March 29, 2024

Words of Warning

July 5, 2015

There are certain words politicians favor, phrases that resonate well, but have vague and variable meaning. Over the last few years that’s about all we get: Terms like fairness, smart, and sustainable. These terms are used to resurrect old ideas that have been tried and failed. When we are presented with a government’s ideas with vague names to cloud concrete details, we should be on alert.

In Traverse City we’re being misled with the term "affordable." It’s a great word for deception. There is no specific number attached to "affordable." At the same time, it’s a word that carries no negative connotation. Each person who hears "affordable" applies his or her idea of something reasonable and within reach. When politicians use the label, they are hiding artificial manipulation of the market.

"Affordable housing" is just a new name for a failed program from the 1960s and 1970s called low-income housing. It still means the same thing: The government taking something from one group and giving to another, thus destroying the market in the process. It hasn’t worked before, and it won’t work now.

It is hard to find low-income housing in downtown Traverse City. The city is an attractive place to live, and there is a finite amount of real estate available. When a resource is scarce (places to live in downtown) those who want it will have to pay more for it. The exact same dynamic occurs during the National Cherry Festival. Lots of people want hotel rooms right downtown, but there are not enough available. As a result, the rooms only go to those who plan ahead, make early reservations, and are willing to devote enough of their resources to securing those prized rentals. Latecomers and the budget-minded are going to end up at the Fairfield Inn in Grawn. There is nothing wrong with the Fairfield. It offers a fine place to stay in a convenient area. It’s just not downtown.

There are only a few ways local government could guarantee hotel rooms in Traverse City. They could restrict the people with enough income from getting the rooms by setting some aside, making the few that are available even more precious. Or the government could build more rooms so there are enough for everyone. In other words, government would have to add to the supply or restrict the demand.

The few rooms that are not restricted would become more expensive and only the very wealthy could afford them. The people who plan their vacations in advance and have limited resources will not get in line with people getting the government-reserved rooms. They will take their vacations in a different place where they can get the reservations they want. Over time, the Cherry Festival will be something for those with significant wealth or those to whom the government allows access. The broad segment of people who enjoy the Festival now will be going somewhere else where access is within their power. Once they are gone the Festival will lose the thing that made it desirable in the first place.

We’ve seen this unintended consequence in every city where it’s been tried. Housing projects came to us under the label of "urban renewal." No one can be opposed to renewal. But it completely failed. Those urban centers are in decline. But the old idea is back with a new name: "affordable housing." The new leaders think they can do it "smarter." They can’t, and they don’t need to.

Traverse City doesn’t have a housing shortage. We have a limited supply in a very small area and access to those prized addresses is limited by income. There is no housing discrimination. There isn’t any historical bias that keeps people out. As a broader area we have a wide range of income levels. There are great places to live available a few miles from downtown. There is inexpensive housing in the limited boundaries of the city itself. Those addresses just don’t have the panache of downtown.

What we do have is a few thought leaders in the city who feel guilty that they enjoy an address that lower income people cannot manage. They have good intentions, but they’re not going to invite low-income people into their houses. Their smart ideas all involve adding housing with government money. They can hide in it phrases like "community contribution" and "subsidy," but in the end it comes to using tax dollars to fight market forces.

The local Chamber of Commerce has also supported affordable housing, and notes that we have a labor shortage in Traverse City. Local businesses can’t find enough low-wage workers. But that isn’t a housing problem, it’s a wage problem. If business cannot find people to work for the wages they offer, they need to offer higher wages. If an employer wants to have employees who can live nearby they need to pay those people well enough to compete in the housing market. The value of Traverse City is organic. Government didn’t create the problem, and by meddling can only bring unexpected consequences that have ruined many communities before ours.

Government manipulation of the housing market isn’t good for anyone but politicians. It gives politicians the power they crave to control lives, but it has a cost of changing the dynamics that make communities work. Let’s resist the vague promise of this latest government solution to a problem we don’t really have.

Thomas Kachadurian is a photographer, designer and author. He lives on Old Mission with his wife and two children. He is currently the President of the Traverse Area District Library Board of Trustees.

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