Socialize All Housing
· Jacobin
In 1872, the German socialist newspaper Der Volksstaat ran a series of articles on housing. The breakneck growth of industrial cities had brought overcrowding, squalor, and soaring rents for workers. Their author, Arthur Mülberger, drawing on the ideas of the French anarchist Pierre-Joseph Proudhon, offered a simple solution — tenants should become owners.In the scheme, rental payments would be transformed into something like a mortgage payment. Eventually, every worker would hold the title to their own home.Friedrich Engels was unimpressed. In a series of replies later collected as The Housing Question, the cofounder of Marxism dismissed Mülberger’s plan as both impractical and political malpractice. Elsewhere in the same work, criticizing the reformer Emil Sax, he warned: “Give them their own houses, chain them once again to the soil and you break their power of resistance to the wage cutting of the factory owners.” For Engels, the answers to the housing question would only be made possible through the abolition of the capitalist mode of production.A century and a half later, the Left is still battling over housing. In a certain populist sense, Mülberger won the argument with Engels. Across the world, homeownership has become a defining ambition of working-class life, and the housing crisis is often framed as a crisis of access to it.Meanwhile, much of the debate on the Left today is framed as a fight between YIMBYs and NIMBYs. One divide is between those who seek to impede market-rate construction, arguing that it can fuel displacement and offers too little to low-income renters, and those who support construction with fewer caveats to boost supply and the bargaining power of renters along with it. We can all agree on building social housing, but so far that hasn’t materialized into a program on the scale of the crisis.However, it’s worth stepping back from these fights and asking what ultimate vision we are fighting for. In what follows, we set aside the thorny problems of transition — how we get from here to there and who will fight for it — and sketch out a maximalist vision of socialist housing.Our answer builds on Engels’s critique of Mülberger while putting aside his reluctance to offer details about the possible shape of a socialist future. We advocate the abolition of private ownership of housing and a fully socialized housing system.A Blueprint for Socialized HousingA home of your own — one you can shape to your tastes and needs, and that you feel secure in — is a genuine good worth preserving. But capitalist homeownership binds together choices about your home with choices about finance and wealth that inevitably come with risks, and the dynamics of the housing market are prone to generate arbitrary inequalities.In a socialist economy, we could preserve that security and freedom while socializing the financial risks and gains of housing. Engels warned that “to speculate as to how a future society would organize the distribution of food and dwellings leads directly to utopia.” But given the “capitalist realism” we seem stuck in today, we think the effort is worth it.In a capitalist society, housing inequality is more than a symptom of broader income and wealth inequality. Homes are both places to live in and vehicles of wealth. In fact, owner-occupied housing alone accounts for about half of gross household wealth in most of the twenty-nine Organisation for Economic Co-operation and Development (OECD) countries covered in a 2022 study. Individuals often hold business wealth through shares, investment funds, and pensions, but they tend to own dwellings directly, whether they live in them or rent them to others as a landlord. Housing wealth is very unevenly distributed, but owning a home is a widespread experience and ambition, and the fact that it is such a personal form of wealth for owner-occupiers complicates the politics of inequality in contemporary capitalism. Housing makes up most middle-class assets in most OECD countries, and accumulating that wealth is often a lifetime project involving paying off a mortgage over many years.Many of the features that make housing unusual as a consumer need would persist under socialism, so it calls for special consideration. Housing stock is expensive to produce and very long-lasting if maintained. It occupies space in particular locations. People care about where they live — in terms both of their home’s position relative to other places that matter to them and of the character of the natural and built environment around it. There is an ineradicable element of scarcity to desirable locations. A given patch of land can be used more or less densely, modifying the supply of dwellings in an area, but density and type of housing are themselves aspects of a location that people care about.Households deciding whether to meet their housing needs by renting or by taking out a mortgage can compare expected interest, maintenance, tax, and insurance costs, along with transaction costs and the opportunity cost of the money tied up in the home, with the rent on an equivalent property. Some households may be willing to pay a premium for the security of ownership and the freedom of renovating; on the other hand, the illiquidity and risks of ownership may lead others to prefer to rent. For some, there is no choice: since mortgage borrowing generally requires a deposit and the lender’s confidence in the borrower’s ability to repay, many of those on low or insecure incomes are unable to finance a purchase.Then there are capital gains. Even gains driven by rising incomes and population can be arbitrary — windfalls unrelated to anything the homeowner has done. Such gains can widen a wealth gap between homeowners (and their descendants) who got in early and those stuck renting or only “getting on the property ladder” later in life.There are a number of ways a socialist society might structure the provision of housing. We suggest a simple approach. In our model, the land and housing stock are publicly owned, but households have secure tenure in the dwelling they live in and the capacity to renovate to their taste. People make regular rental payments for housing, rather than being involved in a financial relationship paying off a large asset purchase over decades. Households take neither the property-price risks nor the capital gains that come with ownership — these are socialized — while the system aims to preserve the security and freedom of a place to call their own.Rents are set by a housing authority, generally aiming to match demand to supply. A household’s rent may shift over time according to changes in supply and demand for dwellings that are similar in location and type. In other words, rents adjust in response to market conditions and are not simply set forever at the beginning of tenure, though movements can be smoothed to avoid sudden shifts. The housing authority is tasked with developing supply in response to projected demand, so that significant general increases in rent would be considered a policy failure to be remedied. Urban planning and development are in public hands and engage worker-managed construction firms to do the building.This system aims to allow each household to make its own housing choices, each bearing the appropriate cost, within a wider system of guaranteed minimum incomes and needs-based transfers that support those who could not otherwise afford adequate housing. Some may prefer a modest apartment so as to have more to spend on other things, while others put more of their budget into spacious villas. Many people will make different choices at different stages of life. The system can accommodate experiments in self-managed collective living for those who want it — as well as handling the traditional family home.Residents are custodians rather than full owners of their homes, but they can use and adapt them to their needs within agreed rules. They can initiate renovations in partnership with the housing authority or its associated bank. Instead of paying up front, the costs of renovations are factored into rents and paid over time. Because maintenance costs and depreciation are already baked into the rent of all dwellings, each comes with a budget and schedule for renovations. Households only need to pay extra for modifications that are idiosyncratic or costlier than the standard.The housing authority could adjust the pace of renovation to help smooth activity for the construction sector, which is notoriously cyclical in capitalism. If a lot of new construction is going on, renovation can be made temporarily more expensive or limited with a waiting list. When new construction slows, this can be reversed. The pace of renovation can also potentially be varied to help with macroeconomic stabilization beyond the sector.Because capitalist housing markets are riddled with externalities, housing is an excellent place to reduce the role of markets and open up a considerable role for public planning. Our model of socialist housing aims to accommodate the diversity of household preferences and needs and preserve the central features of “a home of one’s own” — without the individual property-price risks and windfalls that come with the capitalist model of ownership. A century and a half after Engels, that remains the answer to the housing question.This article originally appeared in Jacobin, a democratic socialist magazine publishing long-form essays and analysis on politics, economics, and culture. Subscribe to the print edition for $20 a year.
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