America’s dual housing crisis and what Democrats plan to do about it

“The housing crisis in this country is solvable but needs the attention of rich and poor solutions. Affluent areas have different problems while urban poor have their unique solution to this growing problem. The article below gives solutions for both sceniories. Follow along and pay close attention to how our democratic candidates wade into housing issues highlighted by them with plans for solving the problems that is not high on the other parties list of concerns.”

Housing policy is back on the national political agenda for the first time in several generations, with multiple candidates rolling out housing policy plans and others at least paying lip service to the idea.

That’s a smart response to an economy in which the labor market has at long last recovered from the Great Recession, but where many families struggle to cover the costs of necessities including health care, child care, college tuition, and the most basic household expense of all, housing.

Current census data indicates that nearly 40 percent of renter households are paying more than one-third of their income in rent, up 19 percent from the level seen in 2001 — even as the renter share of the population has grown. And a bit more than 10 percent of the population finds itself spending over half its income on housing, way above the 30 percent or so that the Department of Housing and Urban Development sets as a standard benchmark for affordability.

At the Brookings Institution housing economist Jenny Schuetz observes, these data points somewhat understate our housing problem. For one, households living in expensive metro areas (The affluent areas with their problem) have average commutes that are nearly 50 percent longer than those in low-cost metro areas. Similarly, while relatively few Americans are experiencing what’s considered overcrowded housing — defined as more than one person per room — 5 to 10 percent of households with children are overcrowded. Not entirely coincidentally, Americans are having fewer children than ever before.

In other words, many of the people who aren’t cost-burdened in their housing are paying the price in other ways through longer commutes and smaller families. But just as real estate agents emphasize the overarching importance of location, location, location, the housing landscape in the United States is quite varied. Central cities are experiencing different economic conditions from exurban fringes; whole metro areas differ enormously from each other; the Silicon Valley suburbs of San Jose look very different, cost-wise, than the suburbs of San Antonio.

This diversity in our housing landscape means that America’s housing problems are better understood as two partially overlapping crises rather than a unitary problem. The first crisis is simply that the social safety net doesn’t do nearly enough to address low-income families’ housing needs. The second crisis is that in a few key places — the places that tend to have the best opportunity for people to get well-paying jobs — there simply aren’t enough houses to go around, severely curtailing the options for many families who aren’t low-income.

The former problem, though big, is relatively straightforward to solve and would basically involve expanding federal housing subsidies to work more similarly to several other existing safety net programs. The latter is a trickier challenge. It requires different policies from state and local governments — which means that for the federal government to make a difference would require sustained engagement over time. But if you could pull it off, the benefits nationally could be enormous.

The first crisis: people need money

For many families, housing cost burdens are just part of the broader problem with being low-income: If you don’t make much money, you will have trouble affording anything. The government does step in and offer assistance and services to cover a range of needs. It guarantees that everyone gets free K-12 education regardless of income. It makes nutrition assistance (SNAP or “food stamps”) available to all low-income families. The health care costs for low-income people, similarly, are taken care of by Medicaid, at least in most states. There are other needs, however, that go unaddressed. For instance, the government does very little on the child care front.

Housing is in a strange middle ground. Our main policy vehicle to help low-income families afford a place to live is Section 8 housing vouchers, a program that gives about 5 million low-income families money to partially defray the cost of renting a modest apartment. But it’s not a perfect solution. Not only are the eligibility criteria fairly strict, but three-quarters of the eligible families don’t end up getting them. The policy fix for this is pretty clear — make Section 8 a program with guaranteed benefits for everyone who qualifies (“an entitlement,” in Washington budget-speak) so the housing safety net doesn’t have such enormous gaps, an idea that Matthew Desmond, the sociologist and Pulitzer Prize-winning author of 2016’s Evicted, has been trying to popularize for years.

A few Democrats have responded to this crisis with their own plans. Former Housing and Urban Development Secretary Julián Castro has taken up Desmond’s idea in his housing plan. He also proposes some reforms to the Section 8 program, like an effort to bar landlord discrimination against voucher recipients and to expand eligibility to cover somewhat more prosperous people. Sens. Cory Booker (D-NJ) and Kamala Harris (D-CA) take a different approach. Their plans would create new refundable tax credits available to people who currently spend a large fraction of their income on rent. This differs from the Section 8 approach in a number of technical ways, but conceptually, one of the biggest differences is that it would funnel a lot more money to people living in expensive places than to people living in cheap ones. Since the expensive states are already richer than the cheap ones, that’s a somewhat perverse policy design that would upend the normal geographical logic of the welfare state, in which rich states subsidize poor ones.

Given that these days the richer states are also much more likely to elect Democrats rather than budget-cutting Republicans, progressives may decide that trying to invert that logic is timely (though it’s worth pointing out that the expensive places are largely expensive because of their policy choices). But doing something along these lines is relatively straightforward and, critically, would qualify for budget reconciliation treatment — meaning that even a narrow Democratic congressional majority can pass legislation along these lines. And doing so could take a big bite out of poverty in the United States, especially as measured by the wonk-approved supplemental poverty metric, which accounts for geographic differences in housing costs.

But such a plan, while helpful, wouldn’t by itself solve America’s housing crisis.

People look at a home for sale during an open house on April 16, 2019, in San Francisco. In the wake of several tech company IPOs, San Francisco is bracing for its already expensive real estate market to get even more so.

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