Betting the house that this issue drives the midterm elections
It's not gas prices
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Americans have been telling pollsters since sometime last fall that they have little confidence in the country’s economy and that they are afraid of falling behind.
The concerns would seem to contradict the reality of a hot labor market that has empowered workers, created a record number of jobs, and produced consistent wage growth, but those gains are being at least somewhat counteracted by monthly spikes in inflation.
Before Putin’s despotic invasion of Ukraine, the news media focused relentlessly on inflation, dissecting consumer price increases as if they were some mysterious phenomenon and not simply the product of bad infrastructure and corporate greed. Now, given oil’s outsized role in the Russian economy, easy allusions to past narratives, and the daily fluctuation on digital billboards across the country, gasoline prices have become the unofficial standard by which national media judges inflation — and, in turn, Democrats’ chances of surviving this year’s midterm elections.
As is so often the case, the national media’s political analysis is blinkered by inherent, ingrained biases. Gas prices are most likely to affect suburban voters, and it’s unclear whether they actually have any direct impact on elections. On the other hand, the housing market is much more likely to shape elections, and right now, inflation in that sector is already beginning to quietly reshape politics in crucial swing states.
Housing prices have spiked across the country over the past year, with particularly egregious increases in the Sunbelt states of Arizona, Georgia, and Florida. Each of those states is run entirely by Republicans and will play host to crucial elections this coming fall, creating an opportunity for good public policy to also make for good populist politics. Over the next few months, this newsletter will be focusing on the housing battles unfolding nationwide, looking at how activists are fighting for working and middle-class residents and the politicians willing to stand with them.
The Tide Begins to Shift
On New Year’s Eve, tenants at a housing complex in North Tampa received notices in the mail from a strange new company that contained some dire news.
The Holly Court Apartments had already been neglected into disrepair, with rampant black mold lining apartment surfaces and water so contaminated that residents were warned to boil their tap water or buy bottled water, if they could afford it. Now, Palm Communities LLC, the management company that had just been hired to run the complex, was ringing in 2022 by announcing plans to kick out some of its mostly low-income residents, through both evictions and non-renewal notices.
The plan was obvious: Get rid of the working-class tenants, renovate the complex into high-end units, and cash in on the region’s skyrocketing housing market. With few city regulations and state law firmly on the side of developers, Holly Court’s residents — many of them seniors on fixed incomes, single mothers, and disabled military vets living on the edge of poverty — were expected to go quietly.
Instead, with rents everywhere else prohibitively expensive and nowhere to turn, they decided to put up a fight.
With help from the Tampa Tenants Union, a grassroots group of working-class residents and housing rights advocates, the residents got organized and got loud. They gathered signatures, delivered petitions, and picketed the apartment complex. The union alerted the local media, which latched onto the story as a proxy for the affordable housing crisis that had gripped the region.
After more than a month, the residents that resisted eviction not only won the battle, but were even put up in a hotel as Palm Communities fixed the fetid water situation in the complex.
“A group of people who otherwise would have been pushed out onto the streets are now getting to stay in their homes,” says Bratton Young of the Tampa Tenants Union. “It’s a pretty modest victory, but one that’s unlike a lot of what we've seen over the last few years in the city. It demonstrated that the tide is shifting, that people are understanding that they can fight back, and that they can win.”
The Tenants Union seized on the moment of civic solidarity to continue its push for changes that would benefit renters all over Tampa. Rent prices had spiked by 24% across the metro area year-over-year, and all of a sudden, what had been a hopeless situation didn’t seem quite as hopeless.
“It set a precedent, because everywhere you go in Tampa, if you mentioned the name Holly Court, everybody knows what you're talking about,” Young, who works full-time as a labor organizer, says. “It demonstrated to people that organizing and fighting back gets the goods.”
Winning Is Contagious
In February 2021, Hillsborough County, where Tampa is located, passed a Tenant’s Bill of Rights that offered a modicum of security for some residents.
The ordinance prohibited landlords from discriminating against applicants or residents who made use of Section 8 vouchers. It also required management to provide residents with resources about their rights and organizations that could help them obtain financial assistance. But the new law only applied to unincorporated parts of the county, so Tampa renters had no such protections.
When eviction notices rained down on the city’s struggling renters after the national moratorium ended last summer, Tampa residents stepped up the pursuit of their own, expanded bill of rights. After some initial momentum, it was rejected by the City Council in February, but public pressure had changed the equation by the beginning of March.
Activists were now asking for broader measures such as rent control and rent stabilization. That prospect sent a chill down the spine of the real estate developers and investment firms that provided a bulk of the city’s political donations (including more than half of the money given to Mayor Jane Castor’s PAC). Suddenly, the Bill of Rights didn’t seem like such a bad compromise, and the legislation went from being voted down 4-2 to passing unanimously.
In addition to the resource notices and protections against Section 8 discrimination, the new ordinance requires that landlords provide resources to residents about their rights and where they can obtain assistance with rent and other issues.
The Bigger Battle
Across the bay in St. Petersburg, an under-fire city council passed a similar measure in December, which represented both a victory for tenant activists and a reminder of the headwinds they still face.
Before the final vote, the council reduced the lead time on eviction notices to 21 days before any forcible removal, a deep cut made in deference to the real estate lobby that has a long-term lease on city halls across the region.
After the national mortgage implosion and subsequent Great Recession, institutional buyers began snatching up foreclosed houses in bulk and turning them into rental units. With the help of new algorithms and technologies, private equity and fintech companies had poured $60 billion into acquiring an economy-shifting number of housing units as of this past fall.
Seeking to buy distressed mortgages in bulk, equity firms and developers targeted the Sunbelt in particular, and the Tampa-St. Petersburg metro area quickly proved one of their most fertile markets. The hedge fund Blackstone sank $1 billion into acquiring single-family units starting in 2012, signaling the beginning of a run that has led to corporations purchasing a full 25% of homes sold in Tampa this fall.
Naturally, the firms have increasingly jacked up rents to squeeze every penny out of residents and squeeze out the residents that couldn’t pay the jacked up rents. The metro area has experienced an influx of new residents and new high-end construction, which fed into one another to create a price spiral that has only accelerated as the Covid-19 pandemic has dragged on.
In January, Zillow named Tampa the hottest housing market going into 2022, which only spelled more trouble for working families in the region. It now takes three minimum wage jobs to pay the rent on the average two-bedroom apartment in the region, while it’s become virtually impossible to afford to buy a house in a market where multi-millionaires are buying homes sight unseen for seven figures.
“It's affecting everybody right now — well, maybe not the really rich, but middle-class people and working-class people,” says Richie Floyd, a first-term city council member in St. Petersburg. “We didn't call it a crisis when it just affected poor and working-class people, but because it's affecting middle-class people now, it’s at least really broadened the scope of organizing and broadened the scope of what's possible. Now it's affecting people who are a little more empowered and have a little bit more political clout than just regular working people have had in the past.”
Activists in St. Petersburg and Tampa have continued to ratchet up the pressure on city lawmakers, and with a larger coalition, they’ve been able to win modest gains that include increased investment in affordable housing. What they’re really seeking, however, is the enactment of city-wide rent control measures, which would be unprecedented in Florida.
Despite Gov. Ron DeSantis’s marketing campaign to promote the “Free State of Florida” and professed loathing for government intervention, the state is rife with pre-emption laws that make it hard for municipalities to regulate industries or limit the greed of business interests altogether. That’s allowed mayors and city council members to shrug their shoulders and deflect blame for not taking further action.
As Floyd explains it, however, it wouldn’t be impossible to institute rent control if lawmakers really wanted to make it happen — they’d have to declare a state of emergency and then hold a local election, but desperate times call for desperate measures. The real issue is that the desperation may not be shared by those in city hall.
“To even declare a state emergency and do a fact-finding mission would be helpful, because we would have to commission a study and maybe we’d find a bunch of things we could do [to lower housing costs],” Floyd says. “But it got shut down in the very early stages, one because yes, it's difficult to do, but two because — and I'll just be honest — a lot of the other people on the council are funded by people who don't want it to happen.”
Recent comments by Tampa Mayor Jane Castor, whose administration has also rejected rent control, gave credence to Floyd’s blunt assertion.
Rising Prices to the South
There’s no need to read between the lines or rely on insinuations when assessing the motivations of Miami Mayor Francis Suarez.
Rents are up by an astounding 36% in the Miami metro area, which is at least in part by design. Suarez’s administration rejected the practical recommendations presented in an Affordable Housing Master Plan produced for the city, instead embracing the big money flooding into the region.
A long-time real estate attorney, Suarez has pitched the city as a high-tech hub and playground for developers. In December, he underscored his priorities by joining the board of a top-tier real estate brokerage, and in February, he offered a select number of residents financial relief — in the form of his custom cryptocurrency, MiamiCoin.
Even low-income communities like Hialeah are becoming impossible to afford, leading to a rise in homelessness and turning working people into activists out of sheer necessity.
It’s not just renters impacted by these spikes in prices, either. As more units get bought up by private equity, it creates more competition for fewer homes available for purchase. The market rate rises, and when compounded with the scarcity, it drives asking prices to ghastly levels. Across Florida, the median sale price on a single-family home is up 20% from this time last year, with a 29% surge in the Miami area.
Homeowners’ insurance rates are also surging, at least in part due to the unchecked havoc that climate change is wreaking on the state. In Florida, that means retirees are now becoming strapped for cash, which does not bode well for the people in power.
The Opportunity
With his state’s residents facing mass evictions and record levels of housing debt, Ron DeSantis spent the recently concluded legislative session doing what any ambitious Republican governor would do: Burnishing his right-wing credentials for an upcoming presidential campaign.
To impress the culture war psychotics, DeSantis backed the “Don’t Say Gay” bill, won a strict abortion ban, and somehow stopped wokeness in public schools. To keep the Wall Street set happy, he did nothing to challenge private equity’s grip on the Florida housing market; if anything, DeSantis actually made the housing crisis worse by supporting a new law that allows businesses to sue municipalities over any proposals that might hurt their profits.
The approach may have made him a popular guest on Fox News, but DeSantis has to win re-election as governor before he can run for president, and skyrocketing housing prices could be a true vulnerability come this November. At the very least, it provided an opening for Democrats willing to shirk real estate money and hammer away at housing prices on the campaign trail. Unfortunately, that may be easier said than done.
“Obviously, the Republicans are not going to do anything about it, but can Democratic candidates actually articulate a vision that makes any sense? Or are they beholden to some of the same people?” Floyd asks, not particularly confident that he’ll like the answer. “Some of them have been really willing to hear me out on some of the more progressive and left-leaning ideas, but we'll see how much they actually commit.”
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