Gold Toilets, Wrecking Balls, and Affordable Housing
How “luxury housing” actually reduces rents for poor people.
Many individuals question whether the housing affordability crisis in the U.S. and other countries really is caused, at root, by a shortage of homes. This skepticism defies the observable reality of long waiting lines to view apartments in New York City and 300-plus people bookmarking a new home in Fairfax County, Virginia near DC a day after it has been listed online (ask me how I know). Critics view YIMBYs and other housing supply advocates as either useful fools or rotten liars. How can we possibly believe that market rate (unsubsidized) housing or even “luxury” apartments or condos make housing more affordable for the poorest of the poor?
I could question the premise, since “luxury” as a real estate term appears to be pure marketing. New market rate housing is inherently expensive, relative to the equivalent home (same location, etc.) that is not new. Below is a photo a fellow DC-area YIMBY took of “Affordable Luxury Apartments” under construction. But let us imagine a luxury condo building with gold toilets. Only the wealthiest of the wealthy could live there, sipping Acqua Panna and spelling crudités correctly without having to look it up. Adding such luxurious homes to a local housing stock, dear reader, would take pressure off the economic drivers of homelessness. Allow me to explain.
Ask yourself, where did the people now sitting on gold toilets live before? Probably in less expensive homes, right? After all, we are talking about the nicest condos and apartments imaginable. One living room (obviously there are a few in each unit) has a fountain with those peeing boy statues. Donald Trump is a poor person’s idea of a rich person. The people living in our imaginary building are a rich person’s idea of a rich person.
To fully understand how our building impacts the housing market, we must add a final element to the thought experiment: Demolishing our building. The gold toilets would be melted down for fixtures in the new structure, perhaps the world’s largest Hermès store. Our residents, assuming they chose to maintain a home in the same area, would move to other, less expensive homes. They would outbid or buy out marginally less wealthy residents. And those folks who were, in the most benign sense of the word, displaced would similarly move to other, marginally less exclusive homes and neighborhoods. This basic dynamic would ripple through the local housing market. And in that way, a few more of the working poor might find they cannot quite keep up with this year’s rent increase.
The term “filtering” was coined to describe how even new high-end homes relieve pressure on the low-cost end of the housing market. Critics derisively call this “trickle down housing policy,” but under the status quo too much money is chasing too few homes, and that demand is trickling down, squeezing the most socioeconomically vulnerable individuals and families, sometimes out onto the street.
I founded a grassroots pro-housing group called YIMBYs of Northern Virginia. A member of my team and I were invited the Tuesday before Thanksgiving to tour a homeless shelter in Alexandria, the city where I live. The staff member who gave the tour was excited to meet us. She saw a direct connection between our work trying to dismantle systemically discriminatory zoning and land use rules, and the families she helps back onto their feet, into permanent, stable housing. She has seen an increase of folks in our area without homes in recent years, not only because the COVID-19 eviction moratorium ended, but also because rents keep rising.
There is an unforgiving, all too real relationship between low apartment vacancy rates, high rents, and the crisis of homelessness in American cities. New homes with gold toilets will obviously not solve the problems in our housing market, yet they would actually help. The current situation is that bad. We must think big about ending the housing shortage, and focus on new ways to say yes to housing in our backyard. Rejecting housing that does not fit a preconceived ideal is a luxury no one should be entitled to.
