National: Federal Housing Agency (United States)

We are in the midst of the greatest affordable housing crisis in American history. Even before the pandemic, increases in rents and home prices in urban areas outpaced the increase in wages for most working families. Now, pandemic-induced unemployment is about to cause more people to lose their homes, and many more tenants to be evicted. This severe and persistent crisis calls for a new approach to the provision of housing.

Murtaza Baxamusa

In “We Need A Federal Housing Agency“, an August 2020 article published in ShelterForce, author Murtaza Baxamusa accurately describes the housing affordability crisis that many American families are facing. Baxamusa also offers a compelling critique of neoliberal policy and its misplaced reliance on market forces to address affordable housing issues.

…neoliberal policy aims to loosen political control over economic actors and markets, replacing regulation and redistribution with market freedom and uncompromised ownership rights…

Neoliberals frame housing as a commodity that should be governed by the laws of the marketplace, rather than a basic human necessity. Within this paradigm of market fundamentalism, it is difficult to find any justification for a productive role for the public sector in housing policy.

Neoliberal policies like the Low Income Housing Tax Credit Program (LIHTC) seek to encourage private real estate investors to finance affordable housing in exchange for reducing their Federal income tax burden. In 1986, President Reagan’s Tax Bill removed all income tax deductions on credit with the exception of home mortgage interest. This effectively increased the amount of taxes that middle class households paid, enabled a reduction in tax rates on high income and investment earnings, and helped fund LIHTC.

Baxamusa is correct that today’s affordable housing crisis calls for a new approach to the provision of housing that differs from a neoliberal faith in markets. Unfortunately, the author’s proposal does not offer a new approach. Rather, he recommends reviving 1930s-era New Deal-style public housing programs.

If implemented, which is politically unlikely, the impact of Baxamusa’s proposal would merely set the stage for a subsequent resurgence of market-driven “solutions”, which, in turn, would set the stage for a revival of governmentally-driven “solutions”, and so on ad infinitum. The truth is that neither market-driven, governmentally-driven approaches, nor a combination thereof can solve the affordable housing crisis. Philanthropy, dependent upon the spoils of investing in private markets, similarly fails to provide an adequate solution to the crisis of affordability in housing.

If not a Federal Housing Agency, then what?

When properly understood, autonomy in housing, as opposed to governmental authoritarianism or market consumerism, provides an answer to the crisis. The private sector’s role in housing is too expensive. Public Housing neither pays local property taxes nor helps rental tenants build equity. The public sector shouldn’t subsidize private sector landlords through rental vouchers or build tax-exempt public housing. The federal government, if it is to play a role in housing at all, ought to be in directly assisting people with unmet housing demands to meet those demands in ways that build wealth and equity.

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