Unaffordable Rents of Affordable Housing

Jan 29, 2024

In California, landlords of more than 350,000 privately owned low-income housing units are increasing their rents well above what workers can afford, in some cases close to 20% more within one year.

The State of California excludes these affordable housing units from the state’s rent cap. As such, these landlords can increase the rents anytime with rates that please them. The affordability of low-income units is not their concern.

But, even California’s rent cap, if it were applied to all these low-income rentals, would not have been affordable to the workers. This rent cap was 10% in 2023. Who could afford a ten percent rent increase? Whose wage increases more than 3% a year?

Rubbing salt into the wound, the landlords build these affordable housing units by receiving tax credits from the Federal Government for at least 15 years. These tax credits amount to about 11 billion dollars annually, which workers pay through our taxes. So, workers are already paying for our rent through our taxes. The landlords’ pure profit is any rent we pay in addition to our taxes.

Because of such scheming, many workers spend nearly 50% of their income for rent. These high rents push workers to live in housing units crowded with more than one family or out of the cities in faraway areas.

These so-called affordable housing units are so profitable that giant investment firms are getting into the bonanza. Blackstone, the world’s largest alternative asset manager with one trillion dollars in assets, bought 83,000 apartments in the New York area, built or modified by federal tax credits for low-income housing.

So, under the guise of “affordable” housing, the Federal Government put a get-rich-forever scheme for companies into play. Capitalism in action!