Best Of: Why Housing Is So Expensive — Particularly in Blue States

Public Housing

Public housing in the U.S. faces significant challenges, both in perception and execution. Jenny Schuetz highlights that the negative reputation of public housing stems from historical decisions to build in poor neighborhoods and underfund maintenance, leading to high crime rates and poor living conditions 1. She contrasts this with countries like France and Singapore, where public housing is more successful due to better funding and social buy-in.

We made decisions like Congress gets to vote on the amount of funding every year for the maintenance and capital upgrades.

--- Jenny Schuetz

Schuetz argues that the U.S. lacks the infrastructure and commitment to replicate these successful models, making public housing a less viable solution here.

   

Homeownership Bias

The emphasis on homeownership in U.S. policies has created a significant bias against renters. Ezra Klein and Schuetz discuss how federal policies, like mortgage interest deductions, have incentivized homeownership as the primary means of wealth accumulation, sidelining other forms of investment 2. This has led to a political landscape where homeowners resist changes that might affect property values, forming a powerful voting bloc.

The federal government has made a bunch of deliberate policy choices to encourage homeownership as a form of wealth building at the exclusion of other kinds of wealth building.

--- Jenny Schuetz

Additionally, Schuetz notes a generational divide, with younger people finding it increasingly difficult to afford homes, exacerbating wealth inequality 3.