A social housing expansion is the answer to the COVID-19 housing crisis

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Derryl Tyner shakes out and folds one of his sleeping bag as he prepares to move into the Union Gospel Mission after being evicted from his location in a homeless encampment along Interstate 35E in St. Paul, Minn. on Thursday, Sept. 10, 2020. St. Paul city officials and volunteers sought to close down the encampment which housed around 80 people at its peak. Tyner who has been homeless for 10 years works temporary day jobs for cash but those jobs have been hard to come by since the COVID-19 pandemic. Photo by John Autey/Pioneer Press via AP.

During the Great Recession, as millions of homes were foreclosed upon, private equity firms and slumlords saw an opportunity. They bought up foreclosed and auctioned properties for pennies on the dollar and successfully destroyed community wealth and neighborhood stability. In my hometown of New Haven, large landlords like Mandy Management used rental profits to buy any foreclosed properties they could get their hands on. Certain cities, like Detroit, were particularly hard hit by mass auctions of tax delinquent properties. As Andrew Kahrl writes in CityLab: “ … in Detroit, 90% of roughly 120,000 properties the county auctioned for unpaid taxes went to speculative investors, leading to sharp increases in evictions and accelerated neighborhood decline.” 

In many ways, the COVID-19 housing crisis is beginning to mirror the 2008 subprime mortgage crisis. In Connecticut, 25% of renters did not make their June rent payment. At least 140,000 renters are at serious risk of eviction when Connecticut’s tenuous eviction moratorium finally lapses on Aug. 25. Roughly one in 11 homeowners are behind on their mortgage payments, and 9.4% of mortgages were tax delinquent by the end of June. 

Patchwork eviction and foreclosure moratoriums have kept millions of Americans housed despite these ominous numbers. However, these moratoriums are a temporary solution to a deeply rooted problem: the ability to access housing, a fundamental human necessity, is tied to our ability to pay, despite the fact that, as David Madden and Peter Marcuse point out in their book, “In Defense of Housing,” “ … the ability to pay is unequal while the need for a place to live is universal.” 

In the midst of widespread, pandemic-induced unemployment, the ability to pay is out of reach for many working families. 

While America has enjoyed brief moments of investment in decommodified, not-for-profit housing (chiefly during and in the immediate aftermath of World War II), by and large we have embraced a private sector, profit-driven approach to providing housing. At the federal and state level, housing vouchers — which subsidize low-income renters — and tax credits — which subsidize the development of low-income housing — are the primary methods of providing for low-income renters. Essentially, we subsidize private landlords and developers to provide low-income housing. 

The provision of housing is also highly financialized, meaning that investment firms see housing as just another frontier for exploitative investment. Investors from all around the world buy up housing — not to live in, but to use as assets — while thousands of people sleep on the streets every night. In certain cities, there are increasingly more vacant housing units than homeless people. 

The consequences of this approach, which treats housing as a vehicle for investment rather than as a necessity for all people, are far-reaching. Even before COVID-19, in Connecticut, 256,900 people, or about 7% of the population, paid over half of their income toward rent. Approximately half a million Americans were homeless. Rent burdens almost always fall disproportionately on the shoulders of Black and Hispanic communities. 

The COVID-19 pandemic will once again present private equity firms and slumlords with the opportunity to expand their profit-driven housing portfolios on the cheap. Last time around, governments at all levels did little to prevent this crisis. This time around, we can take a different tack. 

To address the COVID-19 housing crisis — and to build a permanently affordable, off-the-market stock of social housing — state and local governments should work together to convert private housing into community-controlled and social housing, all the while keeping vulnerable residents housed during the pandemic (and permanently). 

State and local governments have a variety of tools at their disposal to achieve this goal. I’ll highlight two here. 

Local governments (and quasi-public sewer authorities) have the power to foreclose on homes which are tax delinquent. In many places, local governments simply find private investors who can compensate them for lost tax revenue and as a consequence, will sell homes (often with tens of thousands of dollars of equity) for a few thousand dollars. Land banking is a method of holding tax delinquent properties and directing them to public use rather than auctioning them off to private investors. Land banks should be connected to community land trusts (CLTs), a form of social housing in which the CLT owns land and allows homeowners or tenants to purchase homes on top of the land for reduced prices. Because they maintain ownership of the land, CLTs can prevent speculation and keep the housing permanently affordable. Employing a land bank and land trust model could potentially keep vulnerable homeowners housed while also building up municipal and community-owned housing stock, which will remain permanently affordable. 

Local and state governments also have the power of eminent domain, which allows them to take private land for public use, giving fair market compensation to the property owners. For most of this country’s history, eminent domain has been used to clear undesirable populations off of valuable land to make way for development. Many of the highways which ripped through poor Black and Hispanic neighborhoods were legally backed by eminent domain. 

However, at this moment, as millions of renters across the country face eviction, local and state governments should use their powers of eminent domain to buy as many low-to-moderate-income housing units as possible. They should prioritize areas with high rates of missed rent payments first, but ultimately, governments should be looking to act as reverse private equity firms. Their goal should be to dramatically expand the permanently affordable, decommodified social housing stock. With financial support from the state and federal level, municipalities can keep millions of people off of the streets and develop a robust public option for housing in the process. 

In the middle of an unprecedented pandemic, millions of Americans still have to worry about keeping a roof over their heads (not to mention the half a million Americans who were homeless prior to COVID-19). This moment is balancing on a knife’s edge. Governments can look to repeat the mistakes of 2008, and let private equity firms, banks and slumlords cannibalize communities — or we can use governmental powers to keep people housed and mount a significant challenge to the private market’s deleterious stranglehold on housing. 

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