The housing crisis in the United States

New Orleans public housing (Photo: Wikimedia Commons)

Across the United States, many Americans are increasingly concerned about affordable housing availability within their local communities. According to a Pew Research Center survey from 2021, roughly 50 percent of Americans have said that affordable housing availability is a major issue where they live, which is a 10% increase from 2018. Once the eviction moratorium ended, eviction filings increased by 38% from August to September 2021, according to the Princeton Eviction Lab.

In addition, increased living costs and stagnant wages for working people across the country continue to make it difficult for Americans to make rent and mortgage payments on time. Take Massachusetts, for example, which now ranks number three for the most expensive state to live in, right behind Hawaii and California. In MA, minimum wage earners would have to work at least 107 hours each week to afford an average 2-bedroom apartment. And for hourly workers to afford a 2-bedroom apartment, they would need to earn at least $36.24/hour. $36.24/hour is over double the current highest minimum wage in America (currently at $15.20/hour for workers in Washington D.C.). The federal minimum wage requirement is still only $7.25/hour. Wages in most states across the U.S. are unlivable, which makes paying for housing even more difficult for working-class people.

The Housing Crisis Under Capitalism

From 2020 to 2021, average rent increased by 10.1%—compared to the 2.5% increase from 2019 to 2020. Housing prices increased by 34% in the same period. According to the census, almost one out of every ten homes were vacant when the census was taken in 2020. At the same time, homelessness rates (though difficult to track) have been steadily increasing since 2016, with an alarming jump around the pandemic, according to the National Alliance to End Homelessness. Despite the 17 million vacant homes in this country, there are estimated to be about 500,000 homeless people in the U.S, and this is likely a severe underestimation.

Housing under capitalism is treated as a commodity, not a human right. Real estate is a lucrative business for the capitalist class while working people struggle to pay their rent and mortgages. Affordable, municipally-controlled public housing could be one solution to the housing crisis. However, the federal government has consistently resisted providing enough funding to build and maintain mass amounts of public housing. The capitalist class prefers building luxury homes and apartments for one obvious reason: they make more money. Even if luxury homes and apartments aren’t occupied by owners or renters, they are an investment that holds value well for capitalists looking to maintain their wealth.

In reality, local governments have the power of eminent domain; they can take properties, pay the property owners back at the market rate and immediately turn the empty or underutilized land or abandoned houses and buildings into public housing. But local governments choose not to do this. At the local level, especially, housing developers, real estate associations, and landlords use their wealth to influence local elections through campaign donations, ensuring that housing remains a profitable commodity for them to sell. There is no need for housing developers and other middlemen who build housing for short-term profit rather than the public good. The government could be hiring people directly to transform buildings into public and affordable housing, as well as build new housing as needed.

Capitalist solutions will make the housing issue even more unsolvable. For example, it’s not guaranteed that rent will decrease if more housing is built—as we can see with the housing market right now, not even 17 million vacant homes are enough to make the housing market affordable. This is due to the crisis of overproduction; developers will build new apartments and jack up the prices to get the most rent money out of tenants that they can. If new housing is going to be built, then there would need to be rent control at the same time. Many new developments are required to offer units at “affordable” rates, though this simply means that rent must be 30% or less of a person’s income. Historically, the marker for what constituted affordable wasn’t 30% of your income, but 25%.

Going Local

The housing crisis is not only a problem in major cities but also in smaller cities like Worcester, MA or Tacoma, WA where people tend to move to try and escape pricier cities like Boston or Seattle. Worcester has many private housing developers that claim to build “affordable housing” for people living in Worcester. Yet the costs for housing still take up 30% of working people’s incomes, sometimes even 50%, leaving people with little to no savings after paying for gas, groceries, education, childcare, healthcare, etc.

Local representatives from Worcester housing developers have said that on average they get five people per day that come into their buildings looking to find places to stay, especially in the Piedmont area where more lower-income people reside. And the people that stop looking for affordable housing range from people who qualify for disability to people who have full-time jobs. This is not only common to Worcester; people that work full-time are still struggling to find and pay for affordable housing as rent costs continuously increase. Worcester has a homeownership rate of 42% which is lower than the national average of 64.5%.

There are new market rate and “affordable housing” apartment projects that have been either proposed or built in Worcester, but these units are still too expensive, and the homes that do get transformed into rental units are mostly for college students. This type of housing tends to push out Worcester residents, as many students will move elsewhere after four years making it easier for landlords to jack up rent prices with each new tenant. Gentrification is happening across the country as more and more working-class people are priced out of their own neighborhoods. Developers who see that they can “flip” poor neighborhoods and sell them as “up-and-coming” are helping to drive the displacement of working-class people. Where can we go once we are priced out of our own neighborhoods?

Some neighborhoods have been taken over by short-term rentals like AirBnB. These types of rentals are more attractive to investors than long-term rentals since landlords can earn in a weekend what they would ordinarily charge per month to a long-term tenant. Many cities are now struggling with hollowed-out neighborhoods that rent for days, weeks, or a few months to tourists, travelers, or event hosts rather than housing residents and local workers.

Most of the apartment buildings in Worcester, as in most low-income cities, are also extremely outdated with environmental hazards that are not being addressed, mostly due to absentee landlords. Worcester is notorious for having an aging housing stock that is not energy efficient either, as many were built between the early to mid-1900s, so lower-income people are usually left paying higher energy costs.

People who live in triple-deckers, especially low-income people and people of color, may also be at higher risk of house fires, and the fires may actually spread quicker too. Modern building codes, which require compartmentalization of structures and smoke alarms, did not go into effect until around the 1970s. When a fire ignites in a home built before 1970, it can spread much more rapidly, especially when the homes are not being maintained by landlords.

Housing for lower-income and people of color is usually built in places that have more industrial pollution. Racist housing practices are a common characteristic of housing under capitalism. Seven years ago, the corporate media covered the lead poisoning of tap water in Flint, Michigan, a working-class city near Detroit. Today, though pipes have been replaced, many people in the city will not drink the tap water because of how poorly the situation was handled and because they lack faith in the city and state politicians.

Empty Houses 

According to various reports, anywhere from 16 to 17 million homes throughout the country are sitting vacant. Banks, real estate companies, and iBuyers like Zillow have been buying up homes across the country and reselling at or above market value, prompted by high housing demand, increasing rent prices, and skyrocketing home values. These patterns within the capitalist housing system make it nearly impossible for working-class people to buy homes or renters to afford apartments when these investors ultimately price them out. Because investors do not want to sell to lower-income working-class people, houses sit empty because the costs of selling to lower-income people outweigh the benefits of actually housing people. Capitalists have no incentive to house people because it is not profitable for them in the long run. Thus, one of the main things we can do as socialists and workers to solve the housing crisis is to guarantee housing for all and to remove the profit motive for housing.

Solutions to the Housing Crisis

Capitalist solutions to the housing crisis will be both ineffective and only short-term. Rent control, which was won through organized working-class movements, including the labor movement and tenants’ rights organizations, had been systematically deregulated and undercut by policies like rent-stabilization. In New York City, rent-controlled apartments meant that tenets had the right to challenge rent increases. To have a rent-controlled apartment, you or your family had to have been living there continuously since July 1st, 1971. In 2002, 2.8% of rental units were rent-controlled. In 2017, it dropped to just 1%. New York City also has “rent-stabilized” apartments, which means that rent can be increased by a certain percentage each year; this makes up about 43% of rental units as of the 2017 NYC Housing and Vacancy Survey. About 42% of rental units in NYC are unregulated, meaning the landlords can increase rent by however much they want.

In addition to facing economic displacement, tenants face absentee landlords, restrictive policies on pets and children (even though the latter is illegal), and discrimination based on race or sexual orientation. The landlords have the court system to help them evict residents, but working people find it difficult to seek recourse when their landlord violates the law. Workers who own their own homes are still vulnerable to the big banks who repossess homes if workers fall behind on unaffordable mortgage payments.

To defend and extend workers’ rights to fair housing practices and access to affordable housing, socialists and workers need to organize to take full control of housing policy from cities and banks via committees of working-class people that are democratically elected. Such committees could be responsible for constructing new high-quality public housing, taking existing units under public ownership, and maintaining/improving housing units. They would consist of residents and housing workers. Democratic committees of workers and residents will be essential because our current governmental bodies generally do not strongly intervene in tenant/homeowner rights or support rent control. These committees would serve working people, ensuring we have access to high-quality, affordable housing by taking the profit out of the equation.

We must fight for rent control and an expansion of tenants’ and homeowners’ rights, though these ultimately will not be enough to solve the housing crisis. It may improve the situation in the short term, but any reforms under capitalism can be taken away or slowly rolled back, as we’ve seen with rent control. Ultimately, we must fight for socialism, where workers have democratic control over the economy, including housing policy, to end homelessness and ensure everyone has high-quality housing.

ISG demands:

  • Existing buildings be renovated to create more publicly-owned affordable units
  • A minimum 3-year rent freeze
  • Increase minimum wages across the country to at least $20/hour
  • Provide rent and mortgage forgiveness for people who are behind on their payments
  • Increase the supply of affordable units. Take empty investment units under public ownership. Building new affordable units should come after the process of renovating existing buildings.
  • Rent Control.
  • Massive government investment at federal, state, and city levels in new and well-maintained public housing. Renovate run-down public and rent-controlled housing, including completing deferred maintenance and adding amenities like universal accessibility, parks, and community centers to improve residents’ quality of life.

To pay for public housing renovations/construction, we call for increased taxation on large corporations and the ultra-rich. Not only would these measures help to solve the housing crisis, but they would also start to significantly close the wage gap, which would boost workers’ savings, making it easier to save money for emergencies. Unfortunately, both corporate parties in the U.S. have ignored the housing crisis for far too long, and it is up to the working class to take control and implement better housing practices that actually work for the majority of people.

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August 2022