Housing is always a hot topic in Iowa City. And it’s one I write about from time to time. Most recently, I wrote a couple of posts about how both YIMBY and NIMBY positions get it wrong.

I’ll continue that theme in this post.

Obviously housing is one of our most basic needs. It stands alongside food and water as one of the essentials. But it’s also an issue that brings to bear many of the central problems with life in an advanced capitalist country full of inequalities of wealth and power. It also shows our political shortcomings.

Nowhere do we see all this more clearly than in two recent housing developments in Iowa City.

One Success and One Failure

First, we saw a successful affordable housing project on North Summit St. Our city government purchased an empty lot near a bus line and north side amenities. And it’s in the process of developing the lot into publicly owned and managed housing.

Second, we have an empty lot (or, more accurately, a mostly empty lot with a decrepit building on it) that was recently approved for upzoning after a request from a local developer. It sits on North Governor Street, just a few blocks from the successful project.

And it’s a flop. The developer isn’t building anything. He appears to have sold the lot at an inflated price, and it’s questionable whether anything will ever go on it. If it does, it’ll likely be an unaffordable mess.

However, local politics treated the two cases largely interchangeably. YIMBYs supported both, while NIMBYs opposed both. Local media presented the two projects as largely parallel housing developments with the usual political players. But one is shaping up to be a major success, while the other looks like a failure.

Why?

Public Housing vs. Finance Capital

In the Summit St. project, the city government is acting as a housing developer. Essentially, it is directing the building of new housing on the basis of actual public need. This is a wildly promising idea, and it’s one on which the city should build (pun intended?).

And then there’s the second project – the upzoning mess. The developer never had any genuine interest in building on the lot. Upzoning increased the value of his land, allowing him to sell the lot at an inflated price.

But that’s not the entire story. YIMBYs are willing to defend this, as long as something gets built on the lot, eventually. Indeed, the ‘affordable housing‘ movement, in general, is fine with inflated land value, so long as it leads to more housing supply.

However, the deeper problem with this strategy is that inflated land values will get passed on to tenants in the form of price inflation. Any potential benefit from increased housing supply is canceled out. We get more housing. But we don’t get lower prices. Any private developer built housing that goes onto this lot will come out in the form of luxury units and/or smaller homes with inflated prices.

In short, public development works. Finance capital driven private development doesn’t. And in Iowa City, we get to see, side by side in the same part of town, why public development and public housing works better.

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