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Capitalism Can’t Give Us Affordable Housing

Linked by Paul Ciano on December 12, 2018

Robbie Nelson, Jacobin:

Creating and maintaining housing is decidedly not the primary goal of developers, construction firms, mortgage lenders, and landlords. Housing is just a convenient medium through which capital can reproduce itself — through which these developers, construction firms, lenders, and landlords can make more money.

While socialists challenge the profit motive in consumer and industrial production, from cars and computers to steel and soybeans, it is just as important that we challenge the profit motive in the realm of what’s called “social reproduction.”

Social reproduction encompasses the activities and services (like housing, health care, childcare, elder care, education, etc.) that are necessary to maintain the existence of a productive working class. This realm of human labor has been historically unpaid or underpaid, and its burdens have tended to fall on working-class women.

After the 2007–2008 financial crash, many liberal capitalists argued that better regulations on the secondary mortgage market might have prevented the worst aspects of the crisis. There might even be good reason to welcome such regulations. But the constant oscillations of housing prices will never disappear under capitalism, because these boom-bust cycles are inherent to any kind of capitalist commodity.

In this sense, gentrification and white flight are two sides of the same coin. Instead of fighting each phase of the commodity cycle on its own terms, we should address the system of commodified housing that lies at its root.

When housing prices rise — like the bubble we are currently experiencing in the urban areas in countries like the United States — working-class people have their bank accounts squeezed, are displaced from their homes, and subjected to intensified policing. And in such an upswing, the profit motive acts as a powerful limiting factor in a capitalist society’s ability to meet our housing needs. It will never be as profitable to construct or lease housing stock intended for poor and working-class people as it will be for the high end of the market.

Since the 1970s, private developers have constructed more than three million affordable units using public financing from HUD and the Low-Income Housing Tax Credit. But because many of the affordability requirements tied to that financing expire after fifteen years, over 350,000 of those units have been converted to “market-rate” housing since 1995. And the National Low Income Housing Coalition estimates that we lose about 15,000 affordable units per year to market-rate conversion, a number that will only continue to accelerate as the cost of housing rises in urban areas.

Socialists should avoid the “not in my backyard” (NIMBY) trap of opposing new housing construction on the grounds of ruining homeowners’ nice views or “changing the character’ of the neighborhood. This is especially important given our project of building massive amounts of beautiful social housing in dense, livable urban neighborhoods.

But we also need to steer clear of a noxious “yes in my backyard” (YIMBY)-ism which insists that capitalist developers would love to provide us with abundant, secure, and affordable housing if only we allowed them to build more. Many zoning regulations are stupid and not broadly conducive to healthy and sustainable urban space, but we shouldn’t buy the argument that places technical zoning legislation at the root of our housing crises. The actual root is capitalism.

We have to demand massive investment in democratically planned and maintained social housing. Capitalist housing developers will never do it. We’ll have to take their ill-gotten gains — through taxing them and all the other obscenely wealthy people in our society — and do it ourselves.

Paul Ciano

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