There’s an article at Jacobin about “urban homesteading” that I found interesting and largely agreed with. Here’s what I thought was its meat:
Speaking at a national housing convention shortly after his swearing in, Kemp, a former US representative and NFL quarterback, sung the praises of programs that allowed public housing tenants to purchase their buildings and become homeowners.
For Kemp, these “urban homesteaders,†mostly low-income black women, proved that “poor folks can become managers, producers, entrepreneurs . . . if only government helps clear obstacles.†Homeownership transformed welfare recipients into workers and taxpayers by harnessing “the greatest engine of growth ever devised — entrepreneurial free enterprise.†HUD’s small-scale experiments in resident ownership, Kemp insisted, represented “one of the most dynamic movements in America since Rosa Parks moved to the front of the bus and helped launch a crusade.†After all, “equal access to homeownership was what the American dream was all about.â€
If Kemp was particularly rapturous in his praise, he wasn’t alone in imbuing homeownership with an alchemical power.
For more than forty years, supporters in both major parties have offered homeownership as a solution to the myriad problems facing low-income families. More individual private housing, not affordable public housing, has long been cast as the way to attack poverty.
There were some things in the article I took exception to. For example, I think the author is too hard on Jack Kemp. Kemp may have been wrong but he was genuine, sincere, hardworking, and not motivated by racial bias. I think she disses home ownership too much.
We’ve tried building public housing and that was a manifest failure. We’ve tried scattered-site housing and that hasn’t been much better. Dispersing inner city populations have had the adverse effects of breaking up communities and their support systems and meeting with enormous resistance from the previous residents.
If she has another solution to the challenges of inner city housing, she should propose it.
There’s a significant racial component to all of this. When other residents of majority black neighborhoods take derelict homes and rebuild and refurbish them, it’s “urban homesteading”. When whites do, it’s “gentrification”. I don’t know what the experience has been in other cities but I can tell you what happened in St. Louis and Chicago. In both places mostly gay white men moved into urban neighborhoods that were decaying rapidly, took advantage of the low prices, bought property, and turned homes that were in practically falling down condition into showplaces.
Finally, the condition of the inner cities of St. Louis, Baltimore, Detroit, and many other cities is such that anyone who’s willing to tackle the job of improvement should be encouraged. That can’t be accomplished if keeping neighborhoods segregated is a higher priority.
And when blacks with more income move out of urban areas, it’s called “black flight.”
“In both places mostly gay white men moved into urban neighborhoods that were decaying rapidly, took advantage of the low prices, bought property, and turned homes that were in practically falling down condition into showplaces.”
Heh. I used to live in one of those. I wonder what’s going on in the near south side these days.
The ability to own a home, at least one day, has been a central theme in U.S. history since its beginning; it can certainly be found in Uncle Tom’s Cabin as the ultimate goal sought by George, the escaped slave. It’s not enough for a man to personally benefit from wage labor without eventually building a home that protects him and prevents him from being dependent. (There is also a related notion that one can strive too much if it jeopardizes the home)
Malcolm Gladwell had a study a few years ago comparing how poor urban blacks move as compared to others. Blacks were moving frequently, but only a matter of a mile or so, typically because of dangerous conditions in the house they are renting or some momentary financial problem. Most other people move further and are moving for a chance for betterment. The underlying issue could be described as poor blacks not having a home and no future chance of getting one, and they are dependent on the rentier.
On what is middle class, the possibility of owning a home is what separates them from the poor. I’m not sure what the author thinks has happened in the last 50 years or so, but I’m not sure home-ownership rate have changed much in that time. What has happened (though government subsidies) is that the homes have gotten larger or at least the cost has, and a larger class of people have used things that used to be called “homes” as savings banks or real estate investments.
Rate of home ownership:
Reversion to trend. To that I would add that housing prices in majority black neighborhoods have probably recovered more slowly than in other areas. That’s certainly the case in Chicago.
Probably because they don’t feel they’d be welcome and with good reason. And add that their social support systems are quite local.
Yikes that chart looks bad. I had in mind a longer term chart like this one:
https://dqydj.com/historical-homeownership-rate-in-the-united-states-1890-present/
It looks to me like home ownership received a big bump following WWII (GI Programs that were extended to civilians), but all of the programs since around 1960 haven’t really changed the (non-bubble) homeownership rate. I suspect that they have increased the amount of home owned in terms of housing cost.
As the graph clearly shows, in 1995-1996 deregulation under George W Bush caused home ownership rates to increase dramatically, eventually resulting in the housing crisis. This was facilitated by a Time Machine which transported him from the Aughts back to the mid-90s.
It is patently absurd to think that the precipitous rise in ownership in response to Bill Clinton loosening credit standards under CRA in 1995 had anything to do with it as, despite lower standards, only the most creditworthy of borrowers suddenly decided to purchase homes.
One of the unintended consequences of the Civil Rights Movement was that middle class blacks were able to escape working class and underclass blacks. As a result, black communities collapsed into the savagery that marks the black underclass. Today, there is no Harlem Renaissance, nor can there be.
PD:
Let me explain that longer term chart for you. The FHA was created in 1934 with the express purpose of guaranteeing mortgages. One of the things it did was create the 30 year mortgage. In 1938 Fannie Mae was created.
It took a few years for the new 30 year mortgages to catch on. As the reforms took hold home ownership began to take off (just before the war) and continued after the war, accelerated by the low interest rates available under the GI Bill.
So in summary there was a small bump when the FHA was created, a bump during and after the war because of Fannie Mae and the 30 year mortgage, prolonged after the war by the subsidized interest rates available under the GI Bill. The next obviously unsustainable bump was created, as Guarneri points out, by the Clinton era CRA.
@Dave Schuler
The FHA, Fannie Mae, and GI Bill increased the pool of available money for mortgages, and subsequently, mortgages increased.
The CRA did not increase the pool of money available for mortgages, and therefore, the money for CRA mortgages must have come from somewhere else. If I understand correctly, the banks were somehow hoarding money, but when Clinton began rigorously enforcing the CRA, banks were forced to lend this unused money supply.
I am a little skeptical.
I propose that the bumps represent mortgage securitization increases. Mortgage securitization increases the pool of available money, and this is what began occurring in the mid to late 1990’s. Without the repeal of Glass-Steagall, the increase would have leveled off, but with the repeal, there was no mechanism to slow the increase.
If the GI Bill had coerced bank lending rather than guaranteed bank mortgages, there would not have been the increase in homeownership.
Just on the issue of home ownership rates, I think the GI Bill is possibly the most important because it initially only subsidized new homes because the program was to help provide housing for returning veterans, but also to stimulate construction industry jobs. This is a policy that increased supply (and may have also kept existing home prices down).