Not the designed-to-fail model that the US has historically implemented, however. There are other, very successful, public housing systems that show how it can be done successfully. We can basically copy Singapore and Vienna's homework.
The spice must flow, property valuations must go up or the whole thing collapses. It's why non-SF-esque cities only allow expansion in-line with population growth or a little less because they will immediately be tarred and feathered if they make everyone's mortgage underwater.
To be clear this isn't a good thing, but no one wants to blink first and start another 2008.
You've securitized the cashflow from the property, so if that cashflow dips, the lender has an assurance they can reprice the security in line with your new cashflow story.
Even if you cover the shortfall in cashflow out of pocket, this is better for both you and the bank because you don't have to admit that the market rates at which you got your loan have changed.
Yeah. I can see how that would create perverse incentives downstream.
I could not have afforded the plot of land my first city apartment was on, but I could afford an apartment in the building!
https://www.investopedia.com/terms/l/law-of-supply-demand.as...
Can’t wait to see whether and how well it works, or where it evolves, but some places are trying!
We need a mix of housing, including multiple classes of housing that more reflects the diversity of incomes, not more gigantic corporate owned apartment blocks.
There is no simply sound byte answer.
Well, there is your problem.
The lack of housing gets solved by, gasp, adding more housing. A house in a city is luxury, the only way to keep rents down is by adding more to the offer, and guess what, apartment buildings add a lot of housing in a small surface.
Corporations are bound by economics, they can't charge out of bounds rents if the average rent price is much lower, and you get that by, you guessed it, building more.
> We need a mix of housing
No, you need a ton more housing, not a mix, you have to aim for efficiency here, specially in cities. Having a SFH in a city is a luxury, townhome I would say is above average, and everyone else should be in apartments. Apartments don't have to be ugly, if I could I would buy a 2/3 bedroom apartment, however there isn't much offer, and everything is from ages ago because the USA doesn't build.
I want to see better lives for people in whatever capacity they want to make it honestly.
I don’t think it’s an OR situation but I don’t think counterpointing is going to help the conversation any. You’re not wrong. I just think we also need to do things like actually build new cities instead of just adding more and more to existing ones. That’s a formula that we used to have that has just stopped completely happening and now it actually worked.
But more housing and better lives for people is the point so I’ll leave it there.
To use an anecdote, my mother in law has lived, for many years, on a peaceful dead-end street. Last year, an apartment building was put up at the end of the street more than quadrupling the number of families that lived there.
Since then, there are cars driving by on a regular (many times a day) blaring loud music. Her neighbor's big window in her living room has had rocks thrown through it on several occasions in the first months. My mother in law feels less safe going for walks, because she no longer knows most of her neighbors and this area of the city was already not exactly low crime.
Her perception of her new neighbors, and their behavior (both criminal and otherwise) have completely devalued her experience of living at her house.
Does that make her a NIMBY? Yup. Is her quality of life now lower? Yup.
Is it the fault of higher density? No.
It is the fault of a culture that tolerates disruptive behavior. Higher density has only brought more of it to her doorstep.
And what can the quiet 90% do about it? Socially pressure the anti-social people? This provokes even more disruption in retaliation and stands a non-negligible chance of getting you stabbed. Calling the police with noise complaints is ineffectual, as soon as the police leave the disruption will become even worse just to spite everybody else. NIMBYism is the most proximate and pragmatic solution; stop the problem from occurring in the first place.
California already has something like this: it's determining the state's housing needs at the state level. If regions don't realistically create plans for hitting their allotted target, a 'builder's remedy' is triggered. Developments which check certain boxes, and one of them is a percentage of affordable housing, override local zoning blockades.
All you really need to do is go a step further and offer developers subsidies to increase their percentages of affordable housing in their plan.
The thing that makes other countries' public housing succeed is that it's not a monolith of low income residents - the mixed incomes in the development create a more cohesive community that makes them successful. No reason we can't do it here, and no reason it has to be overtly labeled as public housing.
It's already working[1] in California. This is happening through the California Housing Finance Agency[2]:
> The CalHFA Mixed-Income Program (MIP) provides long-term subordinate financing for the new construction of affordable multifamily developments throughout California that provide housing with units restricted at all income levels between 30% and 120% of the Area Median Income of the county in which the development will be located.
So while it's not outright subsidized, the state is providing the financing for these projects.
[1] https://www.calhfa.ca.gov/multifamily/mixedincome/approved/i...
[2] https://www.calhfa.ca.gov/multifamily/mixedincome/index.htm
As an analogy, the rest of the US should not vote to reduce property prices in NYC at the expense of NYC taxpayers. It would be absurd. But that exactly is what the state-level policies achieve at the state-vs-community level.
If we're talking about California, good news: the new homeowners will pay far more in taxes than the entrenched property owners under the Prop 13 system. Also, the single family residences are more of a burden on finances in terms of infrastructure maintenance costs than high-density residences.
Well-managed towns of single family homes are not an infrastructure burden. Sure, they're not as per capita efficient but recall people move to such towns, and pay taxes accordingly, in part for the density decrease.
Take San Francisco. A huge proportion of the housing stock is rent-controlled (everything pre 1979) to try and make it accessible price-wise to low income renters, effectively forcing a ton of housing stock to lock in artificially low prices the same as public housing. This hasn't fixed it, and may have made it worse due to perverse incentives for landlords / building owners. Meanwhile it remains arguably the most difficult major city in North America to build new housing in, especially infill on existing residential properties.
I moved back to Portland, OR the last few years, and the pace of housing development and policy is dramatically better. Single family zoning is illegal. You have people in rich neighborhoods adding ADUs like crazy, and developers knocking down outdated single family homes to increase density in desirable neighborhoods. New mixed use buildings are springing up all along major transit corridors in walkable/bikeable neighborhoods. Prices for new homes and luxury apartments are inaccessibly high, but all of this takes pressure off the low end of rental stock. There is also public housing being built, but it is monumentally dwarfed by private development.
We don’t have to speculate about how civic control over housing development works or what kind of decisions our communities will make. They are the problem, not the solution.
https://www.youtube.com/watch?v=41VJudBdYXY (Youtube: Vienna's Radical Idea? Affordable Housing For All)
https://www.youtube.com/watch?v=d6DBKoWbtjE (Youtube: Does Vienna Have the World's Best Council Housing?)
Even if someone somewhere else did it well, the odds of anyone in the US doing it well are nearly nil.
Additionally as other comments also suggest, resolving the various supply problems.
I will say however we are hitting record number of new apartment buildings being built, so that’s a good sign for renters.
https://www.nytimes.com/2023/05/23/magazine/vienna-social-ho...
What we should copy from Vienna is mixed use development. A huge portion of American suburbs are zoned as single family only and you end up with a housing shortage, horrible traffic, and pollution. Mixed use development allows density to increase while reducing traffic and encouraging people to be more fit (by walking or biking more). It's such a no-brainer from a whole-system perspective.
The problem is that NIMBYs and existing regulations exist to preserve the status quo and protect the equity long-term homeowners have accumulated. In places like CA there are additional disincentives to reform like Proposition 13 that favor long term owners at the expense of new homebuyers. Obviously a tax-advantaged asset is going to have a higher price than an equivalent non-tax-advantaged asset. And significant property tax revenue that could otherwise fund public transit and additional construction isn't collected as a result.
Eventually enough boomers will die and the demographic forces will shift and create the opportunity for reform, but this will be too little too late for a whole generation. I'd love for a concerted national effort to tackle this problem and reduce barriers to building the kind of housing America needs, but it's hard to see that happening anytime soon.
Part of Vienna's success is building so much public housing there is plenty to go around, so all sorts of people live in public housing. There isn't a stigma associated with public housing since using it doesn't imply any specific trait.
I'm a big fan of building all sorts of non-market housing all over cities to avoid the slum problem. Charge means-tested rent, so someone will low income pays very little rent. Someone with a good job pays closer to market rent (and that extra revenue helps pay for the overall housing program).
One of the huge successes of Vienna's public housing model is mixing people of different socioeconomic backgrounds. People connect with people with all sorts of different backgrounds and experiences resulting in much strong social cohesion.
You're right that public housing doesn't fundamentally require income restrictions. The government could forbid all private construction and take over home development itself, placing price caps as needed. But if you think something like that's going to work in the US when we can't even accomplish much more minor housing reform, you're dreaming. Vienna's model is certainly not that radical.
For starters, even Vienna's social housing model has income restrictions. If you and your partner both earn the average 2023 Viennese salary (about €52,000/person) then you don't quality for social housing because your combined income significantly exceeds the annual threshold (€79,490 for two people in 2023).
Even if you do qualify, you are only eligible if you have lived in Vienna for two years already. This system does nothing for new transplants. And once you do qualify, the wait time to be approved for an apartment can be in excess of 5 years. They even have a "bonus period" to move people who have been waiting for more than 5 years up in the line, because the city recognizes how frustrating that must be.
The system is easily gamed too. Vienna only checks your income once as part of the process. If your income increases later on (e.g. because you finished school and got a great job) you don't become ineligible. That part is fine by itself, but you can also transfer the apartment to a qualifying family member if you decide to move out, and they don't need to wait 5 years. This contributes to the reduced supply and long wait times because it reduces inventory and rewards those with family connections in the city.
And of course this whole system is far from free. If you make the average Viennese salary your income tax rate is 42%, whereas it's 25% for the average American worker. The average Vienna home is worth around 1 million euros and the property tax rate on such a home is a whopping 3.5%. Even in expensive coastal places like San Francisco and San Diego, property tax rates are barely above 1%. The tax burden to fund this kind of social housing (and other great things too, to be fair) is definitely heavy. It's fine to point out the positives of such a system, but the costs have to be acknowledged as well. And in the US I don't think the taxpaying population of any city is willing to bear those kinds of costs.
Vienna's system does do a great job mixing different people together, as you note. But not all of this is due to public housing. Quite a bit of it is simply how walkable the city is and how great their public transport options are. Even a moderate amount of public housing for low income individuals scattered throughout a very foot-friendly city would do a great job mixing people together.
Nothing approaching that radical an approach would be required. Just getting funded public housing agencies with a mandate to develop non-market multi-family housing using properties in the city's portfolio would be a massive victory for affordability.
Or generation X becomes the new “boomers”.