The Affordable Housing Conundrum

(c) by Mark Dempsey

A local pundit recently wrote that affordable housing is nice to talk about, but difficult to build. The costs are exorbitant (he quotes a reader saying $400-$800/sq ft, excluding land!) and our resources are already stretched to their limits, never mind the bothersome question of where to get the money.

This discouraging line of talk was echoed by an HVAC technician's comment to this writer about affordable housing he worked on. The poor occupants "trashed" their homes, he said.

So let's clear up a few of the misconceptions that include "housing is too expensive," or "it's too difficult to build," and "it's unappreciated by poor people." Talk may be cheap, but it's important that it be accurate.

First of all, nationwide, there are more vacant homes than homeless. San Francisco has five times its homeless population in vacant homes. As for the expense, Google tells us that Sacramento's median home price is $339 per square foot, including land. And that's for built homes, not theoretical ones. New construction on large lots in a nice neighborhood in eastern Sacramento County sells for less than $370 per square foot, including the land. Overstating the costs or shortages is not helpful here.

Incidentally, "it seems kind of crazy that large homebuilders would be doing joint ventures with each other on land acquisition, when that could very easily lead to holding supply off the market and preventing smaller developers from competing to build cheaper homes." Yes, monopolies in land and building supplies are raising prices. The US stopped prosecuting most antitrust violations in the '80s. Markets aren't competitive if the players collude to raise prices.

And what about the money? The government makes all the dollars it needs whenever it needs them to pursue whatever priorities the governing class wants, whether it's affordable housing or warfare. Incidentally, the sentiment that "printing" money is inflationary is baloney, but let's save that conversation for a later article.

Actually, the lack of affordable housing is a public policy choice. This shortage began when Nixon stopped the feds from building (more) affordable housing, and, as he cut taxes on the wealthy roughly in half, Reagan cut HUD's affordable housing budget by 75%. The largest homeless population since the Great Depression isn't an accident; it's the product of the generations-long, bipartisan attack on the poor.

Won't the poor trash the housing, though? Yes, poor people are comfortable with squalor. They are not concerned about material things; that's why they're poor. The positive side of that attitude is that they're generous and compassionate, sentiments that would profit the wealthy if they ever chose to pay attention to them.

So building affordable housing without either mixing the poor and the rich populations to have neighbors pressure poor people to pay attention to the condition of their homes, and neighbors instruct rich people to be more compassionate and generous...or budgeting not enough maintenance if rich and poor are separate, is a subtle form of sabotage. Rich people get to say, "See! They don't appreciate the crumbs we let fall from our table!"

Incidentally, Finland gave its homeless population homes. Reportedly, 85% of the re-housed had jobs within six months of that change.

One of the key components for affordable housing is affordable land. Want to cut per-unit land costs in half? Build two units on the land. Why don't we do this?

Multi-family housing has problems that public policy makers are eager to ignore. Smaller or non-existent yards--that occupants would otherwise have to mow--mean people need bigger public parks. Parks, culture, and education are the kinds of public amenities the governing class has downplayed in the US for generations now. Public policy makers have done everything they can to say "We can't afford that cultural/educational stuff!" while assiduously casting the isolation and cultural deprivation of suburban life in concrete.

Just about all the complaining about overregulation and intrusive state requirements is overblown. Locally, land speculators seldom find zoning or regulations they can't change to make their bets pay off.

Building codes do increase costs, but not nearly enough to make homes as expensive as they are now. In fact, increased insulation and solar panels requirements make utility costs lower, and earthquake readiness makes insurance less expensive. Nevertheless, there is no shortage of complaining about the "cost" of such regulation.

So to deal with the homeless (40% of whom are employed) and the homes for the poor and even the not-so-poor:

• We don't necessarily need more homes; we need to distribute them more evenly. Vancouver, Canada, began taxing homes left vacant to restrict supply and boost rents, and rents receded after Vancouver implemented the tax. California's governing class would like you to ignore this, but it's true.
• We need to be realistic about how much affordable homes cost to build, and understand that money is always available for society's priorities, without necessarily inflating other costs. USDA used to make ("Farm Home") loans subsidized so even farm workers could afford to own their own house. Needless to say, the Farm Home loans are seldom funded.
• We need to expect poor people will be less attentive to material conditions, and account for that in any affordable housing plan, whether mixing the poor with the rich (multiple units among the mansions) or stand-alone affordable housing (with a larger maintenance budget).
• To reduce land costs, and not incidentally make such things as economically viable neighborhood commerce and public transportation possible, we need denser housing than sprawl. If there aren't enough riders within a comfortable walk of transit stops, then we'll just roll around a bunch of empty buses or trains. The lower threshold is about 11 units per acre, says Berkeley planner Robert Cervero. That's slightly more than duplexes, and amounts to an occasional 4- or 8-plex among the single-family homes.
• Amenities like parks, culture, and education are not optional for more concentrated housing to work. We've tried defunding the "public realm"-- what's available even to the poor--for decades now. That defunding began with "white flight" (i.e., racism)--but it's a dead end.

So...that's what is not just possible, it's necessary. Will it happen? Intelligent pundits discourage it, and try to persuade other it's not even possible, ignoring accuracy in the process. Facing up to the obvious is not automatic.

Scoring a goal for the opposing team is called an "own goal." When people vote against their own interests, it's a version of the "own goal." A large part of political commentary tries to deceive people into "own goal" behavior so the plutocrats can continue to direct resources, even resources they don't use in a tragic pursuit of conspicuous consumption. That's the current state of play.