Affordable Housing Crisis Growing Globally

(Reuters/J. Herrmann)
“Commerce alley” and “hawked for $28 million” by property giants: Berlin’s rising rents have many very afraid of affording their rent or losing their homes

Chicago    When affordable housing is in the headlines, it’s a safe bet that it is not prompted by a concern for low-and-moderate income families, but maybe we can take a lemon and make it lemonade, as activists are doing in many cities.

Here’s the context.

  • According to Knight Frank, a London-based real-estate consultancy reported in the Wall Street Journal: “Across 32 major cities around the world, real home prices on average grew 24% over the past five years, while average real income grew by only 8% over the same period.”  Reading between the lines, when home ownership becomes an affordability crisis for middle- and upper-income families, then “Katie bar the door!”
  • Despite governments in Canada and Australia adding taxes aimed at second-home and transient investors, affordability is still out of control. In Sydney, Australia the average price for a home is 12 times the median income for middle-class families.
  • Rent control is gaining ground as families come to terms with elusive home ownership dreams. There are drives in California, Berlin, and London for example and the Swedish election turned on deregulating rents.  Spain’s government recently capped apartment rent increases as well.

Berlin, Germany, might be the sharp point of the spear.  There tenant advocates are collecting signatures for a ballot proposal that would force the city to expropriate all private, for profit landlords that own more than 3000 apartments.  According to reports, the Berlin mayor has also proposed buying around 50,000 apartments from private owners and his party wants to freeze rents over the next five years.  Germany has a unique system of contracting with private landlords to provide housing for lower income families on extensive multi-year contracts rather than building more public housing as sort of a different twist on Section 8 housing subsidies in the United States.  Nonetheless, taking such units over totally would be huge.  Large landlord combines, as we found in Frankfurt several months ago, are often beneficiaries of so-called public-private partnerships which contract with these rental conglomerates in Germany to build and then manage the units making their size and operations increasing controversial.

The lack of a national housing program or much of a local one complicates the response in the United States.  An easily observed irony that is depleting the construction of affordable housing in many cities is the double standard allowed for AirBnb in commercial rental complexes as opposed to neighborhoods, making some condo and luxury apartment construction projects mini-hotels when they are not able to price their units to sell on the market, the AirBnb loopholes balance their books and fuel more of the same faux market-rate development.  This is easily observed in New Orleans and many other cities.

Meanwhile in Germany the effort to collect 170,000 signatures is ongoing.  The ballot initiative would not be binding, but would state public interest clearly, and that is worrying builders and others.  Perhaps this is the kind of message we need to send everywhere in order to finally force some real attention to the issue and programs that deliver mass solutions for affordable and decent housing.

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The Poor Pay the Price for Another Hurricane

Residents at Trent Court Apartments try to wait out the flooding. (Gray Whitley/Sun Journal via AP)

New Orleans   Keisha Monk made the front page of the New York Times.  I doubt if this was on her top ten list of life’s hopes and dreams.  She lives, or at least lived until recently, in the Trent Court public housing project in New Bern, North Carolina, which turned out to be in the path of wind, rain and flooding when the river rose in the wake of Hurricane Florence.  Her unit and others, not far from the river’s bank, were flooded, ruining virtually everything, and likely making her unit uninhabitable.

The rivers in North Carolina are still rising.  I got a call from a Local 100 person in Houston who was being sent alerts by FEMA to get ready to be deployed as a contractor to do home inspections as soon as the water receded and anyone could drive in and assess the damage.  Keisha Monk will not be on his list.  She’s not a homeowner.  She’s simply a lower income, public housing resident, who was happy to have finally found a home in Trent Court.  She might get a check from FEMA.  Eventually.  After a mountain of paperwork.  She won’t get anything but temporary housing though.  If she is lucky.

An article mentioning Monk was on the front page of the Times, but what really caught my eye was not Keisha or Florence, but the word, “Katrina” which still has a visceral trigger for me even after thirteen years.  There were some sentences from reporter, Richard Fausett, that capsulized the horror of the aftermath that Katrina, Sandy, Harvey, Ike, Irma, and many others that have brought stigma to their human counterparts for life and scarred millions for the rest of their lives as well.  He wrote,

She [Keisha Monk] also realized that she was now a player in the kind of redevelopment drama that tends to swamp storm-battered places like this – a story of race, class, gentrification and safety fears, and questions without easy answers about who gets to live on often alluring, sometimes treacherous, waterside real estate.  She is also being reminded after Hurricane Katrina, that the poor are always vulnerable – to the vagaries of the real estate market and to the perceived value of their residences in good times and the ravages of Mother Nature when disaster hits.

The future of Trent Court, like so many center city public housing projects in cities both large and small, was already precarious.  There was a plan to relocate people and build something new, maybe there, maybe nearby with market rate housing and eighty units still available for the poor.  Many, like Monk, would likely not be on the list for those eighty units, and they are years away as life continues to grind down hard on low-and-moderate income families.  The problem is global, not local, as we heard in Asuncion about the relocation of thousands of families there from areas where they have lived for generations because of flood risk.

Organizations and individuals talk about a “right to the city,” but as we know from Katrina, this is another right that requires a constant fight, and is often lost.

We all know this is not a story that will end well.  At least not for Keisha Monk, her family, and the other residents of Trent Court.  Living on the wrong side of the tracks was about yesterday, but on the bad side of the floodplain is the new and constant misfortune for the poor.  As one of Monk’s neighbors said, it will just be a case of another area where riverfront property is opened up for rich people “to walk their dogs.”

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