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Out of Reach

by Stephen Coyle, Chief Executive Officer, AFL-CIO Housing Investment Trust

The mission of the AFL-CIO is to improve the lives of working people and their families — to bring economic justice to the workplace and social justice to our nation. Few things are more fundamental to a worker’s ability to find and keep a job, raise a family, and participate in the life of the community than affordable housing. Out of Reach documents the distance we have to travel before low wage workers have the means to afford decent rental housing.

Organized labor has a significant history of involvement in providing decent, safe, affordable rental housing to working families. Unions representing working people in the textile and garment industries, now joined together in the Union of Needletrades, Industrial and Textile Employees (UNITE), organized cooperative housing ventures in New York in the 1920s and 1930s. These projects were assisted by union owned financial institutions. In 1934, the Hosiery Workers’ Union built the first housing development for low and moderate-income families in the nation that used federal aid, the Carl Mackley Apartments in Philadelphia. The AFL-CIO Housing Investment Trust recently worked with the city government to renovate the project.

Since 1965, the AFL-CIO Housing Investment Trust and its predecessor, the Mortgage Investment Trust, have provided a vehicle for unions to pool their pension capital for solid investments in affordable housing. When HIT gets involved in a housing development project, everybody wins. People obtain the security of sorely needed affordable housing. Union members, through their pension funds, are getting a competitive return on their investment that will assist in their retirement security. At the same time, they are backing needed housing development and the projects are built with 100% union labor.

A good example of how union pension investment can help transform a community is the El Azteca Housing Development in Laredo, Texas. This HIT financed project in the Colonias area of the Texas-Mexico border was the first low income housing project built in that community in 50 years. All of its 50 units are reserved for very low income residents in need of Section 8 assistance. Other HIT projects have similarly contributed to the revitalization of neighborhoods, provided supportive services for residents, and helped homeless families achieve self-sufficiency, with each investment earning the competitive returns associated with conventional real estate investments.

There’s another aspect to the housing struggle, and that is the provision of wages sufficient to support minimum housing and lifestyle needs. One would hope that having a job would allow you to live in a decent, affordable home. But the housing crisis is most acute among the working poor, and neither housing supply nor wage rates have kept up. In 1995, more than a quarter of the 5.3 million households with what housing experts call worst case needs had earnings at least equivalent to that of a full-time worker at minimum wage. A household with worst case needs has a very low income, and either pays more than half of its income for rent or lives in severely substandard housing, and nonetheless receives no government housing assistance. There are nearly 10 million minimum wage workers in our country, and it takes 86 hours of work for a minimum wage worker to afford median rent. In some cities the number of hours jumps to more than 160. No one should endure these conditions, let alone those who are working full time.

We hear that these are the best of times. Unemployment is low; wages are rising; the stock market is soaring. But one out of five children is raised in poverty. 1998 witnessed the highest announced layoffs of the 1990s. What does our prosperity mean to people without wages that can support minimally decent living standards? Without living wages, there can be no housing security. Without housing security, working people cannot keep their jobs, house their families, or educate their children.

Economic justice in the workplace means, among other things, guaranteeing a living wage to working people. Social justice in our nation includes providing the means for all people to live in decent, affordable housing. Out of Reach thoughtfully challenges us all to find ways to achieve the two critical goals of living wages and affordable housing. The time to take up the challenge is now.

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