Commentary: The Housing Crisis Goes National – for Better and for Worse

By David M. Greenwald
Executive Editor

Washington, DC – The housing crisis has gotten the attention of Washington—which is perhaps both good and bad.  Good because it has been elevated to a national problem, not just a local one or a California one.  Bad because it runs the risk of falling into national political divisions.

For instance, on Tuesday Republicans blamed the crisis on a usual culprit—government regulations.  Meanwhile, experts and Democrats stepped up their call for expanding the housing stock as well as rental protections.

Senator Sherrod Brown of Ohio, who chairs the Committee on Banking, Housing, and Urban Affairs, noted that the cost of housing has increased tremendously, becoming a barrier to people buying homes and also imperiling renters.

Brown said, as reported by Smart Cities Dive, an increasing number of renters are forced to pay more than one-third of their incomes “just to keep a roof over their heads, and we know renters’ challenges are only getting worse.”

Meanwhile, Matthew Desmond, principal investigator at Princeton University’s Eviction Lab and author of the book Evicted, testified that rents last year increased at their fastest rate on record.  One in four renters are spending more than 70 percent of their income for housing.

“This is the inflation crisis on steroids,” Desmond said.

As a result people are facing homelessness and being forced to cut back on other essentials in order to stay housed.

Homelessness is now a serious threat.

For example, Diane Yentel, president and CEO of the National Low Income Housing Coalition, said that “eviction filing rates are reaching or surpassing pre-pandemic levels as emergency resources and pandemic-era renter protections expire. As a result, homelessness has increased in many communities.”

The national number is that the housing supply is about 3.8 million homes short of what is needed according to Senator Brown.

It’s worse than that for low-income people.  The stats show that there are just 36 units that are both affordable and available for every 100 renters that need them.

“Not a single state in the country has enough housing,” Senator Brown said.

For readers here on the Vanguard, nothing of these facts are particularly new or surprising.  What has changed is that the venue for this discussion was a committee hearing in the US Senate rather than the state legislature or the reports from various housing advocates.

That’s a good thing.  But as we also saw on Tuesday, not a good thing.  It simply becomes fodder for partisan in-fighting.

Senator Pat Toomey of Pennsylvania for example, blamed President Biden for rising housing prices—never mind that the problem long preceded the Biden administration, though admittedly became much worse during the pandemic.

In addition, the senator attributed housing prices to government regulations, that he believes have “restricted the ability of developers to build new housing, such as tariffs on steel, rent-control laws, “time-consuming permitting processes” and “overly burdensome” environmental impact reviews.”

Here I think he has a stronger point.  And it is a point that Democrats are finally starting to understand.

We have seen in California efforts to streamline environmental review and approval processes.

Moreover, at the national level, the Biden administration has also attempted to address local regulatory barriers.  Back in May, Biden introduced a plan to “reward jurisdictions that have reformed zoning and land-use policies with higher scores in certain federal grant processes.”  At the federal level, there is not a huge amount the administration can do—at the state and local levels, much more.

Senator Toomey probably went too far when he argued that rental assistance benefits in the American Rescue Plan “further inflamed demand” for housing.  That really doesn’t make a lot of sense, given that people have to rent housing somewhere.

Moreover, the data doesn’t back up Toomey’s arguments.

During his testimony, Desmond for example argued “existing data does not support the theory that rents have increased because expenses have gone up, which some people have argued has forced property owners trying to maintain a steady income to pass along higher costs to tenants.

“In recent years, owners of multifamily properties have seen their rental revenues increase at a faster rate than their expenses,” Desmond said.

The data he presented showed that in low-income neighborhoods, rental revenues increased 47 percent between 2012 and 2018, but expenses just increased 14 percent.

Desmond proposed that Congress provide relief to renters through housing vouchers and Eviction Crisis Act and the Family Stability Opportunity Vouchers Act.  These bills “would create a fund to assist low-income renters facing eviction and provide additional housing vouchers.”

Yentel in the meantime proposed the need to put more housing near transportation but “also to ensure that when they are constructed, they include some affordable housing components so as not to drive gentrification or displacement.”

She also said, “Congress needs to increase its investments in long-term solutions that address the shortage of housing and governments should strengthen and enforce renter protections for the lowest-income people.”

Again, none of these solutions are particularly new.  Most have been proposed in California over the last few years.  What is different is that this is now a national conversation.

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