Housing crisis in the US: discrimination and privatization (openDemocracy, 5 August 2020)

  • Podcast: US election special #3 – the housing crisis (part 1)

  • By Aaron White and Freddie Stuart. Published on openDemocracy on 5 August 2020

  • Summary:

    • In this podcast episode, openDemocracy explores the history of discrimination and privitization that has shaped modern housing policy in the US.

    • The podcast digs deeper into the history of US federal housing policy, and places "the negligence of Trump’s tenure in the context of decades of underinvestment and privatization by successive administrations."

    • Context: In the US today, the number of households who are renting is near postwar highs, and since the 2008 recession, home ownership has dropped by 6%. 17% of households pay over half their income in rent, another fifth pay over a third. There's no US state where a person paid a minimum-wage can afford to rent or own a one-bedroom dwelling.

    • The housis crisis has worsened during the coronavirus pandemic. In April, almost 1 in 3 Americans didn't pay their rent. Now, "with federal unemployment insurance set to expire at the end of July, and eviction bans lifting across the country, some experts believe that “between 20 million and 28 million” people could face eviction between now and September."

    • The authors argue that history of the politics of land and housing reveals the racism and inequality has been at the foundation of American society since its inception. Following the Civil War, "freed slaves went from being property, to workers living in desperate poverty." Many newly freed people were obligated to pay rent on the land by giving a portion of their crop to the white landowners.

    • Between 1915 and 1930, over 6 million black people relocated from the South to the North. Then, in 1929, the stock market crashed, and Millions of Americans lost their housing in the Great Depression.

    • Following the stock market crash, President Roosevelt passed the National Housing Act of 1934 as part of his New Deal plan. But, the Home Owners Loan Corporation "created residential security maps to assess the credit worthiness of certain neighborhoods." The “best” areas in were in green, blue were for “good people”, yellow for “working class families” and red for quote “detrimental influences”. These red zones invariably included areas with significant minority populations. Black neighborhoods were often labelled as as “risky” and thus denied access to government-backed mortgages. This became known as “Redlining”.

    • Following the Second World War, returning veterans were granted a range of benefits from the 1944 Servicemen's Readjustment Act. But “redlining” by financial institutions excluded the nearly 1.2 million black people returning from the war.

    • "As federal and local policies excluded the development of black community wealth, America’s post-war population became increasingly segregated."

    • Despite many successful and important campaigns and actions led by the civil right movements, despite the race riots and Fair Housing Act’s attempting to deal with discrimination, deep, systemic biases in America's housing market have persisted.

    • "The 1980s saw pervasive racial discrimination by banks, real-estate agents and landlords, as well as an orgy of commercial property speculation."

    • In 1992, when Congress authorized the Hope VI program that sought to replace "what it designated as “severely distressed public housing” with “mixed-income” developments through federal grants." Yet, it did not replenish the supply of affordable housing for tenants that lost their residences. It was rather used as a loophole by private developers to demolish “tens of thousands” of public housing units that were not initially categorised as “severely distressed”.

    • Fast forward to Trump’s administration that suggested eliminating the Community Development Block Grant program. Despite being unsuccessful, the administration has re-proposed its removal in 2021.

  • Keywords: US, elections, housing crisis, discrimination, privatisation, privatization, financialisation, financialization, Trump, race, racism, Housing Act, redlining, speculation

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