Elephant in the Room: Amongst Talks of Market Fixes, A Crisis in Human Need
The Federal Housing Finance Agency (FHFA), the U.S. Treasury, and the U.S. Department of Housing and Urban Development’s (HUD) recently issued a joint Request for Information (RFI), soliciting the help of private investors in plotting the sale of nearly 250,000 foreclosed empty homes currently owned and warehoused by the U.S. government. The stated objective of the RFI is to enhance the “market outcomes” of these public-to-private sales.??
This is not the first time the government has attempted to give away viable housing stock to the private sector in the name of market values. Over the last 30 years, the federal government has progressively disinvested in its low-income housing programs and left addressing America’s basic housing needs to the private market. Most notably, the nationwide network of publicly owned and operated rental housing units has been rapidly dismantled through severe funding cuts, massive demolition projects, and public-to- private transfers of property.
Now, the FHFA, the Treasury and HUD are looking to get rid of yet another huge supply of viable homes and quickly. The proposal: large bulk sales of the foreclosed homes they have collected throughout to foreclosure crisis to “market participants” with the “financial capacity” to buy in bulk and ensure the properties’ “productive use.”
In the midst of this rapid government action to “repair” the housing market by essentially investing even more public resources in the same old real estate giants, there has been little critique of the assumptions underlying the policies and practices that allowed in the first place the massive displacement of the millions of families who once occupied these now-empty homes. What’s more, there continues to be a deafening silence on the dire lack of stable and truly affordable housing in the United States.
??As a coalition of grassroots organizations fighting for the human right to housing, we are dismayed to find the U.S. government again looking to feed the “speculative fever” of banks and private investors that have continued to receive bail-out money and subsidies, while millions of U.S. families are forced to sleep on the street or “double up” and millions more are on the brink of losing their homes to evictions and foreclosures.
?In light of this travesty, we stand in unequivocal opposition to the Administration’s disposition plan for its 250,000 empty homes and offer the following considerations and alternative framework based in human rights.
The Wrong Problem, the Wrong Solution: A Human Rights Crisis, Not Just a Housing Crisis
Since the 1980s, neo-liberal economics have fueled faulty assumptions, particularly: that the market has self-correcting mechanisms that function best without regulation, and that the government is not as well-suited as the market to address social needs. Despite changes in administrations, the U.S. government’s approach to housing policy has remained consistent with these assumptions. Unfortunately, it has become painfully apparent that these assumptions about the market in relationship to housing have in fact led to decades of community destruction.
It was in the name of market interests in the form of investment and development that the U.S. government destroyed more than 500,000 permanently affordable rental units without making adequate provisions for their replacement. At the same time, rates of chronic homelessness and rent burdens began to soar. Most recently, free market theories led to deliberate legislative changes in the regulatory system that opened the door to risky, often predatory, mortgage lending in the pursuit of quick profits. This, of course, has since led to the current wave of housing instability and displacement with its profound impacts in a whole new swath of the population – the middle-class – despite record surpluses of empty housing stock!
In the face of these dire human implications, the Administration has doggedly maintained loyalty to the idea of “housing as real estate,” rather than social need. The consequences have become increasingly ridiculous. For instance, the federal government’s most touted programs for leveraging private capital for “affordable” housing – such as Low Income Housing Tax Credits – have done little to provide housing affordable to those who need it most. In fact, today there is severe shortage of affordable units, with only 38 units for every 100 low-income households. Yet, with the above devastation as a backdrop, the Administration’s RFI solicits only ideas for how to use publicly-owned empty homes to encourage private investment in the housing market by enhancing its “asset disposition programs” – that is, the RFI is exclusively focused on market-based solutions to end the government’s “excess real estate problem.”
We understand now more than ever that the crisis we face is not a housing crisis but a human rights crisis. A home is not a mere commodity or even a mere shelter; it is the very foundation of family stability, personal belonging and community. Therefore, we believe the federal government must re-consider the “housing as real estate” paradigm and begin placing people’s needs first and foremost ahead of the profits of corporate real estate giants.
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To make this RFI situation even more absurd, FHFA, the Treasury and HUD are targeting the participation in this process of the very same private interests that played a significant role in creating the crisis. This is at the same time that all fifty states’ attorneys general are investigating numerous prominent real estate giants for fraud in loan servicing and the FHFA itself just filed suit against 17 major real estate investors alleging that they materially lied about the risk level of securities they sold to the U.S. government.
It is prime time to re-think the roles of communities, government agencies, and housing profiteers in ensuring that our most basic housing needs are met. We know from our experience that communities themselves are experts about the problems and solutions affecting their lives. It is this belief that has driven the recent growth of a community-led human right to housing movement and led many to join the efforts of local groups to fight for community control of land.
Community-Based Solutions for Government-Owned REOs
We believe that the nearly 250,000 properties currently in the hands of the U.S. government should be used as part of the solution to the massive human right to housing crisis. In particular, we call upon the FHFA, the Treasury and HUD to challenge the conditions that lead to homelessness, serial displacement, and extreme rent burdens, and to protect the right to housing, by issuing an entirely new RFI that ensures policies and practices meet the following principles:
Universality & Non-Discrimination: The right to housing extends to everyone in our society without exception. Disparities and discriminatory barriers in access to housing of any kind, whether income, documentation status, race, gender, sexuality, family status, or any other factor, must be eliminated.
Equity: Because housing is a basic right, and not merely a commodity, there must be equitable utilization of housing that ensures existing housing stock is used in a way to meet the needs of all people, rather than fuel profit through market speculation. Other available resources, such as government subsidies and tax breaks that apply to the costs of financing housing, must also be shared fairly.
Participation: Residents and communities have a right to democratic control of local resources in an equitable manner that is inclusive of all members of the community, as well as enjoyment of the economic benefits of local development, including employment opportunities.
Security, Peace & Dignity: Every person has the right to occupy their home free from harassment, forced eviction, and other threats of displacement, including that driven by development and demolition projects.
Campaign to Restore National Housing Rights, Take Back the Land - National, Western Regional Advocacy Project, National Economic and Social Rights Initiative, Chicago Anti-Eviction Campaign, Los Angeles Community Action Network, Mayday New Orleans, Picture the Homeless – New York City, United States - Canada Alliance of Inhabitants (USACAI)