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public housing
What We Can Learn From Social Housing in Singapore and Vienna
The housing crisis is threatening to make the American dream impossible. What’s needed is the will and investment necessary to bring social housing—publicly developed homes for residents of mixed incomes—to California.
Oct 05, 2024
California is the epicenter of the national housing shortage. Over half of California renters—and four in ten mortgaged homeowners—are cost-burdened, which means they pay more than 30% of their income on housing. And I am one of them.
Yet of the 120 members of the California State Legislature, I’m one of the only five renters.
In the Bay Area district I represent, home prices average roughly $1.5 million and modest apartments rent for over $2,000 per month. It’s impossible for most working people to afford to buy a home in my district. Too many of my friends and family have been priced out of the communities we grew up in.
To address this urgent crisis, I have tirelessly pursued a policy that has successfully ended housing shortages in jurisdictions around the world: social housing.
Social housing is the public development of housing for residents of mixed incomes. I have introduced the California Social Housing Act every year since I took office. I fought to become Chair of the Select Committee on Social Housing, and I’ve participated in delegations to Vienna, Austria, and Singapore to study their social housing systems.
As that dream becomes impossible for so many Americans, there remains one tool that has realized that dream for millions of people around the world.
Vienna and Singapore have important lessons for us on how social housing can actualize housing as a human right.
In both cities, social housing emerged from crisis. After a crushing defeat in World War I, Vienna saw the collapse of its monarchy and extremely overcrowded living conditions. Singapore experienced destruction during World War II and emerged from both Japanese and British colonization with a severe housing shortage. Squatter settlements were devastated by fire in 1961, leaving about 16,000 people homeless. Today, the two governments are identified with opposite ends of the political spectrum—left-leaning Vienna compared to the more right-leaning Singapore—but both housed their populations through social housing.
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In Singapore, the Housing and Development Board builds 99-year leasehold flats that it sells to citizens. It has built so many units that roughly 80% of Singapore’s population live in them. Nine out of ten of these residents own their homes. Homeowners have the right to resell them, rent them out, and pass them to their heirs. These condos appreciate in value over time, enabling them to generate wealth. Only citizens and permanent residents may buy these flats, so no private equity firms, corporations, or speculators can game this system.
Vienna—sometimes referred to as the “Renters’ Utopia”—builds social housing for rent with indefinite leases that tenants never need to renew and can even pass down to their children. Over 60 percent of its residents live in social housing. As in Singapore, most residents qualify for social housing under the high income cap that encompasses 75% of the Viennese population. This income limit only applies when the tenant moves in. Without constant eligibility screenings, tenants may remain even if they make more money in the future, enabling socioeconomic integration of social housing neighborhoods. Residents pay about a third less rent than their counterparts in other major European capitals. Even private sector renters enjoy strong tenant protections.
While Singapore and Vienna offer different social housing models, both governments prioritize creating housing for the public good. The foundation of their policies are the finances, land banking powers, and expertise to build housing as a human right.
The result? Both are consistently ranked as the most livable cities in the world.
California today is well positioned to implement what Vienna and Singapore undertook in the past century. What’s needed here is the political will to bring social housing to our state. We can’t afford to wait.
The harsh reality is that California has roughly 30% of all people experiencing homelessness in the nation. The Golden State must build at least 2.5 million more homes by 2030 to end the current shortage. But California built just 85,000 housing units annually from 2018 to 2022.
California today is well positioned to implement what Vienna and Singapore undertook in the past century. What’s needed here is the political will to bring social housing to our state. We can’t afford to wait.
Today’s social housing proposals avoid the mistakes of the past by creating socioeconomically integrated, financially self-sustaining housing. And momentum is building nationwide. In 2023, my social housing bill was approved with two-thirds majorities in both houses of the California Legislature, but was vetoed. In 2023, Seattle voters approved a ballot measure to create a social housing developer. The state of Hawaii has passed legislation to develop social housing. Montgomery County, Maryland, is at the forefront of creating publicly developed, mixed-income housing through the Housing Opportunities Commission. The Commission serves roughly 17,500 renter households and owns more than 9,000 rental units.
Earlier this year, British Columbia, Canada, announced a CAD $4.95 billion (USD $3.67 billion) social housing initiative. Called BC Builds, the plan is to build 8,000 to 10,000 homes over the next five years, which could be the world’s largest new social housing program in decades.
The American dream has long been centered on having your own home. As that dream becomes impossible for so many Americans, there remains one tool that has realized that dream for millions of people around the world.
Let’s learn from our global peers and embrace social housing as a proven tool to solve our housing crisis.
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Landlord Greed and the Cruel Barbarism of a Housing Lottery for Children
The housing affordability crisis is a moral outrage of the highest order. So why does Los Angeles leave kids and adults to suffer?
Jun 14, 2024
For California’s homeless population, it is a multi-generational affair. After decades of inaction and utter indifference, there are now hundreds of homeless children on the streets of Los Angeles.
Dozens of children on Skid Row make the trek to school, making their way past tents, tarp shelters, discarded needles, and human waste. Some are lucky, finding a school bus to avoid the chaos. Others, not so much.
Once again, I ask, when is enough, enough? In a city with a school district that has 1,300 buses, there are homeless kids trekking past needles and feces to reach their classroom. In one of the world’s richest cities, there is poverty unseen anywhere else.
One of America's most famous short stories is “The Lottery” by Shirley Jackson. It is the story of a fictional small town in which the whole community prepares for the annual harvest ritual by holding a random lottery to choose a special person. That one "lucky" person—it later is revealed—is to be stoned to death. When this story was first published in The New Yorker, it was met with outrage.
What is the point of such a barbaric story? It forces us to contemplate why we follow meaningless traditions.
Instead of stoning a single person, we subject tens of thousands of people—children included—to the savagery of homelessness.
California has adopted such a barbaric tradition. Instead of stoning a single person, we subject tens of thousands of people—children included—to the savagery of homelessness, knowing full well it will lead them to addiction, mental illness, and death. We may not literally be throwing the stones, but we nevertheless are exacting the punishment. We tolerate the status quo which perpetuates the tragedy.
The idea of a life-and-death lottery is more than a metaphor. Federal housing vouchers actually are distributed through a lottery system that amounts to a game of musical chairs. Not only are few eligible for these vouchers, but very often, they cannot find a landlord who will take them. The music stops, and they are homeless.
Bad things happen to good people, and good people allow bad things to happen to others. We didn't invent the lottery. Therefore, it isn't our responsibility to fix it—because it isn't happening to us, until it is. When we look back in history and wonder how people could have tolerated terrible things that were done in their name, remember we are witnesses in real time to the mass tragedy of a crippling affordable housing crisis. Mostly, we throw up our hands and think that we are powerless to change it. We are not.
Collectively, we are that quaint town that allows the tradition of stoning to continue.
The housing affordability crisis is a moral outrage of the highest order. None of our leaders who preside over it without fundamentally addressing it deserve to be re-elected. Collectively, we are that quaint town that allows the tradition of stoning to continue.
But there is a difference here. We are not equally culpable. There is a tiny group of multi-billionaires who actually profit spectacularly off the lottery. Stephen Schwarzman—the king of the real estate oligarchs—is worth nearly $40 billion, made from milking tenants. The California Apartment Association amounts to a corporate real estate cartel dedicated to squeezing the last drop of blood from the stone that is the tenant community. Then there are their handmaidens in Sacramento who enable them.
We need an entirely new vision for California that not only restores the California dream, but transforms it for future generations. It is easy to get spoiled when you live in such a land of milk and honey. LA’s physical splendor and gorgeous weather can lull us into a false sense of privilege.
We need an entirely new vision for California that not only restores the California dream, but transforms it for future generations.
A state that boasts 179 billionaires, California is the cultural capital of the world and the birthplace of many of the largest technology companies on the planet. We have no excuse for being so dysfunctional. However, when you have so much, you feel like you can afford to waste—or you just don’t pay attention.
People are fleeing California in droves because they can’t afford to live here. Even if they can afford their rent, the prospect of never owning a home or saving meaningfully is so discouraging that it is easier to flee.
That’s how the doom loop begins to accelerate out of control. Californians are crying for help, and some are barely toddlers.
We don't have to cede our state to a greedy landlord cartel. The time for rent control, tenant protections, and dignified public housing is now—if the people answer the cries for a new California.
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US Affordable Housing Policy Works for Wall Street and Rich Developers, Not Renters
Current policy doesn’t make sense if the goal is to provide affordable housing; if the goal is to create market conditions beneficial to real estate developers and investors, it appears to be working quite well.
May 17, 2024
Affordable rental housing policy fails to provide sufficient affordable rental housing decade after decade, yet policymakers continue to do largely the same things. A researcher at the Joint Center for Housing Studies recently observed that in 1960, about 45% of renters in the bottom income quintile spent more than 50% of their income on housing costs. Today, it is about 65%. Renters below the official poverty line spend on average 78% of their income on housing. At what point will policymakers admit that their policies have failed renters?
It Doesn’t Make Sense: The Low-Income Housing Tax Credit
Affordable rental housing policy now primarily relies on the Low-Income Housing Tax Credit (LIHTC). LIHTC seems like a rather bad idea if one is interested in addressing the affordable rental housing crisis. LIHTC has a number of problems, but two of them should be considered fatal flaws. First, LIHTC is not very good at providing low-income rental housing. The Joint Center for Housing Studies states, “LIHTC does not necessarily protect a renter from cost burdens” and that “lower-income renters living in LIHTC units often require additional subsidies to make this housing affordable.” The primary policy to create affordable rental housing does not do a very good job at creating affordable rental housing, yet policymakers rely on it more and more.
The second major problem is that LIHTC rentals typically convert to market rate after 30 years (in some cases 15 years). This transition rate might be reasonable if there were an adequate supply of affordable rental housing, but there isn’t. The National Low-Income Housing Coalition estimates that the United States has a shortage of 7.3 million rental homes for the lowest-income renters. The Joint Center for Housing Studies finds that the country lost 2.1 million rental units for these lowest-income renters between 2012 and 2022. Affordable rentals are too scarce to allow them to be converted to market-rate housing.
The current estimate is that 325,000 LIHTC rental units will transition to market rate by 2029. LIHTC creates a rental housing bucket with a hole in the bottom. Since more and more of our affordable rental housing is created by LIHTC, the amount of affordable rentals lost to market conversion will increase over time. The United States already does not build enough affordable rental housing to keep up with demand, but policymakers have created a system that will lead to accelerating losses of affordable rental housing over time. This doesn’t make sense.
Affordable Rental Policy Is Working Well for Corporations and Investors
Current affordable rental housing policy doesn’t make sense if the goal is to provide affordable housing. If the goal is to create market conditions beneficial to real estate developers and investors, it appears to be working quite well.
Public housing, especially when adequately funded, is a far more effective method of providing affordable rental housing than LIHTC. The rate of cost-burdened renters is quite low in public housing—much lower than in LIHTC housing. Because of this fact, there are very long waiting lists and tremendous demand for public housing.
From the private real estate industry’s perspective, public housing is a serious threat. “From the beginning, the real estate industry bitterly fought public housing of any kind,” Richard Rothstein stated in The Color of Law: A Forgotten History of How Our Government Segregated America. Rothstein adds that the industry later lobbied to structure public housing so that it would be underfunded. Today, after the passing of the Faircloth Amendment, Congress has prohibited the increase in the number of public housing units built by the federal government in spite of the fact that people are, in some cases, waiting for decades to get into public housing.
In addition to investors receiving more and more via tax credits from the LIHTC program, the Joint Center for Housing Studies reports that corporate owners make up a growing share of the rental housing market. (The corporate share of rental properties ranging from 5 to 24 units nearly doubled between 2001 and 2021.) More private equity firms have also moved into the rental housing market. While more and more renters are being cost-burdened, it appears that more corporations and investors are making good profits.
It is possible to create affordable rental housing policies that work well for renters. There are good social housing models in Europe and Asia. Social housing is nonprofit housing. In the European models, it is not restricted to just the lowest income households, which tends to provide it with a stronger political and economic base. The good news is that U.S. city and state governments are beginning to explore these models. In Congress, Reps. Alexandria Ocasio-Cortez (D-N.Y.), Cori Bush (D-Mo.), and Becca Balint (D-Vt.), Sen. Bernard Sanders (I-Vt.), and other members of Congress have recognized the need to repeal the Faircloth Amendment. Once that amendment is gone, the federal government can move toward constructing affordable, quality social housing.
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