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What is neoliberalism?

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Everyone benefits from subsidized housing, not just the people who live in it. (Mike Koozmin/2014 S.F. Examiner)
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If you’ve been following the local slop wars we call San Francisco politics, you might have noticed a new word being flung at YIMBY pro-housing advocates — “neoliberal” — and wondered what it means.

Neoliberalism refers to policies that privatize public services. This can mean the government abandons provision of the public service altogether; or instead of directly providing the service, the government passes rules or regulations that are supposed to ensure that private industry provides the service; or the government contracts with private nonprofits to provide the service; or all three.

Neoliberalism is the opposite of the welfare state. Classical liberals and socialists hate neoliberalism because it results in fewer public services, it channels public tax dollars to private interests and when governments contract with nonprofits to do government work, it breaks public sector unions.

From the 1930s until the 1970s, the federal government owned and operated subsidized public housing for low-income people to live in. These projects operated pretty smoothly. In the 1970s, the federal government decided it didn’t want to pay to provide this public service anymore. It starved the housing projects of money until the 1990s when most of the projects were completely deteriorated and had to be torn down.

Insofar as the federal government continues to participate in subsidizing public housing, instead of owning and operating its own developments, it contracts with private nonprofits — like Mercy Housing, Bridge, Mission Housing Development Corporation, Tenderloin Neighborhood Development Corporation or Mission Economic Development Agency — to build, own and maintain low-income housing.

The other neoliberal policies local governments have pursued since the 1970s to try to ensure that low-income people have housing are rent control and inclusionary zoning. Both of these policies rely on the private market to provide (what should be) a public service. They also, following the neoliberal trend, channel aid to the middle class, away from the people that really need it. A study by the Rent Board in 2002 showed that as many as 40 percent of tenants in rent-controlled apartments earned 120 percent of the area median income or above. Inclusionary zoning is a little better — about 20 percent of the housing produced by that program benefits people making more than the median income.

The YIMBY Party supports the classical welfare state solution to the problem of how to house people who can’t work at all, or are trying to raise a family while earning minimum wage — public subsidy from all of the taxpayers to the lowest-income people. Everyone benefits from subsidized housing, not just the people who live in it. For example, if you shop somewhere with low-income employees receiving public assistance, then the price of the thing you buy is subsidized by that housing program.

To fight neoliberal housing policies and support real public solutions, please call Rep. Nancy Pelosi’s office, (202) 225-4965, and tell her you support House of Representatives bill 948, sponsored by Rep. Keith Ellison. HR 948 is a bill that would reduce the mortgage income tax deduction (which is a subsidy for people rich enough to have recently bought a house) and use the money to subsidize housing for the lowest-income Americans.

Nancy Pelosi is currently opposed to HR 948! She is very powerful in the House of Representatives, so she needs to hear from us that she is on the wrong track. Pelosi needs to hear that San Franciscans really care about public housing, not just name calling and posturing.

Sonja Trauss is founder of the SF Bay Area Renters Federation and co-founder of the YIMBY Party. Their mission is to increase access to opportunities in the Bay Area for all kinds of people by promoting building of all kinds of housing in the Bay Area.

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