[Editor’s Note: This article was originally published by NPQ on June 6, at https://nonprofitquarterly.org/social-housing-how-a-new-generation-of-activists-are-reinventing-housing/. Used with permission.]
What is social housing? The simple answer is that it is a systemic approach to providing homes that treat housing not as a commodity, but as a human right. But to make it more than just a slogan, you need policies and institutions to make that right into a reality.
Not so long ago, social housing was rarely discussed in the United States. But today there are over a dozen social housing campaigns across the country: from municipal efforts in Los Angeles, Washington, D.C., Seattle, Kansas City, and San Francisco; to statewide campaigns in California, New York, and Rhode Island, to mention a few. Some are grassroots campaigns; others are led by elected officials. Each seeks a unique path to meet the needs of their own localized version of the broader housing crisis.
Many reports, too, have called for social housing, including Right To the City, People’s Policy Project, People’s Action, Community Service Society, and the Center for Popular Democracy. Some point to large-scale, government-run rental housing, while others also explicitly include housing cooperatives and community land trusts. And among the most original proposals make an ecological case for social housing as a core part of a Green New Deal.
It makes sense that social housing is gaining popularity today. In the fallout of the pandemic, it looked for a moment as if U.S. housing policy was about to fundamentally change. But in the end, governments dragged their feet and promised change stayed on the drawing board. But that hasn’t stopped movements from pushing. So, might a profound shift to social housing yet be on the horizon?
Vienna and the Birth of Social Housing
The staff and residents of Karl Marx-Hof, the famous public housing complex in Vienna, have seen an uptick in international visitors. The “people’s palace” houses 3,000 residents in 1,300 comfortable apartments, all in a pleasant and well-maintained complex that includes a large courtyard and ample common facilities.
When it opened in 1930, it was the largest residential housing project in Europe. Today a city streetcar line makes four different stops along the iconic kilometer-long façade. At the age of 93, it has a storied past but is also a powerful exemplar of Vienna’s ongoing commitment to housing. Visitors from the U.S. cannot help but be shocked at the contrast with public housing at home, as Karl Marx-Hof seems to suffer from none of the problems of underfunding and poor quality that plague its U.S. counterparts.
And while Karl Marx-Hof is a mandatory stop, what is actually more interesting is the broader system of social housing it exemplifies, which includes public housing, limited equity cooperatives, public developers, inclusive urban and environmental planning, excellent public transit, and extensive regulation and taxation of the private market. Nearly two-thirds of the city’s housing stock is considered social housing.
Local housing authorities expect the flow of visitors to increase this year as the city celebrates 100 years of social housing. In 2022, delegations from California, Hawaii, and New York visited the housing complexes, and now, for a second year in a row, there will be a course offered by the Global Policy Leadership Academy for elected officials and philanthropists interested in learning about the city’s success.
Attention to Vienna’s housing is not new, but interest from the United States is. Not since the founding of public housing in the U.S., when Vienna was also the standard housing expert tour itinerary, has social housing been so prominently part of U.S. public discussion.
A Looming Housing Crisis
Why is social housing gaining U.S. adherents? The reasons are not hard to discern. Evictions are up, while year-over-year rent growth for new leases of single-family rentals peaked at 16.7 percent in July 2021, and has remained in double digits since then. A leading driver of inflation, rent growth had a singular effect on rising prices.
Meanwhile, housing prices rose so fast in 2021 that, on paper at least, people could earn more from their home than from work. As many would-be homeowners were priced out, investors have swept in. At the end of 2021, investors bought 26 percent of single-family homes on the market, driven by the promise of higher rental incomes.
These problems stem from the contradictory demands for real estate as a commodity and housing as a social good. For housing activists around the country, the appeal of social housing is its promise to “decommodify” housing—that is, to shield housing costs and access from the private market.
But 1920s Vienna is not 2023 United States. Vienna’s social housing was created when the city’s hegemonic Social Democratic Party decided to discipline a weak real estate sector and build up a robust local welfare state. The broader development of welfare states in Europe was also in a period when a post-war housing boom, a powerful administrative apparatus, and an organized working class made public inroads into the market possible.
In contrast, neoliberalism, marked by its favoring of private sector over direct government provision, has reduced the financial and administrative capacities of U.S. federal, state, and local housing agencies. After pulling back from providing for the direct ownership and management of public housing, U.S. affordable housing policy is now handled almost entirely through subsidies to the private market via tax credits and rental assistance.
Even in Europe, in recent years investment in social housing has been on the decline; as much as a third of the original social housing has been privatized due to neoliberal pressures there. Legislative change is difficult, since the real estate industry has largely captured the state at all levels of government, creating what urban planner Samuel Stein calls “the real estate state.” Therefore, policy advocates in the U.S. and beyond must contend with the task of growing a robust social housing system in the infertile soil of neoliberalism.
Advancing a Social Housing Vision in America
What is emerging today in U.S. social housing campaigns is a mosaic of different variations of decommodified housing. Despite the debates on how to define it, for these campaigns social housing has three qualities: it’s nonspeculative, it’s democratically run, and it’s publicly backed. Nonspeculative means that the price of shelter and access to it are not determined by the market. Democratically run means that residents have meaningful say over their living conditions. Publicly backed means that housing has governmental resources, and institutions are ready to support a social housing sector. These qualities distinguish social housing from market-oriented programs like housing vouchers or the Low-Income Housing Tax Credit.
Today’s proposals are building on models and lessons from previous eras of social housing. In an era that we call Social Housing 1.0, governments felt that they could build big projects, and thus created and managed large-scale, nonmarket housing. This includes the well-planned and universalist government housing of many places in Europe, as well as the marginal public housing system in the U.S. that only served the poor. These were almost exclusively rental properties.
But as neoliberalism eroded the capacity and willingness of governments to build housing, communities had to roll up their sleeves and do it themselves. In response to the market-based system’s failure to develop adequate affordable housing, we have seen the rise of cooperatives, nonprofit housing corporations, community land trusts, and tenant syndicates—in other words, housing provisions outside of the government.
Today’s campaigns are drawing on a mix of institutional designs and transitionary policies of the prior eras to deal with the unique conditions of the U.S. The result is what we might call Social Housing 2.0, a kind of “institutional bootstrapping” where all the tools are potentially on the table. This means campaigns are pushing for a mix of public and community ownership, and that they are grappling with the challenges of where to get the money.
Creating a system where housing is a right is treacherous. Neoliberalism put millions into deep poverty and simultaneously atrophied the kind of public sector needed to pull them out. Thus, an “ideal” social housing policy may have to be preceded by something that could actually be created in the world of today. But too many concessions risks creating a warmed-over version of the market-based affordable housing policies that are currently in place.
Social housing will have to contend with many dilemmas and contradictions, for which the best resolutions are not clear and likely not applicable to every local context. Dealing with these is not necessarily an either/or. In fact, solutions will often lie somewhere in between. In particular, in structuring social housing policy it is important to address the following tensions:
- Targeted versus universalist: A targeted housing policy focuses on those most in need. The existing housing system has left hundreds of thousands homeless, and millions more giving over half of their income to their landlords, only to (often) live in substandard housing. Traditionally, U.S. housing policy has focused on the neediest, yet even that approach has failed miserably.
By contrast, a universalist social housing policy provides benefits to broad swaths of the population. Universal programs cost more money but typically attract far broader political support. This is one reason why Social Security has proven more sustainable than U.S. public housing. A universalist program also doesn’t require means testing, which is both bureaucratically costly and often degrading to beneficiaries.
- Community-owned versus government-owned: Community-owned housing is decentralized and decisions about what to do with a property are made by residents. These models often involve cooperatives or mission-driven nonprofits—and can involve a mix of resident-owned and rental housing. Community-owned housing also has a history of more democratic and engaged management.
Government-owned housing means that governments hold all property rights to the housing. It is therefore entirely rental housing. It is much easier to grow and manage government-owned housing at a large scale, since it has greater financial and administrative capacity than small-scale community-owned housing, though resident engagement, especially in the U.S., has been mostly symbolic rather than empowering.
- Revenue-independent versus subsidized: Where does the money come from to create social housing and to keep it running? Revenue-independent social housing is financially sustainable on its own. For construction, it may rely on traditional private sources of startup capital, such as loans, government bonds, or funds from the residents themselves. For ongoing costs, these types of housing often “cross-subsidize” the lower-income rents with higher rents from moderate-income renters. The pool of potentially available private capital has fewer political obstacles than relying on public appropriations. But private capital introduces the pressure to generate surpluses to pay back lenders.In contrast, for subsidized models, the government makes up the difference in lower revenue that results from housing low-income tenants. This may come in the form of initial construction subsidies, or with subsidies for ongoing operations costs. Subsidies reduce the pressure for the housing to “break even” and for deeper affordability for those who need it.
How can social housing advocates proceed? Given the challenges of making federal policy gains, at least initially social housing policies are more likely to gain traction at the state and local levels. That means that policies will need to be tailored to local contexts, especially given budgetary challenges. Therefore, the question may be not whether, for example, to depend fully on private funding or to exclude it altogether, but rather how much market influence to allow, while still ensuring that the housing is nonspeculative, democratically run, and publicly backed.
We have already seen early local legislation that is navigating these tradeoffs. In February 2023, Seattle’s I-135 ballot initiative created a municipal Social Housing Developer. The agency will create housing that will be entirely owned by the city, not by nonprofits or cooperatives. People making up to 120 percent of area median income will be eligible for the housing, thus giving it a broader constituency. At least until another source of funding is found, currently the agency’s only authorized revenue stream is from issuing bonds, which will require it to generate a surplus from the housing to pay back the bond holders.
In November 2022, Los Angeles voters approved the affordable housing ballot initiative Measure ULA with a yes vote of over 57 percent, establishing a transfer tax on properties that sell for over $5 million. Seventy percent of proceeds will go to affordable housing and 30 percent will go to various homelessness prevention services. Of the affordable housing dollars, up to 22.5 percent can be used for “alternative models for permanent affordable housing,” which includes public housing, limited equity cooperatives, and community land trusts. The housing is mostly targeted to those making less than 80 percent of area median income—with at least 20 percent of the units reserved for those making less than 30 percent of area median income—while up to 20 percent of the units may be market rate. The revenues from the transfer tax create the ability to provide an ongoing subsidy to low-income renters; therefore, rents do not need to cover all costs.
Like all local social housing advocates, organizers in Seattle and Los Angeles had to make choices on what to prioritize, given local conditions and politics. There is no clear “right” answer, since all the decisions invoke the tradeoffs discussed above.
Building Social Housing for the Long Haul
A single cooperative, community land trust, or public housing project on its own is not social housing. Real social housing is a system that establishes housing as a right. Advancing and establishing housing for all as a right requires not just building decommodified housing but also maintaining housing outside of the market for the long haul. It also requires an “ecosystem” of policies, organizations, and movements to keep the system working and holding true to its mission. The more that housing and real estate are treated as a primary fuels of capital accumulation, the less our ability to create homes for all.
[RELATED ARTICLE: The Making of Co-op City, the Nation’s Biggest Housing Co-op]
Elsewhere, we have proposed a Social Housing Development Authority, which would be a federal institution to acquire and rehabilitate distressed real estate to convert to social housing, as well as build new social housing. This is one possible answer to the complex question of how to build a system of social housing in the United States even amid an inhospitable political context.
Such a federal authority could help local initiatives scale, while transitioning increasing shares of housing out of the housing market through a combination of subsidies, affordable financing, and revolving funds. It would develop new public rental housing as well as seed housing cooperatives. Central to the work too would be extensive organizing and mobilizing work by tenants and movements to keep the federal agency focused on its mission—and to avoid capture by private real estate interests.
To our minds, all these issues boil down to the question of political will. And political will can change. Already in a few short years, social housing has moved from abstract concept to broadly debated policy. The grassroots organizing that has made this possible shows little sign of letting up.