On Thursday, September 15th, Dr. John Goering of Baruch College and the Graduate Center presented joint research done with Dr. Christine Whitehead of the London School of Economics. The presentation, titled Fiscal Austerity and Housing Inequality: US and UK from 2010 – 2026, takes a comparative approach to analyzing the causal relationship between austerity and housing inequality.
Dr. Goering’s presentation of the joint paper focused on the United States’ housing policy, using the United Kingdom policy framework to highlight policy difference. The comparison between the two countries is natural, as both countries introduced significant austerity policies in the wake of the 2008 global recession. The very conception of this research was born out of these austerity policies, as funding for another project was unexpectedly denied due to the funding cuts being enacted.
Surprisingly, not much is known about the impact of cutting funding to public housing programs. However, Goering makes a few observations in the wake of austerity policies. These policies hurt people living in poor communities, but can benefit more affluent communities, and welfare programs that are not cut provide enormous help to combat the negative impacts of austerity.
Several of these observations are mirrored by others. Shaun Edwards finds that austerity measures adopted at the federal level lead to a tightening at the state level that further exacerbates the impact on the most vulnerable citizens. While Paul Krugman takes a comprehensive look at how austerity policies have failed, in no uncertain terms, noting that “Since the global turn to austerity in 2010, every country that introduced significant austerity has seen its economy suffer, with the depth of the suffering closely related to the harshness of the austerity.” The consensus view is clear; austerity has not delivered the benefits its champions promised.
Austerity has not cut funding from all social programs equally. Funding for public housing was cut by $1.6 billion from 2010 to 2016, and these cuts occurred despite an increased need for housing support. Since 2003, Renters facing severe rent burden has increased steadily from 6.4 million to 9.7 million, making up 8.4% of all households. These numbers are projected to go even higher through 2025, as funding is projected to dwindle. This mismatch of supply and demand has led to closed waiting lists at public housing authorities, resulting increases in various forms of homelessness.
These disparities are even worse for people of color. There is still strong discrimination in the rental market, homeownership rates are much lower, and income inequality much higher – leaving people of color more vulnerable to the increasing cost of housing. Goering highlights a report which finds African Americans were quoted higher rents and security deposits or were told no apartments were available, compared to whites interacting with the same rental agent. Homeownership statistics display a similar picture with white homeownership rates and 72.9% and black rates at 43.3%. To address this disparities and increase the effectiveness of public housing, systemic, institutional changes are needed.
The presentation concluded by looking at the future landscape, highlighting potential policies that would improve this environment, and identifying potential pitfalls. Goering sees government assistance to the housing poor continuing to diminish both in the United States and the United Kingdom. In the case of continued income inequality and, hence, growing public frustration with government, it is likely increased government involvement will be shunned despite potential advantages. As governments enact further austerity policies and housing values further prop up rents, housing insecurity will rise and the numbers of the housing poor will increase. Additionally, the move to privatize the housing stock will increase, removing the few remaining public options for those in need. In the United States, homeownership will continue to be a strength and those that own will continue to benefit from a supportive tax code. In the United Kingdom, the shift from permanent, lifelong services will continue toward 5-year term limits targeting lower income households.
The presentation put forward two primary ideal policy responses. First, building on the success of tax credits by roughly tripling these allocations from the current $7 billion to around $15-25 billion. The second desired policy response is to add $30 billion a year dedicated to rental vouchers for the very poorest. The first policy designed to increase supply-side housing stock and the second targeting demand-side funding for the housing poor. Of course, these policies face several pitfalls in the current political environment. Goering notes that these policies face political headwinds. Funding increases for polices already on the “chopping block” are unlikely, let alone introducing new funding for vouchers. The continuation of austerity policies will keep pressure on the trend of increased housing poverty.
~ Ian Haberman
 – Edwards, Shaun. “The Downstream Effect of Fiscal Austerity.” Chicago Policy Review (Online) (2015).
 – Krugman, Paul. “The austerity delusion.” The Guardian, 29th April (2015).
 – Steffen, Barry L. “Worst case housing needs 2015: Report to Congress.” (Online) (2015).
 – Freiberg, Fred. “Racial Discrimination in Housing: Underrated and Overlooked.” Fair Housing Justice Center (Online) (2013).
 – Morial, Mark. “Locked Out: Education, Jobs & Justice.” 2016 State of Black America. National Urban League (Online) (2016).