Why America Needs More Social Housing
Subsidizing market prices to make housing affordable is a losing strategy. There’s a better way—on display for a century in Vienna.
BY Peter Dreier
This article appears in the Spring 2018 issue of The American Prospect magazine. Subscribe here.
The quest to provide what has come to be called “affordable housing” in America is hobbled by one fundamental reality. Too much housing is in the market sector and too little is in a social sector permanently protected from rising prices. The result is that supply and demand relentlessly bids up market prices. Government is required to provide deeper and deeper subsidies to keep rents within the bounds of incomes, so fewer and fewer people get any kind of help. This is true whether the form of public subsidy is tax breaks, direct subsidies, vouchers, or deals with developers to set aside some percent of units as affordable. In most cities, the median rent far exceeds what median incomes can afford. In cities with hot housing markets, homeownership is even further beyond reach for those who do not already own homes, exacerbating competition for scarce apartments.
The idea of having a permanent sector of social housing, protected in perpetuity from market pressures, has a bad reputation in the United States, in part because of misleading stereotypes about public housing. But other forms of social housing are being depleted as well, including middle-income projects built with tax breaks, such as Stuyvesant Town and Peter Cooper Village in Manhattan, which were sold to the highest bidder and converted to market housing; and government-subsidized buildings from the 1960s through the 1980s, built under federal housing programs but allowed to be converted to market-rate apartments once their original mortgages were paid off or the 20-year subsidy contract expired.
Government policymakers have made almost no provision to protect the stunted social sector that exists, much less add to it. There are some exceptions to this dismal pattern, such as land trusts that preserve a social housing sector in perpetuity, in cities like Burlington, Vermont. But for the most part, the place to look for models is abroad. And no place does it better than Vienna.
AMERICAN VISITORS TO Vienna are typically struck by the absence of homeless people on the streets. And if they ventured around the city, they’d discover that there are no neighborhoods comparable to the distressed ghettos in America’s cities, where high concentrations of poor people live in areas characterized by high levels of crime, inadequate public services, and a paucity of grocery stores, banks, and other retail outlets.
(Wendel Fisher/Wikimedia Commons)
Peter Cooper Village and Stuyvesant Town in Manhattan, which was sold and converted to market housing
Since the 1920s, Vienna has made large investments in social housing owned or financed by the government. But unlike public housing in the United States, Vienna’s social housing serves the middle class as well as the poor, and has thus avoided the stigma of being either vertical ghettos or housing of last resort. Every country in Western Europe has some version of social housing, but Vienna’s is by far the largest and most successful. It is typically ranked as one of the world’s most livable cities.
http://prospect.org/article/why-america-needs-more-social-housing
Nannie GETS IT................................WE ON THE OTHER HAND GET WITH GREED
