Checklist the process of writing a cause and effect paragraphre
- 1. Checklist The Process of Writing a Cause and Effect Paragraph Refer to this checklist of steps as you write a cause and effect paragraph. 1. Narrow the topic to fit your audience and purpose. Think of a subject that can be analyzed for clear causes or effects. 2. Decide whether you will emphasize causes or effects. What information would be most interesting to your audience? 3. Compose a topic sentence that states the subject and indicates whether causes or effects will be discussed. 4. Now freewrite, brainstorm, or cluster to find at least three possible causes or effects. Do your mental detective work. At this stage, think of all possible causes; think of short- and long- term effects, as well as positive and negative effects. 5. Select the best causes or effects with which to develop your paragraph. Drop those that are not relevant. 6. Make a plan or an outline for your paragraph, numbering the causes or effects in the order in which you will present them. 7. Write a first draft of your cause and effect paragraph, explaining each point fully so that your reader understands just
- 2. how X caused Y. Use transitional expressions to emphasize these relationships. 8. Revise as necessary, checking for good support, unity, logic, and coherence. Does your paragraph have an interesting opening sentence? 9. Proofread for errors in grammar, punctuation, sentence structure, spelling, and mechanics. Especially watch for your personal error patterns. Suggested Topics for Cause and Effect Paragraphs 1. Reasons why someone made an important decision 2. Causes of a politician’s victory or defeat at the polls 3. Reasons why people want to start their own business 4. Causes of a marriage or divorce (friendship or end of friendship) 5. Reasons why a book, motion picture, video, commercial, or artistic performance created controversy 6. Causes of an act of courage or cowardice 7. Causes or effects of membership in a group (choir, band, sports team, church, or gang) 8. Effects of high blood pressure, alcoholism, diabetes, or some other illness 9. Effects of a certain event (like the death of a loved one, a medical diagnosis, or a move to a new place) 10. Effects of divorce on children 11. Effects of living in a particular place (such as a repressive country or home or a place that is rural, urban, poor, rich, ethnically diverse) 12. Effects (positive or negative) of working while going to college
- 3. 13. Effects of conspiracy theories 14. Effects of social media, smartphones, or other technology on a person’s life 15. www2.elc.polyu.edu.hk/cill/exercises/cause&effect.htm Review of vocabulary and grammar needed to describe causes and effects SOCIAL HOUSING I N T H E UNITED STATES PE TER GOWAN & RYAN COOPER COVER & SEC TIONS Bauer, Paul. Study #2. Photographs of Alt-Erlaa in Vienna. Images appear through license by the artist. paulbauer.net COLOPHON Titles are set in Futura PT. Body is set in Neutraface Text. Data values are set in Franklin Gothic.
- 4. Design by Jon White. AUTHORS Peter Gowan is a Dublin-based researcher. His work has appeared in Jacobin; and he has performed research on housing and labor markets for the Irish Social Democrats. Ryan Cooper is a National Correspondent at TheWeek.com. His work has appeared in the Washington Monthly, The New Republic, and the Washington Post. ABOUT People’s Policy Project is a think tank founded in 2017. The primary mission of 3P is to publish ideas and analysis that assist in the development of an economic system that serves the many, not the few. peoplespolicyproject.org America faces a major shortage of affordable housing. Nearly half of all renters are paying 30% of their income on rent—or more. And the number of households who are renting is near postwar highs. Meanwhile, private market-focused policies have proven completely inadequate for ameliorating this problem. In this paper, we shall argue that large-scale munici- pal housing, built and owned by the state, is by far the best option for solving the affordability crisis. In Part I, we will examine the history and policy failures that created the crisis. In Part II, we will make the case for municipal housing.
- 5. T H E A F F O R DA B I L I T Y C R I S I S 1 figure 1 on next page > The American poor and working class have never been well- housed, but the 2008 financial crisis made a bad problem worse. It dramatically expanded the population of people seriously burdened by the need for shelter. The crash was rooted in the housing mar- ket, and the ensuing tidal wave of foreclosures (see People's Policy Project report: Foreclosed) resulted in a drop in the homeownership rate of 6 percentage points.1 Most of those people ended up on the rental market. A 2017 study by Harvard’s Joint Center for Housing Studies (jchs) details how the population of renters has grown over the last decade to a total of about 43 million households. That increase of about 9 mil- lion2 since the financial crisis roughly matches the number of homes
- 6. lost during and after the crisis,3 and the growth in demand drove up rents across the country. The growth in demand, in tandem with federal government stimulus spending,4 eventually sparked a construction boom. After an initial collapse to record lows for years after the crisis, residential investment increased sharply, led by new rental construction. By 2015, however, new unit construction had only reached 400,000 per year5—this matches unit construction levels in the late 1980s, when the population was 25 percent smaller.6 Meanwhile, new construction has been heavily concentrated in the luxury markets in major metropolitan areas. Where in 2001, construction was fairly equally distributed between cheap, mid- range, and luxury rentals, now the luxury market is by far the largest: figure 1 Additions to the Rental Stock Are Increasingly at the Higher End Notes: Recently built units in 2001 (2016) were constructed in 1999–2001 (2014–2016). Monthly housing costs include rent and utilities and are in constant 2016 dollars, adjust- ed for inflation using the CPI-U for All Items Less Shelter. Data exclude vacant units and units for which no cash rent is paid.
- 7. Source: JCHS tabulations of US Census Bureau, 2001 and 2016 American Community Survey 1-Year Estimates. Over the last year, the growth in rental households has stopped or even reversed—but rent prices are still growing (at 2–4 percent in 2017, down from 3-6 percent in 20157). And the number of burdened renters remains substantially above its pre-crisis level. In 2007, 8 million households spent 30-50 percent of their income on rent; in 2017, that number was at 9.8 million. In 2007, 9 million households spent 50 percent or more of their income on rent; in 2017, that num- ber was at 11 million. These burdened renters (paying 30 percent of their income or more on rent) now account for 47 of all renters.8 Meanwhile, some people who would have been homeowners in de- cades past now appear leery of incapable of home buying. The share of households making over $100,000 and renting has increased from 12 percent in 2006 to 18 percent in 2016,9 while stagnant or declin- ing wages for many demographics mean a down payment is
- 8. simply out of reach.10 Both developments mean further pressure on rental markets. Despite the fact that rent pressure remains severe and fu- ture growth prospects for rental construction remain fairly strong, the construction boom is already slowing. As the Joint Center for Housing Studies concludes, “The rental market thus appears to be settling into a new normal where nearly half of renter households are cost burdened.” That includes many middle and upper- middle class households: 50 percent of those making $30,000-45,000, and 23 percent of those making $45,000-75,000.11 The situation for poor and work- ing-class households, of course, is even worse. An Urban Institute study identified 11.8 million extremely low-income (ELI) renter house- holds (defined as those making less than 30 percent of the median income in their area), and only enough “adequate, affordable and available” housing for 46 percent of them— even when accounting for usda and Housing and Urban Development subsidy programs12 (see below). Naturally, this tends to push people onto the street. Obama administration programs for homeless shelters and similar institu- tions precipitated a substantial decline in the number of homeless people between 2007 and 2016, but skyrocketing rents are over -
- 9. whelming those programs in some cities. From 2016–17, homeless- ness increased by 0.7 percent overall,13 an increase driven mostly by West Coast cities experiencing spectacular rent increases. In Los Angeles, for example, rents have increased by roughly a quarter since 2010—and the homeless population increased nearly 26 per- cent last year. By itself, the city accounted for well over half of a 9 percent increase in the national unsheltered homeless population. Efforts to remedy the housing shortage and ease the rent burden have been pitifully inadequate, both at the city and fed- In Los Angeles, the homeless population increased nearly 26 percent last year. eral level. The nation’s major program to ease rents is the Section 8 voucher program administered by HUD, which assists about 2.5 million ELI households by subsidizing a portion of their market-rate rents.14 While that is certainly better than nothing, the program only covers about 22 percent of the 11.8 million ELI households who are eligible. Another 21 percent have been able to find market-rate hous-
- 10. ing, 2.5 percent are covered under the usda Section 515 program, and the remaining 54 percent are simply left out.15 Thus, these programs are restricted to ELI households, and only help about a quarter of even that small population. They simply do not touch the vast majority of people trapped by the affordability crisis. What's more, like any open-ended subsidy to private provid- ers, these sorts of rental subsidies can stoke the rental market fur- ther, raising prices overall and exacerbating the affordability crisis. Meanwhile, the major strategy to create more affordable units is to coax the private market using tax incentives and zoning rules. The largest such program is the federal Low-Income Housing Tax Credit (lihtc), under which some 90 percent16 of new affordable housing is built. This gives a tax credit to developers for building low-income housing. Once again, one of the biggest problems with this program is its pitiful size: it only provided about $300 per rent-burdened household in 2017, at a total investment of just $8 billion.17 This would not be remotely adequate to make a serious difference in the size of the housing stock even if the program were exceptionally efficient. But it isn’t efficient, either: on the contrary, research suggests18 that at least some of the new housing created under the tax credit
- 11. would have been created anyway. Crime also undermines the program’s ef- ficiency: a Frontline investigation discovered substantial corruption in the lihtc process, helping to account for the fact that while the cost of the credit has increased by 66 percent from 1997–2014 the number of units created under the credit has actually fallen from over 70,000 per year to less than 60,000.19 Moreover, because subsidized units are often placed in poor neighborhoods to avoid political resistance, they tend to increase segregation and concentrate poverty.20 The program also amplifies segregation in the other direction, according to a study from the Institute on Metropolitan Opportunity,21 which found that subsidized units occupied by white people (often designated especially for art- ists) tended to be placed in white neighborhoods. Finally, the affordability requirements under lihtc generally lapse after either 15 or 30 years. And the 2017 Republ ican tax bill also dented the usefulness of the credit (see below). The second prong of this housing strategy is “inclusionary zoning,” which mandates that new residential projects include some fraction of affordable units. There are a huge variety of approaches under
- 12. this umbrella, but once again they are plagued by problems of scale and efficiency. Some cities have tried a smaller ver- sion of the federal approach—most impor- tantly New York City, which has a similar tax credit costing the city $1.4 billion in 2016.22 The program has created some new housing, but some developers have also gamed the system by forcing tenants out of existing affordable units, destroying those buildings, and then collecting city tax money to build a new party high-end development. This is a waste of money and a waste of space: the luxury units private developers naturally include in their inclusionary projects tend to be much larger than affordable or mid-range units, meaning less housing per unit of land overall. Efficiency problems aside, none of these programs are re- motely big enough to match the scale of demand. For example, a A Brooklyn development that was 80 percent affordable had over 87,000 applications for its 200 affordable units. Brooklyn development that was 80 percent affordable—a far greater fraction than the usual scheme23—had over 87,000 applications
- 13. for its 200 affordable units.24 Between 2013 and October 2017, the NYC government financed a mere 78,000 units.25 And the vast majority of those units weren’t new construction; they were existing units maintained at an affordable rate rather than lapsing into the upscale market. Another strategy is rent control, which has been adopted in various forms in many cities. With "hard" rent control, the rate of rent increase is restricted based on a formula (typically tied to inflation), regardless of occupancy. With more common “weak” rent control, increase is restricted during a period of continuous occu- pancy, but when the tenant leaves, rent can be reset, typically at the then-prevailing market rate.26 Rent control is a reasonable policy for allowing people to re - main in their homes and preserve existing affordable units, especial- ly in the face of a spike in demand.27 However, it does little to enable the construction of new units; and stronger forms may actually impede new private construction when they cut into potential profits. Many liberals and libertarians argue these sorts of housing regulations are actually a major culprit behind the affordable hous- ing crisis.28 In traditional economic models, if there is a spike in demand but restrictions on supply—in the form of a slow permitting
- 14. process, low-density zoning requirements mandating single- family homes, parking requirements, setbacks, rent control, and so forth— then the price will increase. Therefore cities should deregulate their housing markets and enjoy cheaper rents. There are many problems with this argument, however. First, “deregulation” is a questionable concept in general as all econom- ic activities of any kind, market ones included, are fundamentally backstopped by the state. American zoning restrictions are often ludicrously anti-density and pro-automobile,29 but that could easily be ameliorated by changing the zoning rules rather than removing them altogether. Second, even in a best-case scenario it's not at all clear that removing restrictions on private market activity will lead to a more affordable neighborhood. If a desirable neighborhood is removed from all market controls, builders will naturally build new luxury units due to greater profits and the simple fact that new buildings command higher rents, as seen above. Construction takes a long time and buildings last even longer—even if market processes do work, it could take decades for such units to “filter” down to lower market segments.30
- 15. Private market construction is also self-limiting: it puts down- ward pressure on rents, which reduces expected future profits. Indeed, that appears to be precisely what has happened in the rental construction market over the past year, long before all poten- tial profitable buildings have been built. (Whether private real estate investors are consciously colluding or not, it is clear that private real estate investors are quite happy with very tight rental markets and a steady stream of easy profits.) In practice, a simple “deregulatory” agenda can easily cre- ate a worst of all worlds scenario that simply replaces affordable neighborhoods with expensive ones, pushing poor and working class families into far-flung exurbs or older houses built with hazardous materials. Owners of new high-end housing will naturally resist new affordable construction that might cut prices and lower their wealth (very often fueled by racist resentment of disproportionately- minori- ty rental households31), as will owners of luxury businesses attracted by new development. Indeed, they will push for any new building to be similarly high-end, so as to keep property values up. And wealthy people living in a neighborhood naturally have far more political in- fluence than low-income people who might someday move into that
- 16. neighborhood, making it relatively easy to block new development once the whole area has been re-developed. In other words, a neighborhood that is “deregulated” from explicit zoning and rent control can quickly become re- regulated by influential private residents. It is one major method by which neigh- borhoods become locked in a high-rent, no-change equilibrium—that is, gentrification. Several neighborhoods in New York City selected by then-Mayor Michael Bloomberg for deregulation, notably former industrial neighborhoods in Greenpoint and Williamsburg, have ex- perienced precisely this process.32 It's also worth noting that in many high-end cities, foreigners who are using real estate as a sort of safe deposit box—many of them almost certainly criminals laundering money33—make up a sub- stantial portion of the people buying housing. The American Com- munity Survey conducted by the Census Bureau found that certain tony neighborhoods in Manhattan were over 50 percent vacant at least 10 months a year.34 That adds pressure on rents by further restricting supply. Finally, the last prong in the US housing strategy is public housing.
- 17. This is no longer a major priority for any city, but there are many legacy buildings still housing over 2 million people.35 Despite over 40 years of disinvestment—the nationwide backlog of maintenance in such projects amounts to over $26 billion36 as of 2010— public housing is virtually the only available housing for poor people in many cities. However, the American approach to public housing is also inadequate and has severe negative side effects. Two million units is simply not very many in a nation of over 320 million people. Where they do exist, means-testing units to only poor people means that rents will be very low, thus placing a large budgetary burden on cities and the federal government. As a result, even with strict qual- ifications and vast spending, there are not, in many cities, nearly enough units to house even the officially poor population. In Wash- ington DC, for example, the waiting list for the meager 8,000 public units was closed to new applicants in 2013 when the total number waiting reached 70,000.37 Worse still, poor-only public housing concentrates poverty in particular locations—directly creating38 one of the worst social ills in American cities.39 Concentrated poverty is associated with higher crime, racial segregation, poor educational outcomes, drug
- 18. abuse, gang violence, and a host of other problems. Finally, the expense and poor reputation of public housing have fueled efforts to get rid of public housing altogether. The hope iv program helps demolish severely dilapidated units and replaces them with mixed-income lower-density ones,40 while the Rental As- sistance Demonstration (RAD) program sells them to private devel- opers outright.41 As a result, the number of public units has eroded steadily over time, falling by 60,000 between 2006 and 2016.42 Despite the terrific demand for public housing, and the fact that those units continue to provide functional shelter for many people, it is no coincidence that “the projects” are a notorious place in most cities where they exist. Applicants are driven by economic desperation, not a desire to live in run-down apartments in danger- ous neighborhoods. So all the existing policy approaches to fix the housing crisis have failed the American people. What should be done? T H E C AS E F O R M U N I C I PA L H O U S I N G
- 19. 2 There is a pressing need for policymakers to consider new approaches for delivering affordable housing. An over - reliance on the for-profit private sector has lead to underin- vestment in communities which produce less profit—and to state subsidies to developers and landlords, simply to maintain some sense of a social fabric. Today, our housing policy bears a marked resemblance to our healthcare policy: an expensive band-aid over a gaping hole, left by the absence of a public sector alternative. The international community has increasingly recognized that private-only housing models adopted in the 1970s and 1980s have failed. The recently-elected government in New Zealand has committed to restart the construction of state housing,43 the Scottish Government resumed construction of state housing after 2011,44 and the Labour Party under Jeremy Corbyn has promised to build 100,000 social houses every year if it wins the next election.45 The centre-right Irish government faces mounting criticism from progressive opposition par - ties for not going further in spending on direct construction of municipal housing.46 The United States is almost alone in the fierce resistance of the overwhelming majority of both its major parties to the involvement of federal and local government in the direct provision of affordable housing. We present below a review of several models from developed countries which may prove informative and helpful to campaigners and policymakers wishing to challenge the political consensus— one built on false premises—and to advocate for the development of sustainable, affordable, high-quality housing
- 20. for all Americans. We have broadly sought to examine models which address the flaws and issues with existing housing policy in the United States. To that end, we have selected three jurisdictions whose municipal housing policies have been designed to cater to people of various income levels, rather than just serving the “deserving poor”: Vienna, Finland and Sweden. The purpose of this section is to establish that municipal housing does not need to be plagued by inefficiency, deterioration, segregation or poor planning. Throughout the world there are ex- amples of all these things evident in both the public and private sectors. It is of course incumbent upon politicians to learn lessons not just from the United States’ own past, but from challenges and failures of other nations too; thus, the section on Sweden will dis- cuss some problems which should be kept in mind while developing a 21st century housing policy. To this date, the United States has failed to learn from the successes that many countries have experienced in providing afford- able, integrated, and well-maintained municipal housing. It is time that changed.
- 21. The success of municipal housing when pursued as a policy goal with the necessary political will can be clearly seen in Austria’s capital city, where 3 in 5 residents live in houses owned, built or managed by the municipal government. Austria is a federal republic, and for the last hundred years the Viennese state government has always been led or controlled by the Social Democratic Party, apart from the fascist period from 1934–45. After the First World War, when the party first took pow- I N T E R N AT I O N A L M O D E LS V I E N N A “Living Side by Side” er, housing became their first priority and they began establishing massive publicly-owned housing complexes called Gemeindebauten or “municipality buildings.” The planners of what became known as “Red Vienna” started from nothing—and built high quality housing developments which are often still in use today. By 1934, one in ten residents of Vienna lived in public- ly-owned housing. The next eleven years, which saw a fascist coup, the annexation of Austria by Hitler, and the devastation of Second World War, took a massive toll on the city. Despite all this,
- 22. however, when democracy was restored the new state government immedi- ately got back to work on rebuilding social housing infrastructure. Unlike the United States, Austria has never treated municipal housing as an option of last resort or a welfare program exclusively for the poor. No less than 80% of the country’s population is eligible to receive social housing by their income.47 In Vienna, this thresh- old is about twice the average annual income.48 Welfare recipients, politicians and sports stars live side by side in projects like Alt- Erlaa, which houses approximately 10,000 residents in a visually impres- sive and spacious community. The municipal government invests in upgrading older properties and in new developments such as smart flats which have sliding partition walls, allowing residents to change the layout of their home in order to give them a unique character.49 In addition to municipal housing, Vienna funds large non-prof- it housing cooperatives that house almost as many individuals as directly state-owned properties, all under strict conditions set by the government. Consequently, the per-capita living space for Vien- na residents rose from 22m2 to 38m2 between 1961 and 2011. Unlike public housing in the United States, subsidized rents in
- 23. Vienna are based on the cost of the property and its maintenance. This has ensured a much higher quality of life in publicly- owned housing than exists in the United States, and indeed in much of Eu- rope. The following table shows the various components of rent in a typical Viennese housing project as calculated by cecodhas, the European Social Housing Observatory. Source: CECODHAS, July 2013. The rents are linked to costs over the course of an approximately 35-year maturity period, after which this component falls to a stat- utory limit. Other components such as utilities, maintenance and repairs increase over time. The rents remain extremely reasonable compared to other major European capital cities, but the small number of residents who are unable to afford rents are covered by the welfare state (though it should be noted that austerity measures adopted after the financial crisis have caused difficulties in meeting costs for some welfare recipients).50 Initial financing for social housing development is primarily ac- complished through a combination of public and subsidized private
- 24. loans: public loans with interest rates between 0 and 2 percent cov- er an average of 35% of construction and land costs, and bank loans (subsidized through tax incentives so as to ensure interest rates that are 50 basis points lower than ordinary loans) cover an average of 43% of the costs. Much of the remainder is financed through “tenant equity”, a quasi-loan by the prospective tenant. If they cannot afford this contribution a public zero-interest loan is provided to them by the provincial government.51 The Viennese model is attractive insofar as it prevents long- term deterioration of the social housing stock. The upkeep of homes is financed by their residents, who receive social assistance from the welfare state where necessary. Vienna implements rent controls on many houses, but even those which are exempt from rent controls end up finding that the mass intervention of the state in the supply of housing sets effective caps on market rents, creating a more affordable rental market for everybody, whether renting privately or from the municipal housing system. The Viennese model interacts with the private rental market
- 25. in a way that functions similarly to American proposals for a robust “public option” in the healthcare market—an initiative supported not just by the most progressive elements in the Democratic Party but by the vast majority of centrist and centre-left politicians. The Finnish housing system is remarkable for its success in combat- ing a recent international trend of increasing homelessness. In 2008, the Finnish government officially adopted a model known as “Hous- ing First”, which focuses on the provision of permanent supportive housing to long-term homeless individuals. This model has gained some international attention for its considerable success in pushing down the rate of long-term homelessness. Housing First works by targeting homeless groups with spe- cific needs and providing unconditional housing support to them— much like smaller-scale initiatives undertaken by the Bush and Obama administrations (primarily targeted at those with disabilities). Those programs have seen some success,52 though falling well short of the progress needed to meet Obama’s commitment to end home- lessness within ten years.53 What is important to note, however—and what has been ignored by some of the international advocates of this model — is
- 26. that this program works in tandem with other measures that sup- port those who are not adequately served by existing social housing structures. Before Housing First, the number of homeless people in Finland had already fallen to 8,000 people in 2007 from over 18,000 F I N L A N D “Diversity of Dwellers” in 1987, when the country first began collecting statistics. Since then, that number has fallen to below 7,000 under the new Housing First program.54 (It is worth noting that Finland uses a considerably broad- er definition of homelessness than the United States; these figures are not comparable on a cross-national basis.) Finland’s first postwar housing program established arava, the National Housing Production Board. The board provided low-in- terest government loans for the construction of housing “for all Finns, not for low-income housing specifically.”55 Now called ARA, it primarily finances the construction of municipally-owned and non- profit housing through loans, guarantees and interest subsidies while also providing grants for upgrading the energy efficiency of older properties.56 Finland has not been immune to the global intrusion of
- 27. means-testing into universalist welfare states, and there are some concerning developments; though 73% of the population fall be- neath the income requirements to obtain social housing, concen- trated housing for the very poor has been introduced in some de- velopments since the 1960s.57 Nevertheless, the situation remains markedly superior to the United States and United Kingdom models, which are associated with the most extreme form of means- testing and concentrated poverty. A 2013 cecodhas study examined a typical ARA-funded property built by a municipally-owned holding company. Like all 43,000 dwellings owned by the Housing Company of the city of Helsinki, the property is built upon land owned by the municipality and leased to the holding company. ARA fixes nominal prices for social housing land at 60% of the market price in the area, and a yearly ground rent is charged to the Housing Company at 4% of that value. This subsidized access to public land is crucial to the viability of such projects, as are the subsidized loans from ARA, which has increased interest subsidies to enable cheaper borrowing by munici- palities. For the property in the cecodhas study, …