Authors Matthew Gordon Lasner and Nicholas Dagen Bloom on the urban housing crisis

The Great Housing Squeeze

by Matthew Gordon Lasner and Nicholas Dagen Bloom

Affordable Housing in NY 2

4.16. Bell Park Gardens, Queens, ca 1949, courtesy Joe Lapal.

As American cities, especially along the coasts, have become centers of global wealth the high cost of housing has become an urgent problem. From Boston to the Bay Area and the South Bronx to Santa Monica, rents and sales prices are up. In New York City, housing inequality has become Mayor Bill de Blasio’s top priority, while in San Francisco several initiatives designed to cool the housing market appeared on this year’s ballots. In Los Angeles families now spend a record share of income on housing: an average of nearly 49% for renters and 40% for homeowners with mortgages. What caused this crisis and what, if anything, can be done about it?

Affordability problems in housing are deep-seated. The market has never housed most Americans well, especially in urban centers. As millions flooded into cities in the nineteenth century, two neighborhood archetypes quickly emerged: the Gold Coast and the slum. As early as the Civil War, observers worried that there were few decent options for working and middle-class families. By the 1920s critics like Lewis Mumford complained that what options there were unsuitable. Those who could afford to pioneered a third alternative: the suburb. Families who could not afford ownership or the commute, moved to row houses and steam-heated apartments in outer sections of cities.

The Great Depression, when millions lost their homes, prompted bold action. Since the 1910s East Coast reformers had argued that nothing short of government subsidies could improve living conditions for working families: tax breaks and low-interest loans for building rental housing, and long-term mortgages with low down payments for homeowners. With American resistance to government intervention at its nadir, President Roosevelt introduced these programs as part of the New Deal.

The impact was dramatic. Cities that wished received money to raze tenements and build public housing. Loans were made to non-profits for middle-income apartments. Most famously, the Federal Housing Administration guaranteed mortgages for modest single-family houses meeting certain social and physical requirements including, most egregiously, that they be racially segregated. Coupled with a robust postwar economy and progressive federal income taxes, the quality of housing for nearly all Americans rose substantially.

But commitment to government aid in housing was tenuous. Even many moderates questioned the value of public action, especially when it was seen, incorrectly, as chiefly benefiting poor people of color. This misconception was sustained by the fact that most beneficiaries, who in reality were middle-class and white, received housing aid that was largely invisible, through mortgage insurance and tax deductions for property taxes and interest payments.

As a result, directly subsidized housing became stigmatized, especially when it was highly visible, as in Modernist high-rises, whether public housing or middle-income complexes, like New York’s Co-op City. Los Angeles cancelled its public housing program entirely in 1953. Nationally, public housing, along with several middle-income programs, ended in the 1970s amid a deep recession and a racist backlash against spending on poverty programs. In an era of urban disinvestment and population loss, few alarms were raised.

Today, however, many U.S. cities have seen a reversal of fortunes. Surging immigration, new lifestyles, and the growth of specialized service industries like media, tech, and finance have meant an influx of people and money. Developers have responded with new construction. But intensifying market pressure at a time of growing income inequality has meant that much of this housing is out of reach of working and middle-class families, while competition for existing homes is pushing re-sale prices and rents to record highs, leading to displacement.

Affordable Housing in NY 5

5.25. Twin Parks NW, Bronx, 1973, courtesy Lo-Yi Chan.

Cities have responded creatively. Working in partnership with developers and non-profits, and with begrudging support from Washington — chiefly in the form of tax credits for private construction of low-income apartments — over the past 25 years builders have created more than 1.5 million affordable units in cities and suburbs. But subsidies are shallow and expire as quickly as after 15 years. And because programs are allocated to states on a per capita basis rather than by need, high-cost cities like receive insufficient support. Few programs benefit middle-class households.

Even though the federal government spends $46 billion a year on housing subsidies, many cities have been overwhelmed by the buoyant market. This is perhaps most evident in rising “rent burdens”: the percentage of income both tenants and mortgage holders spend on housing. But it is also apparent in unprecedented homeless populations (nearly 45,000 in Los Angeles County and 60,000 in New York City) and, at least in New York, the hundreds of applications made for each subsidized apartment that we manage to build, and in the long waiting lists for public housing, vouchers, and popular middle-income developments.

Worse yet, we see it in the proliferation of modern-day tenement slums. Hundreds of thousands — mostly uncounted — now live in illegally sub-divided houses and apartments in New York’s outer boroughs and in places like Fairfax County, Virginia, outside of Washington, D.C., unprotected by tenancy laws and basic occupancy and fire codes.

Some might argue that families unable to make market rents should simply move: to cheaper suburbs like the Poconos or L.A.’s Inland Empire, or out of expensive regions entirely. Millions have. But many already face daunting commutes, particularly those who do not own cars. And often the best opportunities for upward mobility including good jobs, schools, and social services remain in expensive markets. Meanwhile, cities need diverse populations: bankers and businessmen, but also bakers and bartenders, teachers and artists.

To address these problems, we must renew our commitment to government aid for both low- and middle-income housing. The federal government spent untold billions during the foreclosure crisis bailing out the mortgage industry. It gives away $195 billion a year in income-tax deductions to homeowners — mainly, studies show, higher-income ones — despite the fact that this money has not been proven to boost rates of ownership. Cities would be better served if this windfall were used to stabilize neighborhoods through proven programs that create affordable housing. Urban change may be inexorable but as a society we have the power to manage it. What we need now is the dedicated political will to do so.

BloomLasnerNicholas Dagen Bloom is associate professor of social science and director of the Urban Administration program at New York Institute of Technology. His books include Public Housing That Worked: New York in the Twentieth Century. Matthew Gordon Lasner is assistant professor of urban studies and planning at Hunter College, City University of New York. He is the author of High Life: Condo Living in the Suburban Century.

Conversations on Climate: Economists consider a hotter planet on PBS Newshour

NEW climate picIn Climate Shock, economists Gernot Wagner and Martin Weitzman tackle the likely prospect of a hotter planet as a risk management problem on a global scale. As 150 world leaders meet in Paris for the UN Conference on Climate Change, both took the time to speak to PBS Newshour about what we know and don’t know about global warming:


Everyone is talking about 2 degrees Celsius. Why? What happens if the planet warms by 2 degrees Celsius?

Martin L. Weitzman: Two degrees Celsius has turned into an iconic threshold of sorts, a political target, if you will. And for good reason. Many scientists have looked at so-called tipping points with huge potential changes to the climate system: methane being released from the frozen tundra at rapid rates, the Gulfstream shutting down and freezing over Northern Europe, the Amazon rainforest dying off. The short answer is we just don’t — can’t — know with 100 percent certainty when and how these tipping points will, in fact, occur. But there seems to be a lot of evidence that things can go horribly wrong once the planet crosses that 2 degree threshold.

In “Climate Shock,” you write that we need to insure ourselves against climate change. What do you mean by that?

Gernot Wagner: At the end of the day, climate is a risk management problem. It’s the small risk of a huge catastrophe that ultimately ought to drive the final analysis. Averages are bad enough. But those risks — the “tail risks” — are what puts the “shock” into “Climate Shock.”

Martin L. Weitzman: Coming back to your 2 degree question, it’s also important to note that the world has already warmed by around 0.85 degrees since before we started burning coal en masse. So that 2 degree threshold is getting closer and closer. Much too close for comfort.

What do you see happening in Paris right now? What steps are countries taking to combat climate change?

Gernot Wagner: There’s a lot happening — a lot of positive steps being taken. More than 150 countries, including most major emitters, have come to Paris with their plans of action. President Obama, for example, came with overall emissions reductions targets for the U.S. and more concretely, the Clean Power Plan, our nation’s first ever limit on greenhouse gases from the electricity sector. And earlier this year, Chinese President Xi Jinping announced a nation-wide cap on emissions from energy and key industrial sectors commencing in 2017.

It’s equally clear, of course, that we won’t be solving climate change in Paris. The climate negotiations are all about building the right foundation for countries to act and put the right policies in place like the Chinese cap-and-trade system.

How will reigning in greenhouse gases as much President Obama suggests affect our economy? After all, we’re so reliant on fossil fuels.

Gernot Wagner: That’s what makes this problem such a tough one. There are costs. They are real. In some sense, if there weren’t any, we wouldn’t be talking about climate change to begin with. The problem would solve itself. So yes, the Clean Power Plan overall isn’t a free lunch. But the benefits of acting vastly outweigh the costs. That’s what’s important to keep in mind here. There are trade-offs, as there always are in life. But when the benefits of action vastly outweigh the costs, the answer is simple: act. And that’s precisely what Obama is doing here.

Read the rest on the PBS Newshour blog.

Wagner coverGernot Wagner is lead senior economist at the Environmental Defense Fund. He is the author of But Will the Planet Notice? (Hill & Wang). Martin L. Weitzman is professor of economics at Harvard University. His books include Income, Wealth, and the Maximum Principle. For more, see www.gwagner.com and scholar.harvard.edu/weitzman.

 

Zimmerman talks sex education at the American Enterprise Institute

Zimmerman jacket

Too Hot to Handle by Jonathan Zimmerman

Too Hot to Handle: A Global History of Sex Education is shaping up to be one hot book for spring. A long format conversation with author Jonathan Zimmerman recently appeared in Globe and Mail, and he was interviewed (live and available to stream) for WNYC’s Brian Lehrer Show. Zimmerman published “Can Sex Ed be Universal?” in Foreign Affairs, the book was excerpted on PopMatters.com, and was the subject of a feature on Vox.com as well.

This past Thursday, the American Enterprise Institute hosted a conversation with Zimmerman. Taking a look at the differences in sex education between countries and throughout history, he explains how, as countries become more democratic, sex education has become more contentious.

Check out Zimmerman’s American Enterprise Institute talk here.

 

Congratulations Martin Ruhs, Winner of the 2014 Best Book Award for the Migration and Citizenship Section of the American Political Science Association

Martin RuhsThe Migration and Citizenship Section of the American Political Science Association has named Martin Ruhs’s The Price of Rights: Regulating International Labor Migration  the winner of the 2014 Best Book Award in the Migration and Citizenship category. The judging committee lauded Ruhs for his “innovative, rigorous, and very comprehensive treatment of the subject of international labor migration” saying additionally that his “command of knowledge and research skills demonstrates the best practices of scholarship.”

Martin Ruhs is an Associate Professor of Political Economy at the Oxford University Department for Continuing Education and a Senior Researcher at COMPAS. He is also an Associate Member of the Department of Economics, the Department of Social Policy and Intervention and the Blavatnik School of Government. Ruhs’s research focuses on the economics and politics of international labor migration within an internationally comparative framework, which he draws on to comment on migration issues in the media and to provide policy analysis and advice for various national governments and institutions.

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Martin Ruhs is the author of:

The Price of Rights The Price of Rights: Regulating International Labor Migration by Martin Ruhs
Hardcover | 2013 | $35.00 / £24.95 | ISBN: 9780691132914
272 pp. | 6 x 9 | 13 line illus. 16 tables. |eBook | ISBN: 9781400848607 | Reviews Table of Contents Chapter 1[PDF]