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ALEXANDRIA OCASIO-CORTEZ AND TINA SMITH: OUR SOLUTION TO THE HOUSING
CRISIS  
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September 18, 2024
New York Times
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_ Instead of treating real estate as a commodity, we can underwrite
the construction of millions of homes and apartments that, by law,
must remain affordable. _

, Kyle Johnson for The New York Times

 

Stop almost anyone on the street today and you’ll hear we’re in a
housing crisis. In most American counties, minimum-wage workers
can’t afford to rent even a modest one-bedroom apartment. Working
families are bidding against the world’s biggest financial firms for
homes. On top of it all, people living in public housing complexes
across the country are increasingly exposed to inhumane conditions
after years of federal neglect and underinvestment.

It’s becoming nearly impossible for working-class people to buy and
keep a roof over their heads. Congress must respond with a plan that
matches the scale of this crisis.

For generations, the federal government’s approach to housing policy
has been primarily focused on encouraging single-family homeownership
and private investment in rental housing. The mortgage-interest
deduction provides roughly $30 billion in tax write-offs to homeowners
annually. In addition to their support of the mortgage market, Fannie
Mae and Freddie Mac provide up to $150 billion in financial backing to
the multifamily rental market every year, but much of it goes to
large, corporate landlords. These lucrative loans come with very few
tenant protections or labor requirements. And the largest affordable
housing incentive
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offers — the low-income housing tax credit — too often ends up in
the hands of for-profit developers.

Outsourcing development to the private market leaves affordable
housing subject to the boom-and-bust cycle of private investment.
What’s more, the federal government relinquishes the oversight
needed to protect tenants from abusive landlords and racial
discrimination.

The result is a housing market where corporate landlords make record
profits while half
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America’s 44 million renters struggle to pay rent. For a generation
of young people, the idea of home has become loaded with anxiety; too
many know they can’t find an affordable, stable place to rent, let
alone buy.

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Why is this happening? For decades, thanks to restrictive zoning laws
and increasing construction costs, we simply haven’t built enough
new housing.

There is another way: social housing. Instead of treating real estate
as a commodity, we can underwrite the construction of millions of
homes and apartments that, by law, must remain affordable. Some would
be rental units; others would offer Americans the opportunity to build
equity. These models of rent caps and homeownership are already
working around the world, such as in Vienna
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and in some parts of the United States.

In Congress, the two of us represent very different parts of the
country, but New Yorkers and Minnesotans have both benefited from
social housing.

The Electchester complex in Queens and Co-op City in the Bronx today
house over 50,000 New Yorkers. Co-op City stands as not only one of
the largest housing cooperatives in the world — with its own schools
and power plant — but also the largest, naturally occurring
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country, a testament to its financial and social sustainability.

In Minnesota, trusts, such as Saint Paul’s Rondo Community Land
Trust, give people the chance at more affordable homeownership,
because the homeowners don’t buy the land; instead, it’s held in
trust and leased to homeowners on a long-term, renewable basis. The
model has expanded across Minnesota, in rural and suburban communities
alike.

Because we believe that housing is a human right, like food or health
care, we believe that more Americans deserve the option of social
housing. That’s why we’re introducing the Homes Act, a plan to
establish a new, federally backed development authority to finance and
build homes in big cities and small towns across America. These homes
would be built to last by union workers and then turned over to
entities that agree to manage them for permanent affordability: public
and tribal housing authorities, cooperatives, tenant unions, community
land trusts, nonprofits and local governments.

Our housing development authority wouldn’t be focused on maximizing
profit or returns to shareholders. Rent would be capped at 25 percent
of a household’s adjusted annual gross income. Homes would be set
aside for lower-income families in mixed-income buildings and
communities. And every home would be built to modern, efficient
standards, which would cut residents’ utility costs. Renters
wouldn’t have to worry about the prospect of a big corporation
buying up the building and evicting everyone. Some could even come
together to purchase their buildings outright.

To fund social housing construction, our development authority would
rely on a combination of congressional spending and Treasury-backed
loans, making financing resilient to the volatility of our housing
market and the political winds of the annual appropriations process.

Our bill would also invest in public housing and repeal the Faircloth
Amendment, which prevents the construction of new public housing.
Passed in 1998, with the support of both parties, the amendment helped
entrench a cycle of stigmatization and disinvestment. Our legislation
would reinvest federal money in local public housing authorities to
fund the backlog of much-needed repairs.

We know that housing looks a lot different in Bemidji, Minn., than in
the Bronx. It shouldn’t be a one-size-fits-all approach. That’s
why our bill would task local governments, unions and established
local nonprofits with developing homes that blend seamlessly into the
landscape of the town and fit the needs of the people living in them.

Research
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New York University, the University of California, Berkeley, and the
Climate and Community Institute estimates that our bill could build
and preserve more than 1.25 million homes, including more than 850,000
for the lowest-income households.

We can’t wait for the private market alone to solve the housing
crisis. This is the federal government’s chance to invest in social
housing and give millions of Americans a safe, comfortable and
affordable place to call home — with the sense of security and
dignity that come with it.

_Alexandria Ocasio-Cortez is a Democratic U.S. representative from New
York. Tina Smith is a Democratic U.S. senator from Minnesota._

 

* Housing Crisis
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* affordable housing
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* selfish profit
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