New Orleans One of the many unresolved issues from the Great Recession, still painfully winding down, is whether or not it is time to call the dream of home ownership for low-and-moderate income families a tragic mirage. Having wiped out a generation of increased ownership among African-Americans and Hispanic families, and lacking a concerted funding stream, credit and lending standards, federal policy and national consensus on this goal, this is likely to end as a toothless debate. So maybe it’s time to more seriously look at what it might take to make tenancy a stable, long term alternative that works to build citizen wealth.
Looking at the “healthy homes” and landlord licensing campaigns being waged by ACORN Canada in Toronto, Vancouver, and Ottawa as well as ACORN’s EPTAG affiliate in Edinburgh, Scotland organizing among private tenants and ACORN Bristol in Easton, it is clear we still have a long way to go. There are thousands of landlords obviously in the atomized real estate market and the rental business is overwhelmingly local, giving real estate interests an outsized voice in local politics, yet it is city councils that continue to be where real standards with solid, sharp teeth must be won.
It’s no wonder that this is becoming a bigger issue. The Financial Times found in the United Kingdom that private renters had increased from 1980 to 2013 from 11.9% of English households to 18% in 2013, while social or public housing households had plummeted almost in half from 31.4% to 16.8%. In the USA, these issues are becoming lightning rods in San Francisco where tenants are organizing against the gentrification being triggered by the growth of the high-tech industry. In New York City, the new government is pushing for more affordable housing from new developments.
Obviously for renting to work for tenants, it cannot be a good deal only for the landlords. There have to be minimum standards, but more than that the standards have to be enforced, widely and firmly, which happens pretty much nowhere. It is also hard to avoid the fact that rents have to be affordable while also guaranteeing landlords a fair return on private investment, which means that both tenants and landlords need to be subsided. That is the theory behind the section 8 program, but the waiting list is huge and the program just isn’t adequate at the level required. In England, where 4 million household are now in private tenancy, 25% of these households are subsidized through the country’s housing benefit, which far exceeds the USA.
But, if the housing sucks, the divide just becomes an unbridgeable chasm and a trap without escape.
At the same time under the current arrangements for lower income families, there is no way that renting builds citizen wealth or income security because without rent caps or more serious subsidies there is no incentive to savings. Home ownership builds wealth and the wealth is generational. If renting and tenancy are going to more and more be our future, there has to be a way citizen wealth is increased, and there’s no road there yet.