First, it was a coastal, big city problem. Then, it spread to the suburbs and then smaller cities and then vacation areas. Today, unaffordable rents blanket the country — whether you’re in San Diego, Los Angeles, New York City, or a small town in the Hudson Valley.
The COVID-19 pandemic supercharged work-from home-possibilities. Suddenly, where you worked didn’t determine where you lived. COVID restrictions gave way to a reimagining of the relationship to the workplace for many. The seeming virtues of the California dream were squeezed by sky-high rent prices that left little room to enjoy much of what the state has to offer. So, whether to stay or leave came down to the simple question of whether the benefits were greater than the costs.
When one million people fled astronomical rents in California, they had to move somewhere. As these new areas were flooded with California refugees and the resultant shortage of housing drove up rents, the locals were hit hard. There are fewer and fewer places in this country where you can find truly affordable housing. Relatively affluent areas like Orange County have seen some of the greatest increases, but they are not alone.
There is a breaking point. If you earn $100,000 a year, you will seem to be relatively well-off. However, if you have a family and need a decent amount of space, it could easily cost you $4,000 a month, which translates into more than half of your take-home pay.
And so, the rent is too damn high even for mid-level professionals. However, if you are a starting teacher or a firefighter, you are in even worse shape, earning only around $50,000 a year.
The old saying is that rent simply comes down to a case of supply and demand. Apparently, we must allow the market to determine what the rent will be or else no housing will be built, and everything will get worse. It is magical thinking that we can regulate utilities because they are regarded as necessities, but the sky will fall if we regulate rent. Nonsense.
There are many major cities, such as New York or Vienna, Austria, that have strong rent control and don’t leave tens of thousands of people living on the sidewalk, as we do in California. And there is a simple reason for the difference: These cities made a very conscious effort — over decades — to incentivize the building and sustaining of affordable housing.
Without incentives, the billionaire real estate cartels will always gravitate toward high-end construction. As the famous bank robber Willie Sutton said when asked why he robbed banks, “Because that’s where the money is.”
If you build a $1 million condominium unit at a profit margin of 10 percent, you earn $100,000. Build or renovate something for $250,000 at a 10 percent margin, and you only have earned $25,000.
Tens of billions of dollars have been spent putting a Band-Aid on the problem in large cities like Los Angeles and San Francisco, but the homelessness and housing affordability crises have only gotten worse and spread everywhere else. Until or unless some balance is found between the basic need for shelter and the private marketplace, the suffering will only get worse in California — and across America.
Fundamentally, housing is not a commodity. It is a necessity and a human right.
Michael Weinstein is the president of AIDS Healthcare Foundation, the largest global HIV/AIDS organization, and AHF’s Healthy Housing Foundation.
