The COVID-19 Pandemic Shows the Dangers of For-Profit Housing

A recently published article in The Atlantic titled “The Pandemic Disproved Urban Progressives’ Theory About Gentrification” begins with a celebratory cheer for the performance of supply and demand during the COVID-19 pandemic.

As white-collar workers have left expensive urban cores in droves, apartments have emptied and rents have fallen, just as your average economist would predict. Since March 2020, median rents in San Francisco have fallen by 25 percent, for example, and rents in Seattle, Boston, New York and Washington, D.C., have all decreased by more than 15 percent. Therefore, according to the author, we see the folly of the “simplistic analysis” of the left that dismisses the idea that building more housing will meaningfully lower rents and slow gentrification.

This all sounds great, but there’s an immediate problem: these lower rents do nothing to help the tens of millions of people in the U.S. who are facing eviction. The author has nothing to say about this incredibly concerning crisis; it is simply not mentioned, and does not seem to influence his analysis whatsoever. Yet learning from this sobering reality is crucial.

Far from disproving the left’s ideas about housing and gentrification, the COVID-19 pandemic has completely vindicated the demand that housing must be a human right rather than something that is bought and sold for profit. Only then can we end the travesty where one’s home is directly tied to their income and wealth.

In the real estate market, you get what you pay for, and if you suddenly can’t pay much at all, you get evicted (or you don’t get shelter in the first place). Right now, we’re seeing the cruelty of this equation play out in real time for 40 million people thanks to one of capitalism’s periodic crises, which of course is highly racialized, disproportionately harming Black, Indigenous, Latinx and other people of color.

The COVID-19 housing crisis is extraordinary, yes, but it’s far from completely unprecedented: nearly 10 million families lost their homes in the extended foreclosure crisis from 2006-2014.

The possibilities under public or social ownership of land and housing are dramatically different. When housing is run for people, not for profit, a loss of income need not affect the stability of one’s home.

For example, the federal Department of Housing and Urban Development (HUD) is strongly encouraging local public housing agencies to effectively cancel rent for tenants who have lost incomes. Housing Authorities can do this by retroactively applying income reexaminations to the date when workers were laid off. Under public housing, the general rule is that households pay 30 percent of their incomes in rents — if your income suddenly becomes zero, then your rent can be reduced to zero, too, or very close to it.

Another option HUD is encouraging is for housing authorities to provide very generous repayment plans, ideally not requiring any payment at all until a household starts earning income again. In contrast to private landlords who see housing as a money-making venture, the primary goal of HUD during the current crisis is to avoid eviction at all costs.

None of this guarantees that public housing authorities actually will be so humane in practice, especially without strong pressure from organized tenants. The Housing Authority of the City of Los Angeles, for example, is not yet publicly offering retroactive income reexaminations, despite what they are being encouraged to do by the federal government. But we can nonetheless see how stable tenancy can be prioritized, even during a world-shaking crisis, when housing is treated as a public good rather than an asset to profit from.

There’s another major problem with the author’s analysis in The Atlantic piece. Even the apparently dramatic decreases in rent prices we see in these big cities haven’t made housing actually affordable for poor families. A 25 percent decrease in rents in San Francisco still leaves the median rent for a two-bedroom apartment at $2,300 per month, meaning a family would have to earn at least $92,000 per year in order to not be rent-burdened (defined as paying more than 30 percent of your income to rent). This is double the median income of Black households in the city.

In all the other cities named above where rents dropped significantly, the median two-bedroom remains higher than $1,500 per month. To professional-class workers, that may sound like a great deal. But a family of four living right at the federal poverty line (earning $26,200 per year) would have to devote about 70 percent of their income just to rent.

So even in what is supposedly the ideal demonstration of the magic of market forces, where a once-in-a-lifetime crisis drastically reshapes the housing market and rents drop like they never have before, poor people remain priced out of expensive urban centers. The author again does not mention this, let alone reflect on its significance.

A large portion of the article is then devoted to arguing against the idea that luxury development is the primary driver of gentrification. In making this claim, the author is essentially correct, yet here again we see a fundamental misunderstanding of the situation, in addition to a mischaracterization of the analysis coming out of the left.

The tenants’ movement tends to portray the systems of capitalism, white supremacy and settler colonialism as responsible for gentrification and displacement — not individual luxury developments. Surely, big new developments can intensify these processes in certain neighborhoods, and that’s certainly something the tenants’ movement is aware of. But that’s very different from labeling these developments as the root cause of systematic displacement.

The market in land has always been a vehicle for removing non-white people from territory the white ruling class wants to live on or profit from. Even the violent, genocidal seizure of the land that today makes up the United States was mostly taken through supposedly voluntary treaties and market transactions — although in reality, they were of course massively coerced. Racist ideas about Indigenous people not making use of land deemed to be empty (“terra nullius”) was used to justify seizure by white settlers, much the same way redevelopment for the rich today is framed as bringing about the “highest and best use” of a given property.

And the continuities extend to the use of state violence as well: When police flood a neighborhood and criminalize its Black or Latinx inhabitants just as more white people are moving in, or when teams of armed sheriffs come to violently evict families who cannot afford rent increases, we are seeing a continuation of settler-colonial systems and tactics that were used to remove Indigenous people from the expanding frontier.

Towards further understanding the relationship between gentrification and white supremacy, we might consider how some of the most intense displacement and gentrification occur in many of the same neighborhoods that were populated by households denied financing for homeownership under the racist “redlining” policies that began under the New Deal in the 1930s and continued throughout the post-war suburbanization boom of the 1940s and 1950s. Between 1934 and 1962 as the federal government backed $120 billion worth of home loans, 98 percent went to whites. The lower rates of homeownership and lower property values in many Black neighborhoods, for instance, which can be traced directly to this racist history, makes the displacement of residents all that easier and more profitable.

This is why, as just one example, the L.A. Tenants Union (of which I am a member) in its handbook from 2019 explains that gentrification “is rooted in colonialism and white supremacy” and can be stopped only by “build[ing] a different world, one where housing is a fundamental human right, not a commodity for trade and profit.”

Notably, no grassroots tenant organizations are actually quoted in this article to advance its arguments about anti-development politics. Rather, the author generally relies on statements critical of developers from left-ish politicians to make baseless assertions that tenant organizations are fundamentally allied with homeowners in partnerships that “presume that the interests of the landed and the landless are aligned.”

Supporters of the (neo)liberal, market-urbanist, Yes In My Back Yard (YIMBY) logic that prioritizes clearing the way for market-rate construction are correct to pick fights with “Not in My Backyard” (NIMBY) homeowners, who wield political power in all sorts of reactionary ways (for lower property taxes, more police, etc.), and who undoubtedly do cynically appropriate legitimate concerns about gentrification for their own selfish ends. We all gain from the understanding that these property owners influence the political system and benefit from real estate in a manner similar to that of the big developers and financiers. And yet, instead of condemning both sets of capitalists, the (neo)liberals completely let the biggest players off the hook, all while claiming it is the tenants’ movement that is naive.

There are no easy solutions for a systemic problem such as the displacement that has always occurred since the earliest days of the settler-colonial land market. It is not just homeowners, or exclusionary zoning, or even major developers that must be fought — in the short-term, we must take more and more land off the capitalist market, and in the long-term, the entire system must be torn down and built anew if we are ever to win decent, stable housing for all. The COVID-19 eviction crisis has made this clearer than ever.