Diverging Public Policy Responses to Housing Unaffordability in Germany and the US
Saturday, November 5, 2016
Columbia Ballroom (Washington Hilton)
*Names in bold indicate Presenter
Housing in urban areas is becoming increasingly unaffordable, especially for low-income households. A lack of housing safety nets and functioning affordable housing policies manifests itself in socio-spatial inequalities, segregation, and homelessness. Growing-up in low-income neighborhoods is highly negatively correlated with economic opportunities, and comes with large differences in individuals’ health and educational outcomes. In the US, federal housing policies or, as the New York Times calls it, “Housing Apartheid,” have significantly contributed to urban segregation, and continue to do so. This paper uses a two case study approach to analyze the effects of housing policies on income inequality and the overall housing supply. New York City’s chronic housing crisis is unrivaled--in 2012 55% of all rental households were rent-burdened and homeless numbers reached unprecedented levels. Special attention is given to Mayor De Blasio’s 10-Year $7.5 billion heavy Affordable Housing Plan, which is likely to miss its progressive objective and might instead spur gentrification and displacement. Second, the case of Berlin will be examined. Many cities in Germany also experience increasing pressures in the land and housing market. Contrary to the US model, cities that experienced reduced housing affordability adopted a nationwide rent freeze regulation in 2015, which was celebrated by progressives and doomed by conservatives. Using income panel data, housing variables, and real estate prices in New York City and Berlin, this paper examines the effects of recent housing policies on housing affordability and its impacts on the housing stock. Through the use of GIS data, neighborhood effects will be studied to account for segregation and gentrification. The last section of the paper compares the two case studies, and draws conclusions about the impact of public policy in different contexts.