When Government Tries to Create ‘Affordable Housing’

I attended a neighborhood association meeting recently on the inner west side of San Antonio. The concerns were probably not unlike those of residents in other United States urban centers: crime, public intoxication, vagrancy, etc.

One that drew a notable response from the local councilwoman was the cost of housing. This issue provides a good example of how actions of the federal government trickle down and leave collateral damage in our neighborhoods.

Housing is a basic good, susceptible to normal market fluctuations just like any other. When government intervenes, though, things get a little more volatile.

Out in California, regulations are stifling the addition of more housing. Rent controls do the same. The overarching problem in every state for the last several years, however, has been unstable monetary policy coming out of Washington, DC.

Since the dollar has been devalued, it has simply taken more money to buy stuff. Plus, it has compelled more investors to enter the housing market. It’s a safer, less risky investment than an untested invention or new product line.

This arguably explains the widening discrepancy between price growth and that of population.

The sixteen hundred square foot, three-bedroom, two-and-a-half bath house I bought with my girls’ mom in 2003 (which I later rented out for several years) cost us roughly $100,000. Zillow now lists it for $265,000. Over that time, the population of Bexar County has grown by just under half. That’s 265 percent versus 43 percent.

This appreciation leaves homeowners with the illusion of greater wealth. When they look to cash in, they find that the market around them has moved up as well. Further burdened by rising interest rates, they hunker down, and the market for new homebuyers tightens.

This creates an opportunity for local officials to swoop in like heroes and try to fix things.

When some of the residents at the neighborhood association meeting complained about homes being turned into “quadplexes” (essentially makeshift apartments), the councilwoman was quick to point out the city’s “voter-approved investment in affordable housing” that can be found going up all over town.

One of these developments is going up practically in my backyard here on the far west side. Another is raising a stink on the far north side. Residents there complain of inevitable overcrowding in schools, increased traffic, etc.

There is also a perception that more criminal activity is likely to follow.

During my campaign for city council, some of the most engaging, friendly people I met lived in the more impoverished parts of my district. Even they knew it wasn’t a very safe area. Many were anxious to get out.

But they feel trapped, just like everyone else. Or almost everyone else.

Those with the means can and do leave the city’s tax jurisdiction. Despite the county’s previously mentioned population growth, San Antonio’s population grewby only 26 percent. This is important because property taxes finance these bond “investments.”

That necessarily means the burden on the remaining homeowners intensifies. The city begins to entertain the possibility of raising rates. That in turn nudges the holdouts to join the exodus out of city limits or to get on the long and growing waitlist for this “affordable housing.”

It’s a vicious cycle, and it looks like it might get worse before it gets better.

The Biden administration has made it clear that Americans should expect the value of their dollar to drop further. Advisers to former President Donald Trump are discussing their own ways to devalue the currency should they retake the White House in November.

Meanwhile, despite all this, their cohorts here at the grass roots are likely eligible for political promotion.

The aforementioned councilwoman, endorsed by Bernie Sanders, who himself called on the Federal Reserve to lower interest rates earlier this year, could follow the path of former Austin city councilman Greg Casar into Congress.

While our mayor, who spearheaded the bond drive that made this “investment” possible, appears lately to have been groomed for a possible role in a second Biden administration. Residents and community leaders I talk to on the west side are already not pleased being left with his plodding workforce program.

For their part, local conservative officials haven’t been much help.

Falling in line with a growing number of their brethren in DC, too frequently they have voted for higher property taxes. Nevertheless, they are blessed for reelection by lawmakers stationed thousands of miles away.

One of the houses I run by in the morning, similar to mine from 2003, is renting for $1,700. The first rent I charged in 2009 was roughly half that. There’s no logical reason for the gap, and it’s certainly not affordable for a family of modest means.

If they haven’t already, investors will no doubt swoop in to buy the house when the owner has reached his limit. If a quadplex doesn’t fly with the neighbors, and the market collapses under the weight of a growing glut of apartments, it’s not a stretch to guess what comes next: bankruptcy and government bailouts. 

We all remember the fallout the last time that happened.