Wayne O'Leary

Moving On

Our family recently had occasion to move after a dozen years in the same residence. The experience was a revelation. Settling on a rental -- house prices in my part of the country are out of control and evidencing a last manic surge before the inevitable bursting of the bubble -- we set out to replicate our prior situation; it couldn't be done.

For starters, inflation has seized the rental market with a vengeance, equaling in every way its stranglehold over the home-buyers' market. Average rental costs, we discovered, were easily double what they had been a decade earlier. This flew in the face of the constant political refrain that inflation is under control; anecdotal evidence suggests it's under control for the things the other guy buys, but not for the things you buy.

A second discovery was the general shabbiness of the rents being offered. We live in a college town, traditionally considered a premier locale, but no more. Where college towns were once idyllic settings (peace and serenity in a bucolic environment, with tweeded dons ensconced in fashionably quaint, vine-covered residences), they are now the province of upscale slum lords, fast-buck housing entrepreneurs and the like, feasting on a mass student population that no longer lives in dormitories.

The prevailing modus operandi amounts to purchasing dilapidated dwellings well past their prime, slapping on a coat of paint and asking top dollar from a captive audience of students and untenured migrant faculty. One such example we encountered was the "beautiful" house, so described in its advertisement, which featured all the rustic charm of a bombed out shell from post-World War II Berlin. Worst of all, many of the landlords offering these prize disasters are themselves college professors earning money on the side. The professoriat once considered itself above this sort of crass materialism. No longer. The free-market values of the past 20 years have established deep roots even in academe.

What I encountered in my housing search was hardly unique. Decent, affordable rentals have, according to the latest analyses, become an increasingly rare commodity across the country. The National Low Income Housing Coalition reports that the cost of rental housing in the US is now beyond the reach of the great majority of low-wage earners and the elderly or disabled, a full one-third of the nation. Last year, the national housing wage for a two-bedroom unit (the hourly wage a full-time worker must earn to afford the Department of Housing and Urban Development's estimate of a "fair-market rent") reached $15.37, considerably beyond the national median hourly wage of $14 and far in excess of the $10 an hour or less earned by at least a quarter of the population.

Rents, in short, are rising faster than incomes and have been for several years. Regardless, it's not a problem that's on the federal government's radar screen. The push in recent years, especially under the Bush administration's dogmatic ideal of an "ownership society," has been for home ownership at all costs.

Americans are being encouraged, almost forced, to purchase homes they can't really afford, at inflated housing-bubble prices, using risky financing vehicles like variable-rate, interest-only mortgages. In the face of a stagnant stock market, they are being told, it's the only way to "build equity" and get ahead. Yet, most experts agree the housing market is overvalued by anywhere from 30% to 50%, and a day of reckoning is on the horizon. When it comes, housing policy will be forced to address the quiet rental crisis.

Tenancy may soon be on the agenda, given that housing starts, which began trending downward in June everywhere outside the South -- those high purchase prices are starting to bite -- are indicating a deflation of the housing bubble for the first time in five heady years; according to the Washington Post, it's a decline most economists forecast will continue into next year, in line with rising home interest rates. This coincides with the fact that one in four Americans (28 million families) spend more on housing than the federal government's recommended 30% of income; adequate housing is not yet a critical problem, but affordable housing is approaching crisis proportions.

The Bush administration will not address the situation; it continues to believe the market solves all problems. But previous governments, federal, state and local, knew otherwise, and they pointed the way. A revival of rent control, a solution dismissed and almost forgotten in the free-market era, remains a viable option, as About.com, the Internet guide service, suggests in its historical overview of this aspect of regulatory policy.

The rent-control movement, one of the lesser-known outgrowths of the Progressive era, began in New York City during the initial decade of the 20th century as a response to the exploitation of immigrant tenants. By 1920, a postwar housing shortage led to the passage of New York's first temporary rent-control laws. More permanent legislation, which set the pattern for the nation, was enacted in the wake of the Great Depression in 1939.

National legislation, establishing rent ceilings in numerous large cities, followed during World War II, but lapsed at war's end. Rent controls emerged once more as part of the Nixon administration's dalliance with overall wage and price controls during the stagflation years of the early 1970s.

New York City has always been the center of rent-control advocacy and leadership -- progressive Mayor Fiorello LaGuardia was its foremost political champion in the 1930s and 1940s -- but in modern times, the movement has spread to Massachusetts, New Jersey, Maryland, Connecticut, Washington, D.C., and California. The inflation-ridden years of the 1970s saw rent control's most dramatic strides. Since then, it has been in abeyance, a relic of big government according to today's ruling conservatives.

Yet, it has never gone completely away. Once rent control exists in a particular jurisdiction, it is very hard to repeal, the exception being Massachusetts, where landlords killed it in the 1990s by concentrating their energies in localities where it had never been tried and using scare tactics to enact a statewide ban. Nevertheless, whatever goes around comes around, and the times may shortly be ripe for a revival of interest in tenant-protection legislation. It won't be a moment too soon if, as widely predicted, the housing bubble finally pops.

Wayne O'Leary is a writer in Orono, Maine.

From The Progressive Populist, Oct. 1, 2005

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