March 10th 2009
De-Politicizing Affordable Housing
A
s a public affairs guy with clients in the land development business, one of the issues that is always on the agenda is affordable housing; specifically, how to avoid being taken to the cleaners because some politician wants to get some votes at the developer’s expense by forcing false affordability into the free market.
My, my, my. How things have changed.
It was just a year or so ago that cities were passing ordinance mandating that new development provide ten or 15 percent of units at market rate or lower. For a developer of market rate or higher developments, this was akin to ordering Saks that 15 percent of its clothes would henceforth have to be Walmart priced. Not only would Saks give up floorspace that could have gone to clothing with higher profit margins, but Saks’ snotty upscale customers wouldn’t really like sharing the store with those Walmart shoppers.
But after years of political grandstanding on the affordable housing issue, politicians have forgotten every promise they made, every threat they uttered about the horrible societal cost of rising home prices and are pouring their passion (and our money) into the need to keep home prices up. The absurdity would be delightful if it weren’t so dangerous, as Thomas Sowell points out today:
The same politicians who have been talking about a need for “affordable housing” for years are now suddenly alarmed that home prices are falling. How can housing become more affordable unless prices fall?
The political meaning of “affordable housing” is housing that is made more affordable by politicians intervening to create government subsidies, rent control or other gimmicks for which politicians can take credit.
Affordable housing produced by market forces provides no benefit to politicians and has no attraction for them.
Here’s what will happen if Congress doesn’t intervene, in Sowell’s eyes and mine: People who didn’t save for a rainy day or who bought beyond their means will lose their homes and move into apartments. People who were saving for a rainy day and living within their means will move out of apartments and into now-affordable homes.
What a nightmare!
Strong, nasty-tasting medicine is all the economy needs right now, but Franklin Delano Obama is intent on re-establishing the warm, comforting governmental teat that Ronald Reagan worked so hard to stuff back into the bra. It’s a shame and a disaster, but the majority of Americans are ready to sacrifice the beautiful efficiency and freedom of the free market in the name of a thin security blanket imported from China.
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