If we objectively evaluate government’s involvement in housing over the past century, we will discover a legacy of failed policies. From public housing projects that became breeding grounds for criminal gangs to the subprime fiasco of the 2000s, government has proven to be incredibly inept when it comes to the provision of housing. Despite this history, the Biden administration is doubling down on failed policies.
Biden plans to “invest” $65 billion into the nation’s one million public housing units. Neglected and ill-maintained for decades, public housing is little different than it was fifty years ago when the federal government abandoned the idea of building more public housing. There is no rational reason to believe that neglect and poor maintenance will not return in the future.
In 1999, the Department of Housing and Urban Development (at the time headed by Andrew Cuomo), ordered Freddie Mac and Fannie Mae to increase their loans to low-income households and “people of color.” Earlier this year, the Federal Housing Finance Agency, which now regulates Freddie Mac and Fannie Mae, has ordered the two government sponsored enterprises to increase their loans to low-income households and “people of color.”
The only way that previously unqualified households can obtain a mortgage is by lowering lending standards. That is what happened in the 2000s after Cuomo’s directive and ultimately resulted in the Great Recession. There is no rational reason to believe that the Federal Housing Finance Agency’s directive won’t result in a similar catastrophe.
To some observers doubling down on failed policies might seem idiotic. But idiocy is an insufficient explanation. The cause is philosophical.
Morally, these policies are an application of altruism. According to altruism, we have a moral obligation to place the welfare and needs of others before our own welfare and needs. Minorities and poor people have a need, and it is our responsibility to satisfy it. To the defenders of these policies, past failures tell us nothing about future consequences. To the defenders of these policies, we must experiment to find what works.
Epistemologically, this represents a rejection of principles. Principles allow us to project the future consequences of today’s actions. But if we reject principles, we are left to trial and error. If we reject principles, we will try the same policies over and over and expect different results. We will double down on failed policies.