National Social Housing Plan Urges Creation of 12 Million of Homes

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AlterLaa in Vienna composes a neighborhood of social housing towers atop a shopping mall. (foto by Margherita Spiluttini, Architekturzentrum Wien)

Since the Reagan administration, the federal government has gotten out of the game of producing social housing itself. A new report titled “The Case for Social Housing” calls for the federal government to reverse that in a big way and produce twelve million social housing units by 2030, echoing a proposal from Rep. Ilhan Omar (D-Minneapolis).

While it sounds colossally ambitious, report authors Daniel Aldana Cohen and Mark Paul argue the time is ripe and the public squarely behind social housing production.

“A recent poll conducted by the Justice Collaborative Institute and the left-leaning policy shop Data for Progress finds that 63% of likely voters support federal investment in social housing,” Kriston Capps reported in CityLab. “Some 56% of Republicans said they would support social housing (along with nearly 80% of Democrats).”

The Covid pandemic stalled out the economy, but social housing could offer an ideal way to jumpstart it.

“There has never been a better time to invest in a substantial buildout of social housing,” Justice Collaborative Institute and Data for Progress argued in the report. “The economy is in the midst of the worst recession since the Great Depression, with nearly 30 million people collecting, or waiting for, unemployment benefits. Industrial capacity is running 30% below potential, meaning plenty of factories could be kicked into gear to churn out building essentials.”

Daniel Aldana Cohen, Assistant Professor of Sociology at the University of Pennsylvania, where he directs the Socio-Spatial Climate Collaborative, (SC)2 Mark Paul Assistant Professor of Economics and Environmental Studies at New College of Florida. November 2020.
The cover page of the new report out in November.

Cohen and Paul estimate that constructing 12 million homes would generate one million jobs and may cost as little as one trillion dollars–although that may be overly optimistic about federal cost per unit at approximately $83,333. They may be able to braid investment with state, local, and nonprofit dollars, but the scale of uptick in production may strain those systems initially. For example, Washington’s share of these 12 million homes would be about 275,000 based on population–though other metrics like housing demand might tilt even more housing investment to the Evergreen State.

President-Elect Joe Biden campaigned on increasing social housing–though not to the same degree. “Even the Biden campaign has embraced the need for a mass build-out of new housing outside the market; he has pledged to build 1.5 million affordable, green units,” the report said. “Biden’s campaign has also pledged to expand the federal voucher program, known as Section 8, that provides direct rental assistance.”

Some progressive leaders have already proposed going farther. Rep. Omar introduced a bill aiming to generate 12 million social housing units, as we noted in our coverage of Cancel Rent efforts. Similarly, Senator Bernie Sanders’ (D-Vermont) presidential platform called for $2.5 trillion in investment to create 10 million homes.

The plans seek to meet the massive scale of the problem, which has festered for decades but is being brought to a head by the pandemic that has caused a rent crisis. An end to the national and local eviction moratoriums will likely unleash a wave of displacement across the country, which has sparked the Cancel Rent movement to respond to this crisis.

“As of 2018, 43 million households rent; nearly half of them (21 million) are rent-burdened, with rent claiming more than 30% of their income,” Cohen and Paul write. “More than 10 million households had to shell out at least half their income to make rent—and that was before the COVID-19 crisis. There is no county in the United States where a full-time worker earning the minimum wage can afford a two-bedroom apartment.”

Social housing history

The largest American housing programs have been geared toward suburban home ownership, particularly subsidizing home mortgages of the rich and middle class. This in turn has required subsidizing an extensive network of costly freeways to serve all this White Flight suburban sprawl.

The United States’ current federal housing policy is designed to work for only about half of the nation: homeowners. Every year, the government spends hundreds of billions of dollars subsidizing housing, but right now, about five times more public money flows every year to support homeownership—mostly for the affluent—than to affordable rental housing.1 This is no accident. Back in 1937, the real estate industry successfully repelled the efforts of the Labor Housing Conference and the New Deal’s Public Works Administration to create social housing in the United States that would look much like the successful model still used today in Vienna—mixed-use, mixed-income, and high quality. This, after all, was the real estate industry’s nightmare: A viable public housing option that could undermine the private sector’s ability to rake in massive profits.

The Case for Social Housing

Redlining further cemented segregation and blocked Blacks from accumulating household wealth at similar rates. By the 1980s, President Ronald Reagan set to work dismantling the nation’s public housing, barring further investment in new public housing and switching to the public-private partnership model.

“That racist system has helped build the white modern American middle class while ensuring the other Americans were kept out by the white picket fences,” Cohen and Paul write. “For most Americans, the equity they have in their home represents the majority of their wealth.”

Vienna’s example

Time and again the report cites the shining example of Vienna: “Meanwhile, the capital of social housing, Vienna, continues to relentlessly limit rents and build the highest quality social housing. Nearly two-thirds of the city’s residents live in rent-controlled flats; overall, tenants pay less than half as much as Londoners, and nearly a third as much as Parisians per square foot.”

A large lime green seven-story apartment building in Vienna. (Photo by Mike Eliason)
Passivhaus social housing in Vienna. (Foto by Mike Eliason)

Sounding an awful lot like Mike Eliason–passivhaus architect and columnist at The Urbanist–authors stress the high quality of social housing in Vienna, which is in turn tied to the Austrian capital’s remarkably high standard of living. See Eliason’s two-part series recounting housing lessons from Vienna.

“In all these cases, the beauty of the architecture is more than a mere flourish: it’s about the valorization of every human being, the refusal to stigmatize public goods, and putting aesthetic talent to shared, public use,” the report states. “Done right, social housing works brilliantly. Vienna has been ranked the world’s most livable city 10 years in a row. Why should the United States not join the cutting edge of global architecture in repairing and developing green social housing?”

Cooperative with prefabricated wood façade in Vienna’s Seestadt Aspern. (foto by Mike Eliason)

The link to adapting to and mitigating climate change is clear for the authors–and another area where Vienna excels. Increasing the energy efficiency of our housing stock, especially as it comes to heating and cooling, could greatly reduce our carbon footprint, save on costs, and make housing more resilient to the effect of climate changes. Passive house buildings aren’t just cheaper to cool, their air filtration systems also can filter out forest fire smoke and other forms of air pollution.

“[H]ome energy use contributes nearly one-sixth of the country’s heat-trapping greenhouse gas emissions,” the authors note. “Those emissions are causing sea-level rise that could permanently flood the land on which 13 million people currently live by the end of the century.” The United States desperately needs to set a new standard of housing—by building beautiful, healthy, carbon-neutral social housing that echoes the best models worldwide, and raises the bar for all Americans.

Congress does not have a strong track record of passing such visionary policy recently. It’s hard to imagine Senate Republicans going along with such a plan, but perhaps Democrats will be able to claw back control of the Senate or flip enough votes. With the housing crisis only likely to get worse, pressure on Congress to act is likely to rise.

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Doug Trumm is The Urbanist's Executive Director. An Urbanist writer since 2015, he dreams of pedestrianizing streets, blanketing the city in bus lanes, and unleashing a mass timber building spree to end the affordable housing shortage and avert our coming climate catastrophe. He graduated from the Evans School of Public Policy and Governance at the University of Washington. He lives in East Fremont and loves to explore the city on his bike.

24 COMMENTS

  1. The key word in the article is “social” housing. This means publicly subsidized and owned. The next question is whether this housing is rental or owned, and owned by whom.

    The idea that the building of millions of brand new market rate units is going to increase the supply of AFFORDABLE housing just does not work in reality. Yes, more housing in general will likely decrease slightly overall market rate housing prices, but that does not help those who really need subsidized housing.

    This issue becomes much more acute in wealthy cities, like Seattle, in which the increases in income and wealth for some escalate housing prices much faster than brand new units can ever hope to stabilize or address. Seattle has been on a building spree, and yet housing prices — especially single family homes — have increased 11% to 14% from an already high baseline over the past year, during a pandemic. This same phenomena is happening in cities from Austin to San Francisco.

    This issue, or divide, is apparent right now in the different approaches towards homelessness between east and west King Co. The King Co. Council and Executive hope to use the new 1/10th of one percent increase in the sales tax (a very regressive tax) to buy distressed hotels in outlying cities and move Seattle’s homeless there, based on a new paradigm that housing must precede treatment or sobriety because the shelter experience is so unpleasant.

    Those on the eastside believe that creating affordable but subsidized housing is the key, and that the homeless must move from street to shelter to subsidized housing to affordable but non-subsidized housing based on treatment, sobriety and work because otherwise the solution is just not affordable. Otherwise all we are replicating is Medicaid housing for the poor elderly, which also is not financially sustainable. Not surprisingly cities that have been the experiment in this new paradigm like Renton are objecting.

    I can’t even imagine what it would cost to build 12 million government subsidized houses or units. Government construction is usually very inefficient, and figures I have heard state each affordable unit created in the Seattle area — even though quite small and bare — costs $673,000 [Moderator: $300,000 is a more reliable average], and often the rehabilitation of units as tenants move out is very high. Mandating green construction will only increase costs.

    [Moderator: Comment was 1,000 words so we’re hacking it off. Our comment policy requires succinct comments, not diatribes.]

    • Sometimes, I think a lot of the debate boils down to how much of the cost of housing is driven by construction cost vs. people bidding up a limited supply. Obviously, construction cost represents some floor for what unsubsidized housing can cost when the available housing supply is unconstrained. And obviously, there will always be some people who can’t afford that floor, who will require some form of subsidies to keep a roof over their head.

      To get an idea of what the “floor” is, you can look at the cost of housing in places like Kansas, where there is is no real competition for limited urban land, like there is here. The cost of housing here in Seattle is much higher than that, And the only way to solve it is to allow more housing to be built so that the supply and demand can get back in balance. If all the government does is convert X market rate units to X subsidized units, it doesn’t actually solve the problem because the total number of units in question has not increased.

      That’s not to say that all forms of subsidized housing are inherently bad. As I said, there will always be some number of destitute people that cannot afford homes anywhere – even in areas with unconstrained land – without help. There are also sometimes political situations where cities are willing to allow larger buildings to be built on a plot of land if they’re social housing vs. market-rate housing in which case, social housing actually does increase the housing supply, doing its part to bring supply and demand a little bit more in balance, in ways that market-rate housing can’t.

      But, having the government control housing on a massive scale is just plain inefficient in many ways. It’s extraordinary expensive and tends to lead to a “market” that’s very sticky where nobody can ever move without waiting a long time for an opening. Even in Vienna, you still need the market-rate housing so that people moving to the city don’t live on the streets for their first 1.5 years.

    • Interesting that you cut off the part of my post dealing with eviction moratoria, and how that is a ticking time bomb that should be addressed before funding 12 million new government housing units. One is immediate (eviction leading to homelessness) and one is speculative at best and decades out (building 12 million government subsidized units).

      I don’t quite see how that discussion is a diatribe considering it is a focus of the article. Unless there is a plan to have 12 million subsidized units completed — or 1.5 million — by the beginning of 2021. A diatribe is a forceful or bitter attack. How is a discussion of the looming end of eviction moratoria a bitter attack?

      • Maybe tirade would have been a more fitting word choice if you want to split hairs. Regardless, your comment was 1,000 words. Keep them under 500 words please to avoid violating our succinctness guideline.

  2. I’m curious what the experience is like for someone trying to move to Vienna and finding somewhere to live. Can you actually find a place to live there within a reasonable timeframe, and have some options regarding neighborhood and unit size? Or, do you have to pay through the nose for one of the market-rate units for the 10+ years it takes to get off the waitlist for a subsidized unit? And, when an opportunity for a subsidized unit finally opens up, do you just have to take it, even if it’s too small, or in the wrong neighborhood? Similarly, if a longtime Vienna resident gets a job at the other end of town, is it even possible to move closer to work without having to go to the back of the line and wait all over again?

    According to econ 101, anything offered at a below market price, something other than the market has to decide who gets what, be it lotteries, long wait lists, eligibility criteria, or personal connections with government officials.

    • I’ll ask Mike Eliason, but I suspect the wait list problem is much more prevalent where social housing is like 5% of the housing stock rather than 60%. Vienna is building a lot of housing, both market and social. San Francisco it is not.

      • Or to use asdf2 ‘econ 101’ framework, if Vienna is able to ensure that housing supply meets housing demand in the medium-ish term, the social housing ‘price’ IS the market price, particularly when the dominant market is social rather than private housing. Housing demand isn’t a linear function.

        • And reports are that Vienna’s building industry is very efficient, likely due to competition from social housing pushing market builders to optimize (rather than skate on mini monopolies of owning land in prime locations) plus government guidance in the form of design contests creating an environment that reward rather than punishes innovation and creativity.

          I humbly suggest putting simplistic Econ 101isms on the backburner when it comes to housing discussions. They obscure more than they illuminate.

          UPDATE: I just heard back from Mike and he said social housing wait times tend to be about 1.5 years in Vienna, with priority for long-time residents. Significantly less than most US providers. https://apps.derstandard.at/privacywall/story/2000017624826/sozialwohnungen-langjaehrige-wiener-werden-vorgereiht

          • mike eliason: vienna’s is also in the midst of another ‘wohnbauoffensive’ aiming to increase the housing they are building, the overwhelming majority of which is dense, amenity-adjacent social housing: https://www.wien.gv.at/bauen-wohnen/wohnbau-offensive.html

            they’re building high quality near-passivhaus buildings for half the price we build code-minimum wood framed ones.

            but vienna also spends as much on art and culture, as we spend on SPD. and also has presently the tallest mass timber tower – so innovation doesn’t seem to be suffering under their far left leadership. –mike eliason (apologies for name glitch)

  3. “Industrial capacity is running 30% below potential, meaning plenty of factories could be kicked into gear to churn out building essentials.” No, just no. The lack of understanding of how the actual economy works is just flabbergasting. Building materials is one of the few sectors of the economy to be exhibiting strength during this recession, with some input like lumber also showing strong inflation as supply struggles to meet demand.

    National housing starts has recently upshifted from ~1.2 million starts/year to ~1.6 million starts/year (https://fred.stlouisfed.org/series/HOUST), a profound increase that has already put stress on the new housing supply chain, in particular supply inputs with very low short-term elasticity, in particular land. It will take us several years to get back to 2 millions starts/year like we did during the housing boom, and even then we were only able to deliver that volume of housing by building tract homes in the sun belt. In what time frame do the authors think they can build 12 million homes “outside the market,” i.e. above our current run rate? Unleashing a spigot of Federal dollars will mostly crowd out private investment, changing the mix of winners and losers but not solving the underlying causes of our housing crisis, or it will cause immense inflation. Probably both.

    We do not have a national housing crisis. We have the same regional housing crisis repeated throughout our nation because most metropolitan areas are making identical mistakes, but the root causes are not national. Further, the housing crisis in rural America has little to do with an urban housing crisis.

    Federal policy certainly causes problems, for example disconnecting transportation investments from land use decisions and encouraging the financialization of our housing stock. But the problem of 1) not building enough housing, and more importantly 2) building good, sustainable, and affordable housing are problems that must be solved at the regional level. There is plenty of capital going into housing construction, it just need to be directed to the best public use, with direct government spending is only needed at the margin.

    Writing a big Federal check is a no good, terrible idea that will make our problems worse by, at best, temporarily papering over some of our issues, enabling one iteration of politicians to declare the problem solved by simply kicking the can down the road.

    • It all comes back to the pigeonhole problem. If there are 500,000 pigeons trying to live in an area capped by the city at 400,000 holes (through zoning restrictions), you will never be able to fit 500,000 pigeons in there. No matter how much taxpayer money you throw at the problem, it just can’t be done.

      Unless the intention is to locate all 12 million new housing units in exurban greenfield development (in the form of single family houses with yards, since that’s all that’s legal there), any solution to the housing crisis without upzoning is simply impossible.

        • I’m all for more social housing. I just think that any policy that starts with the Federal government is doomed to failure if it’s trying to solve a sub-national problem, for multiple structural reasons.

          For example, if the Feds just ban exclusionary zoning without communities having done the hard political ground game of gaining local consensus on removing exclusionary zoning, then those exclusions will simply reappear in a different legal or economic form.

        • According to the article 2/3 of all housing in Vienna is rent controlled. Isn’t that what we are talking about here? Rent control, based on federal law? Otherwise, if you are not willing to go there why bring up Vienna as a model?

          Of course a large percentage of all new housing construction in Vienna is government subsidized. Private builders and developers don’t build housing that will be rent controlled without subsidies, whether you are referring to Vienna or Seattle.

          Why not just state the goal is a federal law that mandates rent control for all areas of the country, based on some formula, because that is what Vienna does?

      • Yes, but my point is more specific. *Federal* taxpayer money will make the problem worse, because the source of the money is so far divorced from the problem. Local tax money is far more likely to instill the policy discipline need to fix the many non-financial reasons we don’t have enough good pigeon holes (so to speak)

      • What asdf2 said. I’m trying to imagine any federal solution to this problem. Just saying that cities *have* to change their zoning for these specific projects? No chance. So the options are removing cities’ ability to zone (I’d support that, but man that would be a tough debate), building whole new cities and hope for the best, or just flooding cities with money and telling them to figure out the details (inefficient, but might work?).

        What we need is more housing. How we get more housing *has* to start with adding a massive amount of zoned capacity in our cities. I support socialized housing, but you’ll be throwing away money on land value unless you upzone first. That comes with the magical extra benefit of spurring market housing as well (and in much greater number than anything we’ll subsidize in this country).

        • Upzoning increases land value in the near term. Not only is this intuitive (it means more rents can be extracted from the land after redevelopment), there’s also empirical research showing this is the case, such as Yonah Freemark study’s of upzoning in Chicago. Even more troubling, his research suggests, at least in Chicago’s example of a pretty targeted upzone, housing prices increased even before production could deliver added units, likely due to speculating on future redevelopment. https://urbanaffairsreview.com/2019/03/29/upzoning-chicago-impacts-of-a-zoning-reform-on-property-values-and-housing-construction/

          In the long-term, widespread upzoning should bring rents down. But the value of the land still might be higher than it was before the upzone since there’d be more units per lot.

          I think the most advantageous sequence, would be to increase public ownership of land as much as possible, upzone, then build. If you upzone and then seek to acquire the land, you simply enrich the landowners at the public’s expense. Grappling with residual land value (and perhaps specifically the public rather than private land barons extracting land rents) is key to defusing our housing crisis. Upzones are clearly a big part of the solution, but the market doesn’t care about solving the housing crisis for low-income people. We via government action need to intervene to correct this market failure.

    • AJ, I think you’re right that it’s a simplistic way to look at things to say we’re 30% below industrial capacity so factories could easily convert to housing production tasks. Likely it won’t be so seamless. And yet I think most market-oriented and social housing folks can agree getting us back to producing at least 2 million homes per year is important.

      I’m not that worried about crowding out because the price points are different and much of the social housing is likely to be income-qualified meaning the wealthier folks new market units are geared toward serving will continue to be home hunting on the market. Both spigots can run. And, crucially, social housing production can sustain the building industry during market downturns so the massive wipeout of the 2008 Housing Crash doesn’t happen again. Countercyclical housing investment would do wonders do lessen the sting of recessions while nurturing the construction industry. Much higher capacity should be a policy objective.

      Plus, with social housing production ramping up the politics of upzones may well change and working class folks may be open to rezones and new development. The perception that upzones means luxury condos may fade. Renters are not politically mobilized right now, and a big reason is they are such an afterthought in policymaking. Social housing changes that dynamic. Eliason wrote about this housing politics concept last year ICYMI: https://www.theurbanist.org/2019/10/09/seattle-needs-a-wohnungspolitik/

      AND I think your argument for local rather than federal money to form the basis of social housing is misguided. States, counties, or cities can’t print money or deficit spend. The federal government can. To not use these tools would be fight the housing crisis with our hands tied behind our back. Local jurisdictions have failed to fill the vacuum left when the federal government pulled out in the 1980s. I don’t think is reasonable to expect them to be able to pull it off now amidst a pandemic recession double whammy.

      • Great point on countercyclical investment, and I agree higher capacity should be a policy objective. Interesting point about the politics of upzones shifting – I think that reframing is already happening, such as Portland’s recent rezone allowing greater density for affordable housing vs marker-rate housing. That’s great policy and should be extended further.

        For ‘crowding out,’ I meant crowding on the supply side; crowding within the supply chain would decrease the production of market rate units, all else equal. Yes, I’d agree the demand for high income units would likely be mostly unaffected by the production of lots of social housing.

        We’ll just have to disagree on Federal deficit spending. I’m skeptical about the Feds because I don’t see why ‘this time is different’ and we won’t make similarly catastrophic mistakes like prior Federal interventions into housing policy; I don’t see why we’ll have good urban policy now while having destructive urban policy in the 30s, 50s, and 70s.
        I’m skeptical about deficit spending, not in a vague anti-MMT economic objection but instead a political argument that free money from the Feds should be our last lever, not our first lever, when trying to solve local issues. The fact that we can, currently, ‘just print the money’ is what got us into this mess in the first place, and continuing to enable bad policy with more free money will lead us to worse outcome than if we strive to solve the problem within our (rather large and wealthy) regional community. As the MTA is currently proving, a time will come with the gravy trains ends. Unless you want to argue that we need a $1T of free money to solve this problem and only this problem, in which case I’ll have to call shenanigans.

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