MPR News

Housing Insecurity and Homelessness

The U.S business press that reflects wealthy interests is increasingly sounding the alarm on the distressed state of housing and homelessness in American cities. These are important details for investors, business interests and city planners. More than half a million unsheltered human beings, public health concerns, unsanitary communities, open-air drug use and carpets of used needles must be factored in before investment decisions or business plans are made. Further, the cost of living also influences payroll projections and budgeting for business managers. It is important to keep the business community informed of these risks, inconveniences and eyesores. Homeless unpersons must be quantified and qualitatively described so that the persons may make appropriate decisions to live fulfilling and comfortable lives.

Many explanations for housing shortages and homelessness are offered — overly restrictive zoning laws that prohibit new projects causing price increases, the 1977 Community Reinvestment Act, and of course, personal irresponsibility. These attempts to explain the problem are really efforts to explain the problem away. The underlying rot that generates these symptoms is wholly avoided by the business press. After all, it would be contradictory for the profit-propaganda media engines to decry privatized housing.

Privatized Housing

Private housing, first and foremost, seeks to store, extract and grow wealth. Sustainable human habitation and robust living conditions are not its primary or even secondary requirement. The entire process begins with private land, as protected by the state. Ownership of nature is then augmented by ownership of labor once houses are built on said land. The land appreciates as it is a finite quantity, even reducing due to rising sea levels. The buildings depreciate and require upkeep.

The value of the land is derived from the surrounding environment and community — the nature, the people and their work which may result in amenities, attractions and so on. This is why a slice of land in a city is worth more than in the desert. However, with privatized real estate ownership, this natural and communal ‘land value’ is syphoned off into a few hands.

It must be emphasized that this extraction is only enabled by state protection. For instance, 19th-century homesteading laws enforced by the government empowered settlers to steal indigenous land. Privatization of land didn’t simply mean the government selling a plot to a buyer. It meant assault and murder by frontier settlers with the backing of the state — you know, a gentleman’s agreement. The state also chose to extend loan guarantees to certain sections of the population (read: white) which generated a suburban private housing ownership pool.

Racial discrimination, tenant exploitation and speculative gambles on land value that can tank an entire economy present lucrative opportunities for further wealth extraction, after the first step of stealing communal value as described above.

Those are the basics of privatized housing. The details are equally odious.

Through the Private Lens

As the Joint Center for Housing Studies at Harvard University has studied,

The typical sale price of an existing single-family home in 2017 was 4.2 times greater than the median household income, according to our latest State of the Nation’s Housing report. That’s a significant increase from 2011, when the price-to-income ratio was 3.3, and 1988, when it was 3.2.

Further,

The rise in home prices relative to incomes has fueled growing concerns about housing affordability, especially for low- and moderate-income households in markets where the ratios are high and rising. Moreover, the long, secular decline in interest rates that has kept monthly mortgage costs relatively affordable appears to be ending. Consequently, future price increases could lead more directly to increases in mortgage payments.

This outcome can be traced back to Richard Nixon’s moratorium on federally subsidized housing in the 1970s, which created a massive deficit of affordable housing.

As Jacobin covered,

When the moratorium was lifted several years later, it didn’t usher in a new era of public housing, but instead began the era of Section 8 vouchers, a federal subsidy to private landlords of low-income tenants. In the years since, the federal government has doubled down on the shift to private housing, notably under Clinton’s hope vi and welfare reform programs, which disallowed construction of new public housing units beyond the total that existed in 1999. Billions of dollars of tax credits have been distributed to banks and investors through the low-income housing tax credit (LIHTC) program; billions have been cut from public housing budgets. The results have been disastrous.

The lust to privatize and capitalize on a basic human need results in some predictable outcomes. Renters pay a higher share of incomes to service the greed of landlords, cities are gentrified through corporate lordship and people are dragged to the streets by ostensibly meritocratic and impartial forces of the market.

These same forces spur actions to capitalize on this misery. Housing startups such as homeshare.com aim to pack more occupants per apartment unit so as to spread the costs. Not satisfied with the high degree of comfort enjoyed by roommates packed like sardines that would make the Fire Marshall sweat, startup Podshare creates and circulates bookings for barracks-style bunkbeds at $1200/month.

Finally, when people ultimately end up on the streets, the market offers robots to poke them away from the sights and minds of the civilized, upstanding citizenry. Out of sight, out of mind.

Silicon Valley’s Working Poor, Bay Area News Group

Going Home

With support for universal education and healthcare on the rise, the opportunity is ripe to make a case for basic housing as a human right. As HuffPost covered in Vienna’s Affordable Housing Paradise,

With its affordable and attractive places to live, the Austrian capital is fast becoming the international gold standard when it comes to public housing, or what Europeans call “social housing” ― in Vienna’s case, government-subsidized housing rented out by the municipality or nonprofit housing associations. Unlike America’s public housing projects, which remain unloved and underfunded, the city’s schemes are generally held to be at the forefront not only of progressive planning policy but also of sustainable design.

This has resulted in approximately 62 percent of Vienna’s citizens currently live in social housing, where rents are regulated and tenants’ rights are strongly protected. In contrast, less than 1 percent of America’s population lives in public housing, which is limited to low-income families, the elderly and people with disabilities.

These developments are hardly restricted to Vienna. All over Europe, public housing complexes utilize advanced architectural techniques, land optimization and urban planning based on human-interest principles and not real estate profiteering. This approach redefines how housing should be perceived in an equitable society.

Running contrary to this approach is a feudalistic interpretation of housing wherein wealthy owners own sprawling estates. Just a few of those could house the entire homeless population.

Per the National Low Income Housing Coalition, a $21.21/hr wage on an average is necessary to afford a modest, two-bedroom rental home in the U.S. The average hourly wage for renters is $16.38/hr. The federal minimum wage is $7.25/hr. This has resulted in homeless populations that have full-time jobs in many cities.

Self-Enrichment Under Capitalism

The individualistic doctrine of our present-day global capital markets, or as Adam Smith described in Wealth of Nations, “the vile maxim of the masters of mankind,” commands society to relentlessly scratch and claw to find a place in the knowledge class or the capital class, gaining wealth, forgetting all but self. A consequence of this maxim is that no intrinsic personhood remains, and the only extrinsic value that can be gained in society is by specializing and finding a place in the labor markets. Failure to do so gets one discarded into the black-hole of unpersonhood. Healthcare, education and housing are all luxuries inaccessible to those who do not sufficiently further enrich the estate owners. Enrich them, and you may have some medicines, books, four walls and a roof.