Who Stands in the Way of Affordable Housing for Everyone?
by Sofia Lopez, Senior Research Analyst
If you’re reading this from anywhere in the U.S., your city is likely in the midst of a housing crisis, and due to racial capitalism, it is a crisis felt most acutely by communities of color via higher rates of evictions and foreclosures. You might have some ideas about what would fix this crisis, and you might have approached your elected officials about it. Unfortunately, thus far, no city or state seem to have fixed their housing problems.
To understand why, let’s think about actors in the housing arena. A few key characters are fixtures from city to city:
- The residents and community members — This includes everyone. (We all need a place to live)
- The Market — People generally talk about the market like it’s the weather: no one really controls it, and we are all subject to its forces
- Developers and landlords — These are the folks in the business of building and managing housing
- Finally, elected officials — Those in office, who we sometimes treat like the heroes we expect to rescue us when we need it most
In any story of the housing crisis, you’ll find these actors. They all play a different role at different times and, most importantly all have different levels of power. While there’s certainly truth to the importance of organizing elected officials to represent our best interests, elected officials come and go with election cycles. Corporate landlords and developers have real staying power and wield real power to shape housing markets in their interests.
Think about your city: Who gets awarded huge tax breaks or development incentive packages, sometimes reasoned away with the logic that “rising tides lift all boats”? This trickle down public policy has been in place for decades but the benefits never seem to materialize for residents. This is of course by design. Policies we think are meant to promote affordable housing are often actually crafted with heavy influence from the real estate industry, and take care of the industry first instead of centering community needs.
All of this should teach us an important lesson:
To solve our housing crisis, we need to take on the corporate actors who are most responsible for squeezing residents and shaping housing to fit their bottom line.
Here are two examples of the stranglehold these corporate actors have on housing nationwide.
TEXAS: Tenant Late Fees
Just this year the Texas Legislature quietly passed a law allowing landlords to increase the amount they charge in late rent fees, while leaving almost no path for tenants to fight back. How did this bill make its way to the legislature? According to an article by the Texas Observer, in response to several lawsuits against Mid-America Apartments (the single largest apartment building owner in the country), the Texas Apartment Association lobbied for legislation that allows landlords to charge up to 10% of monthly rent in late fees and prevents tenants from challenging these fees in court until the fee has been paid.
If a tenant is having trouble paying rent, of course they will struggle to pay their new higher late fees. This makes it all but certain that tenants will not be able to contest the fees in court, and in turn resulting in more evictions and displacement. No surprise that the Texas Apartment Association donated over $450,000 to Texas candidates’ 2018 campaigns to help ensure that their interests were met above individual tenants’. In exchange for their investment, Texas landlords can now charge among the highest late fees in the country.
CALIFORNIA: Proposition 10
California has a housing crisis of epic proportions. When the 2018 fight over California’s Proposition 10 ballot initiative occurred, corporate landlords responsible for the crisis (like Blackstone, the huge private equity company with over $545 billion in assets under management), had a great deal to lose. Proposition 10 would have repealed the Costa-Hawkins Rental Housing Act, a 1995 state law that preempts expanding rent control. Passage of this initiative would have opened the door for municipalities to expand rent control legislation.
The real estate industry regularly spends heavily to shape outcomes at the California legislature, but the spending that took place in connection with Prop 10 was a completely different scale. Analysis based on the California Secretary of State’s records shows the top three anti-Prop 10 PACs spent a combined $77.3 million dollars to defeat the ballot initiative. According to the disclosures on some of these PAC’s websites, the financial backers of these PACs are some of the largest real estate corporations in the world. These companies spent tens of millions of dollars to defeat a proposal they saw as a significant threat to their business model at the expense of households who need a safe, decent roof over their head.
These two examples from the two most populous states show it’s time to focus our energy towards taking on the corporate actors who have shaped our housing market for far too long. Organizing to pressure elected officials to enact legislation is critically important. Elected officials need to be held accountable for prioritizing the needs of real estate at the expense of their constituents. But you can’t defeat a systemic problem without attacking its roots. And to tackle the root of the problem, corporate actors need to be confronted for their extractive practices — which are at their worst in communities of color. They are the entities keeping us all from having a safe, decent, beautiful place to live and it is imperative we build a movement to stop them.