By Derek Barnes–
It’s always good to understand the history of how and why some laws, legislative policies, and programs are formed—many in response to a crisis or an urgent need (good and bad). An immediate problem emerged where a temporary solution or legislative fix was implemented to respond to that urgent need. The “quick fix” was ultimately made permanent because it may have effectively achieved a short-term objective. Still, the long-term impact may not have been contemplated or properly assessed, nor was comprehensive stakeholder analysis completed to determine the lasting impact or unintended consequences.
Twentieth-century housing policy provides some great examples. Implemented as a temporary measure, Rent Control in the U.S. emerged during World War II to address housing shortages and prevent price gouging. The influx of rural populations to cities and metro areas where booming defense industries were located, government rationing diverted material/resources from home construction, and returning soldiers contributed to the increased demand and shortage of housing. The U.S. population was also growing after the war, and baby boomers would be an important factor in the need for more housing.
In the 1970s, the focus of Rent Control shifted towards regulating evictions and increasing tenant protections in cities like Berkeley, New York, and San Francisco. With rents being the highest in the nation today in these metro areas, the results have been mixed, to say the least. Rising income inequality, Rent Control restrictions, inadequate home production, and housing affordability in these cities have only worsened. Some would agree that the 50+ year agenda passing policies like Rent Control or Rent Stabilization under the guise of renter protections, along with enacting major infrastructure projects and urban renewal programs, have created other conditions as well:
In a nutshell, the prolonged impact of Rent Control and Stabilization policies is clear—increased prices in the market. These policies actually promote scarcity by removing units of housing from the market by owners and stifling the natural movement of people in the market, who become more affluent, to find above-market-rate housing or pursue home ownership.
The latter scenario may explain why there has been little appetite from community and municipal leaders to install “means testing” or “needs testing” of affordable rent-controlled housing that could be reserved for lower-income working-class residents. This would be a pragmatic solution to close the affordability gap. One could argue that restrictive housing policies have been generally effective and working as designed. But at some point, the market attempts to correct these manipulations, leading to the unintended consequences that we see today with the high cost of housing in many metro areas with Rent Control and excessive renter protections.
The amplified plight of minority and immigrant renters and residents is also used as a cajole to advance greater restrictions on housing providers and more renter protections. However, these more progressive social agendas end up targeting and harming under-resourced and under-represented communities of color the most. The leaders of some tenant activist organizations claim to be concerned about inequity but aren’t really accountable to these marginalized groups to solve systemic core issues—especially in Black and brown communities. An inconvenient truth revealed is that permanently fixing long-standing and systemic housing issues and poverty would mean less need, relevance, funding, and political power for many Bay Area service organizations, often referred to as the industrial nonprofit complex (INC).
Large commercial investors need an INC to continue advancing a radical, disruptive agenda and new housing models that don’t consistently deliver what they promise. The objective is that big, centralized housing programs are owned/operated by 1) the government with large commercial contracts or 2) a few commercial interests with enormous municipal contracts. The latter scenario is a newer adaptation of the socialized housing model.
Government has a terrible track record of building, managing, and sustaining public and affordable housing programs. As one city official told me recently, “Governments are saddled with bureaucracy and inefficiencies and aren’t set up to solve these complex problems.”
Historically, these are some of the worst-managed and maintained properties in cities when economies falter, housing funding dries up, or the tax base is threatened—especially if there is a prevailing sentiment that social programs are helping too many Black and brown people. The education and prison systems are other examples where the government gets over its skis and pushes more privatized or centralized solutions. Inevitably, it sets into motion a set of perverse incentives that end up hurting the communities they purport to help.
Few in political power and the media want to acknowledge these conclusions. Inequality, lack of access to resources, and historic equity imbalances are evident. We don’t have to do a deep analysis to see the impacts of housing policies on minority and immigrant communities in cities like New York, Berkeley, Oakland, and San Francisco. Census data tells the story. What’s new is that more radical social progressives in power have now turbo-charged the scheme, which is not just impacting small rental owners/operators (most vulnerable with the older affordable housing stock), but now larger owners/operators as well. We now have a crisis and emergency impacting many more stakeholders in the housing ecosystem.
Derek Barnes is the CEO of the East Bay Rental Housing Association (www.EBRHA.com). He currently serves on the board of Homebridge CA. Follow him on Twitter @DerekBarnesSF and on Instagram at DerekBarnes.SF
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Published on July 27, 2023
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