Having developed my expertise on the topic of social housing, I feel like a 950 word blog post about the subject does not do justice to its importance. Housing costs are as fundamental to our quality of life as energy costs are to production. Yet we, as a society, seem to pay more attention to the rise and fall of oil prices than to the challenges cities face in housing their residents. There is no clear cut solution to our housing crisis, and dumping a huge supply of new houses, although may seem to be intuitive, can have problematic unintended consequences. In this blog I try to discuss these various issues and help you wrap your mind around how intricate the problem actually is. Don't hesitate to share your thoughts!
Having intimately studied social housing, I've observed the spectrum of successes and failures in tackling the housing crisis.Clearly some social housing initiatives succeed, such as the Poljane Community Housing project in Maribor, Slovenia and the Angers Social Housing in Maine-et-Loire, France, others result in catastrophic outcomes, the infamous Pruitt–Igoe project in St-Louis, USA being the archetype of doom. Moreover, innovative strategies have emerged to counter the housing shortage, notably combating the Not In My Backyard (NIMBY) syndrome with modern solutions using inclusivity and ecology as central themes. These however have not been enough to counter the rising cost of housing both in the rental and owner-occupier markets.
Adequate housing: It's My RIGHT!
How is it possible that something defined as a fundamental human right by the United Nations Charter, can be such a contentious issue in most global cities, where resources are generally plentiful. The short answer is that the supply of housing is primarily driven by market forces and provided by private companies. As a consequence, the primary motivator of housing supply remains profit. For example, if it would be more profitable in a given market for a developer to sell one home to one person on a certain lot than to build a multi-unit, multi family housing on that same lot, the developer will naturally choose the former. This situation is exacerbated by the fact that housing, a basic human need, exhibits significant inelasticity in demand, meaning that demand typically remains high despite the increase in costs and prices.
Complicating matters further is the heavy reliance of cities on property tax revenues for financing their operations. In fact, rising property prices are beneficial for most cities as property tax amounts are usually tied to property values. Since most cities lack the capability and expertise to provide housing independently of private developers, this system does not encourage the development of social housing.
I'm sure someone's come up with an answer...right?
One proposed remedy involves injecting a substantial quantity of non-speculative housing into the market, potentially boosting housing supply and stabilizing prices, particularly in the rental sector. However, with the freezing or even falling of rental incomes, landlords, especially smaller landlords, could be forced to sell properties. This could have the medium term consequence of exerting downward pressure on property prices and, mid-to-long-term property tax receipts, exerting added pressure on municipal finances. It could also allow the opportunity for corporate landlords to swoop in and purchase small properties at depressed prices and consolidate their hold on the market. It is not unimaginable that a small group of large companies would profit most out of this whole scenario.
In any such scenario, considering the costs such projects could generate as well as the potential unin-tended negative conse-quences they can produce, elected officials are generally disincentiv-ized from initiating large-scale non-market social housing projects, thereby creating an impasse in addressing the housing crisis.
I'm never moving out of my parents' basement am I?
There's a glimmer of hope in proposed solutions. Courage is the prerequisite for catalyzing impactful changes. It involves segregating and regulating the housing markets and challenging the societal notion that homeownership is the ultimate societal road towards prosperity.
If the intention is to create truly affordable housing accessible to all, municipal authorities have to be granted additional powers, and indeed have the courage to wield them. This would require diversifying revenue streams to unchain ourselves from the property tax dependency. It would also demand that zoning and development regulations be tighter and loopholes for affordable housing imperatives be closed to developers. Concurrently, non-market actors such as co-ops, state entities and NGOs need to be financially, legally and morally incentivized to provide alternative and non-speculative housing options. In order to avoid disasters such a Pruitt-Igoe, finances need to be consistent and plentiful. Moreover, substantial investments in fortifying tenant rights will foster a more equitable housing landscape. This entails measures to safeguard tenants against unjust evictions, exorbitant rent hikes, and ensuring habitable living conditions.
Moreover, challenging the societal perception that homeownership is the pinnacle of success is imperative. Homeownership undeniably has the potential to increase the wealth for individuals. In today's market, one must have a certain amount of wealth to achieve homeownership in the first place. Therefore, as a society, public resources aimed at encouraging homeownership can be interpreted as a disguised subsidy to the "rich". Redirecting those resources towards ensuring secure, affordable, and high-quality housing for all, is crucial.
The Last Word...For Now
Left unchecked, the current pace of increasing housing costs will cause a catastrophic fracture in our societies. Addressing the housing crisis demands a paradigm shift in perspective and policy. It calls for courage, strategic planning, and societal commitment to prioritize housing as an inalienable human right. By fostering a non-market, non-speculative housing sector, revitalizing social housing initiatives, and reshaping societal perspectives, we can pave the way for a fairer and more sustainable housing future.
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