Luxury Tax law

Opinion | America’s housing disaster is a alternative

August 10, 2021
Jason Wilson

This article is part of the Debatable newsletter. You can sign up here to receive it on Tuesdays and Thursdays.

The United States, as you may know, is in a housing crisis: Americans across the country are running out of affordable housing.

This was true even before the coronavirus hit the world, when hundreds of thousands, if not millions, of Americans were homeless, nearly half of renters suffered from the cost burden, and nearly two-thirds said they couldn’t afford to buy a home . And while some hoped last year the pandemic would turn the country’s cities into affordability lighthouses, this is a hope that has proven short-lived in recent months.

How did living in the US get so expensive and how can the problem be solved? Here is what people are saying.

As Nicole Friedman explains in the Wall Street Journal, the housing crisis can be understood as a 20 year old supply and demand problem:

  • Between 1968 and 2000, the United States built an average of about 1.5 million new homes each year. But for the past two decades, due in part to a slowdown during the Great Recession, the country has added only 1.225 million new housing units each year.

  • Today, with 6.8 million units, the country lacks the need to cover new housing and replace units that are aging or destroyed by natural disasters.

The result: Between 2001 and 2019, median rents rose faster than median rental income in almost all states, according to the Center on Budget and Policy Priorities. In only 7 percent of the districts, a minimum wage worker can afford a one-room apartment.

Why weren’t more apartments built? The rising cost of labor and lumber is one reason, according to a recent report from the Harvard Joint Center for Housing Studies. But as Jerusalem Demsas from Vox explains, supply problems also arise to a large extent from restrictive regulations – such as These regulations, which historically served to anchor segregation, can in turn be used by vocal citizens to block new developments, a phenomenon known as nimbyism: not in my backyard.

Nimbyism is a bipartisan disposition, but some of its most acute damage is being felt in liberal cities and states. For example, in California, where any new build can be turned down under the guise of a 1970 environmental protection act, around a quarter of the cost of affordable housing goes to government fees, permits, and consulting firms. “It’s not uncommon for a California project to be in paperwork for many years because of zoning or objections from other property owners before the groundbreaking ceremony,” said Thomas Fuller of the Times. As a result, San Francisco has the highest total construction costs in the world: A two-bedroom apartment with “affordable housing” alone costs around 750,000 US dollars.

Homeowners have a legitimate interest in this policy. “For all the hostility that targets property developers, landlords and bankers, these profit-oriented companies are not the largest group of beneficiaries of regulations that restrict the supply of housing,” writes Jenny Schütz of Brookings. “Homeowners who were fortunate enough to buy their homes in the past have seen significant asset gains, most of which are tax exempt. No wonder that homeowners use their political powers to further restrict the supply of new living space. “

Federal politics has also contributed to housing inequality, as Patrick Sisson, Jeff Andrews, and Alex Bazeley write for Curbed. Since the 1970s, the federal government has prevented any expansion of the public housing stock while cutting aid programs for tenants who, according to affordable housing advocates, have made homelessness a staple of American life. And by allowing mortgage interest to be deducted from taxable income, the government is effectively spending more money on tax breaks for homeowners than it does on all rent subsidies and public housing.

If the housing crisis is causing the housing shortage, isn’t it the solution – or at least a necessary part of the solution – to build more of it? This is the working theory of Yimbyism, a growing movement of political thinkers and activists calling on lawmakers and homeowners to say “Yes, in my backyard.”

“Yimbys urges reductions in zone restrictions to increase housing supply, arguing that all new housing, both at market price and subsidized, helps keep property prices under control,” said Roderick M. Hills Jr., law professor at the New York University, stated in the Washington Post in 2018.

The proof: Recent research suggests that Yimbys are right. For example, a 2019 analysis of New York City found that rents decrease 1 percent for every 10 percent increase in the housing stock within a 150-meter radius (sales prices also decrease). Another analysis from San Francisco this June found that rents fell 2 percent within 100 meters of the new build and tenants’ risk of being forced into a lower-income neighborhood drops 17 percent.

Yimbys often refer to Tokyo as a real counterexample to American cities: Tokyo, known for its permissive development policy, has expanded its housing supply by around 2 percent per year in recent years, while the housing supply in New York has only grown by around 0.5 percent per year. Property prices have soared in New York over the past two decades, but have remained constant in Tokyo at just under $ 1,000 a month for a two-bedroom apartment.

As popular as the goal of containing housing costs is, the Yimbys have made unlikely enemies of some progressives who share it. For example, Ananya Roy, professor of urban planning at the University of California at Los Angeles, has criticized yimbyism as a movement that puts the concerns of white upper-middle-class professionals at the center while ignoring the concerns of those who really care about it Front lines of the housing crisis.

One of those concerns is that a single-minded focus on increasing the housing supply will only lead to more luxury homes, property speculation and evictions without actually reducing average rents. A recent paper by Jenna Davis, a graduate student in urban planning at Columbia University, found that topping up – a key Yimby priority that allows for taller, denser development – is linked to an area becoming whiter, at least for a short time.

Tenant activists – as well as some self-proclaimed Yimbys – therefore argue that the development must be paired with eviction fines, rental price control and other regulations to protect tenants from displacement. And in order to really lower prices, according to the Anti-Eviction Mapping Project, 60 percent of the new developments would have to be reserved for units below the market price.

And in the end, many Yimbys and tenant activists agree that the housing crisis cannot be solved through the market alone. Why? “The private market alone never offers enough affordable housing for the lowest-income tenants,” says Dan Threet, research analyst with the National Low Income Housing Coalition. “There is simply no incentive for the private market to do this. It requires government intervention and subsidies. “

What this intervention should look like is another topic of debate. Some progressives argue that the government should simply build millions of new public housing, as suggested by Minnesota MP Ilhan Omar. “In the age of neoliberalism, far too much time and money was spent getting private markets to achieve political goals,” write Ryan Cooper and Saoirse Gowan in Jacobin.

But while public housing has worked well in other countries, it has had a difficult history of racial and class segregation in the United States, notes Binyamin Appelbaum of the Times. It would be preferable to subsidize private development in areas most in need of affordable housing through land, tax credits and direct government spending. On the tenant side, the federal government is also to expand its residential voucher program, from which only one in four eligible families currently benefits.

For his part, President Biden has promised to take steps in this direction with his infrastructure plan. And on Monday the Senate released a budget resolution calling for $ 332 billion for housing spending. The details of this plan – and its chances of getting passed in a narrowly divided Senate – will become clearer in the coming weeks.

Do you have a point of view that we overlooked? Email us at [email protected]. Please include your name, age and place of residence in your reply, which may be included in the next newsletter.

“How Berkeley Fought Back Nimbys” [The New York Times]

“The struggle to end single-family zoning and the Yimby / Nimby / Phimby war” [Time to Say Goodbye]

“The Californians are coming. Your housing crisis too. ” [The New York Times]

“Is Yimbyism the Answer to the American Housing Crisis?” [The New Republic]

“How Home Ownership Became the Engine of American Inequality” [The New York Times]

This is what a reader says about the last debate: The Delta variant and school opening

Susan from New Jersey: “Most of the articles about reopening schools with Covid, and particularly the Delta variant, an ongoing threat, don’t address the difficulty of teaching and learning with masks. Most people want kids back to school and complain about hybrid and / or distance learning. However, as a teacher, teaching with masks and understanding students with masks is cumbersome and ineffective. Distance learning eliminates the need for masks and communication is greatly improved. In addition, many schools are not air-conditioned and wearing masks when a classroom is 90 degrees or more is miserable. Until the Covid vaccine becomes a mandate, as so many other students need to attend school, the personal model will not achieve the educational results of the pre-pandemic times. “