One thing to do when housing markets don’t work

The new form of housing will be one part of a viable and long-overdue alternative to prevailing market- based housing policies, policies that leave affordable housing in the hands of for-profit developers and unregulated markets. On May 25, Mayor Ed Gainey signed a resolution for the City of Pittsburgh to explore LimitedEquity Cooperatives (LECs) as a remedy to the city’s affordable housing shortage. We applaud the leadership of our elected officials here and encourage further steps in this direction.

A LEC is collectively owned and democratically managed by its residents. Residents buy into a LEC by purchasing shares. LECs can keep housing accessible and secure by offering shares below the costs of marketrate housing and by limiting the amount of equity that anyone can gain when selling their shares.

According to a 2017 Public Source study, Pittsburgh faces a shortage of an estimated 17,000 housing units at or below 50% of the area median income. This figure significantly under-represents actual need, given that so many have given up finding affordable housing in the city.

The problem that Pittsburgh faces, cities all across the world face. From former industrial hubs of the rust belt to rapidly urbanizing cities of the global south, growing numbers of people are housing insecure. In 2019, one United Nations estimate calculated that 1.8 billion people across the world lacked adequate shelter. Continually rising rents, stagnating wages, financializing global markets, and a global pandemic are adding to this human tragedy.

But it is not inevitable, especially in America. It is the result of a long sequence of policy choices that turned housing from a social good and a basic human right into a source of profits for a shrinking group of individuals and financial firms.

Since the 1970s, policymakers have tried to address affordable housing shortages with market-driven approaches. They have transferred large stocks of land and public resources to developers through tax credits, subsidies, and other incentives, arguing that these exchanges will ultimately benefit the public. Yet, housing has become increasingly unaffordable for residents.

Policymakers in Pittsburgh have endorsed these approaches since the 1990s, sometimes against residents’ expressed wishes. Our research found that these approaches have failed to deliver what they promised. They deprived the public of valuable land and buildings, saddled tax payers with exorbitant costs (sometimes up to $400,000 per unit), destroyed thousands more affordable units than they constructed, curtailed residents’ ability to influence policy decisions, and contributed to the exodus of the city’s Black residents.

Market-driven approaches have been rebranded many times. But the outcome is the same: enriching a few private interests at the expense of the city’s taxpayers and most vulnerable residents. UN Special Rapporteurs on the Right to Adequate Housing have demonstrated that the commodification of housing violates the obligations governments have under international law to protect housing as a human right. There is growing international pressure to shift public policies in just the direction that this new legislation on LECs takes us.

Globally, policymakers, residents, and activists demanding a “right to the city” are developing alternatives to market-based housing approaches. Some are re-municipalizing public services, including affordable housing.

Last fall, policymakers in Berlin held a referendum where the city’s residents voted to turn large numbers of privately-owned rental units back into public housing. Others pursue more community-based approaches. Activists in New York and Chicago have won campaigns to turn abandoned properties into community land trusts. By decommodifying housing, these models can better provide low-income and working-class residents with permanently affordable homes that are essential to stable communities.

Pittsburgh’s residents need leaders who will fight for their right to remain in, or return to, places where they choose to live. This fight requires leaders to acknowledge persistent policy failures, stand up against the special interests who benefit from market-driven policies, and to develop new approaches that center the human right to housing.

The resolution signed by Mayor Gainey, and the LECs that should follow, are a meaningful step in this direction and deserve the support of our elected leaders.