The Right to a Home II: What Now?
We can guarantee that everyone has decent housing
Post 12: 25 March 2025
This essay is a continuation of last week’s post. In part one, I focused on why we all should have a social right to a decent home and talked about the housing crisis. Today, I offer some initial thoughts on what practical solutions might look like.
The tension between housing as a marketplace that treats real estate primarily as an investment and housing as a basic human need, always present, is reaching a breaking point. By buying into the housing-as-investment paradigm, we are all at fault for our current conundrum, though there are also some faceless corporate villains in the story. This is a classic collective action problem: individuals, each acting in a rational but self-interested way, have together produced a suboptimal social outcome. “Solving” the housing problem means figuring out the proper role of several levels of government in a sector in which most of the work will be—must be—done by private producers and consumers, by builders and buyers acting individually.
We have to build our way out of the crisis. That means identifying and eliminating barriers to housing production. For a useful vision of how rethinking local housing policies could unlock the private initiative needed, see the recent book by Charles Marohn, Jr., and Daniel Herrings, Escaping the Housing Trap, (Wiley 2024). I can’t recommend this book too strongly. I want to add/emphasize a few points today:
We have to focus on production of rental housing. This means relaxing, at least a bit, our national fixation with single family home ownership. This means apartment buildings, but it also means smaller scale multi-family structures. For my grandparents’ and parents’ generations, owning and living in a multi-family building was critical to long-term financial success. Marohn and Herrings write about the “Zoning Lockdown” that has blocked this path to wealth in most American (and Canadian) cities. Our current patterns of housing development promote segregation by wealth and race. Because of this, housing is the central barrier to achieving equal educational opportunity in America. Zoning reform is not a magic bullet, but it is definitely part of the solution.
Fully funding a program like Section 8 could be effective, but only if the production deficit is overcome. Section 8 makes up with vouchers the gap between renters’ ability to pay and market rents. I haven’t tried to be very careful with my estimates, but to have a real impact, the program would have to be tripled in size, at a minimum. This is affordable, and is the least we can do, but it really isn’t enough.
Housing benefits must be universal. The current system of housing assistance is for the poor. It segregates those receiving vouchers or in public housing from the rest of us. For shelter residents, it’s worse. The shelter is reminiscent of the poorhouse of the 1830s, about which T.H. Marshall wrote
The Poor Law treated the claims of the poor, not as an integral part of the rights of the citizen, but as an alternative to them.1
As markers of equality in membership, social rights must be universal. What does that mean when housing is a service produced and consumed in the private market? As the discussion of zoning shifts implies, nuanced public actions are called for. As I noted last week, we now do most of our promotion of housing through the tax code, with most of this effort aiding middle-class and wealthier homeowners. Using this well-worn tool, we can design a system of refundable tax credits that effect a version of the 30% rental contribution rule now embedded in the Section 8 program. This benefit, available to all taxpayers, would vary only based on household size and, probably, local market conditions, not incomes. For higher-income taxpayers, this benefit would become part of their exemptions from income; it would also replace, with some (probably complicated) transition rules, other housing-related deductions (mortgage interest), helping to level the playing field in the rent-vs-buy housing choice. A close to equivalent system could be created by adopting a universal basic income. I will write about those proposals soon.
The main problem with a universal housing benefit (and with basic income) is that increasing the public’s ability to pay for housing will lead to an increase in prices, effectively channeling the benefit to landlords. I’ll talk about that problem more in my post on basic income. Because of the speculative pressure embedded in housing-as-investment, governments also need to do something to constrain price increases.
This leads to my final point: we need to get over our fear of government-owned housing. For reasons I won’t get into here, rent control systems mostly do not work (that, too, may have to be its own post). “Social housing” has been proven to work, however. Under these systems, local governments build rental property on land they own, either renting it at reasonable rates or selling it with deed restrictions that limit future profiteering. The units are meant for the general public, not just the very poor, and cover the spectrum of housing needs (this is critical). The public units would have the effect of meeting demand and adding what you can think of as “ballast” that stabilizes local prices. The classic international example is the city of Vienna, where 60% of renters live in government-owned buildings. States ought to allow at least some cities to try this approach. In the U.S., the most likely pathway is by acquiring and developing underutilized urban spaces (like surface parking lots).2
The good news in this action plan is that there is no intrinsic reason why the private housing market must fail. This will not be the case for other critical goods and services—health insurance, for example. Better zoning practices and cleaning up distorted incentives, especially those embedded in tax code(s), can support universal access to a decent home. There are significant distributional issues in housing—a housing crisis for those with average or lower incomes and a housing surplus for the rich—but the overall macroeconomic weight of housing is not excessive. On average, housing and utilities amount to 18% of all personal consumption expenditures (GDP data) and the median American household spends about one-third of its budget on housing (BLS data). These levels, though somewhat high, could be sustained if they fell more equally on all American households.3
Next week’s post will be a review of Matthew Desmond’s book, Poverty, By America (Crown, 2023). It will continue to build on many of the themes discussed this week and last, since maintaining a stable home is often the greatest challenge the poor face.
Next post: Social Citizenship and Poverty Abolitionism (1 April 2025)
<All of the posts in On Social Citizenship connect. I recommend that readers go back and read the first entry in the series.>
Notes
T.H. Marshall, “Citizenship and Social Class,” in Marshall and Tom Bottomore, Citizenship and Social Class (Pluto, 1992), 15.
See Peter Dreier, “Why America Needs More Social Housing”, The American Prospect (Spring 2018). This is the simplest way to discipline local housing markets but there are also more complicated, income-tax-based ways to punish landlords for demanding excessive rents that ought to be explored. In a related vein, local tax systems ought to promote faster development by taxing land speculation (holding land for no other purpose than to re-sell it at some future time). People can choose to do this, but the price of this private choice must reflect the social cost of this underdevelopment.
For more on Vienna, see Francesca Mari, “Imagine a Renters’ Utopia. It Might Look Like Vienna”, New York Times Magazine, May 23, 2023.
The average is based on GDP data from the Bureau of Economic Analysis. Median spending data are from the Bureau of Labor Statistics (2023 data).