There is one intriguing solution for America’s housing crisis that would greatly alleviate poverty and income inequality we should consider. It is a universal housing voucher; that is a monthly payment the federal government would make to landlords to cover the cost of housing the poor.
We already have a sort of national housing voucher in the form of Section-8 payments for the poor. The problem with that is there a lot of bureaucracy and strings attached. This makes it easy for smart cookies to game the system and hard for unsophisticated poor people to get the aid they need.
My suggestion would be a flat $1,000 a month housing voucher for all citizens and legal residents of the United States that made less than 200% of the poverty limit. The cash payment would go directly to landlords and it would be based purely upon income level.
Benefits of a Universal Housing Voucher
There are several interesting potential benefits to a universal housing voucher including:
- It might serve as a sort of basic income without a direct payment to the poor which many conservatives would oppose.
- It would encourage entrepreneurship by giving many more Americans a strong incentive to become landlords. The incentive would be a steady income for people that went into the affordable-housing business.
- The voucher would stimulate the economy by giving lower income people more spending money. A working mother with a monthly income of $1,500 would see her rent disappear or largely disappear. That would give her a $1,000 a month income boost which she would spend in her community or on her family. She might use the money to buy a new car or for her children.
- The voucher would further stimulate the economy by boosting landlords’ incomes. Many of them would spend that money in their communities, on property.
- The voucher would create jobs by encouraging the construction; or remodeling, of affordable housing. This would also increase demand for building materials and construction work which would further stimulate the economy.
- The voucher would create a constituency of landlords that would lobby Congress for its support. A major weakness of traditional entitlement programs is that their beneficiaries often have no way to put pressure on politicians. They’re not organized and lack the money or sophistication for organized political action. The landlords and the business interests that profit from a universal housing voucher would.
- It would eliminate the need for other programs that can potentially damage communities such as public housing or rent control.
- It might save taxpayers money by eliminating the need for social services bureaucracy and public housing.
- Public spending for law enforcement and services for the homeless might be decreased.
- The quality of life in communities might be improved by eliminating the public nuisances created by homelessness.
- The potential public safety hazards created by homelessness such as lack of sanitation, trash and fire hazards might be eliminated or alleviated. Forest fires in Colorado; and a fire that destroyed a freeway in Atlanta, were caused by homeless people cooking or trying to stay warm. In Denver city inspectors were horrified to find homeless people living in underground chambers under a highly-used bridge, and cooking with explosive propane tanks.
- Communities and nonprofit groups would have a source of financing for programs to house the homeless.
What Works and What Does Not
We need to consider such a voucher because we know what “solutions” for the housing problem do not work.
Three housing solutions that almost always fail; are rent control, laws requiring developers to add “affordable housing” to projects and large scale public housing projects. These remedies have been tried many times and they are singularly ineffective.
- Rent control fails because it encourages landlords to get out of the business because they cannot profitably rent properties. Landowners get a strong incentive to convert residential units to something else or allow them to decay. A major problem is that the only landlords who can make money under rent control are slumlords who neglect maintenance. The only people who can make money under rent control are slumlords.
- In Colorado we’ve had laws on the books requiring developers to add affordable housing to projects as long as I can remember. Yet the housing problem gets worse because not enough units are built. Developers delay building of affordable housing or do not build enough of it. Another problem is that no housing gets built; because nobody can afford to build homes because of “affordable housing requirements.” Only large corporate developers that can afford to comply with requirements stay in the market.
- Large scale public housing projects. As fans of the classic TV show The Wire know these quickly degenerated into drug marts and crime zones. Eventually most such projects; like those in Baltimore and Chicago, were blown up because they were eyesores and crime factories.
It is time to try something new and radical in housing. A national universal housing voucher funded by higher income taxes on the wealthy; or taxes on luxury housing, might be the answer.
Such a solution is well worth exploring if we want average Americans to have roofs over their heads. The question we need to ask: is do our political leaders have the imagination and will to adopt such innovative solutions?