How Liberals and Leftists Can Unite to Solve the Housing Crisis

Understanding Our Differences for a Common Plan

Those of us that want affordable housing have more that unites us than divides us

I’ve been trying to take my mind off of the Covid crisis recently. As the vaccines get rolled out we have started 2021 with a renewed optimism from a very low bar set by the events of the past 10 or 11 months. This optimism is grounded in the desire to return to normal; towards solving some of the bread-and-butter issues of the past — and in the spirit of that renewed optimism I’d like to turn attention to one problem that will be a little more prescient once the pandemic comes under control: Housing

As a liberal I often direct my ire and criticism towards government and NIMBYs for a housing crisis that’s been bubbling up in cities across the Western world (including my native London). Despite me shouting from the rooftops about my own policy preferences, I know that only having people with economics degrees and globe emojis in their twitter handles behind me is not enough to build a coalition broad enough to actually tackle this thing. Broadly progressive people support the same goals as I do: lower rents, lower house prices, and more housing — but disagreement on causes and solutions prevents any united front from forming.

Despite conflation by the right, liberals and leftists can often be miles apart in their own intellectual bubbles that rarely cross pollinate. Entirely different language and narratives are used, all the while the housing crisis continues to grow. This article will attempt, in demonstrating common values, to reconcile competing pro-affordable housing movements towards a consensus policy framework that can gather the strength of all, rather than allowing a continuation of infighting. Hopefully, this will form a useful guide of sorts to understand the motivations and desires of progressives who can look like our opponents but are actually our allies at heart.

To start, we need to establish who exactly are the these pro-affordable housing movements? To generalise there are essentially four main groups: YIMBYs and Georgists on the liberal side and the Old Left as well as Anti-Gentrification Activists on the leftist side. Each side cross-pollinates heavily among their two groups but rarely, if ever, with the other side — largely because of differences of underlying assumptions rather than merely policy preferences.

Who are the YIMBYs?
YIMBY is an acronym that stands for Yes, In My Back Yard and is a movement that sees greater and denser housing development as the main solution to the housing crisis. Starting in opposition to the Not In My Back Yard phenomenon where housing development gets halted by local groups, the housing crisis is seen by YIMBYs in the lens of mainstream economics. Simply put: housing is a problem of supply, and the goal is to expand that supply upwards (housing with more floors) and outwards (more housing units). YIMBYs, given their grounding in mainstream economics, believe that the top solution to the housing crisis is a liberalisation of laws and regulations around zoning and town planning which will allow developers to create denser housing (fewer bungalows, more multi-storey buildings, as well as more converted commercial to residential units) and a greater quantity of housing that through increased supply will see rents fall, homes cheaper to buy and a wider variety of housing available. Much of the YIMBY vision necessarily involves limiting the objections from local residents and municipal government in halting or scaling down construction (much more often than not these are property owners worried about the possibility of lower property values). To some YIMBYs, the movement is less about unleashing free market competition in property and development and is more of an expression of social justice: markets making possible the right of people to affordably live in whatever city or neighbourhood they wish.

Who are the Georgists?
Named after the 19th century economist and campaigner Henry George, Georgists see the housing crisis as one rooted in the ownership of land and land values. This might be a little hard to follow so bear with me here. Land (or location, if you prefer) to Georgists has its value rise through all the collective efforts of the community (it’s hard to pinpoint to one person or group for why a city or neighbourhood becomes a more attractive place to live) — we all, as a society, cause that value to rise. Naturally, as the demand to live there rises, so does the value of the location and suddenly you have many people competing to live in one place — as a result, property owners end up charging a higher price to rent or buy in that location. Like YIMBYs, Georgists are grounded in mainstream economics but see demand, rather than supply, as the principle driver of the housing crisis. Their top solution is to impose a Land/Location Value Tax (LVT) on property owners, confiscating the rise in location values away from land owners and returning it back to the community (either directly in the form of a universal basic income, or back in the coffers of the state as the community’s representative). Georgists believe that taxing all the rent that land owners normally pocket would encourage them to sell or relinquish titles to locations that they are not using, this will then cause property prices to fall by removing the rental value that would otherwise be factored into the price of property. Like YIMBYs, Georgists believe in their policies unleashing free markets to achieve social justice, but in their case it is through clawing back what they see as the rightful inheritance of the community away from landlords. As an aside, Georgists were behind the board game Monopoly and created it as an educational tool to demonstrate how land ownership tends towards monopoly and the general injustice of rent.

Who are the Old Left?
This is more of a generalisation than any organised movement like the prior two groups, but essentially these are the housing advocates that come from the economic left (Marxists, socialists and left social democrats). To the Old Left, the free market is incapable of producing plentiful, affordable housing. Grounded in less mainstream economics, the left believes that the profit motive in capitalism is tied strongly to property just as it is to any other industry, therefore all actions undertaken by the capitalist owner class is to maximise profit at all costs. Underpinning this is a lack of confidence in developers and other investors to create a situation where housing can be cheap and plentiful because ultimately, artificial scarcity of housing will be maintained by a small and monopolised elite. The central question is ‘Why would capitalists create a surplus of housing that lowers profits?’ To the Old Left, the wealthy will continue to have several empty properties while the poor live in cramped conditions for high prices. Therefore, the Old Left supports policies that involve heavy government intervention to combat this state-of-affairs such as through mass construction of public housing and rent controls. More radical leftist elements would support nationalisation of all property. Starkly different to the YIMBYs and more pessimistic than Georgists, the Old Left is grounded in the idea of housing as a human right, rather than a commodity like any other. On the other hand, like YIMBYs, it sees housing as a supply problem but one that is far too important to be left to the free market.

Who are the Anti-Gentrification Activists?
A growing portion of the left-wing of the affordable housing lobby are those who raise the question of gentrification above all else. To the uninitiated, gentrification is the transformation of a working class or vacant area of a city to a middle class residential and/or commercial use. Anti-Gentrification Activists (AGAs) see new and wealthier residents much like vultures, preying on poorer neighbourhoods who have cheap rents, to save cash at the expense of those already living there. AGAs assert that these wealthy residents, or gentrifiers as they’re known, can afford to pay higher rent and so rise rents for the rest of the neighbourhood. Moreover, gentrifiers bring their middle class habits and preferences, opening up small businesses such as cafés and shops that create more “buzz” which further raises the cost of renting. Eventually working class people cannot afford to live in their own neighbourhoods and are forced out. These activists have a particularly “New Left” streak to them and are therefore less concerned with economics and more with the communities and cultures under threat by the bland transformation of working class areas into middle class ones. While less pro-development than the Old Left, AGAs are similar in policy as staunch defenders of public housing and rent controls: keenly aware that rising rents are what drives local residents out. Unlike the Old Left however, it is demand, not supply, that is chiefly to blame. Like Georgists, AGAs are concerned with the phenomenon of neighbourhood improvements causing more misery than benefits for existing residents. Traditionally working class neighbourhoods have character and culture which AGAs believe is worth preserving, and that new wealthy residents destroy this by moving in. In the case of majority non-white neighbourhoods, gentrification is often compared by AGAs to colonisation. Given the more identity-focused nature of AGAs, proposals to limit property to locals only through banning semi-vacant “second homes” and community land trusts tend to be the pet policies of this group in efforts to guard a limited supply to existing residents.

Despite the differences displayed by each tradition, there is perhaps a surprisingly noticeable overlap between liberals and the left: on the supply side there are concerns that not enough housing is built, what kind of housing that is (public or private) and the mechanisms of development (state or market) is subject to debate. Similarly, on the demand side there is mutual recognition about the perverse incentives of rising rents and costs when people seek to make neighbourhoods more desirable places to live but a disagreement on how to stop or reverse these incentives. In these terms, there is plenty of common ground for liberals (YIMBYs and Georgists) and the left (Old Left and AGAs) to reach a common plan of action on both ends of the economic equation (and beyond) to achieve socially just outcomes.

The following consists of a few proposals that address the approaches and value concerns each group holds, optimistically creating some kind of framework for a united front to combat the housing crisis. How that united front can manifest electorally depends on political circumstances between different cities and countries, but whether in countries with either majoritarian systems or multi-party coalitions, this general compromise should hopefully unite a greater number of progressives than before.

The glib leftist opposition to liberalisation of zoning and planning laws more often comes more from pessimism of efficacy rather than outright opposition. Leftists are not against construction, but if it comes to lining the pockets of developers rather than lowering rents and house prices then it feels like wasted time, or worse, a boon for a few wealthy capitalists at everyone else’s expense. To have everyone on board, in return for the zoning/planning freedom that YIMBYs want, a tax on new developments should be instituted with a portion of the profits from sale given back in cheques to the local community, that way regardless if developments do eventually reduce rents and house prices as YIMBYs predict, a more immediate benefit can be felt that leftists can be happy with in the knowledge that the profits aren’t merely going solely to developers.

Likewise, liberals do not seem to be too actively opposed to state-driven housebuilding but often do not pursue it out of concerns about the cost of public housing construction and the lack of freedom of choice to move out to another dwelling when under a tenancy offered by the state. In return for granting leftists a hefty programme of state-driven construction, the majority of these houses should be private (that is, free to be bought and sold) with the profits sold on these state-constructed houses returned to the public at large (either as state revenue or as direct payments to citizens). As for public housing, liberals should concede that there ought to be a consistent supply of rapidly available (short or no waiting list) public housing that allows freedom of movement, as neither leftists nor liberals want a repeat of the situation in the United Kingdom where the lists for public housing are so lengthy that moving city or neighbourhood is incredibly difficult.

Reform of the tax system around property should form a large part of the plan. As it stands, both liberals and leftists oppose extortionate rents and the negative consequences that result. While some YIMBYs might shrug and accept the political legitimacy of these high rents, most desire them tackled and may not trust supply to be the only solution. A Location Value Tax (LVT), the prized horse of the Georgists, is ultimately acceptable to liberals and leftists. To liberals it remains recognised as a mainstream proposal from respected economists (even of the right like Milton Friedman and Friedrich Hayek) and to leftists it clearly represents a transfer of wealth from landlords to the community, directly removing the incentive of landlords to charge rent in the first place. That said, there might be a worry on behalf of leftists that upon the start of LVT levying, there is little to stop landlords raising rents above market rate. A fundamental belief in markets among liberals allows them to believe that tenants will move in reaction to increased rent, since landlords try to charge as much as they can for housing, if someone tries to charge rent at above-market rate, then someone else will come along and undercut them. However, to a leftist this would seem absurd and hard to swallow for a lot of leftists given the propensity for capitalists (including landlords) to collude on price as well as the difficulty for some individuals to simply move to another property on short notice. In order to make LVT a pill worth swallowing for leftists, some kind of temporary rent control should be conceded: capping rents (for at least a year or so) to where they were before the start of LVT levying with the promise to make the rent controls permanent should Georgist predictions on the housing market turn out false. This still allows the housing market to adjust in the ways LVT proponents predict but will do plenty assuage the fears leftists have without resulting in much of the kinds of concerning effects rent controls can cause according to the mainstream economists beloved by liberals.

Both liberals and leftists have to pay strong attention to factors which aren’t exactly economic but arise from the housing crisis too. AGAs, although passionate about housing issues, do share one key surface-level concern with those opposed to new housing: neighbourhood character. It is important to engage in the reality that addressing supply and demand issues will enable existing residents to avoid being priced-out and therefore maintain their place and influence on the community. Crucially, it is also worth recognising the types of people who choose to move to working class neighbourhoods and recognising that the choice is often a limited one too; many potential gentrifiers may in fact prefer to live in a suburb or commuter town or perhaps even completely newly built towns altogether but they lack the transport links: in this way transport policy is very closely linked to housing concerns and may shift the incentives that raise concerns among AGAs. In other words, offer potential gentrifiers with other options. While to a degree this could be seen by YIMBYs as pandering to NIMBYism, by incentivising development outside of increasingly highly sought after neighbourhoods, better transport links at the very least offers the kind of freedom of movement and choice that liberals crave. Neighbourhood character, from the cultural perspective of AGAs and others, is a strong non-monetary factor worth preserving in order to get others on board with new housing. To further relieve any fears, YIMBYs should concede some zoning/planning law to residents on a street by street basis, allowing to vote on restrictions of architecture style or expressing preference to reflect shared cultural heritage; to many new leftists this kind of concession would demonstrate respect for working class norms and values, particularly for ethnic minority communities and delivers a certain degree of democratisation without risking housing supply. As for the keen AGA focus on the vacant second homes of non-residents, with the above changes to supply and demand, the problems caused by second homes would largely remain neutralised, therefore making empty units more palatable.

To summarise, there are 5 main compromise policies:

  1. Granting a liberalised zoning/planning regime contingent on a tax and public dividend on new private developments, including street-by-street votes on architecture style and cultural heritage.
  2. A state-driven housebuilding programme contingent on requirement that over 50% of state-built homes are for sale.
  3. A public dividend on sales of state-built homes contingent on a maintained and consistent supply of rapidly available public housing and ending of convertibility of public housing to private (such as ending Right to Buy in the UK).
  4. Levying of Location Value Tax contingent on a one to two-year cap on rents at pre-LVT levels (provided that the positive effects of LVT are subsequently proven).
  5. Massive investment in transport links between cities and neighbourhoods to allow greater freedom of choice and preservation of neighbourhood character.

While not the ideal programme of most leftists and liberals, this compromise (by marrying policies of different schools of thought) neutralises many of the concerns and worries proposals raise among different groups, allowing for policies that would fundamentally reach the shared goal of affordable housing for all, one way or another.

Do I expect this to take off? Absolutely not, for infighting is just too irresistible, not to mention the immense power behind the large NIMBY and landlord lobbies. But with a little bit of luck I think that this kind of consensus-building, respectful of all other political and theoretical differences, has a good chance to make some inroads should someone give it a go.

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