Previous post: Better Housing Policy
Renters make up a majority of the households in many, if not most, of the cities in coastal California. According to the 2010 Census, 57% of the households in Los Angeles and 56% in San Francisco were renters, which gives them considerable leverage in advocating for affordable housing in their communities. Renters need to organize themselves politically and pressure local government to provide affordable housing and approve the construction of more mixed-use, multifamily, sustainable housing by the private sector. In practice, this means renters as citizens need to attend local City Council and Planning Commission meetings and voice their collective support for the development of sustainable housing projects, while also voting for council members that support their interests. This would provide a necessary democratic counterbalance to the monopoly control of local government currently exercised by homeowners and landlords.
Currently, coastal California is effectively in lockdown. Incumbent property owners, and those able to weather the financial storm of 2007 with enough wealth for a down payment on a home when the market was briefly down, have got theirs and are kicking out the ladder for everyone who comes after, by opposing new housing construction. As a result, coastal California has become a gated community and an amusement park where people are free to come from distant suburbs, and other states and countries, to spend their money in the shops and restaurants, stay in Airbnb homes or hotels, and go home. People choose to live in California primarily because of the ocean and the climate; if housing near the coast remains expensive due to lack of supply, residents will be forced to leave to other states where the cost of living is cheaper. Without the construction of more housing, California will increasingly come to resemble other warm climate coastal countries such as Mexico, Portugal, Spain, or Greece, where the economy depends on tourism.
While Los Angeles has committed to raising the minimum wage to $15 by 2020, the housing affordability crisis can’t be solved by an increase in wages alone. Indeed, many have correctly argued that landlords will see wage increases as just another opportunity to raise rents. And as we all know, once rental rates go up, they rarely (if ever) come down again. Only with more housing construction in coastal California, will rents stabilize; without it, rents will continue to increase, until people simply leave California to avoid joining the poor and homeless, because they can no longer make enough money to put a roof over their heads and eat, never mind being able to save enough to pursue their own prosperity. California will suffer economically for their loss.
By now it should be clear where the status quo of homeownership as an asset class and wealth generator leads. In Los Angeles, 22% of the population lives below the federal poverty line. In San Francisco the poverty rate is 11.8%. In a wealthy developed country like the United States, these figures are both outrageous and unacceptable. The homeless population of San Francisco is estimated at 13,500. As reported by the LA Times, based on a survey by the HUD, as of this month in 2013, there were 58,000 homeless in Los Angeles, an increase of 16% from the previous years, a reality “fueled by lingering economic devastation from the recession and rising rents and housing prices.” Since then housing costs have only increased, while wages are stagnant and unemployment remains high.
Homelessness and poverty are a direct result of a lack of employment, low pay, and unaffordable housing. Businesses that don’t pay a living wage, landlords who charge too much for rent, and homeowners who obstruct or prevent development of sustainable, affordable housing in their communities, are all responsible for the homelessness and poverty in their respective cities and metro areas. When homeowners and landlords don’t care about anything but their property values, home equity, and maximizing their rents, their self-interested behavior ultimately damages the United States economy and destroys American lives. Thus we can conclude that, in addition to tenant activism, these overlapping cartels need to be forced to meet their obligations as citizens through government intervention and regulation of the housing and rental market.
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