“Wish I didn’t know now what I didn’t know then.” 

It was a throwaway line in Bob Seger’s 1980 ballad “Against the Wind,” a reflection on innocence and regret. Although he felt the line sounded odd and thought it was grammatically incorrect, Seger kept it in because the people around him liked it. The line has since inspired other artists to offer their own interpretations. It inspires me as an invitation to learn, providing a frame for reflection on unintended consequences and letting us imagine how we might have done things differently. It’s particularly apt in the context of our current national affordable housing crisis.  

For four decades I directed and studied the use of public, private, and philanthropic funding to produce affordable housing and provide decent shelter for low-income families since the Great Depression. Lots of big ideas were discussed, many of them implemented. Most of those implemented did not deliver the expected results, but they all delivered unintended consequences. What can we learn from these 20th-century missteps—and more to the point, what are we willing to learn?  

The federal government has struggled for more than eight decades to meet the basic commitments it made in the U.S. Housing Acts of 1937 and 1949: “a decent home and a suitable living environment for all Americans.” The acts committed significant subsidies to build new public housing and eradicate slums. They promised new jobs, modernized cities, and better housing for those who needed it. Because the Housing Acts proposed to benefit all Americans, they attracted broad public support.

When implementation time came, most public housing authorities aimed to provide housing for those in the lower half of the income distribution—a politically popular decision. To maintain the new housing stock, rents were set to cover buildings’ operating expenses. But as the buildings aged, operating expenses increased, and rents increased along with them. By the late 1960s, lower income tenants were getting priced out—paying upwards of 60 percent of their income to keep a roof over their heads.

Senator Edward Brooke (R-MA) remedied the situation by sponsoring an amendment to the Housing Acts in 1969, which capped rents at 25 percent of tenants’ incomes. The federal government covered operating shortfalls with subsidies. For reduced rents to be set, tenants had to disclose their incomes. It soon became apparent that public housing was not serving the poorest families with the greatest housing needs. In 1981, Congress acted again, reserving public housing for families earning half of the median income and reserving 40 percent of the units for families earning less than 30 percent of the median.  

The deterioration of the buildings was accelerating. This was because federal operating subsidies did not cover capital expenses and major systems (heating, lighting, elevators) began to fail. The federal fiscal austerity of the 1980s compounded problems by reducing operating subsidies. By the end of the decade the only reasonable response to the national crisis in public housing was widespread demolition.  

As the subsidies declined and our aging housing stock failed, a counternarrative emerged through which the residents themselves were blamed. The “culture of poverty” and “learned helplessness” became dominant memes. Poverty was viewed as a communicable disease rather than a symptom. The poor became convenient scapegoats bearing responsibility for the failure of their own shelter, as if any renters, poor or not, are expected to take responsibility for maintenance of their buildings. By concentrating the poor in public housing, we reinforced bad habits and transmitted values that perpetuated poverty across generations. This was supported by another dominant meme of the 1980s—the perils of big government. Big government was sloppy and inefficient, this narrative went (and still goes); the decline of public housing was the government’s fault.  

In the “HOPE” programs that followed—Homeownership and Opportunity for People Everywhere—many public housing projects were replaced with low-rise, mixed-income developments, typically replacing one affordable unit for three that were demolished. To stimulate additional rental housing production, the federal government created the low-income housing tax credit (LIHTC) in 1986. The program offered private investors a decade’s worth of tax credits in exchange for upfront equity investments—typically the hardest money to find—for housing production. States had authority over how to allocate the credits, and regulations mandated long-term affordability of the housing.

Importantly, the LIHTC program promised to overcome the two biggest failings of public housing. By attracting private investment, the efficiencies of the private sector would overcome dependence on inefficient big government. Second, location decisions could be delegated to state and local governments who could ensure that the housing production did not concentrate poverty. Moreover, competition for the tax credits would reduce their cost to taxpayers and eventually, the private sector would produce affordable housing without the need for subsidies.  

Some pundits consider the LIHTC program extraordinarily successful. Over three decades, more than 2.5 million units of housing were built. But through that period, we lost more affordable units from the national housing stock than we produced. Moreover, the promised private sector cost efficiencies never materialized. Depending on the year and the market, production of LIHTC units was estimated to cost 20 to 50 percent more than similar unsubsidized units. This does not even count the estimated $100 million spent annually to administer the program. 

Tax credits for equity from private investors came at credit card rates to taxpayers. And the costs went up when public capital was cheapest. During the Great Recession, tax credits were yielding average after-tax returns of 12 to 14 percent to investors when the federal funds rate was near zero and the 10-year Treasury yield was around 2 percent. The private sector never was weaned from subsidy dependence. Today, virtually no affordable rental production happens without tax credits. Finally, disappointingly, it is universally accepted that the production of tax credit housing exacerbated the concentration of poverty.  

How can the largest housing production program in the history of the nation, with broad bipartisan support, produce such disappointment? There are a lot of things I wish I didn’t know now that I (and we) didn’t know then—in 1999, in 1979, even in 1949.  

I wish I didn’t know that as good as we are at identifying big challenges and announcing ambitious responses, our commitment rarely survives economic challenges. We know now that simply building affordable housing is not sufficient for providing a decent home and a suitable living environment. One needs a sustainable model that maintains the buildings and preserves their affordability over time and builds where we need to—close to good jobs and schools.  

I wish I didn’t know that political support is evanescent, and memories are short. Ensuring that scarce subsidy reaches those who need it most is reasonable, but only if the subsidy is protected. The neediest are politically weak and not likely to marshal support to defend their entitlements. And when they try, they are easy to scapegoat.  

I wish I didn’t know that we spent tens of millions of dollars evaluating housing programs, but we haven’t learned very much. We counted units, acting as if the number produced is the only important measure of impact. Twenty years ago, one in four families who qualified for housing assistance received it. Today, it is one in five families. While the general wisdom says housing costs that exceed 30 percent of income are unsustainable for families, about half of renters pay more than 30 percent of their pretax income for rent, with 20 percent handing over more than half of their income.  

When do we take an honest reckoning of eight decades of effort to shelter our people? The complexity of housing challenges makes it impossible to learn anything from program evaluations. To learn, we need to reveal and commit to our intended outcomes, share the logic guiding our actions, and reconcile what we actually accomplish with our intentions. This is a learning model that we’ve embraced at the Lincoln Institute and I hope it can be applied more broadly to policy analysis in housing, community development, and philanthropy.  

Providing affordable housing for all is no easy task. The painful truths of eight decades of work are offered not as an indictment, but as an invitation to learn, and to think and act differently. We need to try new things and learn from them. That innovation might take the form of building apartments above public libraries, a trend we explore in this issue. It might mean forging unexpected partnerships, as public utilities and housing advocates are doing in Seattle. It might mean auctioning development rights or otherwise leveraging land value.  

We should aspire to the same ambition of the confident policymakers of 1949, committing to provide “a decent home and a suitable living environment for all Americans.” But we’ll need to try a lot of new things and learn from our mistakes. And if we commit to “searching for shelter again and again,” as Seger sings later in the same song, we just might get it done. 

Have your own example of “wish I didn’t know now what I didn’t know then”? A policy or program we could have, or should have, learned from? We hope to spotlight a few in an upcoming issue—send yours to publications@lincolninst.edu.

George W. McCarthy is the President and CEO of the Lincoln Institute of Land Policy.

Marvin Rees was born in Bristol, U.K., and grew up in the city’s public housing. From there, he went on to study economic history and politics at Swansea University, then global development at Eastern University in Pennsylvania and the Yale World Fellows global leadership program. Rees worked in public health, promoting racial equality in mental health care, and as a broadcast journalist for the BBC before seeking office in his hometown. When he was elected in May 2016, he became the first mayor of Black African-Caribbean descent to lead a European city. He has pledged to make Bristol—a former manufacturing hub that lies about 100 miles west of London and is home to more than 450,000 people—“a fairer city for all,” with a focus on affordable housing, improved transit, health care, and social mobility through access to education. Rees, 47, has also worked to improve communications and collaboration with constituents and civic groups. He lives in East Bristol with his wife and their three children. In this interview with Senior Fellow Anthony Flint, Rees reflects on equity, growth, and immigration, amid a tumultuous political climate in the United Kingdom.

Anthony Flint: One of your campaign billboards indicated you would build 2,000 homes per year once elected. What was behind that promise, and how has it played out?

Marvin Rees: The reason affordable housing became our top priority is because it is one of the single most important policy tools we have for delivering population health, a strong economy, a stable society, and good educational outcomes. We have a housing crisis as many American cities do. We haven’t built enough, and the private market alone hasn’t provided the opportunity to own a stable home. It’s been a challenge, in part because we didn’t have the organizational machinery in place to bring land forward and get it developed. But it looks like we are on track to meet that target, which is 2,000 homes a year by 2020, 800 [of them] affordable. There’s a whole mix: council houses where we own the land; a social housing association with rents below market rates; we’ve got volume builders who, within their schemes, are also required to provide affordable homes; and we are supporting self-build schemes, where communities come together [to build cohousing on underutilized land]. We’ve had the Bristol Housing Festival exhibition, which showcased modern methods of construction such as off-site manufacture. We place an emphasis on quality and community. What we don’t want to do is just put boxes up and slot people into them.

AF: As you think about sustainable growth and affordable housing, what in your view is the role of land policy, including the taxation of land? Where do you stand on land value capture and a land value tax?

MR: I’m from a public health and journalism background, so I had to have a crash course about how various parts of a city work. Land value is a massive challenge because land has become a commodity, passing through the hands of several owners, not to be built on but just to make money. We need powers at the local govern­ment level, and the national government needs to take action to change how land is used. Personal­ly, I think there’s a huge conversation to be had. In the U.K., we think education is a public good. We think the same about health, and hence we have a National Health Service. And I think for social justice and the strength of our economy we need to reframe how we think about land and housing. If we fail on this, we’ll end up with what we’ve seen across the world—the middle class disappears, and you end up with a bifurcated population and fragile state. This is a crisis.

AF: You have embraced the concept of reinven­tion for post-industrial cities, which is a big theme of the U.K. 2070 Commission, a research initiative that counts the Lincoln Institute as a partner. But how do you encourage growth in your city and others like it in the context of Brexit?

MR: Brexit is the wrong answer to the right problem. People have been left behind; they’ve lost hope. [People feel that] politics has become increasingly distant from them. The other problem Brexit has identified is that people have lost touch with their national story and narrative, and who they are. Just like in the United States, many want to go back to the 1950s. These are legitimate grievances, but Brexit is not going to solve the problem. Globalization has integrated our communities so we use the same products—there’s nothing British about Pizza Hut, right? In many ways we’re in a post-national world and we can’t leave our futures in the hands of national government. The city level of government is best placed to deliver, with cities forming international networks to work together on shared issues like climate change, immigration, and equity.

AF: Take a moment to explain Bristol’s One City Plan, which lays out a vision for where the city will be in 2050 and is shortlisted for the EU’s Capital of Innovation prize. How do you balance myriad ideas from constituents and pushing the agenda you have determined is needed?

MR: The One City Plan comes from an under­standing that what people receive is not by government alone—that people sit at the intersection of [decisions made by] the city, universities, the private sector . . . And if we want to shape the future, we have to grab ahold of that collective impact and get some alignment. It’s also based on the sense that we can’t wait to see what comes down the railroad tracks. We need to see where we need to be in 2050, and if we want to be there in 2050, what needs to be delivered by 2048 or 2025, and work our way back. It’s a living document with shared priori­ties and real agreement. Anyone in Bristol can pick up a copy of the plan and say, ‘Right, I see you are doing X by 2050, but I think it should be done by 2025.’ Carbon neutrality, for example. The One City Plan gives us the raw materials and shows how we can get to common ground.

The plan is based on six stories [Health and Wellbeing; Economy; Homes and Communities; Environment; Learning and Skills; Connectivity]. Each of those stories has a board [made up of community members], and they are responsible for updates every year. Every six months we also have something called the City Gathering. The first one we had 70 or so people come together . . . and I said to them, between us we spend £6 billion [$7.4 billion] and employ 70,000 people in the economy. If we align ourselves on a small number of shared priorities, what could we not do? We have incredible power. We’re trying to create space for people to [connect and] come up with answers.

AF: As you’ve been going about your work, you’ve been the target of extremist and anti-immigration rhetoric. How do you manage being chief executive with a progressive agenda in that kind of climate?

MR: I manage it because I think the whole argument about immigration is, to put it charitably, a mistake, and less charitably, a big lie. Immigration is not the cause of people’s problems. I grew up poor and among those often preyed upon. To have members of the British elite running around, and you see something similar in the United States, blaming migrants for the state of the country that they have had all-encompassing power over for centuries—it’s a little bit rich. They have created a situation where relatively poor and powerless people are blaming other poor and powerless people for the state we are in. It’s also not difficult for me because I want to be in a place where I can say what I really think. I’m a mixed-race man. My dad came from Jamaica; my mum’s English heritage goes back in Bristol for a very long time. My granddad was from South Wales and before that Ireland. I’m a physical embodiment of migration, so I think it’s disingenuous to say migration is the cause of the world’s ills.

Another problem is that the migration discussion is being shaped by national govern­ments. That’s the wrong way around. What we need are national governments to start talking to cities and asking what cities need. [Cities are] more inclined to look at migration as an asset in terms of our connectivity to world markets. Following our Asian, African, or Eastern European populations—they connect us to international opportunities. National govern­ments are using abstract numbers and talking about how many more people to let in. And it’s completely different from the conversation we need to have.

AF: Last but certainly not least, what is your vision for how cities like Bristol can contribute to combating climate change, while also preparing for its inevitable impacts?

MR: We absolutely recognize it as a crisis with very real consequences. Increased flood risk, more extreme temperatures, desertification—we’ll end up with more rural-urban migration, and a source of conflict leading to more crises. For cities, the climate emergency will be inseparable from the global migration emergency. Cities have to be in the driving seat for a number of reasons. One is about political will. Certainly in the United States, your federal government seems to have no political will, but we’ve seen American mayors stepping up to lead when the federal government withdraws. Cities are more inclined to look in terms of interdependencies, whereas the national government is more occupied with boundaries. Cities are equipped with the political machinery to lead the way.

Anthony Flint is a senior fellow at the Lincoln Institute of Land Policy.

Photograph: Marvin Rees, the mayor of Bristol, England, has prioritized affordable housing and climate change during his time in office. Credit: Office of the Bristol Mayor.

Shared equity housing programs are designed to provide a key to those who are locked out of homeownership, whether because of fast-rising housing prices, stagnant incomes, or a history of discriminatory policies. As new research shows, the programs do just that.

In the Lincoln Institute of Land Policy working paper “Tracking Growth and Evaluating Performance of Shared Equity Homeownership Programs During Housing Market Fluctuations,” Ruoniu Wang of Grounded Solutions Network and his coauthors study the performance of more than 4,000 shared equity housing units across 20 states over three decades—the largest study of shared equity to date. They demonstrate that shared equity housing promotes sustainable wealth-building opportunities and lasting affordability for lower-income households, and serves an increasing number of minority households.

“Shared equity homeownership provides opportunities for families of color to access quality housing, build wealth, and counter systemic racial housing disparities,” said Grounded Solutions CEO Tony Pickett, citing how the median shared equity household accumulates approximately $14,000 across all housing cycles, compared to a median initial investment of $1,875 made at purchase.

“We believe this study validates shared equity as a sustainable housing model, and our focus is on growing the scale of shared equity housing to a level where increased numbers of lower-income families view it as something they can participate in and benefit from.”

Comparing 58 programs across the country with data from Grounded Solutions’ HomeKeeper National Data Hub, the study measures the impact of the shared equity housing sector over 33 years, from 1985–2000 (pre-housing bubble), 2001–2006 (housing boom), 2007–2012 (housing bust), and 2013–2018 (housing recovery). It finds that 95 percent of shared equity mortgages are affordable for households earning 50 to 80 percent of area median income, and the share of minority households living in shared equity homes increased from 13 percent between 1985–2000 to 43 percent between 2013–2018.

“Shared equity programs unlock stable housing opportunities and provide a foothold for people who would not otherwise be able to access homeownership, one of the main wealth-building vehicles in the United States,” said George W. “Mac” McCarthy, president of the Lincoln Institute.

Under the shared equity housing model, lower-income residents are provided the opportunity to own a home—either directly or indirectly—at a lower cost than the open market rate. When a shared equity home changes hands, the resident reaps a portion of the gains, and a portion stays with the property, providing a perpetual subsidy and allowing others to purchase the same home at below-market cost.

The study covers three types of shared equity homeownership: community land trusts, deed-restricted housing, and limited-equity cooperatives. In community land trusts, a nonprofit corporation owns the land and provides a long-term lease to the resident, who owns the structure. In deed-restricted housing, the resident owns the entire property, but the resale price is restricted to preserve affordability. In a limited-equity cooperative, the residents own a share of a corporation, which wholly owns the property.

In addition to wealth-building and affordability, the study explores other dimensions of homeownership including the demographics of homeowners served, the structure of different programs, the levels of public and private funding, and the frequency with which participants sell their home.

Will Jason is associate director of communications at the Lincoln Institute of Land Policy.

Brandon Frazier is director of communications at the Grounded Solutions Network.

Photograph: Rawpixel/iStock via Getty Images