COVID-19 Housing Crisis: We Need Economic Solutions, not Political Ones
The housing market is in the middle of a perfect storm. As a result of various factors, most of which traces back to the pandemic, the housing market has seen increased demand but decreased supply, causing chaos for homeowners, renters, and buyers. There is a large demand for new housing due to the unprecedented layoffs rendering people unable to afford housing, as well as the ability to work from home, which encourages wealthier individuals to buy larger housing. However, with increased lumber prices, overcrowding, labor shortages, and low mortgage rates encouraging people to keep their homes, there are only half of the amount of homes on the market now as there were in early 2020.
Beyond making it difficult for prospective buyers to find homes, this crisis has further implications. A lack of affordable housing could cause gentrification because it could lead higher income households to move to low income areas, driving up home prices and the cost of living within the neighborhood. Additionally, it could make owning a home unaffordable for young people, namely millennials, who are searching for their first home. Finally, it is also a risk to those who currently rent because in addition to home prices, rent costs are also rising which could lead many to get evicted. Congress has taken action with regards to this crisis by implementing eviction moratoriums, stimulus checks, emergency rent assistance, and funding for affordable housing in the American Rescue Plan Act, CARES Act, and American Consolidation act. However our heavily partisan congress still remains split on how to further deal with this issue. While liberals promote rent assistance, loosening zoning laws, and equitable loan assistance, conservatives feel that the government should not take a commanding role in fixing this crisis and rather only educate residents about responsible home buying.
One divisive issue has been eviction moratoriums, as liberals have been large supporters of rent assistance while conservatives generally feel that it is an undue burden on landlords. From the start of the pandemic until recently, there has been an eviction moratorium under the Public Health Service Act Section 361. Democrats have strongly supported this bill as it helps lower income families by allowing them to keep their homes; this means that they can keep their children in school, and maintain some normalcy is times so difficult as the pandemic. On the other hand, conservatives stress that eviction moratoriums are bad for the economy and possibly unconstitutional. Their argument follows the thread that if people who cannot afford their housing are not evicted, it will contribute to the lack of supply in the market, thus eviction moratoriums are actually perpetuating the issue. Furthermore, they argue that it is an undue burden on landlords who cannot make an income and families who still have to pay their rent.
While it is important to help families that lost their jobs to the pandemic and are financially struggling, eviction moratoriums must be made with caution and strict qualifications. It is important to help families still struggling from the pandemic, as it is unfair to disregard such extreme circumstances. This is especially vital given the current housing crisis. That said, if all rents are suddenly compensated, we run the risk of turning to Lochner v. New York, the Supreme court case that declared the right to make a private contract between two people a constitutional liberty void, as it would allow the government to overturn private agreements.
Another issue that has proven divisive is editing zoning laws in an attempt to promote increased construction of multi-family homes, increase the supply in a certain area, and help lower prices. Zoning laws are essentially a set of rules to which contractors must comply when building homes. One popular type of this law is single family zoning laws, which mandate that only one family can live on a given lot. They were initially created to help promote safety in reducing overcrowding, but now such concern is far less existent as other housing regulations can promote safety.
Democrats have largely been in favor of repealing extra laws, as they feel that it will open up the market. They feel that doing this will help increase mobility for lower class populations. Conservatives on the other hand, fear the repeal of the single family zoning laws, for getting rid of such laws would possibly abolish the suburbs, put safety at risk, and decrease the value of already-bought homes.
While in some suburbs it may make sense to loosen single family zoning laws, it is not something that should be instituted nationally. Repealing them will not be a complete threat to safety, given that in cities without such laws many residents are still safe, but repealing zoning laws actually brings forth a new issue: gentrification. The repealing of zoning laws would lead people who want to live in the suburbs to leave their increasingly urbanized area and move to cheaper areas where they can afford to buy more space. An influx of wealthier individuals moving into a lower income neighborhood would drive prices up and make it unaffordable for the prior residents to remain in their homes, initiating another housing crisis.
Finally, there are two solutions that are uniquely plausible due to the COVID-19 pandemic: educating future homeowners and promoting movement of home buyers to underpopulated states. When it comes to educating homeowners, there are multiple ways it could take place: mortgage education at school, advising from real estate agents, or more warnings on legal documents. In terms of encouraging people to move to areas where there is available housing, states could provide tax incentives. The pandemic has created such massive changes that both solutions are more plausible than ever before. Online school has made it clear the efficiency of pre-recorded courses, which could be used for buying seminars; the increase of employees who work remotely has also made it possible for many to keep their jobs and move to a more remote location.
Out of the few things that Democrats and Conservatives agree on, they both recognize the pressing issue of the COVID-19 housing crisis, yet neither party is sufficiently compliant with the other to fix the issue. The lack of supply and increased housing prices should not be turned into a debate for political parties to push their own political agendas, but rather an opportunity for them to address pressing economic concerns. Many of these issues could be solved with a temporary plan and simple changes made in specific areas, but little has been done to ameliorate the crisis since the beginning of the pandemic. Polarization is an issue in almost all aspects of the current U.S. government and congress’ inability to address this crisis it a demonstration of its consequences.
