Why Columbus mass evictions are not surprising

Kevin Cox is emeritus distinguished professor of geography at Ohio State University and author of "Boomtown Columbus (OSU Press )."

Two recent cases of tenant eviction have put the spotlight on Columbus’ housing crisis: first the Sandridge Apartments one and second on Riverview Drive .

In both instances, and significantly, planned mass evictions followed purchase by property companies: Carlton Equities LLC of Lakewood, New Jersey and a local firm, Peak Property Group, respectively. The effects on the tenants, and judging from the articles, the most vulnerable of people, rightly attract indignation. But that aside, how to understand what is going on?

First, this is an aspect of where our country is right now, but in a different and more complex way than is usually imagined. Relatively low interest rates over the past couple of decades have led to a torrent of money available for investment. The government intent has always been that it would find its way into industry. But it has not worked out like that.

For whatever reason, industry has been relatively indifferent. Instead the money has moved into assets: stocks and shares, which is why the stock market has soared, despite weak fundamentals; and into property, including odd things like hospital emergency and operating.

Money to finance housing, including the purchase of existing units, has exploded, which then helps to explain the extraordinary run-up in the price of homes:  Between 2000 and 2020, the mean home price in Franklin County increased by more than 130%. The fact that median household incomes only increased by scarcely 40% has then created a crisis of affordability. And to return to the recent eviction cases: while one does not know what is planned for the properties, the past record of private equity firms does not inspire optimism.

So what is to be done? The British case is instructive. Up till the early 1980s, social housing comprised a large proportion of the stock. In 1981, 31% of all British households lived in social housing. Today it is 17%. The fall is owing to two things.

First, from 1980 on, governments allowed tenants to purchase their units; and then they put limits on the ability of local governments to build new social housing. Rents were relatively low, but, and contrary to common claims, this was only in small part owing to public subsidy. Rather the fact that social housing units were never part of the wider housing market, meant they would not follow the upward trend in prices. And then rents on older units built at lower costs, were used to subsidize rents on more expensive newer ones. The significance of social housing for the housing market as a whole, is that their low rents curbed the ability of landlords and private builders to up their prices. The fact that in the United States, social housing was always a meager fraction of the total has meant that there has never been a brake on the upward march of housing prices.

A common justification from developers about high prices is that zoning policies are restricting supply. Well, perhaps. But escalating prices inject an increased speculative element into the housing market. In the past it was a matter of whether there would be buyers or not. Now, escalating prices act as a brake on new housing starts, as in, "Lets wait, and they’ll be even higher."

But they are only a small part of the puzzle, exploiting favorable circumstances. Nor is it simply a matter of the housing market that explains Sandridge and Riverview.

Incomes in the United States are extraordinarily unequal. Poorer people just cannot afford the rent. Of the G7 countries, the United States has the dubious honor of being the most unequal: 35% greater than that for Canada, the least unequal; which is something to ponder.

Kevin Cox is emeritus distinguished professor of geography at Ohio State University and author of "Boomtown Columbus (OSU Press )."

This article originally appeared on The Columbus Dispatch: Why Columbus mass evictions are not surprising