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tina smith
Congress Must Repeal Its Cap on Public Housing Now
The Faircloth Amendment and the consistent underfunding of public housing has caused the number of public housing units to decline 40% from 1.4 million in 1994 to 835,000 in 2022 while the need has steadily increased.
Dec 13, 2024
Randall Irvin has been waiting for public housing in Chicago for six years, and his situation is not that unusual. For example, there are over 100,000 families on San Antonio’s waitlist for public housing. In Chicago, there were more than 200,000 families on the waitlist in 2023. Public housing waiting lists are extremely long because there is an inadequate supply—and a 1998 amendment to federal housing law is a significant barrier to building new housing.
Table 1 lists the average number of months households waited before they were able to receive public housing in selected metropolitan areas according to the U.S. Department of Housing and Urban Development. It ranges from a low of 11 months in San Antonio to a high of 84 months (seven years) in Miami. These numbers hide the wide range of variation around the average. In the city of Chicago, families can wait for as few as six months or as long as 25 years depending on the specifics of their situation and their family size. Households that are still waiting for housing or that never receive housing are not included in the calculation of the averages, so these average wait times do not fully capture the difficulty of obtaining public housing.
The families remaining on public housing waitlists for housing for years are in desperate situations. They are people who are homeless, who are living in unsafe and unsanitary conditions, and who are struggling to afford their housing. In Washington, D.C., Rosalynn Talley, who waited 14 years for public housing, described her overcrowded housing situation as being “smashed up like sardines.” Her neighborhood was also unsafe, and there was mold in the house.
Congress is to blame for the low supply of public housing. In 1998, Congress passed the Faircloth Amendment which put a cap on the number of public housing units. The cap and the consistent underfunding of public housing has caused the number of public housing units to decline 40% from 1.4 million in 1994 to 835,000 in 2022 while the need for affordable housing has steadily increased.
Public housing is one of the most affordable forms of housing, but affordable housing policy has shifted to relying on the Low-Income Housing Tax Credit (LIHTC). LIHTC goes to private developers and investors and creates “affordable” housing that is often more expensive to renters than public housing. The Joint Center for Housing Studies reports that “LIHTC [housing] does not necessarily protect a renter from [housing] cost burdens.” While the Faircloth Amendment has been a benefit to the for-profit real estate industry, it has hurt low-income renters.
Thankfully, there are some in Congress working to undo this bad law. The Homes Act, introduced by Sen. Tina Smith (D-Minn.) and Rep. Alexandria Ocasio-Cortez (D-N.Y.), if passed, would repeal the Faircloth Amendment and provide the funding needed to address the maintenance and repair backlog in public housing. Currently, the bill has 40 supporters in the House of Representatives and two supporters in the Senate. Repealing the Faircloth Amendment would open another channel to address the affordable housing crisis.
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Why Wall Street Landlords Love a Housing Shortage
And how a new social housing bill introduced Rep. Alexandria Ocasio-Cortez and Sen. Tina Smith aims to address the crisis harming families and communities nationwide.
Sep 24, 2024
In its most recent year-end letter, the private equity firm Blackstone gave its stockholders a seemingly counterintuitive assurance: the lack of new housing stock was reason for optimism.
Why does a stagnant growth in new living spaces benefit Blackstone? Because it is the nation’s largest corporate landlord. For the firm and its investors, chronic housing shortages mean more power to set prices and more leverage to extract wealth from vulnerable working-class tenants.
Blackstone’s letter reveals the malevolent and distortionary role private equity plays in our residential real estate market and underscores the fundamental problem with housing commodification writ large.
Our market-based system simply does not give the private sector incentives to meet the public’s demand for high-quality, permanently affordable housing. Providing it would be against the sector’s economic interests since new supply would bring down prices and negatively impact profitability.
Social housing will make certain that housing is treated as a public good that satisfies a social need, not a financial asset to profit off of.
The negative effects of housing commodification are all around us. For-profit investors are snatching up properties at an alarming rate – 1 in 6 of all residential homes in the second quarter of this year – giving them the power to charge residents junk fees on top of rent increases.
As a result, a record number of renter households – 22.4 million individuals and families, half of all renters – are now paying more than 30 percent of their income on rent and other housing-related expenses. This places a significant strain on household budgets and contributes to a range of problems related to mental health including anxiety and depression.
Tenant unions and working-class institutions across the country have spent years fighting back against the financialization of housing, organizing their communities against speculators in favor of greater tenant protections and fighting for housing to be a human right.
A promising step in this direction was taken last week when Senator Tina Smith (D-MN) and Congresswoman Alexandria Ocasio-Cortez (D-NY) introduced new legislation designed to solve our acute affordability crisis.
The Homes Act would invest in the construction of new social housing while dedicating resources to rehabilitate the existing stock. The bill proposes to establish a Housing Development Authority, authorizing $300 billion over the next ten years for the new department to finance and develop permanently affordable housing. It would also repeal the obsolete Faircloth Amendment, a provision that effectively limits the availability of public housing, removing structural barriers to the construction of new public units.
Rents would be capped at 25 percent of a household’s income for tenants, greatly easing the burden of housing for them.
Perhaps the most innovative aspect of the bill is the importance it places on equity and democracy. The new units will be built by union workers; priority will be given to protect underserved communities of color from displacement; a significant share of the affordable housing stock will be earmarked for households with low incomes; and many of the new homes will be placed under democratic and community control when transferred to eligible entities like community land trusts and tenant-owned cooperatives.
The emphasis on permanence in the provision of social housing is critical for understanding housing struggles today. Permanent affordability will not only begin the process of decommodification, but it will also protect buildings from private equity firms who see affordable housing as another sector they can plunder.
Affordable housing already accounts for eight percent of Blackstone’s BREIT portfolio, but there is no genuine commitment to providing reasonably priced homes to working-class households. The firm has opened its coffers more than once to defeat rent control ballot initiatives and it exploits programs like the Low-Income Housing Tax Credit (LIHTC) to secure the tax benefits that come with investing in affordable housing. Yet Blackstone still raises rents, evicts tenants, and underinvests in maintenance.
The permanence of affordability is the cornerstone of social housing. Social housing will make certain that housing is treated as a public good that satisfies a social need, not a financial asset to profit off of. Only when speculators and concentrated wealth are reined in will we solve the housing crisis and guarantee safe, healthy, affordable, and dignified homes for all.
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Ocasio-Cortez, Smith Push Bill to Create Social Housing Authority
"Because we believe that housing is a human right, like food or healthcare, we believe that more Americans deserve the option of social housing."
Sep 18, 2024
"It's becoming nearly impossible for working-class people to buy and keep a roof over their heads. Congress must respond with a plan that matches the scale of this crisis."
That's according to U.S. Rep. Alexandria Ocasio-Cortez (D-N.Y.) and Sen. Tina Smith (D-Minn.), who on Wednesday introduced the Homes Act in a New York Timesopinion piece and an event with supporters of the proposal on Capitol Hill.
"Because we believe that housing is a human right, like food or healthcare, we believe that more Americans deserve the option of social housing," the pair wrote in the Times. "That's why we're introducing the Homes Act, a plan to establish a new, federally backed development authority to finance and build homes in big cities and small towns across America. These homes would be built to last by union workers and then turned over to entities that agree to manage them for permanent affordability: public and tribal housing authorities, cooperatives, tenant unions, community land trusts, nonprofits, and local governments."
"Our housing development authority wouldn't be focused on maximizing profit or returns to shareholders," the congresswomen continued. "Rent would be capped at 25% of a household's adjusted annual gross income. Homes would be set aside for lower-income families in mixed-income buildings and communities. And every home would be built to modern, efficient standards, which would cut residents' utility costs. Renters wouldn't have to worry about the prospect of a big corporation buying up the building and evicting everyone. Some could even come together to purchase their buildings outright."
In addition to establishing the new authority under the Department of Housing and Urban Development, the bill would repeal the Faircloth Amendment, which prevents the use of federal money for building new public homes. Under the new plan, construction would be funded by congressional spending and Treasury-backed loans.
"In New York, the average worker would need to clock in 104 hours a week to afford a one-bedroom apartment," Ocasio-Cortez said in a statement. "This country is staring down a full-blown housing crisis. A crisis where affordable housing is slipping out of reach."
"This bill would create more than 500,000 jobs and create 1.25 million affordable housing units," she noted, declaring that "everyone deserves a place to call home."
It's not just New York City where lower-wage people are struggling to keep a roof over their heads. Smith pointed out that "more than 90% of workers cannot afford a modest one-bedroom apartment. Americans across the country are bidding for homes against the wealthiest financial firms and they're losing."
"We have a severe housing crisis," she stressed. "The private market cannot meet this moment on its own. The Homes Act meets peoples' needs through social housing."
As Jacobin's Samuel Stein wrote Wednesday:
The housing system sketched out in the Homes Act looks nothing like what we are used to in the United States. Though we have an important social housing legacy, we have never normalized decommodification as the cornerstone of our housing system.
Introducing legislation like the Homes Act does not accomplish that goal in and of itself, but it offers us a concrete depiction of what that transition could look like. It also highlights the severe disjuncture between what our housing and urban planning system does right now—promote private profits in real estate while minimizing the public provision of housing—and what we need it to do.
The goal of legislation like this is not to pass it immediately, since no sober person would expect the current U.S. Congress to line up in support. Nor is the goal to supplant the messy work of organizing with the schematic and technical language of legislation. Instead, the point is to inspire organizing: to show that the status quo is not the only way our housing could operate, to give tenant organizations a concrete and affirmative vision to build toward, and to offer socialist candidates for office a platform to run on.
The bill to create a social housing authority—introduced less than two months out from the U.S. general election—is backed by the Center for Popular Democracy (CPD) and its affiliates from across the country.
"Working families are being forced to make sacrifices in order to pay the skyrocketing cost of keeping a roof over their heads, while corporate landlords and Wall Street executives are getting even richer," said CPD co-executive directors Analilia Mejia and DaMareo Cooper. "This legislation provides a clear alternative to for-profit housing. It creates a framework to make community-owned, permanently affordable green social housing a reality."
Advocates from both sponsors' states also spoke out in favor of the bill.
"In Greater Minnesota, counties and towns don't have staff to build affordable housing projects, financing is another huge issue. We don’t have as many philanthropic organizations or financial institutions as urban areas," explained Noah Hobbs, policy director at One Roof Community Housing in Duluth. "This bill is the first real investment we've had in years. We're incredibly proud to endorse this legislation."
Aisha Hernandez, secretary of the Coalition to Save Affordable Housing at Co-op City in the Bronx, said that "cooperative housing gave me the ability to co-own my home. A few years ago, my neighbors and I came together to ensure our housing stays affordable, that our management is working in the interest of homeowners and prevent any corporate takeover of Co-op City."
"We are co-owners, not at the whims of corporate landlords," Hernandez added. "I want my fellow Americans to have the same access to housing that co-op has afforded me. This bill has the ability to do that. So let's get it done."
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