As The Pendulum Swings

April 14, 2015

We continue our series of blog posts from our Runstad Center Affiliate Fellows class of 2015, who have just returned from their travels to Santiago, Chile, and Rio de Janeiro and Curitiba, Brazil.  Here, Joe Ferguson shares his thoughts about balance and moderation with regard to public housing incentives. 
I have always found it discouraging when I see our government push policy too far in one direction in response to a problem and then watch it years later swung back the other way without any legitimate progress to speak of. It reminds me of the diet craze when most of us have realized that we could or should lose a few pounds, so we decide that we are going to completely cut out gluten or maybe sugar or maybe we decide to eat like a caveman or put large amounts of butter in our coffee in the morning. I commend the few that realize a life style from these methods to improve their health, but for the rest of us it seems inevitable that we return to the same eating habits as before and possibly even more indulgent given the fact that we’ve been deprived for so long.  Consciously I know that the real answer is balance and moderation, but corporate marketing campaigns remind me that this is not how our society is structured. This is a first-world problem, and one in part that Chile is experiencing.
While in Santiago, a city representing approximately half of Chile’s 16 million people, we have learned of the country’s significant achievement of providing formal ownership housing to the majority of its population on the way to their goal to cover their entire housing deficit by 2020. The institutional framework established by the previous military regime (or dictatorship depending who you ask), provided an effective voucher system for
private industry to answer the call for housing. Amazingly, this goal and its underlying policy Over the past 14 years, approximately 100,000 units per year have been built. This is especially impressive given our country’s inability to address our own homeless population with anything but stale band-aids as solutions. Self-admittedly, Chile’s approach has not been without its problems and certainly lessons have been learned given the extreme segregation and lack of public goods provided for low-income communities. Unfortunately, the pendulum swung too far and private investment provided the necessary quantity of housing, but without a balanced regulation and thus the majority of the units are poor quality and communities were created with sub-standard living conditions. The government has recognized this and has recently begun an effort to renovate or redevelop most of the social housing it delivered during this period.
However, the effectiveness with which the volume of units were delivered under multiple government leaders is something to take note of and my hope for the United States is that we can focus on effective incentives for private investment in affordable housing. We can ensure cost-effective solutions and require quality product while improving our effectiveness and hopefully resist the urge to start over every time there is an election.