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Corporatization of the Tenant Movement

by nobody Monday, Dec. 21, 2015 at 11:41 AM

MakeRoom.org is pushed by a nonprofit housing corporation, Enterprise Community Partners.

The rising regional and national tenant movements are inspiring, but as is always the case, there are different factions that want to get in front of the trend.

Some are for housing as a human right. This is the idea that the right to housing drives all decisions, meaning that housing should be provided by the government if the market cannot. In the past, this emerged as support for, and creation of, public housing, aka "The Projects."

Some are for rent control. This is related to the idea of housing as a human right, but via market controls. The idea of rent control is that private ownership needs to be prevented from price gouging. Rent increases are tied to rises in the CPI. Rent control only exists in some cities, and Los Angeles is one of those cities.

Some are for increases in Section 8 vouchers. This is a program that helps people rent in the market by subsidizing people who rent so that only 1/3 of their income goes toward rent. To get Section 8, you need to be low income or disabled. There's a waiting list, and the money runs out.

Some are for increases in the supply of Affordable Housing. This is the most complex faction. Affordable Housing is a term for a specific kind of housing project that is operated by a nonprofit corporation, who acts as the landlord or management, and funded by a mixture of private investor money, and government money. Affordable Housing generally uses Section 8, but applies it toward units that are new and operated by the nonprofit.

There are four main actors in the rental market. First, there are renters. Second, there are landlords. Third, there are the public housing agencies. Fourth, there are the nonprofit housing companies.

Renters generally support rent control. They may support section 8, particularly if they qualify to get it - but that means the poor and disabled. It's a toss up. They may or may not support public housing. They may or may not support Affordable Housing.

Landlords generally oppose rent control. Some accept it - it doesn't prevent profits, but it does prevent profiting hugely if there's an upturn. Landlords often support section 8, but mainly because it prevents the expansion of public housing, and because they can rent to section 8 tenants if a neighborhood declines in value. Landlords do not support public housing, because it increases the number and density of units and is direct competition. Landlords may or may not support Affordable Housing - again depending on market conditions and whether they participate in Section 8. If Affordable Housing displaces rent controlled housing, that could reduce the number of voters who support rent control.

Landlords and tenants are the traditional adversaries, but the gray area of subsidized housing, public housing, and Affordable Housing is where the organizing action is.

The current consensus is that public housing has no future. Nearby owners oppose it, landlords oppose it, middle class renters can't get into it, and politicians aren't willing to organize political support for it.

Into this breach the Affordable Housing nonprofits have flourished. They get private money to build what are, effectively, housing projects. There is a poison pill, however - the nonprofit doesn't own the property. The project belongs to the investors. So Affordable Housing ultimately becomes a way to clear out old housing, and "clean up" an area, and then, 30 to 100 years later, potentially turn it into market-rate housing. (By which I mean that the housing will be torn down, new units built, and then rented out at market rate.)

Investors like Affordable Housing because each investment comes with tax credits called the Low Income Housing Tax Credit (LIHTC). If a developer is profitable, they can shift their profits into Affordable Housing, and pay less in taxes. It's not a "donation" but an investment that can be re-sold in the secondary market for bonds. So it's potentially profitable.

The LIHTC is from 1986 and now funds 90% of housing built for low and moderate income people. The first Affordable Housing buildings are now maturing, hitting the 30-year mark, and we can see how they have fared, both as housing for the poor, and as investments.

All this long preamble is to explain this group called MakeRoom.org. They are not a group that supports rent control, and may not necessarily support tenants rights. They are a group that will push for Affordable Housing, and they are operated by Enterprise Community Partners, which helps corporations invest in Affordable Housing.
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Retraction

by nobody Monday, Dec. 28, 2015 at 12:42 AM

I'm not happy with the framing of this essay. I was hoping to be more positive and descriptive of public housing as a ideal. Instead I only described it as politically out of favor, which it is. It needs to be brought back into the array of options. Affordable Housing has grown instead, both in good ways and in problematic ways.

So that's why it's being reported. I may write another essay on this topic that's shorter and more about forms of public and collective housing.
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