Why the Section 8 Solution Won't Cut It

Donald Trump’s appointment of Ben Carson to be the next Secretary of the Department of Housing and Urban Development puts Dr. Carson in charge of a $45 billion budget that administers housing aid to over five million American families. Reading Matthew Desmond’s new book, which powerfully recounts the daily struggles of eight low-income families in Milwaukee, will help him prepare for the job.

An impressive work of ethnography (and also a bestseller), Evicted: Poverty and Profit in the American City is the product of time spent living alongside Americans of low income—the author spent over a year in two communities, one black and one white—and rigorous research. The reader is drawn into, and made to care about, the daily toils of America’s neediest; by the book’s end, one cannot help but be ready to respond to this call to end the human suffering that happens in our own backyards. It provides a compelling view into the lives of landlords and tenants alike, illuminating the country’s housing and poverty crises by giving names and faces to the complex issues that contribute to them.

Desmond’s thesis is that safe and affordable housing is extremely scarce in the United States, and this scarcity is a primary perpetuator of the vicious cycle of poverty. He shadows two landlords, Sherrena and Tobin, and some of their tenants, all of whom are referred to by pseudonyms to protect their privacy. Sherrena owns and manages a number of properties in the predominately black community of Milwaukee’s North Side. Tobin owns a trailer park whose residents are predominantly white. Both landlords come across as industrious and law-abiding entrepreneurs who saw a lucrative opportunity in providing housing to low-income tenants. They turn a good profit from their rental properties, but Desmond shows that their work is far from easy, often because of the manifold life problems with which their clientele are saddled.

While living in the dilapidated properties that Sherrena and Tobin rent to him, Desmond follows the lives of his neighbors. He shows them to be unhappy individuals made unhappier by their travails. Most of them have a hard time maintaining steady employment. For some, addiction and mental illness prevent them from work; others simply can’t find work or choose not to. All are dependent on monthly welfare checks and food stamps for survival.

Desmond compels readers to take into consideration the problems associated with unaffordable housing. He does so by immersing his audience in the decisions that underprivileged Americans make each day in order to survive.

Arleen, an African-American mother of two and one of Sherrena’s tenets, spends 88 percent of her $628-a-month welfare check on housing. The rest she spends on utilities, school supplies, and food for her sons. When her sister died, Arleen decided that the unexpected funeral costs superseded eating that week and rent that month. She fell behind in the rent, and Sherrena gave her an eviction notice. After being expelled from her home, making nearly a hundred calls to landlords in search of a place to live, and living in homeless shelters with her boys, Arleen saw one of her sons removed from her custody by Child Protective Services to live with her sister.  “Just my soul is messed up,” says Arleen. “Sometimes I find my body shaking or trembling . . . my body is trying to shut down.”

In this book, people’s decisions have consequences; but its vignettes also show the degree to which people can be trapped by their circumstances. A trailer park resident named Larraine, after being evicted from her dwelling and while living with a neighbor, uses food stamps to dine on lobster and crab legs (washed down with Pepsi), fully aware that it means she will only be able to eat canned food for the rest of the month. Larraine also prefers having expensive anti-wrinkle cream and nice jewellery to paying rent and saving money. The fact is, she has little incentive to save. If her account accrues more than $2,000 she could lose her benefits, or her landlord Tobin could access her savings for any past rent. “If I can’t keep my money in the bank, then I might as well buy something worthwhile,” she says, “because once I pay on it, it’s mine and no one can take it from me, just like my jewelry.”

Through stories like these, Desmond acknowledges the effects that individuals’ choices have—for better or for worse—but we are still left wondering how they could escape their poverty, at least on their own. The details we get simply do not support the stereotype of low-income individuals gleefully living off the dole at taxpayers’ expense.

Desmond asserts that there exists a tension of competing goods: the right for a landlord to profit from his or her property investment and the freedom for a tenant to live in safe and affordable housing. Chief among his proposals to make available more affordable housing is the universal housing voucher—or an expansion of Section 8— for which anyone below a certain income level would be eligible. The only story here with a happy ending is that of Scott, from Tobin’s trailer park, who lost his nursing license because of his opiate addiction. Scott only regained sobriety— and the ability to work toward reclaiming his license—after he obtained a housing voucher. Therefore, Desmond argues, expanding housing voucher programs would allow landlords to make money (albeit not too much!) while ensuring that all those who need housing receive it.

But here is where conceptual problems emerge in this in many ways admirable study. Evicted is a classic case of the prescription not following the description. Probing as he is, the author has avoided two critical questions: Why is rent in Milwaukee so unaffordable in the first place? And what is the cause of his neighbors’ difficulty staying housed?

Desmond neglects to look at the underlying reasons that Sherrena and Tobin charge so much in rent. He reports that price-to-rent ratios (ratio of home’s purchase price to the price for which it is rented) are higher in the North Side than the well-off Milwaukee suburb of Wauwatosa. He expresses suspicion about this—but doesn’t consider the fact that landlords renting in the North Side have to factor costs into their rental prices that landlords in Wauwatosa do not, such as damage to property, missed rental payments, and evictions (not to mention the reduced likelihood of the homes themselves significantly appreciating in value). Landlords know that these are costs inherent to servicing their disadvantaged clientele; it’s an unfortunate reality that hardworking single mothers like Arleen suffer because of the negligence of other renters.

The powerful descriptions of the lives of the non-working poor lead him to reach for a solution (the universal housing voucher) before he has plumbed the root causes of their problems. To prescribe the voucher as a solution is implicitly to assume that housing is itself the root cause. But does a lack of housing cause drug addiction, compulsive spending, or violence? Or do those habits cause a lack of housing? In some cases, like that of Scott, it is acknowledged that drug addiction had much to do with this man’s homelessness and poverty. But the heavy focus on the voucher solution belies this recognition. Widening the eligibility of the voucher would hardly do much to get at such problems as addiction and family breakdown. A randomized controlled trial, the gold-standard among research methods, recently published by the American Economic Review examined the effects of randomly allocated housing vouchers. The result was that individuals who received vouchers worked less and relied more on government welfare.

Another question is that of representativeness. Evicted tells us much about poverty and under-housing in Milwaukee, but provides insufficient evidence that the experience of Milwaukee’s poor is representative of other American states and cities.

Lastly, it is important to consider Desmond’s policy proposal in the broader context of other policies aimed at solving this problem. Policymakers in the past have examined supply-side policies—such as building public housing and rent control—and demand-side polices—including artificially low interest rates to incentivize home ownership (a la the housing bubble of late 2007 and the subsequent financial crisis), and Section 8 housing vouchers. Each of these have fallen short in their own right, so it’s not clear that enlarging a failed program would do much in this circumstance.

The irony is that by attempting to help the under-housed afford shelter, the policy prescription favored here would pad the pockets of the Sherrenas and Tobins of the world who, with a universal housing voucher, would only profit more. Granted, with the increased demand that an expanded voucher would allow, more landlords would likely enter the market and provide much-needed competition, but the fact remains: landlords would almost certainly benefit. We see from this account, perhaps more against than with its author’s own conclusions, the important role that landlords—and payday lenders for that matter, which he also condemns—play in providing services to low-income Americans. If more regulations were put in place to curb the extent to which landlords or payday lenders could profit from providing their services to the poor, the result would be fewer such services available to the poor, not more.

Still, it is well to remember that issues relating to poverty and housing in America are layered and complex. Evicted presents many lessons about what Secretary-to-be Carson ought and ought not do if he hopes to improve the status quo. “We cannot have a strong nation if we have weak inner cities,” Dr. Carson told Fox News. The answers are not as simple as Matthew Desmond seems to suppose, but his book should be celebrated for calling attention to this subject and most of all for giving it a compelling human face.