A response to Hampton on Housing
About four years ago, I published a short, relatively low-effort video on why landlords are unnecessary middlemen in the housing industry. Some guy named Hampton rolled out a 9-minute video in response to it. This addresses his response, and better analyzes land lording while explore options we can use to make housing affordable.
To begin, the single article Hampton sourced for the entirety of his video is an opinion article written in 2014, by Aboubacar Ndiaye for NPR. Not even that, it was a comment on another article that was turned into an article. Its reliability is very questionable, and the author doesn’t have qualifications However, a 2004 FAIR study concluded that "NPR’s guestlist shows the radio service relies on the same elite and influential sources that dominate mainstream commercial news and falls short of reflecting the diversity of the American public." Follow-up studies published by the same organism in 2015 demonstrated that the board members of NPR disproportionately have corporate affiliations such as investment funds, banking, consulting firms and corporate law firms, with 75% of them fitting into this category; the other having been former US state officials or academics. According to itself, 33% of its funding comes from corporate sponsorships.
FAIR also found in 2015 that “corporate one-percenters dominate NPR affiliates’ boards.”
Full article: (https://fair.org/home/national-plutocrat-radio/)
NPR has also been criticized by Noam Chomsky for having a bias towards ideological power and the status quo: it is a bourgeois media that serves the interests of the ruling class to push a pro-establishment message. It maintains the same opinions as Washington and political pragmatism & corporate donators decides which views are suitable for publishing. Any opinions critical of US foreign policy, capitalism and bureaucracy do not make it out of the studio. (https://web.archive.org/web/20090111175741/http://books.zcommunications.org/chomsky/sld/sld-1-09.html)
It is inevitable that an opinion article from an elite-funded news outlet will favour landlords, the status quo and the rich, as well as policies that benefit them. Better sources would be actual academic essays and research papers that analyze the impacts of landlording and housing policy from various angles.
The premise of the source article is very odd, since it has both a praising and a denouncing tone toward government regulation. Yes, regulation of zoning laws is generally harmful, but not making multiple incomes converge into a same building or neighbourhood will lead to either gentrification or poverty. It also only addresses privately developed “affordable housing”, ignoring housing cooperatives, public housing, and other policies such as strictly regulating Airbnb’s, rent control and subsidies, that work to make housing affordable.
There is a massive difference between harmful and unsustainable single-family home zoning regulation and other state interventions such as price ceilings, stimulating mixed-income private development with available rent-to-own schemes, housing coops, construction of public housing units. These two should not be clumped together, as the first one is a direct result of the corporate lobbying from General Motors to direct the world towards car dependency, while the latter is a protective measure for tenants.
The argument does not consider public housing at all nor mixed-income development, just ‘grouping poor people together’ and imposing price controls. Of course, if you just cap rent and do nothing else to recoup the lost housing units, there will be issues regarding housing supply as landlords expect to make an often-large profit. These solutions work together, not standalone. Arguing otherwise is turning the pro-tenant argument into a strawman, entirely misrepresenting it, and ignoring the actual solutions supported by empirical evidence/real world data. It’s like taking protein shakes without going to the gym and expecting results: it’s not going to happen.
None of what was said in the cited article has much to do with the role landlords play. The necessity to make a profit on a mortgage often above an acceptable market price leads to concentration of capital and price gouging. It effectively commodifies housing and inflates its price well above its value.
Policy-wise, we need public housing mandates imposed on private development – paired with a rent cap, since this former policy usually incentivizes landlords to raise the rents on the private units to make-up the lost potential profit from the mandated public housing units. Mixed income zoning, investments in public and active transit, mixed-use zoning laws: all these policies increase the value produced per acre in each neighbourhood, reduces housing prices and increases revenues to the city, which can in turn be used for infrastructure improvements, bike lanes, public services, transit lines, parks, and amenities.
Mixed-use zoning is a very strong component at the core of the new-urbanism movement, which advocates for a return to the traditional way of organizing a city on a human scale: along transit lines but more importantly with mixed-use buildings, like stores, restaurants on the ground level of the main streets along the transit axes, and housing (prioritizing coops and public units, with strong regulations on landlords and Airbnb’s, explaining later) on the next floors. This not only makes for a denser, more lively, and more liveable city that negates the necessity for car ownership along transit lines, but it also increases tax revenue to the city because of the previously mentioned increased value per acre: a business generates way more income and consequently tax revenue than any household or housing unit. This directly translates to better public services, amenities, parks, libraries, better-funded local schools, and emergency services, and most of all transit like a metro, bus, and tram lines. All this significantly improves quality of life and as a result a myriad of other elements.
Another interesting element would be the maximization of space use with point access blocks rather than hallways with multiple stairways. This can reduce the amount of space dedicated to circulation to 6.5%, down from 13% in a classic apartment block. This is not only able to provide more units for the same amount of land, it gives more character to the neighbourhood.
Promoting active transportation as an alternative to any other way of transit is also quite important to increase the health and wellbeing of the local citizens through more frequent physical activity. It integrates this activity in a life that is otherwise quite sedentary, especially for those who work white-collar jobs. I had this active transit experience while in Paris: even in a more remote neighbourhood, the 14th, specifically on Rue Pernetty, pretty much every building was mixed-use, and every location was in walking/biking distance. Getting groceries was a daily occurrence rather than weekly: I always passed by the local Carrefour by foot to grab a bag of groceries that was well enough for a few meals, composed of more fresh ingredients and less processed food. Breakfast and lunch always brought me to a local bakery to enjoy an espresso, chocolatine or one of the delicious sandwiches the Boulangerie d’Alésia makes. In short: capitalist, hyper individualist cities built on Euclidian zoning and car-dependent infrastructure are financially unsustainable, worsen the mental, physical health of its citizens as well as worker productivity, and enslaves people to the use of their car to get anywhere, even for a simple grocery trip.
Another thing that isn’t talked about enough is the use of ‘third places’ as community builders: locations to hangout, exchange ideas, have a good time and build meaningful relationships. In urban America this third place, previously a pub, library, or a public square, is effectively gone since suburban developments are simply single-family homes on miles on end without any life or interest. Breaking down social siloes and negating the isolation of the elderly, increasing socialization in an increasingly individualist society is EXTREMELY important to maintain a strong social cohesion, collective mental wellbeing and so on. Densification is key to not only reducing rent but improving quality of life.
One neighbourhood in my area called Saint-Jean Baptiste in downtown Québec City formed a tenant union in 1976, which in turn formed many comities aimed toward dismantling harmful practices such as Airbnb’s since 2016, hotels and gentrification. The union also opened a thrift store, a community garden and made significant progress in freeing empty units that were rented out by Airbnb landlords which was putting an upwards stress on the housing market of the neighbourhood. After the new zoning restriction policy and redirection of responsibilities regarding illegal hotel businesses towards Revenus Québec, the neighbourhood saw its amount of Airbnb’s drop from 180 to about 80, which represents a 3% total increase in housing availability, which cooled down the market, brought down rent and allowed lower-income residents to keep living there. Citizen-action and government intervention here were the reason housing prices were able to be brought down and gentrification to be, in a way, reversed. Landlords paid dearly for their behaviour. (About 700k in fines for operating airbnbs illegally in a working-class neighborhood)
Something I need to stress is that not all renting is inherently bad; a lot of people must move often or prefer to rent an apartment rather than having to own it, since they plan to move out anyways. That would account for a non-negligible portion of renters. However, the problem lays with individuals and corporations who buy up housing stock, renting it at exorbitant prices, often above the 30% of income of the tenants, preventing affordable housing and home ownership. Public housing for those who wish to rent rather than own, or who cannot afford a mortgage is necessary. One of the interesting solutions for the housing crisis is building enough non-profitable, non-market housing units for a break-even rent that will stay consistent and become relatively cheap on the long term. Enough of these units will make it unprofitable for landlords to raise their prices or profit from housing, since they will have to compete with non-market housing.
Let’s get to what Hampton argues. He starts off with an array of ad hominems and tries to project his lack of knowledge about the housing market on communists. He calls “self-evident” the assumption that landlords provide housing and are benevolent beings. This, of course, ignores the need for them to profit from a basic housing necessity, often price gouging above market-price. This is accentuated when deregulated areas see private developers gentrify former working-class neighbourhoods with luxury apartments, displacing people and making life unaffordable.
[1:39] The state can and should provide basic amenities such as water for free or cheaply, since it is a necessary for survival. Water, electricity, and sewage systems should never be controlled by a single or multiple private entities that run on a profit motive: the state should provide these services for free or at a break-even point. None of these factors cuts out the tedious process of getting water, it just upcharges people for a service that could be gotten for free from a state which works much differently than a private enterprise: without a profit motive. There is a clear difference between housing provided cheaply by the state for the cost of upkeep and utilities, and a landlord who profits off this necessity.
[2:19] “Landlords don’t just sit on property; landlords homestead that property and maintain it and upkeep it. They’re the ones who must spend money on repairs, on damaged pieces of property, to expand their property. They’re the ones who take the financial burden if there’s an economic downturn. What they do is cutting out the cost of one having to buying a house themselves and the time and money it would take to upkeep it. They lower the cost of housing. Instead of purchasing a house for 600k in California a landlord could charge you only 5 to 600 dollars a month”
Lots to unpack here. First, they do just sit on property, they hog the housing market to profit from this necessity. Sure, they might have to handle the repairs, but that is an extremely weak argument to justify their existence. They don’t take any more financial risk buying up property considering the steady rise in the cost of housing and property prices, and they upcharge people for often more than the price of a mortgage, which tenants can usually not afford in combination with a down payment. It sends them down a vicious circle of renting at market price and spending a large part of their income to enrich a landlord. The burden argument is the same used to justify the exploitation of workers by capitalists. It has no basis in material reality. I’d really love to see Hampton find a market-priced housing unit rent for less than 1000$ a month, let alone 500. In fact, the average rent for a studio apartment in California for 2022 was $1538, and $1854 for a one bedroom. The national average for a two-bedroom apartment in the US was $1295, which includes many uninteresting areas. Hampton specifically mentioned a house, for which the rent would be well above $4000 a month, 8 times what he said it was. So much for all his ‘citation needed’ remarks. Landlords do anything but lower the cost of housing: they consistently raise rent and upcharge tenants for units. The profitability is evident when we look at places such as Olympic village in Vancouver, where market-priced units priced at 2900-4000 dollars a month exist right next to housing coops who charge only 1000$ a month. Because once the mortgage is paid off, the units get very cheap. Combining this construction of non-market housing, subsidizing it with state grants, with private development will work wonders to deflate housing prices. The state can easily build public housing on available land or hand it over to non-profits which will be able to develop housing coops. Making sure new housing development allow mixed-income population will make sure there is a possibility of upwards mobility for the less fortunate, as well as bringing down the cost of housing.
Another reason for the rising price of housing is obviously the massive surge in single-family suburban development which makes a horrible use of land and creates a scarcity that doesn’t need to exist, paired with horrible zoning laws that restrict what’s being built. Landlords certainly do not help to make housing affordable. You can’t argue otherwise without knowingly being wrong.
[3:22] “Sure you could cut out the middleman but that would just raise costs. Even then, a landlord paying someone to repair something on their property, how is that a parasitic relationship, and an expense that’s worth being cut out. The value the landlord provides is the formula I’ve just created.”
This is just hiring a contractor like everybody else does. It doesn’t create any more value that justifies exorbitant upcharges and does not cut out any labour since a tenant with a rent-to-own scheme or in a housing coop could just as easily get those services, without that upcharge. The parasitic relationship is very clear: a landlord extracts value from a necessity which can be provided for much cheaper, without profit, from non-parasitic actors. This ‘parasitic relationship’ can be minimized with pressure from housing coops. They don’t provide housing, rather they keep it from being more widely owned.
[4:10] “A drive to increase the capital value of the unit is necessarily good and leads to an increase in living condition.”
A lot of the time we see private developers gentrifying working class neighbourhoods, effectively ‘raising’ the standard of living in that block but driving affordable housing out of the neighbourhood. This isn’t all black and white, and libertarians have a very simplified understanding of these issues. The point isn’t simply to repair broken elements of the apartments that are rented out, rather to evict tenants to renovate/gentrify the place.
[4:40] “What value do you generate for the landlord as a tenant. If anything, it’s reverse the landlord is providing you with housing, with a place to be, at a lower cost from the alternative.”
You quite literally pay back their mortgage, with an often-large profit margin.
[5:51] “This alternative to rent is best economically fit”
No, home ownership is much more economically fit. Rent-to-own schemes have been a great success and help build a minimum of wealth for less-fortunate families, raising the likelihood of upwards mobility.
[6:14] “Landlords aren’t the reason for the poor not being able to afford housing.”
Yeah, they quite literally are. Gentrification, landlords, corporations buying up housing stock, lack of public housing, the list goes on. They are part of a much broader issue that has to do with how capitalism operates in the first place. Rents are much lower in cities like Vienna where there are a lot of housing coops to pressure landlords into renting at acceptable costs. That way, people with a lesser socio-economic status can afford housing, often for less than 250 euros a month. More broadly this is an issue with capitalism; underpaid workers who earn the minimum wage cannot afford an apartment, food, clothing all at once. This is the free market favouring a slim portion of the population while the largest, working-class part of it suffers. This ‘hierarchy’ isn’t natural or justified, it’s simply a case of Capitalism working how it’s intended. Again, in a 1997 study Yakovenko simulated a capitalist model repeatedly, finding each time there was significant income inequality and a shift in wealth distribution, with extreme concentration in the hands of the 0.1% wealthiest share of society. Arguing that “poor people don’t deserve housing because that’s just how things are” is an insane apathetic take that lacks any semblance of social analysis. I wouldn’t expect more from an anarcho-capitalist who advocated for a ‘genocide of leftists’ to prevent social ostracism.
[7:32] “He’s expecting a return on investment”
This doesn’t warrant exploiting this necessity. The only times when this is remotely okay would be renting an available unit for below market price or at a break-even point. Housing is one of the most secure investments and there’s remotely zero risk.
[7:39] “If the demand is higher and the equilibrium is set higher, then the prices need to be set higher, that’s simply reflective of normal market activity.”
Except it’s not really the case. The economy doesn’t work that way and non-profit housing, affordable housing mandates and coops destroy this argument: they drive down costs all around the city since market prices are not natural and add a massive upcharge. Supply and demand alone aren’t principles that operate on their own. There’s a myriad of other factors that influence housing cost. Newsflash Hampton, there’s no invisible hand that coordinates the free market.
He then spends the last few seconds mocking me for saying housing is a right, even though it is explicitly written in the declaration of human rights.
It is seriously draining as a Québécois where the ideological norm is closer to social-democracy and the welfare state, to watch working-class Americans defend the very system that keeps them from self-fulfillment, taking the same socio-economic positions as multi-billionaire oligarchs who decide on policies that harm them, such as the supremacy of the “free” market and deregulation of business. These people blame any economic downturn or problem on “government intervention” without a broader systemic analysis or context, a lot of the time the intervention in question like an affordable housing mandate is not sufficient and needs to be paired with other policies. Because they don’t see themselves as workers, rather as ‘temporarily humiliated millionaires’. They hope to all be part of this 0.1% one day instead of destroying it.
Be united against the system of oppression, support or join your local tenant union, fight for better services and more affordable housing.
[7:39] “It’s not just the threat of being outcompeted by the market that can make you incur risk, like natural disasters, damages by the tenants, having to adjust for an ever-expanding housing market, regulations that they may not be able to afford.”
Yeah, if you buy a house or an apartment building and expect
there not to be wear and tear due to people living in those spaces, and cannot
afford the costs of repair, then get a real job!
[9:07] “The rest of the video is him repeating himself, “ooooh housing
is a right”
sybau
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