De-Commodifying Housing for Fun (and Zero Profit)

I recently discovered this youtube channel that uses cities:skylines to explore the politics of planning. It’s pretty great. This one video in particular I think says a lot of important things about housing and gentrification, so I took notes. The notes are on the second half of the video, not because the first half isn’t good but because it goes over concepts I’m already familiar with. Everything below should be taken as basically a transcription of the ideas outlined in the video, i.e. I don’t own anything and if you find this useful you should consider kicking a few bucks his way.

so here we go:

Conventional methods of fighting gentrification:

More housing (YIMBY)
-YIMBYists are ragtag groups, varies wildly in quality (internet urbanists, development shills, actual anti-poverty activists), east coast groups generally more friendly to tenant rights

-Some nuances on luxury vs affordable housing:

-“luxury” is an advertising term, it basically means granite countertops, hardwood flooring, in house laundry, maybe a doorman. But the only real difference between luxury and affordable units is the rent.
 
 -The floor area is generally the same, because of minimum requirements, and the fact that shoebox apartments are generally illegal.
 
 -Luxury housing costing more (DESPITE BEING BASICALLY THE SAME) means higher ROI and less risk.

-“filtering” – some argue that luxury housing of today becomes affordable stock of tomorrow. This is basically trickle down economics, and even if by some miracle it works that way, at best it will take 20 years and buildings generally don’t last much longer than that (citation needed).

-older, worse buildings for poor people also means higher risk of displacement due to construction.

-land value tends to be higher where higher density is. We can argue cause and effect, but NYC and Hong Kong are both extremely built up and dense, but you don’t see units decreasing in price.
 
Downzoning

-Usually done through downzoning broad swathes of a neighbourhood (medium/high density to low density, meaning that new apartments won’t get approved) – but illegal conversions will still remain a thing as well as conversions made before downzoning

-Downzoning only serves to stave off problem of rising rents, it doesn’t change the fact that richer people want to move into the neighbourhood and are willing to pay a premium to do so. In addition, it means new units are limited in number. The community may have more control over the rate at which rent rises, but the problem still persists.

-zoning also obviously doesn’t cover renovations, so landlords can still renovate cheap units into expensive ones, which means that displacement of current residents will still happen.

Opposition of Neighbourhood Improvements

-opposing bike lanes, transit improvements, sidewalk improvements, etc.

-the idea is that even if the neighbourhood lands a good employer, it’s not likely that current residents would get the jobs there. Therefore improvements that might improve mobility/attract employers are generally opposed.

-following this line of logic, there will never be housing that is both good and cheap.

In general…

Yimbys and anti-gentrification activists are answering two different questions. Yimbys are asking “how do we fit everyone in?” Anti-gentrification activists are asking “how can we keep everyone already there in their houses?”

The truth isn’t in the middle (this isn’t south park). There is a pressing and urgent need for more housing in lots of cities, but those same cities are also going through eviction crises and mass displacement owing to the development of those desperately needed housing units.


The Actual Real Solution: The De-commodification of Housing

Housing needs to become just housing, and not also the default investment vehicle for large swathes of the population. Socialists talk a lot about this and tend to get patronizing responses like “haha, wow, everything’s possible after the revolution, right comrade?” but there are genuine actionable strategies to make this happen piecemeal in the current capitalistic political environment.

We can’t just pass a law that says “housing is de-commodified now, guys,” but anything that reduces the ability for landlords to extract rents from their tenants, or otherwise reduces their power over them, is de-commodification. Anything that provides housing at below market-prices, competing with the current profit-seeking model, is de-commodification. Policies that help homeowners afford foreclosure insurance, or otherwise support them when they are underwater on their mortgage, is de-commodification. Policy examples:

Co-operative ownership of apartment buildings.
 -A board elected by the tenants oversees the building(s) and makes decisions about maintenance and finances.
 -Plenty of these exist already, but mostly for the well off (baugruppe with private mini units and collective unschooling for the kids!!!!!)
 -Encouraging co-op housing would go a long way towards reducing the power of landlords.

Rent control.
 -limits rent increases per year to reasonable levels, or stops them entirely sometimes.

Guaranteed legal counsel in tenant-landlord court.

Improved and expanded tenant rights.

Community land trusts.
 -civic organizations that own and manage land and the buildings on them in a community.
 -they are organized by members of that community
 -they keep rents just high enough for maintenance purposes but lower than a for-profit entity would.

Increased availability of quality public housing.
 -you want make public housing cheaper than the market rate, and you want to open it to everyone and not just poor people. You have to build a lot of it and you have to make it accessible to jobs and services. Be as appealing, if not more appealing, than private sector alternatives.

Right of first refusal laws.
 -Already a thing in Washington DC (TOPA)
 -If an owner sells an apartment building, the tenants of that apartment building have the right to form a tenant association and purchase the building from the landlord, rather than the person the landlord is trying to sell it to.
 -In DC this generally requires the association to partner w another development firm to finance the purchase, but it still means that the tenants have more leverage to stay in the apartments, or to receive hefty buy-outs to leave.
 -Can also be applied to factories and manufacturers – workers get the option to buy the equipment and the factory and continue as a worker co-op
 
Vacancy taxes.
 -if an apartment or condo is vacant you have to pay an extra tax. Same goes for if you’re airbnbing it out.

Tenancy unions.

“Good-cause” eviction laws.
 -laws that impose major restrictions on what can result in a tenant’s eviction.

Stricter licensing requirements for landlords and stiffer penalties for failure to keep apartments in good condition.
 -Landlords sometimes let the building they own rot so tenants are forced to move out, and then turn around and sell it to a developer – who was going to demolish it and build new housing on top anyways.
 -Better monitoring and implementing actual consequences for illegal conversions, slumlords


So all of this would work towards making it much harder to make money off of housing. It curbs speculation and decreases profit possible from rent-seeking. Effectively, the idea is to make housing useless as an investment, and therefore only to put people in. Now obviously this makes it less financially viable for the private sector to build housing, since the profits from speculation and rent-seeking would disappear, or be significantly reduced. But it wouldn’t be impossible. The value of housing would simply be based on its usefulness as a house, rather than as an investment vehicle.

All the policies mentioned above have been implemented in at least one or two cities, but having these policies work together and full de-commodification would have to go further. We also don’t really know what that might look like. People’s retirement savings are tied to their houses and huge parts of our economy are based on appreciation of real estate holdings. Policies that de-commodify housing will hurt the economy as we know it, pretty significantly. But if we want to live in a world without rent or landlords or homelessness or gentrification, it’s a risk we’ll have to be willing to take.

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