Housing and urban development
The financier Ponzi-scheme economy demands that we bring in ever-increasing numbers of immigrants (our native-born population does not reproduce itself, much less grow) and have rich developers produce housing for the increased bodies. But, in general, the housing is not built for the immigrants if they are poor. It is built for higher-income, higher-wealth citizens, who move out of older housing that goes to the immigrants. The new housing is built by rich developers in essentially unplanned developments that spread like cancers around our urban centers, without thought for transportation or other public infrastructure. But now that housing has become generally unaffordable in much of the country due to multiple actions of the parasitic financiers, we don’t have so many middle-class families moving out of their rentals and into new homes. Despite the low interest rates since 2008, housing completions dropped. Private equity buyers and foreign investors started buying up rental units and jacking up rates. With demand exceeding supply, developers and landlords made fat profits.
The fact that our financier-controlled economy was not allowing working people to keep up with housing prices should not be surprising if you look at the statistics over time. The numbers show a clear deterioration in the working-people’s economy, despite the media telling us that we are just imagining that decay. Let’s look at how our economy did in the 175 months before the financial crisis started in September 2007 (that is, between January 1993 and August 2007) versus the 175 months after that time (September 2007 through April 2022). During this more recent period, the government had the stimulus gas pedal to the floor the whole time. Nonetheless, new housing completions in the earlier period averaged 1,570,000 units per year versus 1,000,000 more recently. The 12 month weighted median wage growth percentage was 4.56% versus 3.17%. The Industrial Production Index increased 37.31 points, from 64.63 to 101.94, versus 0.86 points from 101.94 to 102.80. Real median personal income increased by $7,270 (25%) versus $4,110 (11.3%). Real per capita GDP increased by $14,820 (36.3%) versus $9,478 (17%). The labor force participation rate averaged 66.6% versus 63.4%. Wages as a percent of GDP dropped from 44.4% in 2007 to 43.7% in Q1 2022, meaning that the share of production going to the producer class rather than the capital class fell. The ratio of total mean family household income, including capital income, for the top 10% versus the middle 20% went from 5.5 in 1992 to 8.4 in 2007 and 10.1 in 2022. Across the board, thehttps://www.propublica.org/article/when-private-equity-becomes-your-landlordn, our economy has been getting worse, despite the prior period including the 2001 recession, and it has especially been getting worse for ordinary working people. And this wasn’t a COVID issue. You can see a little COVID blip in some of the lines, but it did not alter the underlying trends.
The average amount of mortgage debt per household did not increase significantly between September of 2007 and April of 2022 for households in the income brackets below the 1%, which seems to indicate that for most of us our ability to take on more mortgage debt from for-profit lenders is limited even at low interest rates. Nonetheless, the US median home price skyrocketed, becoming unaffordable to a median family. Private Equity firms bought up distressed housing in the Great Recession, and began a strategy of trying to corner the rental housing market. Institutions owned an estimated 5% of single-family rentals in 2022, projected to rise to 40% by 2030. As young families are priced out of the market because they can’t cover the down payment, they become a renter class that PE can squeeze.
As with everything in the financier economy, housing construction is not driven by what working people need, but instead responds to what makes money for the financiers. In housing, the difference between those two things has been increasing, and working people are suffering because of it. Laborism will help with that.
Laborism will give no-interest loans to fund the construction of housing that working people need in the locations where they need it. As discussed in the overview, this kind of funding will not generate inflation. To the contrary, by balancing supply with demand it will decrease housing inflation. If you are an existing homeowner, that means the price of your home won’t rise as much, but so what? As long as you are living in your house, having its price inflate just means you pay higher insurance premiums and real estate taxes and have a higher insurance deductible. Having the value stay stable is fine. Meanwhile, younger families will be able to buy homes or afford rent.
This will allow us to correct several things where the financier economy fails. For one, with climate change many pricey areas of the country will become increasingly unlivable. Hurricanes, fires, floods, and rising sea levels will make insurance and rebuilding unaffordable, while falling aquifers will make some areas uninhabitable. We need to start adjusting for that. Laborist housing policy will make it easier to relocate our population to more stable areas and will encourage employers to relocate the jobs to match the people, instead of having jobs move to escape unions.
For another, we will be able to start moving towards communities that are designed for living rather than for developer profits. I have lived in a city neighborhood built in the early 1900s and in a railroad suburb of Chicago built around the same time. In both, the houses are nicely spaced with good yards, but you can easily walk to shops (including a hardware store and drug store and a grocery store or convenience store) and restaurants and banks, to parks and playgrounds and schools and the library and a bandstand with free concerts. Further, you are within a short walking distance of good, safe transit that will take you to the city downtown. That is how people are meant to live, and it is how we used to build our communities. After World War II there was a lot of discussion about community design, but actual suburban communities were built by rich developers in ways that generally ignored any of those principles. We got suburbs where you can’t walk to anything and the stores and restaurants are all big chains with big parking lots, and the jobs are somewhere 30 minutes to 90 minutes away and you have to drive. Laborism will seek to bring communities back to serve human needs rather than developer profits. When a new community is built it will have a humane, walkable design and will have jobs in the community or close at hand or a train ride away. When an older community is restored, it will be pushed in the direction of retrofitting it to a humane design.
The houses and apartments will also be designed for human needs rather than developer profits. Houses built between about 1880 and 1940 were commonly designed by competent architects. Many were built from good reused plans. Our 1897 house in Wheaton was built to a plan sold by Sears Roebuck. The house two down from ours was built to that same plan, but with the different finishes and such applied to that plan you would never realize that unless you were actively looking for it. Houses in that period used quality materials, even when they were smaller, inexpensive houses in little Midwestern towns. They were built to let every homeowner feel a sense of pride, and they were built to last. The people who built them were trained craftsmen who really knew their stuff and took pride in their work. After WWII, developers stopped using architects and starting using “designers” who created or followed fads that weren’t designed for practical living. We got houses with a family room that people use plus a formal living room that you put expensive formal furniture in and rarely even visit, and then added media rooms and great rooms and closets the size of your garage and giant bathrooms with fancy tubs that are rarely used and so on. The finishes are consciously intended to be faddish and fall out of fashion within 10 years, so that homeowners will want to spend a small fortune “updating” their house or will want to buy a new one. The builders use workers who have no real training, no real blueprints, and no incentive1 to do quality work, and they work with low-quality materials imported from China. If you don’t replace things they fall apart. Apartments have semi-fancy kitchens but otherwise are basically featureless spaces so that the landlord can easily repaint or recarpet at minimum cost, and they are full of fumes from toxic materials. The recent LA fires were bad partly because modern houses are built with so much chemical-laden junk that they emit flammable fumes when they are exposed to heat, and explode into flame.
Laborist housing will use thoughtful, practical plans that real working people actually want. It will be built with attractive, safe, long-lasting materials in timeless designs. It will be built by properly-trained and skilled craftspeople who earn a good living.
Laborist housing will co-exist with the fully private housing market, so if you really want a modern McMansion with the latest trendy rooms and countertops and bathrooms and so on, you will be 100% free to buy one. But if you want to live in the kind of highly livable, non-toxic, low-maintenance, attractive house or apartment that the financier market doesn’t offer today, you will also be able to choose that instead. Because laborism believes in markets, laborist policy does not take away choices. Instead, it adds choices that the profit-maximizer economy does not offer, choices developed to serve the actual needs and desires of real working people. The free market only serves working people if they are given choices that match their needs and wants. If, instead, the choices are all designed to maximize the profits of the financiers, the consumer market is unable to reward good products and punish bad ones. Anyone who has done house hunting in recent years knows how hard it is to find anything good, despite the outrageous prices, and if you do spot something good it is subject to a bidding war and sells in a weekend. There are few good choices because the market has been controlled by the desires of the financiers for decades and so has failed. Laborism will fix that market failure.
As to America’s homeless population, laborism will admit that the homeless really represent four different groups, though they overlap. First are the true economic homeless, people who can’t find a job that pays enough to afford rent and who don’t have family or friends willing or able to help them with housing. This group will benefit from laborist economic policies, including restoring the minimum wage to its 1968 real value, and the laborist housing construction discussed above. They will further benefit from laborism’s guarantee of employment for all citizens who want to work. We have lots of work that someone could do. If you need a job and either are or are in danger of becoming homeless, a laborist government will connect you with work, either for a private employer or for a government public improvement project, similar to the Roosevelt era Civilian Conservation Corps. The jobs may not be in your current location, but the government will get you there and will arrange suitable housing in the job location. This may be particularly useful for ex-convicts, who often have a hard time getting a private job until they can show a good track record of private employment. Having ex-convicts unable to find paying work is obviously unhelpful for their rehabilitation.2
Second are those who had to flee a bad home situation, including children of abusive or irresponsible parents and wives of abusive husbands. A laborist government will ensure that they are housed in a safe and welcoming manner where they can get full assistance with whatever accompanying problems they may have. Depending on the person’s situation and what will be most helpful for them, their new home may be in the same town or it may be in a different part of the country where they can get a fresh start.
Third are the drug addicts unable to function at a level where they can work and support themselves. A laborist government will dry them out, get them healthy and give them rehabilitation services, and usually will then relocate them for a fresh start. The single biggest factor in addicts relapsing is being in the environment of their addiction. Being in a new, largely drug-free environment with a new job and new friends and a new lifestyle will boost their odds of recovery immeasurably. Laborist child policy and drug policy will substantially reduce the number of addicts being generated and the presence of hard drugs in society, again making it easier to stay clean.
Finally, there are the homeless who are mentally ill. America largely shut down its psychiatric facilities. The stated reason for that is that such facilities were awful, Bedlam-style places or lent themselves to abuse by staff in the manner of One Flew Over the Cuckoo’s Nest. In reality, politicians mostly just didn’t want to spend the money and preferred to dump patients on the street. Modern psychiatric drugs, while far from perfect, are often extremely helpful for the patients who reliably take them, giving them the ability to stay stable and connected with reality. Modern electronic surveillance gives us the ability to have a residential facility where interactions between patients and staff or other patients are under 24-7 observation, while still allowing both patients and staff privacy when they are alone. With monitoring by family, friends, and inspectors, this should make it relatively easy to prevent abuse of patients. Computers and videoconferencing make it easy for inpatients to be able to connect with family and friends and with the world at large, and to do office work if they have the ability. A laborist government would provide services for those who can successfully function as outpatients to live their lives as normally as possible, while those who can’t succeed as outpatients or who are a real danger to others would be given fully modern residential care in one of a range of facilities suitable to their particular needs and abilities. Nobody would be abandoned on the street to live in filth, cold, hunger and danger. Again, we are a rich society. We have 4 times the income we had in 1972. We can afford this basic level of human decency.
Laborism will also work to fix environmental injustice, meaning the lack of parks and greenery and the concentration of poisons and other bad things in low-income areas. As discussed above, laborism actually cares about children, cares enough to make sure that every child can play and grow up in a decent area. Through a combination of new housing and communities and retrofitting old neighborhoods with safe3 green spaces and low pollution levels and low indoor toxins, we will make that possible for our children. Much of the investment to do that can be done with the no-interest loans that are only workable under a laborist system and that don’t cost taxpayers a dime. Much of the improvement will come from other laborist child policies and laborist tax policy that uses market forces to improve our lives. Investment in new public parks and green spaces, on the other hand, will take tax dollars. Again, though, the government tells us that our real GDP is 4 times as high now as it was in 1972. As a society, can we be happy saying that we have 4 times the wealth we had in 1972, but we can’t afford to have parks and green spaces for our children? Laborism says no. Children will grow up safe, happy and healthy in laborist society.
To defeat the power of compound interest, we must use compound effort. Please subscribe (it’s free and I won’t send you any spam, just posts) and pledge to recruit at least 5 other people who each pledge to recruit at least 5 others. Recruit family, friends, co-workers, church members, union members, lodge members, people in your organizations, strangers. We can do this, but we each need to put in the effort.
Our first house was in a new development in a Dallas suburb and we contracted to buy it up front and then they built it to one of 5 designs. After the sheathing for the master bedroom wall was up we saw it had a hole in it about 18 inches across, and we told the builder to fix it. They told us the house wasn’t ours yet and the building process was none of our business, and they never did fix it. When a big area of our front lawn died we discovered they had sodded over a full-size piece of plywood. They had zero interest in quality control.
As explained in other posts, laborism will make a serious effort to divide offenders between foolish dolts who commit dumb crimes but can be rehabilitated and real evildoers, and to properly protect potential victims from the latter group. The non-evil offenders need to be given a proper chance to turn around and succeed.