No one doubts that we face a rental housing crisis. As labor markets recovered in the wake of the pandemic, rental inflation soared. And with the conclusion of pandemic-era protections and rental assistance programs in 2022, evictions filings increased by nearly 80% in areas across the country. Housing costs are “unaffordable” by government standards for millions of low- and moderate-income families who pay more than 30% of income for rent, while according to a recent report from the National Low-Income Housing Coalition, more than 7.7 million extremely low-income renters spend more than half of their limited incomes on housing costs. People of color face singular impediments to securing decent, affordable housing.
One contributing factor to this situation is that the limited construction of new affordable units in recent decades did not come close to matching the long-term disappearance of low-cost housing. But contrary to the conventional wisdom, this crisis cannot be addressed simply by ramping up construction of more housing units, especially as new multi-family construction is overwhelmingly high-end and unaffordable to most.
One reason is the pressures of gentrification, affecting large and moderate-sized cities alike. The demand for rental housing is increasing with upper-income renters, homebuyers, and corporate investors acquiring an increasing share of the available stock in desirable locations, regardless of who might be currently occupying it. There is a vast difference between what upper and upper- middle-income households and businesses can bid for space and what low and middle-income people can bid to hold onto their apartments—a difference that grows each year as the bifurcated high tech/services economy steadily increases income and wealth inequality. The result is that landlords can raise low and moderate rents at will, or let the rental property run down, because those pushed out by gentrification above them or gentrifiers looking for the next hot spot are willing and able to pay. Tenants pay a rent premium for little or no increase in amenity; they get evicted if they can’t manage it.
What is occurring in the US (and has been for some time) is a massive, upward transfer of wealth for the benefit of landlords in the short run and developers and new occupants in the long run. The social results are equivalent to a nation-wide wage-cut: skipped meals, longer low-wage hours worked, and deterioration of all aspects of family and neighborhood life that go along with grinding poverty.
The impact of gentrification and the existence of pernicious housing conditions for many, especially poorer tenants, pose a serious threat to not just individual and family welfare but to the livability of our cities. In most cities, especially larger ones, renters account for at least forty percent of all households. Renters constitute the majority in the four largest U.S. cities (New York, Los Angeles, Chicago, and Houston), as well as in two others of the top 10 (San Diego and Dallas).
The weakness of tenant power is the other reason for the crisis. Tenants need a way to push back, and the law as it stands is strongly tilted in favor of landlord power. The similarity between wage cuts and rolling rent increases on millions of unorganized tenants facing a business class of landlords and developers contains an important lesson. During the New Deal, in the depths of the Great Depression, the federal government took the initiative to redress the great imbalance between employers and labor by giving workers the right to form unions and by institutionalizing collective negotiations supervised by a neutral federal agency, the National Labor Relations Board, to encourage negotiation and the peaceful resolution of disputes. This was the Wagner Act of 1935.
In our time, the sharp imbalance in bargaining power between landlord and tenants, laid bare during the pandemic, calls for a similar social response. While the disparities of bargaining power are most obvious for the relations between landlords and very poor tenants, they exist and are becoming more and more pressing for tenants at every income level.
To address this imbalance, we must institutionalize countervailing tenant power in bargaining with landlords. Hence, we propose the adoption of a set of reforms that would empower tenants to form unions for collective bargaining about rent, residential conditions, and evictions. In the draft authorizing statute attached at the bottom of this post and linked here, we sketch the architecture and identify the key components of a legislative package that would entitle tenants to organize into unions with specified rights, powers, and protections against retaliation. Our proposal is easiest to visualize operating at the municipal level, but it can be adapted for legislative action at county, state, or even federal level as political circumstances permit. Landlord-tenant bargaining would occur under the oversight of a Housing Disputes Resolution Board, an agency based in the community and familiar with local conditions. This Board would bring the parties together to facilitate negotiations and have the power to go to court to ensure observance of basic rights.
Typically, the tenants of a large building would form a union, but there would be the flexibility to adopt other formats such as organizing all units owned by a particular landlord or those in a particular geographic zone. If a union or tenant council meets a minimum membership level, it could require the landlord on request to meet and confer about rent, building conditions, and related matters. Once the Board confirms that a tenant union meets a higher membership threshold (for example, 50% of tenant families in a building, comprising at least 10 units), the union could require the landlord to negotiate in good faith regarding rent, evictions, building conditions, repairs, improvements, and similar questions. Tenants who do not wish to form a union could ask the Board to designate a “residential monitor” to ensure compliance with the law and flag unsafe or unwholesome building conditions. Foremost among the rights our proposal accords to tenants is to prohibit landlords from interfering with, impeding, or retaliating against the formation of a tenant union. Facilitating tenant unions would secure other fundamental tenant rights that presently are either unprotected by law or unenforceable in practice. These are the right to habitable conditions and compliance with health and safety regulations, protection against bad faith evictions, and a right to counsel in eviction proceedings.
Altogether this proposal is a constructive response to the looming humanitarian crisis in rental housing. In time it will transform the current chaos in rental housing markets into a more protective, just, and efficient system for resolution of landlord-tenant conflicts.