Living affordability is a major and growing concern. Recent Census survey says about 44 percent and 41 percent of adult Latino and black renters, respectively, said they had no or slight confidence they could pay their rent next month

Living affordability is a major and growing concern. With rising unemployment, housing experts are predicting that 20 percent of all renters will be at risk of eviction by early fall.

As with other aspects of the pandemic, Black and Latino people will be hurt the most. As reported in the Washington Post, a recent Census survey found that “about 44 percent and 41 percent of adult Latino and black renters, respectively, said they had no or slight confidence they could pay their rent next month or were likely to defer payment.” Majority Black zip codes already had the highest rates of eviction.

The CARES Acts and expanded unemployment benefits have helped some cover their rent or mortgage, but those benefits are scheduled to run out at the end of July. Eviction moratoriums in many cities, meant to provide temporary relief, will eventually expire.

Unions and other worker organizations can play a unique role in solving the housing and debt crisis both for union members and for the unorganized.

Build It Ourselves

Decades ago, unions built affordable housing cooperatives for workers. From the 1920s to the 1970s, dozens of unions played a role in constructing cooperatives with thousands of units. Some even include cooperative grocery stores, movie theaters, and libraries.

For many union leaders the move to housing was a natural progression of their organizing. David Dubinsky, president of the International Ladies Garment Workers Union, once said, “We have wiped out the sweatshop; we return to wipe out the slum.”

Unions have also promoted legislation and programs to make housing more affordable. This has been more prevalent in other countries, such as in France where workers are entitled to government housing subsidies based on income and family size.

In 2019 the Chicago Teachers Union took on affordable housing in their contract campaign, making demands on city government. Though they didn’t win, CTU demonstrated that unions can fight for affordable housing at the bargaining table and outside of it.

One framework that labor groups are turning to is “Bargaining for the Common Good,” where unions partner with community groups around issues such as housing. The Massachusetts Teachers Association and the Boston community organization City Life/Vida Urbana are working together to educate teachers, students, and their families about tenants’ rights. They helped pass an eviction and foreclosure moratorium in the state legislature, and the MTA has endorsed rent control legislation.

The worker center Centro de Trabajadores Unidos en la Lucha (Workers United in Struggle) in Minneapolis partnered with tenants’ organizations early this year to demand the city address tenant and worker needs together.

They called for better wages and conditions for workers, more affordable housing, and fair pay for construction workers building that housing—no more employer wage theft. They said that developers who receive public money and tax incentives to build public housing should have to pay a living wage.

The Private Equity Connection

Perhaps one unexpected connection between unions and housing rights is private equity. Private equity is a way to create a big pool of money for investments. While much of that money comes from wealthy individuals, some of it comes from union pension funds.

Private equity firms frequently buy public corporations and take them off the stock market, restructure them, and then sell them off for a big profit, often while saddling the companies with crippling debt. Private equity investors may also buy up small companies and consolidate them into larger ones, laying off workers, cutting benefits, and perhaps destroying a union.

Investors have increasingly used private equity funds to buy up housing as well. Between 2011 and 2017, private equity groups bought over 200,000 homes across the country and converted them to rentals. They have been buying up mobile homes in rural areas and large apartment buildings in major cities. As more and more housing units fall into fewer hands, they can drive up rents.

Unions and housing activists can work together to fight these companies, like the Blackstone Group and Starwood Capital, that both lay workers off and drive up housing prices. Coalitions should support efforts to regulate private equity firms and fight to exclude them from any future stimulus bills.

Common Ground

Labor organizations and tenants’ associations have a lot of common ground. After all, tenants are workers, and workers need housing. When workers have more stable and affordable housing they are not as dependent on their employer. Workers may be willing to take more risks, such as trying to organize a union or to go on strike, if they are not one day away from eviction.

In some cases, the groups have shared tools and strategies. For example, tenants in Brooklyn have formed the Crown Heights Tenants Union and are working to negotiate contracts with landlords. Their plan is to move toward a neighborhood-wide contract to fight gentrification through rent freezes, regulated increases, and repair and renovation regulations.

One possible model is the Ann Arbor Tenants Union, formed in 1968, which organized for a citywide rent strike and demanded to be the sole bargaining agent for all renters in the city. The tenants did not win that demand but did win much-needed apartment maintenance and have continued to fight for tenant rights for decades.

In 2017, the Los Angeles Tenants Union helped renters organize a rent strike and win a three-year contract with a landlord who had multiple apartments. These campaigns can benefit labor organizations as well, as they teach workers organizing and bargaining skills.

Rent Strikes

On May Day this year, workers around the country took part in one-day strikes against Amazon, Whole Foods, InstaCart, and Trader Joe’s. The same day, tens of thousands of people planned to participate in rent strikes, though it is difficult to get accurate numbers on how many actually participated.

One group, We Strike Together, claims to have recorded 790,000 households who have refused to make rent or mortgage payments since mid-March. This includes cases like a group of tenants from 15 buildings in New York City that stopped paying rent and demanded their landlord bargain with them collectively to provide relief.

In a borough outside Pittsburgh, tenants have formed the United Neighborhood Defense Movement to demand their landlord, C.P. Development, negotiate over evictions and maintenance. They are calling for a rent strike August 1.

Last year, labor and community organizers Stephen Lerner and Christina Livingston called for a national Bargaining for Housing Justice campaign that could incorporate many of these elements and more.

They argued that campaigns must “expose the role key employers may play in making housing unaffordable”—such as expansion that tears down affordable housing or investments and pension funds that are tied up in private equity. Labor-housing coalitions can launch campaigns directly targeting the offending companies.

The need is greater than ever. When labor organizations and tenant groups work together, their demands speak more holistically to people’s needs, and they can increase each other’s power.

After Recovery, What?

Another way the labor movement can support access to housing is to take part in the “Beyond Recovery” campaign.

It’s run by the Right to the City Alliance of more than 80 organizations that have been fighting against gentrification and for affordable and safe housing for low-income, Black, and Brown communities. The Beyond Recovery campaign calls on local, state, and federal governments to invest in sustaining human life and building a foundation for life after the pandemic subsides. Their demands include:

  • Immediately cancel rent, mortgage, and utility payments through the duration of the public health crisis.
  • Turn all vacant units into safe homes for people experiencing homelessness or needing safe housing now.
  • Ensure that people can stay in their homes, have adequate housing, and be allowed to safely shelter in place whether they are housed or unhoused.
  • Prohibit utility shut-offs and rate increases and restore service to all households.
  • Provide essential safety equipment to everyone doing essential work.
  • Guarantee unemployment benefits, sick time and paid leave, and health care for all.

Labor organizations can support the campaign. Sign on to the list of demands at bit.ly/beyondrecoverydemands. Ask members and families to fill out this survey and tell their stories of how this crisis is affecting them: bit.ly/cancelrent.

Unions can join in the growing number of rallies and actions against evictions. One way to follow the movement is to scan social media for #cancelrent.

Stephanie Luce is a professor at the School for Labor and Urban Studies, City University of New York, and a member of the Professional Staff Congress-CUNY/AFT.

**

February 11, 2020

New Survey Shows Affordability Continues to Drive Purchase and Rental Decisions

Share

Related Links

A new Freddie Mac survey shows that affordability remains top of mind for those individuals looking to rent or purchase a home. In fact, Freddie Mac’s “Profile of Today’s Renter and Owner” shows vast majorities of both renters and homeowners believe their current living situation is the most affordable option. However, the survey illustrates that issues of affordability remain pervasive throughout these groups. In addition, the survey takes a look at the impact of the current interest rate environment on buying preferences, including a close look at the preferences of Baby Boomers in particular.

Key findings:

  • An unprecedented number of renters (84%) believe renting is more affordable than owning, an all-time high for the survey and up 17 percentage points from February 2018.
  • Regardless, affordability issues continue to affect renters more than owners, 42% of renters paid more than a third of their household income on rent compared to 24% of owners on their mortgage.
  • Given low interest rates, 40% of renters plan to purchase a home and 46% of owners plan to renovate in the next several months.

Renters Perceive Renting as More Affordable

When it comes to renting, the survey finds that an unprecedented number of renters (84%) believe renting is more affordable than owning, an all-time high for the survey and up 17 percentage points from just two years ago in February 2018.

Additionally, a majority (62%) of renters continue to be satisfied with their rental experience, down slightly from 66% in 2018. In fact, 73% of renters feel that minor or no renovations should be made to their rental property—another strong sign they’re happy with their current rental.

However, while renters do feel renting is the more affordable option, the new survey does paint a concerning picture about many renters’ ability to make housing work within their family budget. Specifically:

  • Forty-two percent of renters surveyed are currently cost-burdened, i.e., paying more than one-third of their income for rent, up eight points from just April of 2019. This is compared with only 24% of owners spending the same amount, a number that has not changed in recent years.
  • Eighteen percent of renters are not interested in ever purchasing a home, up four points from August 2017.
  • Renters are growing more concerned about their rent going up in the next 12 months (69%) and not being able to pay for their larger expenses (68%).
  • Sixty-seven percent of renters have made spending changes or have moved to afford their monthly housing payment, up five points from April 2019. Among those who live in rural areas, 70% made changes to afford their monthly payment (up from 59% in April 2019). Eighty-two percent of renters in the “essential workforce” also had to adjust (up from 76% in April 2019).
  • Half of all renters are finding it difficult to find affordable housing that is close to work, up 12% since April 2019. This includes 57% of essential workers, up 23% from April.

Interest Rate Environment

With mortgage rates near historic lows, both renters and homeowners are interested in taking advantage of low rates in the next several months. In fact, 40% of renters plan to purchase a home given current interest rates.

Forty-six percent of owners plan to renovate their home. In addition:

  • Twenty-nine percent of owners plan to refinance;
  • Twenty-seven percent would like to purchase a new home or additional investment property;
  • Twenty-six percent plan to sell their current home and purchase a smaller one; and
  • Twenty-four percent think it is likely they would sell and purchase a larger home.

In addition, Baby Boomers are the least likely to take action in the low mortgage rate environment.

Boomers are Comfortable and Unmoved by Rate Changes

As compared to other generations, Baby Boomers stood out in the survey. As owners, they are highly satisfied with their overall experience (71%) and prefer to live in a small home (61%). Similarly, Boomer renters are more satisfied (50%) with their rental experience than other generations (older Millennials 39%, Gen X 35%, younger Millennials 33%).  Growing portions of Boomer renters (27%) say they will never move, as compared to Gen X (9%) and Millennials (6%). The same is true for Boomer owners, with an increasing percentage (34%) saying they will never move, as compared to 18% Gen X and 8% of Millennials.

Survey Methodology

Freddie Mac contracted with Harris Insights & Analytics to conduct the online survey over a four-day period, beginning August 22. The poll collected data from 4,012 respondents over the age of 18, including 2,715 homeowners, 1,233 renters and 64 others. The data has been weighted to reflect the composition of the U.S. adult population. Additional findings from Freddie Mac’s survey can be found here pdf

Opinions, estimates, forecasts, and other views contained in this document are those of Freddie Mac’s Economic & Housing Research group, do not necessarily represent the views of Freddie Mac or its management, and should not be construed as indicating Freddie Mac’s business prospects or expected results. Although the Economic & Housing Research group attempts to provide reliable, useful information, it does not guarantee that the information or other content in this document is accurate, current or suitable for any particular purpose. All content is subject to change without notice. All content is provided on an “as is” basis, with no warranties of any kind whatsoever. Information from this document may be used with proper attribution. Alteration of this document or its content is strictly prohibited. ©2020 by Freddie Mac.