Understanding housing policy, finance, and regulation can be daunting, requiring us to wade through a sea of acronyms, untangle public and private interests, trace knotty financial flows, and decrypt complex bureaucracies. In our new Housing Brass Tacks series, we’re going back to basics to get a grasp on this unwieldy topic.
In the second Housing Brass Tacks discussion, housing scholar Matthew Lasner, an associate professor of urban studies and planning at Hunter College, laid out the history of the fight to make housing affordable: from zoning codes to co-ops, it’s always been hard-won. Here are a few things we learned about the long battle against privation in the US.
#1 Housing is in “a state of paradoxical crisis”
Since the austerity of the 1970s fiscal crisis, New York City has experienced a dramatic economic resurgence that has resulted in higher employment, safer schools, and better parks. But the city has also grown more unlivable in one crucial respect: the cost of housing. As rents and sales prices have soared, incomes have stagnated and declined, producing a “yawning gap,” in Lasner’s words, that threatens to swallow the 55 percent of the city’s households that are moderately or severely rent burdened (spending more than 30 percent of their income on rent). Meanwhile, hundreds of thousands of families are living in crowded, substandard, or dangerous conditions. Despite the inroads that Mayor Bill de Blasio is making with his Housing New York plan, it will not be enough. Lasner sees it as an essential quality of New York City’s prosperity: “extreme plenty paired with extreme privation, cheek by jowl.”
#2 Four essential tools increase affordability (although not enough)
Four approaches have been used in various combinations to make a dent in housing inequality in New York City over the last two centuries: building codes, rent restrictions, non-speculative ownership, and subsidies.
Building codes, which essentially sought to outlaw the worst conditions in housing, were the first regulations introduced in New York to cope with housing inequality. In the late 19th century, urban reformers, such as photojournalist Jacob Riis and architects I.N. Phelps Stokes and Ernest Flagg, worked to improve housing for the poor. Their advocacy helped push through a series of New York State tenement laws between 1868 and 1901. Tenement laws focused on increasing access to light and air and improving sanitation, which got rid of the “worst sorts of fire traps” while still turning a profit for builders — but mostly made a bad product slightly better. (Today we’re trying to undo some of these regulations in the campaign to legalize accessory dwellings and through experiments with micro-units.)
Rent restrictions, first introduced in the aftermath of World War I amidst high inflation and dramatic spikes in housing prices, went a step further. Plagued by rent strikes, New York City and Washington, DC, were the first cities to introduce extremely controversial rent regulations — they even provoked Congressional hearings into their constitutionality, according to Lasner. But by 1942, in the face of persistent inflationary pressures, the federal government issued rent controls to all “critical defense areas.” (In New York, responsibility for these has since passed between the state and city.) Like building codes, rent control addresses affordability at the end of the pipeline, and may even limit the supply of housing overall by disincentivizing landlords from maintaining housing and deterring builders from constructing new units.
Meanwhile, non-speculative ownership seeks to eliminate the profit motive in building, and serves as “one of the bedrocks of affordable housing today,” according to Lasner. This was pioneered in New York City in the late 1800s by “philanthropic builders” who financed affordability by seeking cheaper land (hello, Brooklyn!) and taking smaller returns on investment. The crown jewels of privately built, low-profit housing in New York were built through the Mitchell-Lama program, a state program started in 1955 using low-interest mortgages and property tax exemptions to create middle-class rental units and co-ops. Today, community development corporations (CDCs) dominate the limited-equity landscape, while community land trusts (CLTs), non-profits that hold land ownership in common, also garner interest. The Lower East Side’s Cooper Square is a leading example of an urban CLT, but the model’s viability is limited because it doesn’t solve the problems of expensive land, labor, and materials. “None of these models ever really served the poor. They all tended to serve, at best, families with steady, regular employment,” said Lasner, “unless, of course, we see separate infusions of cash.”
That infusion of cash is the fourth, and perhaps most important, method of producing affordable housing: subsidies. The idea of subsidizing housing — putting up tax dollars to defray the costs of constructing and operating housing — spread after World War I, with New York again at the helm in the US, inspired in part by reform-minded architects like Clarence Stein and Andrew Jackson Thomas. The first state intervention was rather tepid (the 1926 New York State Housing Law essentially amounted to tax breaks) but it paved the way for the most robust subsidy we’ve ever had: public housing.
The Amalgamated Clothing Workers Union (ACW) developed the Amalgamated Houses in the Bronx, completed in 1930. Dozens of limited-equity cooperatives were subsequently built in New York by or with the support of unions. The ACW and other labor, civic, and housing groups created the non-profit United Housing Federation (UHF) in 1951 to promote cooperatives, particularly in housing. The UHF constructed major developments, notably Co-op City in the Bronx, the largest cooperative housing complex in the world.
#3 Public housing works
Subsidies enabled far more dramatic improvements in living conditions than previous approaches. After the Great Depression, taking advantage of a political climate unusually hospitable to government intervention in poverty, the federal government built modern, up-to-date housing (“not-quite middle-class standards”) for the poor for the first time. Yet the federal commitment was short-lived, ultimately crippled by Americans’ belief in “the myth of their own independence,” according to Lasner. As the white middle class retreated to the suburbs, the housing crisis was marginalized as an urban (read: black) problem. The growing unpopularity of public housing eventually resulted in a moratorium on new construction by President Nixon in 1973.
#4 We’re sliding down a slippery slope of ever-shallower housing subsidies
In the postwar era, robust government subsidies metastasized into public-private partnerships, funneling federal funds to private builders. Between World War II and the 1970s, subsidies produced about 410,000 units of housing in New York. About 40 percent of this was public housing, but the rest were subsidies to the private market, most famously the Mitchell-Lama program. The government commitment was further pared down 1970s, as Vietnam-era inflation undermined efforts like Mitchell-Lama and white suburbanites railed against anti-poverty programs. “By the ’70s, the whole idea of generous public subsidies for housing was basically doomed,” said Lasner. Since then, policymakers have tried to veil government involvement in housing through subsidies to private partners that are increasingly shallow (both meager and short-lived). Nixon replaced public housing with Section 8 housing vouchers used in the private market. Reagan created the Low Income Housing Tax Credit Program (LIHTC), now the largest source of funding for affordable housing nationally, avoiding the direct allocation of government funds in favor of foregone future tax revenue. Under Clinton, the HOPE VI program turned much of the country’s public housing over to private ownership. Meanwhile, the affordable housing crisis persists.
Housing Brass Tacks is an ongoing, biweekly series of informal conversations with scholars and experts engaging complicated topics in housing policy, hosted by The Architectural League. Future conversations will cover homelessness, fair housing, and more. Next up on February 27th: The Money — we hope to see you there!