• A new model of public housing is gaining traction among Democratic lawmakers in the United States.

• AOC is behind a new bill to create a federal social housing developer.

• Housing experts support local experimentation, but doubt a federal approach will be effective.

Across the country, soaring rents and housing prices have made housing one of the most pressing issues facing voters this election.

About half of the tenants spend more than 30% of their income on housingwhile owners are facing rising insurance premiums, home repair costs and property taxes. At the same time, government housing assistance for the most needy recently reached its lowest level in a quarter of a century.

Vice President Kamala Harris focused on the issue, promising to build 3 million new homes in his first term, send $25,000 in down payment assistance to first-time home buyers, and spend billions on housing innovation. But some progressive lawmakers in Washington want to go much further.

In September, two Democrats — Rep. Alexandria Ocasio-Cortez and Sen. Tina Smith of Minnesota — introduced a bill called the HOMES Act it would create a federal housing development authority charged with building and rehabilitating more than 1 million permanently affordable housing units. The units would be owned and managed by local governments, nonprofits, or some sort of cooperative, and rent would be capped at a percentage of income. The legislation aims to address the fundamental problem plaguing buyers and renters: the shortage of affordable housing.

“There’s been a lot of talk about building new housing in this country, but too often we don’t talk about who will build that new housing,” Ocasio-Cortez said. last month. A spokesperson for Ocasio-Cortez had no comment before this article was published.

The new developments would be what’s called “public housing,” meaning they would exist outside of the for-profit market, cap rent at a percentage of income, and be owned by the government, a nonprofit organization or to some sort of cooperative.

Unlike traditional American public housing, usually reserved for low-income families, social housing is intended to be mixed. Under the HOMES Act, 70 percent of the housing units in a given development would be reserved for low- and extremely low-income people, while 30 percent of the housing units would be reserved for people at the area median income.

But some housing policy experts — who subscribe to the YIMBY, or Yes in My Backyard, movement — are skeptical of the logic of federal authority over public housing. They want to see more experimentation at the local level first and don’t think many state governments — much less the federal government — have the resources or know-how to do the work of developers and corporations real estate.

Local and state governments experiment with public housing

A trip to Austria in 2022 changed the way New York State Assemblywoman Emily Gallagher views housing.

Gallagher, a Democrat who represents the gentrifying neighborhoods of northern Brooklyn, was struck by the stability created by public housing in Vienna. Residents “weren’t thinking about their rent going up. They weren’t worried about displacement and the things that consume the minds of New Yorkers,” she said.

So, earlier this year, she introduced legislation to create a new national housing authority, charged with building permanently affordable housing for very low- and middle-income New Yorkers.

Progressive policymakers across the country, including in Rhode Island and Atlanta, are also exploring this model. California adopted a bill last year to study the concept. The wealthy Washington, D.C. suburb of Montgomery County, Maryland, already built his own social housing.

In Reno, Nevada, Mayor Hillary Schieve, who is prioritizing housing in a state facing a severe shortage, argued that the success of a public housing effort would likely depend on the quality of the local authority housing and the partners with whom it works. “It worries me because we’re not developers,” she said. “You have to have very competent people around the table.”

Although “wealthy local governments with high political capacity” can achieve this, “Jenny Schuetz, an expert in urban economics and housing policy at the Brookings Institution, said many other localities lack resources or know-how.” TO DO.

“The reality is that many states and authorities are not going to be interested in building housing themselves,” said Shane Phillips, a housing researcher at UCLA’s Lewis Center for Regional Policy Studies.

Unlike traditional public housing — which relies on fickle federal lawmakers to fund its upkeep and operation — public housing proposed by U.S. lawmakers would be financed in part by marketing bonds and managed by a series of local organizations, including non-profit organizations and tenant unions.

Schuetz worries that co-ops and tenant unions won’t be able to tap the kinds of capital that real estate companies have access to and that are needed to continue investing in buildings. Local housing authorities also have limited budgets. “The challenge is always, where are you going to find the money in 10 or 15 years, when you have real capital expenditures?” she said.

Delicate politics in Washington

Federally funded public housing has an imperfect history. Between the 1930s and 1960s, the government reinforced racial segregation by consolidating public housing in poor black and brown neighborhoods, while building highways who tore these same communities apart. The continued lack of funding from Congress caused housing to deteriorate over time and much of it was demolished.

In recent decades, the United States has moved away from the tarnished model of publicly built and owned housing and embraced federal subsidies for below-market rate private construction projects, fueled by government credit. tax for low-income housing.

Under the Homes Act, the U.S. Department of Housing and Urban Development would work with states and cities to assume the role of developer. Schuetz argued that the federal government should outsource much of the work to local governments and real estate developers, so a national approach would look quite similar to the low-income tax credit development model.

“Could HUD even hire a team of people who know how to work the land planning, entitlement and construction process in localities across the country?” » said Schuetz. “There’s a reason we moved from public housing to LIHTC.”

Congress would likely not support a federal public housing authority until there was evidence of its success at the state level.

Once states develop their programs, “it’s a lot easier to go back and say, ‘Okay, we need a national coordinating entity to manage this,'” one national expert said on affordable housing, who requested anonymity to protect his congressional connections.

Schuetz would also like to see HUD invest in a series of local pilot programs to experiment with different versions of public housing, evaluate them, and then help scale the most effective model. “It’s not as hot and sexy as a public housing program, but it would actually be much more effective and have a better chance of passing Congress,” she said.

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