The Housing Affordability Crisis: Progressive Responses

Shelter Burden: Local Politics and Progressive Housing Policy by Edward G. Goetz.  250 pp.  Philadelphia: Temple University Press. 1993. $39.95 (cloth)

Shelter Poverty: New Ideas on Housing Affordability by Michael E. Stone. 423 pp. Philadelphia: Temple University Press. 1993. $49.95 (cloth) $18.95 (paper)


In Shelter Burden, Professor Ed Goetz of the University of Minnesota focuses on the local government response to federal cutbacks in housing in the 1980-1990 decade. During this period, he estimates that increased state and local governmental spending on low- and moderate-income housing made up approximately one-third of the loss of federal aid. Goetz acknowledges the restraints on the fiscal capacity of local governments attempting to promote greater equity and income redistribution, e.g., limitations on their ability to tax, competing budgetary demands, economic restructuring that has reduced central city tax bases. Nevertheless, Goetz demonstrates that many local governments have been increasingly responsive to addressing housing affordability problems.

Goetz sees this pattern as a result of the actions of the housing movement and, in particular, the growth of nonprofit community development corporations (CDCs), as well as other community-based housing organizations. He documents the financial support of local governments for CDCs through his own and other national and local surveys. This, in turn, can lead to a larger role for nonprofits in the delivery of affordable housing, although this is not guaranteed.

Goetz outlines four models of CDCs and local low-income housing delivery systems: 1) local government sponsorship; 2) [public-private] partnerships; 3) community-based networks; and  4) pre-organization. Goetz surveyed 133 cities, using 13 progressive housing policies, to determine which U.S. cities were the most progressive. His top three cities, in order, were Berkeley, San Francisco and Los Angeles, all in California.

Goetz’s major case study was Los Angeles in the last terms of former longtime mayor Tom Bradley (generally cast as a moderate/conservative Democrat). Goetz sees more liberal and progressive changes in the city’s housing policies as resulting directly from advocacy by various community organizations. What effect the 1993 election of conservative Republican Richard Riordan as mayor will have on the future of more progressive housing policies in the nation’s second largest city remains to be seen.

In addition to city governments, Goetz surveyed the directors of statewide housing coalitions in 32 states. As with cities, Goetz found evidence of significant impact on state housing policies by progressive statewide housing coalitions. However, he found it more difficult to measure this.

Goetz sees the 1990s as a “post-federal” era, meaning that the pre-1980 HUD budgetary levels for low- and moderate-income housing are not likely to be restored, even with incremental increases (e.g., since the Clinton administration and Henry Cisneros have embarked upon re-inventing HUD). Therefore, Goetz sees state and local government as continuing to be very important for the development and implementation of progressive housing policies. Goetz identifies three attributes of the progressive paradigm: growth with equity; economic democracy; and the creation of a viable third sector of nonprofit housing. His analysis supports the view that incremental reforms are possible at the state and local levels, even in an era of federal neglect of housing policy and conservative opposition to governmental intervention in the private housing market.

Professor Michael Stone of the University of Massachusetts, Boston,  has written a lengthy version of previous arguments for removing housing from the market system and making it a nonprofit good. He argues for social ownership similar to nonprofit cooperative and public housing more prevalent in Western Europe, echoing similar proposals made by John Gilderbloom and Richard Appelbaum in their book Rethinking Rental Housing (1988) and John Emmeus Davis in The Affordable City: Toward a Third Sector Housing Policy (1994).

Stone’s contribution to the debate over the problem of housing affordability and how to address it is his concept of “shelter poverty.” By this, he means that each household’s ability to pay for decent shelter should take into account their income and composition, as well as their other basic needs. He rejects affordability standards such as the twenty-five or thirty percent of income for housing payment requirements used by HUD. What Stone is concerned with is meeting the needs of lower-income Americans for all basic necessities, including housing. His basis for analysis is ability to pay, not what is actually paid in a mostly market-driven housing system.

By his definition, in 1991, an estimated 29 million U.S. households comprising 85 million persons were shelter poor. Forty percent of renters, compared to 20 percent of homeowners, were shelter poor. Half of African-American and Hispanic households were shelter poor, compared to one-fourth of white households. Stone calculates that our national housing affordability deficit in 1991 was $95 billion, equivalent on average to $300 monthly needed by shelter poor households. This deficit has increased by half in the past two decades.

Much of Stone’s analysis elaborates upon the magnitude of the shelter poverty problem, its historical roots, and the failure of public policy through programs like public housing, urban renewal, welfare assistance, Section 8, and the low-income housing tax credit to solve shelter poverty.

Stone then discusses in detail his concept of social ownership, removing much of the housing stock from the private market and making it permanently affordable. His ideas are a more detailed version of previous proposals made through the Institute for Policy Studies – A Progressive Housing Program for the United States (1987) and The Right to Housing: A Blueprint for Housing the Nation (1989).

Stone would replace market-based incentives used to produce low- and moderate-income housing with direct federal capital grants. He proposes to buy out the private rental market through government bonds at a total cost of $280 billion ($18 billion annually over 40 years). He proposes to substitute cooperative forms of ownership to replace individual home ownership. Stone estimates that the costs for his proposed social housing program would be $100 billion annually (about half of which would support the operation of housing in the social sector). This is roughly four times higher than HUD’s current authorized budget. Stone would also establish a National Housing Trust Fund to provide credit to the social housing sector. One source of financing this massive increase in federal funding would be the elimination of regressive federal tax benefits for homeowners and landlords. Another source would be tax reform (additional taxes on the wealthy and corporations).

Obviously, Stone’s proposals would require a virtual political revolution, especially among the two-thirds of Americans who are owner occupants. The banking, real estate, homebuilder, insurance, and development lobbies that have so influenced American housing policy would all fiercely oppose such changes. Throughout, Stone argues for ideologically-based organizing, citing examples in Massachusetts. He also cites a few examples of populist organizing against taxes, redlining, and foreclosures as offering hope of a possible constituency to provide support for his proposals. However, there are few examples of progressive municipal regimes, none at the state level (although some states have adopted progressive housing reforms), and no indication that there is any support nationally among voters or in Congress that such radical policies would receive any serious political consideration. The Clinton administration’s apparent refusal to even consider a proposal by Labor Secretary Reich to limit the “mansion” subsidy to help pay for healthcare reform indicates the difficulty of directly challenging the current housing system.

In the present economic, political and social climate, the radical “socialistic” nature of Stone’s reforms, combined with an incredible price tag when the federal deficit prevents virtually any major domestic social reforms that are not self-financed, means that his call for a right to housing will not soon be heard in Washington, DC. However, Stone, like Goetz, identifies many housing reform policies on the way to a right-to-housing that have been enacted at the federal, state and local levels. This gives hope that incremental changes, largely at the grassroots level, may eventually form the basis for more progressive, systematic changes at the national level when a political constituency for such change emerges.

Dennis Keating
Dennis Keating is an emeritus professor in the Department of Urban Studies at Cleveland State University. He has written widely on housing, neighborhood development, and urban planning. His 2016 history of Cleveland's Tremont neighborhood was published by the History Press. He is a member of the board of Future Heights and its Planning and Development Committee in Cleveland Heights, Ohio.

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