As we move through the third decade of the 21st century, we are confronting a deepening and widening housing crisis characterized by skyrocketing housing costs and swelling landlord harassment, evictions, and displacement. Unabated climate disruption and policies that criminalize people experiencing homelessness exacerbate the lethality of being unhoused, insecurely housed, or poorly housed (i.e., living in conditions of disrepair). In the last five years, as these crises have grown, so too has interest in social housing as a promising pathway toward securing housing for all.
This interest, which is both honorable and necessary, has so far manifested in a deluge of reports and op-eds that aim to cultivate the political energy needed to sustain and expand the state and local legislative proposals for social housing. However, there is some misalignment between the stated aims of social housing supporters and the technical details of what’s proposed under that name. If we are to truly chart a course toward housing and social justice for all, we must contend with a couple of those issues.
One of the challenges is semantic: “social housing” means many different things, and the broader political economic context matters. The term has been used to refer to a number of state-subsidized, state-owned, community-owned, or community-controlled housing models, including public housing, community land trusts, and nonprofit-owned housing. What connects these models is not the specific technical arrangements, but a shared commitment to prioritizing the needs of everyday people over profit and private interests.
Drilling down further, most of the writing on social housing highlights specific commitments to decommodified, nonspeculative housing that is socially owned, resident-controlled, and permanently affordable. Much of the discussion also highlights an interest in building mixed-income communities, though for me this is somewhat misguided, as I explain later.
The blog post “How Social Is That Housing” by Community Service Society of New York evaluates and hierarchically organizes housing models on the basis of how well they fulfill the above-described commitments of social housing. The report Social Housing 2.0 by the Urban Democracy Lab at New York University does the same, while also considering scalability and political will.
These assessments conclude that existing models fall short in different ways. For example, public housing is too exclusive in serving only the most economically vulnerable households, and therefore also struggles to attract the political will required to secure much-needed funding for repairs, retrofits, and expansion. Community land trusts lack the state relationship and backing necessary to scale up, but in serving households of low, moderate, and middle incomes, they are considered more “social” than public housing. The reports argue that these (perceived) shortcomings leave a void that should be filled by the introduction of a new model of social housing.
Dangerous Public Debt
The new model has been described as a new version of public housing that devolves responsibilities to the state and local level and alters how the projects would be funded. Rather than annual allocations from the federal government, this new version of public housing would rely heavily, maybe exclusively, on bond financing. Though bonds are a normalized mechanism of public finance in the United States, they carry significant risks as a primary financing mechanism for social housing.
Bonds are debt instruments that state and local governments use to generate a cash flow for public works projects. Today, they are typically issued by an agency specific to the project that is empowered to issue related bonds and solely responsible for repayment. Like all debt agreements, bonds are repaid with interest. For other bond-reliant public agencies, bond debt has been known to balloon over time, and debt repayment can cannibalize the public function of the agency. For example, New York State Comptroller Thomas DiNapoli has repeatedly raised concerns about the trust fund created in 1991 to fund infrastructure like roads and bridges. Today, debt repayment consumes the majority of the agency’s public resources, leaving only 17 cents per subsidy dollar for bridges and roads. Similar runaway debt has left New York City’s central public transit agency, the Metropolitan Transit Authority, reeling as well, leading to declining conditions and rising user fees.
Should social-housing-related debt deals similarly spiral out of control, it is the living conditions and the affordability of the units that would decline. This scenario would mirror the current situation with our existing federal public housing program. However, the solution to this future scenario would be much less clear. With the existing program, if the federal government increased its annual funding allocation, dignified living conditions could be restored, and buildings could be strengthened in the face of climate change. Moreover, with enough additional funding and some regulatory tweaks, the program could be expanded toward addressing the housing crisis at scale. With a program that is reliant on bond financing, traditional governing bodies are typically absolved of any obligations and responsibility and would probably only step in to prevent debt defaults and ensure debt repayment—not necessarily to address deteriorating and unsafe housing conditions.
The prioritization of debt repayment speaks to the fact that bonds are not only a core feature of public finance today, but are also an important investment and wealth-creation opportunity that is coupled with tax exemption privileges. While many seem to benefit from bonds in this way, through retirement funds or college funds, the principal and most concerning beneficiaries are part of a wealthy, global class of actors. For this bondholding class, bonds are a tax-free, state-secured income stream that steadily grows their wealth and balances riskier investments. When large bond issuances are first announced, it is the potential public benefits that are prioritized and celebrated, but if—and maybe more accurately, when—public and private commitments come into competition down the road, it is wealthy private interests that have won out.
This reality might be less of a problem if the bondholding class paid its fair share of taxes, and therefore also contributed to the pool of money used for repayment. However, the rollback of progressive taxation since the 1980s has created a divide between the taxpaying classes and the bondholding classes, creating an extractive relationship between the two. In short, the structure of our public financial system at present takes from the poor and gives to the rich in the name of providing public benefits for the many, which may or may not materialize or be sustained in the long-term. In so doing, this structure exacerbates wealth inequality and deepens the public’s dependency on the bondholding class. This tips the scales of political power as well, making it more difficult to pass the progressive policies needed now while also creating more friction for future efforts.
Centering Middle-Income Residents
The preference for bond financing also affects who the new model of social housing would serve, or at least prioritize. Without direct federal funding, these social housing projects will struggle to serve the households that are most in need of stable, quality, affordable housing.
To be clear, those most in need are households earning less than $30,000 a year, who are more likely to be homeless or living with substantial habitability issues while allocating more than 60 percent of their income to covering housing costs. These households are confronting a life-threatening housing situation, especially as climate change progresses, and with less than $10,000 a year to cover the cost of food, medicine, emergencies, transportation, and other needs, are in an extremely precarious position overall. These households are also more likely to be Black and/or Indigenous to the Americas, pointing to the deep historical roots of the present day crisis. It is these households that must be at the center of our pursuit for housing and social justice.
While this reality is acknowledged in the discussion about social housing and key to the promotional rhetoric, the technical details of social housing proposals raise concerns about which housing crisis would actually be addressed. In addition to the focus on bond financing, it is cross-subsidization rather than federal subsidization (or public investment) that would supposedly ensure lower-income households are also served. In short, social housing projects set aside different proportions of units for different income groups, and the higher rents paid by moderate- and middle-income households would in theory subsidize the lower rents paid by lower-income households.
This is an approach used in many other places around the world. What is overlooked in the U.S. context, however, is that the situation of low-income households here is much more severe, consistent with how thoroughly the social safety net has been shredded. The lack of protections extended to low-income households has created a vast gulf between households in different income brackets that is difficult for many in the middle to truly comprehend. This is why it is so important that lower-income households not only be centered in, but also lead, the discussion and pursuit of housing and social justice.
Instead, what the focus on cross-subsidization in the U.S. does is focus the discussion about social housing on moderate- and middle-income households. While these households are increasingly struggling, they are still qualitatively and quantitatively better off than their low-income peers, with significantly more access to resources and backup options. However, with a focus on mixed-income developments to allow cross-subsidization, these households are not simply some of the potential beneficiaries of the program, but a structural pillar of the financing. This in turn positions the moral imperative to house those most in need as contingent and secondary. This is incredibly concerning given the dire nature of the housing situation confronting low-income households.
The focus on bond financing and cross-subsidization in U.S. social housing proposals is concerning because it continues the state abandonment that has characterized the last half century and the social exclusions that have defined the U.S. since its conception. The pursuit of just futures requires that we instead challenge these conditions, but how?
Public Housing and the Pursuit of Just Futures
Groups led by public housing residents, such as Save Section 9, have been raising these concerns. Their ongoing efforts to instead preserve and expand public housing have been central to renewing the call for the Green New Deal for Public Housing. This legislation presents a truly radical opportunity for housing and social justice at this historical juncture.
What if the existing public housing program were the center of gravity for the emerging discussion about social housing? What if moderate- and middle-income households seeking housing security joined the call for direct federal investment in a housing program that prioritizes the needs of low-income, elderly, disabled, female-headed, and Black and brown households first and foremost? What if we collectively demanded that this program—which already serves some middle- and moderate-income households earning up to $120,000 a year—be funded sufficiently to allow its housing stock to be repaired, retrofitted, and expanded to provide for more neighbors in need?
This pivot would require that we recognize our housing crisis and its solutions in relation to other concerning trends like our regressive tax structure, offshore tax evasion, and the misuse of our taxpayer money to wage wars and enact violence here at home and abroad—and further, it would require that we contend with and address those realties as well. This is a tall order, but a strong demand for real federal investment in housing and abating the housing crisis could boil over into a broader demand for federal investment in other public goods and human needs, like food, health care, transportation, and education. This kind of clarity across communities could create the groundswell needed to realize the freedom dreams that many hold and all would truly benefit from.
What if we didn’t abandon the fight for the federal government, but instead made that the central focus of the working-class movement in the 21st century? Could we ensure that future generations actually thrive, rather than endure similar or worse inequality, exploitation, oppression, and violence? Is this not the radical departure needed to set a new course toward housing and social justice as the 21st century continues to unfold?
About the Author
Tags
Comments
6 thoughts on “We’re Approaching Social Housing Wrong”
Leave a Reply
This site uses Akismet to reduce spam. Learn how your comment data is processed.
Interesting insights, but some gaps here. Social housing’s definition has expanded far beyond the cross-subsidy model for operating costs (and public debt for bricks and mortar capital costs) . Cross subsidy is indeed a”needle thread” and case dependent and rarely guarantees deep affordability. But social housing can and should incorporate direct operating subsidies, tenant based (voucher) subsidies, and project based subsidies to defray operating costs to meet deep affordability. As far as debt concerns–with bricks and mortar and recapitalization–when has debt (private or public) ever been equitable? Public banking and debt-free housing development are still in the future. Indeed, we must push for financing models now that lay the groundwork for that. States have become a laboratory for various financing tools–gov’t grants, debt, guaranteed loans, soft mortgages, etc. {And BTW, federal spending primarily is public debt (T-notes, bonds, etc.)]. Federal involvement in financing is imperative to bring social hosing to scale, but state campaigns do not preclude federal advocacy. And Indeed the call for social housing is a call for an economy that meets all fundamental human needs. Most who heed this call also are involved in mobilizations spanning numerous silos relative to that transformation. We can and will do all these things simultaneously. Thank you for your insights, Kristen.
I agree with your concerns, but I also have concerns about public housing, because it is so vulnerable to political changes that result in underfunding and privatization. In the U.S. context it would be better to have Federal support for non-profit and community land trust housing that can’t be privatized and provides an economic base for independent organizations that work to get more funding for permanently affordable housing and generally support other social justice causes as well.
This is a thoughtful and needed piece. I am particularly concerned about initiatives that argue for a more politically popular appeal to moderate- and middle-income populations (a reasonable strategy for increased funding), but then may not focus sufficiently on actually helping those in most need of subsidy (including *public land*). I am all for a vision of broadening the base of “social housing” if it maintains a necessary focus on first ensuring affordable housing for those at most risk of instability, eviction, and homelessness. In the foreseeable future, available subsidy (either public or private), including land, will remain very scarce, and should be devoted primarily to these folks.
Great piece, discouraging too unfortunately.
Poor people need fewer lectures and more rent assistance, permanent rent assistance. A person on Social Security is going to be 10% AMI and they need rent help because no one seems to build housing for them, period.
I agree with Dan that this is a needed piece, but looking at the longer history of public housing and broader issues of income disparities is important here. While there is no question that we need more resources to address those most in need, intentionally concentrating poverty in the physical projects we support goes against everything we have learned about the negative impacts of concentrating poverty.
Also, public housing WAS essentially a cross-subsidy program, where the federal government paid the debt cost for construction, but operations were primarily funded by rents. The public housing operating subsidy from the federal government didn’t really become a major program until after the Brooke Amendment of 1968, which capped rent at a percentage of income. Though a clear and valuable tenant protection, this also made locally operated housing authorities dependent on federal subsidies for day-to-day costs and contributed to the increased concentration of poverty in our public housing properties.
Prioritizing those most in need for most or all units in specific physical housing developments (as opposed to tenant-based rental assistance) seems shortsighted. Any kind of social housing – public or (private) non-profit – is only one part of the continuum of programs and policies we need to address our housing and income disparity issues. I believe it is important to keep this in mind when creating new social housing programs (or reforming old ones like public housing).
9xcjsy