WHY IS HOUSING SO PRECARIOUS?
“In no state, metropolitan area, or county in the U.S. can a worker earning the federal, state, or local minimum wage afford a modest two-bedroom rental home at fair market rent by working a standard 40-hour work week.”
“The struggle to afford rental housing is not confined to minimum-wage workers… Nearly 50% of wage earners cannot afford a modest one-bedroom… while working one full-time job.” — National Low Income Housing Coalition’s 2023 report.
In 2022, close to 600,000 people were homeless in the U.S., a 6% increase since 2017.
Low-income families have to work 20 to 60 hours extra every week to bring their rent burden below 30% in the top 20 least affordable metros. In Seattle, rent has increased by 17%, but wages have only risen by 5.4%. How have we gotten here?
To learn more, Sông2Sea hosted a study group in 2022 based on the book How to Kill a City: Gentrification, Inequality, and the Fight for the Neighborhood by P.E. Moskowitz.
In 2023, we hosted a community conversation in collaboration with the Puget Sound Tenants Union (PSTU) and screened Push, a documentary on the global commodification of housing and the consequent lack of affordability.
In this post, we share what we have learned.
Gentrification is dynamic and multifaceted
Urban studies professor Phillip Clay outlined four stages of gentrification in 1979, which housing researchers have since updated due to changing socioeconomic conditions. We should understand gentrification as a process happening over time using both large-scale and small-scale analysis.
Gentrification is not caused by individuals
Gentrification is a confluence of policies pushed by politicians, corporations, and industries. It doesn’t happen because people want to open barre studios and drink craft beer out of mason jars. Those are the signs of gentrification, not its causes.
In The New Urban Frontier: Gentrification and the Revanchist City, a landmark book on the subject, geographer Neil Smith wrote that cultural choices and consumer preferences do not explain gentrification.
So, then, what does? Let’s look at some factors.
1. Decades of federal budget cuts to the social safety net and decreased public housing
Since Reagan's neoliberal budget cuts—40% to the Department of Housing and Urban Development and 10% to Transportation—the U.S. government has steadily redirected funds from the public to private housing market.
Today, only 29 to 33 affordable available homes exist for every 100 renter households with low incomes.
2. Cities are forced to run like corporations
These cuts forced cities to find other sources of funding, like taking out loans. Credit agencies give cities ratings, which are downgraded if there’s high spending (i.e., on social services) and not enough income. This incentivizes cities to push out the poor and attract the wealthy, whose taxes help cities fund their operations.
3. Land being subjected to unregulated market forces
In capitalist real estate evaluation, "highest and best use" refers to "property use that can produce the highest overall return for each dollar of capital invested" — meaning poor people living in the city center are not "highest and best use."
Gentrification, according to Neil Smith, is capital going to where profits are the highest.
4. Private equity firms as landlords
Gentrification is a result of capitalism. In Push, we learned about private equity firm Blackstone, the largest real estate company in the world and the largest landlord in the U.S., owning over 300,000 units of rental housing.
Corporate entities (private equity, real estate investment trusts, hedge funds) increasingly own more and more housing. Today, they own about 50% of apartment units in the U.S.
Global real estate as an investment asset is valued at $217 trillion USD, more than twice the world’s total GDP. “This exits the domain of money. Finance is basically an extractive sector,” says Professor Saskia Sassen in the documentary.
What can we do?
Join a tenants union, such as PSTU, which seeks to improve tenants’ living conditions through organizing to fight against issues like rising rent, evictions, and unresponsive or abusive landlords.
Connect the root causes of displacement. Displacement in the U.S. is linked to displacement globally due to militarism, colonization, and exploitative trade deals. Connect with a migrant justice org like IMA or Super Familia.
Fight for accessible public lands, housing regulation, and raising taxes on corporations and spending on the poor. Support social housing and orgs like House Our Neighbors. Support working class people’s fight to unionize and negotiate for living wages and benefits, like Homegrown. Support anti-displacement orgs, like Black Star Farmers and CID Coalition.
Examine government taxes, incomes, and budgets. Ask why the federal budget is 6% for housing, but 46% for the military? Get involved with local budgeting efforts like Solidarity Budget.
Continue learning. To be effective organizers, we need to understand how systems function so that we can be strategic about what to fight for and against. Start or join a political education effort. You can access study guides for How To Kill A City and other texts here on our website.
Thanks to the PSTU for collaborating with us, and to the Duwamish River Community Coalition for donating Covid tests. Thanks to all who participated in the conversation!