Dave Chappelle is under attack for quashing a plan to develop so-called affordable housing units in his neighborhood. What’s the real story here, and why the anger?
As most people know, housing prices, whether rent or mortgage, have been increasing at a rapid pace recently. Year-over-year home price appreciation is reaching levels not seen since the housing crisis, with home price appreciation for December 2021 averaging 16.1%, up from 10.5% the year prior. As a result of such drastic increases, which far outpace wage growth, many people are being priced out of the market.
Is this a good thing? It depends on whom you ask.
Existing homeowners and local governments benefit from ever-increasing home prices and make more money from property taxes if homes are assessed at a higher value — as do all of the housing industry lobby groups, which turn greater profit margins if home prices are high and continually increasing. Given the political clout of all these groups, it’s a safe assumption that the government’s housing stance will be to keep prices increasing indefinitely.
So if we can’t arrest the rate of housing cost increases, how do we solve this problem?
Most solutions have focused on promoting what is inappropriately called “affordable housing.” Rather than describing housing that’s affordable to the average person, as a plain understanding of the phrase might suggest, the term as used by special interest groups and the government means something quite different. It describes housing where: 1) A portion of the construction is subsidized by taxpayers, and 2) in exchange for the taxpayer subsidy, the housing development agrees to keep rents at some of its units capped at a certain maximum rent, known as a price control or rent control, exclusively for individuals or families whose income is below a set threshold.
There are some problems with the concept.
First, we’re faced with the cronyism and regulatory red tape that make the cost to build so-called affordable housing units often exceed that of comparable market-rate units. The Los Angeles Controller’s Office demonstrated this clearly in its analysis of the city’s program to build housing for the homeless. A single unit of housing for the homeless in Los Angeles’s flagship program often costs a stunning $500,000 and upward. This is not “affordable” in any sense of the word. Second, the rent caps inherent to “affordable housing” function as rent control. And rent control increases rents and reduces housing availability.
Let’s not forget the impact of public housing on crime.
Now that we understand why the term “affordable housing” is a misnomer and most often means the exact opposite of what the name implies, enter Chappelle. Chappelle refused to allow taxpayer-subsidized housing in his neighborhood, ostensibly for many of the aforementioned reasons. Isn’t it amazing that when one has to put his own money into something, the virtue-signaling slogans almost instantly give way to actual reality? Chappelle is black and often speaks on race sadly from the standpoint of victimization. Yet the racial victimization shtick dropped immediately when it was his community and his money in question.
Let us learn from what happened with Chappelle and not fall for shallow solutions meant only to benefit interest groups.
Dr. Ben Carson is the founder and chairman of the American Cornerstone Institute and the former secretary of the Department of Housing and Urban Development.
