• A new public housing model is gaining momentum among Democratic US lawmakers.

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

• Housing experts support local experimentation but doubt a federal approach will work.

Across the country, skyrocketing 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 home owners faced with rising insurance premiums, home repair costs and property taxes. At the same time, government housing aid for the most needy recently hit a quarter-century low.

Vice President Kamala Harris focused on the issue, promising to build 3 million new homes during 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 which would create a federal housing development authority charged with building and rehabilitating more than one million permanently affordable homes. The housing would be owned and managed by local governments, nonprofits or some kind of cooperative, and rent would be capped at a percentage of income. The legislation aims to address the fundamental problem affecting homebuyers and renters: the lack 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’s going to build that new housing,” Ocasio-Cortez said. last month. A spokesman for Ocasio-Cortez had no comment before this story was published.

The new developments would be so-called “social housing,” meaning it exists outside the for-profit market, caps rent at a percentage of income, and is owned by the government, a nonprofit, or some kind of cooperative.

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

But some pro-housing policy experts — who subscribe to the YIMBY or Yes in My Backyard movement — are skeptical that a federal social housing authority makes sense. They want to see experiments at the local level first, and I don’t think many state governments – much less the federal government – have the resources or the know-how to do the work of developers and real estate companies.

State and local governments are experimenting with social housing

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

Gallagher, a Democrat who represents gentrifying neighborhoods in North Brooklyn, was struck by the stability created by public housing in Vienna. Residents “were not thinking about raising their rent. They didn’t worry 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 state housing authority charged with building affordable housing for both very low- and moderate-income New Yorkers.

Progressive politicians across the country, including Rhode Island and Atlanta, are also exploring the model. California a bill passed last year to study the concept. Affluent suburb of DC in Montgomery County, Maryland, he has already built his own social housing.

In Reno, Nevada, Mayor Hillary Schieve, who has prioritized housing in a state facing severe housing shortages, argued that the success of a social housing effort will likely depend on the quality of the local housing authority and the partners with whom it works. he works “It just worries me because we’re not developers,” she said. “You have to have very knowledgeable people at the table.”

While “wealthy, high-powered local governments with political will” can make it happen, Jenny Schuetz, an expert on urban economics and housing policy at the Brookings Institution, said many other localities don’t have the resources or the know-how. -how.

“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 provide funding for maintenance and operations — the social housing that U.S. lawmakers have proposed would be financed in part through marketing bonds and operated by a range of local, including nonprofits and tenant unions.

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

Complicated politics in Washington

Federally funded public housing has a checkered history. Between the 1930s and 1960s, the govt reinforced racial segregation by clustering public housing in poor black and brown neighborhoods, even as it built freeways which tore apart the same communities. The lack of continued congressional funding meant that the housing deteriorated over time and many were demolished.

In recent decades, the US has moved away from the damaged model of publicly built and owned housing and adopted federal subsidies for below-market private development, fueled by the Low Income Housing Tax Credit.

According to the Homes Act, the US Department of Housing and Urban Development is supposed to work with states and cities to take on the role of developer. Schuetz argued that the federal government should outsource so much of the work to local governments and developers that a national approach would look quite similar to the Low Income Tax Credit development model.

“Could HUD at least hire a team of people who know how to work through the process of development and land titling and construction in townships across the country?” Schuetz said. “There’s a reason we evolved from public housing to LIHTC.”

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

After states build their programs, “it’s a lot easier to go back and say, ‘Okay, we need a national coordinating entity to handle this,'” a national affordable housing expert, who requested anonymity to protect his relations in Congress.

Schuetz would also like to see HUD invest in a series of local pilot programs to experiment with different versions of social housing, evaluate them, and then help scale whichever model is most successful. “It’s not as flashy and sexy as a social housing program, but it would actually be much more effective and more likely to pass Congress,” she said.

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