Affordable Housing Rent-Seeking

M-Station, one of the projects developed with funds from the 2006 bond. Image via Foundation Communities

M-Station, one of the projects developed with funds from the 2006 bond. Image via Foundation Communities

Last night Austinites approved $65M in new bonds for affordable housing. This was a huge reversal from just one year ago, when a similar proposition was narrowly defeated.

It’s now clear that affordable housing advocates were quite shocked by the defeat last year, and they campaigned hard to win this time. The branding was better–”Keep Austin Affordable” vs. “Yes for Homes,” the outreach was better–we received at least a half-dozen direct mail pieces, and the ground game was way better. I don’t recall a single canvasser last year. This year we had campaign volunteers knock on our door at least four times. So, kudos to the campaign. They won at the ballot box, and that’s all that matters in that game.

And yet, even putting aside the policy questions around the bond, the entire thing strikes me as extremely troublesome. Here we have a group of organizations that got together to fund a campaign that will issue public debt, the proceeds of which will be distributed to those very organizations! As I commented last night on twitter, that is substantively no different from any interested party using political influence to secure some kind of preferential treatment or, in this case, direct disbursements from the public treasury. We have a word for that kind of behavior: rent-seeking.

I don’t dispute that many of the recipients of these bond funds do good work. In fact, I have a great deal of respect for many of them. I just don’t think you can draw lines between “good” corruption and “bad” corruption.