In 2022, ProPublica published an investigation that alleged with substantial evidence that a large number of landlords across the U.S. were colluding to raise rents via algorithmic price-setting software provided by RealPages. Shortly thereafter, the Department of Justice opened a formal investigation into the company and, as of 2024, is alleging this effectively amounted to a monopoly that violated antitrust laws.
This kind of price gouging is occurring in the midst of rents rising faster than wages across the country. Much of the blame for this is laid down to a shortage of available housing. However, this isn’t the whole story. Even as there are calls for re-zoning to allow private developers to build, we need to take a deeper look at how for-profit housing is to blame for high rents.
For-profit housing has failed us and will continue to do so if we only focus on zoning reform.
We must turn to building nonprofit public housing if we want to truly address the systemic issues plaguing our housing system in the U.S.
If we were to build enough public housing such that it occupies a large proportion of the overall supply we would end up with a situation similar to Vienna, Austria. Rents are cheaper than would seem possible; renters pay only a third of those in London, Dublin or Paris pay.
Sixty percent of housing in Vienna is public housing, which makes this magic possible. At that point, for-profit housing is obligated to compete for market share with non-profit housing. This in effect stabilizes the housing market by keeping housing prices generally tethered to the actual costs of the developer. This overall effect is termed a Unitary Housing Market, where non-market housing influences the overall housing market. We can see similar effects in countries such as Sweden and the Netherlands.
Perversely, we rely on for-profit housing almost exclusively in the U.S. Landlords and real estate investors are encouraged to essentially act like vampires — to take whatever profit they can get away with. Renters are their victims.
Ric Campo, CEO of a company which participated in RealPages’ alleged price fixing venture, was perhaps more explicit. “What we found was that driving our turnover rate up actually captured additional revenue,” Campo says. “The net effect of driving revenue and pushing people out was $10 million in income,” Campo says. “I think that shows keeping the heads in the beds above all else is not always the best strategy.”
I’m not here to say we need to get the wooden stakes but we do need to curb their appetites.
We need to acknowledge the adverse incentives present in our housing system and any solutions to our housing crisis must address them directly.
A unitary housing system supported by an expansion of public housing is a solution that directly addresses those adverse incentives at a systemic level. We wouldn’t even require any wooden stakes.
Public housing in the U.S. is undermined by both racism and classism, which has left it underfunded and restricted to very low income households.
Congress has proved reluctant to even fund the backlog of necessary repairs to the existing public housing stock. Despite increasing funding for public housing in Fiscal Year 24, the budget still falls short of the necessary maintenance funds: $3 billion allocated instead of $70 billion requested. We’re only 96% off our goal!
American views of U.S. public housing, both real and imagined, are not favorable. Generally, they imagine run-down low income tenements, falling apart and rife with crime.
Fundamentally, aiming for a unitary market requires changes that address these concerns.
First, the goal should be for public housing to be open to anyone who wants to live in it. That is mixed income, quality housing open to all — a godsend for the almost half of households that are rent burdened. Rents would be stabilized or reduced for all others. And reframing public housing as an option for all would tear down the stereotypes around it.
Second, we still have to face a Congress unlikely to implement any of this any time soon. However, states can take up (and are taking up) the mantle. Individual counties have made real progress.
We still need national action for communities without the necessary resources to take on this work. However, localized action can lead to localized unitary housing markets (i.e. the city of Vienna), and those local successes can lead to leverage for national change. We don’t necessarily need federal involvement to see results.
Our housing market is foundationally unstable — structurally deficient in ways that lead to predictable recurring problems. Without addressing those deficiencies, we not only incentivize another RealPages scandal but we also fail to address the same adverse incentives at the core of gentrification (where alternatives to pure for-profit housing are effective countermeasures). Subsidized cooperative models in particular would also help ensure housing sovereignty from capitalist — and inherently racist — systems. Let’s make our housing market more like Austria and less like Transylvania. Housing is right, not a commodity.
Connor Higgins is a graduate student in urban planning at the University of Minnesota.