Unaffordable America: The Underlying Causes of the Housing Crisis

After years of tax breaks for the wealthy and deregulation of corporations, accompanied by low wages for labor and huge returns on investments for the rich, the income gap in America has grown wider and wider. One (among many) grim manifestations of our neo-Dickensian economics is the scarcity of affordable housing for low- and middle-income workers.

What are the underlying causes of unaffordable housing in America? Is it a result of the existential fact that “the poor are always with us” or does it spring from deliberate choices by the rich?

Segregation

Historical Segregation, NIMBYISM (not in my back yard), and Gentrification lead to younger families, blue collar workers and, especially, people of color, finding themselves priced out of neighborhoods where landlords and developers raise rents and property values by replacing smaller, affordable units with luxury apartments and “McMansions” worth millions of dollars. 

Birmingham, Michigan, for example – the town near Detroit where I live – used to be a mix of small, medium, and larger-sized suburban housing. There were neighborhoods of mansions, but they were not the predominant housing style. Now whole blocks have been stripped until small to medium-sized houses are rarities among much more expensive multi-bedroom lot-fillers.

We once had a downtown where middle-class folk like me could shop at the hardware or drugstore with a choice between a moderate and a (slightly) more dressy department store. Now shop rents have gone through the roof and it has become an outdoor boutique where only the rich can afford to buy anything.  

Given the paucity of affordable starting homes, fewer families with children move in, resulting in too few pupils to support our school system. To mediate this situation, our City Planners suggested adding duplexes and multi-family units to the remaining small houses.

Needless to say, the NIMBYISTS went mad: “I don’t want Frat parties next to My house!” “That’s government intervention in my way of life!” “They have to earn a right to live here; let them start out in Royal Oak (a more affordable Detroit suburb) and then move up, when they can afford it!”

Although there were a good number of residents who looked forward to the neighborhood diversity in both race and age that affordable housing would bring, those negative outcries suggest the remaining traces of a racism once endemic to our community, which has long been a hot spot for Northern Suburban Segregation.

Local journalist Lisa Brody explains how this works: “As neighborhoods grew in Detroit, along with historic inner ring suburbs [including Birmingham], zoning was put into place to not only determine what could be built in certain areas, but what could not be. And it was often used as a means of enforcing racial segregation.  Neighborhoods filled only with single-family homes were meant to keep neighborhoods white.”      

Zoning is enforced by devising city maps with red lines around areas where Blacks and other People of Color are restricted. A neighborhood or district draws these to ensure that White and Black residential areas remain as far apart from each other as possible. Red-lining also applies to insurance denials and banking restrictions to prevent Blacks from getting reasonably priced insurance coverage, loans or mortgages.

The Federal Housing Authority (FHA) long promoted Northern segregation by permitting cities and towns to include restrictive ordinances in deeds, a situation I encountered on a painful personal basis when we bought our Birmingham House, only to discover that my deed read:

“No lot, or any part thereof, shall be sold, conveyed, rented, leased or loaned by either party hereto to any person not of the pure, unmixed, white, Caucasian, Gentile race, nor shall any person not of the pure, white, unmixed, Caucasian, Gentile race be permitted to occupy or use any lot of building erected thereon, except that of owner or tenant of the premises may employ servants thereon who are not of the pure, unmixed, white, Caucasian. Gentile race.”

Rushing to the County Court House to have a disclaimer notarized did little to salve my conscience of the historic wrongs (however long they have been illegal) that this horrendously racist and anti-Semitic legal language portends.

Gentrification

Gentrification, now widespread in American towns and cities, seems to be a milder version of historical housing segregation than red-lining, but it turns out to be equally vicious in that it not only limits housing availability but also impoverishes and even unhouses wide swathes of people.

Take the street that I grew up on in New York City, where we rented an affordable apartment at 529 E. 85 Street from 1942 until 1954. Our block was typical of the way, until quite recently, several economic classes shared urban neighborhoods.  At the bottom of the street, facing East End Avenue, was the Vincent Astor building with a liveried doorman, catering to the very rich. Half way up was our middle-class apartment, with no doorman but with an elevator. The rest of the block, up to York Avenue, consisted of “walk-ups,” four or five story “tenements” full of working-class New Yorkers, with plenty of immigrants (at that time, Serbo-Croatian) blended in.

I checked the rental listings on that 85th Street stretch recently to discover that the tenements have been “upgraded” to “studios,” renting at an average of $2,000 a month for one living/bedroom; our two-bedroom apartment costs $4,000 a month, and I can only imagine the rates at the Vincent Astor apartment building. None of that matters, however: even if you could afford the rent, there is only one vacancy on the entire street.

Related Articles: How Homes Made of Plastic Waste Can Solve a Double Crisis | Food Deserts to Urban Oases: Circular Economy Solutions | Good Morning America: The Fight Against Climate Change Leaps Forward | Political Polarization in America: The Way Forward?

When I was growing up, the diversity along our blocks applied only to white-looking people like our Serbo-Croatians and the Hungarians on the next block and the Irish several blocks over, while Puerto Ricans and Black Americans were segregated in East Harlem and Harlem, neighborhoods north of us. Harlem, by the 50s, was famous as the heart and soul of the Harlem Renaissance, rich with music and dance and home to pioneers of Black theater and literature. 

Now, would you believe it, Harlem is itself becoming gentrified, to the extent that many middle- and working-class Blacks can no longer live there.

The City University of New York (CUNY) reports that:

“As a result of Harlem’s reestablishment, residents were displaced and the change of social status in Harlem led to an increase in rents and prices as well as the demographic of Harlem shifting drastically. The change of demographic leads to neighborhoods having an influx of white population pushing out the black low-income population. The prices of food and rent are increasing leaving many of the low-income residents homeless and resourceless. Harlem became a big investment space for developers.”  

The variety of small shops lining 125th Street have been replaced by standard Starbucks-type venues and restaurants so upscale that even soul food is becoming unaffordable. The result of White gentrification, as reported in Humanity in Action, is that Harlem residents are being forced out of their own neighborhoods:

“From 2000 to 2005, 32,500 blacks moved out and some 22,800 whites moved in to the Harlem district. Many argue that this displacement of blacks from the neighborhood is a result of increased housing costs.”

Structural Causes

Northern Segregation, zoning, gentrification, and red-lining are all manifestations of an American poverty deeply rooted in our economic system. Sociologist Matthew Desmond analyzes the role of affordable housing in economic inequity in two books, his Pulitzer prize-winning, “Evicted: Poverty and Wealth in the American City” (2017) and “Poverty, By America” (2023). 

Desmond observes that unaffordable housing is as much a cause as an effect of poverty, a deliberate (“By America”) enforcement of the political and economic power of the rich. Predatory practices like exploitative landlords, bank refusals of housing and rental loans, impoverishment by Pay Day sharks, low wages necessitating more than one job – not to mention unaffordable health, unavailable child care, and benefits so poorly distributed that many never receive them – are deliberate and systematic structures kept in place not merely by overt White racism but by Northern progressives too passive to oppose structures that keep our own property values high.

“Poverty,” Desmond concludes, “is an injury, a taking. Tens of millions of Americans do not end up poor by a mistake of history or personal conduct. Poverty persists because some wish and will it to.”

Remedies

First, there is the rule of law. Under the Civil Rights Act of 1968, Title VIII created a Fair Housing Law that prohibited housing discrimination based on race, color, religion, sex, or national origin.

Michigan’s Fair Housing Law, the Elliott-Larsen Civil Rights Act of 1977, declared as civil rights the “opportunity to obtain employment, housing and other real estate, and the full and equal utilization of public accommodations, public service, and educational facilities without discrimination because of religion, race, color, national origin, age, sex, or marital status.”

It was under Elliott-Larsen that we progressive White residents were able to disclaim our property deeds, though we still enjoy (as Desmond indicates) the unearned benefits of good housing and better schooling than potential Black residents who, still weighed down by the residue of historical discrimination and its lack of affordable housing, cannot attain.

Secondly, there are Federal Remedies. The U.S. Department of Housing and Urban Development (HUD) provides affordable housing for low-income families, including public housing, as well as grants to states and local governments to build affordable housing units. HUD’s HOME Investment Partnerships gives grants to states and local governments, enabling them to build, buy, or rehabilitate affordable housing for rent or homeownership.

Thirdly, pragmatic Americans are eagerly creating solutions to our historical inequities. Law Professor Michelle Adams, for example, seeks ways to eliminate barriers that keep poor Black citizens in disempoweringly segregated neighborhoods: “Where I think about interventions, I think about lowering barriers to entry so that people who have lower incomes can move into areas where folks have higher incomes and have access to resources.”

Carolyn Ulstad, Transportation and Community Design program Manager at Groundwork, writes about “Missing Middle Housing,” calling attention to a variety of projects to offset the impact of segregation and gentrification.   

“Well-designed 2-,3-, or 4-unit homes,” she writes, provide “missing middle homes [that] can improve equity. Single-family zoning across the country perpetuates and worsens economic and racial segregation since homes in those areas tend to be priced higher. Desirable downtowns like those in the Grand Traverse [Michigan] region should consider affordable missing-middle housing strategies to ensure that families with more moderate incomes can live in the area.” Among Ulstand’s examples are:

• Zoning reforms have been undertaken in Grand Rapids and Traverse City, Michigan municipalities responding to the demand for more affordable housing units, with further motivation provided by the Michigan State Housing Authority’s 2022 Missing Middle Housing Program.
• Minneapolis, Minnesota, in 2018 “removed single-family zoning restrictions.” Blending a forgivable loan from the City of Minneapolis with donations from two congregations and other donors, The Black Lives of Unitarian Universalism group Northside Housing Cooperative Initiative is building 24 affordable homes in North Minneapolis.
• The State of Oregon’s 2019 law states that cities with more than 10,000 people can build duplexes in formerly single-family areas.
• California prohibited single-family zoning in 2022.

Meanwhile, Governor Kathy Hochul of New York has proposed a plan to build 800,000 affordable housing units in New York and its suburbs, “touching a political third rail” in the very birthplace of northern segregation, zoning, and NIMBYISM.

Hochul’s plan forces communities to increase affordable housing every three years, by 3% downstate and 1% upstate. Also, there must be 50 homes per acre within a half mile of any railroad station. Amid screams and yells from a plethora of historically segregated suburbs, she is holding her ground.

Poverty is not inevitable

Governor Hochul’s determination, like the good work folk are pouring into affordable housing projects in Minneapolis, Traverse City, Grand Rapids, Oregon, California, and New Jersey, reminds us that we are not doomed by a fated and intractable housing scarcity. When we grasp Matthew Desmond’s idea that poverty is not inevitable because we all – progressives and right-wingers alike – are the ones who let it happen, we can discard our historic weight of hopelessness and passivity to consider what it is within our capacity to achieve. 

The Republican Party’s vicious revival of historic American racism is a reaction to the demographic reality that we are fast becoming a multicultural, majority non-White country. And that means voters! More Democrats than ever before, including more women, people of color, and young Americans are turning out in force, as witnessed by the 2022 midterm elections. Our towns and cities are already becoming an exciting mixture of citizens from every race and nationality; with affordable housing, we can extend that bracing diversity to include a mixture of classes as well.  

 We have agency. Let’s use it!