alt Hacker NewsFor those looking for the actual data. It's from 2024 - says nothing about the current situation.
* ~37K affordable housing units (baseline) across ~400 projects * 89% rent collection rate (down from 90.6% in 2023) * That's 600 units that went 'delinquent' in 2024 - assuming a $24K 'base' rent (just a guess) that's $15M in lost rent. * Deeply troubled projects (that can't survive without this rent) are at 11% - seems like the inverse. * Cumulative arrears (unpaid rent) of $500M
Here's the problem: * If no one had to pay, no one would. * We've tried free housing before - it suffered tragedy of the commons. Not paying means no ownership means subjugation to the worst actions of the worst members of society. * The projects fall into disrepair, there's no way to bring them back, because they won't be maintained.
Landlords aren't a great solution to the problem to be sure. They can be greedy and heartless.
The bigger problem is the bid up of asset prices - aka private equity and class warfare. As soon as you switch (from renting to owning) your incentives immediately shift.
There doesn't actually seem to be a way around this. Taxing to spend on rent ironically makes the problem worse because you just transfer the money into the cash flows of the owners.
Anyone thinking there's a simple solution to this problem hasn't spent enough time with the problem.
Replies
The solution is pretty simple: build and unreasonable amount of housing. And entirely new cities. America has enough land. We could build new infrastructure, give people lots of land or build houses like we did in the 40s and 50s. Of the price of a house was brought down to 1x the annual salary of the median individual income some of these problems wouldn’t exist. We need to flood the system with investment and inventory.
> We've tried free housing before - it suffered tragedy of the commons. Not paying means no ownership means subjugation to the worst actions of the worst members of society.
I tried free housing for the first 18 years of my life and it worked out fine
> We've tried free housing before - it suffered tragedy of the commons. Not paying means no ownership means subjugation to the worst actions of the worst members of society
We tried cramming people from generational poverty into one place and it didn't go super great, therefore public housing as a concept must be the failure, and not our hilariously bad implementation?
Singapore, Austria, Finland, and even a number of mixed income public housing projects in the US have actually done quite well. The narrative that it's all inevitably going to turn into the worst examples is pretty worn out.
> The bigger problem is the bid up of asset prices - aka private equity and class warfare.
This is definitely true: housing can either be affordable or it can be a safe investment, never both. Really private equity moving in on the safe investment is a symptom of the problem: regulatory capture by the landed gentry resulting in strangulation of production which benefits a small group at the expense of the greater public.
Cities have to truly compete with private rent-seekers for it to work.
In Vienna they are still building state of the art for that reason:
https://www.theguardian.com/lifeandstyle/2024/jan/10/the-soc...
> Anyone thinking there's a simple solution to this problem hasn't spent enough time with the problem.
I've spent a lot of time with the problem. and there is a simple solution: relax zoning restrictions and various lot requirements to allow private developers to build more housing. the market incentives are already there, they're just blocked by NIMBY's and stupid city councils, etc.
Rents are going down in Austin, Texas despite an increasing population and lots of landlords.
Run it down, swoop in low, build it up, sell out high, repeat.
NY is back in the first phase of a realestate cycle. As the wheel turns ...
I don't understand why we can't just copy another country's housing strategy. There are many countries in the world where housing is affordable, relatively high quality, and the homelessness rate is low. What are we doing that makes this problem so seemingly intractable? Why is our approach to public housing seemingly worse than any other approach in history?
Is charging just enough rent to reasonably mantain the building such a strange prospect?
> Here's the problem: * If no one had to pay, no one would. * We've tried free housing before - it suffered tragedy of the commons
Here's the actual problem. You've based your argument on a debunked economic theory ie the tragedy of the commons. You may as well argue trickle down economics.
Garrett Hardin wrote an essay called The Tragedy of the Commons in 1968 [1] and it became all the rage in neoliberal circles to justify wealth transfer to private hands (ie privatization) [2]. It never fit experimental data. Ultimately, Elinor Ostrom debunked it entirely using empircal data from the world over, work for which she won the 2009 Nobel Prize for Economics [3].
Whatever your arguments against free housing might be, the tragedy of the commons ain't it.
[1]: https://math.uchicago.edu/~shmuel/Modeling/Hardin,%20Tragedy...
[2]: https://socialistproject.ca/2008/08/b133/
[3]: https://aeon.co/essays/the-tragedy-of-the-commons-is-a-false...
Tax property values.
We could talk about the merits of Georgeism but honestly let's set that aside - conventional property taxes are sufficient here. Most of Manhattan apparently has <1% annual property tax, and the eclectic sometimes regressive way it's calculated in NYC is suggestive of corruption. These asset bubbles can only inflate because the owners make nearly as much money sitting on a vacant property as they make with tenants, so they borrow approximately All The Money to dump it into real estate. Property taxes are not just a necessary evil to keep the schools running and the garbage collected (cough), they're a tiny fractional "decommodification" of property as asset, because the money collected from the owners is spent on the residents. Most of this money passes through directly into higher rents, and we shouldn't care about that, because it's spent on the residents (if the residents don't want good public services, literally hand them a check, direct redistribution). This punishes vacant properties appreciably, and pushes them back into the market.
The ecosystem of debt and bank collateral that has grown around near-zero property taxes has strongly encouraged high vacancy rates, because the banks directly demand that what rents be collected, are high enough to justify the collateral valuation, but don't actually demand that rents be collected.
Set property values to the rate of inflation (depending on your preferences, CPI or local COL or local selling prices or S&P), and you have fully "decommodified" housing without lining the landlords up against the wall and shooting them, an option that is increasingly popular.