The Case for Social Housing: A Letter

The following letter is from candidate for DC Council Will Merrifield. Will has been an attorney at the Washington Legal Clinic for the Homeless for eight years, and has anchored his campaign for office on the social housing model to create truly affordable housing for the District of Columbia.


Before running for public office, I worked as a housing attorney at the Washington Legal Clinic for the Homeless. At the Legal Clinic, I represented tenant associations fighting to keep their housing affordable and their communities intact despite large-scale redevelopment projects. The notion that redevelopment should be equitable and that people should have a right to continue living in housing that is both safe and affordable should not be a radical proposition. As one of the wealthiest regions in the wealthiest country in the world, it should strike us all as absurd that our elected leaders have not used the vast resources of the government to accomplish this task. Not only have leaders at both the national and local level failed to meet this obligation, they have presided over and maintained a system that has resulted in an acute housing crisis. Let me be very clear: DC’s housing crisis is a political crisis —politicians are allowing private developers to control housing policy in the District. These developers have in turn designed and implemented a housing system with one goal in mind- to maximize their profits. 
 
This system has many defining features:
 
First, it is completely dependent on government subsidies. Every year, our local leaders give away hundreds of millions of taxpayer dollars, hundreds of millions of dollars of public land, and hundreds of millions of dollars in tax breaks to developers to build luxury apartments that working-class Washingtonians cannot afford. 
 
Secondly, this system inherently builds in the notion that there is not enough housing available and therefore we have to give private developers more taxpayer money and more public land to build more luxury housing. Their argument is this housing will at some point in the future trickle down and rents will come down. But this never happens. Instead, currently affordable units are demolished and developers build more expensive units in their place. In fact, between 2002 and 2012 the number of low-cost rental units in DC dropped by more than 50% while the number of more expensive units rose by 155%. This occurs because in order to maximize rents, which in turn maximizes profits, perpetual scarcity has to be built into the model. The end result is the reality we find ourselves in today: skyrocketing rents, massive amounts of inequality, hyper-segregation, displacement — and a corrupt political system..        
 
Given all this, it is my position that no amount of tinkering around the edges of the current system will fix the fatal flaw in that its driving force is the profit motive. While other politicians talk about fixing this irreparable system, I am proposing something different. I am proposing a system that is proven around the world to create affordable housing on a massive scale built with maximum economic efficiency.
 
The name of that system is social housing and the secret to its efficiency is the elimination of the profit motive. One of the places this commonly-used system works well is in Vienna, Austria, where my proposal originates. 

Here is how it works: In a social housing model the municipality- in our case the District-  builds housing as an infrastructure program. Once built, the housing units are open to everyone (non-means tested). All tenants would pay 30% of their income in rent and the higher rents paid by higher income tenants subsidize the rents of the lower income tenants. Because social housing eliminates the profit motive, all rents in a social housing building are able to be used 100% productively- meaning that the rents are reinvested back into the building to cover the operating costs of the building. At the end of the month, after the operating costs have been covered, there is additional rent money left over. We call this the surplus. In the past this surplus money would have been the developer’s profit. However, social housing uses this surplus- not to enrich a developer- but instead to pay down the construction costs of the building.

In this way, social housing creates deeply affordable, mixed-income housing that actually pays for itself. By decommodifying housing and giving renters a public option, social housing reduces costs and provides a real solution to the affordable housing crisis. If built with enough scale, social housing is a way to achieve a human right to housing.
 
Social housing also works to boost the economy both in the short- and long-term. Because renters only pay 30% of their income in rent, they have more money to spend in the local economy. In addition, we can pair the building of thousands of units of green social housing with guaranteed government jobs for people to work through and after the pandemic. This would cut unemployment, put money in people’s pockets, and allow that money to be recycled back into the local economy.

Social housing also provides economic relief to small businesses by creating below-market commercial opportunities. The fraction of market rent businesses pay will be used productively just like the rents paid for housing units above. Furthermore, small and minority-owned businesses could be targeted for the ground floor retail of these social housing buildings.
 
As I said earlier, the affordable housing crisis in DC is a political crisis.To solve it, we are going to have to create our own political movement — engaging thousands of people in Washington, DC to organize not only around the concept of social housing, but the broader concept of redirecting our resources to meet the needs of the many as opposed to the few. This means social housing. This means a guaranteed jobs program. This means investing in strong neighborhood public schools and building public institutions that lay the foundation for strong communities. This means taking a huge step toward true equity and ensuring each DC resident can live safely and with dignity.