Affordable Housing proves to decline every year due to the market, a social housing through wealth tax is key to sustain the market

Investors, mortgage bankers, developers, and landlords don’t screw over working-class tenants and homeowners just because capitalists are mean people (though many of them are). It’s because if they don’t continually accumulate profit and reinvest it, then they will be thrown out of business. 

This tension is ratcheted up in urban areas where land prices are particularly high. Why would a private housing developer purchase an expensive one-bedroom rental in San Francisco, then rent it at the “below-market” rate of $1,130 per month when the median rent for a one-bedroom is almost $3,300 per month? That’s just bad business sense.

Investors, mortgage bankers, developers, and landlords don’t screw over working-class tenants and homeowners just because capitalists are mean people (though many of them are). It’s because if they don’t continually accumulate profit and reinvest it, then they will be thrown out of business . Even if they wanted to, landlords, developers, and investors can’t afford to look out for the best interests of poor and working-class tenants in a cutthroat urban housing market filled with other capitalists looking to edge them out.

The high cost of land in urban areas is one of the primary reasons that we can’t “build our way out” of the current crisis by slashing regulations and giving huge tax breaks to private developers, like a lot of  and  claim. The only way for developers to make good profits in this circumstance is to invest in high-end housing whose sale or rents will make them profits beyond the massive costs of land, materials, and labor for construction. The only way to engineer affordability in this kind of housing market is for governments to heavily subsidize capitalist developers and landlords. Wouldn’t it just make more sense for governments to cut out the middleman and construct or finance that housing themselves, pledging to provide it at affordable rates to anyone who wants it?

This kind of publicly built and publicly run “social housing” is far superior to the privately owned and publicly subsidized “affordable” housing. That subsidized housing will also be confronted by the pressures of the profit motive. These developments will be less likely to undergo proper maintenance, and if the underlying land continues to rise in value, there will be pressure to convert those units to market-rate rent or sell them off as condominiums.

Since the 1970s, private developers  more than three million affordable units using public financing from HUD and the Low-Income Housing Tax Credit. But because many of the affordability requirements tied to that financing expire after fifteen years, over 350,000 of those units have been converted to “market-rate” housing since 1995. And the National Low Income Housing Coalition  that we lose about 15,000 affordable units per year to market-rate conversion, a number that will only continue to accelerate as the cost of housing rises in urban areas.

Socialists should avoid the “not in my backyard” (NIMBY) trap of opposing new housing construction on the grounds of ruining homeowners’ nice views or “changing the character’ of the neighborhood. This is especially important given our project of building massive amounts of  in dense, livable urban neighborhoods.

But we also need to steer clear of a noxious “yes in my backyard” (YIMBY)-ism which insists that capitalist developers would love to provide us with abundant, secure, and affordable housing if only we allowed them to build more. Many zoning regulations are stupid and not broadly conducive to healthy and sustainable urban space, but we shouldn’t buy the argument that places technical zoning legislation at the root of our housing crises. The actual root is capitalism.

The capitalist class, through its monopoly on investment, is holding our society hostage over basic human needs like housing. Our society has the resources to produce stable, secure, and free or nearly free shelter for all. Capitalists refuse to meet this human need because it will never make them the profits they require to stay in business.

We have to demand massive investment in democratically planned and maintained social housing. Capitalist housing developers will never do it. We’ll have to take their ill-gotten gains — through taxing them and all the other obscenely wealthy people in our society — and do it ourselves.