Buyout, not Bailout: Housing in the Coronavirus and Climate Crises

The crisis we’re facing today is unprecedented; the coronavirus is spreading like a wildfire and as many businesses shut down and lay off workers en masse, all signs point to a recession much worse than 2008. Naomi Klein’s insightful analysis of “disaster capitalism” shows how through the neoliberal era the capitalist class seized on a series of political and economic crises to move countless public assets into the hands of multinational corporations, at the expense of working class people the world over. The Trump administration’s early response to the pandemic already demonstrates this strategy, but as Klein points out its success is not a foregone conclusion; social crises also provide the Left an opportunity to present our own solutions and an alternative vision for the way forward. While it’s impossible to predict what will happen in the coming weeks and months, we know that we will need to build alternatives to disaster capitalism in the midst of the COVID-19 crisis. We must organize a path out of this crisis that provides short-term relief while also building a permanently just society for all. In the face of COVID-19 disaster capitalism, we are organizing for socialist resilience.

The current crisis lays bare how existing institutions have placed working class people in a state of precarity, where a temporary and unexpected shock to their earnings puts them at risk of losing their housing. Over the next few months many people will not be able to pay their rent due to circumstances beyond their control. As of March 22nd, 2020, Oregon Governor Kate Brown implemented a statewide executive order for a moratorium on evictions for 90 days. In Portland and Multnomah County, tenants have six months to pay their rent and avoid evictions if their income was impacted by COVID-19, but renters outside of Multnomah County do not even have that weak protection. While these measures acknowledge the crisis that our state and nation at-large are facing, they do not take into account that the rental market has served to extract wealth from working-class people for years. According to the National Low Income Housing Coalition, a minimum-wage earner in Portland would need to be working approximately 82 hours a week in order to afford a two-bedroom apartment. These temporary measures do not address the reality that even a short-term financial setback can spiral the average Oregonian into a crisis. If someone unexpectedly becomes unemployed due to the crisis, it will take well beyond six months for them to recover.

Since many landlords are using tenants’ monthly rental payments to pay their mortgages, loss of rental income due to renter unemployment will make them unable to meet their monthly mortgage obligations. Some may be able to restructure their loans, but others will not. With a possible second mortgage crisis looming, some landlords will not be deemed creditworthy. Many properties are owned by large institutional investors with more diverse portfolios, who might be looking to dump their worst performing assets. In the near future, there will be a lot of properties that are either financially insolvent or being sold at a low-cost. Many property management companies will be looking for a bailout; elsewhere real-estate speculators will be looking to snap up cheap properties for future gentrification. These developments would only serve to further dis-empower struggling workers in a city already notorious for high rents.

Public stimulus is already being used to bail out real estate investors from the liquidity crisis they’re facing. We believe that now is the perfect opportunity for the public sector to leverage its power to choose who benefits from a real estate “bailout”. The bailout shouldn’t be a no-strings-attached giveaway to property owners; we don’t believe in handouts to the landlord class, who make their living by exploiting working people’s need for housing and inability to buy their own homes due to low wages and inflated market values. Any public action to address a crashing housing market should come with significant public control over the housing market in the short and long term to ensure all Oregonians safe and affordable housing through the crisis and into the future. This means that the public sector must have, at minimum, a stake in properties that are bailed out — it’s the best way to ensure that tenants have stable housing in this time of uncertainty.

This is not just a short-term solution to the immediate crisis — it is acknowledging and recognizing that the housing crisis is deeply interconnected to our urgent environmental crisis. American land-use patterns are built around the personal car — our cities are surrounded by residential suburbs that require us to drive to work, to the store, to anywhere we need to go. In Oregon, 40% of our greenhouse gas emissions come from transportation. We need to be able to live in denser, more affordable urban housing that gives us walking and biking access to transit, jobs, and resources. Many of us can’t afford to do that because the speculative nature of construction on the private rental market has produced a glut of expensive luxury units, just to feed developer and real estate investor profits. This pushes poor and working-class families further and further out to the margins of the metro-area — the underlying economic process which leads to gentrification. In addition to pushing them out of their communities and further from the urban center where so many work, this process also increases marginalized communities’ exposure to environmental hazards in their neighborhoods which impact their overall health and well being.

What’s needed is an innovative approach and an alternative to the failures of the private market, in line with the vision and values of the Green New Deal. We need robust and bold measures, such as an expansion of public housing. We need to create non-market housing in urban centers that is significantly cheaper than what the private rental market offers. There are two ways this can be accomplished — through rental assistance, in which governments are forced to shell out to private landlords, or through public housing, which will allow us to skip landlord profits altogether. We have the opportunity to significantly expand public holdings of rental units that will be in crisis in the coming months. Doing so will not only make housing more affordable for people in those units; in the long term, a significant presence of cheap public housing will exert competitive pressure on all rental housing, making it more affordable for all of us. By expanding the public housing sector, we can improve unemployment rates by getting many people back to work post-recession. We could increase unionized “green jobs” through the public sector through maintenance, restoration, and retrofitting units. We can accelerate programs for mold removal, lead removal, and other immediate repairs to make public housing apartments safe for residents faster than the private sector is willing to. We can transition future public housing stock into highly energy-efficient homes that generate carbon-free renewable energy.

We need to create more deeply affordable housing for houseless communities, the poor, and working class. As ecosocialists, we believe in supporting the needs of people and the planet, not the private interests of the 1%. It is time for us to seize this moment to address housing needs in both the coronavirus crisis and the climate crisis, with a bailout for tenants instead of landlords.

In the immediate term, all levels of government must restrict evictions regardless of the financial status of the tenant or landlord. If rental properties ultimately do become insolvent, the federal government should buy large apartment rental properties that go on the market at rock bottom prices and convert them into public housing. Additionally, the federal government should be given receivership over properties that need any form of debt restructuring, giving it control over assets that may be liquidated. In this scenario, the federal government should have the right of first refusal to acquire the property.

We need an immediate housing solution to combat the COVID-19 crisis that is already wreaking havoc on our economy. We need to implement a long term solution that will address our housing and environmental crises. The state of Oregon could become a trailblazer by creating a stronghold in the housing market. Public housing is the answer to address both our housing and environmental crises. We have a slim window of opportunity; we must take action to bail out tenants and build a path towards ecosocialism and a just future for the working class.

— Democratic Socialists of America, Portland, Oregon

The Portland chapter of the Democratic Socialists of America. Hailing from all corners of the socialist left, our goal is a better world beyond capitalism.

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