Free Market Solutions to the Housing Crisis: Introduction

Across the nation, low-income families face a severe shortage of affordable housing. (Housing is considered affordable if it consumes 30 percent of less of a family’s income.) While there is widespread agreement that a problem exists, there is little agreement on the proper solution. Indeed, many of the proposed solutions conflict with one another and contribute to a worsening of the crisis.

The cause of this conflict and confusion is a flawed method for thinking about the problem. If we follow the wrong method in addressing any problem, the decisions that we make are unlikely to achieve the results we desire, and those decisions often lead to undesirable results. If we choose the wrong standard by which to judge alternative policies, or if we do not consider all of the relevant facts—the full context—we are unlikely to make the best decisions.

If we want to make the best decisions possible, then our thinking must be guided by a method that is founded on the proper standard of value and considers the full context. We must begin with the proper goal in mind, and then we must consider all of the relevant facts, including the pros and cons of the alternatives in light of that goal.

Most discussions of housing policy begin with the wrong standard of value. With few exceptions, some group—such as low-income families or the working class—serves as the standard of value. When the interests of the group are the standard, then the interests of the individual are subordinate to that group. The individual is regarded as relevant only to the extent that he sacrificially serves the group. Further, most discussions of housing policy focus on one particular aspect—such as “”voucher discrimination”—and ignore the broader context. The resulting policies attempt to address one issue while ignoring the consequences of those policies on other aspects of housing.

Because the wrong standard is used, the proposed policies attempt to benefit the members of one group at the expense of individuals—non-members of that group. Because the full context is not considered, the proposed policies inevitably create new problems.

If we want to avoid these flaws, we must reject collectivism—the idea that the group is the standard of value. In its place, we must embrace individualism—the idea that each individual is a sovereign being with an inalienable right to live for his own sake. Then we must consider all of the facts that are relevant to promoting and protecting the individual’s freedom to live the life of his choosing. Finally, we must consider the pros and cons of the alternative policies.

Affordable housing is a multi-faceted issue. Many factors contribute to the cost of housing, as well as its affordability to a particular individual or family. If we want to implement the best policies, then we must consider all of these factors, as well as their interrelationship.

Over the next two weeks, we will examine six different issues pertaining to the affordable housing crisis, the policies proposed by many housing advocates, and free market alternatives. This series of posts is founded on the premise that each individual has a moral right to live for his own personal happiness. In examining these issues, we will see how they relate to one another and the overall impact on housing affordability—we will consider the full context. To solve the affordable housing crisis, we need an integrated policy.