Housing Gets Its Due

We may be on the verge of a new public conversation about housing, poverty, and falling behind in America. A forthcoming book, Eviction (Crown), is set to be released on March 1, and by all accounts it will be the next academic blockbuster.

The author, a young sociologist at Harvard named Matthew Desmond, moved into a poor, majority white trailer park as a graduate student, which marked the start of his formal ethnographic research. Here’s an excerpt from an article about Desmond in The Chronicle of Higher Education, describing what he learned after he moved into a rooming house in a poor black neighborhood (emphasis added):

… he began to spend time with Sherrena Tarver, a tiny woman with brown skin and a booming laugh whose business career drives home one of the central themes of Desmond’s research: exploitation. Sherrena (a pseudonym, like all landlord and tenant names in Evicted) was an elementary-school teacher who had reinvented herself as an inner-city landlord. Desmond rode along in her ’93 Suburban as she went about the daily grind of buying properties, repairing units, screening renters, evicting tenants, and attending court. The more time he spent with landlords like her, the more he came to understand that certain aspects unique to poor areas made them lucrative opportunities.

Landlording in the inner city paid well for the same reason that owning a home there was a poor investment: depressed home values. A comparable property might be worth two or three times more in a middle-class white area. But rents in the richer neighborhood weren’t all that much higher, Desmond discovered. For example, a two-bedroom unit in suburban Wauwatosa could command about $750, while a similar place in the inner city rented for $550. The Wauwatosa property, however, came with lots more expenses: higher tax and mortgage payments, plus greater maintenance standards. It was tough to match the return on investment of owning in a poor area. Over the years, Sherrena had acquired three dozen inner-city units, all occupied by impoverished tenants. She calculated her net worth to be about $2 million.

“The ‘hood is good,’” she liked to say. “There’s a lot of money there.”

This quotation gets to the heart of the matter: people must have a place to live, and those who can’t afford to buy are at the mercy of the rental market. Decent places to live are too expensive for many people, particularly in economically vibrant areas. Even in cities with landlord/tenant laws that favor tenants, landlords still hold most of the cards—after all, they own the property, they set the terms of the lease, and they are enriched by their tenants’ rent payments.

It is a set of circumstances ripe for exploitation.

If we want to increase the stock of affordable housing, it seems we have only a few choices: significantly weaken land use regulations to allow more density (see: San Francisco); institute rent control in hot markets (see: New York) or greatly increase housing subsidies (which leads to its own problems). It will be interesting to see which direction the conversation heads.

You can read the full article here. Barbara Ehrenreich’s review of Evicted is set to run in Sunday’s New York Times.

 

image credit: landlordlawblog.co.uk

Why Aren’t We Talking more about Housing?

This campaign season has been filled with ideas about how to help the middle class: raise the minimum wage, reign in Wall Street, make college more affordable, bring jobs back home, spur investment, or give small businesses a boost.

Why, then, is no one talking about housing?

In economically dynamic metro areas, housing is growing increasingly unaffordable for even middle-income workers. This map shows how much, on average, it costs to rent a two-bedroom apartment in every state in the U.S. The results are sobering: “one out of four households spends more than half their income on housing costs.” For minimum-wage workers, the outlook is even bleaker.

A higher minimum wage may help—the study notes that Oregon and Washington, with minimum wages $2/hr higher than the federal minimum wage, have some counties with a slightly better affordability ratio.

But if the federal minimum wage is raised to $15/hr, as Senator Sanders has suggested, what would keep rents from rising along with it, thus negating any advantage to low-wage workers? There is already more demand for affordable housing than supply. Renters are trapped: they cannot afford to buy and therefore stabilize their housing costs, and high costs of living bar them from saving to buy later.

This issue may soon reach a crisis point. Families without stable housing are at risk for a host of other social ills, and average workers paying half their income for housing cannot provide for other basic needs, making them dependent on debt or the state to subsidize their unaffordable rent.

Workable solutions are few; land banks, first-time homeowner incentives, and related movements are a start. Other measures may be necessary: various kinds of rent control or rent stabilization, loosening zoning laws to allow smaller units and denser development, and requiring developers to set aside more units for below-market rates.

Like medical care, housing is not a luxury good. After food and clothing, shelter is the most basic human need. Providers of rental housing have some moral obligation to those from whom they profit and to the cities whose economies provide them with investment opportunities in the first place.

So why don’t we hear more about housing?

Much more could be said. Stay tuned.

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