The Deep, Uniquely American Roots of Our Affordable-Housing Crisis

Thursday, May 24, 2018
Bryce Covert
The Nation

When Rosalina Hernández and her husband moved into their studio apartment on Los Angeles Street in South Central LA 15 years ago, the place was just for the two of them and the baby they were expecting. Back then, it wasn’t too hard to find what they needed: an apartment they could afford with just a bit more space.

But as their family grew, they remained stuck in place. Eventually, six people—Rosalina, her husband, and their four children—were sharing the one main room, a small kitchen, and a bathroom. Today, the tidy living room is also the dining room and bedroom; the bathroom serves as a makeshift closet. “It is hard, because we’re six,” Rosalina says in Spanish, clasping her hands in her lap. “It’s too small for six.” When her oldest son, now a freshman in college, needed to concentrate on schoolwork, he’d lock himself in the bathroom until the early-morning hours.

Her children ask her why they can’t have their own rooms. Her second-oldest son has always had a particular dream: to have a house, a dog, and a tree. “I would have liked to,” Rosalina says haltingly, wiping away the tears. They’ve looked for a bigger place, but they just can’t afford it. “We have to choose between [paying more] rent [for] a bigger space, or giving [our children] food and shoes.” They currently pay $700 a month in rent, something that Rosalina and her husband can afford on his salary as a garment worker. A three-bedroom apartment in LA easily goes for more than triple that. Soon, though, the Hernándezes will have no choice: All of the residents in their building are being evicted. The owner has decided to sell it, and a developer plans to raze it and build a new complex in its place. Many families have already left, plywood nailed over their doors to mark their departure. The Hernándezes were able to get a year’s extension because their youngest daughter has a severe learning disability, but the grace period ends next May.

The uncertainty has taken its toll. Rosalina’s 4-year-old daughter asks her, “Mommy, am I still going to have my same friends? Mommy, am I going to have my same teacher?” If she could, Rosalina would keep her family in that same small apartment—at least it’s home. “Cuatros paredes tienen historia,” she says. Four walls have a history.

When rents are that high, those people lucky enough to find a place have to make other difficult choices. “They have to sacrifice health care, food, clothing for their children, education, transport—all the basic necessities,” says Dagan R. Bayliss, director of organizing at Strategic Actions for a Just Economy, which is working with Rosalina and her family. Many families have two or even three people living in a single room to bring down costs. More than half of the most heavily crowded areas in the country, where the homes have more than one person per room, are located in Los Angeles and Orange counties, according to US Census data spanning from 2008 to 2012.

Among American cities, Los Angeles is second only to Las Vegas (and tied with Orlando, Florida) in having the severest shortage of affordable housing for its poorest renters, with just 17 homes for every 100 extremely low-income families. The median rent for a one-bedroom apartment is nearly $1,400 a month, making it one of the most unaffordable markets in the country. Over half of the renters in LA are paying more than 30 percent of their income in rent, above what’s considered affordable; for nearly a third of those residents, rent eats up more than half of their income. “It’s not a housing crisis,” says Larry Gross, executive director of the grassroots group Coalition for Economic Survival. “It’s a housing catastrophe.”

Other people decide to move where rents are cheaper, but that often means longer commutes and higher transportation costs, not to mention leaving behind family or a familiar community. The Hernándezes have considered it. Rosalina’s sister and brother-in-law went to San Bernardino, where the rents are much lower, but her husband would have to drive more than an hour into the city for work every day. He currently walks to his job, and Rosalina can walk to her children’s schools, so they don’t need a car. If they moved, they’d have to shoulder that extra expense and travel time. Still, many working people make that trade-off. “We’re becoming a tale of two cities: the very rich, and the very low-income who are on some type of subsidies,” Gross says. “The middle class, the working class, are being pushed out.”

But if LA is the extreme, it is also a harbinger of trends that are under way everywhere in a country in which rents are increasing while incomes stagnate. There is nowhere in the United States that a family like the Hernándezes can easily find an affordable and adequate place to live. Nationwide, there are just 35 affordable and available rental homes for every 100 extremely low-income families—those who either live in poverty or earn less than 30 percent of the median income in their area. It’s a problem in every major city and in every state. Nationally, nearly half of renters spend more than 30 percent of their income on housing.

It may feel as though the country has always failed to offer an affordable home to everyone who needs one. But in 1960, only about a quarter of renters spent more than 30 percent of their income on housing. In 1970, a 300,000-unit surplus of affordable rental homes meant that nearly every American could find a place to live. “When there was an adequate supply of housing for low-income people, we did not have widespread homelessness in this country,” says Nan Roman, president of the National Alliance to End Homelessness. At the time, “the word ‘homelessness’ was relatively unknown,” says the Rev. David Bloom, a longtime advocate for the homeless, who adds that when he first used a word processor in the early 1980s, the spell-check didn’t even recognize the word. Today, there’s a deficit of more than 7.2 million rental homes inexpensive enough for the lowest-income people to afford, and nearly 554,000 Americans are homeless on any given night.

How did we get here? The mismatch between the number of people needing homes and the amount of affordable housing available isn’t unique to this moment in history, or even to the United States. Matthew G. Lasner, associate professor at Hunter College’s Urban Policy and Planning Department, describes housing shortages as a “product of industrial capitalism. The minute we see people flooding in from the countryside in search of work to cities, we see housing inequality emerging.” As their populations became urbanized, countries like Britain and Germany started to experiment with government subsidies for housing around the time of the First World War, ultimately developing programs that provided housing for many people, not just for the poorest. But despite the efforts of Progressive Era reformers, the idea failed to take root in the United States. “We were giving land away for free out west,” Lasner notes, but “the idea of the government actually helping the [urban] poor, at a time when one of the prevailing ideas about poverty was [that] it was a moral failure, was beyond the pale of political discourse.” Today’s crisis can be traced back to those early beliefs about poverty and private property. The federal government never developed a national plan to coordinate the construction of affordable housing where it was needed or required any city to construct it, and it never successfully challenged the notion that housing was a commodity, not a right.

The catastrophe of the Great Depression, which led to nearly 13 million unemployed and hundreds of homeless encampments across the country, shifted the political calculus in Washington. For a brief period of time, a different approach to housing—and a completely different way of thinking about poverty—seemed possible. From 1933 to 1941, President Franklin Roosevelt launched a range of employment programs, including the Public Works Administration, which he tasked with building model homes, among other major construction projects, thus addressing the twin crises of unemployment and unaffordable housing. PWA-built homes, which housed both the poor and the middle class, were often attractive, equipped with laundry facilities, meeting rooms, playgrounds, even libraries.

Yet the PWA wasn’t a comprehensive housing program, and it provided housing only for a small share of Americans. It also inaugurated the long history of racial segregation in public housing, as most of the PWA-built developments were either divided by race or open only to whites. But the PWA’s housing initiatives were significant enough that the real-estate industry, which realized it had a growing competitor, fought back. Members of the National Association of Real Estate Boards—today known as the National Association of Realtors—took to publishing columns in The Saturday Evening Post railing against the New Deal housing program as communistic.

Meanwhile, social reformers and their allies in Congress, like Senator Robert Wagner, were pushing for a true federal housing program—one that “must not be confined to demonstration projects, or to the improvement of conditions in limited though well-selected areas,” Wagner declared in a speech in 1936. “It must encompass the basic housing need of the population as a whole.” Their solution was a bill that became the Housing Act of 1937, which, when first drafted, reflected an entirely new way of thinking about housing in the United States. It would have provided public housing for both the poor and the middle class, as well as give the federal government more power to determine where that housing would be built. But over years of debate—Wagner introduced housing bills in each of the three years leading up to 1937—the legislation’s most radical pieces were hollowed out. The National Association of Real Estate Boards proved to be a powerful enemy of high-quality, widely accessible public housing, and succeeded in profoundly weakening the bill. Ultimately, the 1937 law provided housing only for the poor and allowed communities to opt out of constructing any affordable housing at all. It included low cost ceilings, which meant that public housing couldn’t become too desirable, as well as eligibility criteria that prevented the middle class from qualifying for it. Southern Democrats ensured that the housing could be racially segregated. Perhaps most counterproductive, the legislation included a requirement forcing public-housing authorities to demolish one unit of substandard housing for every new one built, raising costs and keeping the supply capped. “If it had been the bill that housing experts had imagined,” Lasner says, “we would be facing a very different housing landscape today.”

The public housing built thereafter was in line with what we think of today: housing projects for the poorest, cheaply built and concentrated far from the communities that refused to accept them. Though public housing still supplies more than 2 million people with permanently affordable homes, it provides housing for only a fraction of the 40 million Americans in poverty, and it leaves the private housing market almost entirely intact.

The legacy of the 1937 law is clearly seen in Los Angeles today. There are just 14 public-housing facilities, with just over 6,500 units, in a city of about 4 million people, an estimated 21.5 percent of whom live in poverty. In the 1950s, the City Council sank a plan to build 10,000 units of public housing using $100 million from the federal government. Around the same time, California voters approved a referendum requiring city or county approval for public-housing site selection, hamstringing development. For its part, New York City runs 326 facilities—23 times as many as LA—though it has double the population and a lower poverty rate. “Even though we’ve had all these liberal mayors,” says Gary Blasi, a law professor emeritus at UCLA, “there’s still virtually no coordinated or strategic policy to increase the amount of affordable housing.”

Subsequent federal efforts fell prey to the same forces that undermined the 1937 bill. The Housing Act of 1949 aimed to provide “a decent home and suitable living environment for every American family,” and resulted in the construction of nearly 324,000 units over ten years, but Congress failed to appropriate adequate funding. Southern Democrats, joined by some of their Northern counterparts, again prevented the law from prohibiting segregation.

Congress’s failure to allocate sufficient funds for public housing would, over the ensuing decades, lead to the long-term neglect of public-housing projects. As a result, many were demolished. Starting in 1972, the Department of Housing and Urban Development (HUD) doled out grants that cities used to tear down abandoned or dilapidated housing. The country has lost 250,000 public-housing units since the mid-1990s alone.

In 1973, citing “mounting evidence of basic defects in some of our housing programs,” the Nixon administration issued a moratorium on nearly all subsidized-housing programs. The symbolism was clear: During congressional hearings on the move, Senator William Proxmire declared, “The historic pledge of a decent home in a suitable environment for all Americans has been abandoned.” A year later, Congress authorized a new approach to housing the poor: the Section 8 program, which provides poor people with vouchers that they can spend on private housing. Yet obtaining housing with a voucher in the private market can be fraught with challenges; not only are there few affordable units, but in many parts of the country, it is legal for landlords to reject voucher-holders. If a voucher recipient can’t find a home within 60 or 90 days, she loses her subsidy. And as with public housing, Congress has never given Section 8 enough funds to meet the demand: Today, just one in four families who are eligible for federal rental assistance actually gets it. Meanwhile, moderate-income families who can’t afford housing don’t qualify.

And things only got worse. When Ronald Reagan assumed the presidency, public housing became one of the biggest targets of his anti-government, pro-market worldview. With Reagan in the White House, HUD’s budget was cut by more than half, falling from $83.6 billion in 1976 to less than $40 billion by 1982; it has never recovered. Federal spending on housing assistance hemorrhaged by 50 percent during the same period. Homelessness, in his administration’s view, was a personal failing; homeless people were homeless “by choice,” Reagan said on Good Morning America in 1984.

Like Nixon, Reagan combined cuts to public housing with a housing program that expanded the role of the private sector. In his landmark 1986 tax package, he included a measure that is still the main source of federal funding for affordable housing today: the low-income housing tax credit (LIHTC). Developers gain access to the credit by pledging to build affordable housing. But the housing they build usually doesn’t reach the poorest families, and it requires securing complicated funding sources, which prolongs construction time. Plus “developers would almost always prefer to build more [LIHTC] housing in low-income, segregated neighborhoods,” says Richard Rothstein, author of The Color of Law. “The land is cheaper there, and they don’t have to hold 100 community meetings to explain why they’re putting poor people in their precious community.”

Decades after Nixon and Reagan, these two market-based solutions—tax credits to get developers to build low-cost units, and vouchers that supposedly help poor people afford them—provide the dominant share of affordable housing. Leaders and lawmakers, including Democratic presidents, have by and large failed to challenge this status quo. Bill Clinton, who failed to increase HUD’s budget and even let it decline for most of his tenure, once declared, “Public housing has never been a right; it has always been a privilege.”

As the federal government disinvested, other cheap housing vanished too. From 1970 to the mid-1980s, 1 million single-room-occupancy (SRO) apartments—modest units that people could rent by the day or week—disappeared as cities cleared them out and developers tore the buildings down to build commercial properties or luxury housing. Multifamily housing was converted into co-ops and condominiums. Some of these homes hadn’t been decent places to live, but the former residents weren’t given a replacement. “A lot of times, when we improve things, we don’t improve them for the people who are living there,” says Nan Roman. “We improve them for someone else to live there.”

Between 1995 and 2016, Los Angeles lost more than 5,400 federally subsidized housing units, and the production of affordable housing has stagnated, too. Meanwhile, market-rate development boomed. “Luxury-market rate—that’s the only category in which we’ve come close to our production goals,” says Becky Dennison, executive director of Venice Community Housing. In 2015, over 80 percent of new apartments were luxury units.

Los Angeles’s Skid Row, 52 blocks where the city has corralled both its homeless services and homeless population, is the logical result when a housing market in a booming city is left to its own devices. Past the shiny skyscrapers of New Downtown and the hipster cafes of Little Tokyo, the sidewalks are filled with tents, shopping carts, folding chairs, pots, pans, and the other bits and pieces of people’s lives. The tents that line almost every inch of the sidewalk are makeshift homes, connected to one another with ropes, tarps, poles, and umbrellas. The air hums with quarrels and boom-box music and smells of bodies and trash. Skid Row has been described as a refugee camp for Americans—and in its appearance and purpose, that’s exactly what it is.

Jojo Smith lived in a tent on San Pedro Street for six years starting in 2006. He tried to get into a housing program but was always told that the waiting lists were full. For those six years, Smith was woken up in the early hours of the morning every day by the police and told to pack up his stuff and move along, only to have to set everything back up that evening. The wake-up calls are less regular today, but they still make people’s lives chaotic. There are few water fountains or public bathrooms, let alone showers or laundry facilities. The scant trash cans fill up quickly and are rarely emptied by the city. “It shows you that the city is not caring about people,” Smith says. “Homeless people are humans too.”

Most of those living in tents would prefer four solid walls. “They’re constantly saying that folks are resisting services. No, people are resisting shelters because of the simple fact that it’s not your own home,” Smith says. “They want housing.” Shelters come with a maze of rules and regulations to navigate, including bans on pets and couples living together. Some people with mental-health issues struggle to sleep in the crowded rooms.

At the last official count, there were nearly 60,000 homeless people in Los Angeles County on any given night in 2017, up 23 percent from the year before, although that’s likely still an undercount. About three-quarters of these people are unsheltered, living in tents or cars. Even as the city moves more people into housing, many others are getting pushed out of it and into homelessness. “Too many poor people and not enough housing means some people will get left out,” Blasi notes. Anything that makes a poor person less able to compete for housing—mental illness, a disability, or just being black and a victim of discrimination—makes them more likely to fall into homelessness.

LA’s laissez-faire approach to housing shows up in the factors driving its swelling homeless population. The city does little to prevent affordable housing from being demolished. Gross’s organization estimates that 23,550 units of affordable housing have been lost thanks to a law that allows landlords to evict tenants when they decide to demolish or sell their buildings—exactly the circumstances that the Hernández family now faces. LA also has few robust rent-control laws, which played a role in rents rising 20 percent between 1990 and 2009, even as incomes dropped.

And decades of failing to construct new affordable units have resulted in a situation in which the demand for single-room apartments is so acute that there is virtually nothing available. Zoning restrictions and local opposition, which were given outsize political power in the 1940s and ’50s, make it virtually impossible to build more housing in the city. “There is really powerful NIMBYism,” Blasi says. “Anywhere middle-class people get a toehold, they’re pulling up the ladders as quick as they can.”

In the 1990s, the national crisis in affordable
housing didn’t feel as acute because income growth was relatively strong, giving people more of a cushion to afford their rent. But when the subprime-
mortgage crisis hit in 2007, America’s long-term refusal to deal with housing was once again laid bare. If modern mass homelessness began in the 1980s, the foreclosure and housing crises at the end of the 2000s represented a second wave that redoubled the problem. Nearly 3 million homes were foreclosed on in both 2009 and 2010; those homeowners sank back into the rental market, competing for cheap units with the low-income people who were already renting. Millennials delayed homeownership. The share of households renting in the country’s 50 largest cities climbed from 36 percent in 2006 to over 40 percent in 2014. Roughly 10 million more families rented in 2016 compared with the decade prior. The vacancy rate for rental units has fallen since the end of the recession and is lower today than it was in 1986. “The supply is just not keeping up,” says Diane Yentel, president of the National Low Income Housing Coalition. “That is leading, in many communities, to skyrocketing rents, [which are] felt most severely amongst the lowest-income people.” There’s been a 32 percent rise in the median asking rent since 2000, and the number of households that are rent-burdened, or forced to spend more than 30 percent of their income on rent, increased 19 percent between 2001 and 2015.

The financial crisis meant that Ericka Newsome didn’t get a raise in January 2009, yet the rent on her studio apartment in her hometown of Pasadena, just northeast of downtown LA, went up. Newsome had been hired as a teller by a bank in 2005 and was promoted soon after. For the first time, she was living in her own place. But by March 2009, she was living in her car. Her boss eventually found out, and she lost her job in June over concerns that customers would see her sleeping in her vehicle.

“I didn’t know where to go or where to turn,” Newsome says. She couldn’t afford a new apartment without a job, and she couldn’t find a shelter with an available space. She lived briefly with a childhood friend in 2010, working during that time to earn her certification as a pharmacy technician. But she couldn’t find a job in the midst of the recession. She struggled with mental-health issues. Eventually, her friend asked her to leave, and she had to give up her car.

Newsome found her way to Skid Row in 2016. She still remembers her first night there: She tried to find a spot that felt safe where she could sleep for the night, but as a solitary woman, she attracted men’s attention. So she chose an isolated spot to set up camp. “The first night was scary,” she recalls. “I had to stay up all night for my safety.” Newsome spent her days sleeping or walking through the streets and riding the trains. An outreach team eventually helped her get into temporary housing and then an SRO, but both felt unsafe and unsanitary. Finally, she had a stroke of luck: Newsome was approved for a housing voucher, and an organization called Brilliant Corners connected her with a case manager who helped her look for an apartment. That help was needed: Although she found a number of apartments close to Pasadena that she really liked, landlords repeatedly told her that they wouldn’t accept her housing voucher. She also suspects that she was being discriminated against because she was black. “It was like, immediately I was getting labeled as a person who is not safe to live in their building or be part of their neighborhood,” she says.

Newsome looked for a place for nearly a year. Finally, with her case manager making calls on her behalf, she found an efficiency studio in Highland Park, close to Pasadena, in April of last year. When the landlord accepted her application, “it was such a happy moment for me,” she recalls, a broad smile transforming her face. “Since then, things became easier. I was able to focus on my mental health…because I had a safe place to go home to.” She began the pharmacy-technician recertification process and is also working toward becoming a personal trainer. “It’s like a second chance for me to change my life and get myself more independent, more financially stable, and actually have a good, strong career job,” she says. Eventually, she wants to leave the voucher program altogether. “I want to be able to say, ‘This is my place.’”

The housing crisis “is like a game of musical
chairs,” says Nan Roman. “There’s just not enough chairs for the number of people.” And the private sector simply can’t solve this problem: Even if developers put up buildings without taking on any debt, the poorest tenants still can’t pay enough rent to cover a building’s expenses. However, most affordable developments do take on debt to finance construction, putting the eventual units even further out of poor people’s reach. Without a subsidy, the only housing that private developers can afford to build is for high-end customers. Income inequality only fuels the rush for developers to cater to the top of the market with luxury housing, while ignoring the middle and bottom. “There’s a market failure, and the government should be stepping in to ameliorate that,” Yentel says. But so far, the debate in Washington over housing is limited to helping veterans off the street or preserving the tax breaks enjoyed by wealthier homeowners.

If there is a silver lining to LA’s affordable-housing crisis, it’s that things have gotten so bad that the city’s residents are finally paying attention. Street homelessness appears in every community; it’s not just crammed into Skid Row. “We see huge amounts of activism that have sprung out of this crisis,” Gross says. In the absence of assistance from the federal government, the city is attempting to patch together solutions. In November 2016, three-quarters of city voters approved Proposition HHH, an increase in property taxes to raise $1.2 billion for 10,000 units of permanent supportive housing for the homeless over the next decade. But now comes the test of whether the city can actually get the units built. “The money’s there,” says Paul Beesemyer, a program director at the California Housing Partnership Corporation, but “the potential gantlet of community opposition is a tough thing.” Early last year, voters also approved Measure H, which raises the sales tax by a quarter of a cent and uses the money to fund homeless services.

“It’s a sea change for Southern California,” Beesemyer says. “We’re in a fundamentally more hopeful place than we have ever been.” But, he adds, “we’re in a deeper hole than we’ve ever been in.” Advocates warn that, while the money is welcome, it’s a trickle in a chasm of need. “There’s going to be this big influx of resources that hasn’t existed in 30 years,” Dennison says. “But without federal resources, none of it works.”

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