been several attempts to reform the housing system in small ways. Rent control and rent freezes have been won in some areas but have been systematically undercut and eroded. Mayor Michelle Wu of Boston recently pushed a watered-down version of community demands for rent control consisting of a cap to rent increases of 10% a year for some properties. All but the most exploitative landlords wouldn’t be affected by this cap and, on top of that, it only applies to continuing leases, and only in Boston. Oregon did something similar on a statewide basis. Portland, Maine, has seen ballot initiatives meant to protect tenants from arbitrary evictions and “shock and awe” rent hikes. These measures will help some people from the worst abuses that renters have been subject to recently, but they do not go far enough to solve the problems of market-based housing.
Another supposed solution to the crisis is building “affordable housing.” Often developers are told to include some units of “affordable housing” in order to be able to build the luxury buildings they want. This strategy fails in a few ways. First, the term “affordable” is routinely abused to the point of meaninglessness by developers and politicians and is based on a percentage of the price of the “market rate” luxury building rather than on what working people can actually afford in the area. In addition, luxury housing drives up housing prices and the general cost of living in the surrounding neighborhood, making the entire area less affordable.
Subsidized housing, such as Section 8, is helpful in emergencies to get people under a roof, but it falls far short of being a real solution. Section 8 remains a market-based solution: the government pays the landlord to accept less rent from the beneficiary. This means that the landlord still gets a market value for the apartment, so there is no effect on the larger housing market. Section 8 vouchers are also reserved for the very poorest people, ensuring that the landlords who accept the vouchers will do so only on the worst, most run-down buildings. The vouchers are also very scarce due to the usual government underfunding, and wait times can run into years.
The only way to alleviate the housing crisis is to create high-quality public housing. Such housing could be built at the local, state, or federal level and run not for profit but in the public interest, more like a public utility. Many of the limitations that capitalist politicians built into public housing during the last century need to be overcome. Currently, much public housing in the US has been reduced to ghettos reserved for the very poor and plagued by problems of underfunding and intentional neglect by city and state governments controlled by the two corporate political parties. Public housing done correctly would mean treating housing not as a commodity to be sold for the highest price, but as a public good to which everyone has a right. It would also mean buildings run democratically by the residents and related workers, not landlords anxious to maximize profits.
The fight for rent control and renters’ rights is crucial to protect workers from the worst excesses of landlords’ greed in the short term. Moderate successes in several states have shown that when a movement makes demands, it can and will win concessions. But it is easy for the property owners to wait out a movement and walk reforms back in a capitalist system.
What we need to solve this and future housing crises are not tentative moves in a few states but a radical and sweeping new public housing program. The fight for rent control, including rent freezes and forgiveness of back rents, must be urgently organized to help people in the immediate crisis. Beyond that, we need to build new public housing units, renovate old buildings for this type of use, and take unoccupied “investment properties” under public ownership. We could create well-paid union jobs for the builders and renovators. We need a higher minimum wage, at least $25, so that the worst-paid among us can still have some savings after paying for housing, and won’t fall into homelessness at the first run of bad luck. We need greatly expanded and fare-free public transit to ensure workers can get to and from work, stores, and the business of daily life.
We know, however, that our capitalist two-party system will not get us out of the housing crisis. With the government completely captured by monied interests insulated from the horrors of the status quo, there will be no real incentive to change for the better. We must build a new party that is of, by, and for the working class to organize strong movements behind a program to fight for the interests of the working people who are the engine of the world. Only the working class, with its own political party and strong unions, has the power to eliminate homelessness, poverty, and the deaths of despair that plague our communities. We must fight for socialism to create a society where we can all have decent lives, including the human right to a place to live.
Image credit: David Jackmanson via Flickr // CC BY 2.0
Independent Socialist Group 