The Decline of Affordable Housing Is A Crisis Of Capitalism
The number of people in the United States living in what’s been described as “extreme poverty”—a designation applied to those making less than $2 per day, per person, during any given month—is on the rise.
According to a report published in 2014 by H. Luke Shaefer, associate professor of social work at the University of Michigan, and Kathryn Edin, the Bloomberg Distinguished Professor in the department of sociology at Johns Hopkins University, the number of households with children surviving on less than $2 per day “has risen dramatically over the past 15 years, even after accounting for all sources of income, plus means-tested transfers.”
That number, as of 2014, is 1.65 million households, which hold 3.55 million children. According to the report, “the highest growth rates [were] found among groups most affected by the 1996 welfare reform.”
Xan Gordon, a 26 year-old financial planner and insurance agent in Portland, Oregon who works with low-income and working class people, tells Shadowproof that he estimates the cost of living in Oregon has increased by some 134 percent in the last 15 years, while median wages have decreased by 14 percent.
“The median income here is about $60k/yr gross, which isn’t bad until you realize that we have an approximately 1.8% occupancy rate on new houses, and that more than half of new housing construction is for units that cost $2250+ per month—or more than half of the net income of someone making $60k/yr—and as a result, we have a huge and growing homeless population, and a serious housing crisis that nobody seems to really have any interest in stopping.”
Gordon says that Portland has seen one of the most dramatic changes to its labor market nationwide. Last year, The Oregonian reported that the working class was being purged from Portland in a new housing boom, which has left people struggling to simply stay in their homes. This is the crisis that capitalism has created.
In March 2015, The Institute For Research on Poverty at the University of Wisconsin-Madison published Unaffordable America, covering the decline of affordable housing, the prevalence of eviction, and the implications for the poor. Matthew Desmond, affiliate of the Institute for Research on Poverty, examines falling incomes among the poor, the shortfall of federal housing assistance, as well as who is most at risk of being evicted.
According to Desmond, the decline of affordable housing means that most renting households, who are usually African-American and Hispanic-American, are unable to meet “what long has been considered the standard metric of affordability and spend considerably more than 30 percent of their income on housing costs.” In 2013 at least 23 percent of Black renting families and 25 percent of Hispanic renting families were spending half of their income on housing alone.
Even more troubling, according to Unaffordable America, the number of households below the poverty line, who dedicated half of their income to housing between 1991 and 2013, rose from 42 percent to 52 percent. Desmond reports those most at risk of eviction from their homes are children and low income women, “especially poor Black women.”
“Among renters, over one in five Black women report having been evicted sometime in their adult life. The same is true for roughly one in twelve Hispanic women, and one in fifteen white women,” the report states.
In another report on Eviction’s Fallout, authored by Desmond and Rachel Tolbert Kimbro, founding director of the Urban Health Program at the Kinder Institute for Urban Research, we find that housing is central to the deepening of poverty in the United States, as well as the suffering of depression and parental stress. The consequences of eviction can be as devastating as the eviction itself, which oftentimes leads to homelessness, job loss, increased financial hardship, and long-term mental health ramifications.
In 1872, Frederick Engels wrote of the bourgeois response to what he calls The Housing Question. Engels profoundly argued that “Capital does not desire to abolish the housing shortage even if it could; this has now been completely established. There remain, therefore, only two other expedients, self-help on the part of the workers and state assistance.”
He writes that the bourgeoisie have only one method of responding to the housing question, and that is to solve it in such a way that the solution recreates the question: “The breeding places of disease, the infamous holes and cellars in which the capitalist mode of production confines our workers night after night, are not abolished; they are merely shifted elsewhere! The same economic necessity which produced them in the first place, produces them in the next place also.”
If it wasn’t enough that those already scaling the rough edges of poverty are threatened with the prospect of being homeless, there’s now an app that will undoubtedly increase housing prices to an even more frightening level. Rentberry is a service that allows for tenants to bid on houses for rent. “You place a desired bid and track the competition.” Landlords are then given a tenant’s profile, which includes their credit score, annual income, and their bid for the property. Alex Lubinksy, the CEO of Rentberry, told the San Francisco Chronicle that landlords should see at least a 5 percent increase in rental income. The new face of poor purging and capitalist exploitation is here, and they even have an app for it.