As de Blasio Launches “Affordable Housing” Scam

Real Estate Barons Devour New York

Two years after New York City’s liberal Democrat Bill de Blasio rode his mantra of a “tale of two cities” into City Hall, low wages, rotten schools and racist cop terror are as much a daily fact of life as under his predecessor, billionaire Michael Bloomberg. Nothing looms as large on the index of misery as housing—for the tens of thousands without any; for the predominantly black and Latino families in the dilapidated, rat-infested projects; for those terrorized by landlords into abandoning apartments that have been home for decades; for nearly everyone else seeking a roof over their heads without mortgaging their first-born child.

With rents rising as fast as ugly glass towers, the most visible sign of the housing crisis is the swelling number of homeless. In the financial capital of U.S. imperialism, the official homeless population (those in shelters) reached a record 60,000 this summer—enough to overfill Yankee Stadium. Untold more sleep in the parks, streets, subways and, if lucky enough, their cars. It has long been a truism that thousands of workers are a missing paycheck away from the streets. Today, the ranks of the homeless include many holding one or more regular jobs. Among them are some 300 full-timers on the NYC payroll.

Enter the “affordable housing” plan de Blasio rolled out this summer. A New York Times editorial (11 August) lauding the effort proclaimed the “vital importance” of “saving a city of stable, integrated neighborhoods where people of ordinary means are permanently embedded.” This lofty vision has zero reality, as is clear from a look at NYC schools, which are among the most segregated in the country. The relief offered to hard-pressed working people by de Blasio’s housing scheme will prove just about as illusory.

The plan centers on “inclusionary zoning,” by which a portion of new housing is to be offered to low- and middle-income earners at below market rate. In fact, it’s a giant windfall for developers. Those who choose to build will be handsomely rewarded with tax breaks and other government subsidies. The developers previously raked it in under mogul-mayor Bloomberg’s own inclusionary zoning policy. And to what effect? Units deemed affordable made up less than 2 percent of housing growth between 2005 and 2013, less than population growth. In San Francisco, similar regulations have not stopped rents from even surpassing those in New York.

De Blasio has set a target of 25 to 30 percent of new housing in rezoned areas to have affordable rents. Affordable for whom? Not the poor, that’s for sure. Just 16,000 apartments for families making $42,000 and less would be created—3 percent of the actual need according to the city’s own figures. True, some thousands of new apartments might be built with rents pegged for families squeaking by on $50,000 or $60,000 a year. At the same time, 100,000 market-rate apartments would be built in the same neighborhoods, displacing more working-class people—black, white, Latino and Asian—and accelerating the drive toward ever higher rents. De Blasio’s plan would thus accelerate the process of driving workers from their homes, not least families concentrated in the ghettos and barrios. And the bodegas and car repair shops they rely on will be chewed up as well.

The program is to be launched in Brooklyn’s East New York, Cypress Hills and Ocean Hill, where a mere 132 new units out of 6,000 are supposed to be set aside for people making less than $25,000 a year. The ghetto and barrio poor, then, are to stay stuck in their hovels. And maybe not even there for much longer. De Blasio proposes to build luxury high-rises on New York City Housing Authority (NYCHA) parking lots and other “high value” land within housing projects. The purpose, supposedly, is to raise money to install working light bulbs, fix leaky roofs, replace gas-leaking stoves and supply heat in the winter. Brooklyn’s Wyckoff Heights and the Upper East Side Holmes Towers in Manhattan have been selected for this scam because they are in already gentrified neighborhoods where two-bedroom units go for $3,000 or more a month. Public housing residents rightly fear that they will be driven out.

Against those ostensible socialists who saw de Blasio’s election as a victory for workers and the oppressed, we told the truth: “The hopes he has aroused are bound to be cruelly dashed. Whatever posture he takes today and whatever palliatives he may dole out, de Blasio as mayor will be charged with managing the finance capital of U.S. imperialism on behalf of the Wall Street plutocrats and real estate barons who run the city” (“De Blasio: Liberal Populist Face of Capitalist Politics,” WV No. 1032, 18 October 2013). It is the labor misleaders’ support to the Democratic Party that is the chief political obstacle to the militant class struggle that workers must wage to wrest even the slightest improvements in their conditions.

As the local capitalist chief executive, de Blasio is overseeing a problem as old as the system of production for profit. Nearly 150 years ago, Karl Marx’s chief collaborator, Friedrich Engels, precisely described the housing problem as “a necessary product of the bourgeois social order...in which the great masses of the workers are exclusively dependent upon wages, that is to say, on the sum of foodstuffs necessary for their existence and for the propagation of their kind; in which improvements of the existing machinery continually throw masses of workers out of employment” (The Housing Question, 1872).

There is a simple way to overcome the housing crisis: make available the existing supply of livable quarters and build new places for people to live. But such a rational solution is held hostage to an economic system in which no ground is broken, no cement poured, no home occupied unless the pockets of the bankers, developers and landlords are stuffed. As Engels stressed, the housing shortage “can be abolished together with all its effects on health, etc., only if the whole social order from which it springs is fundamentally refashioned.”

Got a Million?

So, what does it cost to live in NYC these days? The erstwhile ghetto of Bedford-Stuyvesant in Brooklyn is among the most rapidly gentrifying areas of the city. Over the past year alone, the median price of a residence there has leaped $200,000 to nearly $750,000, which is still $100,000 less than in Harlem. Gentrification has even begun to spread to the South Bronx, long synonymous with urban decay. In a city where nearly 70 percent of residents rent, one-third pay more than half their income for that purpose. A minimum-wage worker spending half his income on rent would have to work 139 hours a week to afford the average apartment. Meanwhile, more than a quarter of a million households await space in a NYCHA project.

The current housing squeeze results from a confluence of factors. Government-engineered housing segregation and, in recent years, the lifting of rent regulation have exacerbated the problem, particularly but not only for minorities. But the primary factor driving housing prices to astronomical heights is rich people gobbling up bigger chunks of Manhattan and other prime locations. There is nothing new here. Starting in the middle of the 19th century, workers and the poor were pushed out of the centers of the major cities of Europe. Paris, where the bourgeoisie ripped down the plebeian quarters that were hotbeds of revolution, served as the model. Moreover, as Engels noted, “The growth of the big modern cities gives the land in certain areas, particularly in those which are centrally situated, an artificial and often colossally increasing value.”

In NYC, the Astors had their Fifth Avenue mansions and working stiffs had their tenements, and later some got subsidized housing. Today, the likes of the Astors are still there, while the people who actually make the city run are pushed farther and farther out, with transit workers, construction workers and others commuting from as far away as eastern Pennsylvania. With everybody but the filthy rich feeling the squeeze, Engels’ remark from his 1872 pamphlet resonates loudly today: “This housing shortage gets talked of so much only because it does not limit itself to the working class but has affected the petty bourgeoisie also.”

Towers of multimillion-dollar apartments continue to mushroom near Central Park, often as third or fourth homes for American and foreign big money. In lower Manhattan’s Tribeca, formerly a center of light industry, old warehouses have been converted to luxury lofts. It is such factors that drive home prices out of reach for everyone else, whatever zoning regulations or other tinkering is attempted. The cruel “magic” of the capitalist market is simply not subject to control by more benign spirits.

Buildings are kept empty because it is more profitable to hold onto them as investments to be sold when a neighborhood gentrifies. The neighborhoods hit hardest by gentrification also have the most vacant buildings. A study three years ago by the advocacy group Picture the Homeless estimated that the thousands of properties in the city that are kept vacant could house some 200,000 people. Blacks and Latinos make up more than 95 percent of the homeless families in the overcrowded, filthy city shelters, in neighborhoods far removed from their schools, medical providers and extended family. Thirty years ago, we raised the call: “Homeless should seize Trump City!” To that we would now add the Atlantic Yards of de Blasio crony Bruce Ratner.

There once were rent regulations that kept New York City somewhat affordable for those who qualified. Those measures essentially froze the rent of the original tenant and immediate family for apartments built before 1947 (rent control) and then limited rent increases for new tenants in those built before 1971 (rent stabilization). The city’s rulers had their reasons for adopting such policies. For example, a good deal of publicly subsidized housing was built after World War II to help relieve an acute shortage produced by the return of veterans.

At the same time that they decreed rent control, state lawmakers declared that the “objective of state policy” should be the “transition from regulation to a normal market of free bargaining between landlord and tenant.” This one-sided “bargaining” has since come to pass. The 1993 Rent Regulation Reform Act allowed the deregulation of rent-stabilized apartments, of which NYC still has one million. That number is falling quickly.

In many cases, landlords can free themselves from constraints and charge market rate once an apartment becomes vacant. If they fail to empty buildings by pricing or buying out renters, many of these bloodsuckers just make apartments uninhabitable. In a common example, Noelia Calero of Bushwick, Brooklyn, was told by her building’s new owners that they would paint and fix the bathroom, only to have the walls dividing her bathroom from the neighbor’s kitchen torn out, her walls and floor ripped open and toilet and bathroom sink removed. Her family was without running water for 18 months.

In another city of soaring rents, Seattle’s “socialist” councilwoman, Kshama Sawant, declares that rent control is “essential to address the existing power imbalance in which landlords and developers have all the control, just as a minimum wage is essential to defend workers from corporate executives who prefer to keep wages low” (Socialist Alternative, October 2015). We defend rent control and support increasing the minimum wage as measures that, however minimally, help working people and the poor to survive in this viciously class-divided, racist society. But contrary to the reformist Sawant, such measures are no more a solution to capitalist profiteering than a tourniquet is to a severed artery. The answer to the “power imbalance” between the exploiters and those they exploit and oppress is workers’ class struggle culminating in, as Engels wrote, “the abolition of the capitalist mode of production and the appropriation of all the means of life and labour by the working class itself.”

“Urban Renewal”: Black Removal

Today’s NYC building boom recalls the redevelopment of the late 1940s-60s, which led to the saying, “Urban renewal means Negro removal.” Along with state and local government policies, federal housing and development programs bulldozed black and integrated neighborhoods. More than a quarter million people were driven from their homes but only 150,000 units were built in the city. Pushed to designated corridors, black people were further compacted into overcrowded housing, while the scarcity of apartments drove up rents. The occupants of the public housing towers that were built were overwhelmingly black.

Robert Moses, the quintessential power broker behind such development projects, summarized his outlook years later by ranting, “How do you visualize the area that we cleared out for the Fordham [University] expansion downtown? They needed the space. Now I ask you, what was that neighborhood? It was a Puerto Rican slum.” Along with other members of the city planning commission, Moses opposed allowing black veterans returning from World War II to move into the newly built Stuyvesant Town development in Manhattan. One thing Moses did not build was a new stadium for the Brooklyn Dodgers, prompting a team that was beloved especially by the black population to decamp to Los Angeles.

The racial segregation that is built into the American capitalist system has long been reinforced by the government. The de Blasio administration is currently fighting a lawsuit by three black plaintiffs who are challenging a policy dating back to the 1980s that reserves half of city-funded, low-income apartments for people already resident in the community. That regulation all but barred them from moving into the neighborhoods of their choice, which are predominantly white.

During the Great Migration of black people from the South, cities and towns commonly adopted zoning codes designating neighborhoods as all-white and all-black; racist mobs worked to enforce the separation. The Home Owners Loan Corporation, created in 1933, and the Federal Housing Administration (FHA), which opened a year later, introduced redlining: demarcating white neighborhoods where black people could not get mortgages and vice versa. Ninety-eight percent of FHA-insured loans between 1934 and 1962 went to white borrowers, spurring them to move to new, suburban single-family homes. With FHA and Veterans Administration guarantees, white working-class and middle-class families could buy homes in places like Levittown on Long Island with little or no down payment and with an extended payment schedule.

The government had an explicit policy of not insuring suburban mortgages for blacks. A 1938 FHA manual encouraged officials to avoid the mixing of “inharmonious racial or nationality groups” and “the occupancy of properties except by the race for which they are intended.” After the war, banks often refused to approve loans for black soldiers attempting to use the GI Bill to buy homes. When a black family could afford a home in a white area without government assistance, the FHA would refuse to insure future mortgages in the neighborhood, even to whites, on the grounds that integration would supposedly result in lower property values.

The 1968 Fair Housing Act, passed in the wake of the ghetto rebellions that followed the assassination of Martin Luther King Jr., directed the government to “affirmatively further” fair housing. This promise rang as hollow as the one a century earlier about giving freed slaves 40 acres and a mule. A proposal to use federal funds to compel metropolitan areas to desegregate was deleted from the bill. When Housing and Urban Development (HUD) secretary George Romney ordered the agency to reject grants for cities and states fostering segregation, President Nixon slapped him down. Successive Democratic and Republican administrations stayed that course. Since Nixon, HUD has only twice withheld money from communities violating the Fair Housing Act, all the while sending grants to those promoting segregation. A senior HUD official under Bill Clinton observed, “People say integration has failed. It hasn’t failed because it’s never been tried.”

For Low-Cost, Quality, Integrated Housing!

Last June, the Supreme Court struck down the use of federal funds for a plan to build low-income housing in segregated black communities in Dallas, rejecting the city’s claim that this was a “race neutral” attempt to revitalize the areas. A couple of weeks later, Obama’s HUD announced rules requiring communities seeking housing grants to study patterns of segregation and their effect on access to jobs, quality schools and public transportation. Both the Supreme Court decision and the HUD directive are far from mandating housing integration. The Court ruling offered Dallas developers an out if they could demonstrate that the “revitalization” brought by their projects was as worthy an outcome as integration, while Obama’s plan calls for communities to either integrate or distribute services more evenly. These are but a pretense of putting a bit more equal in separate-but-equal.

In this country built on chattel slavery, separate never was and never will be equal. This basic understanding has driven the historic struggles of the black masses for full assimilation into American society with equal rights. Black oppression is integral to the maintenance of capitalist class rule, serving to divide the multiracial proletariat and weaken its struggles against the class enemy. The simple truth is that the American working class cannot advance its struggle against the capitalist exploiters without simultaneously taking up the fight against the racial oppression of black people.

The civil rights struggles of the 1950s and ’60s ran into a dead end because their leaders, exemplified by King, relied on the bourgeoisie, its courts and government in their attempts to achieve equality. The liberals’ betrayals of black aspirations were most clearly seen in the North, where demands for “open housing” and school integration ran up against entrenched black poverty and segregation. As we noted in “Revolutionary Marxists and the Fight for Black Freedom” (WV No. 930, 13 February 2009):

“The everyday conditions of life facing the mass of blacks—widespread and chronic unemployment, rat-infested slums, rampant police brutality—could not be eradicated by Congress passing another Civil Rights Act. What working-class and poor blacks hoped to achieve through the civil rights movement in the North would have required a radical restructuring of the American economy and a massive redistribution of wealth. And that the American ruling class was not going to do.”

Along with housing integration, busing programs to desegregate schools were defeated by racists in the streets and liberals in government. Now, decades later, the goal of integration is rarely even uttered by those claiming to fight for black rights.

Yet the need for quality, integrated housing and schools remains pressing. The decrepit, overcrowded housing and skyrocketing costs that have long defined conditions for the ghetto and barrio masses are increasingly the plight of working people more broadly. Any real struggle for livable homes must include the demand for low-rent, quality, integrated public housing. This demand must be linked to the struggle for jobs for all through a shorter workweek at no loss in pay, for public works programs to rebuild this country’s infrastructure, for massive pay hikes indexed to inflation.

These vital necessities demand an assault on the entire system of production for profit. The Spartacist League is dedicated to building the workers party necessary to lead the proletariat in the overthrow of the capitalist system. That party must advance the program of revolutionary integrationism: opposing every manifestation of racist discrimination and bigotry in order to arm the multiracial working class to carry out its duty to sweep away capitalist rule—the only road to black liberation. Workers’ rule will lay the ground for building an egalitarian socialist society, the only basis on which to achieve genuine equality.