We have a whole lot of extremely complicated problems on our hands these days. The COVID-19 pandemic, for example, is a hellish enigma of epidemiology, pharmacology, virology, social psychology, medical ethics, regular ethics, macroeconomics, microeconomics, supply-chain logistics, and more — and that’s just one crisis that interacts with all the other ones like climate change, racism, economic immobility, political polarization, and so on. Those are hard problems, with complicated and conflicting solutions. So, I’m going to (mostly) ignore them for now and concentrate on something a bit easier: the housing crisis and how building a new condo in Swarthmore will help solve it.
Contrary to popular belief, the housing crisis is not that complicated. You can make it complicated if you want by throwing in unnecessary factors, but they don’t affect the fundamental equation of things. We have a housing crisis for precisely two reasons: 1) people need housing, and 2) right now, we have considerably more people than we have housing. We can solve this by either building more housing or reducing the number of people. The latter option is unacceptable, so we have no choice but to build more housing.
But hold on a second: are there actually more people than available housing? After all, I saw a viral tweet the other day saying there are more vacant homes in America than homeless people. And yes, “there are more vacant homes in America than homeless people” isn’t technically a false statement: at any given time in America, about 600,000 people are homeless and about 15 million housing units are unoccupied. But that statistic is missing context (to put it mildly). For starters, about half of those housing units aren’t really vacant — they’re just between occupants, usually for a period no longer than a few months as the unit is sold or transferred. And as for the other half, those are concentrated exactly where most homeless people aren’t: rural areas, Rust Belt cities, and places where people have moved away due to a lack of opportunities. (Also, the definition of “vacant housing” used for this statistic only stipulates four walls and a roof; creature comforts like running water, heating, or a grocery store within fifty miles aren’t required.)
The upshot is that if you’re suggesting that the government move every homeless person into a vacant housing unit, you’re just saying that we should put them on buses to dying Midwestern towns with no economic opportunity and few services. I understand why people cite this statistic; it would be nice if tens of thousands of modern empty apartments were actually lying around in the most popular cities! But there aren’t. And the rich-people-buying-all-the-vacant-homes theory doesn’t even make sense, anyway. If you’re a scummy investor who bought a bunch of apartments to speculate on their prices, there’s no reason for you not to rent them and squeeze even more money out while you wait for the prices to go up!
Even if there were enough housing units in a city to accommodate everyone who lived there, we’d still want to build more so that we have a stash of vacant housing available. For one, people move around — they get a new job in a different city, move out from their parents, or just want more space. Furthermore, some of the most vulnerable people in our society often need to find housing on very short notice: victims of house fires or natural disasters, those fleeing abusive partners, LGBTQ+ youth kicked out by their parents, recently released inmates, refugees, and so on. An oversupply of housing lets people move when they need to, which is good for almost every group in society except landlords. But that’s a feature, not a bug.
Building more housing will massively reduce the amount of power landlords have over their tenants. Right now, many landlords have a carte blanche to ignore health hazards, neglect improvements, and jack up rents. But if we had a surplus of housing, landlords would have to compete for business! In fact, we’re seeing this phenomenon in the job market. The last decade or so of the American economy has been defined by more people wanting to work than there were jobs for them to fill. Employers could get away with offering abysmal pay and poor working conditions because a terrible job was still a better option than unemployment. Thanks to a variety of factors (most prominently the federal government giving poor and unemployed people a ton of money), there are now almost two job openings for every unemployed person. Nowadays, employers must compete for workers by offering higher wages, better working conditions, more flexibility, or other benefits — which is great for the workers!
This is also a very good explanation of why we aren’t building enough housing. Low rents, good living conditions, and renting flexibility are great for everyone … except landlords. And just as a lot of business owners are not exactly happy about the new labor market paradigm, a lot of landlords are (very literally) invested in making it really hard to build more housing. This is true for all landlords, but the easiest ones to hate are companies like Invitation Homes (a spinoff of Blackstone, the largest private equity firm in the world) that buy up tens of thousands of homes. Invitation Homes is basically a caricature of an exploitative corporate landlord, with mold problems, shoddy contracting, and a host of livability issues in many of their properties. According to the documents they give investors, they look for homes in areas with “lower new supply” and “high barriers to entry,” and specifically list “construction of new [housing] supply” as a risk that would adversely affect their business. That is, building new apartment buildings isn’t a plot by Wall Street — new construction is actually terrible for them! The entire business model of these firms is betting that we won’t allow enough housing in high-demand areas. By stopping new projects (like 110 Park Ave), you play right into their hands.
By the way, while we’re on the subject of landlords, it’s tempting to stick the housing crisis under a general umbrella of “capitalism is bad” (or “liberals are bad” or “conservatives are bad” or “society is bad” or whatever). But even if you pressed the Magical Communism Button and turned the entire country into a communist utopia, you would still have exactly as much of a housing crisis as before. High rents, displacement, and predatory landlords are just the capitalist-flavored reflection of the very real physical fact that we cannot fit all the humans we have into the housing we have available near places with jobs. The Magical Communism Button would just replace predatory landlords with decade-long waiting lists, or rotating occupancy, or the homeless-people-on-buses-to-Midwestern-ghost-towns thing I mentioned earlier. Whether any of those are better than the current system is sort of up for debate. But they’re all strictly worse than just building more housing. If you want to build housing in a socialist way, then go ahead. It just has to happen somehow.
So yes, we really do need to build more housing. But usually, the main complaints I hear about buildings like 110 Park Ave aren’t against the abstract idea of “more housing.” Rather, people are worried that the building will push up rents in the surrounding area and lead to gentrification. The extent to which you can meaningfully “gentrify” a town that’s already 81% white, 78% college-educated, and has a median household income literally higher than Beverly Hills, California is … questionable. But either way, asserting that 110 Park Avenue (or any new housing development) is going to raise rents is putting the facts exactly backwards. It’s not new construction raising housing prices — it’s the lack of it.
“More new homes lower prices, and fewer new homes raise prices” is a settled scientific fact roughly on par with “CO2 emissions cause climate change.” But don’t believe me — read the studies yourself. A study of areas in Florida found that restrictions on development make home prices go up and cause the few homes that do get built to be bigger and targeted towards wealthier buyers. Another study found that when lots of people start moving to a city, cities with more restrictions on development have correspondingly larger increases in housing prices. This isn’t isolated to the United States, either; researchers have found the same phenomenon all the way over in England. When neighborhoods in New York City are designated for historic preservation (which is just another restriction on development, though well-intentioned), housing prices go up in those neighborhoods and in nearby areas. We can also look at real-world cities. Take Tokyo for an example. In 2018, a two-bedroom apartment went for less than $1,000 a month in US dollars, a price that has stayed more or less constant since 2000. Not coincidentally, Tokyo builds new housing at almost twice the rate of New York City, per capita.
You might still be skeptical, though. How could a project like 110 Park Ave decrease housing prices when it consists of “luxury” units much more expensive than the units it replaces? The short answer here is that the new occupants of these units won’t just appear out of thin air — they’ll upgrade from a previous residence, leaving it available for someone else. The new occupant of that residence opens up a lower-cost unit for another person, and so on and so forth until the new spots have filtered all the way down to the cheapest housing available. Eventually, the “luxury” apartments will become affordable housing as their occupants move to newer housing and as they become more out of date. Like the relationship between new construction and prices, this relationship has data to back it up. A Harvard study found that most affordable rental housing units that became available between 2003 and 2013 came from price reductions in older units. Two additional studies confirm the relationship to varying degrees.
You can also imagine the inverse of this process: let’s say that 110 Park Avenue doesn’t get built or gets significantly downsized. The people who wanted to live there aren’t going to just disappear from existence! A lot of them will still want to be in Swarthmore because it’s a nice place to live. But instead of moving into the new housing project, they’ll bid up the price of existing housing and displace long-time residents. Those residents need to find a new place to live, so they’ll bid up the price of lower-quality units, and the chain continues until the person at the bottom of the ladder gets kicked out of the cheapest home on the market and becomes homeless (or moves to another city). That’s how gentrification really happens: it’s caused by what we don’t build. When we block new housing somewhere, it might feel like we’re saving the place’s character, but we’re really condemning it to death by a thousand cuts: a silent exodus, one by one, of everyone who currently makes the place what it is. And because rent hikes and eviction notices don’t require community meetings and don’t result in any backhoes digging up the street, nobody notices the problem until it’s already far too late and you end up like San Francisco.
But there’s yet another reason to build more housing and to build more housing in places like Swarthmore specifically: it helps close the racial wealth gap. When housing prices go up, it’s great for current homeowners. While tenants experience rising rents and evictions, and as prospective homebuyers are priced out of the market, homeowners see their home value increase by hundreds of thousands of dollars. And as it turns out, 73% of white Americans are homeowners, compared to 42% of Black Americans — which itself is one of the biggest reasons the net worth of the median white family is nearly ten times that of the median Black family. (The historical causes of said gap are outside the scope of this article, but “widespread systemic racism spanning several hundred years” is a good starting point.)
This homeownership gap makes Black communities especially vulnerable to gentrification and displacement and in a position to benefit the most from additional housing construction. But the housing developments that do get built are in the places without the political power to resist development the same way wealthy neighborhoods can. And it’s unfair to expect these communities to bear the entire load of new housing construction, especially since our current pace of construction is woefully inadequate anyway. A key step to fixing this is building necessary housing all over the place, not just in neighborhoods with little political power. Every apartment complex we build in Swarthmore takes a load off more vulnerable communities.
(By the way, this isn’t just a Black issue. In general, people who’ve had fewer opportunities are less likely to own their own home, regardless of if said lack of opportunity was due to their race, gender, sexual orientation, or any other factor out of their control. Everything I’ve said about decreasing housing costs applies to them too.)
New housing is also a climate and sustainability issue. There are some environmental costs associated with building a new building. But those costs are dwarfed by the benefits of modern construction and especially by increased density. Transportation emissions, mostly from cars, make up more of the US’s greenhouse gas emissions than any other category; anything that can reduce reliance on cars is a net good from a climate standpoint. Low population density forces people into long car commutes, makes public transport inefficient, and makes cities impossible to navigate for people without access to a car. Furthermore, complicated and expensive “sustainability” features like geothermal power might hurt more than they help if they cause fewer housing units to be built for the same amount of money. Sustainability isn’t about how many trees you plant or how much forest you have access to: each resident of Wyoming emits 104 tons of CO2 each year on average, while in New York the figure is just 8 tons (and considerably less in New York City).
These are just a few of the reasons I wholeheartedly support the construction of the 110 Park Ave building, and almost any other housing development that might get proposed or built here. That doesn’t mean that I think the development plan is perfect, not by a long shot. But the housing crisis is a national emergency, and we literally can’t afford perfectionism. If we want to have even a chance of getting ourselves out of this crisis, we need to build the housing that we desperately need — even if it won’t make everyone happy. 110 Park Avenue is more housing. Build it.
Photo Courtesy of Swarthmore College
Really glad to see more students interested in housing, though I am concerned about some of the conclusions you have drawn here. I recommend you enroll in the Housing Crisis class with Professor Nina Johnson, read Deborah Potts’ book “Broken Cities: Inside the Global Housing Crisis,” and learn more about what the commodification of housing under a capitalist economy entails. I would also caution against painting the Midwest as a place with “no economic opportunity” where we can send “homeless-people-on-buses-to,” and am wary of how quickly you wield examples of vulnerable populations for the sake of your argument – specifically, you mention LGBTQ+ youth who may have to leave their homes, and renters whose housing security depends on selfish landlords.
While I agree with some of the points you have laid out here, your underlying message – that more housing is always good, always needed, and always beneficial – is missing a few extremely important caveats. I was shocked by the total reliance on trickle-down-economics you have employed here, even without a price-cap specification (meaning you do not make a distinction between affordable and unaffordable housing). The invisible hand model, as I thought all Swatties knew by now, conflates the interdependence of supply and demand. Increasing the supply of market-rate housing (rates set by private real estate developers and private equity analysts) will do nothing for the unhoused. If we are talking about housing everyone in the US, the problem is no longer a shortage of supply, but rather a shortage of demand (again, read Potts); inequality has become so stark that America’s most impoverished populations cannot afford any of the market-rate housing. This reality, then, requires a more complex solution than the one you have laid out here. The problem is not simply our capitalist economy, but a federal government that prioritizes private property over the lives of the average citizen.
So in the future, I would warn against straw manning opposing arguments and dismissing “unnecessary factors” which ironically cause you to miss the “fundamental equation of things”.
Thanks for the comment! I appreciate some of the points you raised here, and I apologize if you felt like you were being straw-manned. I’ve been highly engaged on the issue of making housing more affordable for a while now, but unfortunately I didn’t have time to get as much nuance in this article on deadline.
You make a gesture at getting rid of “commodification,” but housing in the US is extremely un-commodified—production capacity is highly regulated by e.g. zoning laws and landlords routinely make massive profit margins. The *actual* commodification of housing would be a great thing: commodities such as staple foods are generally produced in extremely high quantities, for low prices, by companies with razor-thin profit margins. This is not the situation in the US today. Unfettered capitalism in housing looks a lot like tenements on Manhattan’s Lower East Side in the early 1900s—incredibly dense, squalid, and unsafe living conditions, but at an extremely low price which made them accessible to impoverished immigrants. To be clear, that’s not a desirable outcome either! But it looks very different than the housing crisis in America today, where homeless people line the sidewalks outside of single-family homes because it’s literally illegal to build apartments to accommodate demand.
I’m also confused by your use of the term “trickle-down economics.” I don’t think trickle-down economics—that is, cutting taxes on the rich to boost the economy—is a good idea, because rich people tend to hoard their tax savings while the multiplier effect of giving more money to the poorest people in society produces considerably more economic activity. (I mention this in my article: the COVID stimulus package gave a lot of money to poor people, which was fantastic, and we should raise taxes on rich people so we can do that sort of thing more often.) But the process of housing filtering is an entirely different thing—rich people don’t hoard housing *nearly* as much as they hoard money. For example, Jeff Bezos owns about ten or fifteen homes (depending on how you’re counting), which is definitely more than any reasonable person should own. He owns 15x the homes of the average person—but he also has over 1,000,000x the wealth, so obviously the relationship is non-linear. If your thesis is that we should confiscate all of those and give them to poorer people, then sure, if you want—but fifteen homes isn’t going to make a big dent in the housing crisis, and there aren’t actually all that many people with Jeff Bezos-level wealth! In general, taxes are a different thing than production—especially production of assets like houses that fluctuate in price over time. It’s comparing apples and like, cars.
In fact, cars are a good way to think about this, given that cars are routinely purchased new by wealthier people and then passed down throughout their lifetime as they become more affordable. What makes houses so special among durable goods that they somehow wouldn’t exhibit this behavior?
Back to your point, though: I certainly don’t make a price-cap specification, and I think that mandating affordable housing is often counterproductive. In many cases, mandating affordable housing causes a sharp decrease in the number of total housing units built—units which, due to the filtering effect, would have helped decrease housing prices regionwide. The end result is we might help the few people who are able to get a affordable housing unit, but we leave many more out in the cold. If you’re suggesting widespread development of public housing units, I might be inclined to agree, but that doesn’t require stopping private development and whatever private development exists should still be encouraged to take a load off of the public housing system.
Your statement that “increasing the supply of market-rate housing does nothing for the unhoused” is just empirically false: when the market rate for housing is lower (which, as I’ve established, is linked directly to more supply of housing), the homelessness rate is correspondingly lower. There’s plenty of studies supporting this relationship, but you can read one of them here: https://gspp.berkeley.edu/assets/uploads/research/pdf/p59.pdf. And I’m not sure where you get your idea that market rates are “set by private real estate developers and private equity analysts,” given that I linked to four different studies showing that market rates are determined by the supply of new housing.
That said, while a lot—perhaps even the majority—of homeless people are homeless because their job doesn’t give them enough money to compete in the market for highly scarce housing units, there will always be people who wouldn’t be able to afford the lowest price for housing (i.e. how much it costs the developer to produce it). For those people, the solution isn’t price caps but subsidies—I’m personally a fan of just giving poor people cash, but because American welfare state politics are insane a tax credit or voucher for housing might go over better. Subsidies have the effect of stimulating production instead of crimping it, which is incredibly important given that new housing construction has lagged population growth for decades now.
But regardless of all that, if the housing crisis requires a “more complex solution,” then what does that solution look like specifically? What would justify not building something like 110 Park Ave, and what would you build in its place? And why does this “more complex solution” just so happen to be the one that doesn’t inconvenience you, personally, with a construction site near the $80,000 a year college we both attend?
I beg you to read this article! Not for my sake, but your own. Clearly you think you have a good grasp on the housing crisis, evidenced by your extremely arrogant titling of this article. Please educate yourself.
If you won’t read the whole thing, at least this section:
“The YIMBY narrative [your stance] rests on an idea called filtering, which maintains that even luxury construction increases affordability: as new luxury units are built, wealthier residents move into the new housing stock instead of competing for existing lower-quality housing. Apart from the condescension — should low-income people really have to wait for housing to “filter” down to them? — this framework ignores the reality of today’s housing market. Existing housing is more likely to be turned into short-term rentals through Airbnb, flipped to a condo developer, or turned into a high-end rental than it is to be occupied by a low-income family. There is also strong evidence that rents in existing housing near new luxury housing rise more than rents in apartments that are not close to new luxury housing… New development often comes with marketing campaigns that promote not just one building but the surrounding neighborhood, which can send rents soaring. As developers and real estate brokers attract the high-income residents who can afford the new development, those residents also demand higher-end retail, restaurants, and neighborhood services. The incoming retail can also pay higher rents, pushing out existing neighborhood businesses and lower-income residents.”