People’s Houses

This article originally appeared in Southern Exposure Vol. 8 No. 1, "Building South." Find more from that issue here.

Decent housing is a right. Decent housing is a necessity. These ideals have resounded in government rhetoric since the New Deal.

But public policy and our economic system have belied the rhetoric, denied our ability to provide good shelter for everybody. Decent housing at affordable cost is not a right, but a privilege, ever available to fewer and fewer people. 

While housing expresses needs and social and aesthetic values, it is also a commodity, an object for making profit. Our housing failures are built into a framework which supports the economic ideal of profit over the social ideal of equity. Housing as commodity leaves many out in the cold, many others caught in a hopeless cycle of paying more and more for less and less, and a few raking in the dollars. Government policy and the lenders, developers, realtors and other members of the homebuilding industry it sustains, are the two foundation piers which support the system. 

Elsewhere in this journal, articles on the Jim Walter Corporation, mobile homes and Fairfield Communities, Inc., provide information on the powerful forces that shape established Southern homebuilding. Additionally, the research section beginning on page 101 shows some of the characteristics of Southern housing — the homes we have, the homes we need, the homes being built today. 

In this section, we present three attempts to change the shelter system: in Appalachia’s coalfields, in rural South Georgia and in Savannah’s inner city. We hope that the directory of housing groups will aid individuals and organizations trying to take control of their own housing. 

Finally, a list of proposals suggests where we should go from here. That list does not attempt to describe a complete program for change, nor to offer details and implementation plans. Rather, in this limited space, we present suggestions which range from a complete overhaul of our housing system to changes which are quite feasible under present conditions. The list’s unifying theme: reconstruction is long overdue in American housing. 

A number of people contributed their ideas, especially Wallace Kaufman of Heartwood Realty in Carrboro, North Carolina; Chester Hartman, presently teaching at the University of North Carolina School of Planning; the Appalachian Alliance; and Elizabeth Chase, who coordinated the housing section. Elizabeth heads the Tennessee Valley Authority Architectural Design Branch’s Solar Group. She has been involved in housing research and design for many years. 



·      Take housing out of the market to reduce costs and de-commodify it: Tinkering with housing’s debt financing system has only created more inflation and shortages. Using the economic model of public housing, we could build houses by capital grants instead of mortgage credit. Replacing the mortgage system would do away with the constant and escalating repayment of ongoing costs due to resales and remortgaging, and could cut ongoing costs by half. Housing would change from a commodity to a social good which people could use and occupy as long as they wished, but not own, buy or sell for a profit. Public housing can work, as some scattered-site and cluster developments, recycled structures and small projects for the elderly have shown. Public housing’s much-publicized failures derive not from its concept but from several avoidable factors: patronizing, authoritarian management instead of resident/community control; insufficient funds to build and maintain units; and oppresive design. These experiences, as well as our past failure in using large amounts of public money through the private sector (like Medicare) should teach us how to use housing funds in a socially useful way. (See “Housing: A Radical Alternative,” by C. Hartman and M. Stone, in The Federal Budget and Social Reconstruction, Marcus G. Raskin, ed.)


·      Redirect subsidies: The bulk of existing subsidies go not to lowerincome families who need assistance most but to middle- and upper-income families in the form of tax deductions. Direct assistance for low-income housing amounts to $4.4 billion of the 1980 federal budget, while tax breaks for homeowners are estimated at $16 billion. 

Homeowner tax deductions favor the affluent. Households with incomes under $20,000 (which comprise threequarters of all households) receive less combined homeownership tax deductions than households with incomes over $50,000 (two percent of all households). Tax-exempt bond financing, real estate tax shelters and capital gains incentives feed the inflation and speculation that have caused houses to be sold once every eight years on average. 

Direct assistance programs, established to help lower-income homeowners, fail to get the job done, too. Between 1970 and 1975 the portion of Farmers Home Administration (FmHA) 502 loans that went to rural families with incomes under $6,000 dropped from 49 to seven percent. Housing subsidies must go to the people who require them instead of propping up the real estate industry. Of our current subsidy system, researcher Cushing Dolbeare says, “If the purpose is to provide housing for those who need it most, we could hardly devise a less effective or more expensive method.”


·      Encourage housing cooperatives: This form of ownership, common in well-to-do urban apartment areas and resort regions, could be adapted by lower-income people to pool resources and management expenses — and help prevent programs like housing allowances from simply lining landlords’ pockets. Housing co-ops should avail themselves of the new Consumers Co-op Bank (recently created by Congress) and should lobby to end the speculation that has caused subsidized homes built for poor and workingpeople to be sold into markets defined by more affluent buyers. In addition to the Co-op Bank, more preferential construction loans should be made to cooperative developments that mix economic levels and shelter types instead of encouraging the enclave-like islands for the elderly spawned by Section 8 funding.

·      Drastically increase federal housing assistance to rural areas: The proportion of rural housing that needs upgrading is far greater than that in the cities, but most funds go to urban areas. Nearly 60 percent of the country’s inadequate housing is in rural areas, but in the 20 years following World War II, 37 houses were built with federal help in the cities for every one in rural areas. The imbalance continues, especially in the South, where agribusiness, tourism and extractive industries have stripped much of the countryside’s residential character; the substandard homes that remain constitute 63 percent of rural America’s poor housing. Any discussion of energy, farm or housing policy must speak to the issues of how and where to house the rural people who still produce coal, gas, oil, food, timber and other critical resources.

·      Get the land: One primary housing problem is getting the land to build on. Major portions of Appalachia and the Deep South are controlled by the federal government or coal, timber and railroad companies (and underassessed for tax purposes). These ownership patterns literally leave people without a place to live. Cities have been segregated by function just as neighborhoods are by age, race and class. Inner-city spaces cleared by tearing down lower-income neighborhoods sprout structures for commerce, government, “culture” and industry but rarely for living, least of all for poor and working people (see Portman article on page 77). Black people’s disastrous land loss in the rural South has been matched by urban renewal programs which multiply housing shortages and the number of blacks who own no property (see Research Section). In all areas, land costs are rising far faster than the overall rate of inflation; between 1960 and 1975, the average price of a finished lot for single-family housing rose 275 percent. Suburban expansion, based on the assumption that energy will remain a free lunch, is not the answer. If strategically used, condemnation, equitable taxes and seizure can help people regain some rural and downtown land from corporations which have colonized it.

·      Use zoning and land use planning to assure people equal access to all parts of the community: Subdivisions can be regulated just as well for diversity of housing as for uniformity. Present zoning tends to put lots of certain sizes in self-contained neighborhoods, stratifying society and discouraging a mixture of housing types. Restrictions on the size of houses and lots are one of the clearest forms of economic discrimination. Savannah’s inner-city revitalization (see page 48) suggests how urban neighborhoods could be zoned and planned so that rehabilitation does not mean gentrification.

·      Revive rental housing and make it equitable: A National Landlord-Tenant Commission should be developed to regulate the nation’s rental housing stock. Modernizing feudal rental laws, establishing rent controls, and protecting and augmenting our supply of rental units should be some of the commission’s major work. In 1979,between 130,000 to 250,000 rental units were lost to an epidemic condominium conversion, raising rents and creating shortages that primarily affect older and poorer people. Congress should enact the national moratorium on condo conversions proposed by Representative Benjamin Rosenthal (HR5175, now stymied in the Ways and Means Committee.) The landlord-tenant commission, made up of builder and housing group representatives, should find alternatives to the conversion trend during this moratorium.

·      Housing desegregation goals of all federal agencies should be enforced consistently. Conflicting regulations favoring lending and real estate industries should be eliminated: All agencies of government and all public officials should support racial equality in housing choice. In the past, the policies of agencies like the Federal Home Loan Bank Board, the Federal Reserve Board, the Federal Deposit Insurance Corporation and the Federal Savings and Loan Insurance Corporation have undercut this goal. The Federal Housing Administration was formed on a program of racial bias in mortgage credit and neighborhood formation, including instructions on how to write restrictive covenants in the 1930s and ’40s. Even now on the local, regional and national levels, HUD officials are often hostile to desegregation and hostile to programs seeking to provide housing to lower-income people. Staffing regulatory agencies with real estate and banking representatives should be discontinued. One federal agency should be given the responsibility of insuring that each federal agency complies with housing desegregation goals.

·      Make building codes flexible, educative and truly protective: Building codes are intended to guarantee decent, safe shelter, but they often help push the cost of housing beyond reason. Intimately tied to lending and insurance requirements, codes express vast featherbedding by contractors and materials manufacturers. Housing groups have an obligation to master building design and technology, so that they, not trade associations, influence the codes. At their best, codes assure the safety of occupants and neighborhoods and regulate negligent landlords and developers. To become more protective, code enforcement should: 

Subsidize repairs. Code grant programs could help owner-occupants and renters bring their homes up to code and keep them there. Rental housing grants should be made through tenant associations or non-profit community groups, not landlords, and shouldrestrict rent hikes following the rehab work. 

Educate. When possible people should be involved in the repair of their own homes. Building inspectors should be supplemented with a “building facilitator” program. The facilitators would be familiar with both conventional and alternative methods and materials and would advise all interested builders. They would be resources, not regulators. 

Encourage diversity. Instead of guaranteeing a building’s suitability for resale or repossession, the codes could help discourage speculation. One step would be to erect a special category for owner-built homes that allows owner-builders to assume responsibility for their choices, providing they don’t physically endanger the surrounding community.

·      Decentralize the industry: Shortages and other housing problems result not from the purported “inefficiency” of small-scale production, but from the economic system that governs homebuilding. Corporate concentration must not be allowed to alter the scale, ownership and products of homebuilding as it has already affected agriculture. Small builders must not go the way of small farmers. Besides altering government’s role as subsidizer and builder, we should change its regulatory agenda. Multiregional operations like Jim Walter and U.S. Home should receive careful attention from local building inspectors and the Federal Trade Commission. Existing oligopolies in building materials should be broken up, not slapped on the wrist, for decades of fixing prices and withholding supplies. 

Public subsidies should favor unions, builders co-ops and individual or collective self-help efforts which develop housing without involving entrepreneurs. Such groups can bypass Lowes, Georgia-Pacific and other corporations by using indigenous materials and traditional forms that work better than the Sweet catalog and Minimum Property Standards. Non-profit groups like Housing Design Research (P.O. Box 116, Brunswick, ME 04011) have successfully organized FmHA clients and pressured the agency into accepting design standard changes that reflect local needs and resources. Materials-buying co-ops could institutionalize similar changes by supporting existing local sawmills, brickyards and other primary suppliers.

·      Establish non-profit realty services similar to legal aid: Transfer costs take up 10 percent of a home’s selling price, and the bulk of that goes to brokerage commissions. In 1978, real estate commissions totaled $15 billion, more than all lawyers’ and investment brokers’ fees put together. Much of the profit comes from monopolistic uses of MLS, the Multiple Listing Services which underpin real estate practices. After numerous anti-trust actions, the Supreme Court recently ruled that brokers can be sued for price fixing through the MLS. 

However, if current trends continue, the listings may be outmoded: big business is moving into realty, and the wealthiest brokers are becoming big business themselves. Century 21 represents the movement to draw real estate agencies into national chains in much the same way that McDonald’s franchised restaurants. The neighborhood professionals now have 7,500 franchises nationwide and expect over the next eight years to buy or sell the equivalent of one home for each person between 18 and 49. Sears owns part of real estate giant Coldwell Banker, Equitable Life and Transamerica have also set up realty operations, and Transworld Corp. (owners of TWA and Hilton Hotels) bought Century 21 for $90 million in November, 1979. 

“Community homefinder offices,” similar to the current California model, provide an alternative to real estate monopolies. A small number of homefinders could match buyers and sellers and maintain listings at minimal cost, opening up new ways to use the abundant, non-productive talent and money that gets poured into brokering. (For more information, contact: Myron Moskovitz, California Housing and CD Commission, 2317 Eunice St., Berkeley, CA 94708.)

·      Change the banks’ role: The best way to change banks’ role in housing would be to eliminate it. Until then, housing advocates can work towards shaking up the lenders’ design and income criteria and investment policies. 

For example, when banks apply their formulas to determine the ratio between income and safe borrowing limit, they leave out important considerations and discriminate against the buyers of small, efficient houses. Banks should credit owners’ incomes for energy-saving and low-maintenance homes even though the money doesn’t show up on their paychecks. 

Also, when lenders send around their regular notices of mortgage money and criteria, many mortgage pools come with restrictions on house size attached. Anti-redlining laws (like Michigan’s) should outlaw this form of discrimination against building or buying homes below a certain minimum size. The banks’ spurious insistence on three bedrooms, standard baths, central heat and all the other features that create monotonous, wasteful houses must be challenged. 

Most importantly, disinvestment must end now. For decades banks in rural Appalachia and redlined urban neighborhoods have invested deposits made by local people elsewhere. The new Community Reinvestment Act obbliges banks to meet the credit needs of their own communities. Vigorous use of the CRA by housing groups and enforcement of it by the government could revive homebuilding in areas where banks have kept it suppressed. (For more on CRA, contact the Center for Community Change, 1000 Wisconsin Ave. NW, Washington, DC 20007).

·      Organize: Organize local activist groups. Unless communities organize to make their needs felt they are at the mercy of existing powers. Planning, design and construction are too important to be left solely to professionals; they must be community controlled. Displacement, redlining, disinvestment and underassessment of dominant industries can be stopped if communities come together. New housing, rehabilitation and controlled development can be started. 

Link local activist groups together. Housing groups must learn from and support each other. They also can make more imaginative alliances with builders, designers and people involved in other social, economic and energy issues. 

Organize and participate in national advocacy groups. Local organizing and networking is crucial, but much policy is made in Washington, so housing groups must be heard there through voices like Rural America, the Housing Assistance Council and the Low-Income Housing Coalition.