Housing and the 99 Percent

From the We are the 99 Percent Tumblr archive.

They got bailed out, we got sold out! 
They got bailed out, we got sold out!
They got bailed out, we got sold out!

Chanted by protesters in Lower Manhattan and beyond during the early weeks of the Occupy Wall Street movement, this slogan captures the growing popular disenchantment with the federal government’s handling of the Great Recession and the foreclosure crisis. While the too-big-to-fail banks and government-sponsored enterprises Fannie Mae and Freddie Mac have received substantial support in the form of low-cost loans, guarantees and toxic asset purchases, defaulting homeowners have received comparatively little government assistance. Mortgage foreclosures have become a flash point for populist anger over widening income inequality and a growing sense that the richest individuals and corporations are leveraging their wealth to consolidate economic and political power.

The We Are the 99 Percent Project manifests another side of the populist campaign that is challenging the distribution of resources and benefits, opportunities and risks. “We are the 99 percent,” proclaims this Tumblr blog, which started in August 2011. “We are getting kicked out of our homes. We are forced to choose between groceries and rent. We are denied quality medical care. We are suffering from environmental pollution. We are working long hours for little pay and no rights, if we’re working at all. We are getting nothing while the other 1 percent is getting everything.” In the past few months, site administrators have uploaded a few thousand self-portraits of visitors to the site, along with images of printed or handwritten notes telling their stories and declaring their opinions.

In one post a woman stands before a textured beige-painted wall and stares at the camera as she holds a handwritten sign protesting her bank’s foreclosure on an underwater mortgage.

I have paid $125,869 into a house currently worth $91,000 but the bank is
taking it back because I still owe them $355,692.91 (on a house worth
I am the 99% ?

As she uploaded the photo, this woman explained: “I have done awful things to make my mortgage payments … including selling my body. But I am no longer willing to sacrifice my remaining shreds of dignity on the altar of a faceless institution that gave me an ill-advised loan to begin with. Are you guys really THAT greedy?”

Another contributor, a man wearing glasses and black sweatshirt and standing beneath a beamed ceiling, holds up a text neatly printed in architect’s block caps on a large pad of gridded paper:

I am 62 years old.
I have worked honestly & hard my whole life (since I was 14) because that is how you “realize the American Dream.”
I was a home builder & designer.
In 1980, the “Savings & Loan Crisis” forced me out of work & out of business.
(The gov’t helped the banks survive …)

In 2007, the “Sub-prime Mortgage Crisis” crushed me again. I lost my home, my wife & my belief in that “American Dream.” (The gov’t saved the banks again …)

Like these online testimonials, the marches and protests that have occupied parks, plazas and streets not only in New York’s financial district but also in cities around the nation and the world have elaborated what we might call a housing imaginary: a set of representations — texts, images, practices, performances — that shape the ways in which we understand and imagine housing. Through various media and representational strategies, Occupy Wall Street and the 99 Percent Project are calling our attention to how homeownership and mortgage finance mediate the economic risks and opportunities of globalization.

Occupy Wall Street, October 29, 2011. [Photo by David Shankbone, via Wikimedia]


The terms of these protests underscore the middle-class thrust of OWS and the 99 Percent Project. Many of the personal narratives and posts emphasize high levels of educational achievement and housing equity as tokens of middle-class promise turned sour. The concerns of the poor and working class, like those of people of color, are less evident. So it is perhaps not surprising that so many occupiers, activists and supporters are demanding homeownership support rather than housing opportunities for all. In many ways, the housing imaginary elaborated through these encampments, marches and blog posts can be understood as a rueful response to another housing imaginary: to the culture of “house flipping” — of purchasing, improving and quickly reselling houses — that emerged during the 1990s and proliferated through the bubble of the early 2000s.

Before the crash in 2008, the proliferation of easy credit and mortgage financing had expanded access to homeownership, particularly among minorities historically excluded from financing through redlining and other mechanisms; homeownership had become an attractive way for middle-class consumers to speculate on credit. Between 1973 and 2007, although household sizes were decreasing, the average size of a new single-family house increased by more than 50 percent, while the average value of the properties increased almost fivefold. 1 And starting in the 1970s and greatly accelerating in the late ’90s, the securitization of mortgages created new linkages between individual consumers and global capital markets, and capital flooded the residential mortgage market. Homeownership and speculation were now supported not only by the standard 30-year fixed-rate mortgage but also by new loan types introduced since the 1970s, including the so-called “jumbo loans” larger than the maximum amount insured by the Federal Housing Authority; the 40-year loans; second mortgages or “piggyback loans”; adjustable-rate mortgages; home equity loans; and of course the subprime loans that benefited — and then cursed — lenders, borrowers and investors alike.

For a while it all seemed to work. As housing prices rose ever higher during the boom years, astute homeowners could use credit to finance purchases and sales that netted good profits, even accounting for transaction and renovation costs. The additions, renovations, tear-downs and McMansions financed by the new collateralized credit instruments became showy symbols, in neighborhoods and subdivisions across America, of the opportunities afforded by credit-backed speculation.

[Collage courtesy of Jonathan Massey]

So did the TV networks, where viewers could jump from Flip This House and Flip That House to Property Ladder, Designed to Sell, Flipping Out, Curb Appeal, The Stagers and Extreme Makeover: Home Edition. These reality-based programs dramatized the apparently endless possibilities — the acres of square footage, the multi-car garages and in-ground pools and master suites — of bubble-based speculation. They reflected and fueled an alternately anxious, avaricious and jubilant homeownership culture in which owner-investors imagined themselves as commodity speculators using leverage to bet on anticipated inflation and evolving market preferences.

As the website for the Discovery Channel’s Flip That House explains:

This half-hour reality series brings the viewer into the latest trend in “buy-sell” house renovation known as “house flipping.” Each episode will follow the transformation of a different house, each with its own “flipper/host” familiar with home renovation and real estate. Our stories will begin just after the initial purchase of a new home. Viewers will learn what the owner paid for the house and their plans for giving it the necessary “facelift” to re-sell with a profit. You’ll witness the actual step-by-step renovation and cosmetic work and the revealing before/after transformation. At the end of each episode, the results of the house-flipping exercise will be revealed, along with a new sales price for the “flipped” property.

House-flipping shows became a sizable programming component in the “makeover” genre that also includes programs that dramatize various transformations, ranging from personal wardrobes to plastic surgery. Some studies of the genre have emphasized its links to neoliberal economic restructuring and the flexibilization of employment. TV shows that mobilize resources and expertise in the service of guiding everyday, “ordinary” people through the upgrading of their bodies and personal styles, their garden and home décor, finances and fashion are part of a broader makeover culture, the tacit premise of which is that each of us must become an entrepreneur of self-improvement: in a deregulating society, we are all responsible for our own welfare.

Here are Laurie Ouellette and James Hay, in their contribution to the collection TV Transformations: Revealing the Makeover Show: “As the liberal capitalist state is reconfigured into a network of public-private partnerships, and social services from education to medical care are outsourced to commercial firms, citizens are also called upon to play an active role in caring for and governing themselves through a burgeoning culture of entrepreneurship.” Reality TV becomes a technology of citizenship, “testing, refining and sharpening people’s abilities to conduct themselves in accordance with the new demands being placed on them” and serving as “an experimental training ground for the government of the enterprising self.” 2

In rehearsing the practices of real estate purchase, renovation and sale as both avocation and income source, house-flipping shows have dramatized the evolving demands of what sociologists Ulrich Beck, Anthony Giddens and Scott Lash call “second modernity” or “reflexive modernization”: an era in which the welfare state, the nuclear family and other institutions of industrial modernity are yielding to new structures, to new ways of managing the risks and opportunities of globalization and post-industrial society. In this way reality programming has helped viewers to imagine themselves as the enterprising subjects of neoliberal society — or to imagine ways of securing retirement at a time when corporate pensions and the social safety nets of the welfare state were being cut. 3

Pennsylvania State University students working construction for Extreme Makeover: Home Edition. [Photo via Penn State, Pennsylvania College of Technology]


The house-flipping programs and Occupy Wall Street protests alike underscore the role of homeownership and mortgage financing in mediating between the microeconomics of household finance and the macroeconomics of a globalized economy. Though often envisioned as the stable foundation for domestic life and personal finance, the house is also an unstable commodity, and as such exposes its owners not only to the opportunity for profit but also to the risk of loss. The terms of homeownership, and of the mortgage financing that usually enables it, shape the relationships of individuals and households to the market and to the state.

These relationships change over time, and in the United States we can trace them through four major periods, linked to cycles of boom and bust in the real estate market and the larger economy. During the first period, in the early 20th century, laissez-faire economics prevailed; the state provided little support for homeownership apart from the homesteading provisions in land policy, and credit markets were small and localized. In the second period, during the long boom of the 1920s, growing collaboration between the state and real estate interests forged an “associational state,” shaped by expanded access to credit and the coordination at the national scale of the mortgage finance market. In the next era, following the Great Depression and the New Deal, the interventionist state established a highly regulated, state-supported national mortgage market that informed and guided the development of American houses, neighborhoods and land-use patterns right up to the oil embargo of the early 1970s. The last period, from the mid-1970s until the mortgage-triggered global financial crisis that began in 2007, was characterized by market innovations and the globalization of finance, which combined to outpace and undermine the existing regulatory regime just as Keynesianism yielded to neoliberalism as the predominant political ideology.

During each period, new and evolving lending institutions and practices reshaped the ways in which the house functions as mediator among individual, state and market. 4 Contestation has always been integral to this history; people with varied interests have imagined housing in different ways as they competed to define how we organize and finance homeownership. The insurgent activities of Occupy Wall Street recall the protests of American farmers during the severe depressions of 1893 and the 1930s. When foreclosures spiked in the early ’30s, at the start of the Great Depression, for instance, populist farmers blocked bank auctions of foreclosed farmsmarched on state capitols, and occupied town squares. At the same time, optimism — or what Federal Reserve chairman Alan Greenspan called “irrational exuberance” — has been a recurring force. The speculative house-flipping culture of the past couple of decades, for instance, recalled the real estate boom of the Roaring Twenties, when builders and civic associations promoted homeownership and helped to consolidate the distinctive position of the suburban single-family house within the American civic imaginary.

Everyman’s House, located at 2026 S. Westnedge, Kalamazoo, MI, c. 1924. [Photo at Western Michigan University, via The Making of Modern Michigan]


Beginning just before World War I, developers, builders, lumber companies and realty agents promoted single-family houses and homeownership through national advertising campaigns. Using slogans like “Own Your Home,” these initiatives promoted the idea that the house was a special kind of commodity, worth the risk of investing a substantial down payment and going into debt.

The war and the brief recession that followed exacerbated a shortage of sturdy, sanitary housing, and when the economy surged during the 1920s, this gave new impetus to a growing cultural and economic campaign that historian Jeffrey Hornstein has called “dreaming the American home” through advertisements, pamphlets, media programming, and even the construction of demonstration houses. 5 Construction and real estate interests found new political and institutional partners, including U.S. Commerce Secretary Herbert Hoover and Better Homes in America, an educational foundation initiated by the Butterick Publishing Company that promoted ownership of single-family houses. Led by the journalist Mrs. William B. (Marie Mattingly) Melony, with Hoover’s endorsement, Better Homes published books, pamphlets and a magazine that introduced readers to the emergent homeowner imaginary, educating them in what to want and how to get it.

One of the most effective instruments in this dreamwork campaign was the annual Better Homes Week, when local chapters across the nation built or renovated demonstration houses that exemplified the organization’s ideas of good design and home culture. During the first national campaign, in 1923, local chapters in 57 cities and towns built or remodeled a total of 78 demonstration houses. In the 1929 campaign, of the nearly 6,000 committees participating, 269 reported showing a total of 532 houses. Heavily advertised in local media and through partnerships with lumber yards, hardware stores, real estate brokerages, building and loan associations, and other parties to the development process, these demonstration houses attracted thousands of visitors eager to see examples of the new, modern single-family house, usually built in a streetcar or automobile suburb on the developing outskirts of town, and to learn about the latest in kitchen layouts, home furnishings and middle-class living.

Like the house-flipping programs today, Better Homes demonstration houses modeled not only the characteristics of up-to-date suburban living but also the attributes of the ideal citizen. And in the Hoover era — when federal intervention was limited to encouraging business interests to rationalize and regulate themselves through voluntary cooperation among trade associations — the ideal citizen was an entrepreneur who joined local associations to improve his or her own fortune and, by extension, that of the community and the nation.

These ideas informed the design and construction of Everyman’s House, a compact yet carefully worked-out demonstration house built in 1924 by the Kalamazoo, Michigan, chapter of Better Homes in America. Designed by Caroline Bartlett Crane, a doctor’s wife who had organized local and statewide home ownership initiatives, and detailed for construction by architect Gilbert Worden, Everyman’s House adapted a traditional American house form — the colonial revival cottage — to the changing needs of middle- and working-class families. It also reflected the availability of longer-term amortized loans from building and loan associations, those institutions that pooled the savings of individuals, then lent these funds to member-investors who were buying or building a house. Though they had been around since the 1880s, it was only in the 1920s that building and loans became a significant source of mortgage financing. Described by the authors of the 1929 sociological study Middletown as “the working man’s way par excellence of achieving a home,” B&Ls were precursors to the savings and loan associations that the federal government would bail out in the 1980s. 6

Everyman’s House, located at 2026 S. Westnedge, Kalamazoo, MI, c. 1924. [Photo at Western Michigan University, via The Making of Modern Michigan]

In Everyman’s House, her book about her project, Crane pointed out that the high cost and geographical fixity of homeownership had the valuable effect of stabilizing workers and bringing them into the social and political imaginary of the rising middle class. She characterized her demonstration project as a way of reducing political dissatisfaction with America’s capitalist economy by increasing the proportion of Americans who owned property and so had a stake in maintaining the established social order. By helping him “achieve a home,” she explained, the house promised to give a man “a vital stake in government.” Along with the “sense of dignity in belonging to the social order” that came with homeownership, Crane wrote, Everyman would acquire “respect for organized industry and for the law-regulated institutions of finance which furnish him the employment and insurance and credit necessary for the building of that home. Home-owning and Bolshevism,” she concluded, “are just naturally strangers.” 7

Crane echoed the rhetoric of Hoover and the many other proponents of homeownership who saw it as the basis of good citizenship or even, as the slogan of the United States League of Local Building and Home Associations had it, “the safeguard of American liberties” in the face of crises such as the world war, the postwar recession, and the Red Scare. In a chapter on mortgages, she explained how an aspiring homeowner could secure favorable financing — a loan for up to 80 percent of construction costs, with a twelve-year term at just below seven percent interest and amortized payments — by joining a building and loan association. Because securing financing in this way required the prospective borrower to build up savings and credibility over time, it provided a powerful incentive to stay put. The wage laborer aspiring to homeownership, Crane asserted, “must not be casual or peripatetic. He must be both willing and able to anchor in a home of some sort and become a part of the community.” 8 Like most new houses in an era of increasing mortgage indebtedness, Everyman’s House was an anchor tying working families to place and polity through credit obligations.

Through its magazine, pamphlets, local chapters and demonstration houses, Better Homes imagined the single-family detached house and its mortgage as instruments for transforming renters into owners, itinerant laborers into stable yeomen, radicals into conservatives. This message was further amplified by the coverage of Better Homes Week in the mass media. In 1934, for instance, Better Homes built an unusually prominent demonstration house at the intersection of 39th Street and Park Avenue in Manhattan. “America’s Little House” was a substantial three-bedroom colonial revival surrounded by a lawn and white picket fence. Promotional photographs played up the contrast between the high-rise apartments and offices of midtown Manhattan and the two-story suburban house, which hosted not only the usual BHA demonstration activities but also visits by dignitaries such as first lady Eleanor Roosevelt and novelist Pearl S. Buck. Microphone outlets distributed throughout the house allowed technicians from the Columbia Broadcasting System, headquartered a few blocks away, to record speeches and programs, and the attached garage contained a radio studio from which CBS broadcast the special programming to some 100 affiliates, in this way reaching millions of “radio homes” across the country.

“America’s Little House,” on the corner of Park Avenue and 39th Street, New York, one of the demonstration houses of Better Homes Week.


While mainstream architectural organizations like the American Institute of Architects joined Better Homes in promoting homeownership and the construction of new single-family houses, progressive architects and reformers were also projecting alternatives. One of the most visually striking was Buckminster Fuller’s vision of a world transformed by Dymaxion Housing, the portable, mass-produced, single- and multi-family aluminum housing units he designed at the tail end of the housing boom of the ’20s. By industrializing housing production — just as Henry Ford had industrialized car production — Fuller aimed to make technologically and culturally modernized housing affordable and ubiquitous. He also sought to transform the nature of economic and civic participation by changing the terms of homeownership and financing.

Seeing shelter as a service subject to continual improvement rather than a finished product, Fuller proposed to lease rather than sell his portable Dymaxion units. By circumventing mortgage lenders and stabilizing housing costs, he sought to protect consumers from price fluctuations in land and credit. In Fuller’s utopian and corporatist imagination, mobile dwellings would stabilize the economy and eliminate neo-feudal bonds by creating a self-regulating labor market in which workers followed jobs. The state would dissolve into a self-optimizing industrial economy in which consumers, disconnected not only from municipal infrastructures but also from less tangible forms of local association, would deal directly with transnational corporations.

Dymaxion House, designed by Buckminster Fuller; undated photo.

Whereas Caroline Crane sought to settle workers whose mobility seemed to threaten disengagement from community and the social order, Fuller celebrated the increased autonomy and economic efficiency of a mobile workforce. Trusting the stock market more than the market in land to create value for investors and corporations alike, he tried to accelerate the modernization and integration of a global capitalist economy, which he believed afforded all parties greater opportunity for prosperity and happiness at lower risk.

There were others who, like Fuller, disagreed with the Better Homes assumption that the solution to the housing shortage was to build more houses. Frederick L. Ackerman, an architect and policy analyst who emerged in the 1920s as a leading voice for the socialization of housing, contended that the major problem was not a shortage of units but rather a lack of financial accessibility to families of low and moderate income. Ackerman argued that the practices of market-based development and speculative investment, along with complex financing mechanisms, worked systematically to withhold housing from potential occupants in order to maintain high profit margins.

Before World War I had even ended, in fact, Ackerman and other progressives began elaborating an alternative housing imaginary: one that promoted government-built multi-unit social housing rather than the market-based development of single-family houses. Charles H. Whitaker, Richard S. Childs and Edith Elmer Wood, along with Ackerman, argued this case and analyzed suitable models in a series of articles, “What Is a House?,” published in 1917 and 1918 in the American Institute of Architects Journal. Their solutions included not only new principles in planning and design, but also alternative mechanisms of ownership and financing to circumvent the complex and costly system in which homebuyers financed their house purchases with multiple mortgages that required large down payments and charged high interest rates. Among these alternatives were state development and ownership of housing, state financing of cooperative associations, the formation of nonprofit community land companies funded through bond issuance, and tax exemptions for housing developments that reflected progressive garden city ideals.


The housing boom peaked in 1925, when home loan foreclosures began to increase — a trend that accelerated rapidly following the stock market collapse in 1929. As the economy shrank in the Great Depression, lenders began to demand repayment of short-term balloon loans when they came due, rather than granting the renewals that had been customary in better times. Property values fell, in many cases below the value of the debt the properties had secured, and some properties became unmarketable given the weak economy and tightened credit market. Foreclosures and tax delinquencies followed. “It was our fault for overselling them,” said a real-estate agent in Muncie, Indiana, “and the banks’ fault for overlending. Everybody was buying a better home than he could afford.” The expansion of homeownership through the liberalization of credit had afforded many people the opportunity to invest in homeownership; but it also exposed them to the risks of borrowing against an asset as expensive and sometimes volatile as a house. 9

One consequence of rampant foreclosure was the emergence of shantytowns on empty lots and on marginal land along rail lines and city edges, as unemployed and evicted individuals and families built rudimentary shelter from scrap materials. Commonly called “Hoovervilles,” after the president many blamed for the economic crisis, these encampments ranged from small clusters to large settlements. An especially big Hooverville in St. Louis accommodated more than 3,000 and included four churches, a welcome center and a community center. A camp-city built on the flats of the Anacostia River in the nation’s capital by the disgruntled veterans of the Bonus Expeditionary Force featured an organized street layout and toilet facilities. The ex-soldiers paraded through the camp daily during the summer of 1932 as they pressed the Congress to approve a bill accelerating payment on deferred bonus compensation for veterans, until they were forcibly evicted by the army in late July. 10

Top: “Hooverville” shantytown, Seattle waterfront, ca. 1930s. [Photo via King County Museum Collections] Bottom: Bonus Expeditionary Force, march of unemployed World War I veterans to Washington, D.C., summer 1932. [Photo via the Library of Congress]

The Depression spurred more direct federal intervention in the home ownership market, beginning with Hoover’s creation of the Federal Home Loan Bank Board and, after the election of 1932, continuing on with Franklin Roosevelt’s New Deal, which established the Home Owners Loan Corporation and the Federal Housing Administration. The FHA provided mutual mortgage insurance on houses and low-cost housing projects, and it chartered national mortgage associations, beginning in 1938 with the Federal National Mortgage Association, commony known as Fannie Mae. By buying FHA-insured mortgages, Fannie Mae established a secondary market that increased the availability of capital for mortgage lending, allowing banks and building and loans to lend more extensively in an increasingly national mortgage market. In this way, housing entered the emerging mixed economy, shaped by both government regulation and market action.

By assuming risk on mortgages that met its criteria, the FHA reshaped the consumption of land, housing and credit. Its underwriting policies — the criteria whereby the authority assessed the soundness of a mortgage and the value and creditworthiness of the house that served as its collateral — soon became prescriptive for developers, purchasers and lenders alike; in addition, the FHA favored large tract developments of single-family houses on lower-cost land on the edges of developed areas. The new regulatory regime of federal loan insurance and guarantees was geared toward institutional lenders and a new tier of large “merchant builders” or “community builders,” companies that handled the entire development process from land acquisition and subdivision through construction and marketing. These were the companies that created the large master-planned developments that epitomize postwar suburbia, such as the Levittowns in New York, New Jersey and Pennsylvania, or the master-planned development of Lakewood in southern California. 11

Combined with postwar prosperity, these federal mortgage supports made the house a more reliable vehicle for investment and equity accrual. The interventionist state inaugurated by Roosevelt’s New Deal assumed much of the risk in mortgage lending and channeled public funds into expanding the pool of mortgage capital. The increase in homeownership spurred by these provisions also expanded the middle class — particularly among whites, who benefited from racially exclusive covenants and preferential access to credit. 12 Excluded from this largesse by redlining and the federal focus on suburban single-family housing, poor residents of the nation’s cities — including many members of minority communities — encountered the interventionist state in another way. Beginning with the New Deal and continuing with the urban renewal programs begun in 1949, the federal government sponsored the construction of social housing, some of it along lines pursued by Ackerman and his associates during the 1910s and ’20s. These initiatives left a mixed legacy of successes and failures that we are just beginning to reassess from an historical vantage.

Levittown, New York, undated photo. [Photo via statemuseumpa.org]


From the late 1960s on, and especially following the oil shock of 1973, economic inflation raised house prices, making homeownership a more challenging but also potentially more rewarding investment. Many consumers began investing a greater proportion of their money in housing, buying larger and more expensive homes not only as residences but also as a means of market speculation. The federal government restructured Fannie Mae and created the Government National Mortgage Association (Ginnie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) to expand the supply of home finance credit through mortgages in the secondary market.

Throughout this period, savings and loan associations provided the bulk of primary mortgage financing. Following federal and state deregulation in the early 1980s, however, many S&Ls expanded into new types of lending and investment. Inexperience in these new arenas, combined with market saturation and outright corruption, triggered a wave of bank failures in the late 1980s. In a precursor to the much larger credit crisis of the last few years, the federal government bailed out the banks. 13

The Savings and Loan Crisis of the late ’80s thinned the field of mortgage lenders. Combined with federal re-regulation in the early 1990s, it also accelerated a shift toward larger banks and institutional investors in mortgage finance. Computerization of mortgage origination and servicing allowed banks and other investors first to securitize mortgages by batching many loans into large debt pools that generated monthly income streams, and then to sell securities backed by narrow slices of the aggregated debt. Institutional investors around the world — including central banks, pension funds and commercial banks — saw the federally regulated American mortgage market as a low-risk, high-yield investment opportunity, especially once credit rating agencies began rating mortgage-backed securities. In this way, securitization created new linkages between individual consumers and global capital markets, as American home finance became globalized. Once scarce, and extended only cautiously to house purchasers, capital soon flooded the residential mortgage market, stimulating the entrepreneurial culture of house-flipping as borrowers and creditors alike entered into an “imprudent partnership” of real estate speculation that yielded large profits but carried sizeable risks. 14

Daniel Kariko, Speculation No. 3, from Speculation World: Topography of Real Estate Crisis in Florida. [Photo courtesy of Daniel Kariko]

The rise in house prices that fueled the real-estate boom coincided with income stagnation for all but the wealthiest Americans, with the result that the median house price, which had long been double to triple the median annual income, increased to become about quadruple the median income. So in 2005 and 2006, when house prices began to fall in many markets, subprime borrowers began to default at an accelerating rate. As had happened in the late 1920s and early ’30s, defaults triggered a sudden contraction in the credit market. Securitization had obscured the extent of subprime lending, and it had blended subprime loans into the larger pool of standard mortgages, so that nearly all investors in the credit markets were exposed to some risk. The consequences of the real estate downturn spread into other economic sectors, causing a worldwide economic recession. Once again, the federal government shouldered a large burden of the losses, this time in order to protect investment banks as well as Fannie Mae and Freddie Mac. The federal government socialized the costs of losses by private companies that for years had pocketed huge profits. Once again, many of the economic and social costs of the bust were absorbed not by market participants but by the broader taxpayer base. They got bailed out, we got sold out. 15

Reimagining Housing

The foreclosure crisis exposed the hollow promise of the “ownership society” advanced by George W. Bush. The emphasis on personal responsibility and privatization of government programs in the recent rhetoric of homeownership belies structural problems: homeowner prosperity during the recent boom was based not on rising incomes — which have stagnated since the 1970s — but on debt-financed consumption. In the absence of strong government support for public housing, education and health care over the past 30 years, many people pursued access to these basic goods by borrowing more heavily. The expansion in consumer credit — including mortgage and home equity financing along with automotive loans, credit card debt and student loan debt — masked income flatlining and growing income inequality, especially as house prices rose during the 1990s and early 2000s. 16

Last fall, shantytowns sprang up again in American cities. Like the Bonus Army encampment 80 years ago, the camps of the Occupy movement were spaces of populist protest expressing widespread dissatisfaction with a gamed system. Before they were cleared in many cities during the late fall — usually by municipal police forces, which since 2011 have adopted paramilitary tactics and equipment — these spaces of civic dissent launched a new cycle of debate over the nature of public support for housing. How should the state pursue the goal of making decent housing affordable and accessible to all its citizens? How can we mobilize our collective resources in the service of social justice? In what other ways might we imagine living together? What is a house?

Damon Rich, from Red Lines Housing Crisis Learning Center, Queens Museum of Art, 2009. [Photo via Queens Museum]

Even as Occupy Wall Street and the 99 Percent Project have been elaborating their populist, redistributive housing imaginary, parallel efforts by artists, architects, academics and not-for-profit institutions have also been bidding to reshape how we think about housing. These efforts include projects staged in New York City, not all that far from Occupy’s original epicenter in Zuccotti Park/Liberty Square. Beginning in 2007, as the foreclosure crisis emerged, artist-architect-urban designer Damon Rich translated a polemical analysis of housing policy and mortgage financing into a pair of visually powerful museum installations. First staged in 2008 at the MIT Museum in Cambridge, Massachusetts, Rich’s Red Lines Housing Crisis Learning Center mixed visual, physical and spatial representations to examine the role of financial risk management in urban planning and development. When the show was remounted at the Queens Museum of Art, Rich modified the museum’s celebrated panorama to track foreclosures across New York City. 17

Rich developed Red Lines Housing Crisis Learning Center in partnership with the Center for Urban Pedagogy, a nonprofit organization he founded in 1997. CUP has also addressed the politics of housing through imaginative and visually compelling documents such as Envisioning Development Toolkits, which provide materials for teaching students and citizens about the politics and procedures that guide land use and urban development in New York City, and Making Policy Public posters, including one on Predatory Equity that describes the process by which speculators have used private equity and bank loans to buy affordable housing for conversion to market-rate and luxury housing.

Center for Urban Pedagogy, from Making Public Policy. [Photo via CUP]

Also during the past few years, the Buell Center for the Study of American Architecture at Columbia University has sponsored events and publications to revive support for public housing. Following several decades during which federal, state and local housing policies have largely sought to work through market mechanisms, the Buell Center is reasserting the value of direct public support for new housing construction. More broadly, it is reminding us that — since all housing construction is supported in various ways by public subsidies, including the mortgage interest tax deduction that lowers the cost of mortgage-financed homeownership — “all housing is public housing.” Buell director Reinhold Martin made this case in his 2009 pamphlet Public Housing: A New Conversation, and in the 2011 book The Buell Hypothesis, co-authored with Leah Meisterlin and Anna Kenoff.

The Buell Hypothesis imagines that the stimulus package codified in the 2009 American Recovery and Reinvestment Act had channeled federal funding into the provision of new public housing. This counterfactual provides the conceptual basis for Foreclosed: Rehousing the American Dream, a collaboration between the Buell Center and the Museum of Modern Art dedicated to changing the national housing conversation by projecting new imaginaries of American housing, suburbia and citizenship. A successor to the Rising Currents exhibition, Foreclosed has mobilized five architect-led interdisciplinary teams in a series of design workshops, held last summer at PS1 Contemporary Art Center in Queens; their work will be exhibited at MOMA starting this month.

The brief issued by Barry Bergdoll, the museum’s chief curator of architecture and design, foregrounds the imaginative nature of the project — its character as a kind of dreamwork: “The foreclosure crisis has led to a major loss of confidence in the suburban dream. The idea of single-family houses on private lots reachable only by car has been broken, and this new reality has hit especially hard in suburbs. It is here, rather than in the next ring of potential sprawl, where architects, landscape designers, artists, ecologists, and elected officials need to rethink reshaping urban America for the coming decades. Projects will aim to challenge cultural assumptions concerning home ownership and associated settlement patterns, such as suburban sprawl, and assist the public in contemplating a potentially different future for housing and cities. … It is our hope that new paradigms of architecture and regional and transportation planning become the silver lining in the crisis of home ownership.”

At the open studio presentations held at PS1 in mid-September 2011, the design teams presented early versions of these new paradigms — visions ranging from modified suburban houses and reworked modernist housing blocks to megastructural forms for communal living. These formal strategies were complemented by alternative models of individual and collective ownership.

It was also in mid-September 2011, of course, that the Occupiers and their allies began setting up encampments in Zuccotti Park, soon to be Liberty Square, where they projected another set of American dreams. As people convened by the hundreds for the General Assembly, reclaiming “privately-owned public space” from corporate cleaning crews in order to enact a primordial form of democratic politics, they modeled a more vigorous and egalitarian polity than those to which we have gotten accustomed in our privatized times. While many participants focus on strengthening government support for private homeownership, Occupy encampments and assemblies have modeled practices of self-government that aim to diminish the state’s role in public affairs. Their tents and tarps and sleeping bags just might lead us to reimagine not only housing but also the state itself.

Editors' Note

“Housing and the 99 Percent” is part of our ongoing exploration of the dynamic of public and private in contemporary politics and culture, and how this dynamic influences the design and production of buildings, cities and landscapes.

For more by Jonathan Massey, see “Risk and Regulation in the Financial Architecture of American Houses,” which will be published in the anthology Governing by Design: Architecture, Economy, and Politics in the Twentieth Century, by the architectural history collective Aggregate, forthcoming this spring from the University of Pittsburgh Press.

For more on Occupy Wall Street and the 99 Percent, and the role of architecture, see Occupy: What Architecture Can Do and Occupy: The Day After, by Reinhold Martin. See also Beyond Foreclosure: The Future of Suburban Housing, by Aron Chang, and The Interventionist’s Toolkit, Part 4, by Mimi Zeiger.

  1. See Census Bureau, “Characteristics of New Housing.”
  2. Laurie Ouellette and James Hay, “Makeover Television, Governmentality and the ‘Good’ Citizen,” in Tania Lewis, editor, TV Transformations: Revealing the Makeover Show (London: Routledge, 2008), 32.
  3. See Ulrich Beck, Anthony Giddens, and Scott Lash, Reflexive Modernization (Palo Alto: Stanford University Press, 1994).
  4. I discuss this history at greater length in “Risk and Regulation in the Financial Architecture of American Houses,” an essay in Governing by Design, forthcoming from University of Pittsburgh Press.
  5. See Jeffrey M. Hornstein, A Nation of Realtors ®: A Cultural History of the Twentieth-Century American Middle Class (Durham, NC: Duke University Press, 2005).
  6. See Robert S. Lynd and Helen Merrell Lynd, Middletown: A Study in Modern American Culture (New York: Harcourt, Brace and Company, 1929).
  7. Caroline Bartlett Crane, Everyman’s House (Garden City: Doubleday, 1925), 149.
  8. Crane, 50.
  9. Lynd and Lynd, Middletown in Transition: A Study in Cultural Conflicts (New York: Harcourt, Brace, and Company, 1937), 191.
  10. See Paul Dickson and Thomas B. Allen, The Bonus Army: An American Epic (New York: Walker & Co., 2005).
  11. See Ned P. Eichler, The Merchant Builders (Cambridge MA: MIT Press, 1982); and Marc A. Weiss, The Rise of the Community Builders: The American Real Estate Industry and Urban Land Planning (New York: Columbia University Press, 1987).
  12. On redlining and racial discrimination see not only Kenneth Jackson, Crabgrass Frontier: The Suburbanization of the United States (Oxford: Oxford University Press, 1987) but also Amy Hillier, “Redlining and the Home Owners’ Loan Corporation,” Journal of Urban History 29 (May 2003), 394-420.
  13. See David Mason, From Buildings and Loans to Bailouts: A History of the American Savings and Loan Industry, 1831-1995 (Cambridge: Cambridge University Press, 2004).
  14. See Alex Blumberg and Adam Davidson, “The Giant Pool of Money,” This American Life (radio show), episode 355, first aired on May 9, 2008.
  15. With new accounts appearing monthly, our picture of the resulting boom and bust is still taking shape. Among the popular books published to date, see Adam Michaelson, The Foreclosure of America: The Inside Story of the Rise and Fall of Countrywide Home Loans, the Mortgage Crisis, and the Default of the American Dream (New York: Berkley Books, 2009), esp. Ch. 7, “Building a Better Housetrap,” 148-181; Joseph E. Stiglitz, Freefall: America, Free Markets, and the Sinking of the World Economy (New York and London: W. W. Norton & Co., 2010), esp. Ch. 4, “The Mortgage Scam,” 77-108; and Robert Scheer, The Great American Stickup: How Reagan Republicans and Clinton Democrats Enriched Wall Street While Mugging Main Street (New York: Nation Books, 2010). For more systemic and academic accounts, see Herman M. Schwartz, Subprime Nation: American Power, Global Capital, and the Housing Bubble (Ithaca and London: Cornell University Press, 2009), and The Great Credit Crash, ed. Martijn Konings (London and New York: Verso, 2010).
  16. See Johnna Montgomerie, “Neoliberalism and the Making of Subprime Borrowers,” in The Great Credit Crash; and Alex Gourevitch, “A Failed Social Model: Providing Basic Goods through Crushing Consumer Debt,” on New Deal 2.0, 15 November 2011.
  17. Rich also outlined the analysis that motivated the exhibition in the essay “Real Estate and Liquid Architecture,” published in Perspecta 42.
Jonathan Massey, “Housing and the 99 Percent,” Places Journal, February 2012. Accessed 21 Mar 2023. https://doi.org/10.22269/120214

Comments are closed. If you would like to share your thoughts about this article, or anything else on Places Journal, visit our Facebook page or send us a message on Twitter.

Past Discussions View
  • 03.08.2012 at 17:38

    Dear Jonathan
    I printed out this post a couple of weeks back and have only just got around to reading it. I'm surprised no one has commented so I just wanted to belated say that I think this is an engaging post that covers a lot of important issues. Thanks and keep up the great work.