#yimby

The crash of 2008 took down all kinds of industries, but none were so hard-hit as home-building (after all, mortgages were the raw material of the financial bubble that popped in 2008). After 2008, construction of new housing fell by 90% for the next two years. This protracted nuclear winter in the housing market killed many associated industries. Skilled tradespeople retrained, or "left the job market" (a euphemism for becoming disabled, homeless, or destroyed). Waves of bankruptcies swept through the construction industry. The construction workforce didn't recover to pre-crisis levels for 16 years (and of course, by then, there was a huge backlog of unbuilt homes, and a larger population seeking housing).

Meanwhile, the collapse of every part of the housing supply chain – from raw materials to producers – set the stage for monopoly rollups, with the biggest firms gobbling up all these distressed smaller firms. Thanks to this massive consolidation, homebuilders were able to build fewer houses and extract higher profits by gouging on price. They doubled down on this monopoly price-gouging during the pandemic supply shocks, raising prices well above the pandemic shortage costs.

The housing market is monopolized in ways that will be familiar to anyone angry about consolidation in other markets – from eyeglasses to pharma to tech. One builder, HR Horton, is the largest player in 3 of the country's largest markets, and it has tripled its profits since 2005 while building half as many houses. Modern homebuilders don't build: they use their scale to get land at knock-down rates, slow-walk the planning process, and then farm out the work to actual construction firms at rates that barely keep the lights on:

https://www.thebignewsletter.com/p/its-the-land-stupid-how-the-homebuilder

Monopolists can increase profits by constraining supply. 60% of US markets are "highly concentrated" and the companies that dominate these markets are starving homebuilding in them to the tune of $106b/year:

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3303984

There are some obvious fixes to this, but they are either unlikely under Trump (antitrust action to break up builders based on their share in each market) or impossible to imagine (closing tax loopholes that benefit large building firms). Likewise, we could create a "homes guarantee" that would act as an "automatic stabilizer." That would mean that any time the economy slips into recession, this would trigger automatic funding to pay firms to build public housing, thus stimulating the economy and alleviating the housing supply crisis:

https://www.peoplespolicyproject.org/wp-content/uploads/2018/04/SocialHousing.pdf

The Homes Guarantee is further explained in a separate article in the package by Sulma Arias from People's Action, who describes how grassroots activists fighting redlining planted the seeds of a legal guarantee of a home:

https://prospect.org/infrastructure/housing/2024-12-11-why-we-need-homes-guarantee/

Arias describes the path to a right to a home as running through the mass provision of public housing – and what makes that so exciting is that public housing can be funded, administered and built by local or state governments, meaning this is a thing that can happen even in the face of a hostile or indifferent federal regime.

In Paul E Williams's story on FIMBY (finance in my back yard), the executive director of Center for Public Enterprise offers an inspirational story of how local governments can provide thousands of homes:

https://prospect.org/infrastructure/housing/2024-12-11-fimby-finance-in-my-backyard/

Williams recounts the events of 2021 in Montgomery County, Maryland, where a county agency stepped in to loan money to a property developer who had land, zoning approval and work crews to build a major new housing block, but couldn't find finance. Montgomery County's Housing Opportunities Commission made a short-term loan at market rates to the developer.

By 2023, the building was up and the loan had been repaid. All 268 units are occupied and a third are rented at rates tailored to low-income tenants. The HOC is the permanent owner of those homes. It worked so well that Montgomery's HOC is on track to build 3,000 more public homes this way:

https://www.nytimes.com/2023/08/25/business/affordable-housing-montgomery-county.html

Other – in red states! – have followed suit, with lookalike funds and projects in Atlanta and Chattanooga, with "dozens" more plans underway at state and local levels. The Massachusetts Momentum Fund is set to fund 40,000 homes.

https://www.nytimes.com/2023/08/25/business/affordable-housing-montgomery-county.html

The Center for Public Enterprise has a whole report on these "Government Sponsored Enterprises" and the role they can play in creating a supply of homes priced at a rate that working people can afford:

https://prospect.org/infrastructure/housing/2024-12-11-fimby-finance-in-my-backyard/

Of course, for a GSE to loan money to build a home, that home has to be possible. YIMBYs are right to point to restrictive zoning as a major impediment to building new homes, and Robert Cruickshank from California YIMBY has a piece breaking down the strategy for fixing zoning:

https://prospect.org/infrastructure/housing/2024-12-11-make-it-legal-to-build/

Cruickshank lays out NIMBY success stories in cities like Austin and Minneapolis adopting YIMBY-style zoning rules and seeing significant improvements in rental prices. These success stories are representative of a broader recognition – at least among Democratic politicians – that restrictive zoning is a major contributor to the housing emergency.

Repeating these successes in the rest of the country will take a long time, and in the meantime, American tenants are sitting ducks for predatory landlords, With criminal enterprises like Realpage enabling collusive price-fixing for housing and monopoly developers deliberately restricting supplies to keep prices up (a recent Blackrock investor communique gloated over the undersupply of housing as a source of profits for its massive portfolio of rental properties), tenants pay more and more of their paychecks for worse and worse accommodations. They can't wait for the housing emergency to be solved through zoning changes and public housing. They need relief now.

That's where tenants' unions come in, as Ruthy Gourevitch and Tara Raghuveer of the Tenant Union Federation writes in their piece on the tenants across the country who are coordinating rent strikes to protest obscene rent-hikes and dangerous living conditions:

https://prospect.org/infrastructure/housing/2024-12-11-look-for-the-tenant-union/

They describe a country where tenants work multiple jobs, send the majority of their take-home pay to their landlords – a quarter of tenants pay 70% of their wages in rent – and live in vermin-filled homes without heat or ventilation:

https://www.phenomenalworld.org/analysis/terms-of-investment/

Public money from Freddie Mae and Fannie Mac flood into the speculative market for multifamily homes, a largely unregulated, subsidized speculative bonanza that lets the wealthy make bets and the poor pay their losses.

In response, tenants unions are popping up all across the country, especially in red state cities like Bozeman, MT and Louisville, KY. They organize for "just cause" evictions that ban landlords from taking their homes away. They seek fair housing voucher distribution practices. They seek to close eviction loopholes like the LA wheeze that lets landlords kick you out following "renovations."

The National Tenant Policy Agenda demands "national rent caps, anti-eviction protections, habitability standards, and antitrust action," measures that would immediately and profoundly improve the lives of millions of American workers:

https://docs.google.com/document/d/1JF1-fTalW1tOBO0FhYDcVvEd1kQ2HIzkYFNRo6zmSsg/edit

They caution that it's not enough to merely increase housing supply. Without a strong countervailing force from organized tenants, new housing can be just another source of extraction and speculation for the rich. They say that the Federal Housing Finance Agency – regulator for Fannie and Freddie – could play an active role in ensuring that new housing addresses the needs of people, not corporations.

In the meantime, a tenants' union in KC successfully used a rent strike – where every tenant in a building refuses to pay rent – to get millions in overdue repairs. More strikes are planned across the country.

The American system is in crisis. A country that cannot house its people is a failure. As Rachael Dziaba writes in the final piece for the package, the situation is so bad that water has started to flow uphill: the cities with the most inward migration have the least job growth:

https://prospect.org/infrastructure/housing/2024-10-18-housing-blues/

It's not just housing, of course. Americans pay more for health care than anyone else in the rich world and get worse outcomes than anyone else in the rich world. Their monopoly grocers have spiked their food prices. The incoming administration has declared war on public education and seeks to relegate poor children to unsupervised schools where "education" can consist of filling in forms on a Chromebook and learning that the Earth is only 5,000 years old.