The Profit Motive and the Home

By Eric Goldfischer

In a recent conversation with a manager of distressed assets for a highly profitable group, I was told (in appropriately condescending tone) that “the only reason we buy buildings is to make money.” As an afterthought, he added something to the effect of, “Of course we want to create a nice place to live, but…” The end of the sentence trailed off into nothingness, leaving no doubt of exactly how little value it held for the owners and managers of the property.

Of course, the relationship of housing and profit is nothing new, nor should it surprise anyone that most of the housing market in New York City operates to the direct benefit of wealthy, private individuals and corporations and to the detriment of low-income tenants. Many have previously noted the dangerous paradox of the commodification of such a basic human need as housing, which is often spoken of as a right but rarely practiced as such; still more have commented incisively on the role that the market played in the twisting & turning housing policy of the 20th century, from the creation of suburbia in the 50s and 60s, to the destruction of our inner cities in the 70s, to the current gentrification of urban areas once seen as unprofitable. As we confront the fallout of this housing reality on the daily, I find myself continually asking the question posed by Peter Marcuse several years ago: How do we create a city for people, not for profit?

Members of Banana Kelly’s Resident Council have spent the last several months in a series of workshops on how nonprofit HDFC housing works, which is intended to empower them to serve on the board of their respective HDFCs. Learning alongside them, I have certainly gained an appreciation of all the costs that go into maintaining multi-family affordable housing. These expenses are not insignificant, and in some ways their use as justification for various cost increases on tenants is a logical part of a chain of passing on costs. But the key difference is the scale of commodification of housing as the place where households are formed, children are raised, and neighborhoods are created. As a nonprofit, we need to break even; any leftover money goes back to the buildings themselves, thus preserving a connection between organization, structure, and people. But for a group such as Stabilis Capital Management, who are part of a financial system that is destabilizing affordable housing in our neighborhood (see story here and here), a building, including the people who inhabit it, is only worth as much money as it can create for the owners. In multi-family buildings where residents cannot engage in any form of governance and the owner is profit-driven, creating any kind of decommodified home seems unlikely.  The only recourse tenants have is to organize, but in a system where the needs of investors take precedence over the needs of people, success is hard-won, if indeed success is possible.

And what of the cultural and personal sides of “home?” In a very specific moment—the postwar period when suburbia was created and propagated—those looking to appropriate housing for financial gain moved in lockstep with the government and the producers of mass culture to create a kind of home that worked for a very select group of Americans, white middle class men. The long cultural influence of the 1950’s created a particularly enticing yet exclusive image of home that continues to affect how we create housing, even in the least suburb-like places—Charlotte Street provides the best example. In the intervening years, of course, the terribly detrimental outcomes of that set of policies have become clear: disinvestment, the spatial mismatch of jobs and housing, and the horrors of sprawl all come back to the creation of financing for suburbia in the 1930’s-50’s. But what if all that energy and collaboration between government and finance caught the cultural zeitgeist once again and, instead of creating enclaves for middle-class families, spurred a movement for housing for low-income people? Some have noticed the movement back towards the city, particularly by younger Americans, and incorrectly diagnosed it as a reversal from the suburban housing policy. But the creation of home in the city once again tilts towards those producing the most wealth, spurring the negative aspects of gentrification while ensuring that the communities that would most benefit from more services and housing will not receive them. Essentially, this is the same housing policy as the creation of suburbia–new location, less explicit, but the same outcome.

This kind of transformation could happen, but it would require a complete break with this entire tradition of housing creation, essentially creating a city for people, not for profit. There remains, like Henri Lefevbre’s Right to the City, “a hue and a cry” for a decommodified home. The profit motive created the housing struggle as we know it today, and yet it also drives the search for a home, reaching through cultural production across lines of race and class. The paradox continues to hold sway, even as counter-market initiatives such as nonprofit HDFCs, mutual housing associations, and community land trusts provide hope and trusted models for fighting back. Yet for so many, the search for home continues, bound up in the space between concrete structure and cultural creation, and caught in the paradox of profit and housing.

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