Housing Is a Labor Issue

Landlords are taking all our wage gains. It doesn't have to be this way.

What is the labor movement concerned with? The labor movement is concerned with improving the lives of working people. The proper ambit of labor unions is not limited to extremely specific workplace issues like wages and schedules and lines of internal communication. The more wise and evolved unions have long understood that they can use their power—the natural power that a group of united working people have—to tackle much broader issues which also affect the lives of working people. That’s why enlightened unions have thrown their weight behind everything from the civil rights movement to better public schools. Racial discrimination hurts working people. Bad schools hurt working people. It is not just appropriate but necessary for working people to use the single most effective source of influence they have—the ability to withhold their labor, wielded by their unions—to tackle whatever they need to that is plaguing their lives.

In vast swaths of America, including most of its vibrant major cities, the single most overwhelming economic issue that is squeezing workers is the cost of housing. It is the sort of mega-issue potent enough to drive mass migrations and warp major life decisions like college and marriage and starting families. It governs regular people’s entire financial lives. As housing costs rise past the point of affordability, all other decisions about money are subordinated. Every other expenditure must bend the knee.

What good is a higher wage, if all of it goes directly to the landlord?

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This is not a theoretical question. America, and specifically its most desirable cities, is in the midst of a gargantuan affordable housing crisis rooted in the fact that we have now spent decades failing to build enough new housing to keep up with growing demand. We do not have enough housing supply where people want to live. Therefore housing prices go up. And up and up. When there is not enough housing supply to go around, richer people will bid up the price of the housing units that exist, and poorer people will be forced to crowd into the shittier, less desirable housing units at the bottom. The only winners in this situation are the landlords (and existing homeowners) who own the existing housing supply, who are free to continue raising their prices, because the housing shortage means that people don’t have other choices. That includes major investment firms like Blackstone, who are happy to explain to their investors that the shortage of housing supply is what makes housing such a good investment. Right there in the Blackstone pitch deck, it says: “Chronic housing shortage exacerbated by recent supply declines support the pricing power of BREIT’s existing rental housing assets.” Everyone who inveighs against new housing construction because it might help out greedy developers is, in fact, playing into the hands of landlords and investment funds, who are happy to see the population suffer under a housing shortage because that shortage protects their pricing power. Congrats.

Blackstone loves limited housing supply.

Here is something that should mightily concern you: a new research paper by UC Berkeley economists finds that there are indeed (as anyone who has moved from a small town to a humming big city knows) earnings premiums for workers who live in certain areas—but “local housing costs at least fully offset local pay premiums.” That is to say they found that all or more of the extra money that a worker earns by moving into an economically strong area is clawed back by housing costs. That big raise that your union fought for in the last contract? Send that right on over to the landlord.

It doesn’t have to be this way. This is not some inevitable natural dynamic. It is the opposite. All things being equal, there would be tons of housing supply in high demand areas. Developers want to build as much housing as they can sell, where they can sell it, for the exact same reason that farmers will grow as much food as they can sell. The problem is that, in city after city, the supply of housing has failed to keep up with demand, largely because existing homeowners as a class prefer not to see a bunch of construction around them messing up their nice neighborhoods. Estimates of America’s total housing shortage range from three to seven million units (with much of the need in the cities where people want to live the most), but experts all agree that the amount we need to build is “enormous.”

This is a problem that hurts non-rich people more than anyone. That means it’s a labor problem. Working class renters suffer more than any other group. Landlords have a siphon directly into their wallets. They can demand high rents because people don’t have anywhere else to live because there are not enough units for people to live in. Vox last week published a good story by Rachel Cohen detailing how the Carpenters and other building trade unions in California slowly came around to the YIMBY position of supporting legislation to make it far easier to build housing in that unaffordable state—a position that clashed with the traditional position of the building trade unions, which focused exclusively on how much the construction would be of direct benefit to their members. Teachers unions and SEIU, representing low wage workers, are supporting the bills that make it easier to build as well. The president of the SEIU state council told Cohen, “Regardless of if you’re a janitor or a nurse or a health care worker or a home care worker, everyone overwhelmingly said the number one issue was housing affordability… We have members sleeping in their cars, who have big families sleeping in one-bedrooms, who are traveling hours and hours to get to work because they can’t afford to live near their jobs.”

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It is good to build more public housing. Labor should support that. It is good to build more Vienna-style social housing. Labor should support that. In the middle of the 20th century, labor unions helped to build enormous cooperative housing projects in New York City. That’s great too. But there is a stack of research a mile high that shows that the number one thing we need is a lot more housing supply, and there is not enough money in the bank accounts of every single union in America combined to make a dent in that housing shortage by directly funding new construction. What unions—and all organizations concerned with the fact that working people are getting squeezed out of all their gains by landlords—can and must do is to follow in the footsteps of those unions in California and throw their weight behind bills that make it possible to build more housing, faster, everywhere it’s needed. It’s also important that we make it clear to everyone who thinks of themselves as a supporter of the labor movement that NIMBY-esque opposition to housing construction has the effect of exacerbating the housing crisis that is crushing working people, even if you don’t see it happening right before your eyes. Many people who are have genuinely progressive values oppose new housing because they genuinely believe that doing so somehow puts them on the side of the working people and against the greedy developers. Unfortunately, no. It puts you on the side of the Blackstone Real Estate Investment Trust and its pricing power. Don’t do that.

Organized labor works very fucking hard to win economic gains for working people. The point of those economic gains is to raise people’s living standards. If all of the gains leak out right into a landlord’s bank account, there is no progress. That’s a lot of hard work for nothing. We must build more housing. Build more housing. Build more housing. That is what the people need.

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Also

• Speaking of labor issues, I have a new piece in In These Times about the recent NLRB rulings that make it easier to organize unions—and the fact that if unions do not start investing more in organizing now, the benefit of the new rules will be squandered. If you’re curious why we don’t seem to be organizing the millions of people that we need to be organizing already, please preorder my book.

• Reminder: The WGA and SAG-AFTRA strikes are still going strong. They still need your support. Find all the information you need here to go join them on the picket line. If you can feel the bubbling power of organized labor and you want to know how it can be used to transform our entire inequality-wracked nation, please preorder my book.

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