Public Housing Reimagined

 Our poor history with public housing does not have to be repeated. There are several good, new ideas on making public housing work.

But where this model may already most clearly demonstrate the government’s power to increase housing supply is in Montgomery County, Maryland — a suburb just outside Washington, DC. The local public housing authority there is on track to build nearly 9,000 new publicly owned mixed-income apartments over the coming years, by leveraging relatively small amounts of public money to create a revolving fund that can finance short-term construction costs.

“What I like about what we’re doing is all we have effectively done is commandeered the private American real estate model,” said Zachary Marks, the chief real estate officer for Montgomery County’s housing authority. “We’re replacing the investor dudes from Wall Street, the big money from Dallas.”

 the public sector can start with acknowledging they have the tools and resources that make it easier to build even in weak economic periods, plus no voracious investor to satisfy at the end of a project. Governments could even step in now to buy half-finished housing from companies that suddenly find themselves unable to make their financing math work.

Andrew Friedson, a Montgomery County councilmember who has been leading efforts in Maryland to address his region’s housing shortage, told Vox he’s been supporting the public development idea because “there is now much broader recognition and understanding” that governments have to be more aggressive. “The status quo and even marginal improvements are not going to come anywhere close to meeting the need,” he said.

Paul Williams, the founder and director of the Center for Public Enterprise, a recently launched think tank, has been leading efforts to promote the idea of state and local public housing developers.

It’s not an immediate fix — “getting out of this mess will take no less than 20 years,” he wrote in an essay last August on solving the housing crisis — but it’s one of the only viable solutions he sees.

But despite these NIMBY attitudes, some local policymakers are beginning to recognize their own self-interest in stepping up on housing development, capitalizing on tools and public ownership that can create value and be reinvested into the community.

“Both because we don’t have to meet the private sector return requirements, and because it’s much easier to set policy on things that you own, all of that [revenue] just gets poured back into overall housing production and operation,” said Marks, of Montgomery County. “A lot of the time I’m talking to people about the short-term benefits [of our development model], but frankly the biggest benefit is that value that we’re creating very slowly over 20 years, so that the people sitting in my chair in two or three decades will have a ton of resources that can be realizable by them then, to continue the mission.”

Stanley Chang, a state senator in Hawaii who has been leading efforts in his state to promote social housing, says he spent a lot of time visiting places like Vienna and Singapore to understand regions that actually solved their housing shortages. “I’m not arguing we should copy-and-paste but I do think we should learn the lessons from these places,” Chang said.

Kallman, the Rhode Island state senator, says she doesn’t view her proposed public developer bill as a revenue generator for the state, though she acknowledges it could indeed turn out to be one. “For me this is primarily about the state stepping up,” she said. “To solve a housing problem that is affecting huge numbers of people.”