Across the United States, from the Rio Grande to northern New England, housing activists, civic leaders, and policy-makers are struggling to produce affordable, below-market housing. In rapidly gentrifying city centers but also in suburbs and rural areas, the challenge is fundamentally the same: to bridge the gap between stagnant wages and the high cost of quality housing.
This quest has spawned a tangle of small-scale programs and partial financing mechanisms, local, state, and federal, each promising its own kind of byzantine, incremental salvation. Tax credits, low-interest loans, land trusts, zoning, and other land-use regulations have all been deployed in the service of lowering the cost of housing for increasingly rent-burdened Americans. Yet amid these myriad offerings, the one remedy capable of providing the quantity and quality of affordable housing we need is not even on the menu: deep cash subsidies for construction and/or operation of buildings.
Decades ago, these kinds of subsidies, provided by the federal, and in a few places state government, gave rise to what was once praised—and is now maligned—as public housing. If we want to solve the problem of the high cost of quality housing today, we will have to embrace this kind of active government engagement again.
To understand the singular importance of government subsidies, it helps to look back at the country’s long history of attempts to solve its various housing crises.
The Birth of Public Housing
Americans have more than a century of experience in the field of affordable housing. Roughly 140 years ago, Alfred Tredway White began work on the country’s first subsidized apartment complex, the Home Buildings, in what is today the heart of Gold Coast Brooklyn: Cobble Hill. A well-to-do Unitarian, White became interested in the housing question when tasked by his minister to investigate the topic. White’s solution, following examples in the United Kingdom, was to wrest control over production and ownership from the speculative market by developing so-called model tenements on a low-profit basis, offering “wage earners” quality apartments at below-market rents.
Half a century later, an entire industry had emerged in New York and other cities, including Washington, Philadelphia, and Chicago, to provide immiserated workers better housing than the market, at lower rents. Nonprofit, subsidized housing as an alternative to tenements was just as important as strong building codes in making cities livable, advocates claimed. Some of the housing, like the Home Buildings, was developed and managed by organizations set up by single benefactors. Other complexes were built by joint-stock companies designed to allow larger numbers of smaller investors to participate. Yet others were owned, and sometimes built, by the tenants themselves on a nonprofit, consumers’ cooperative basis, often with the support of trade unions. Along the way, local and state governments started to support private nonprofit housing with property-tax abatements and long-term low-interest construction loans.