This article was posted on Wednesday, Jul 01, 2015

There was a review of Barney Frank’s memoir in the Sunday Chronicle.  The reviewer gave Frank credit for not shying away from the liberal label by using progressive instead.  I would never equate the two.  In a previous editorial, I delineated what I see as the difference between liberals and progressives. 

Liberals believe that markets are effective in meeting human needs, but are quick to see market failures and willing to deal with them with what they see as corrective government intervention. 

Progressives, on the other hand, believe markets to be exploitive (providers only gain by taking advantage of consumers) and discriminatory – which they are.   They believe that government should own or at least control the means of production and that the distribution of goods and services – at the very least essential goods and services – should be in the hands of … ta da…the people.  I think liberals can credibly claim they are not socialists; progressives cannot and most likely would not.

The progressive view of housing is to my mind easily dismissed.  What government has ever done housing well?  For that matter, what government has ever done even a mediocre job of providing housing?  Think of Cuba and Soviet-era Russia.  The former nationalized charming but marginal housing in Havana and over the course of several decades, through blatant neglect, turned it into less charming dilapidated housing.  Imagine if Cuba were not in such a benign climate.  Then conjure up your impression of Russian housing in the Soviet era; endlessly repeated six-story walk-ups, overcrowded and casually maintained at best.

I would venture to aver that public housing at anything larger than a tribal scale is inherently a disaster.  Everyone owns it which means that nobody owns it.  As a result, nobody takes care in building it or keeping it viable and the residents warehoused therein have respect for neither the housing nor the ersatz owner.

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When a single entity owns, or at least controls all the housing, there are two possibilities.  Either it is all the same or it is not.  (Even all-the-same will vary by location.)  As a result, either everyone gets the lowest common denominator or housing is allocated by systemically applied clout.  In a control economy, the counterpart to greed in a market economy is the conniving counterpart for favoritism; brownie points instead of bucks, if you will.  It is arbitrary, demeaning and, if Russia is any example, has produced a suspicious, cynical populace ever-looking over its collective shoulder.

The liberal answer to the provision of housing is the free market buoyed by some level of public support for those perceived to be unable to successfully compete for a roof over their head.  This means that those who can afford to take care of themselves and their families with some degree of margin are taxed to also provide for those who cannot.

The result as often as not has been dense housing developments in urban centers that concentrated and stigmatized the poor in government ghettos  The Bay Area is probably among the least corrupt in the United States and yet housing authorities are notoriously inept.  The agency in San Francisco was once named by the left-leaning Bay Guardian as the worst landlord in San Francisco.  Berkeley was threatened with a federal takeover.  For years, a Richmond employee shunted dozens of purchased refrigerators to her garage where they were sold off for her own gain. 

The symbol of the failure of mass scale public housing in the United States was Pruitt-Igoe in St. Louis, a project that got so bad that all 33 11-story buildings were imploded in dramatic fashion in 1973; the project at the time was less than 20 years old.

The properly civilized English did better job with Council Housing which was not limited to high-density buildings in urban areas.  They did pretty well until the economy went sour and the local governments could not maintain what they had, let alone add more.  The Tories eventually sold much of the better stuff to the residents and the Brits subsequently went to the denser model which today is mostly ghettoized with immigrant populations.  Ironically, the program worked pretty well when it was least needed – when the economy was good and government revenues adequate – and failed when the coin flipped and subsidized housing was most needed.

The failure of publically provided housing is pretty straight-forward.  Countries that tried to provide it all have proved both too poor and too organizationally challenged to produce a viable product.  Countries that provided just some subsidized housing could never produce enough.  The problem of inadequate shelter was never solved due to a lack of resources or will.  Providing housing for a small number of those who cannot compete in the market place is a palliative at best.  It creates the appearance of doing something and the necessary talking point, but does not come close to solving the problem.

It should be clear that housing is a commodity, not a utility.  Treating it like the latter – with all the government interference implied – compromises the productivity and efficiency of private housing and transfers resources to the public sector better utilized by the market.  I, at least, have no doubt that with respect to the provision of goods and services profit is way cheaper than bureaucracy.  This is true especially for housing.  Market solutions, even crappy market solutions, usually better meet human needs than well intentioned government programs.  Flop houses are better than living on the street but social reformers have all but eliminated them.

Rent control, inclusionary provisions, large-lot zoning, endless entitlement procedures, excessive code requirements, impact fees and myriad other requirements make the provision of housing ever more difficult.  Ironically, often the very same political forces that impede the market are the first to condemn the market for not meeting everyone’s housing needs at affordable prices.  They cause the problem and then impose supposed solutions which make the problem worse subsequently requiring more intervention. 

Albert Sukoff is the Editor of BPOA Monthly, the publication of the Berkeley Property Owners Association.  Reprinted with permission.