Arriving in Kansas City from London sometimes feels like being a messenger from the future. The place where I grew up has been subject to enormous speculation on residential real estate over the last 25 years. In the neighbourhood where I lived – a place with some of the highest levels of deprivation in the country – house prices have increased 900%. Yet almost none of those suffering from poverty have benefitted from that increase. Instead they have paid for it in increased rents. And when they can no longer afford the price hikes, like me, or when their social housing is demolished to make space for another block of luxury apartments, they leave. Normally this means leaving behind jobs, community, and family.
Here in Kansas City, historically, house prices have been relatively low. Like much of the Mid-West, in the post-war period housing prices were pegged to income. Of course that is not the whole story. Kansas City is the very archetype of a city that is scarred by racism in the realty sector: from redlining and ghettoization, to white flight and blockbusting, to failed attempts at remediation through FHA loans (as brilliantly described by Keeanga-Yamahtta Taylor), to new gentrification by the children of white flight. If housing here has been the result of a free market, it was never a balanced one. The predatory practices that have profited directly from poverty, and from class, racial and social division have triumphed.
Nonetheless housing remained relatively affordable until a few years ago. In part this was a result of the city’s housing stock, which while being old, and frequently in disrepair, is of high quality, and is mostly built to last. Today that is not what is being built. Much like in London, the trend is towards “luxury apartments”. Next door to the public library in downtown, where I am writing this – sat surrounded mainly by the city’s homeless population, who are here to get some aircon on a hot day – you can rent a 750 square foot luxury one-bed for $1750 per month. It is peculiar how, under these definitions, luxury morphs into its opposite: poverty. The whole thing is a delusion, because if you can only afford 750 square feet when you are having to spend $1750 a month, that probably makes you rather poorer than you anticipated! Many units like this sit empty for years on end in the hope that one day some wealthy chump might stump up that much cash for a poky room. In general, very few people want to live in these places. Those who eventually buy them will see them rapidly devalue due to high depreciation in those first years of being lived in, and soon enough the blocks will be ready to be knocked down and new ones built in their place. Never mind, they were poorly built to start with.
Like so many cities, luxury apartments are springing up everywhere, but they are rarely meant for living in. Back in London, thousands of units of social housing have been demolished in order to sell land to property speculators, who have built endless glossy blocks of mothballed apartments. The promise is straightforward to local government: sell us the land at a knock-down price and you get a lump sum of cash. Meanwhile the predatory speculators try to guarantee that house prices in your district increase. Local government can take a little extra in property taxes, and won’t have to deal with all the poor people who are forced to leave. And, best of all, when anyone looks at the statistics, they will see an “improvement” in your area.
The mechanism is, in essence, not so distant from a pyramid scheme. Invite the speculators in to your city and they will develop. They don’t have to sell the housing units as long as the property prices continue to increase faster than inflation, meaning there is a profit to be made simply on holding these assets. And so, as soon as the speculators arrive they begin lobbying against anything that might decrease the price of property, whether that is government schemes to build social housing, or regulation of planning, or restriction on rental price increases. The only other units these developers want to see are new luxury apartments built on further speculation. Or perhaps a fancy restaurant or two.
In lots of places this is – peculiarly – a vote-winner. Where there are large numbers of home-owners, they see an increase in the value of their homes, or increased equity against their mortgages. In most places home-owners are more likely to vote than renters too. In short, the invitation to luxury developers offers a kickback to home-owners. Yet the increasing value of homes is paid for by increasing pressure on renters, who experience massively increased costs and decreasing access to affordable places to live. Every single place where this pattern has taken hold, the wealthy have got wealthier on the backs of the poor. It might be good electoral politics, for those who only care about winning, but it is disastrous for anyone who believes politics should serve the people and not just politicians.
Last week, the Kansas City Mayor pushed a new ordinance through the City Council. Back in 2020 when property prices began to explode across the city, the council passed a policy that if it was going to offer subsidies to developers, they would have to include in the plans a number of rental units at affordable rates. In principle, 10% were to be set aside at rates affordable to those earning 60% of the area median income, and 10% were for those earning 30%. Only if these conditions were met would the council continue to hand over tax dollars to developers. Of course the figures were fiddled so that what counted as “affordable” was well out of reach of most of Kansas City’s poorer residents. Nonetheless, it was a good concession of sorts (however much similar policies have been plagued in other places by the building of incredibly small, inadequate “affordable” apartments with “poor doors” appended to the backs of blocks.)
Two years into this policy the council – led by the mayor and the city manager – decided no longer to hold this line. Apparently, even with the promise of subsidies, there were just not enough developers wanting to make this tiny concession. More likely, though, is that the developers sensed that they could just lobby these wobbly politicians and have the policy removed before they submitted their applications. So in the end the council removed the requirement for developers to set aside apartments at the 30% rate. Now those special “affordable” units will cost $1200 for a one bedroom apartment, and once they are in place, the city’s government will be permitted to squander as many tax dollars as they like, handing the cash over to developers.
During the debate on the ordinance, Council member Melissa Robinson gave a speech about how she supports this policy because she misses the good old days when doctors and judges lived on her block. In short, she recognised that the professional classes will only return to the most deprived areas of the city if they are offered highly securitized complexes with concierge services, so that they don’t actually have to recognise or interact with the people who live around them. Certainly all that security might be necessary when the people who live on the block, who are already barely coping, realise that by having a new luxury apartment complex built next door they will all end up paying more rent!
Lots of the most mealy-mouthed arguments from the politicians are made in the language of “need”. This is peculiar because despite the claim that this policy meets the needs of the “middle class”, it is just a policy to line the pockets of corporate developers. Meanwhile, both Councilwoman Robinson and Mayor Lucas spend a lot of time talking about how the elites need elite housing, how young professionals need housing appropriate to young professionals, how the middle class need middle class housing. All of these profoud needs are seen as entirely equivalent to the needs of the poorest people in the city to have housing they can afford, as opposed to being made homeless or being displaced from the city.
I am not sure that these people have really thought hard about what is actually meant by need. Or if they have, it was a thought about how they needed a meal in a fancy restaurant at the end of another well-paid day. The fact is that wealthiest people in the city do not need property that magically increases in value. They just need places to live, like everyone else. The upper middle-classes do not need to show they are not as poor as their neighbours through their choice of accommodation. Especially not if there is plenty of adequate, good-quality, long lasting housing for everyone. There is nobody in the world who needs a luxury apartment. Except, perhaps, for those sharks who build them to speculate. And even they do not need them to live in.
I am not really a messenger from the future, just a displaced person from some place else that got sucked into this dreadful economic whirlwind two decades before it reached here. But I can tell you that Kansas City now faces a choice. It can encourage property speculation in the way that so many other cities have. It can believe the politicians who say that the only solution to the crisis of increased property prices is to increase housing supply, and that this can only be done by inviting in speculators to develop luxury apartments, because that is all they want to build. Or it can choose a different way, and resist this march of the speculators.
Mayor Quinton Lucas insists that Kansas City has to be “open for business”. The trouble is, the more open it is to property speculators, the less open it is to normal people, who simply want to live their lives in the comfort of a home. The more open it is for business, the more of the wealth of Kansas Citians will be sucked into the pockets of landlords. The more it is open for business, the less likely it will ever be able to escape the cycles of development leading to increased housing costs for everyone. That’s fine if you own your home – as all of the politicians in this city do. And some own more than one. But for the 50% of Kansas Citians who are renters, this is a catastrophe.
Thankfully some people are fighting back. KC Tenants protested the council meetings last week, loud and furious. The politicians even had the chutzpah to have one of the KC Tenants organizors arrested and dragged out of the chamber as they voted. If that doesn’t give you an image of the future they want, I don’t know what will.