Homeownership is more than a status symbol; it is interwoven into the fabric of the American Dream. Sadly, for a vast number of the population earning below 400% of the Federal Poverty Level, this dream is increasingly out of reach. This is especially true with the resurgence of mortgage rates from two decades ago and the new report stating that home prices are at or near all time highs in some cities because home prices rose for the fifth consecutive month.
The rental landscape has also become increasingly hostile. As rents exploded unchecked, we saw a stagnation in essential housing attributes: energy efficiency, accessibility, and climate mitigation measures. Current solutions aren’t anything more than performative advertising to buoy laissez-faire real estate schemes without public blowback.
The neo-YIMBY movement (YIMBY being short for “Yes, in my backyard”), not to be confused with the YIMBY movement of the 1990s, is at the forefront of many of these discussions. Their primary argument hinges on supply and demand: build more housing, even at market or luxury rates, and costs will inevitably drop due to increased availability. At a surface level, this approach seems logical. Flood the market with supply, and prices should decrease for older housing stock. It’s sometimes called “Trickle-down housing”. However, housing and the American economic and social landscape isn’t that simplistic.
Housing isn’t merely a product whose value drops when supply increases. It’s tied to land, whose value can increase, especially in desirable areas. Simply building more housing doesn’t guarantee affordability, especially when new constructions target higher-income brackets due to higher profitability.
An alternative consideration in this realm are 99-year land leases. These leases can provide residents with long-term security and stability, without associated land acquisition costs. Individuals or entities could utilize a piece of land for 99 years, effectively allowing them to develop or improve upon it, while the underlying ownership remains with a governmental body or trust.
Another oversight is the shift from the traditional benchmark of housing costs. Earlier, the belief was that housing shouldn’t exceed 25% of one’s income, and then Reagan increased that to 30% of one’s income, but newer metrics based on area median income have changed the narrative. As a result, discussions have veered away from homeownership as a vehicle for stability. This has forced a significant part of the middle class into unaffordable rentals, stymying their efforts at establishing generational wealth and upward mobility.
While the neo-YIMBY’s advocacy for measures like accessory dwelling units (ADUs) potentially helps homeowners become landlords, it is not a guarantee of lowered rents. The intense focus on just increasing the supply through popular solutions like Tiny Houses or container homes often neglects broader community-centered strategies. Concepts like community land trusts, neighborhood investment trusts, community investment trusts, housing cooperatives, intergenerational cohousing, and mixed income social housing don’t get their deserved attention.
The best solution is a multifaceted approach that follows the practical lead of communities that have championed homeownership rights for ages. Strategies like reintroducing the Individual Development Accounts and Mortgage Reserve Accounts with modern modifications like progressive deposits and a higher match, can be instrumental. These accounts, combined with the support of financial institutions like Community Development Financial Institutions (CDFI), can provide more attractive mortgage rates and safer terms for more people to own homes.
The U.S. doesn’t need to reinvent the wheel. Countries like Singapore and parts of South America, the Caribbean, and EU all have robust social housing systems that can serve as models. Housing solutions that are financially accessible and environmentally and socially conscious can be developed with the right strategies and partnerships.
To be sure, constructing and renovating social housing comes with significant costs. Comprehensive green retrofitting, healthy housing standards, ensuring energy efficiency, inclusive design, and integrating climate resilience in new projects require substantial investment. However, juxtaposed with the long-term societal costs of inaction, these upfront investments seem not only justifiable but imperative. Community Benefit Agreements like retrofitting older homes, inclusive apprenticeships, and public-private collaborations can usher in an era where homeownership is within reach for many more Americans.
Young Montanans made a significant stride in their fight against climate change by winning a crucial lawsuit, emphasizing the growing urgency and acknowledgement surrounding environmental concerns. This victory stands in stark contrast to the stance taken by the U.S. Department of Justice. In Juliana v. United States, the Department filed a brief asserting that there isn’t a constitutional right to a stable climate system. This raises pivotal questions about the government’s role in its responsibility to provide housing that meets the challenges of our times.
Historically, the U.S. government has taken notable steps to promote housing stability and environmental sustainability, like providing programs like Individual Development Accounts (IDAs) to foster homeownership. The Justice 40 initiative highlights the dedication to address environmental challenges, augmented by allocations for climate funding. Federal agencies have seamlessly woven this funding into housing-centric policies, with initiatives like Zero Energy Homes grants for sustainable housing development. The GI Bill, provided by the government, assists veterans with more affordable mortgage rates. The Section 8 homeownership program and the 1940 workforce housing program recognized the dual importance of housing stability and homeownership as a vehicle for generational wealth creation. There are also programs that offer assistance to specific groups like first responders and teachers. However, these efforts are not all-encompassing.
The correlation between the government’s obligation towards climate action and its duty to provide adequate housing is clear. Given the historical precedence of initiatives like IDAs, the Zero Energy Homes tax credits, workforce housing, and the GI Bill, the federal government has both an ethical and historical mandate to ensure housing that meets green standards, especially in the realm of social housing, while championing the broader cause of equitable homeownership for all.
The neo-YIMBY argument that building more will drive prices down is not entirely without merit. However, a comprehensive solution demands we look beyond just quantities and delve deeper into quality, accessibility, and community engagement. It’s about more than the homes we build, who the homes are for, or how they integrate into larger community and societal frameworks. The true measure of success will be when homeownership, a cornerstone of the American Dream, is accessible and achievable for all who desire it.
