Three community-oriented alternatives to Sacramento’s historic housing crisis

Sacramento is amidst an extraordinary housing crisis.

Housing insecurity, displacement and homelessness have reached historic levels. In a study published in 2017, the nonpartisan California Budget & Policy Center reported that in the 2016 Census, more than one in five Californians are living in poverty, meaning the Golden State is the most impoverished in the country. The study concluded that, while poverty is complex, there is one major factor driving its proliferation: housing unaffordability.

To combat the crisis, organizations have been canvassing to get rent control and a repeal of Costa-Hawkins–the 1995 law limiting the ability of cities to pass rent control ordinances–on the November ballot. And while these two policy prescriptions are crucial in the fight for more below market rate and public housing, neither will change the fact that the amount of new housing built each year lags far behind demand.

While California has experience building affordable housing through public-private partnerships such as the Sacramento Housing and Redevelopment Agency, solving the housing crisis will require the people of Sacramento to consider and advocate for large-scale social housing and land trusts as well. The market has failed to provide. So what are the alternatives? Below is a brief exploration of three possible housing futures:

The Classic

In 1945, California passed the Community Redevelopment Act, which allowed cities to operate Redevelopment Agencies, or RDAs. Most affordable housing housing built in California was funded through these agencies, but when the 2008 financial crisis hit, Gov. Jerry Brown and the Legislature voted to dissolve them all, and stopped any related funding–dissolving the largest and most stable source of affordable housing funding in the state. Assemblyman David Chiu and others are now proposing to bring RDAs back in order to ease the housing crisis.

The Upside: This model of public-private housing partnership has a history in California and wouldn’t require the wholesale creation of new government bureaucracies (something to which Americans are typically averse). In addition, local development companies and associated nonprofits should know where best to spend subsidized housing dollars, given their proximity to the community.

The Downside: Even at full-steam, this model failed to provide enough below market rate housing. Additionally, making affordable housing dependent upon the state legislature means funding would fluctuate based on changing political tides.

The National

Though many take the above public-private approach to building housing for granted, there is another way. In Europe, municipalities have been incredibly successful in building and sustaining vast public housing networks through direct public financing and borrowing. Peter Gowan and Ryan Cooper of the People’s Policy Project write that in Vienna three out of five residents live in public or cooperative housing. In 1960s Sweden, at a time when the population was about 8 million, the government committed to building 1 million new units of publicly-owned housing (and did so in under 10 years). These units are incredibly popular, generally well-maintained and reflect a broader belief that housing is not a commodity, but a basic human right.

The Upside: Whereas the classic model takes public money and puts it into the pockets of private and nonprofit developers, the national model puts public money directly into the hands of builders, and when the structures are complete, the public owns them. Rent payments would go back into city coffers in order to pay off bonds and federally secured loans, maintain newer units and modernize aging ones. In Europe, some publicly-owned housing developments are made into cooperatives with their own governing boards, meaning control over one’s housing is hyper-local and accountable. What is most important, though, is that these developments are open to people of all income levels. Richer residents would pay “solidarity rents” to help compensate for the reduced rents charged to poorer residents. This is important because mixed income housing helps combat the social ills of economic segregation seen in “means tested” public housing built to house only those who have nowhere else to go

The Downside: As with the classic model, depending on the federal government for preferential loan rates would leave projects vulnerable to shifts in political will. Also, as has been the case in the US, some European countries have neglected their public housing. In places like France the conditions in the banlieues can be inhumane. This, however, is a result of the government’s failure to sustain investment in these communities, as many European governments turned to privatization from the 1970s on.

The Local

Recently, Marketplace published an article about a unique community near Seattle. The Emerald City is, like Sacramento, facing its own tech-driven housing crisis. Rather than turn to the city or state government to plead for help, some residents at a trailer park have fought back collectively by raising funds and buying the land they live on outright. Now, rather than paying a landlord rent for a lot, they pay dues to a resident-run nonprofit. This model has spread to housing insecure communities across the country, and last Saturday the Sacramento Community Land Trust launched its own efforts to buy and develop land and properties built exclusively for poor and marginalized communities.

The Upside: The local model has the significant advantage of cutting out federal and state governments. If a community-run nonprofit can raise the money to purchase land, it’s theirs, and they can do with it what they want. Also, local ownership means much more responsiveness to tenant concerns and increased accountability. It’s a much more community-focused and flexible model than either of the first two.

The Downside: Despite major advantages, the local model features one defining flaw: a lack of scalability. Though this may be the best way for certain blocks or neighborhoods to address the housing crisis, it may never be viable on a city- or state-wide level. With evictions on the rise and folks pouring in from elsewhere, the local model can play a part in abating the housing crisis, but it won’t solve it entirely.

With rent control and a repeal of Costa-Hawkins possibly on the November ballot, residents need to begin considering what their communities will look like going forward. Will Sacramentans continue to wait for wealthy developers to build enough market-rate housing to stabilize rental costs, or will they choose some other viable but less profit-driven approach?

By pursuing subsidized, social and cooperative housing, the city could shift from being one for sale to the highest bidder to one built for stable, prosperous communities that will last for generations.

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