Horizons in Housing

The COVID-19 pandemic is not America’s only crisis. From one of the highest rates of child poverty in the developed world to tens of millions lacking proper health insurance, to over half a million sleeping on the streets, the pandemic has laid bare structural issues in America that have been allowed to fester for far too long. As part of the pandemic response, President Biden has decided to continue former President Trump’s policies of eviction and foreclosure moratoriums. This policy addresses the difficulty many experience affording housing, an increasingly apparent pitfall of the American model. While the moratorium is a necessary band-aid to keep people in their homes during this tumultuous year, it is no solution to a crisis that has worsened over the last few decades in nearly every major metropolitan area in the country. The principal issue is that there are not enough houses in areas of high demand, especially ones affordable to low-income individuals and families. While America has no shortage of land to build houses on, job opportunities are increasingly concentrated in urban centers, causing high demand for living space in cities and the surrounding suburbs that are rapidly filling up. Urban rents are rising dramatically as housing supply fails to keep up with this demand. The sharp contrast between the accessibility of housing in rural and urban markets has allowed this problem to go unaddressed for too long. There are a multitude of reasons behind this crisis, but the solution is an obvious one: we need to build more homes.

In my home state of California, this issue is prevalent in every major city. Exclusionary single-family zoning has led to urban sprawl, and cities such as San Francisco are more suburban. Directly south in San Jose, duplexes are banned on 94% of residential land. Furthermore, high profits incentivize developers to build high-end housing, resulting in a dearth of low-income housing, as seen in Los Angeles. The cost of living is rapidly increasing in each of the above areas and, as it leads more and more Californians to leave the state, many are starting to wonder what can be done to make housing more accessible. Eliminating single-family zoning, as the cities of Sacramento and Berkeley recently voted to do, is certainly a step toward having enough homes to meet demand. Some champion rent control, a policy that is good for those struggling to keep up with their monthly payments, but that economists say discourages the development of additional units. Proponents of rent control argue that the free market is incapable of fixing this crisis, while its critics retort that restrictive zoning has prevented developers from having the opportunity to do so. However, rent control is not a new idea, and is currently law in many cities experiencing housing crises such as San Francisco and New York. The government has tried to solve the lack of affordable housing primarily through the implementations of the Low-Income Housing Tax Credit (LIHTC) and Section 8 Housing vouchers, both of which have proven to be inadequate. LIHTC gives tax credits to developers who build affordable housing, but the current incentives are weak, and the affordability requirement expires after just 30 years. Section 8 provides low-income renters with vouchers to subsidize private housing, but applicants spend years on wait lists and options are often limited to the most undesirable neighborhoods. While private-sector reforms are certainly necessary to make housing markets more accessible, solving the crisis will require exploring new ideas in the public sector.

When many Americans hear the phrase “public housing,” images of dilapidation, poverty, and crime come to mind. American public housing has a controversial history, one that started with great hope but often ended up reproducing the problems it sought to solve. Public housing has been built in nearly every major city since the post-war period, yet much of it is no longer standing. St. Louis’ own Pruitt-Igoe housing complex is an exemplary case study of how American public housing projects failed to deliver on their promises and brought us to our current crisis. 

Pruitt-Igoe was constructed with federal funds in the early 1950s with the goal of providing affordable units to working class families in the St. Louis area. However, by the late 1960s many units were vacant and the complex had fallen into a state of disarray. While Pruitt-Igoe was federally funded, maintenance of the low-income housing project was not subsidized. Many tenants were single mothers and part-time workers with intermittent income, meaning that when they were unable to pay rent, the housing complex’s utilities were disabled. This created more vacancies, exacerbating the lack of funding. Furthermore, Pruitt-Igoe was built in a place with few options for food, employment, and public transportation. This had the effect of isolating tenants from the rest of society and densely concentrating poverty in the community of almost entirely black residents, many of whom were in public housing due to decades of discrimination in housing and job markets. Because the projects were limited to those at the very bottom of the income distribution, there was never any chance of turning the situation around, and concentrated poverty remained its defining trait. The buildings deteriorated and became a hotspot for crime as everyone who could get out did. In 1972, the city of St. Louis admitted what Pruitt Igoe’s tenants already knew: the project had failed. By 1976, all 33 buildings had been demolished. If America is going to view public housing as a potential solution to the crisis at hand, we must be willing to look to other nations’ examples of success for inspiration. While Americans have an overall negative view of public housing, that is not the case elsewhere. The nation of Singapore and Austrian city of Vienna, stand out as examples of successful public housing regimes, each having taken their own approach to the question at hand. 

Vienna’s social housing project began in the 1920s when the Social Democratic Party controlled Austria’s first democratic government. The socialist government built tens of thousands of units of mixed-income social housing in the first few years, and the city has continued to expand social housing ever since. The average rent in Vienna is 65% less than what it is in New York City and residents in social housing spend far less on rent than the benchmark 30% of income that is deemed acceptable in America. These projects avoid the pitfalls of Pruitt-Igoe such as the concentration of poverty and underfunded utilities by providing units that vary in size and amenities, available to everyone except the richest 20%. Middle-income Viennese living in social housing get units at below-market rates while their rents help to cover the costs of low-income neighbors. Vienna’s Social Democrats also implemented a variety of public goods as rights, from healthcare to transportation, which have been integral to the city’s successful social housing model and earned it the name “Red Vienna.” While the United States lags behind in this regard, social housing would increase the desirability of quality public transit and build solidarity between citizens in our increasingly atomized society.

Singapore, a far denser country than America, has also done public housing in its own unique way. The Singaporean government builds condominiums and sells them at an affordable rate on 99-year leases. This program allows Singaporeans to own homes and build wealth as property values rise, without all units being bought at a market rate that only the already well-off can afford. The condominium complexes are managed by town councils and house over 90% of Singaporeans. While this is easier to administer than Vienna’s model, some have raised questions about its sustainability as tenants start to re-sell their units for far more than they bought them for. Singapore’s approach to public housing provides an example for how the public sector can help solve the housing crisis through homeownership, a core aspect of the American dream.

Ending the housing crisis is no simple task. No one policy can get everyone off the streets, and successes may take years to be observable. However, there is finally reason to be optimistic about the future of affordable housing in America. Assemblyman Alex Lee of California’s 25th district recently sponsored AB 387, a bill that would open the door to social housing in America. Some may be skeptical of the bill’s central call for a new agency, the California Housing Authority, to build social housing up and down the state. What many don’t realize is that California has been successfully doing this for decades in the form of housing at its public universities. Lee’s bill combines aspects of the systems used in Vienna and Singapore, calling for mixed-income rental and ownership housing to be built and socially or publicly owned to keep affordability sustainable. As a mere first step, the bill is rightfully broad, allowing for a variety of approaches based on each location’s specific circumstances and demand. Keeping an open mind and learning from existing models must be integral to the mission to ensure every American a home. With similar bills having been recently introduced in Maryland and Hawaii, there may be reason to believe that the end of the housing crisis is on the horizon.

Will Pease ’23 Studies in the College of Arts & Sciences. He can be reached at wpease@wustl.edu.