Will it take the feds to solve the Bay Area’s housing woes? Image: Wikimedia Commons.
Tuesday, the San Francisco Board of Supervisors passed an ordinance that, if affirmed by the voters, would allow them to increase affordable housing requirements. Meanwhile, in Sacramento, lawmakers want to spend $1.3 billion on low-income housing. Both will help with the Bay Area housing crisis and it’s great that San Francisco and California are working on the problem. But what about the Feds?
Without a large-scale financial commitment from the federal government, the issue of affordable housing will never be solved. Further, if we truly want to curb displacement of the most vulnerable households, this housing will also need to be publicly owned. States, regions and local jurisdictions simply can’t solve this problem on their own, and many of the strategies currently on the table–rent control, inclusionary housing, impact fees–are simply playing in the margins.
Market-based supply can play a significant role in addressing the housing affordability problem that is currently faced in communities like the Bay Area where housing costs have gotten so high, even high income households have difficulty obtaining new, market-rate housing. However, unfettered, market-based supply will not–and never could–fully address the affordable housing issue. This is where federal funding is critical.
With annual outlays nearing $4 trillion, where the federal government prioritizes–or retracts–its resources has significant effects that reverberate through our economy and society. Changes in federal policy can be so subtle and fundamental that it’s easy to mistake shifts in federal policy with the “the free market.” When we wonder why housing has become unaffordable for so many, we often lose sight that the problem largely emerged from changes in federal policy decades earlier.
Since 1981, we have seen public housing replaced, but nothing added to the stock of public housing. In fact, public housing has dwindled from a peak of 1.4 million units to a little over 1.1 million–roughly the same number in the mid-1970s. Meanwhile, the number of people in poverty increased by 17 million in that same time period–29.3 million in 1980 to 46.7 million in 2015. That’s not a problem the free market or cities can fix.
Current federal housing programs exacerbate the issue by further privatizing public housing, putting more people at risk for displacement. Voucher-based Section 8 is the largest federal housing assistance program, but it relies upon the cooperation of private landlords. In high rent areas where market rates far outpace HUDs “fair market rent (FMR)”, fewer and fewer landlords find Section 8 attractive–precisely the places such programs are needed most.
Nobody argues for a repeat of the racially and economically isolated public housing built between the 1950s through the 1970s. Say what you will about public housing, the neighborhoods that have fared best against displacement are those where it exists. While most associate public housing with the menacing images of Cabrini Green, there are many successful examples of public housing around the country. The failure of public housing was lack of funding, poor design and discriminatory housing policies. Blaming tenants for the deterioration of a building they did not own or have the responsibility of maintaining is like blaming drivers for potholes in the streets.
And this crisis exists in every county in the nation. The loss of affordable housing in cities has resulted in the spread of the population further into the peripheries. The outcome is congested freeways, longer commute times, and increased carbon emissions, all of which choke productivity nationwide. Moreover, it places an acute burden on those most at risk of displacement. A low-income household displaced from a city with mass transit now faces the new cost of purchasing and maintaining an automobile. Finally, regions don’t have the ability to shut their front doors and can’t be islands of respite. Denver solving the problem does nothing for the fireman traveling from Sacramento to Palo Alto, nor does it stop that fireman from relocating to Denver.
The withdrawal of federal involvement in the production of public housing created a “reality” where the largest historical source of funding for affordable housing is absent. As a result, the responsibility has fallen on state and local governments. To backfill the hole, they are left with few tools other than impact fees and inclusionary housing requirements. While one could argue developers should play a role in providing affordable housing, structuring housing policy that relies on a profit-based industry delivering housing that is by definition unprofitable is fundamentally flawed. The affordable housing crisis is a societal problem that can only be solved by society itself.
Of course it’s unrealistic to expect the current Congress to step in. Yet, while complex issues take decades to solve, Congress changes relatively quickly. It was not even a decade ago when Democrats swept in with supermajorities in both houses and the presidency. Times change, and we should prepare for when they change again. We should not limit our demands for the now, but work toward policies for the country we envision for the future. If we are truly going to solve the issue of affordable housing, we must understand what underlies our reality. The federal government isn’t the sole cause of this crisis, but its withdrawal was a key contributor. It should be held in account to play a key role in the resolution.
Jonathan Fearn is VP of Development for SummerHill Housing Group, a residential builder and developer. His is also a volunteer with “Connect Oakland.”