Evicted (part 3)

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The renters studied by Matthew Desmond in Evicted had incomes so low that they were effectively shut out of the market for good housing. The sad fact is that they had to pay too large a portion of their income even to live in housing at the bottom of the market.

Making housing affordable

The United States does have programs that partially address the housing problem. About 15 percent of poor renters live in public housing, which has evolved from the high-rise towers of the 1950s and 60s to “low-rise, attractive buildings dispersed over several neighborhoods.” Another approach, serving 17 percent of poor renters, is a housing voucher that pays part of the cost of renting in the private market. In both cases, renters only have to pay a portion of the rent based on their income, such as 30 percent. These programs leave about two-thirds of the poor to fend for themselves.

In Milwaukee, Desmond observed some of the limitations of housing assistance. Many landlords, such as Sherrena, would not accept housing vouchers because they came with higher standards and inspection requirements they preferred not to meet. When they did take vouchers, landlords tended to charge more rent, adding to the cost of the program for taxpayers. Public housing often excluded the families that needed it most, since “Housing Authorities count evictions and unpaid debt as strikes when reviewing applications.” Families that did qualify faced waiting lists and delays that could go on for years.

Desmond recommends that the United States do what many other developed countries have done—adopt a universal housing voucher program. He describes it this way:

The idea is simple. Every family below a certain income level would be eligible for a housing voucher. They could use that voucher to live anywhere they wanted, just as families can use food stamps to buy groceries virtually anywhere, as long as their housing was neither too expensive, big, and luxurious nor too shabby and run-down. Their home would need to be decent, modest, and fairly priced. Program administrators could develop fine-grained analyses, borrowing from algorithms and other tools commonly used in the private market, to prevent landlords from charging too much and families from selecting more housing than they need. The family would dedicate 30 percent of their income to housing costs, with the voucher paying the rest.

The logic here strikes me as similar to that of the Affordable Care Act. On the one hand, we set housing standards, analogous to the minimum requirements of Obamacare insurance policies, such as coverage of pre-existing conditions. On the other hand, we provide housing subsidies for the poor, analogous to subsidies of health insurance premiums. If we only try to enforce housing standards without putting more money into the low-end market, landlords may choose to take units off the market instead of spending money on them. That aggravates the housing shortage and contributes to homelessness. Under a universal plan, landlords would be prohibited from evading the housing standards by discriminating against voucher holders. How much the voucher could be worth for a given property would have to be set carefully. Set it too low and the renter still cannot afford a decent place; set it too high and it subsidizes an overpriced or luxurious unit.

Desmond tries to answer some of the objections that taxpayers may have. Would it cost too much? Actually, only an additional $22.5 billion a year, which is much less than the cost of middle-class tax breaks like the mortgage-interest deduction. Would it reduce people’s incentive to work? That’s a more complicated question:

One study has shown that housing assistance leads to a modest reduction in work hours and earnings, but others have found no effect. In truth, the status quo is much more of a threat to self-sufficiency than any housing program could be. Families crushed by the high cost of housing cannot afford vocational training or extra schooling that would allow them to acquire new skills; and many cannot stay in one place long enough to hold down the same job. Affordable housing is a human-capital investment, just like job programs or education, one that would strengthen and steady the American workforce.

Human capital investment is an idea I take very seriously. Are we really strengthening our economy by making children live in substandard housing, in the hope that the deprivation will motivate their mothers to work more hours (probably in low-wage jobs)? Maybe that benefits low-end employers and landlords, but does it contribute to the future productivity of poor children?

Poverty and class consciousness

If poor renters are a disadvantaged class, why don’t they unite as a class, cooperating as a political force to support causes like affordable health insurance and affordable housing? Desmond discusses a few reasons why they don’t.

One reason is that they have more pressing things on their mind than political participation, like scraping together the money for next month’s rent. “Under conditions of scarcity people prioritize the now and lose sight of the future, often at great cost.”

Another reason is that substandard housing and other effects of poverty take a toll on psychological health. They make people feel worthless, defeated and powerless. That applies especially to families who have been stuck in poverty for generations, as opposed to, say, new immigrants who are experiencing more opportunities than they had in their country of origin.

A third reason is that American culture discourages the poor from thinking collectively. America is supposed to be the land of opportunity for any hardworking person of good character. Poverty is easy to associate with individual failure—laziness, immorality or poor decisions. The family stories Desmond tells intermingle social conditions and individual events, allowing us, if we choose, to focus on what individuals did wrong. Arleen shouldn’t have given up her rent-subsidized apartment to live with a friend. Crystal shouldn’t have gotten into fights with other tenants. Vanetta shouldn’t have stolen purses. Larraine shouldn’t have spent money carelessly. Lamar, Scott, Pam and Ned shouldn’t have become drug addicts. The American poor often blame themselves and one another for their problems, developing what Desmond calls a high tolerance for economic inequality and social injustice.

Desmond discusses housing segregation, but he has less to say about the racial divide in our politics. The black poor mostly support the political party that represents their economic interests. The white poor are strongly drawn to the party that appeals to white privilege and Christian conservatism, despite its greater opposition to anti-poverty programs. That makes it pretty hard for the poor to see themselves as a disadvantaged class and join together for their collective advancement. Hopefully, books like this can stimulate a national discussion that can help change that.

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