Wages Aren’t Enough, Wall Street Catches Up

It’s not just along the high-priced coasts or Airbnb’s top markets that housing costs contribute to strikable conditions. Whether in McDowell County, West Virginia, or Denver, Colorado, workers demand both dignified wages and housing security. Workers earning the minimum wage cannot afford to rent a two-bedroom home anywhere in the United States. The wage floor for a full-time worker effectively denies the right to housing.

On the one hand, increasing wages makes all the difference to the nearly half of US renters who are cost-burdened. Collective bargaining provides the strongest chance workers have to defend themselves. Wage increases can and should be a bulwark against rising rents. But wages aren’t enough. Landlords appropriate wages with a speed that outpaces state-legislated wage increases or union contract negotiations. A wage-only focus is as inadequate today as it would have been after the Great Depression.

What’s more, corporate landlords concentrate their real estate buy-ups geographically to shift market conditions, raising the rent for all. Case in point, in the wake of the foreclosure crisis, the private equity company Blackstone purchased the foreclosed homes of entire communities, including 12,400 single-family properties in Atlanta alone, converting them into rental properties for investment purposes.

By 2016, the Federal Reserve Bank of Atlanta reported an eviction crisis arising from such institutional investments in the Atlanta area. It found that corporate landlords were five times more likely to evict than mom-and-pop landlords, and black households were disproportionately among those displaced. The larger the Wall Street landlord, the greater the impact of housing instability, both for single-family and multifamily properties. And of course, rent protections rarely cover single-family rentals. In a report by the Alliance of Californians for Community Empowerment (ACCE), one of the group’s members, Marika Reagan of Oakland, California, explained how the crisis affects her: “For me to work twelve- to fourteen-hour days and barely have enough to pay skyrocketing rents to a billion-dollar Wall Street landlord is like sharecropping all over again.”

And now, within the more than eight thousand new Opportunity Zones established by Trump’s 2017 Tax Cuts and Jobs Act, Wall Street investors are positioned to accelerate gentrification, taking advantage of tax incentives to spur market development in distressed neighborhoods. Known to housing justice organizers across the country as “eviction zones,” Opportunity Zones mean displacement and further insecurity for largely black, Latinx, and immigrant communities and women who struggle for healthy, affordable homes. This fall, Los Angeles–based Strategic Action for a Just Economy (SAJE) will release its report analyzing the impacts of Opportunity Zones, along with principles for a housing justice response.

Workers’ Capital Eats Their Own

Paradoxically, union workers’ earnings are helping to finance corporate landlords. A 2015 review of annual pension reports found that more than thirty local and state public pensions invested $3.2 billion in the single-family foreclosure to rental portfolios of Blackstone Real Estate LP. Even before the creation of post-foreclosure, single-family portfolios, the recession had exposed how union workers’ public pension funds invest in evictions. In the years leading up to the housing collapse, some of the largest institutional investments in multifamily properties and related securities were predicated on taking regulated rents to market. This involved tenant harassment, illegal rent hikes, and exploiting regulatory loopholes. In other words, the current tenants, including union public sector workers, would be pushed out.

One teacher close to retirement at New York City’s P.S. 3 put it this way: “My pension made my apartment unaffordable” — the teacher’s pension fund had invested in her displacement through its financing of private equity–backed rental portfolios held by Urban America. In a perverse twist, the pension fund’s fiduciary mandate to secure workers’ retirements was helping to push out some of the very same workers ready to retire.

This is a case of both tragedy and farce. The NYC teachers’ pension fund famously bailed out the city and saved New York from financial collapse in the 1970s. Almost forty-five years later, with the loss of nearly 150,000 rent-stabilized units since the early 1990s, there are few places left for teachers to call home.

The 2005 sale of NYC’s Stuyvesant Town–Peter Cooper Village offers another remarkable example of union pensions helping to make life unaffordable for workers. The California Public Employees’ Retirement System (CalPERS) lost $500 million, and the California State Teachers’ Retirement System (CalSTERS) lost $100 million gambling on securities in that over-leveraged portfolio. More recently, in 2016, Canadian public pensions invested $2 billion in the restructuring of this portfolio. New York City’s mayor Bill de Blasio helped negotiate the deal, sweetened with a $220 million in city subsidies and promised support for the owner, Blackstone Group, to sell the properties’ air rights. In turn, Blackstone promised to retain five thousand of the original eleven thousand stabilized units under rent regulation for twenty years. More than half had already lost regulated status. Neither the mayor nor the private equity company anticipated the rising tide of renters who this year ended up winning a New York State legislative victory for all NYS renters, and one that ensures that the remaining regulated units will retain rent protections. Still, ensuring that Blackstone rents rather than warehouses these regulated units remains an ongoing battle.

In this trillion-dollar real estate landscape, unions should exercise their power to demand the housing their communities need by targeting public pension funds, strengthening and winning rent control, and bringing the bargaining table to the community. They can grow their power by doing so.

Target the Pension Fund Landlord

During the height of the foreclosure crisis, California renters targeted CalPERS for its investment in Bay Area rental portfolios. These included Parkmerced in San Francisco and Page Mill Properties in East Palo Alto. In the case of East Palo Alto, a working-class small city surrounded by Silicon Valley, the Service Employees International Union (SEIU) Local 521, a union of public service workers in California’s Central Valley, issued a resolution of protest that explained, “CalPERS has invested the retirement funds of L521 members in a real estate investment that threatens to displace East Palo Alto residents including SEIU L521 members.” One SEIU L521 member and Page Mill renter said at the time, “It’s like I’m paying for these people to give me the boot.” The portfolio in East Palo Alto comprised nearly half of all rent-regulated units in that city.

California’s statewide grassroots tenant union alliance, Tenants Together, renter and youth leaders of East Palo Alto, and SEIU L521 spearheaded support for a state legislative initiative to prevent public pension investment in “predatory” real estate. A larger coalition of union affiliates supported the bill, including the American Federation of State, County and Municipal Employees (AFSCME), AFL-CIO, and the California Teachers Association (CTA). That 2010 legislative action was pushed aside by a less enforceable commitment from both CalPERS and CalSTERS to revise their investment policies. Without actual legislative oversight, however, there’s little way of knowing whether they’ve followed their own guidelines.

Lessons from these portfolio investments should push unions to devote strategic research to how their own pension funds are shaping and exploiting the real estate markets. In California, the Anti-Eviction Mapping Project makes plain how Wall Street’s investments result in and profit off displacement.

Most of us who are fortunate enough to have a pension have no idea what our elected pension trustees and asset managers are doing with our pension money. Worker activists in public sector unions could advance demands for a member vote on a set of principles to guide the investment decisions of their elected pension trustees. In the aftermath of CalPERS’s predatory equity investments, SEIU Local 521 formed its own rank-and-file retirement committee to engage CalPERS trustees on their investment decisions, and on the local’s organizing campaigns. The next part of this strategy can involve running for elected trustee positions. Although the Employee Retirement Income Security Act (ERISA) requires most private pension funds to maximize returns, public pension fund managers, including those at CalPERS, can and do shift investments for reasons of public interest, when pushed. For the working class, it’s the morally and financially responsible thing to do.

Win and Strengthen Rent Control

A major lesson of institutional investment in rental housing is that strengthening rent control matters. When East Palo Alto’s city council and rent stabilization board got wind of eviction attempts by finance-sector landlords in their city, tenant mobilization pushed them to respond with the shields they had at the ready. The council passed a moratorium on rent increases, and the city’s rent stabilization board overturned eviction attempts that flew in the face of just cause protections. The city fortified its rent stabilization act and passed a measure to affirm renters’ rights to organize.

Strong, meaningful, universal rent control and “just cause” against evictions can allow more workers to keep more of their wages and remain in their homes. But rent control is only as strong as those who are organized to defend it. Organizing for rent control is a commitment to base-building that outlasts the policy campaign. Winning rent control is never enough. Strong rent control relies on continued organizing by renters who can ensure enforcement and guard against sabotage.

Translocal Strategy

Across the country, renters organizing municipal and state campaigns for rent control connect their fights through what they call a translocal strategy. In the example of Homes for All (HFA), a campaign of the Right to the City Alliance, their translocal strategy starts with the local and connects organizers and leaders across cities to discuss similarities and differences in their strategies while carrying out action from the neighborhood to municipal, state, and federal levels. This structure began in 2016 at an assembly of HFA members in Chicago, and now involves seventy-eight grassroots housing justice organizations in forty-four cities and twenty-seven states. Partners participate in Our Homes/Our Land, Development without Displacement, and the Renters’ Rights translocal action committees, the latter of which strategizes around rent control campaigns and tenant union organizing.

A recent scaled-up win for rent control took place in Oregon. HFA member Community Alliance of Tenants launched a campaign to make Oregon the first state with statewide rent control. Since 2010 average rents in Oregon have increased by 60 percent. The modest law limiting rent increases to 7 percent per year means, in the short term, a win for renters in light of otherwise unpredictable rent hikes. Still, there’s a lot more work to do to curb rents further and to empower local jurisdictions to legislate stronger rent control on their own terms.

In states such as Washington, Illinois, and Colorado, organizers have launched campaigns to “ban the ban,” that is, roll back state bans on local rent control ordinances. Decades ago, California came close to being subjected to a state rent control ban, but it was the AFL-CIO president, wielding the power of the then-strong union voting bloc in the legislature, who reportedly persuaded Governor Jerry Brown to veto the legislation. Eventually, California passed the statewide 1996 Costa-Hawkins Act that undermined local ordinances by allowing for vacancy decontrol.

Last November, the California Teachers Association, the California Nurses Association PAC, and the AFSCME Local 3299 Issues PAC were the largest contributors to the Proposition 10 campaign to repeal Costa-Hawkins. The ballot measure was supported by nearly five million voters but was defeated by a landlord campaign backed by Blackstone that outspent the grassroots organizing efforts. One lesson from Prop 10 was that winning is not only a question of resources, but of rank-and-file power. Unions no longer represent the voting bloc they did in the 1970s. At this moment, organizing to scale in California will require winning and defending municipal rent control, city by city.

In localities with rent control, organizers are fighting to strengthen protections within and beyond their cities. Ironbound, an organizing powerhouse in Newark, New Jersey, built from their success upholding rent control. This past December they won a program for legal representation for low-income tenants in housing court with the support of the NYC-based Right to Counsel. More recently, this May, one of the most remarkable victories against the real estate lobby in decades was waged and won by the Upstate/Downstate Alliance in New York State. Renters with and without regulatory protections, people experiencing homelessness, bank tenants, and manufactured housing residents strategized for a common cause. The legislation they won tightens existing rent controls and, importantly, brings the fight back to municipalities with the statewide expansion of the Emergency Tenant Protection Act. ETPA allows for any locality with a housing vacancy rate of 5 percent or less to provide for rent stabilization.

Unions like SEIU 1199, United Federation of Teachers, DC37 AFSCME, Professional Staff Congress, and the Retail, Wholesale and Department Store Union have working-class members who service working-class communities in hospitals, public schools, and retail. These unions supported the legislation, as did several more, including the NYS AFL-CIO. One 1199 SEIU Organizing Committee Member who testified before the NYS legislature recounted, “They tore our houses down. Then they built new ones that we cannot afford.” After two moves, and despite union wages, she still could not find adequate affordable rental housing for herself and her grandson in her hometown of Albany, New York.

It’s notable that for SEIU 32BJ, the largest property service union in the country, the real estate industry is, quite literally, the boss. In this fight, the union supported the landlords in hopes of worker gains, bypassing the possibility of activating their members to defend their own communities and the larger working class. Pitting decent jobs against decent housing is a false dilemma.

There are other ways unions might wield their existing power beyond advocacy in the legislative arena. Public sector unions negotiating with municipalities can bring the neighborhood to the bargaining table to demand municipal and state action, whether for rent control, right to counsel, or land acquisition for social housing. This is what labor strategist Stephen Lerner and others call Bargaining for the Common Good.

Community Power Through Bargaining

Bargaining for the Common Good asks, what more would be made possible if unions’ demands included community-worker demands? This July in Chicago, Bargaining for the Common Good brought together organizers from community and labor as well as academics to discuss predatory Wall Street real estate investments, and how they might expand the terms of collective bargaining to address the housing crisis. Already, the Red for Ed strikes have led by example, demonstrating how worker organizing based on community power can win.

This past winter, Oakland educators tested their power with a strike, and they won much more than a raise, including smaller class sizes, more nurses, social workers, a temporary ban on school closures, and the agreement by school officials to advocate the state for a moratorium on new charter schools in Oakland. Los Angeles educators, an inspiring example of social movement unionism, also won on the issues that matter to LA parents and students: devoting more green space to schools, rolling back school policing, and curtailing standardized testing. These, too, all lie beyond the mandatory subjects of labor bargaining that cover wages, hours, and conditions.

In similar cases of robust rank-and-file leadership in the future bargaining terms could include demands for the use of a school district’s vacant and underutilized properties. For example, the Oakland Unified School District’s warehoused properties could help expand Oakland’s promising Community Land Trust, not only for educators but for their students’ families. The Los Angeles Unified School District, known for its mega property holdings, developed one of its own properties as affordable housing for low-wage school district staff. This September the LAUSD promises to report the full inventory of its 6,500 acres of parcels. Likewise, educators are well-positioned to involve the community in their proposals for underutilized and vacant parcels.

And what if workers advanced community demands to block Opportunity Zones, shore up rent control, just cause enforcement, and right to counsel? Chicago unionists shared their efforts in this vein at this summer’s convening of organizers with Bargaining for the Common Good. The social movement–based Chicago Teachers Union exercises its power at the bargaining table to advance the interests of students and their families, including their housing needs and rights. This year CTU’s House of Delegates passed a resolution that calls for lifting the statewide rent control ban. In what may become protracted contract negotiations, the union’s housing committee issued multipronged contract proposals. These include in-school social service supports for homeless students and teacher housing programs, advocacy by the Chicago Public Schools for the financing of social housing, and full funding for Section 8.

Unions can focus their bargaining leverage on housing and win, but only when their rank and file are in the lead making bold demands with the communities where they work and where they live. This requires deep organizing, free debate, and tests for unity. That means more than union activists showing up for housing justice or tenant activists joining the picket line. It means social movement unionism.

When Housing Justice Wins Are Union Wins

One social movement union campaign showed how strategies that put housing justice at the forefront of worker organizing can both test and grow labor power. In the era of gentrification, no union campaign for housing security has been quite like that which took place in Stamford, Connecticut in the years spanning 1998–2002. The Union Organizing Project formed a community-labor alignment that not only saved public housing, but fought for new investment in public housing maintenance, a one-to-one replacement ordinance, and inclusionary zoning for affordable units within new private development. And they won it all, plus first contracts.

Organizer Jane McAlevey recalls that, initially, all the union leaders pushed back at the strategy, saying “housing is a distraction.” Unions, in their view, should narrow their demands to the mandatory subjects of bargaining. Yet unions that win adequate pay and dignity on the job can win much more when they fight for what McAlevey calls the “whole worker.” But that means labor organizing has to start with listening to workers. In Stamford, the unions brought the bargaining table to the community.

Saving public housing and winning more affordable housing was not a diversion, but the heart of the union organizing wins. Stamford’s fight for housing emboldened the union campaigns, including winning dozens of NLRB elections, bringing thousands of workers into first contracts supported by United Auto Workers Region 9A, Hotel and Restaurant Employees Local 217, SEIU District 1199 New England, and SEIU Building Service Local 531 (later part of SEIU 32BJ).

According to McAlevey, unions going to bat to challenge and defeat a massive gentrification scheme activated workers to sign cards in their campaigns for first contracts, allowed for multiple pressure points on the Stamford mayor, and kept members active between contracts. Importantly, social movement unionism encouraged those who had become leaders in the community-union campaigns to amplify their leadership in the city, including getting themselves elected.

Social movement unionism, from the Memphis Sanitation Workers’ strike to the Red for Ed strikes, has forged strategies that open doors and add seats to the bargaining table, whether in the state legislature, city hall, the neighborhood, or at the worksite. Groups like the national Jobs with Justice, Massachusetts’s Community Labor United, Stand Up Nashville, and Align NYC all formed to build social movement unionism for economic, environmental, gender, and racial justice. A just transition will require all of this.

Organize for a Just Transition With Housing Justice

Just as the Green New Deal (GND) framework emerged from decades of movement organizing, its success will depend on ongoing, growing movements led by the grassroots and the rank and file. What can bring workers and communities together for racial, gender, environmental, and economic justice is their basic need for and right to affordable, healthy, and secure housing.

Massive investment in public housing preservation and energy-efficient retrofitting can help launch a just transition, shifting state investment from displacement by gentrification to community preservation. The $4.6 billion subsidies promised to Amazon HQ2 in New York City could cover the $3.1 billion needed in repairs to boilers, piping, and radiators to bring adequate heat and hot water to NYCHA public housing residents.

Public pension funds should shift away from predatory investments and contribute to the long-term financing of massive, environmentally sound social housing preservation and production to help meet the nationwide shortfall. AFL-CIO’s Housing Investment Trust estimates 7.2 million additional deeply affordable, environmentally sound units are needed nationwide for the lowest-income renter households alone. State pension funds in New York once invested in cooperative housing and can stabilize their own investment portfolios with long-term stable, sustainable affordable housing investments to help meet this need. The AFL-CIO’s Housing Investment Trust should lead the way and prioritize financing of deep affordability and acquisitions for community land trusts. The Trust’s $6.43 billion in assets can help ensure long-term decommodification and stewardship of land while supporting democratic practice, union jobs, and maintaining secure if modest returns.

But the answer isn’t always new construction. New construction alone will not address the staggering twenty-million-plus renter households who are presently cost-burdened. Municipalities and states will need to halt the eviction industry with just cause provisions and rent control, while at the same time creating transfer programs to develop social housing and community land trusts from the portfolios of exploitative landlords. Fully retrofitted, maintained public housing will require renewed political will from the municipal to the federal levels.

These demands, and much more, will continue to be brought to the streets and the bargaining table. But our bargaining will only be as sure as our demands are bold, and our social movements are forged in deep organizing, like the growing number of coalitions between educators, parents, and students, as well as translocal renter alliances.

Workers’ demands for a place to live within the city have always been labor issues and are now frontline battles where unions can test, demonstrate, and rebuild their power. All of our movements need housing justice to weather — and lessen — the storms to come.