We Must Demand Better Than Privatized “Affordable Housing”
By: Jacob Woocher
Tags: Tenants Unions, Affordable Housing, Los Angeles, Activism, Privatization

The following is based on the original, longer, collectively written article “Affordable Housing” Is A Scam, by a group of organizers with the LA Tenants Union. This is being co-published with the Law and Political Economy Blog.

You hear it everywhere: we need more “affordable housing.” It’s a seemingly uncontroversial call, and yet we must be far more critical in our analysis and precise in our demands.

Inspired by and learning from struggles of tenants in Los Angeles, a group of members of the LA Tenants Union (LATU) were compelled to document the many and profound problems with the dominant model of privatized “affordable housing” in the United States.

We found that the major “affordable housing” programs serve to co-opt the radical visions of our movement and funnel energy and social wealth into strategies that fail to provide decent and stable housing for the most vulnerable among us, all while supporting, and in many ways bolstering, the rule of landlords and the racist, violent system of capitalist land ownership. We can and must do better, demanding and building tenant-led social housing models that create a future outside of the real estate market.

Our first lesson came from LA’s Chinatown.

Presently, the residents of the Hillside Villa Apartments remain in their homes and are on their way to winning a historic struggle to force the City of LA to use eminent domain to keep their building permanently affordable. Two years ago, however, their future was far more uncertain.

In late 2018, the residents of this 124-unit building learned that in just six months the building’s “affordable” status would expire, and their landlord would increase rents to match market prices in their rapidly gentrifying neighborhood. Some tenants would see their rents raised from $850 to $2,500 per month — an increase of 200%. Functionally, these were eviction notices.

Hillside Villa’s basic funding structure resembles that of the vast majority of “affordable housing” constructed in the US in the past several decades. The building was constructed with $5.5 million of public funds in the late 1980s, and in return, the developer and future owners would be required to rent the 124 units to tenants with incomes below a certain level, at affordable rates — but only for 30 years. Now, landlord Tom Botz — a wealthy, white resident of Malibu with multiple investment properties across Los Angeles and a history of slumlordism and discriminating against families with children — could cash out and force the displacement of dozens of poor households.

But Hillside Villa organized and fought back. With support from LATU and Chinatown Community for Equitable Development (CCED), the tenants formed the Hillside Villa Tenants Association, meeting every Thursday night with simultaneous interpretation occurring in three different languages at once (Spanish, English, and Mandarin). They’ve engaged in legal strategies, occupied the offices of their city councilmember, held multiple protests at their landlord’s mansion, and energized LA’s entire movement in the process. Now, it looks like they are here to stay.

But the lesson remains: “affordable housing” expires. And other tenants won’t be so lucky.

In the City of Los Angeles alone, there are an estimated 11,771 “affordable housing” units which are expected to convert to market-rate rents within the next five years. Across the entire country, one estimate puts the number of “affordable” units that may be withdrawn from agreements that keep rents restricted over the next 10 years at one million. In LA, 71% of expiring units are owned by for-profit entities; nationally, at least for units produced by Low-Income Housing Tax Credits (LIHTC), the program responsible for the largest number of “affordable” homes, that number is over 80%.

Instead of providing a social good in perpetuity, the dominant models of providing “affordable housing” allow for mass displacements — and mass profits — after just a few decades.

Here’s another problem we saw firsthand, which in policy debates is often acknowledged yet too easily swept aside: “affordable housing” is often not actually affordable, and almost always excludes the poorest tenants.

This lesson came from the struggle of the tenants of the Kingswood Apartments in Hollywood, an “affordable” development where residents were being hit with rent increases of up to hundreds of dollars — but it wasn’t because Kingswood’s affordability covenant was expiring.

Here, like in the vast majority of “affordable” apartments across the country, rents are tied to the “Area Median Income” (AMI), a number set by the federal Department of Housing and Urban Development’s (HUD). Since the AMI for LA is adjusted upward every year as the county’s median income increases, the owners of their building, The Michaels Organization, one of the largest owners of “affordable housing” in the entire country, could legally raise rents, regardless of tenants’ abilities to pay.

Fortunately, the Kingswood tenants organized and, with support from LATU, were able to put enough pressure on The Michaels Organization to get the increases substantially reduced. Like Hillside Villa, tenants were able to remain in their homes thanks to their collective willingness to fight.

Crucially, the AMI standards don’t just mean that “affordable housing” can actually be quite expensive for tenants living in these developments. In most instances, AMI calculations effectively guarantee that the poorest tenants are completely excluded from these programs.

In LA, a household of 4 with an income of up to $83,500 absurdly qualifies as “low income.” Recent numbers show that units targeted at this income bracket account for nearly 40% of “affordable” homes created by LA’s Transit Oriented Communities program, a policy that has been widely and uncritically embraced by most mainstream commentators, which allows developers to build with more density in exchange for a certain number of “affordable” units.

The “very low income” bracket in LA includes families making up to $52,200 per year, and even the “extremely low income” bracket includes families earning up to $31,300 — significantly more money than the median household in many gentrifying neighborhoods like Chinatown, Pico-Union, South Central, and East Hollywood. In LA County, over one-fifth of households (699,328 total) have incomes below $25,000, meaning they would very likely not be served by even the most generous “affordable housing,” or, if they do manage to get a unit, they will be devoting far too much of their income to rent.

Housing providers can offer these units at lower rents to tenants with substantially lower incomes, yes, but they have every incentive not to. That’s because at essentially every step, “affordable housing” development and management is tied to the profit motive. The public money only covers a portion of the development costs, so the rest is made up with private financing from for-profit lenders. In order to make a project “pencil out,” developers — even nonprofit ones with the best intentions — tend to plan on setting rent at the maximum levels within each affordability bracket, and increasing them as much as they can each year. The public funding per project is simply not robust enough to provide truly affordable units to those who are most desperate.

Supporters and practitioners justify these programs by arguing they leverage large amounts of private money for social good, and euphemistically call the low levels of public spending “shallow subsidies,” reflecting the idea that something is better than nothing. We call it a scam.

There are many more critiques to be levelled at the dominant programs that have made up “affordable housing” in the last several decades, but I’d like to end by highlighting what is perhaps the most profound shortcoming of “affordable housing,” which is the way it wholly fails to challenge, and even strengthens, the institutions and logics of capitalism, preventing us from building or even imagining different ways of relating to housing and land.

These programs rely on capitalist actors and incentives to provide what ought to be a human right that is socially and democratically produced and controlled. They continue to treat land as a commodity that can only be temporarily and weakly regulated by state action. By relegating subsidized “affordable housing” as something only necessary for a small subset of the population, their means-tested nature suggests this system is broadly acceptable for the vast majority of people. And they perpetuate the fundamentally inequitable and undemocratic relation of landlord-to-tenant, where the owner of the land has far too much power over the people that live there.

It is the job of the left and of our movements to provide alternatives to and critiques of the oppressive systems that rule our lives. We must set our eyes firmly on challenging the system of capitalist land ownership, an institution rooted in settler colonial genocide that has always relied on racial violence to produce value and whose function has been, and still remains, to efficiently allow the (white) ruling class to dominate the poor.

More “affordable housing” simply keeps this system in power. We must make alternative demands, not for “affordable housing,” but for public- and community-owned housing, re-imagining the society we can create that would provide for the needs of all.

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