A Homes Guarantee

All Americans should have an affordable home. Equal opportunity for all requires providing decent affordable housing for all. Today, tens of millions of families pay so much for housing that they have little left to save or invest, and our housing policy does almost nothing to enable them to build wealth. Yet policymakers routinely deploy housing policy to assist millionaires with their multi-million dollar homes, second homes, and yachts, providing more resources for the already-wealthy to build more assets. As a result, policymakers perpetuate disadvantage for some and opportunity for others. Policymakers should instead make investments in affordable rental housing to help all American families build wealth.

In the United States, we already spend enough on housing to make it affordable for all, but because most of these dollars go to the affluent, we are in the midst of a severe housing affordability crisis. This problem has become worse over time, and it will continue to worsen if we fail to shift our federal expenditures away from subsidizing the wealthy and toward investments in affordable rental housing. To make housing affordable and to reduce housing insecurity for low-income households, policymakers must create enough rental housing dedicated to low-income households to reduce rents at the lower end of the rental market. This is a longer-term solution, since the needed housing cannot be constructed right away. Instituting rent control, however, would immediately work to preserve affordable housing and prevent high rents from becoming even higher. And preventing landlords from evicting low-income households without cause (a maneuver often used to attract higher-income renters) is another important step to preserve affordable housing and keep housing secure.

To address the needs of low-income renters, Demos calls for the following from our federal policymakers:

Create 7 million affordable housing units. Senator Elizabeth Warren’s American Housing and Economic Mobility Act would create 3 million units. We need an additional 4 million new public housing units.

Reform the estate tax, the capital gains tax on home sales, and the corporate tax to fund affordable housing.

Move affordable housing policy back toward the “social housing” policy which existed in the United States prior to the 1950s and which currently exists with wide support in Europe and Asia.

Allow public housing tenants to build wealth by permitting households to earn up to 110 percent of area median income after households have met the conventional income restrictions for 2 years.

End the ineffective Low-Income Housing Tax Credit and shift those dollars to Housing Choice Vouchers.

Establish rent control nationally.

Establish a just-cause requirement for evictions and a civil right to counsel for eviction cases.

Support, through the Department of Housing and Urban Development, the establishment of tenant councils for the purpose of collective bargaining by tenants.

The Affordable Rental Housing Crisis

A Focus on Renter Households

All Americans, whether they are renters or homeowners, should have an affordable home. Renters are the focus of this proposal because they are twice as likely as homeowners to have unaffordable housing. Renting households are also more likely to comprise people of color. America has a long history of racial discrimination against people of color in its housing policies, and these policies have dramatically reduced the wealth in communities of color. Making rental housing affordable for all is an important step to move our society toward the goal of equal opportunity for all.

On average, renters have much less wealth than homeowners. In 2016, the median value of financial assets (not including the value of the home and other property) for homeowners was $68,000, while it was only $2,000 for renters. In spite of this disparity, our housing policy favors homeowners over renters, and rich homeowners over middle- and low-income homeowners. This orientation toward rich homeowners has rightly been called an upside down policy. The neediest households should receive the most help, not the wealthiest ones.

The Affordability Crisis Among Middle-Class and Poor People

It is generally recommended that households not spend more than 30 percent of their income on housing. In recent years, the average American household, renters and homeowners combined, spent 33 percent of its income on housing, just above the 30 percent threshold. Households spending above this threshold are considered to be “cost-burdened.” In this discussion, housing that costs more than 30 percent of a household’s income is considered to be “unaffordable.”

When households spend more than 30 percent of their income on housing, they have less for other necessities, savings, and investments. While the 30 percent standard is a general recommendation, it is most important for middle- to lower-income households. If someone earning a million dollars a year wishes to spend $750,000 on housing, for example, he would still have $250,000 for everything else and would still be able to maintain a very high standard of living. For thisreason, the following discussion will focus on American households in the middle- and lower-income groups.

To attain the goal of affordable housing for all, policymakers need to radically re-make our housing policy, starting with rental housing. In 1960, two-thirds of the renting households in the bottom quintile paid more than 30 percent of their income on housing (see Figure 1). By 2016, more than 80 percent of these bottom-quintile renters were cost-burdened. In 1960, about a quarter of renters in the lower-middle quintile were cost-burdened; by 2016, more than half were cost-burdened. Nearly one-quarter of households in the middle quintile— those households solidly in the middle class—were cost-burdened in 2016, up almost 20 percentage points from 1960. There is every reason to expect the rates of cost burdens to continue to increase without government intervention.

There are multiple factors behind the housing affordability crisis, but a major part of it is that private developers and the government simply have not been building enough affordable rental housing. When the demand for housing increases but the supply does not match it, costs will rise, and housing will become unaffordable tomore and more households. We have seen this across the country. For example, in the 1990s in New York City, private developers built only 85,000 new units for an additional 456,000 city residents. Further, many of these units were priced for higher-income tenants. From 2010 to 2017, the San Francisco Bay Area added more than 500,000 jobs, but fewer than 100,000 new housing units. In the Washington,D.C. metropolitan area, the population grew 7 percent from 2010 to 2016, but the number of housing units grew by less than half that amount. Because of this dynamic, there has been an overall upward pressure on rents.

Additionally, policymakers have allowed the continual loss of rental units specifically designated to be affordable for lower-income households. For example, the Institute for Housing Studies reports that Chicago lost nearly 9,000 affordable rental units between 2014 and 2015, despite there being a growth of over 2,500 renter households needing affordable housing. Nationally, we have lost at least 400,000 subsidized housing units through demolition and conversion to market-rate units since the late 1980s. ​​​​​​​ The Joint Center for Housing Studies estimates that we will lose over 1 million more subsidized rental units over the next decade. ​​​​​​​ When we add the loss of affordable housing to our failure to build sufficient housing to keep up with population growth, we have a monumental housing affordability crisis.

Currently 7 million extremely low-income households are in unaffordable rental homes where they are paying more than 30 percent of their income on housing. ​​​​​​​ This shortage of affordable rentals will not be addressed by the private sector because there is no profit for the private sector to serve extremely low-income residents without government subsidies. ​​​​​​​ Another 6 million renters with higher incomes are also in unaffordable rentals. ​​​​​​​ The population of renting households is expected to increase by about 500,000 per year for the next 10 years. This means that we will need in excess of 500,000 rental units a year to lower rents and increase the affordability of rental housing. Additionally, it is important that we minimize future losses of affordable housing. We must make major investments in affordable housing to address these needs.

How High Housing Costs Reduce the Wealth of Families and the Nation

In the Housing Act of 1949, the federal government declared that “the general welfare and security of the Nation and the health and living standards of its people require housing production . . . sufficient to remedy the serious housing shortage.” The authors of the Act addedthat “the goal of a decent home and a suitable living environment for every American family” would contribute to “the advancement of the growth, wealth, and security of the Nation.” While there are many important differences between 1949 and today, the concerns about the shortage of housing and its impact on the wealth of Americans are the same.

High housing costs harm families. In the worst-case scenario, high housing costs lead to homelessness, which negatively affects all psychological, social, economic, and health conditions for a family. Even without causing homelessness, high housing costs can lead to evictions or, in the wake of the steady rise in costs, the need to move frequently to find more affordable housing. Homelessness and frequent moves have a negative effect on children’s academic achievement and increases the likelihood that children will repeat a grade and drop out of school. High housing costs also worsen health outcomes. Families forego health care and nutritious food so that they have more money for housing. High housing costs can also drive families into unsafe housing, which increases the risk of accidents and illness. Finally, high rents have been shown to reduce the likelihood of individuals purchasing a home. This suggests that high rents are inhibiting wealth-building among families, since the home is the major source of wealth for most American families.

These harms to families ultimately translate to harm to the nation. Lower educational achievement and worse health outcomes decrease the level of economic development for the nation as a whole, while increasing costs related to addressing poverty and health care. In the quest for more affordable housing, families are often forced to live further and further away from work. Longer commutes mean that there is a greater consumption of fossil fuels, which contributes to climate change. We need to address our current housing shortage to build wealth for families and for the nation.

Toward Progressive Investments in Affordable Rental Housing

Upside-Down Priorities

Policymakers have structured housing policies such that they routinely provide assistance to millionaires for their multi-million dollar homes, second homes, and yachts, while denying assistance to people living in poverty. ​​​​​​​​​​​​​​​​​​​​​​​​​​​​The Center on Budget and Policy Priorities reports that a larger share of federal housing spending goes to the 7 million households with incomes of $200,000 or more than the more than 50 million households with incomes of $50,000 or less. ​​​​​​​​​​​​​​​​​​​​​​​​​​​​

In addition to the skew in favor of the rich, our federal housing spending privileges homeowners over renters. More than 70 percent of federal housing subsidies go toward homeowners, although renters are more likely to have severe housing cost burdens. ​​​​​​​​​​​​​​​​​​​​​​​​​​​​ Three-quarters of needy renters receive no federal housing assistance, while all who qualify for homeownership tax breaks receive them. ​​​​​​​​​​​​​​​​​​​​​​​​​​​​

Making the Financing of Rental Housing Policies Progressive

Policymakers need to stop privileging rich homeowners in the nation’s spending on housing and focus resources on middle- and low-income households, where it will do the most good. Senator Elizabeth Warren’s American Housing and Economic Mobility Act (S. 3503) is an important first step toward fully funding affordable housing. The bill calls for $50 billion a year to be invested in affordable housing. This investment will be paid for by returning “the estate tax thresholds to their levels at the end of the George W. Bush administration and institut[ing] more progressive rates above those thresholds.” ​​​​​​​​​​​​​​​​​​​​​​​​​​​​

While the Warren bill is a good, bold proposal, it is likely insufficient to address the problem fully. The Warren bill will provide about 3 million housing units over 10 years. We currently have a deficit of 7 million units for the extremely low-income, and other trends continue to push rents higher, potentially worsening the situation. ​​​​​​​​​​​​​​​​​​​​​​​​​​​​

Congress should use the Warren bill as a model, and add $75 billion annually over 10 years to that investment in order to move towardaffordable housing for all. The additional $75 billion would provide enough for an additional 4 million public housing units and address the backlog of maintenance and repairs in public housing, which is conservatively estimated at $50 billion. ​​​​​​​​​​​​​​​​​​​​​​​​​​​​ This $75 billion plus the level of spending in the Warren bill would make for a total investment of a $125 billion a year.

The additional $75 billion can be secured from tax reforms. An additional $35 billion a year in revenue can be obtained from eliminating the capital gains tax exclusion for home sales. Income from capital should not be privileged over income from work. The remaining $40 billion a year can be generated by repealing the corporate tax cuts in the Tax Cuts and Jobs Act. ​​​​​​​​​​​​​​​​​​​​​​​​​​​​ These changes would help to re-balance our housing policy away from subsidizing the richest and toward helping the neediest.

Affordable Housing Policies

Bring Social Housing Back to the United States

“Social housing” is a term commonly used for public housing in other parts of the world. Social housing in Europe and Asia, however, is more flexible than U.S. public housing in terms of what entity is responsible for the financing and management of the housing, and the income profile of the tenants. Social housing need not be managed by the government; it can also be managed by non-profit organizations. While it typically receives some government financial support at some time, social housing need not be primarily reliant on the government for operating expenses. One way social housing achieves more financial independence from the government is that it has not been exclusively for poor families. Income from rent often contributes a substantial amount to the management of the housing because significant numbers of non-poor households may also reside in social housing. ​​​​​​​​​​​​​​​​​​​​​​​​​​​​

Public housing makes up less than 1 percent of the housing stock in the United States, ​​​​​​​​​​​​​​​​​​​​​​​​​​​​ but social housing is 5 percent in Canada and Germany, ​​​​​​​​​​​​​​​​​​​​​​​​​​​​ 18 percent in Sweden, 32 percent in the Netherlands, ​​​​​​​​​​​​​​​​​​​​​​​​​​​​ nearly 50 percent in Hong Kong, ​​​​​​​​​​​​​​​​​​​​​​​​​​​​ and 80 percent in Singapore. ​​​​​​​​​​​​​​​​​​​​​​​​​​​​ Unlike public housing in the United States today, social housing is generally viewed positively in the rest of the world. ​​​​​​​​​​​​​​​​​​​​​​​​​​​​

The more flexible social-housing model would be beneficial to the United States in that it can build a broader base of support for affordable housing for all. Also, since social housing has a more economically diverse range of residents than U.S. public housing, it can be used more effectively to combat the racial and class segregation found in U.S. housing. ​​​​​​​​​​​​​​​​​​​​​​​​​​​​ At present, the shortage of affordable housing for low-income households is too severe to do much experimentation with mixed-income public housing, but the long-term goal should be to transform public housing in the United States into more European-style social housing.

Some might say that what works in Europe cannot work in the United States. This is not the case. The first iteration of public housing in the United States was essentially social housing. It was built to provide housing for workers, sometimes with the support of labor unions andother groups, in a time of a housing shortage, and households did not have to be poor to reside in the housing. American public housing looked a lot like European social housing prior to the 1950s. ​​​​​​​​​​​​​​​​​​​​​​​​​​​​

After the 1940s, institutional racism in American society, conservative politicians opposed to the government providing goods and services, and the real estate lobby unwilling to compete with the government for customers, transformed American social housing into public housing reserved for poor people and disproportionately serving African Americans. ​​​​​​​​​​​​​​​​​​​​​​​​​​​​ This transformation led to less resources for public housing and therefore difficulties maintaining the quality of the housing.

A long-term goal for affordable housing policy should be to reinvigorate social housing in the United States. There should be more experimentation with non-profit management, and more mixed-income tenants in public housing. These experiments should have sufficient regulatory safeguards, including robust enforcement mechanisms and tenant empowerment, to make sure that they serve the public good and are not a vehicle for making the wealthy wealthier. The many different models of providing affordable housing found in Europe, in Asia, and in American history should serve as inspiration for new social housing in the United States. ​​​​​​​​​​​​​​​​​​​​​​​​​​​​

One Small Step Forward to Social Housing: Allow Public Housing Residents to Build Wealth

One small step forward to social housing would be for public housing to remove income limits for tenants over time. Our safety net programs, like public housing, punish people if they improve their economic situation. ​​​​​​​​​​​​​​​​​​​​​​​​​​​​ For example, if someone in public housing obtains a job that lifts her family’s income to the median level, her family can be forced out of public housing. ​​​​​​​​​​​​​​​​​​​​​ The forced move to market-rate housing could leave the family worse off financially because of the higher rental costs.

To help tenants build wealth, they must be able to increase their income and their savings while residing in public housing. This approach would also slowly increase the class diversity in public housing and help with the finances of public housing, because tenants with higher incomes would pay higher rents. After 2 years of meeting the income limits for public housing, tenants should be allowed to stay in public housing with incomes up to 110 percent of area median income. Because of the current scarcity of affordable housing, this policy should not be enacted until we have a net increase of the current public housing inventory by at least 4 million.

Invest in Public Housing

While there is much room for improvement in public housing in the United States, it remains the best way to address the affordable housing crisis today. With public housing, policymakers can determine exactly how many housing units to build and ensure that they are affordable and accessible to low-income households. They can essentially guarantee affordable housing to the most cost-burdened populations. No other affordable housing policy intervention has all of these benefits. ​​​​​​​​​​​​​​​​​​​​​

Generally, public housing is misunderstood by the American public. Part of this misunderstanding probably stems from the fact that such a small slice of the American public has had any direct engagement with public housing. Currently less than 1 percent of America’s housing is public housing. ​​​​​​​​​​​​​​​​​​​​​ And there have been widely popularized horror stories about large public housing apartment buildings in the United States.

The reality of U.S. public housing, however, is more complicated than the picture painted by these horror stories. First, the public housing that probably comes to mind for most Americans—high-rise apartment buildings—has been in decline since the 1970s. Most public housing projects are composed of garden apartments, low-rise walk-ups, and single-family homes or townhouses. ​​​​​​​​​​​​​​​​​​​​​ Public housing can look like any type of housing. Second, most residents of public housing find it to be better than the housing they could obtain in the private market. In 1991, during a period of high crime in America, ​​​​​​​​​​​​​​​​​​​​​ 62 percent of tenants who had recently moved into public housing stated that public housing was better than their last home. ​​​​​​​​​​​​​​​​​​​​​ Finally, renters in public housing have lower rates of housing cost burden than renters using most other forms of housing assistance. Public housing is superior to Housing Choice Vouchers and the Low-Income Housing Tax Credit in providing affordable housing. ​​​​​​​​​​​​​​​​​​​​​ Public housing is a key mechanism for providing affordable housing for all.

Based on the demand for public housing, the current supply is insufficient. The average wait time for public housing is over a year. Most cities have closed their wait lists because they are so long. ​​​​​​​​​​​​​​​​​​​​​ Clearly, many low-income renters see public housing as a desirable alternative to their current housing. In spite of the benefits, policymakers have been weakening public housing since the 1950s. Policymakers have let the number of public housing units decline steadily since the mid-1990s. The number of public housing units is at its lowest point in decades, despite population growth and a worsening affordability crisis. ​​​​​​​​​​​​​​​​​​​​​

The lack of support and chronic underfunding by policymakers is at the root of many of the problems facing public housing. ​​​​​​​​​​​​​​​​​​​​​ There is currently a backlog of maintenance and repairs of at least $50 billion. ​​​​​​​​​​​​​​ We propose that $75 billion annually should be invested exclusively in providing public housing.

End the Low-Income Housing Tax Credit and Transfer the Dollars to Vouchers

Our current primary mechanism of providing housing for low-income households—the Low-Income Housing Tax Credit (LIHTC) ​​​​​​​​​​​​​​—is grossly inadequate. Under the program, the federal government provides the tax credits to housing developers, who then sell them to investors. The capital raised from the sale of the credits pays for about 70 percent of the development costs. ​​​​​​​​​​​​​​ In exchange for this subsidy, the developers are supposed to address the country’s affordable housing needs. But they do not, for reasons described below, which is part of the reason why housing cost burdens keep rising.

The LIHTC has been alternatively described as a leaky bucket ​​​​​​​​​​​​​​ and as a ticking time bomb ​​​​​​​​​​​​​​ because the housing units built with the credit are generally only required to be affordable for 30 years—and in some cases, for only 15 years. ​​​​​​​​​​​​​​ This is an early retirement age for housing. Thirty years is less than the median age for America’s private owner-occupied housing stock. ​​​​​​​​​​​​​​ The median age for public housing is over 45 years. ​​​​​​​​​​​​​​ As shown in Figure 1 above, our affordable housing crisis is more than 30 years old. By 2029, we will lose nearly half a million LIHTC housing units due to the expiration of the affordability requirement. ​​​​​​​​​​​​​​ We should not be using a short-term solution to address a long-term problem.

Enacted in 1987, the LIHTC has failed to provide enough affordable housing to reverse the trend of rising rates of housing cost burdens illustrated in Figure 1. Because the LIHTC is a tax credit, there is no societal control over the number of units created. The Great Recession led to a decline in the amount of credits used, ​​​​​​​​​​​​​​ and the Tax Cuts and Jobs Act of 2017 is also expected to reduce the amount used. ​​​​​​​ The credit is designed to meet the desires of wealthy investors, not the needs of people with housing cost burdens.

The LIHTC also does not guarantee that the units constructed with the credit will be affordable to poor households. In fact, a large share of LIHTC residents are still cost-burdened. A majority of LIHTC residents receive an additional form of rental assistance to pay for their housing. ​​​​​​​ In other words, Low-Income Housing Tax Credithousing is generally not affordable to low-income households unless there is a second government subsidy. The LIHTC performs worse than Housing Choice Vouchers and public housing in preventing housing cost burdens. ​​​​​​​

The LIHTC is ineffective and should be ended. The roughly$9 billion annual cost of the program should be transferred to the Housing Choice Voucher program, also known as “Section 8,” which provides a subsidy to households so that they can live in a private rental without paying more than 30 percent of their household income. Because the benefit is given to the household, the Housing Choice Voucher, ideally, can be used to help reduce racial and class segregation and to allow low-income children access to high-opportunity neighborhoods. ​​​​​​​ As with public housing, the demand for vouchers greatly exceeds the supply. ​​​​​​​

Establish Rent Control Nationally

There is an urgent need for affordable housing. However, it is not possible to build 7 million affordable housing units overnight. Rent control or rent stabilization ​​​​​​​ is an important solution to begin to address affordable housing needs today and to prevent housing cost burdens from worsening.

During a period of scarcity in rental housing, like we are facing today, landlords can raise rents and increase their profits without making any additional investments and without regard to wage growth or stagnation. These higher rents increase the financial hardship for renters without providing any benefits. Rent control policies would prevent this from happening.

By prohibiting rapid rent increases, rent control is an effective measure to prevent displacement and increase housing stability. Stable, affordable housing is associated with improved well-being and higher educational achievement for youth. ​​​​​​​ Policymakers have created policies to benefit homeowners with the justification that there is a social benefit to the housing stability that comes with home-ownership. ​​​​​​​ Rent control achieves housing stability for renters. A recent study of rent control in San Francisco shows that residents in rent-controlled units are less likely to move. ​​​​​​​If policymakers wish to stop privileging higher-income homeowners over low-income renters, rent control is one policy they can promote.

Rent control can also be an important component of maintaining class-based diversity in communities. By protecting longer-term residents and lower-income residents, areas with rent-controlled properties can become more socioeconomically diverse. (Formore on the need for and benefits of rent control see Our Homes, Our Future: How Rent Control Can Build Stable, Healthy Communities.)

Build Tenant Power

Tenant power is an important resource in maintaining safe, decent, and affordable housing. Landlords unfairly evict tenants so that they can convert affordable housing into housing for the affluent. Even when they do not issue eviction notices, unscrupulous landlords pressure tenants to move by failing to keep up on maintenance and degrading the living conditions in rental housing. ​​​​​​​ In addition to having appropriate regulatory anti-eviction safeguards and enforcement, strong tenant protections and tenant power help prevent low-income renters from being pushed out of affordable housing.

The Secretary of Housing and Urban Development (HUD) should require states receiving assistance from them to require just-cause evictions. In other words, as Congressman Ron Dellums proposed in 1989, “Grounds for eviction will be restricted to voluntary nonpayment, willful destruction of property, and gross violation of community standards.” Additionally, there should be due process for eviction proceedings, and HUD should establish and support a “civil Gideon” or right to counsel for eviction cases.

HUD should also require states receiving assistance from the agency to establish a right to collective bargaining by tenant councils so that tenants have a voice in the management of their housing. If a manager of rental housing fails to provide minimum services, to adequately maintain the property, to treat tenants appropriately, or even to comply with building code regulations, tenants individually have little power to compel the manager to act in a timely fashion. In a period when affordable housing is scarce, landlords can easily evict residents who complain and replace them with some of the many people who are desperate for affordable housing. A tenant council with the right to collectively bargain would establish bargaining procedures to see that landlords properly maintain the property and treat tenants fairly. HUD should support and provide technical assistance to tenant councils. With just-cause evictions, a right to counsel for evictions, and a right to collective bargaining, tenants will have the power to require that landlords provide safe and decent housing without fears of eviction.

How These Policies Ensure Affordable Housing for All Renters

We can solve housing problems when we have a national commitment. For example, the Department of Veterans Affairs and theDepartment of Housing and Urban Development cut homelessness among veterans by half between 2010 and 2018 because there was a strong federal commitment.

Increasing the supply of rental housing reduces rents. In 2010, only 498 new apartment units were built in Denver; by 2016 that same number was being built every 3 weeks. Rents in Denver fell significantly in 2016 and 2017. The housing constructed was built for affluent tenants, however, not for poor and working-class house- holds. The creation of affordable housing units requires federal investment because there is little profit for the private sector in serving these communities.

An analysis of rent control in San Francisco found that it saved tenants between $2,300 and $6,600 per year, and made it easier for tenants to stay in their homes.

Based on the demand for public housing, the current supply is insufficient. The average wait time for public housing is over a year, and most cities have closed their wait lists because they are so long. Additionally, renters in public housing have lower rates of housing cost burden than renters using most other forms of housing assistance. The lack of financial support from policymakers is the biggest problem facing public housing.

Before American racism and capitalism transformed American “social housing” into “public housing,” public housing was highly desirable and part of the upward mobility of many African Americans. J. S. Fuerst documents this in When Public Housing Was Paradise: Building Community in Chicago.

Polling Data: Americans Want Policymakers to End the Affordable Housing Crisis

More than 80 percent of Americans believe that housing affordability is a problem in America today.

“[M]ore than three in five adults (63%) believe a great deal or fair amount can be done to address problems of housing affordability, and the same proportion (63%) believes this issue has not yet received enough attention.”

“76 percent of likely voters in the 2016 presidential election stated that they would be more likely to support candidates who made housing affordability a focus of their campaigns and a priority in government.”

How to Talk About Promoting Affordable Housing for All

America is at its best when we all have a place to call home. Access to a safe and affordable home near quality schools, transportation, and jobs is basic to the American Dream and to our nation’s future. Millions of working Americans should not have to struggle to find an affordable place to live. We are a stronger and better country when decent housing is within reach of all of us.

Our housing rules have swung out of balance, favoring the wealthy rather than Americans in need. The American public invests $200 billion each year to support housing, but most of the benefits go to households that are already wealthy. Rather than catering to wealthy special interests, we can change the rules to ensure that federal housing resources serve families with the greatest needs: housing the homeless, and enabling low-paid renters to raise their families in stable homes.

Across America, rents are skyrocketing while paychecks lag behind. As long as we rely on private developers and landlords aiming to maximize their profits, we will never guarantee that every family has a safe and stable home. It’s time for the public to step up and ensure that affordable social housing is available to all who need it. Flourishing European models, and successful examples from our own history, show that adequately-funded, well-managed public housing can provide good-quality homes that poor and working people can afford.

Wrap-Around Policies

Address Income Inequality and Wage Stagnation

The high and rising rates of housing cost burdens are the result of 2 major factors. First, there is an inadequate—and declining—supply of affordable housing. Second, household incomes have grown little since the 1960s, especially relative to the growth in rents.

Looking again at Figure 1, we can see slight interruptions in the upward movement of the rate of housing cost burdens from 1990 to 2000 and from 2010 to 2016, particularly for the middle quintile and the lower-middle quintile. These interruptions correspond to periods where the national economy approached full employment and wages began to rise. (The country approached full employment by national measures in 2000, and has been trending toward full employment since about 2015.) When more people are working and they are working for higher wages, household income rises and households have more money to dedicate to housing. A broad policy agenda, like that of the Economic Policy Institute ’s , can create an American economy of full employment for all in good jobs.

Pursue Policies to Redress Historic Disinvestment

The U.S. government actively deprived African-American communities of investment through its redlining policies. Years later, lenders targeted African-American communities for predatory subprime lending that resulted in historic losses of wealth. Policymakers should develop policies to redress the economic harm cause by these discriminatory practices.

Title II of Senator Elizabeth Warren’s American Housing and Economic Mobility Act, “Reversing the Legacy of Housing Discrimination and Government Negligence,” is a promising start. This section of the bill has 3 sets of policies to address communities that have faced historic disinvestment. (1) It calls for down-payment-assistance grants to be given to first-time homebuyers who currently reside in low-income communities that were subject to redlining by the federal government. (2) It calls for HUD to assist communities that have not yet recovered from the financial crisis by pursuing loan modifications for borrowers with negative equity; by purchasingvacant, foreclosed property to enhance property values; and by assisting borrowers with negative equity to rehabilitate and keep up with maintenance on their property. (3) It calls for the Community Reinvestment Act to be amended to cover more financial institutions, to promote more investment in poor communities, and to strengthen sanctions against institutions that fail to follow the rules.

Address Housing Segregation

America is a deeply racially segregated society, and this segregation is to a large degree the result of government action. The government’s role is amply documented in Richard Rothstein’s The Colorof Law. Rothstein even documents a public housing authority that evicted all white families from an integrated development to create a blacks-only project. The federal government should pursue integrationist housing policies with the same zeal with which it pursued segregationist housing policy.

One important step in this process would be recommitting to the Affirmatively Furthering Fair Housing rule established under the Obama administration. There should be no further delay in applying this rule. The Poverty and Race Research Action Council and other organizations are working to have the rule followed and compliance monitored.

Stop Source-of-Income Discrimination

Landlords help to maintain America’s race and class segregation in housing by discriminating against renters based on their source of income. Renters who pay their rent based solely on income from work are more likely to be accepted as tenants than renters who use Housing Choice Vouchers and other sources of safety-net income. This practice must be prohibited. The Center on Budget and Policy Priorities reports that states and localities with voucher non-discrimination laws are effective at reducing this form of discrimination. These anti-discrimination laws are likely to open up voucher households’ access to higher-opportunity neighborhoods.

End Exclusionary Zoning

There are a number of zoning laws that inhibit the supply of housing and help to facilitate racial and class segregation. Policymakers should carefully review these laws and encourage the removal of those laws that do not serve the creation of safe and socioeconomically diverse communities. Section 2 of Senator Cory Booker’s Housing, Opportunity, Mobility, and Equity Act of 2018 is a good start. Booker linksCommunity Development Block Grant funding to the removal of exclusionary zoning policies. The bill calls for Block Grant recipients to develop a plan to increase the supply of affordable housing by doings things such as authorizing high-density and multi-family developments in more areas, eliminating height restrictions on developments, and streamlining permitting processes. ​​​​​​​