As sky-high rents and homelessness continue to persist in California and across the United States, politicians must adopt a more dynamic, multi-pronged strategy to help poor and middle- and working-class tenants – the “trickle-down” housing solution pushed by the real estate industry clearly isn’t working. It’s time for elected leaders to immediately implement what activists call the “3 Ps”: protect tenants, preserve existing affordable housing, and produce truly affordable and homeless housing.
For years, corporate landlords and developers, as well as YIMBY groups, have called for a flawed, self-serving trickle-down housing approach to lower rents and rates of homelessness. It’s an over-simplified, one-dimensional concept that’s based on flooding the rental housing market with new luxury apartments, with the real estate claiming that rents will lower for everyone. (It’s also disingenuous: does anyone really believe billionaire corporate landlords want rent prices to go down?)
More luxury housing is a boon for corporate landlords and developers, who can charge sky-high rents and swiftly rake in massive profits. But that agenda does nothing to urgently help the poor and middle and working class, who are drowning under excessive, unfair rents and can’t afford expensive apartments.
Housing experts have long said that trickle-down housing is ineffective and not what’s needed to make housing more affordable. Zillow Chief Economist Dr. Svenja Gudell, for example, unequivocally called for the construction of more affordable housing, not luxury.
“There’s a growing divide in the rental market right now,” the chief economist said in 2016. “Very high demand at the low end of the market is being met with more supply at the high end, an imbalance that will only contribute to growing affordability concerns for all renters. We’re simply not building enough at the bottom and middle of the rental market to keep up with demand.”
She added, “As a result, these segments are becoming very competitive, as both new renters look to find their first place and existing renters get shut out of homeownership because of extremely limited for-sale inventory.”
Gudell concluded: “Apartment construction at the low end needs to start ramping up, and soon, in order to see real improvement.”
Richard Florida, an urban planning guru for many politicians, wrote that “the markets – and neighborhoods – for luxury and affordable housing are very different, and it is unlikely that any increases in high-end supply would trickle down to less advantaged groups.”
In a white paper published at the Harvard Business Review, Brian Callaci and Sandeep Vaheesan, of the Open Markets Institute, wrote that the real estate industry’s “trust-the-market strategy,” which is what trickle-down housing is all about, “has to date failed to solve the problem.”
Notably, Callaci and Vaheesan said that a multi-pronged approach was needed for the housing affordability crisis, including rent regulations to protect tenants against the predatory business practices of Big Real Estate.
It’s something housing activists have known for years, and they call that strategy the “3 Ps”: protect tenants, preserve existing affordable housing, and produce truly affordable and homeless housing.
Protecting tenants involves strong renter rights so corporate landlords can’t carry out aggressive evictions and charge outrageous rent hikes. From top economists to Callaci and Vaheesan, the experts say that rent control or rent stabilization is a key, and urgent, tool to protect renters.
Preserving existing affordable housing is also crucial. Too often rent-controlled buildings are demolished to make way for luxury-housing projects, which permanently shrinks a city’s affordable-housing stock. Politicians must do everything they can to preserve affordable housing for the poor and middle and working class.
Producing truly affordable and homeless housing is needed, too. That housing can be built quickly and inexpensively through the adaptive reuse of existing buildings and pre-fabricated housing.
More dynamic and effective than trickle-down housing, the 3 Ps is a multi-pronged approach that quickly helps seniors, working-class families, students, teachers, and many others – and politicians can implement it immediately.
Patrick Range McDonald is an award-winning investigative reporter and the advocacy journalist for Housing Is A Human Right.