The nation is on the brink of a severe housing disaster.
More than 1.2 million families are facing eviction in the coming months. Millions of others face foreclosures, persistent homelessness, unaffordable rental housing and out-of-reach home ownership.
The U.S. Supreme Court’s ruling in late August striking down President Joe Biden’s eviction moratorium will cause the pace of evictions to accelerate. The human costs of eviction are enormous, made worse by the ravages and uncertainty caused by the pandemic.
The federal eviction moratorium, put in place by President Donald Trump and extended by Biden, was designed to buy time to get federal emergency pandemic funds to local jurisdictions to fill the gap between lost wages and unpaid rents.
Unfortunately, states and localities have moved at a snail’s pace to spend that money. As of early August, only 11% of the $46.5 billion of funds from the federal Emergency Rental Assistance Program had reached tenants and landlords.
The eviction blowout is the tip of the iceberg of a housing affordability crisis. For many households, rent or mortgage payments are absorbing half of their household budget and rendering the dream of homeownership impossible.
Many communities need more affordable housing stock, but the main driver of the crisis isn’t housing supply; it’s who owns that supply during a time of extreme wealth gaps.
In some places, large corporations and private equity firms like Blackstone have moved in to buy up millions of units of rental housing, including single-family homes. Families locked out of homeownership are forced to rent the homes that they aren’t able to buy.
Other investor-buyers are removing millions of units of rental housing from the market and converting them to short-term rentals like Airbnb. This drives up rents for people who actually live in these communities.
Finally, wealthy investors from around the world are buying up U.S. real estate — not to live in, but as a form of wealth storage. In cities like Los Angeles, that means tens of thousands of units of vacant housing sit alongside tens of thousands of people without homes.
Many of these buyers are using anonymous shell companies to mask who the real owners are. Today, anonymous shell companies own 40% of the rental housing market, an estimated 18 million out of 48 million rental units nationwide, according to Census data.
After World War II, our nation experienced a similar housing emergency. Back then, Congress made expanding affordable housing a national priority. The famous GI Bill allocated funds to build rental housing and encourage homeownership with low-interest loans through the Veterans Administration and Farmers Home.
It wasn’t an equitable program — nearly all of the households that benefited were white. But it moved millions of people from tenancy to homeownership, a ticket on the wealth-building train to the middle class. Lawmakers today could repeat a similar program without the racial bias.
But many communities aren’t waiting for the federal government to act. From Rhode Island to California, cities and states are levying “mansion taxes,” taxing luxury housing sales to fund permanently affordable housing. Other jurisdictions are taxing vacant units and passing laws requiring the disclosure of real ownership.
Who owns the housing matters. Communities need to expand the supply of local homeownership and permanently affordable rental housing, owned by nonprofits and community housing authorities.
Failure to act will lead to the destruction of stable communities and undermine the possibility of economic recovery for the majority of households.
Chuck Collins is the co-editor of Inequality.org at the Institute for Policy Studies and author of The Wealth Hoarders: How Billionaires Pay Millions to Hide Trillions. This column was produced for The Progressive magazine and distributed by Tribune News Service.
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