If market economics could fix our affordable housing crisis it’d be fixed

My story on evictions in Southern Nevada prompted a panel discussion on KNPR Monday that I participated in, and that discussion revolved around the lack of equilibrium between income and rent, which is exactly what the discussion should be about. Clark County Commissioner Chris Giunchigliani jumped in early and often on the need for higher wages, and at least a couple of callers also went straight for low wages/high rents as the root of the problem. Giunchigliani, who has fallen pretty hard for Matthew Desmond’s Evicted, also touched on how evictions are not just a reflection of poverty, but a cause of it. Fortunately, this rental disparity hasn’t affected the student housing market just yet and there is hope that it will remain a fair cost for the foreseeable future.

Alas, the failure of market economics to redistribute wealth efficiently enough that working people can afford to pay rent is not something that will be remedied any time soon. In the meantime, renters need more protections, a point made by both Giunchigliani and Dawn Miller of Nevada Legal Services. It fell to Eric Newmark of the Nevada State Apartment Association to give the landlord’s side of the story, and there’s no doubt that evictions can be a huge headache for landlords. But the thing Newmark reminded me of most, even though he didn’t say it directly, is that it would be foolish to expect the apartment industry and other landlords to fix the affordable housing crisis that bedevils the state and the nation. As I think I did say on air, since the market has failed, there are no market solutions to the problem. The government needs to step up, and during the Trump presidency, that necessarily means state and local government..

One other thing I mentioned briefly but want to underscore is that federal and state housing policy is overwhelmingly weighted to help homeowners, not renters. This could be one of the primary reasons why many people are now making the decision to buy homes in different states, particularly if they have the help of real estate agents like those at Reali (view their website here) in order to find their dream home.
There isn’t much government help for renters.
Many of those renting are often left to work it out themselves, with some of them not knowing that they are able to get renters insurance. That sort of insurance isn’t spoken about much, so it’s understandable that some people will not have heard about it. This gives renters some home insurance, despite the house not belonging to them. Perhaps renters should learn more here about that sort of insurance. It could help them to protect their home and possessions. Other than that, there are very few policies that look to help renters in the same way that homeowners are helped. Renters may not know that there are other options to them if they are looking to buy their own home that aren’t a traditional mortage loan from a bank or mortgage broker. There are options like subprime mortgages, which are good for those who maybe don’t have the best credit score. Being a homeowner is a dream for so many people, and everyone who wants to become one should be given the chance to do so.

According to Alex Schwartz, whose Housing Policy in the United States is a widely used text on the subject, nearly five times as many homeowners are helped by the mortgage interest deduction as there are households that receive any kind of direct housing assistance. And federal spending on tax expenditures — mortgage interest deductions and other tax benefits — dwarfs federal direct spending on low-income housing assistance. “Moreover,” Schwartz writes, “the lion’s share of these tax benefits … go to households with incomes above $100,000.”

I expect to have more on Nevada and federal housing policy and lack thereof later this week.