Local governments are trying a new way to address the housing crisis.

VOX, Rachel M. Cohen, February 11, 2024

Quietly and with little fanfare, the idea of building new publicly owned housing for people across the income spectrum has advanced in the United States. 

Governments have successfully addressed housing shortages through publicly developed housing in places like Vienna, Finland, and Singapore in the past, but these examples have typically inspired little attention in the US — which has more restrictive welfare policies and a bias toward private homeownership.

Then one US community started exploring social housing with a markedly more American twist: Leaders in Montgomery County, Maryland — a suburban region just outside Washington, DC, with more than 1 million residents — said they could increase their local housing supply not by ramping up European-style welfare subsidies but through essentially intervening in the traditional capitalist bidding process. Government, when it wants to, can make attractive bids.

Now, with an acute nationwide housing shortage, and declining home construction due to high interest rates, the idea is spreading, and more local officials have been moving forward with plans to create publicly owned housing. They are very clear about not calling it “public housing”: To help differentiate these projects from the typical stigmatized, income-restricted, and underfunded model, leaders have coalesced around calling the mixed-income idea “social housing” produced by “public developers.”

“What I like about what we’re doing is all we have effectively done is commandeered the private American real estate model,” Zachary Marks, the chief real estate officer for Montgomery County’s housing authority, told me in 2022. “We’re replacing the investor dudes from Wall Street, the big money from Dallas.”

By offering private companies more favorable financing terms, Montgomery County hoped to move forward with new construction that they’d own for as long as they liked. They had plans to build thousands of publicly owned mixed-income apartments by leveraging relatively small amounts of public money to create a revolving fund that could finance short-term construction costs. Eighteen months ago, this “revolving fund” plan was still mostly just on paper; no one lived in any of these units, and whether people would even want to live in publicly owned housing was still an open question.

Answers have since emerged: The first Montgomery County project opened in April 2023, a 268-unit apartment building called The Laureate, and tenants quickly came to rent. It’s not the kind of public housing most Americans are familiar with: It has a sleek fitness center, multiple gathering spaces, and a courtyard pool. “We’re 97 percent leased today, and it’s just been incredibly successful and happened so fast,” Marks said.

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