“Affordable” Phonies Make Life Unaffordable for the Serfs

According to Merriam Webster online, affordable means able to be afforded: having a cost that is not too high.  And among New York’s Democrats and progressives there is always talk of having government policies make something affordable:  affordable education, affordable health care, affordable housing, affordable transportation, etc.  And yet observing 40 years of public policy in New York, I can think of only a handful of examples of policies that have actually made life, or a better life, less costly for the public at large.

When one examines the totality of public policies enacted in so-called Blue States, you see that the goal actually seems to be to make many things more expensive.  

Sometimes for reasons I agree with.  A developed country (and I’m not sure ours is) shouldn’t be making goods and services more affordable in the short run by making them more expensive, more dangerous, or more misery-inducing for the community as a whole, in the long run.  That’s what the builders of the “affordable” Surfside condo in Florida did by cheaping out on the building structure.


But mostly for reasons that would be impossible to justify if openly admitted.  To make some workers — those who work for the government, or are paid funded by government programs — richer compared other similar workers, at the expense of making those other similar workers pay more and become poorer.  And to make it more expensive to live in politically influential “liberal” communities, ensuring the less well off, their burdens and troubles, will be somewhere else.  The result is hypocrisy.

When Democrats and progressives say “affordable” what they really mean is “subsidized.”  Part of the cost is paid for by someone else, so it seems to be more affordable.  But since fiscal resources are not unlimited, even in New York City where we have the highest state and local tax burden and the most debt, the subsidies for “affordable” health care, education, transportation, housing etc. only end up going to the fortune few.  And many if not most of those few often turn out to be among those were already fortunate.  For the rest, somebody has to pay after all.  Often those who are already burdened by policies to make things more expensive – policies that lead to the need for subsidies to begin with.


I’ve previously written about the fact that despite the “Affordable Care Act” the United States, unlike developed countries, does not have universal health care, and has the least affordable health care in the world.  In fact, its tax-financed and mandatory health care costs exceed, as a percent of GDP, the entirety of health care spending in developed countries with universal health care.

For one thing, keeping people healthy to start with is far more affordable than providing expensive, labor intensive, high-tech medical care after the fact.  And in this the United States has just had the latest of many colossal failures.

In fairness, I’m not in favor of Republican ideas to make health care “affordable” either – they tend to be phony as well.  For example, the “affordable” high deductible insurance policies they promote charge less in the short run by not paying much out later, when health care is actually required.  They are basically bait and switch.  And having states compete for the insured by allowing policies purchased across state lines would merely create a race to the bottom with regard to excluding congenital health problems, such as cystic fibrosis and spina bifida, from policies, and thus cross subsidies.  The reality, however, is that health care is substantially government funded in the United States, and this had led to higher costs and less equity, not lower costs and more equity.  

I’ve also noted that despite NYC’s doubling (inflation-adjusted) in school spending to student over two decades, to double the national average, quality education remains unaffordable.  They still keep demanding, and getting, more money in exchange for benefits that somehow never arrive.

In part because the additional money has gone to additional days, hours and years spent out of the classroom and not providing education at all.  This shows something else about affordability.  If quality public or publicly-funded services are provided, then the public might very well decide that funding must be adequate, and refuse to provide more.  Therefore, for those who provide such services to succeed in grabbing more, what is provided not only has to be increasingly expensive, it also has to be inadequate.  An incentive structure we’ve seen play out over and over.

On the transportation front, it should be far more affordable for 40 or 120 people to ride on a bus or subway car than for one person to ride in their own motor vehicle.   But since so much of what is now spent on mass transit in NYC is sucked into the past, to those who grabbed more for themselves 10, 20 or 30 years ago, it turns out that the fare plus subsidy cost per passenger mile for transit here is as high as the cost of people riding in their own cars elsewhere.  If you look here…

You’ll see that in FY 2018 the NYC subway’s operating costs were 51 cents per passenger mile.  Capital costs and debt service were on top of that.  That includes the cost of the road, whereas drivers use the streets for free.  But NYC buses cost $1.78 per passenger mile, on those same roads.  NYC paratransit cost $10.03 per passenger mile.

If I were to ever use my own car for business for the firm I just joined, meanwhile, it will reimburse me 50 cents per passenger mile.  The IRS, meanwhile, allows taxpayers to deduct 56.5 cents per mile from their taxable income.


The standard mileage rate for business use is based on an annual study of the fixed and variable costs of operating an automobile.

Someone other than riders and taxpayers, probably someone in Florida or already dead on approaching one or the other, is now benefitting from nearly the entirety of the efficiency benefit of mass transit in New York, other than the traffic and environmental benefits.

When was the last time you heard of a plan or proposal or program to provide some public or publicly-funded service with fewer work hours and therefore fewer people?  Or to provide more public or public or publicly-financed services with the same number of people?  In reality, New York’s politicians are there to make sure that no such proposals can ever be adopted.  They are unthinkable.  What you hear, instead, is proposals to provide more services for even more money, that somehow end up providing the same or less services for more money.

I was inspired to write this post, however, not by health care, or education, or transportation, but by an article I read recently about housing.


Lockwood Development Partners has bought a portfolio of nine hospitality properties across eight states, amassing 1,550,000 square feet with a total value of approximately $225 million.

Lockwood plans to reposition the properties, which have struggled during the pandemic. After they are repositioned, the properties will feature a sustainable hotel operation, affordable multifamily housing and ghost kitchens. The properties will also serve as a resource for veterans to receive permanent housing, physical and mental assistance, and other support programs through SarahCare, an organization dedicated to providing resources for seniors.

The properties are all located in so-called Red States.   

Other firms are also taking on these repositioning projects, though the hospitality-to-apartment play seems to be most popular. For instance, developer Repvblik has already built a pipeline of redevelopment projects, including transforming a Days Inn hotel into a 341-unit affordable property in Branson, MO. The development is the largest affordable project to be developed without federal funding or tax credits.

Discounted distressed assets help make affordable deals—which are notoriously challenging—pencil. “A lot of these asset classes had PPP loans and other federal programs that allowed owners to kick the can down the road,” Richard Rubin, CEO of Repvblik, tells GlobeSt.com. “When it comes to a lot of these programs, they eventually run out of runway. For the properties that don’t have a discernible path forward, there is going to be a lot of lender-owned stock available. It is very clear to see what is happening, and I think a lot of the distress is going to be a bridge for the housing.”

Johnny at Granola Shogun, as usual, saw this one coming.

So what is going on in New York City?  Once upon a time, many of the mentally ill and addicted lived in single room occupancy “flophouses” (SROs) in places like the Bowery.  I recently saw a documentary about the last of these on the gentrifying street.

But single room occupancy properties were also used by young adults new the city.  The Barbizon was a famous example for young women.

When the mentally ill were discharged from state mental hospitals in the 1970s, many ended up living in old, down on their luck hotels near Penn Station that had lost their customers as travel shifted from rail to air.

As the city recovered, there was a movement to prevent greedy landlords from evicting the poor and homeless and turning these properties back into regular hotels.  

What made this hypocritical is that not only were new SROs banned in New York City, but even regular hotels were greatly restricted outside the Manhattan central business district, limited to industrial zones and auto repair streets.  

Then, during the pandemic, the DeBlasio Administration started filling new outer-borough hotels with homeless men.  Then during the pandemic homeless men were housed in a hotel on the Upper West Side.  A political uproar ensued.

In response, to calm the fears of outraged “progressives,” and perhaps due to campaign contributions from existing hotel owners (the real estate industry and NY Post have been awfully quiet about this one), the DeBlasio administration has now proposed not allowing any new hotels anywhere in New York City.

To open a new one in the future, under the proposal, a would-be hotel would have to pay $tens of thousands in consultant and legal fees, and $tens of thousands in campaign contributions, and perhaps $millions in property carrying costs, while waiting a year or two or three for a discretionary approval that may never come.  To increase costs so that only “upscale” hotels financed by large corporations can be developed in NYC in the future, not cheap ones where homeless men might be placed – or less affluent tourists might stay.  An exclusionary policy with the fig leaf justification of preventing hotels without unions from opening.  Sorry Mr. Tale of Two Cities, but I know what this is really about.

Think about that for a minute.  There will be not one place in New York City where the zoning would allow someone to buy a piece of property knowing they were allowed to open a hotel.  How could that be justified by a “well considered plan”, the legal requirement for zoning?

To really find hypocrisy, however, one has to look to Blue State suburbs, and zoning that limits housing to one-family homes, often on large lots, even in places where sewers are available.

The cheapest way to add a new housing unit is for the owner of a one-family home whose children have become adults to add a second unit.  All it costs is a new entrance, a new wall (or just covering a door), a new circuit breaker panel to shift some of the cost of electricity to a separate meter, and a kitchenette.  Often there are already more bathrooms than the primary occupant requires, and there is no need to even add one of those.  

The owner gets income.  The tenant gets affordable housing.  Later, if a young family with children moves in, the property could be converted back to a one family home.  This kind of flexibility allows ongoing reinvestment.

So why is it not allowed?  Social exclusion for one thing.  Consider the Village of Belle Terre v. Boraas decision (1971), one that legalized exclusionary zoning in New York by accepting the legality of rules that limited to occupancy of a home to people related by blood or marriage.

A quiet place where yards are wide, people are few, and motor vehicles restricted are legitimate guidelines in a land use project addressed to family needs.  The goal is a permissible one within Berman v. Parker, supra.  The police power is not confined to the elimination of filth, stench, and unhealthy places.  It is ample to lay out zones where family values, youth values, and the blessings of quiet seclusion, and clean air make the area a sanctuary for people.

First of all, the youth values argument is bogus.  I made sure to live in a place where my children would be able to get together with other neighborhood children without my having to drive them there.  The kind of places created by that zoning are fine for working adults who want to drive everywhere and don’t have time to socialize with people they don’t already know, but are alienating for children and seniors.

Second of all, the zoning in question did not regulate motor vehicles.  One-family homeowners could have as many as they wanted, and drive them as much as they wanted.  If anything, suburban zoning tends to mandate auto dependency by limiting the goods and services available within walking or biking distance. and mandating extensive off-street parking. Something that might have made sense when large automobiles were the only option for people living in such places.  With the advent of work from home, shop from home, and e-bikes, and the rising popularity of bicycle transportation, it makes less sense now.  If the goal is to limit the space occupied by parking lots, and the amount of motor vehicle traffic, then regulate the ratio of motor vehicles and imperviable coverage to lot area, rather than restrict how buildings are used.

You have someone’s own property.  There were two adults and two children.  Now if a second unit is added, there could be two (and eventually one) adult – and one or two other adults.  It’s the same number of people, or fewer.  If the problem is the motor vehicles, then regulate those.

Red States have their own hypocrisy here.  While they have far less exclusionary zoning, much and (in some cases most) of their new housing is built in private communities with their own exclusionary rules.  


I want to revisit a conference I attended at Pepperdine University’s School of Public Policy sponsored by Fieldstead and Company back in October of 2019. I was one of the invited speakers and I had a minor clash with some of the other presenters. There was a distinction made between government regulations and private contractual agreements. Some speakers insisted that while it was not the place of governments to dictate what owners can and can’t do with their own property, it’s perfectly appropriate to have a private home owners association restrict all sorts of things. The people buying into such communities were doing so voluntarily. They choose to live with those specific covenants and codes. But the government had no business interfering with private property in the same way.

I pointed out that large chunks of the country have municipal and/or county mandates that all new construction must be incorporated within a private home owners association. So I asked if it’s illegal to build or purchase a home without all manner of onerous and picayune private controls, is that really voluntary? And what legal justification would local governments have for mandating such private communities in the first place? Haven’t people been building homes for centuries and managing just fine without HOAs?

My inquiry was met with complete silence from the panel. No one had any desire to address the issue. And that was my point. They chafed at some government rules that infringed on their liberties, but turned a blind eye to others that served their interests. The panel wasn’t really interested in liberty. They were preoccupied with a very specific and highly limited interpretation of their favorite kinds of freedom – mostly the ability to own things and control their neighbors’ behavior in particular ways. What we have everywhere is a symbiotic relationship between private interests and government bodies that work cooperatively to guarantee specific outcomes.

As I have noted exclusionary zoning, and its private sector alternatives, are the only anti-poverty program with real, bi-partisan support in this country.  That this policy doesn’t reduce the total number of poor people, and may in fact increase poverty, does not reduce its popularity.  Since it reduces poverty near the people who benefit from the exclusion.

The fact that more and more new and affluent Floridians live in private communities, and pay homeowners association dues in lieu of property taxes (or have some of those costs capitalized in the cost of the houses), is one of the explanations for that state’s falling state and local government tax burden.  So is increasing federal money.  The federal government pays a higher share of base Medicaid costs in poorer states – it varies from 50 to 80 percent federal.  New York is just 50 percent federal.  So is California.  So are Texas and Illinois.  When I first started following this stuff, Florida was a 50 percent state too.  It is now up to 65 percent.  Either it got some kind of special deal, or it has become much poorer on average.  So if you move down there, you might want to be careful if you step outside of your private community with its exclusionary non-zoning. 

Right now this country has a housing shortage.  Or does it?  By some measures, Americans are vastly over-housed.  Compare the housing statistics from the 2019 American Community Survey

With the social statistics from that same survey.

You’ll find 3,650,241 housing units with no bedroom, 15,323,800 with one bedroom, etc.  Even if every housing unit with five or more bedrooms has only five, that’s 381,816,476 bedrooms in the U.S. And there are about 768,274,150 rooms in total, excluding bathrooms.  

Meanwhile, there were 320,155,161 people in households.  Many of them are married, and 58,340,394 of them were reported to be the spouses of those who filled out the form.  Assuming spouses wanted to share a bedroom, that means that everyone else could have their own bedroom in just 261,814,767 total bedrooms.  There are 120 million extra bedrooms in the United States.  Not even including all the now-empty hotel rooms.

If you think the availability of excess bedrooms is a brilliant insight, I must admit that there were already excess bedrooms (though fewer of them) in the mid-1980s, when Professor James Hughes pointed it out when I was a graduate student at Rutgers.

Some of this is distributional.  Some people have more than one house.  Others could choose to keep bedrooms empty. The bedroom our daughters shared as children is one empty, but we are not looking to rent it out.  Others, however, are prevented from using that excess square footage for cottage industry income by zoning law or homeowner association rules.

Meanwhile, in rural areas where land is cheap the most affordable housing is a pre-fab trailer in a trailer park.  And in the Sunbelt, where it doesn’t get that cold, more and more people are living covertly in vans and recreational vehicles.  In New York, where it does get cold, I suspect a colony might be growing under the Gowanus Expressway.  I doubt either solution would be accepted in a Bohoburb.

Shockingly, one does not have to look outside New York State to find a somewhat more enlightened policy.  Most of the City of Auburn is zoned for single-family housing.  But if the owner of the property lives there, they are allowed to install an “accessory” housing unit of up to 800 square feet.  The owner-occupancy requirement is intended to prevent the accessory unit from turning into an “Animal House” that the owner doesn’t care about because they live elsewhere.  (When the brownstones of Park Slope were turned into SROs, my father-in-law told me, most of their owners lived in south Brooklyn or on out Long Island).  If they are willing to live there themselves, however, they could add a rental apartment.

Auburn does require an extra 2,000 square feet of lot area above the minimum if they want an accessory unit.  Something that doesn’t make sense of a neighborhood that is already built, where the lot area cannot be changed.  But at least a household living in an older, over-wide home on an over-sized lot can use some of it to earn some income – perhaps enough income to keep the property up.  Something that the City of Yonkers does not allow in Park Hill, for example.

Later born generations have been left increasingly less well off.  But no one is going to make a campaign contribution in support of, or get a patronage job overseeing, adaptations they make themselves on a small scale.  Whereas affordablesubsidized housing programs have staff members, lawyers, consultants and developers looking to benefit from the subsidies.  Just as the automobile manufacturers spend lavishly on ads, dominating the media.  Cheap bicycle transportation does not.  The bigger the flow of money, the easier it is to skim a little off.  Cutting costs doesn’t produce profits and political opportunities for the executive/financial class and the political/union class.

Here is the reality, however.  Later born generations of serfs can’t afford the cost of “affordable” anymore.  And as relative cost inflation (revenue inflation for those on the inside) continues and the debts older generations are leaving behind soar, they can’t afford to pay for subsidies either.

1 thought on ““Affordable” Phonies Make Life Unaffordable for the Serfs

  1. larrylittlefield Post author

    Some of you may be familiar with the computer game SIM City. I’m not a computer gamer, but given my background in city planning I did try an early version of this one. You are the mayor of a developing city and have to make choices about taxes and public investment. Consistent with my values, I chose to make decisions that cost more in the short run, but made things better and cheaper in the long run. The developers of the game, in touch with the zeitgeist, programmed those decisions to cause a riot that burned the city down. Making things cheaper and easier in the short run at the expense of the long run was the successful strategy.

    Until the long run arrives.

    Then whoever is around then gets blamed, and they can only sell off the further future even further to keep the wolf at the door. I wonder if the game is programmed to go back to those who played it in the 1990s and tell them that their city is burning down? Or their country.

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