St. Louis officials exulted when the National Geospatial-Intelligence Agency (NGA) announced in June 2016 that it planned to stay in the city and build its new facility, Next NGA West, on the disinvested North Side. The $1.75 billion complex, known as the “spy center,” would be the largest federal project in St. Louis history, representing thousands of jobs and millions of dollars in tax revenue and development. Had the NGA opted to leave, the city would have lost its single largest source of tax revenue. City and state officials committed significant resources to keeping the facility.

The NGA is the nation’s primary source of geospatial intelligence, providing the U.S. Department of Defense and intelligence community with digital mapping for counter-terrorism and counter-narcotics efforts, border and transportation security, and humanitarian and disaster relief. NGA Director Robert Cardillo said the agency chose the North Side site because of the city’s partnerships with universities and technology companies, the appeal of the urban setting to younger workers, and because the NGA’s data facilities and workforce were already in town. “Next NGA West will be attractive to millennials and the next generation of the NGA workforce,” Cardillo said at the August 2017 Department of Defense Intelligence Information Systems Worldwide Conference, in St. Louis.

The new NGA facility, which will be located about a mile northwest of downtown and several miles northwest of NGA’s current location on the Mississippi riverfront, will spur “a transformation with reinvestment and redevelopment” in the city’s North Side, said Don Roe, executive director of the St. Louis Planning and Urban Design Agency.

The NGA’s plan calls for one million square feet of buildings and the same amount of structured parking, surrounded by a 500-foot security perimeter. Given the North Side’s history of disenfranchisement, economic stress, neglect, and blight, some wonder whether this ultra-secure facility will be an unapproachable fortress in the neighborhood, and whether it will ultimately benefit the community.

Site Opportunities and Challenges

From 1866 to 1904, St. Louis was the fourth largest city in the United States, with booming flour mills, shoe factories, meatpacking plants, and brick, paper, and paint manufacturing facilities drawing thousands of European-immigrant workers. But the second half of the 20th century saw large-scale loss of industry, suburban sprawl, and white flight, and the urban population declined from 857,000 in 1950 to 312,000 today.

In the past two decades, the city has worked to reinvent itself as a technology and bioscience center. These efforts have borne fruit for the downtown Central Corridor, stretching from the iconic Gateway Arch on the Mississippi riverfront west to Forest Park, and encompassing the city’s major universities, museums, and other popular amenities. Cortex Innovation Community and T-REX have attracted a highly skilled workforce. The 200-acre Cortex campus—formed in 2002 by Washington University, BJC Healthcare, the University of Missouri–St. Louis, St. Louis University, and the Missouri Botanical Garden—has generated over $550 million in investments and 4,200 jobs within the 250 companies located there. And the T‐REX technology incubator building has provided a home for 200 companies since 2011, including 180 startups and 2,230 jobs. Its annual economic output is over $350 million.

But the city has remained deeply divided racially and economically. The South Side of the city has become increasingly white and affluent and has attracted the lion’s share of new development. In the core North Side neighborhoods around the NGA site, 93 percent of residents are black and half live below the federal poverty level, and there are hundreds of vacant buildings and empty lots.

On the North Side, which has some of the nation’s highest violent crime rates, development comes mostly in the form of self-contained, subsidized affordable and low-income housing, said Alan Mallach, city planner, senior fellow for the Washington, DC–based Center for Community Progress, and author of The Empty House Next Door: Understanding and Reducing Vacancy and Hypervacancy in the United States, to be published by the Lincoln Institute in May 2018. The neighborhoods there have few jobs and lack resources such as new market-rate housing, health-care facilities, transportation connections, grocery stores, and other amenities. The area encompasses several federal economic and community development zones (figure 1).

St. Louis officials initially proposed building the new NGA complex on a vacant 34-acre North Side site where part of the infamous Pruitt-Igoe public housing project once stood. Erected in the 1950s and acclaimed as a monument to modern architecture, the project was supposed to be a great leap forward for the large number of residents living in overcrowded 19th-century tenements. But Pruitt-Igoe’s 33 high-rise apartment buildings were demolished in the 1970s following years of neglect, high crime rates, and abandonment, and the project became a case study in how not to provide public housing. Most of Pruitt-Igoe’s 57-acre site was never redeveloped and now exists as a wild urban place with vacant fields and heavily forested areas. The city wanted the U.S. government to assume some responsibility for a federal site that had so spectacularly failed the community, but the NGA plan was scrapped in 2015, when the agency expanded the site’s size requirement to 100 acres.

The city chose a new site for the NGA campus just north of Pruitt-Igoe at the intersection of North Jefferson and Cass Avenues, in the St. Louis Place neighborhood, and ultimately delivered 97 acres. This new site proved challenging and costly to procure.

In the decades after Pruitt-Igoe was razed, few incremental public and private efforts to redevelop the North Side with new housing and services succeeded, outside of reinvestment pockets such as the Old North St. Louis historic district. Roe, who presented the NGA project at Lincoln’s 2016 Big City Planning Directors Institute (BCPDI), said two federal initiatives by the Obama administration will leverage revitalization around the site: the 2015 designation of North St. Louis as part of a Promise Zone, giving the high-poverty area priority access to federal investments, and the 2016 award of a U.S. Department of Housing and Urban Development Choice Neighborhoods grant. The $29.5 million grant will go toward rehabilitating a distressed 625-unit public housing complex into a less densely packed group of buildings, funding social services, and building a new community center. The idea is to invest in low-density, mixed-income housing in diverse neighborhoods, green space, educational opportunities, job training, and social services for some 14,000 residents.

“We see [the NGA relocation] as a complementary project” that will, at the very least, bring better transit to the near North Side, said Esther Shin, president of Urban Strategies, Inc., in St. Louis, the nonprofit managing the Choice grant efforts.

The Effort to Keep a Valuable Asset

The city looked at the new NGA facility as “a retention effort” that will spark new growth and services in the North Side neighborhoods, said Otis Williams, executive director of the St. Louis Development Corporation (SLDC). Williams led the city’s initiative.

One fundamental reason the city wanted to retain the NGA presence was tax revenues. People who live or work in the city contribute 1 percent of their earnings each year, and this income tax represents the city’s largest source of general revenue. If NGA had selected another location outside St. Louis—such as its nearest rival for the project, a cornfield site near the Scott Air Force Base east of the Mississippi in St. Claire County, Illinois—the city would have lost as much as $2.6 million in annual payroll-tax revenue from NGA’s 3,100 current employees, who earn an average salary of around $85,000.

“If you’re going to grow in the next few years, you’re competing with Amazon and Google, and you need to be in the city and make a place where people want to be,” said Mark Johnson, principal of Denver-based Civitas, an urban design and landscape architecture firm that consulted on the NGA site for the city. “Staff recruitment and retention needed to be the most important issue.”

Since the early 1950s, the Springfield, Virginia–based NGA and its precursors, including the Defense Mapping Agency and the National Imagery and Mapping Agency, has operated its western headquarters in a series of converted 19th-century riverfront buildings at the 27-acre St. Louis Arsenal complex. In 2014, the agency announced it needed a new facility to allow for workforce expansion, heightened security, and new technology. The NGA plans to move into its new home by 2024.

In its bid to keep the NGA, the city offered free land, cleared of buildings on the North Side site. This meant assembling 551 properties quickly. A 2015 blight study reported that 78 percent of the land was vacant, and 6 percent had vacant buildings, for a total of 84 percent vacancy, according to the Environmental Impact Statement for the NGA campus. Roe said 137 structures on the site included active businesses and 63 homes inhabited by owners or renters. Most property owners agreed to sell to the city, though as the St. Louis Post-Dispatch and other local media reported, the process was somewhat contentious.

A historic brick house was moved several blocks to an appropriate infill site, but the city demolished 17 structures on the National Register of Historic Places, according to the Post-Dispatch. One was the redbrick Buster Brown Blue Ribbon Shoe Factory, built in 1901, when St. Louis was one of the nation’s largest shoe manufacturing cities. (Listing on the National Register does not, by itself, prevent a property’s demolition.)

The city spent $69 million acquiring properties within the 97-acre NGA site, including approximately $3.75 million to compensate owners of the 46 properties taken through eminent domain, and funds to buy back properties that the city had previously sold to a local developer, according to Russell Halliday, principal with consulting firm Stantec and NGA site preparation manager for the SLDC.

In addition to razing the buildings, the city agreed to clear the site of infrastructure including 27 streets, relocate utilities, and remediate arsenic in the soil. And it agreed to construct new infrastructure such as sidewalks and a full highway interchange.

The State of Missouri is providing the majority of the total $147.6 million in public funding needed to ready the site and provide access—$114.5 million in bonds has been set aside for construction costs, and $33.1 million in funds resulting from the sale of Brownfield Remediation Program tax credits. The city will allocate half of the earnings tax generated by the NGA—up to $1.5 million per year—and the state will direct up to $12 million in state withholding taxes for the next 30 years to the project (figure 2).

The city and state investments in the NGA’s cross-town move, which is effectively the shuttering of one military/intelligence installation and construction of another, reverses the usual roles in military base closings. In those cases, the federal government typically cushions the blow to the local economy, said David Merriman, professor of economics at the University of Illinois at Chicago and author of Improving Tax Increment Financing (TIF) for Economic Development, a Lincoln Institute policy report to be published in July 2018. “It’s an unusual relationship where the city is making a lot of efforts to keep a federal employer as opposed to a private-sector employer. To the extent that it sets a precedent, it’s a precedent we really want to think about carefully,” he said. “This really raises questions about the federal government’s responsibility here.”

Site Preparation and Financing

NGA West site preparations are slated to be completed by November 2018, when the land will be transferred to the US Air Force, which also owns the current NGA facility, said Stantec’s Halliday. The project is being overseen by teams from four separate entities: the city and its redevelopment corporation; the NGA, which will lease the site; the Air Force; and the Army Corps, which has issued a request for proposals (RFP) for design-build firms.

By early 2019, the Corps will select a firm to design and build the project. Its total $1.75 billion price tag includes $700 million for design and construction; the rest will pay for outfitting the campus with specialized NGA equipment, as well as the city’s costs for preparing the site for development.

Construction, due to begin by 2020, will tentatively include a 900,000-square-foot office building, a visitor center, inspection facility, access control points, one million square feet of parking garages plus surface parking, a cafeteria, fitness center, meeting spaces, and a campus landscape of grass, trees, and walking paths. Roe said the land within the NGA site, upon the federal government’s request, has been consolidated into one zoning district that allows for mixed-use buildings—offices, housing, small commercial, retail, and restaurant spaces—at greater heights than in the surrounding residential area.

Community Wants and Needs

The agency has said the project will create jobs in construction, security, maintenance, and administration that do not require a college education and will be made available to the community. The city is working to help neighborhood residents prepare, said Sal Martinez, executive director of the North Newstead Association, a community development corporation. The St. Louis Agency on Training + Employment (SLATE) has opened offices in the area and is focusing on the skills needed for NGA employment—technical skills like coding and software design.

“SLATE programming could be a gateway to that world and spark an interest in residents,” Martinez said.

Choice grant manager Esther Shin said residents understand that NGA’s highly skilled and relatively affluent staff of 3,100 will largely transfer to the new site, potentially displacing existing residents and businesses as new housing and services are built. “There’s definitely some tension, but the important thing is to be sitting at the table with NGA. The city, NGA, and residents see this as an opportunity to leverage other jobs for folks who live in the neighborhood,” Shin said.

“Some residents don’t want this facility in their neighborhood,” noted Martinez, “but the greater percentage are excited about what this can do for North St. Louis and the city. I’m very confident that amenities will come with redevelopment around the NGA, such as sit-down restaurants, major shopping, and other retail entities that will want to take advantage of these new workers and the residents.” In the past, it has been difficult to bring in “grocery stores, shoe repair, dry cleaners, office and school supplies, everyday things that people in thriving neighborhoods take for granted,” he noted. “But now we’re getting calls and interest from commercial developers because they see the potential for customers.” 

Project Connect

In 2016, the city launched Project Connect, an initiative to engage neighborhood stakeholders and coordinate redevelopment efforts by the public and private sectors. Project Connect provides “a vision for city and regional agencies to collaborate,” said Isa Reeb, a Civitas urban designer and Project Connect coordinator. Working with over 30 entities, including federal, state, and local agencies, community groups, and some 30,000 residents who live and work in the eight neighborhoods surrounding the NGA site, the group produced the Project Connect Action Plan, published in April 2017.

The action plan summarizes market, traffic, and storm water studies; financial modeling; and community and city goals for catalytic redevelopment around the NGA site. The plan presents priorities and locations for infill development to improve the place and character around the NGA site, gateway mixed-use development east of the NGA site to connect with downtown, neighborhood redevelopment with a community center, new retail and service development, including a potential local and regional retail center on the Pruitt-Igoe site, and locations for light manufacturing and industrial development that could bring more permanent jobs. The nonbinding plan is also intended to guide future investments in streets, transit, bicycle access, social services, parks, open spaces, and storm water facilities. Public realm redevelopment can draw on revenues from a tax increment financing district established in 2009 that allows for up to $390 million to be used primarily to finance infrastructure improvements, but because the neighborhoods have been so distressed, other funding sources likely will be needed. A newly hired Project Connect manager will work with the SLDC on a process for reviewing redevelopment projects.

“Continued alignment and coordination is key to the success of this area, and to changing the perception of this area,” said Reeb. “We’ve had a lot of discussions with developers, [and] we want to hold them accountable.”

Security Buffer: Isolation v. Engagement

Probably the greatest controversy surrounding Next NGA West has to do with its rigid security protocols. Post-9/11, federal regulations for an intelligence-mapping facility require 500 linear feet of defensive space from property line to building. The March 2017 RFP soliciting design and construction firms indicated the site would need a “layered security” approach, with access controlled by fences, bollards, and other barriers. A visitor control center, remote inspection facility, and checkpoints will manage access to the main operations building, which will have another layer of security.

The NGA has discussed the 500-foot security barrier at community meetings that include city and Army Corps representatives. “The community respects the need for security,” Martinez said, “but we don’t want this to be an intimidating barrier.” He said many community members would like to see ample green space around NGA that would provide a “calming and welcoming feel,” perhaps with monuments to the area’s cultural history and art created by local schoolchildren, “to soften the wall and honor the neighborhood.” Residents desire places for community members to meet within the building and outside the perimeter, as well as tours of what he said could become a “destination site.”

“Space and programming within the building for exhibits and educational opportunities like mapping and data-analysis programs for kids could benefit the community and help bridge the divide,” said city planner Alan Mallach, who has not worked directly on the project but offered perspective during a presentation of the NGA project at the 2016 BCPDI.

Mallach said Next NGA West is “very challenging” and unlike any project he has seen in other U.S. cities. Because of the “sheer size” of the facility and the buffer, he said, “it runs the risk that what you’ll have is a black hole with no real connection to the neighborhood. If it’s just a high-security box, there are no spillover benefits,” he said. “What would make a facility with a big wall and security gates attractive for housing, cafes, and shops in a commercial district?” The NGA buildings will be a self-contained workspace, he said, and most workers would not feel the need to relocate from a pleasant and more stable neighborhood to move across the street from a gated facility in a transitioning area.

Toni Griffin, professor in practice in urban planning at the Harvard Graduate School of Design, who also provided an independent perspective at Lincoln’s 2016 BCPDI, observed that “It’s challenging when you have a suburban typology in an urban environment in this very big lot site with very little development.” Griffin, who has worked on urban revitalization projects in Detroit, St. Louis, and Washington, DC, noted that NGA’s security perimeter width is more than twice the 200 linear feet of an urban block in many cities. To make the site as urban as possible, she said, designers will have to be “more creative about what they allow to exist within the security belt,” she said. “There has to be some sort of value and usable amenities for the community there.” Project designers could place the building at the perimeter, at the edge of the street wall, to activate local businesses, and use that as a first line of defense, with more secure functions set back, she noted.

Griffin points to the Navy Yard in Washington, DC, as an example of the project’s catalytic potential. Contractors for the Navy set up their offices adjacent to the secure federal facility, which “created demand for investment in the neighborhood,” including not just commercial office space but also restaurants, shops, and services, as well as market-rate and affordable housing. Griffin said St. Louis could ask NGA and the Army Corps not to program the campus with everything employees need during their day. With the number of employees at NGA, “that’s a fairly large consumer potential if the workers were encouraged to patronize businesses within the neighborhood.”

For project leaders, security is the primary objective, rather than integrating the facility within the urban fabric. “We’ve expressed that our security requirements specify a secure barrier,” and that shared public space for elements like recreation fields and walking paths within that barrier would not be permitted, said David Berczek, chief of corporate communications for Next NGA West.

Residents don’t want the facility to “look like a fortress,” according to Halliday, who has been asked by the city to find out what the community wants. “A barrier wall can be done in so many ways” and does not have to be a brick wall with barbed wire, he said. “We’re informing the NGA and Army Corps: please consider the neighborhood.”

NGA security forces will have jurisdiction adjacent to the site to protect NGA employees and neighborhood residents, and the site will have 24-hour security patrols. How will this security scenario play among residents of North Side—a community with a racial dynamic and socioeconomic conditions similar to those of nearby Ferguson, Missouri, which experienced protests and riots after a white police officer killed an unarmed black teenager, Michael Brown, in August 2014?

Martinez said the grand jury’s decision not to indict the police officer for any crimes related to Brown’s death “strained things a bit, but that happened outside of this district.” Martinez said the Fourth District of the metro police assigned several officers specifically to building strong relationships within the community. “They show up at block meetings, neighborhood association meetings, and other events, and we have a very good working relationship.”

Even if the place ends up being a fortress, Martinez said, NGA’s security measures, such as new exterior lighting and strengthened police presence, will provide the “ancillary benefit” of helping make the North Side safer.

Next Steps for St. Louis

“There’s no playbook for a project of this size and complexity,” said Civitas’s Reeb. “The area is so distressed that single projects here and there will not be effective in changing the opportunities and perceptions of the area. We need everyone to focus on the same vision for the same areas” and pursue opportunities “where the city can make an impact.”

Around the NGA site there is vacant land, and Roe said the city is evaluating zoning and proposing short-term changes, with an overlay zone “to enhance and protect the site and goose development.” He said the city is considering public-realm projects that would benefit residents and encourage new commercial development for firms that work with NGA, innovation clusters, and service-oriented businesses.

But the classified nature of the NGA’s work and its strict security requirements limit the facility’s potential for spin-offs and other development compared to university research and technology hubs, according to Merriman.

Reeb, meanwhile, is focused on two areas not immediately adjacent to the NGA site. At Cass Avenue and North 14th Street, about a mile east of the site, manufacturing could give way to mixed-use development as a segue to downtown. At Florissant and St. Louis avenues, about a mile northeast, vacant land could be redeveloped for apartments and neighborhood-serving retail, and infrastructure enhancements could improve safety and connectivity.

Developers will begin planning more projects “when they see NGA starting,” Halliday said. “We’re hearing interest from local and outside developers about mixed-income housing and commercial development.” Redevelopment plans underway include a nearby medical clinic and a grocery store/gas station.

Despite the agency’s non-negotiable security demands, an August 2017 Post-Dispatch article quoted NGA director Cardillo as saying the agency wants close collaboration on its campus with contractors involved in geospatial mapping, cybersecurity, and other defense systems. “We wall ourselves off at our own risk,” he said. Reinforcing that the agency is looking to develop its future workforce in St. Louis by encouraging science and technology education in local school districts and universities, Cardillo added, “We’re placing a bet on St. Louis, and it’s a hundred-year bet.”

Kathleen McCormick, principal of Fountainhead Communications, LLC, in Boulder, Colorado, writes frequently about healthy, sustainable, and resilient communities.

Photograph: Chris Lee/St. Louis Post-Dispatch/Polaris

References 

National Geospatial-Intelligence Agency (NGA). 2016. “Environmental Impact Statement for the Next NGA West Campus in the Greater St. Louis Metropolitan Area.” April 1. https://www.nga.mil/MediaRoom/PressReleases/Pages/-Next-NGA-West-Final-Environmental-Impact-Statement-to-be-published-by-Army-Corps-of-Engineers,-NGA-Identifies-Preferred-Al.aspx​.

NGA. 2015. “National Geospatial-Intelligence Agency (NGA) Briefing Book,” second edition. December 11. https://www.stlouis-mo.gov/government/departments/mayor/documents/nga-briefing-book.cfm​. 

St. Louis Development Corporation. 2017. “Project Connect Action Plan: A City of St. Louis Initiative.” April 3. https://www.stlouis-mo.gov/government/departments/sldc/project-connect/upload/ActionPlan_FINAL_Printable-3.pdf.

Desde 2015, los representantes de varias entidades públicas, fundaciones y organizaciones sin fines de lucro del área de la Bahía de San Francisco, Los Ángeles y Denver han estado participando en forma conjunta en talleres de “absorción de capital” para forjar soluciones ante la escasez de vivienda social en sus regiones por medio de estrategias para atraer suelo, capital y otros recursos. Representan a organizaciones no sólo de vivienda sino también de transporte público, planificación y desarrollo económico, partes interesadas que frecuentemente no se unen para resolver problemas, si bien trabajan en temas con muchos puntos en común y en geografías idénticas.

En una de estas reuniones, en 2016, Abigail Thorne-Lyman, gerente del programa de desarrollo orientado al transporte público (TOD, por su sigla en inglés) de Bay Area Rapid Transit (BART) —un sistema de transporte público que todos los años presta servicio a más de 125 millones de pasajeros a lo largo de la región— se dio cuenta de que su agencia podría hacer una contribución sin precedentes para resolver la crisis local de vivienda, que es una de las más grandes del país. Más de 250.000 hogares de muy bajos ingresos de la región carecen de acceso a vivienda a su alcance. La mediana del valor de una vivienda en San Francisco es de USD 1.147.300, en comparación con USD 197.500 en todo el país; la mediana de un alquiler mensual es de USD 4.350, más de tres veces la mediana de alquiler nacional, de USD 1.500. Casi la mitad de los inquilinos locales gastan más del 30 por ciento de sus ingresos en alquiler.

Cada equipo regional de 6 integrantes que participó en este taller había confeccionado una hoja de cálculo con todos los proyectos de desarrollo pendientes que contemplaban unidades de vivienda social. “Cuando analizamos nuestra lista, nos dimos cuenta de que la restricción principal que impedía la construcción de vivienda no era el capital”, explica Thorne-Lyman. “Lo que necesitábamos —el eslabón perdido, digamos— era el suelo”.

“En el área de la Bahía, los emprendedores no compran el suelo hasta estar seguros de conseguir la financiación necesaria para su proyecto, lo cual dificulta la competencia en un mercado inmobiliario recalentado”, dice Thorne-Lyman. Pero BART ya poseía 120 hectáreas en la región.

Esa noche, Thorne-Lyman comenzó a imaginar la posibilidad de que BART pusiera a disposición su suelo para todos los emprendimientos que incluyeran vivienda social. Al hacer los cálculos, “me di cuenta de que podíamos producir alrededor de 30.000 unidades si usabamos nuestro suelo”, explica. De ellas, 10.000 unidades podían ser vivienda social, una cantidad significativa, dado que el emprendimiento típico de vivienda social en el área de la Bahía produce entre 50 y 200 unidades. “Y, si somos los primeros en hacer este ofrecimiento, quizás otras agencias de transporte público en otros condados nos acompañaran”, ya que BART sólo abarca cuatro de los nueve condados en el área de la Bahía. Esto podría aportar una solución incluso más considerable. “Las 30.000 unidades se podrían convertir en 60.000 unidades, todas ellas en suelo público”, dice Thorne-Lyman.

Thorne-Lyman y el resto del equipo de absorción de capital entregaron su análisis a la gerente general de BART, Grace Crunican. Tanto Crunican como la Junta Directiva de BART decidieron aumentar el compromiso de la agencia con el desarrollo de vivienda social y vivienda a precios de mercado en suelo de BART. Después pidieron a Thorne-Lyman y su equipo que generaran modelos que superaran los cálculos imaginados en privado.

“La conversación con Grace fue como una catapulta”, dice Thorne-Lyman. “Tuvimos estas ideas y las desarrollamos. Después la Junta Directiva nos pidió que imagináramos una visión aún más ambiciosa para nuestro suelo. A través de nuestro trabajo con el equipo de absorción de capital, teníamos todos estos socios interesados —como activistas de vivienda social, instituciones financieras de desarrollo comunitario y fundaciones— que apoyaron la idea y la difundieron al público”.

Los nuevos objetivos de desarrollo para el programa TOD de BART, adoptados en diciembre de 2016, establecen una meta de 20.000 unidades de vivienda nuevas y 400.000 m2 de superficie edificada para oficinas en suelo de BART para el año 2040. Por lo menos el 35 por ciento de estas unidades, o sea 7.000, se destinarán a hogares de bajos y muy bajos ingresos. Hasta ahora, BART ha producido 760 unidades de vivienda social en su suelo, así que queda mucho trabajo por realizar. De todas maneras, Thorne-Lyman se ha entusiasmado con este desafío. “California tiene una crisis de vivienda social, y podemos decir que BART contribuirá a la solución”, explica. “Tenemos el suelo. Y estamos dispuestos a aportarlo”.

“Alguien tiene que pensar en grande sobre cómo abordar esta crisis. Y nosotros estamos ofreciendo algo grande”, dice.

El Marco de Absorción de Capital

Los talleres de absorción de capital a los que asistió Thorne-Lyman son parte de un programa diseñado para ayudar a las ciudades a atraer y distribuir inversiones comunitarias y aprovechar otros recursos críticos para alcanzar sus metas, como suelo y conocimiento técnico. Las inversiones comunitarias se definen como “inversiones que tienen por objeto brindar beneficios sociales y medioambientales en comunidades necesitadas, como préstamos, bonos, créditos tributarios y vehículos de inversión estructurada”.

La arquitecta principal del programa, Robin Hacke, dice:“Es una manera de dirigir los recursos a lugares donde no irían naturalmente, de contrarrestar las fallas del sistema financiero para producir la cantidad suficiente de vivienda social, y reducir las disparidades de salud o minimizar el impacto del cambio climático en lugares vulnerables, entre otros factores ligados al uso del suelo”.

Hacke, directora del nuevo Centro de Inversiones Comunitarias en el Instituto Lincoln, está haciendo un ensayo piloto de una nueva estrategia de “cambio de sistemas” que diseñó en colaboración con sus colegas David Wood, de la Iniciativa para Inversiones Responsables de la Universidad de Harvard, Katie Grace Deane y Marian Urquilla. El modelo, denominado Marco de Absorción de Capital, se basa en la idea de que los mercados de capital tradicionales frecuentemente no resuelven las necesidades de las comunidades de bajos ingresos, por lo cual hace falta una metodología sistemática para reparar esta carencia y obtener resultados significativos a escala (a diferencia de proyectos individuales que son difíciles de implementar y que, aunque sean exitosos, no tienen un impacto significativo sobre el problema). Al “reunir en la misma mesa” a diversas partes interesadas que pocas veces se unen para resolver este tipo de problemas a pesar de tener intereses alineados, el modelo también aumenta la cantidad de activos y de poder, ayudando a identificar nuevas herramientas y estrategias efectivas para abordar las necesidades insatisfechas de la comunidad.

Este marco es una respuesta a los problemas que enfrentaron Hacke y Urquilla mientras trabajaban en la Iniciativa de integración, un programa de USD 80 millones iniciado en 2010 para mejorar las vidas de residentes de bajos ingresos en cinco ciudades piloto: Baltimore, Cleveland, Detroit, Minneapolis/St. Paul y Newark. La idea, administrada por el programa Living Cities (Ciudades Vivientes), era alinear los intereses de una serie de participantes y capitales de inversión en barrios que tradicionalmente no tienen acceso a fondos de financiamiento. 

“La Iniciativa de integración demostró que las ciudades participantes carecían no sólo de capital sino también de la capacidad para absorber y utilizar los fondos asignados por medio del programa”, dice Hacke.

“La distribución espacial desigual de personas de bajos ingresos en los Estados Unidos es producto de muchas décadas de políticas públicas que básicamente privaron de capital a las comunidades, ya sea por trabas burocráticas de los bancos o trabas burocráticas impuestas o toleradas por la Administración Federal de la Vivienda”, dice George McCarthy, presidente y gerente ejecutivo del Instituto Lincoln de Políticas de Suelo, quien participó de la Iniciativa de integración durante su trabajo en la Fundación Ford.

Los sistemas cambian

Para poder superar los efectos de la discriminación y la falla en los mecanismos del mercado para proporcionar bienes, servicios y oportunidades adecuadas a comunidades necesitadas, tenemos que asegurar que fluya capital hacia esos lugares. Para que los residentes puedan progresar hay que encontrar maneras de financiar vivienda social y desarrollar entornos saludables con acceso a comida fresca y lugares seguros para caminar, andar en bicicleta y jugar, y proporcionar acceso a una educación y puestos de trabajo de calidad. No basta simplemente con invertir en un solo proyecto y esperar que los lugares se transformen. El Centro de Inversión Comunitaria se compromete a robustecer los sistemas que impulsan a una comunidad a planificar su futuro, mediante la creación de una plataforma y red de relaciones que unan instituciones con individuos con la capacidad de concretar la visión de la comunidad el desarrollo y la ejecución proyectos de inversión que implementen dicha visión y la adopción las políticas y prácticas que aceleran cómo estos proyectos se llevan a cabo.

—Robin Hacke

“Dado que privamos a las comunidades de capital, pensamos que la mejor manera de ayudarlas a recuperarse es darles dinero. Pero en realidad durante todos esos años no sólo le quitamos el capital sino también la capacidad para ayudarse a sí mismos. Muchas personas del movimiento de desarrollo comunitario creen que, si solo encontramos una manera de aportar más capital a esos lugares, el problema se va a resolver. Pero una de las lecciones que aprendimos es que, aunque les demos dinero, no necesariamente tendrán una forma de usarlo. Puede sonar como que estoy culpando a la víctima, pero no es así. En realidad, se trata de comprender que cuando uno priva de recursos críticos a un lugar por un tiempo prolongado y después se los da, la comunidad puede no estar preparada para usarlos. Es como la gente. Si uno le niega comida a alguien por demasiado tiempo y después se la ofrece, quizás no pueda comerla”.

Cómo alinear los recursos necesarios

“Para utilizar el capital con éxito, los lugares tienen que identificar las fuentes de capital y también los proyectos que lo pueden utilizar. Los proponentes de inversiones con impacto se han concentrado en organizar la oferta de capital; nuestro enfoque es en la demanda de inversión”, dice Hacke. “Por ejemplo, en Detroit, Baltimore y Cleveland, no estaban considerando principalmente proyectos de vivienda. Querían acelerar todo tipo de emprendimientos, como proyectos comerciales y de uso mixto. Pero, para negociar convenientemente los proyectos y las condiciones adecuadas para que estos tuvieran la capacidad necesaria, hubo que aportar mucho más que simplemente el capital de inversión. El trabajo tomó más tiempo que lo esperado y requirió mucha más coordinación de recursos de lo que pensábamos”, agregó.

“A pesar de las grandes necesidades de estas comunidades desfavorecidas, las partes interesadas tienen que superar obstáculos mayores para completar sus proyectos”, dice Hacke. “Si la gente cree que la probabilidad de concretar un proyecto no es alta, se da por vencida. Así que organizamos las partes interesadas para resolver los problemas más urgentes, y alineamos los recursos que puedan aumentar la probabilidad y confianza de concretar estos proyectos críticos”.

La falta de confianza se debe a la fría realidad de que los proyectos de desarrollo comunitario en general son difíciles de concretar (figura 1). Hacke ataca esta realidad de frente pidiendo a los participantes que identifiquen lo que ella llama “proyectos de impacto comunitario ejemplares. Los proyectos que la gente identifica como representativos son complejos, prolongados y políticamente trabados, ya que tienen que equilibrar los intereses de muchas partes interesadas y combinar las múltiples fuentes de capital con diversas restricciones y requisitos. Los participantes evocan el lenguaje de misiones heroicas para describir estos proyectos”.

La identificación y el análisis de estos “proyectos ejemplares” son útiles por partida doble. Primero, realzan la naturaleza compleja y enrevesada de muchos proyectos de inversión comunitaria, resaltando la necesidad de una estrategia más eficiente y expansible. En segundo lugar, y más importante aún, el análisis de proyectos ejemplares puede ayudar a las partes interesadas a determinar los recursos y restricciones potenciales del sistema de desarrollo comunitario en general, incluyendo el nivel de participación de las diversas partes, la disponibilidad de una serie de destrezas y recursos y las oportunidades de colaboración.

Tres componentes de un sistema efectivo de inversión comunitaria

Una vez que las partes interesadas de una región hayan usado el marco de proyectos ejemplares para analizar cómo está funcionando actualmente el sistema de inversión comunitaria, el próximo paso es identificar maneras de mejorar el funcionamiento del sistema para que pueda proporcionar impacto a gran escala. De acuerdo con el marco, un sistema efectivo requiere tres elementos, que son el foco del trabajo de Hacke con las comunidades.

Identificar prioridades compartidas

Primero, las partes interesadas tienen que articular un juego bien definido de prioridades ampliamente aceptadas a través de la comunidad. La vivienda social no es siempre el ancla para establecer estas prioridades, pero en los ensayos pilotos organizados por Hacke han sido el punto de partida más fácil, parcialmente porque este aspecto cuenta con fuentes de financiamiento confiables y eficaces, como el crédito tributario para vivienda de bajo ingreso, y una red sólida de organizaciones experimentadas.

“Nos esforzamos mucho por reunir y fortalecer relaciones a lo largo de diversos sectores, para poder operar con un juego de prioridades compartidas”, dice Thomas Yee, encargado de iniciativas de LA THRIVES, una organización sin fines de lucro que se propone avanzar el tema de equidad por medio de crecimiento inteligente, y que participa en el ensayo piloto del Marco de Absorción de Capital.

“Van a existir desacuerdos entre los activistas políticamente progresivos, los funcionarios electos y los emprendedores privados, así que es necesario colaborar mucho, generar confianza y encontrar puntos en común. Pero esa es la manera de organizar metodologías a nivel de sistemas. Permite reducir el trabajo a unos pocos principios que entusiasman a la gente y la mantiene enfocada en el sistema, en vez de su barrio o proyecto en particular”.

Una de las prioridades compartidas que surge del trabajo en Los Ángeles es la importancia de asegurar que LA Metro, la agencia pública responsable por el servicio ferroviario y de autobús en el condado de Los Ángeles, preste un servicio efectivo a los residentes de bajos ingresos, que son los usuarios de base de los servicios de la agencia.

Antes de participar en los talleres, LA Metro sabía que sus usuarios de base eran residentes de bajos ingresos. Un estudio de investigación comisionado por la agencia antes de incorporarse al equipo de Los Ángeles describió cómo podían ayudar a esos usuarios a vivir cerca de las líneas de transporte público. LA Metro estaba generando metas agresivas de construcción de vivienda en suelo de su propiedad cuando se unió a la colaboración con LA THRIVES.

“Se produjo una confluencia que obligó a LA Metro a pensar cómo estaba administrando sus operaciones, qué iba a pasar si esos usuarios de base vivían cada vez más lejos de los sistemas de transporte público existentes”, explica Yee.

Según Yee, LA Metro estaba interesada en encontrar maneras adicionales de contrarrestar el desplazamiento de sus usuarios, y su colaboración con LA THRIVE fue “realmente el riego que necesitaba para hacer crecer esas semillas”.

La idea de que los usuarios de bajos ingresos iban a ser desplazados a mayor distancia también causó preocupación en otros miembros del equipo piloto de Los Ángeles. Los planificadores de transporte público criticaron el costo e ineficiencia de ampliar el servicio a zonas más alejadas, mientras que los conservacionistas se preocupaban por el impacto en el medio ambiente. Los activistas comunitarios estaban preocupados por el aislamiento económico y social, y las organizaciones de vivienda temían por la falta de vivienda social en los anillos periféricos de la ciudad. La resolución correcta de este problema presentaría una oportunidad para abordar en forma simultánea estas preocupaciones aparentemente no relacionadas entre sí, convirtiéndose en una prioridad compartida en la colaboración. Gracias a ello, LA Metro adoptó un nuevo término para pensar sobre el transporte público en el contexto del desplazamiento de sus usuarios: el Marco de Comunidades Orientadas al Transporte Público.

Pero LA Metro quería hacer más aún. A diferencia de BART, la agencia no contaba con mucho suelo adicional para albergar las miles de unidades de vivienda social necesarias. En su lugar, LA Metro, en sociedad con otros miembros del equipo, creó un fondo de préstamo para respaldar el desarrollo de vivienda social y retener unidades existentes no restringidas de alquiler bajo cerca de las líneas de transporte público de la agencia. Lo importante es que estas unidades no tienen que estar en suelo propiedad de la agencia, sino sólo lo suficientemente cerca como para brindar fácil acceso al sistema de transporte público.

“Estamos muy entusiasmados porque LA Metro está dispuesta a realizar inversiones fuera de sus propiedades”, dice Yee. “El desarrollo de vivienda social en suelo de la agencia es importante, sin duda un paso enorme por sí mismo. Pero ir más allá del suelo de su propiedad es una gran innovación y demuestra un compromiso para limitar el desplazamiento de los usuarios de base”.

Establecer una lista de proyectos para ejecutar

Una vez que las partes interesadas hayan identificado una serie de prioridades estratégicas, pueden concentrarse en establecer una lista de proyectos para ejecutar, el segundo paso de la implementación del marco. Las partes interesadas comienzan por examinar los proyectos en marcha y analizar si responden a las prioridades fijadas y si puede haber brechas.

La práctica de examinar la lista de proyectos también permite identificar los recursos necesarios para concretarlos con éxito.

Para el equipo de Denver, el análisis de la lista de proyectos municipales le permitió reconocer que el equipo se tenía que concentrar más en atraer capital privado acorde con la misión, dice Dace West, uno de los líderes del programa piloto de Denver y en ese momento director ejecutivo de Mile High Connects, una organización sin fines de lucro cuya misión es asegurar que el sistema de transporte regional de la zona metropolitana de Denver promueva comunidades que ofrezcan a todos los residentes la oportunidad de tener una alta calidad de vida.

“Se produjo este momento crucial como comunidad cuando nos dimos cuenta de que la manera en que realizábamos nuestras actividades de desarrollo comunitario en realidad estaba gobernada por fuentes de financiamiento específicas y restrictivas, propias de sistemas más maduros, como los créditos tributarios, que han llegadoa su límite, o, en otros casos, fuentes de capital que no son muy predecibles”, dice West, en referencia a las conclusiones del análisis de la lista de proyectos.

“Nos dimos cuenta de que con frecuencia nos quedamos cortos en los emprendimientos que abordamos debido a que no podemos obtener y utilizar el capital de manera sistemática. Así que, de aquí en más, estamos muy enfocados en cómo aprovechar el capital de impacto del sector privado en el sistema, utilizando las fuentes de capital tradicionales de nuevas maneras y esforzándonos por incorporar una cantidad significativa de capital que está buscando lugares donde invertir”, dice West.

“Gracias a un trabajo profundo e intencional, hemos descubierto que el término ‘impacto’ tiene distintos significados para los inversores de impacto. Cuando algunos de ellos dicen que quieren generar un impacto, lo que realmente quieren es poder otear el futuro y ver buenas ganancias; eso les basta, porque lo que quieren en última instancia es liquidez y una buena tasa de retorno. Nosotros pensamos: ‘Es bueno saberlo, porque hemos estado perdiendo el tiempo en estas cosas que a nadie le importa’. Ahora nos podemos enfocar en cuestiones tales como: ¿cuál es la tasa de retorno buscada? Y ¿cuáles son los lugares correctos para utilizar este tipo de capital en vez de otros tipos? Y ese fue un descubrimiento esencial, reconocer que los emprendimientos inmobiliarios, que habíamos considerado una inversión más tradicional, pueden ser en verdad una inversión de impacto comunitario, que crea conexiones nuevas e interesantes”.

Una de esas conexiones es con la agencia de financiamiento de vivienda de Denver.

“A medida que fuimos pensando en maneras de aprovechar este nuevo capital, hemos descubierto que tenemos una agencia de financiamiento de vivienda muy inusual. Es muy creativa y flexible y ya está administrando una enorme cantidad de fondos estructurados separados que tienen alguna forma de propósito comunitario”, dice West. “Estamos trabajando para construir una plataforma que use la agencia como base para atraer capital que puede destinarse a canales específicos, pero que también se puede usar para rellenar esas brechas e implementar proyectos impulsados por la comunidad y sus necesidades. La agencia de financiamiento de la vivienda no está respondiendo meramente a las fuentes de financiamiento existentes; está actuando como un intermediario amplio para trabajar con otras agencias del sistema”.

Crear un entorno habilitante

Después de crear una lista de proyectos para ejecutar, el próximo paso natural es la última pieza del marco: fortalecer el “entorno habilitante”. Esto se define como “las condiciones latentes que conforman las operaciones del sistema”, como “la presencia o ausencia de destrezas y capacidades necesarias, las realidades políticas, las relaciones formales e informales entre los actores clave y las normas y comportamientos culturales que se manifiestan en forma distinta dependiendo del lugar”.

En los talleres de absorción de capital, se les pide a los participantes que analicen cuáles áreas del entorno funcionan bien y cuáles no, y cuáles políticas y prácticas afectan en forma directa sus prioridades estratégicas. Al hacerlo, pueden comprender mejor las oportunidades y limitaciones inherentes en el sistema actual. 

Para Thorne-Lyman y el resto del equipo de San Francisco, el análisis del entorno habilitante —o sea, qué recursos están o no disponibles y funcionan bien o no en el ecosistema de vivienda social— reveló inmediatamente el problema de la escasez de suelo.

Centro de Inversión Comunitaria

Thorne-Lyman no es la única persona entusiasmada por el trabajo generado por el Marco de Absorción de Capital. McCarthy también se muestra optimista.

“El suelo es uno de los recursos más valiosos y escasos de una comunidad”, dice. “Las políticas de suelo pueden jugar un papel central en atraer o generar la inversión necesaria para hacer uso de lotes vacantes y desperdiciados por mercados de suelo disfuncionales, o para abordar el impacto desigual de la polución y el cambio climático sobre familias pobres y necesitadas”.

Por esa razón, en 2016 el Instituto Lincoln de Políticas de Suelo lanzó el Centro de Inversión Comunitaria con el respaldo de la Fundación Kresge y otras fundaciones nacionales importantes. El Centro es una iniciativa de investigación, construcción de capacidad y desarrollo de liderazgo para ayudar a que las comunidades movilicen el capital y aprovechen el suelo y otros activos para implementar sus prioridades económicas, sociales y medioambientales. Hacke dirigirá el nuevo centro y lo usará como plataforma para desarrollar el modelo de absorción de capital.

“Hemos visto una y otra vez que el suelo es realmente una parte importante de la solución, ya sea que se trate de la salud de la gente, o infraestructura ecológica y la salud de los ecosistemas naturales. Ser parte del Instituto Lincoln, que tiene un conocimiento tan amplio en el uso de suelo para generar y recuperar plusvalías, es una gran ventaja para nosotros”, dice Hacke.

En Lincoln, Hacke espera ampliar su trabajo con programas pilotos en comunidades adicionales. Aquellos que integran su cohorte actual alientan a estas ciudades a aprovechar la oportunidad. “Cuando comenzamos a trabajar, hace dos años, esto parecía un ejercicio académico abstracto repleto de ‘tareas para el hogar’. Pero persistimos con su metodología y hemos podido encontrar mucho valor en el marco”, dice Christopher Goett, un alto administrador de programa en California Community Foundation y uno de los que respaldan el programa piloto de Los Ángeles. “Robin, Katie, David y Marian han construido un espacio seguro para poder realizar trabajos difíciles, y han creado un sistema de apoyo que se ha ido fortaleciendo con el tiempo. En retrospectiva, estas actividades han constituido momentos críticos para nuestra evolución y crecimiento”.

“El trabajo de desarrollo comunitario y económico se aborda frecuentemente por medio de programas aislados, pero esa no es la manera en que funciona el mundo”, dice Goett. “El angelino promedio se despierta y usa el transporte público para ir a trabajar o llevar a sus hijos a la escuela. Los sistemas de vivienda, empleo y educación interactúan entre sí, y esta es la manera en que está diseñado el marco del Centro”. 

“Para alguien que administra una cartera de crecimiento inteligente aquí en California Community Foundation, el marco es cada vez más útil; el crecimiento inteligente es, por naturaleza, integrado. Tenemos que pensar sobre la salud pública al mismo tiempo que pensamos sobre infraestructura y vivienda, y con este marco podemos promover el desarrollo orientado al transporte público y aun así ver el ángulo de la prevención de desplazamiento y la vivienda”.

Este artículo se publicó originalmente en el número de Land Lines de abril de 2017.

Loren Berlin es una escritora y consultora de comunicaciones independiente del área metropolitana de Chicago.

Fotografía: Cortesía de Abode Communities

Referencias

Bay Area Council Economic Institute. 2016. “Solving the Housing Affordability Crisis: How Policies Change the Number of San Francisco Households Burdened by Housing Costs.” (Octubre). www.bayareaeconomy.org/files/pdf/BACEI_Housing_10_2016.pdf.

Hacke, Robin, David Wood y Marian Urquilla. 2015. “Community Investment: Focusing on the System.” Documento de trabajo. Troy, MI: Kresge Foundation.

Truong, K. 2016. “Here Are 11 Solutions to the Bay Area Housing Crisis.” San Francisco Business Times. Octubre 11.

Zillow.com. “San Francisco Home Prices and Values.” https://www.zillow.com/san-francisco-ca/home-values.

Zillow.com. “United States Home Prices and Values.” https://www.zillow.com/home-values.
 

Las personas que trabajan conmigo por lo general se sorprenden de hasta qué punto mi canon filosófico deriva de las películasno convencionales de bajo presupuesto, especialmente de la década de 1980. Cuando busco sabiduría, suelo recurrir a las enseñanzas de la película “Repo Man” (traducida al español como “Los recolectores”) o, en el caso de este ensayo, a la obra maestra alegórica de Terry Gilliam, “Time Bandits” (“Bandidos del tiempo”). En esta película, un grupo de trabajadores públicos son empleados por el Ser Supremo para rellenar los agujeros que quedaron en el continuo espaciotiempo por el apresuramiento de haber creado el universo en siete días: “Verán, fue un trabajo algo chapucero”.

Al igual que los bandidos del tiempo, los gestores de políticas generalmente tienen la tarea de rellenar agujeros: agujeros literales, como los baches de las calles, o agujeros más teóricos, que son los artefactos de los mercados privados disfuncionales; uno de ellos es la oferta inadecuada de viviendas sociales. Por ejemplo, los economistas especializados en vivienda de los Estados Unidos se han vuelto bastante expertos en hacer el seguimiento del tamaño de este agujero, que cada vez es más difícil de rellenar desde que el gobierno federal se comprometió a tratar el tema como una prioridad de política nacional a partir de la Ley de Vivienda de 1949, que fue parte de la legislación conocida como Fair Deal del expresidente Harry S. Truman.

En su discurso del Estado de la Unión de 1949, el presidente Truman resaltó que, para poder suplir las necesidades de millones de familias sin una vivienda adecuada, “la mayoría de las viviendas que necesitamos deberán ser construidas por el sector privado sin subsidios públicos”. Casi 70 años más tarde, nuestro fracaso colectivo para resolver el déficit de viviendas sociales tenga que ver con un análisis incorrecto del problema y con la conclusión de que pueden diseñarse soluciones basadas en el mercado con el fin de resolver la discordancia entre la oferta y la demanda de viviendas sociales.

Para apoyar esta idea, me desviaré brevemente hacia la teoría del mercado. Partiendo del enfoque matemático para analizar la economía que predomina hoy en día, un mercado es, simplemente, un sistema de ecuaciones diferenciales parciales que se resuelve mediante un único precio. Estas captan las decisiones complejas que toman los consumidores y los productores de bienes, y concilian las preferencias y los presupuestos de los consumidores con la elaboración de técnicas, capital y costos de transacción por parte de los productores para así llegar a un precio que despeje el mercado mediante el acuerdo de las operaciones que todos los proveedores y consumidores están dispuestos a intercambiar por ese precio.

Los prestigiosos economistas Arrow, Debreu y McKenzie demostraron la existencia teórica de un conjunto único de precios capaz de resolver simultáneamente la cuestión del “equilibrio general” de todos los mercados en una economía nacional o mundial. Un aspecto importante de esta contribución (que obtuvo el Premio Nobel) fue la observación de que un único precio despejaba cada mercado: un mercado, un precio. No se esperaba que un único precio mantuviera el equilibrio en dos mercados. Y este es el defecto fundamental del mercado de la vivienda: en realidad, no es un mercado, sino dos. Los mercados de la vivienda proporcionan tanto lugares para vivir a los consumidores locales como bienes de inversión comercializables en todo el mundo, gracias a los grandes mercados de capital al servicio de los inversores a nivel mundial. Esta condición de mercado doble correspondía al sector de viviendas ocupadas por sus propietarios; sin embargo, con la proliferación de los fideicomisos de inversión inmobiliaria, los mercados de alquiler se encuentran ahora en la misma situación.

Los mercados de bienes de consumo se comportan de manera muy diferente a los mercados de inversión, ya que responden a “reglas básicas” distintas. En lo que a la oferta se refiere, los precios de los bienes de consumo se derivan de los costos de producción, mientras que los precios de los mercados de inversión tienen que ver con los beneficios esperados. En relación con la demanda, factores tales como gustos y preferencias, ingresos de las familias y características demográficas determinan el precio de la vivienda como lugar donde residir. La demanda de vivienda con fines de inversión está relacionada con aspectos tales como la liquidez y las preferencias de liquidez de los inversores, las ganancias esperadas de inversiones alternativas, o las tasas de interés.

En los países desarrollados, los mercados de capitales mundiales y el mercado de la vivienda colisionan a nivel local, con pocas probabilidades de reconciliación. Los hogares a nivel local compiten con los inversores a nivel mundial para decidir el tipo y la cantidad de viviendas que se producen. En los mercados que atraen la inversión mundial se produce una gran cantidad de viviendas, aunque la falta de viviendas sociales es aguda y empeora con el paso del tiempo. Esto se debe a que una gran parte de las viviendas nuevas se produce para maximizar las ganancias de la inversión y no para suplir las necesidades de vivienda de la población local. Por ejemplo, no escasean los inversores mundiales dispuestos a participar en el desarrollo de apartamentos de USD 100 millones en la Ciudad de Nueva York; sin embargo, escasean las viviendas sociales por la dificultad de conseguir fondos para desarrollarlas. En los mercados que han sido abandonados por el capital mundial, los precios de las viviendas caen por debajo de los costos de producción, por lo que existe un excedente de viviendas que se acumula y se deteriora. En casos extremos como el de Detroit, el orden del mercado sólo puede recuperarse mediante la demolición de miles de viviendas y edificios abandonados.

Tal vez sea este el momento de cuestionar la conclusión de que las soluciones basadas en el mercado pueden resolver el desafío de proveer de vivienda a la población del país. Truman concluyó que “al producir pocas unidades de alquiler, frente a una proporción demasiado grande de viviendas de alto precio, la industria de la construcción se está excluyendo a sí misma rápidamente del mercado debido a los precios”. No obstante, Truman se refería al mercado de la vivienda para residir, no para invertir. Es destacable que la cantidad de unidades habitacionales en los países desarrollados excede en mucho la cantidad de hogares. En el año 2016, el censo de los EE. UU. calculó que en el país existían 13 millones de unidades habitacionales y 118 millones de hogares. Una de cada siete unidades habitacionales se encontraba vacante. Este excedente de la oferta de viviendas es una característica de todos los mercados metropolitanos de Estados Unidos, incluso de aquellos mercados con una escasez extrema de viviendas sociales. En 2016, el 10,3 por ciento de las unidades habitacionales se encontraban vacantes en el Nueva York, un 6,0 por ciento en el área de la Bahía de San Francisco, un 8,2 por ciento en Washington D.C., y el valor sorprendente del 13,7 por ciento en Honolulu. El problema radica en que muchas familias no tienen suficientes ingresos para acceder a las viviendas que están disponibles.

Al final, los bandidos del tiempo decidieron, en lugar de rellenar los agujeros que existían en el tejido de espacio y tiempo, aprovecharse de ellos para “hacerse indecentemente ricos”. Los bandidos querían capitalizar las imperfecciones celestiales, al igual que los inversores mundiales desean obtener rentabilidad de las dislocaciones del mercado a corto plazo. A fin de ilustrar los peligros de dicha especulación desmedida en los mercados no regulados, consideremos un relato apocalíptico de un mercado muy diferente. En 1974, en Bangladesh, se sugirió que, debido a las copiosas lluvias que habían caído durante la temporada de siembra, era posible que existiera una escasez de arroz en la temporada de cosecha, y el precio del arroz comenzó a subir. Los especuladores expertos en bienes comercializables se dieron cuenta de que obtendrían una buena rentabilidad del arroz que mantuvieran fuera de mercado. La cosecha real produjo abundante arroz, pero la interacción entre las expectativas del mercado y las manipulaciones del mercado por parte de los inversores en bienes comercializables generó una de las peores hambrunas del siglo XX, que causó aproximadamente un millón y medio de muertes relacionadas con el hambre. Esta hambruna no fue el resultado de una escasez real de alimentos. La colisión entre el mercado de bienes y el mercado de inversión especulativa causó tal aumento del precio del arroz que hizo que quedara fuera del alcance de las poblaciones locales, lo que dio como resultado que las familias sin tierras sufrieran una tasa de mortalidad tres veces más alta que las familias con tierras.

Tal vez la vivienda y el alimento sean aspectos demasiado importantes para ser administrados por los mercados no regulados. Quizá las políticas públicas deberían concentrarse en proteger una parte del mercado —y del público— de los estragos de la especulación. En este número especial antológico de Land Lines, Loren Berlin describe las medidas tomadas a fin de preservar la vivienda social en forma de viviendas prefabricadas y promover la accesibilidad permanente a dichas viviendas mediante la conversión de comunidades de viviendas prefabricadas en cooperativas de patrimonio limitado.

Los fideicomisos de suelo comunitario y las políticas inclusivas de vivienda también son formas efectivas de apartar a las viviendas sociales de la especulación, según lo demostró una investigación del Instituto Lincoln. Después de casi setenta años de medidas fallidas para lograr que los mercados privados suplan las necesidades de vivienda social de la población, tal vez sea el momento de desarrollar y exportar estos otros enfoques que se fundamentan en una comprensión más realista de la complejidaddel mercado de la vivienda y del mercado del capital.

Este artículo se publicó originalmente en el número de Land Lines de julio de 2015.

In 2015 and 2016, representatives from various public agencies, foundations, and nonprofit groups in the San Francisco Bay Area, Los Angeles, and Denver participated in “capital absorption” workshops, to forge solutions to local affordable housing shortages through strategies that attract land, capital, and other resources. They represented not just housing, but transit, planning, and economic development organizations—stakeholders that often don’t join forces to solve problems, even though they work on overlapping issues in identical geographies.

At one of these meetings in 2016, Abigail Thorne-Lyman, program manager for transit-oriented development (TOD) at Bay Area Rapid Transit (BART)—a public transportation system that annually shuttles more than 125 million passengers across the region—realized her agency might be able to make a game-changing contribution to solving the local housing crisis, which is among the nation’s largest. More than 250,000 of the region’s very low-income households lack access to affordable housing. The median home value is San Francisco is $1,147,300, compared to $197,500 nationally; the median monthly rent is a whopping $4,350, more than three times the national median rent of $1,500. Nearly half of local renters spend more than 30 percent of income on rent.

Each six-member team of participants from each region had drafted a spreadsheet of all pending development projects that included affordable housing units. “Staring at our list, we realized that capital wasn’t the primary constraint to building more housing,” explains Thorne-Lyman. “What we needed—the missing piece, so to speak—was land.”

In the Bay Area, developers don’t buy land until they are confident they can assemble the necessary financing for their project, making it difficult to compete in a hot real estate market, Thorne-Lyman says. But BART already owned 300 acres across the region.

That evening, Thorne-Lyman started imagining scenarios in which BART made all its land available for developments that included affordable housing. She ran the numbers. “I saw that we could produce maybe 30,000 units if we put our land in play,” she explains. Ten thousand units could be affordable—which is significant, given that the typical affordable housing development in the Bay Area produces 50 to 200 units. “And if we put ourselves out there first, maybe other transit agencies in other counties would come along,” as BART serves only four of the Bay Area’s nine counties. Together they could make an even bigger dent. “The 30,000 units could turn into 60,000 units, all on public land,” says Thorne-Lyman.

Thorne-Lyman and the rest of the capital absorption team delivered the analysis to BART’s general manager, Grace Crunican. Both Crunican and the BART board of directors decided to increase the agency’s commitment to both market-rate and affordable housing on BART land. Then they asked Thorne-Lyman and the team to model scenarios above and beyond any they had privately imagined.

“That conversation with Grace was like a slingshot,” says Thorne-Lyman. “We had these ideas and played them out. Then the board asked for an even more ambitious vision for our land. Through our work with the capital absorption team, we had all these willing partners—including the affordable housing advocates, community development financial institutions, and foundations—who backed up the idea and pushed it out to the public.”

BART’s new TOD development targets, adopted in December 2016, call for production of 20,000 new housing units and 4.5 million square feet of office space on BART land by 2040. At least 35 percent of these units—7,000, to be exact—will be affordable to low- and very low-income households. So far, BART has produced 760 affordable units on its land, meaning the agency has some work to do. Nonetheless, Thorne-Lyman is encouraged by the challenge. “California has this affordable housing crisis, and we can say that BART will be part of the solution,” she explains. “We have land. And we are willing to offer it up.” 

“Someone has to be thinking big about how to address this crisis. We are putting forward something big,” she says.

The Capital Absorption Framework

The capital absorption workshops that Thorne-Lyman attended were part of a pilot program designed to help cities attract and deploy community investment and to leverage other critical resources, such as land and expertise, to achieve their goals. Community investment is defined as “investments intended to achieve social and environmental benefits in underserved communities—such as loans, bonds, tax-credit equity, and structured investment vehicles.”

The program’s chief architect, Robin Hacke, says, “It’s a way to make resources go to places where they’re not going by themselves, to address the failures of mainstream finance to produce enough affordable housing, reduce health disparities, or minimize the impact of climate change on vulnerable places, among other factors tied to land use.”

Hacke, who is the director of the Center for Community Investment at the Lincoln Institute, is utilizing a new “systems change” strategy that she designed in collaboration with colleagues David Wood of Harvard University’s Initiative for Responsible Investment, Katie Grace Deane, and Marian Urquilla. Called the Capital Absorption Framework, the model is predicated on this idea that mainstream capital markets frequently fail to address the needs of low-income communities, requiring a systemic approach to repair this breakdown and achieve meaningful outcomes at scale (opposed to one-off projects that are difficult to accomplish and, even when successful, fail to move the needle in a significant way). By “bringing to the table” stakeholders who rarely join forces to solve problems despite having aligned interests, the model also augments available assets and power, helping to identify effective new tools and strategies to address unmet community needs.

The framework is a response to challenges Hacke and Urquilla faced while working on The Integration Initiative, an $80 million program begun in 2010 to improve the lives of low-income residents in five pilot cities—Baltimore, Cleveland, Detroit, Minneapolis/St. Paul, and Newark. Administered by Living Cities, the idea was to align interests across a range of players and invest capital in neighborhoods that traditionally can’t access funds.

The Integration Initiative demonstrated that participating cities not only lacked capital; they lacked the capacity to absorb and deploy the funds allotted to them through the program, says Hacke.

“Spatially inequitable distribution of low-income people across the United States grew from decades of public policy that basically starved communities of capital, through redlining by banks or redlining aided and abetted by the Federal Housing Administration,” says George McCarthy, president and chief executive of the Lincoln Institute of Land Policy, who was involved in The Integration Initiative during his tenure at the Ford Foundation.

Systems Change

In order to overcome the effects of discrimination and the market’s failure to deliver adequate goods, services, and opportunities to disadvantaged communities, we need to ensure that capital can flow to those places. Ensuring that residents can thrive means finding ways to finance affordable housing; developing healthy environments with access to fresh food and safe places to walk, bike, and play; and providing access to quality education and jobs. It is not enough simply to invest in a single project and expect places to be transformed. The Center for Community Investment is committed to strengthening the systems that engage a community in planning for its future, creating a platform and network of relationships that unite the institutions and individuals with the capacity to advance the community’s vision; developing and executing investment transactions that implement that vision; and shaping the policies and practices that accelerate how transactions proceed.

—Robin Hacke

“Because we starved communities of capital, we think the way to help them recover is just to provide them with money. But that misses the point that over the years we didn’t just strip out the capital but also the capacity of those places to help themselves. Many people in the community development movement believe that if we just find a way to get more capital to places, then good things are going to happen. But one of the hard lessons we have learned is that, even if you can get the money to those communities, they don’t necessarily have a way to use it. It may sound like I’m blaming the victim, but that’s not it. Rather, it’s understanding that when you deny a place critical resources for long enough and then suddenly provide it, the community may not be ready to deploy it. It’s like people. If you starve someone for too long and then provide food, that person may not be able to eat it.”

Managing the Pipeline

“To deploy capital successfully, places need to identify sources of capital as well as projects that can use it. Proponents of impact investment have focused on organizing capital supplydemand for investment,” Hacke says. “For example, in Detroit, Baltimore, and Cleveland, they were not primarily looking at housing. They wanted to accelerate all kinds of development, including commercial and mixed-use developments. Getting the right set of deals and the right conditions to supply capacity to those deals required much more than just investment capital. The work took longer than we expected and required much more upfront arrangement of the plumbing than we had anticipated,” she adds.

“Despite the great need in disadvantaged communities, stakeholders have to overcome major obstacles to complete projects,” says Hacke. “If people don’t believe that the deals have a decent-sized chance, they give up on them. So we organize stakeholders around what is most urgent at that time and organize the resources that way as well to increase the probability and the confidence that the critical deals will get done.”

The lack of confidence stems from the cold truth that community development projects are usually difficult to realize (figure 1). Hacke confronts that fact head-on by asking participants to identify what she calls “exemplary community impact deals. The ones that stick out in people’s minds as representative of the field tend to be complex, time-consuming, and politically fraught, balancing the interests of many stakeholders and blending many different sources of capital with varied constraints and requirements. Practitioners evoke the language of heroic quests to describe these deals.”

Identifying and examining “exemplary deals” is helpful in two ways. First, it highlights the complex and convoluted nature of many community investment projects, clarifying the need for a more efficient, scalable strategy. More importantly, analyzing exemplary deals can help stakeholders determine the potential resources and constraints of the larger community development system, including the engagement level of various players, the availability of an array of skills and resources, and opportunities for collaboration.

3 Components of an Effective Community Investment System

Once stakeholders in a region have used the exemplary deals framework to examine how the community investment system is currently operating, the next step is to identify ways to improve the functioning of that system so that it can deliver impact at greater scale. As organized by the framework, an effective system requires three things, which are the focus of Hacke’s work with communities.

Identify Shared Priorities

First, stakeholders must articulate a well-defined set of priorities that are widely embraced across the community. Affordable housing is not always the anchor for establishing these priorities, but it was the easiest starting point in Hacke’s pilot programs—in part because the field has reliable, effective funding sources, such as the Low-Income Housing Tax Credit, and a robust network of experienced organizations.

“We work really hard to convene and build cross-sector relationships so that we can operate from a set of shared priorities,” says Thomas Yee, the Initiatives Officer at LA THRIVES, a nonprofit that works to advance the equity agenda around smart growth and participated in the Capital Absorption Framework pilot.

“There’s going to be disagreement among really progressive advocates, elected officials, and private developers, so it takes a lot of working together, building trust, and finding common ground. But that’s the way to organize system-level approaches. It allows you to boil down the work to a few principles that excite people and keep them focused on the system instead of their particular neighborhood or project.”

One of the shared priorities to emerge out of the Los Angeles work is the importance of ensuring that LA Metro, the public agency responsible for bus and rail services in Los Angeles County, effectively serves low-income residents, who are the agency’s core riders.

Prior to joining the workshops, LA Metro knew its core riders were low-income. Based on the findings of a research study the agency had commissioned prior to joining the Los Angeles team, the agency also understood how it could assist those riders to live near transit lines. It was developing aggressive housing targets on agency-owned land when it joined the LA THRIVES collaborative.

“The sea change was coming together to get LA Metro to think about what that means for how the agency runs its business—about the bottom-line question of what happens if those core riders are living farther and farther away from existing transit systems,” explains Yee.

According to Yee, LA Metro was interested in additional ways to counter displacement, and joining the collaborative was “really the water needed to grow those seeds.”

The idea that low-income riders would be pushed farther afield disturbed the other members of the pilot’s Los Angeles team. The transportation planners balked at the cost and inefficiencies of expanding service to outlying areas, while the conservationists worried about the environmental impact.

The community advocates were concerned about economic and social isolation, and the housing folk feared there was a lack of affordable housing in the outer ring areas. Resolving this issue correctly would present an opportunity to simultaneously address these seemingly unrelated concerns, and so it became a shared priority among the collaborative. In response, LA Metro adopted a new term for thinking about transit in the context of displacement: the Transit-Oriented Communities frame.

But LA Metro wanted to do more. It was clear that, unlike BART, the agency did not have much additional land that could allow for thousands of new affordable housing units. Instead, LA Metro, in partnership with other members of the team, created a loan fund to support the development of affordable housing and retention of existing low-rent, nonrestricted units near the agency’s transit lines. Critically, the units do not have to be on agency-owned land, but they must be close enough to provide easy access to the transit.

“We are so excited that LA Metro is willing to make investments off their property,” says Yee. “Making it easier to develop affordable housing on agency-owned land is one thing—and obviously a huge step in and of itself. But for them to go beyond agency-owned land is a big innovation and demonstrates a commitment to limiting the displacement of core riders.”

Establish a Pipeline of Deals

Once stakeholders identify a set of strategic priorities, they can then focus on establishing a pipeline of deals—the second step in implementing the framework. Stakeholders begin by examining deals in progress, analyzing whether they support the priorities and where there may be gaps.

The practice of examining the deal pipeline also helps to highlight the resources that are necessary for success.

For the Denver team, analyzing the city’s pipeline resulted in the recognition that the team needed to focus more on attracting mission-driven private capital, says Dace West, a leader of the Denver pilot and, at the time, executive director of Mile High Connects, a nonprofit with a mission to ensure that the Metro Denver regional transit system fosters communities that offer all residents the opportunity for a high quality of life.

“We had this powerful moment as a community when we realized that the way we are doing community development work is really driven by specific, restrictive funding sources that are more mature systems—like tax credits, which are oversubscribed—or, in other cases, sources of capital that are not very predictable,” says West, referring to the takeaways from the pipeline analysis.

“We realized that we are so often falling short in the developments we are working on because of an inability to be very systematic about the way we draw down and deploy capital. So, going forward, we are very focused now on how we leverage private-sector impact investment capital into the system, looking at traditional capital sources in new ways and at what we need to do to unlock significant capital seeking a place to land,” West says.

“We have discovered, from deep and intentional work, that impact means really different things to impact investors. When some say they want impact, what they are really saying is that they want to be able to squint and see something good; that is good enough for them, because what they really want is liquidity and rates of return. We think, ‘That’s good to know, because we have been wasting our time on these things that aren’t real issues.’ Now we can focus on questions such as: what is that target rate of return, and where are the right places to leverage that capital versus other kinds of capital? And that’s been a real ‘aha’ moment—this recognition that real estate, which is something we had been thinking of as a more traditional investment, can be an actual community impact investment, which creates new and interesting connections.”

One of those connections is to Denver’s housing finance agency.

“As we have been thinking about ways this new capital could land, we have discovered that we have a very unusual housing finance agency.

It is very creative and flexible and is already managing a huge number of siloed, structured funds that have a community purpose in some way,” says West. “We are working to build out a platform that uses the agency as a base to draw in capital that can go to specific sleeves but can also flow across those gaps and allow us to pursue projects driven by the community and its needs. The housing finance agency is not responding merely to existing funding sources any longer; it’s acting as a broad-based intermediary that can work across and among agencies in the system.”

Create an Enabling Environment

After building out a pipeline of deals, it’s a natural next step to the final piece of the framework—strengthening the “enabling environment.” This is defined as “the latent conditions that shape the system’s operations,” including but not limited to “the presence or absence of needed skills and capacities, political realities, formal and informal relationships among key actors, and the cultural norms and behaviors that manifest differently in different places.”

In the capital absorption workshops, participants are asked to figure out which areas of the environment are or are not working well, and which policies and practices directly affect their strategic priorities. In doing so, they can better grasp the opportunities and limitations inherent in the current system.

For Thorne-Lyman and the rest of the San Francisco team, it was analysis of the enabling environment—of what resources are and are not available and functioning well in the ecosystem of affordable housing—that immediately revealed that shortage of land.

Center for Community Investment

Thorne-Lyman is not the only one excited by the work that has come out of the Capital Absorption Framework. McCarthy is also encouraged.

“Land is one of a community’s most valuable and scarce resources,” he says. “Land policies can play a central role in attracting or generating the investment needed to tackle vacancies and blight produced by dysfunctional land markets or to address the disparate impact of pollution and climate change on poor and disadvantaged families.”

For that reason, the Lincoln Institute of Land Policy launched the Center for Community Investment in 2016 with support from The Kresge Foundation, Robert Wood Johnson Foundation, John D. and Catherine T. MacArthur Foundation, and Surdna Foundation. The Center is a leadership development, research, and capacity-building initiative to help communities mobilize capital and leverage land and other assets to achieve their economic, social, and environmental priorities. Hacke will direct the new center and use it as a platform to advance the capital absorption model.

“We have seen over and over again that land really is an important part of the solution, whether we are talking about the health of people or green infrastructure and the health of natural ecosystems. Being at the Lincoln Institute, which has such tremendous expertise in the use of land to generate and capture value, is a real boon for us,” says Hacke.

Building on the success of the pilot, the Center for Community Investment has launched a new initiative, Connect Capital, aimed at helping cities and regions across the country improve access to opportunities so that everyone has a fair chance to lead a healthy and productive life. The Center is working with cross-sector partnerships that are reshaping local systems and deploying capital to make their communities healthier, more cohesive, resilient, and vibrant. Selected teams receive coaching and the opportunity to participate in learning sessions to help them strengthen their local community investment system.

At Lincoln, Hacke hopes to expand her work by piloting it in additional communities. Participants in the pilot cohort encourage those cities to seize on the opportunity. “When we started this work two years ago, it felt like an abstract academic exercise replete with homework assignments. But we hung in there with their approach and have seen such value in the framework,” says Christopher Goett, a senior program officer at the California Community Foundation, one of the supporters of the Los Angeles pilot. “Robin, Katie, David, and Marian pulled together a safe space that allowed us to tackle difficult work and created a support system that strengthened over time. In hindsight, these activities have been critical moments for us in our evolution and growth.”

“Community and economic development work is often addressed through programs in their own respective silos, but that’s not how the world operates,” Goett says. “Average Angelenos wake up and use transit to get to work or drop off their children at school. Systems such as housing, employment, and education all interact, and that’s how the Center’s frame is laid out.”

“For someone who manages a smart growth portfolio here at the California Community Foundation, the framework continues to become increasingly useful; smart growth is, by its nature, integrated. We have to think about public health at the same time we think about infrastructure and housing, and with this frame we can walk through the transit-oriented development door and still see the anti-displacement and housing angles.”

Revised in January 2018, this article originally appeared in April 2017 Land Lines.

Loren Berlin is a writer and independent communications consultant in Chicago.

Photograph: Courtesy of Abode Communities

References

Bay Area Council Economic Institute. 2016. “Solving the Housing Affordability Crisis: How Policies Change the Number of San Francisco Households Burdened by Housing Costs.” (October). http://www.bayareaeconomy.org/files/pdf/BACEI_Housing_10_2016.pdf

Hacke, Robin, David Wood, and Marian Urquilla. 2015. “Community Investment: Focusing on the System.” Working paper. Troy, MI: Kresge Foundation.

Truong, K. 2016, October 11. “Here Are 11 Solutions to the Bay Area Housing Crisis.” San Francisco Business Times. October 11.

Zillow.com. “San Francisco Home Prices and Values.” https://www.zillow.com/san-francisco-ca/home-values/

Zillow.com. “United States Home Prices and Values.” https://www.zillow.com/home-values/
 

People who work with me are often surprised by the extent to which my philosophical canon derives from low-budget offbeat films, typically from the 1980s. When in need of wisdom, I frequently turn to the teachings of Repo Man or, for this essay, Terry Gilliam’s allegorical masterpiece Time Bandits. In the movie, a group of public workers are employed by the Supreme Being to fill holes in the time-space continuum left from the haste of creating the universe in seven days: “It was a bit of a botched job, you see.”

Like the Time Bandits, policy makers are often tasked to fill holes—actual potholes in roadways, or more theoretical holes that are the artifacts of dysfunctional private markets, such as the inadequate supply of affordable housing. For example, housing economists in the United States have become quite adept at tracking the size of the hole, which has only become harder to fill since the federal government committed to address it as a national policy priority beginning with the Housing Act of 1949, part of President Harry S. Truman’s Fair Deal.

In his 1949 State of the Union address, President Truman noted that to fill the needs of millions of families with inadequate housing, “Most of the houses we need will have to be built by private enterprise, without public subsidy.” Nearly 70 years later, our collective failure to solve the affordable housing deficit may stem from wrongheaded analysis of the problem, and the conclusion that market-based solutions can be designed to solve the mismatch between the supply of affordable housing and demand for it.

To support this claim, permit me a short departure into market theory. From the now-preferred mathematical approach to economic analysis, a market is simply a system of partial differential equations that is solved by a single price. The equations capture the complex decisions made by consumers and producers of goods—reconciling consumers’ preferences and budgets with producers’ production techniques, capital, and transaction costs—to arrive at a price that clears the market by settling the transactions of all suppliers and consumers willing to trade at that price.

Acclaimed economists Arrow, Debreu, and McKenzie proved the theoretical existence of a single set of prices that can simultaneously solve for the “general equilibrium” of all markets in a national or global economy. One important aspect of this Nobel Prize–winning contribution was the observation that a unique price cleared each market—one market, one price. There was no expectation that a single price could maintain equilibrium in two markets. And this is the fundamental flaw of the housing market—it is actually two markets, not one. Housing markets supply both shelter for local consumption and a globally tradable investment good made possible by broad capital markets that serve global investors. This dual-market status used to pertain to owner-occupied housing, but, with the proliferation of real estate investment trusts, rental markets are now in the same boat.

Markets for consumption goods behave very differently than investment markets, responding to different “fundamentals.” On the supply side, prices for consumption goods are dictated by production costs, while prices in investment markets are dictated by expected returns. On the demand side, such things as tastes and preferences, household incomes, and demographics determine the price of housing as shelter. Investment demand for housing is dictated by factors like liquidity and liquidity preferences of investors, expected returns on alternative investments, or interest rates.

In developed countries, global capital markets and the market for shelter collide locally with little chance of reconciliation. Local households compete with global investors to decide the character and quantity of housing that is produced. In markets that attract global investment, plenty of housing is produced, but shortages of affordable units are acute, and worsen over time. This is because a huge share of new housing is produced to maximize investment return, not to meet the needs of the local population for shelter. For example, there is no shortage of global investment willing to participate in developing $100 million apartments in New York City. But affordable housing, being much harder to finance, is in short supply. And in markets that have been abandoned by global capital, house prices fall below production costs, and surplus housing accumulates and decays. In extreme cases such as Detroit, market order can only be restored by demolishing thousands of abandoned homes and buildings.

Perhaps it is time that we question the conclusion that market-based solutions can address the challenge of sheltering a country’s population. Truman concluded that “By producing too few rental units and too large a proportion of high-priced houses, the building industry is rapidly pricing itself out of the market.” But Truman was thinking about the market for shelter, not investment. Remarkably, the number of housing units in developed countries significantly exceeds the number of households. In 2016, the U.S. Census estimated that there were 135 million units of housing in the country and 118 million households. One in seven housing units was vacant. This over-supply of housing characterizes every metropolitan market in the United States—even markets with extreme shortages of affordable housing. In 2016, 10.3 percent of housing units were vacant in New York, 6.0 percent in the San Francisco Bay area, 8.2 percent in Washington, DC, and a stunning 13.7 percent in Honolulu. The problem is that many households have insufficient incomes to afford the housing that is available.

In the end, rather than fill the holes in the fabric of time and space, the Time Bandits decided to take advantage of them to “get bloody stinking rich.” The bandits sought to capitalize on celestial imperfections, the way global investors seek returns from short-term market dislocations. To illustrate the dangers of such naked speculation in unregulated markets, consider an apocalyptic tale from a very different market. In 1974, heavy rains during planting season in Bangladesh suggested that rice might be in short supply at harvest time, and rice prices started to rise. Savvy commodity speculators realized that there would be a good return on any rice that was held off the market. The actual harvest produced a bumper crop, but the interaction between market expectations and market manipulations by commodity investors produced one of the worst famines of the 20th century—with an estimated 1.5 million famine-related fatalities. The famine did not result from real food shortages. The collision of the market for goods and the market for speculative investment priced rice out of the reach of the local populations, with landless families suffering mortality at three times the rate of families with land.

Perhaps shelter and food are too important to be left to unregulated markets to allocate. Perhaps public policy should focus on protecting a share of the market—and the public—from the ravages of speculation. In this special anthology issue of Land Lines, Loren Berlin describes efforts to preserve affordable housing in the form of manufactured homes and to promote permanent affordability of that stock through the conversion of manufactured housing communities to limited equity cooperatives. Community land trusts and inclusionary housing policies are also effective ways to insulate shelter from speculation, as demonstrated by Lincoln Institute research. After almost seven decades of failed efforts to get private markets to meet populations’ needs for affordable shelter, it might be time to develop, and to export, these other approaches based on a more realistic understanding of the complexity of housing and capital markets.

This article originally appeared in July 2015 Land Lines.