Affordability

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.”

The origins of the housing squeeze  In certain respects, housing affordability is a contemporary problem. With the advent of the Industrial Revolution, housing no longer came with a job, and the rental market emerged in full force. Urbanization brought extreme housing privation. In 1872-73, witness to the degrading living conditions of workers in London and Manchester, England, socialist philosopher Friedrich Engels penned a series of articles that were later gathered into a pamphlet titled The Housing Question. Engels saw a shortage of housing as a necessary result of capitalism: the production of wealth for some requires those who labor to live at or near subsistence levels. Compounding this problem, under capitalism, land use is determined on the basis of investors’ profits, rather than social interests — such as housing the working class — therefore requiring wage earners accept the dismal lodgings the market supplies. In New York at the close of the 19th century, according to Lasner, this meant a “part of a bed for part of the day in extremely overcrowded, dingy” conditions. Engels advocated revolution. Instead, affordable housing policy in this country over the last 150 years has tried to chip away at the basic contradiction — workers aren’t paid enough to afford decent housing on a private market that lacks incentive to meet their needs — while failing to address the root issue.

#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.)

A model of an overcrowded block on the Lower East Side made the case for new housing regulations at the 1900 Tenement House Exhibit.  | Via Columbia University Libraries Online Exhibitions

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.

Labor led the way Non-profit cooperative housing doesn’t have a single origin point in New York City. What was likely the first non-profit housing cooperative in the country was begun by socialist Finnish immigrants in Sunset Park in 1916. But one entity picked up the mantle of cooperatives and had an outsized influence on the development of affordable housing in New York in the early and mid-20th century: labor unions. About three-quarters of the 250,000 units of limited-equity cooperatives built in the US were constructed in metropolitan New York, and it was the labor movement that was the foremost developer of middle-income housing in the city through the 1970s. 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.
Co-op City consists of 15,382 units for moderate- and middle-class families. | Photo by Amani Willett for Urban Omnibus

#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.

Public housing’s early days First came First Houses. Opened on the Lower East Side in 1935, those units were actually a gut renovation of existing buildings with piecemeal financing. The first two federally-funded, new construction public housing complexes came in the late 1930s: the Williamsburg Houses in Brooklyn and the Harlem River Houses in Manhattan. These campuses were designed to bring fresh air, sunlight, and access to green space — an antidote to the tenements — but differed considerably in their approaches. The Williamsburg Houses, designed by a group of architects that included William Lescaze and Richard H. Shreve, was one of the first housing developments in the US to reflect the ideas of modernism on a superblock site. The design team for the Harlem River Houses included John Louis Wilson, Jr., one of the first black registered architects in New York, and was developed in the more traditional garden apartment style; two-thirds of the site’s nine acres were left open as green space. While public housing pushed back at some societal problems, it doubled down on others: the Harlem River Houses was open exclusively to African American families and the Williamsburg Houses exclusively to white ones.

#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.

Even subsidies are private now Increasingly, the production of affordable housing sidesteps the government altogether. According to Lasner, contemporary housing policy seeks “to harness the effervescence of the private market to lean on basically market-rate tenants and homeowners to in effect privately cross-subsidize production and operation of below-market units.” This happens primarily through inclusionary zoning (IZ), which trades a zoning bonus — allowing a developer to build more units than otherwise allowed — in exchange for construction of a certain number of “affordable” units. Originally pioneered in the 1970s in suburban areas like Montgomery County, Maryland, inclusionary zoning programs are usually implemented at the local level and are now popular policy in most major US and European cities. As Lasner detailed: “It’s national governments that really have the power to tax and redistribute wealth. States’ ability to do this is much more circumscribed, and cities have virtually no power when it comes to doing this kind of thing.” Yet the state and city have had to pick up a lot of slack in the face of federal retrenchment over the last half-century, leading to less fruitful and more “timid” programs. Introduced in New York in the 1980s, IZ was expanded first under the Bloomberg administration and further under Mayor de Blasio, who made a previously voluntary program mandatory in neighborhoods that have been upzoned. The program is both widely hailed, for prompting the private market to produce meaningful numbers of below-market units, and panned, for failing to produce enough housing, or housing that is truly "affordable.” But at this time, it’s what we’ve got.
Series

Housing Brass Tacks

Reports from an ongoing, biweekly series of informal conversations with scholars and experts engaging complicated topics in housing policy, hosted by The Architectural League.

Comments

Mike Lindgren March 18, 2017

The most fundamental problem with inclusionary zoning is that its structure is essentially non-enforceable and is easily sidestepped by real estate developers and landlords looking to maximize market potential. An important step would be making sure that the back end of the zoning requirements are enforced. The larger problem will need a larger solution.