Want Affordable Housing? Move Where It’s Cheaper–The Myth Of Subsidized Diversity

‘Affordable’ housing – today’s meme, the byword of diversity, inclusivity, and social harmony.  There is an inherent value to mixed neighborhoods – rich and poor, gay and straight, black and white – and government, as guarantor of the commonweal, should make them possible.  Yet, despite the currency of this notion, the evidence is elusive at best.  What exactly does an investment banker get from living next to a plumber? or a white Beacon Hill matron from living next to a rowdy boy or welfare queen?  Conversely do wealth and privilege rub off so that by living on Park Avenue a family from the South Bronx will assimilate the ambition, sophistication, taste, and propriety of their neighbors?  Is life more worth living when gay bars crowd out quiche and foraging?

In Leonard Bernstein’s West Side Story, the Broadway 50s musical based on Romeo and Juliet, a boy and girl from two opposing gangs, one white and the other Puerto Rican, fall in love. Anita, a friend of Maria, warns her against getting involved with someone from a different community.  She sings:

A boy like that
Who'd kill your brother
Forget that boy
And find another
One of your own kind
Stick to your own kind
A boy like that
Will give you sorrow
You'll meet another boy tomorrow
One of your own kind
Stick to your own kind

In short, the story is about diversity.

The remake of Bernstein’s original, faithful to theme, music, and lyrics attempted to make the story one of today – all traces of racial and ethnic stereotypes removed and the upbeat, happy ending emphasized.  Although we may cling to outdated notions of cultural and racial separatism, we will eventually realize our common humanity and such divisions will disappear.

However, this will never happen – history since the first human settlements records the persistent identity of tribes, clans, religious sects, communities, states, and nations. Although recent DNA analysis has shown that homo sapiens did interbreed with Neanderthals, it probably was no more common than clowns marrying circus freaks. In fact historians of pre-history conclude that the two ‘racial’ groups tried to kill each other off, and thankfully the right side won.

Bloomingdale is a neighborhood in Washington, DC.  It was once one of the worst of the inner city with high levels of crime, failing schools, disrepair, and drugs – but because of its classic, sound housing stock and prime location, it became the hunting ground for white professionals and slowly but surely became gentrified.  The bars on windows disappeared, geranium pots appeared on window sills, cars were no longer vandalized, schools improved, and sidewalks and streets were litter-free.  

Whereas the first white settlers in Bloomingdale said they wanted ‘diversity’, they soon learned that this came with a price, and only the hearty stayed; but such retention paid off, and housing prices soon soared well into six figures.  More and more affluent families moved in, and soon the community was as affluent as any in the Virginia suburbs.

No one complained.  Diversity was never what it was cracked up to be, like attracts like, and everyone was happy.

The black families who were displaced by the market moved out and beyond their cheap rentals to Prince George’s County, a preferred LZ with a majority black population and an improved socio-economic environment.  Not Park Avenue, but a step up.

Washington’s demographics have changed. The days of ‘Chocolate City’, an era of a population 75 percent poor black are long gone.  In the last few decades Incomes and average residential housing prices have risen as well as tax revenues, and while the city has been unable to improve conditions in the perennial dysfunctional neighborhoods across the Anacostia River, gentrification elsewhere has been good for the city.  The market has facilitated historical trends – those families priced out of gentrifying neighborhoods find housing elsewhere, and those moving in to renovated areas are happily living with their socio-economic cohorts. 

The DC City Council, however, is not happy.  Socio-economic integration is a good thing per se, and poorer families should not be priced out of Washington, forced to move to the suburbs.  They belong in Washington, say the Council, add to its spice and diversity, and make life richer and more rewarding for all who live there.  Of course they say so with no evidence behind them.  Diversity has been a fiction for millennia. Communities welcome all comers if they subscribe to the same norms, values, mores, and social standards in place.  The integrity of Bloomingdale has been preserved while profession, talent, interest, and promise are encouraged. Race, gender, and ethnicity have no relevance whatsoever.

The results of DC’s social engineering projects are obvious.  Forced to include low income units in otherwise high-income buildings, developers have put them in the back, by the alley, out of the way, on lower floors overlooking the parking lot; and wealthy communities have voted time and again to refuse the construction of all-low income housing in their neighborhoods.

People have always moved to find housing that fits within their economic possibilities and socio-economic character.  There is no shame to living within one’s means outside the center city.  It has always been, yet municipalities seduced and trapped by idealistic notions of ‘diversity’, have ignored history and the market, and have siphoned off valuable taxpayer revenues for failed schemes of ‘affordable’ housing. 

The central issue of the affordable housing debate is this - what is the rationale for disrupting the market and using taxpayer dollars to enable citizens to live where they could not otherwise afford? There is none.  In fact, government subsidies aimed at keeping people in place discourage the incentive to move and to seek new economic opportunity. If you are poor, unemployed, and on welfare, government will add another perk – low-cost housing; thus increasing the incentive to stay poor, unemployed, and on welfare.

Taxpayer investment, if considered at all, should be used to build the infrastructure and provide the services necessary to attract employment.  If every jurisdiction has the same goal in mind – increased economic activity – the movement of labor to opportunity will increase and wages will rise thanks to competition. ‘Affordable’ housing, rent control, rent stabilization and any other distortions of the housing market only discourage private investment, economic growth, and individual opportunity, and should be discontinued.

People have the right to live close to their work, affordable housing advocate say.  Why should a fire fighter, police officer, or janitor live far from their places of employment, spend valuable family finances for the commute, and arrive home tired and dispirited from the long journey? These civil servants provide a critical but undervalued service to the community and should at least be afforded the benefit of close-in living. 

Of course doctors provide an equally important service to the community; and in this increasingly complex age so do lawyers, accountants, and financial advisers all of whom find their own housing and pay for it accordingly. Governments have no business in social engineering. Labor follows employment, and every family, wealthy or low-income calculates cost and benefit in the same way. How much is anyone willing and able to pay to live close to work?

Former New York City Mayor Bloomberg was criticized for allowing Manhattan to become a wealthy enclave; and while it is true that Americans and foreigners alike are buying up pricey real estate, New York is becoming an even more exciting place to live – an urban architectural landscape bar none.

Bloomberg invested in the development of Battery Park and the entire West Side riverfront; helped foster development along the High Line, and followed in former Mayor Giuliani’s footsteps to create a safer, cleaner, and more appealing city both for residents and visitors.  Without a doubt lower income residents left Manhattan; but the increased tax revenues have allowed the City to make public investments in Brooklyn, Queens, the Bronx, and Staten Island, improving the entire city, not just Manhattan.
The free flow of labor and capital has always been a principle of America’s market economy; and recent (2012) IRS figures confirm that over 40 million Americans move their residence every year.  While net in- and out-migration rates vary by region and by decade, constant movement is the rule rather than the exception. 

While there will always be populations that are less mobile than others, most Americans have the wherewithal to follow better opportunities.  As suggested by the IRS, legions of us move every year.  We move from cities to suburbs, suburbs to suburbs, county to county and state to state.  Move we do and as we always have done.