This is the root of the housing crisis

And how to fix it, while sequestering enormous quantities of CO2

Why is there a housing crisis?

It's certainly not for lack of capital or building supplies or land. And yet, here we are, with even modest homes too expensive for the middle class in some places, while vast quantities of abandoned homes decay in others.

At its root, the housing crisis is caused by the mobility of capital. Who makes investment decisions under capitalism? Capitalists do, and they do it unilaterally.

If you have capital to invest, there are few restrictions on where or how you can invest it. So investment decisions are guided instead by capitalism's only imperative: to maximize profits. This means that what gets developed and where is up to unaccountable individuals seeking to maximize their returns.

Geographical shifts in investment occur due to new profit-making opportunities. In the business school textbook example, these opportunities take the form of improved efficiencies: suppliers locating closer to buyers, etc. The theory goes that this endless process improves the efficiency and productiveness of capitalism overall.

In reality, these geographical shifts more often occur to escape state regulation and labor organizing; to take advantage of state subsidies; to exploit new labor pools; to move operations to more convenient locations for owners; and to be more visible to investors. None of these moves improve the efficiency or productivity of the economy, but they do improve profits.

This process is cyclical in America. As capital is shifted around in search of the next deal, it invariably finds its way back to places it had previously abandoned, which now offer bargains and incentives. Cities go from boom to bust to boom again.

As investment is shifted geographically for the benefit of the capitalist class, workers must follow, and, naturally, they must find new housing. This is where we run into problems.

In most times and places, new housing is simply built to accommodate the workers that are forced to drag themselves around in capital's wake. Cities become boom towns, filled with brand new slums, managerial housing, and mansions, while the same structures deteriorate in bust towns. But the U.S. has created a Ponzi scheme that has interrupted this cyclical nightmare.

In America, housing functions as part of a web of schemes that substitute for a proper welfare state. Instead of a decent state pension, Americans are forced to invest in real estate, with the promise that it will appreciate in value ad infinitum. Through the magic of massive state intervention, that has mostly worked, with a notable blip in 2008 caused by the state backing off on some key regulations. Real estate has become the most important way Americans build wealth and also the most important form of generational wealth transfer.

For this scheme to work, housing must constantly get more expensive, otherwise it's not a good investment. For that to happen, the housing supply cannot be elastic; it must be restricted. That means it cannot accommodate a mobile workforce. This puts capitalism in a bind, which can only be resolved by someone—capitalists or homeowners—losing. Both are powerful, which is why this problem is so intractable.

This problem can't be solved without structural changes to the American state and economy. The issue is, it would be bad in real terms if either capitalists or homeowners won out over the other. The boom/bust cycle of housing and the Ponzi scheme of home value wealth building are both bad for people (who need houses as homes, not investments) and our planet (which cannot support the endless construction and abandonment of infrastructure.)

So how could this problem be solved positively? First, investment would have to come under democratic control. This would prevent capital from chasing higher returns through geographic movement, which is the root of the problem. If you're thinking, "Well, sure, but democratic control over capital would mean the end of capitalism," then you are correct.

Second, that democratic control would have to have ecological guardrails. The best framework for those guardrails is called bioregionalism, which allows the ecological carrying capacity of naturally defined geographic areas (watersheds, etc) to set the limits for human development. A scientific assessment of carrying capacity would set those limits, and then democracy would determine how development occurred within them.

Were this to happen, we would quickly find that some areas are wildly overdeveloped and others dramatically underutilized, due to the capriciousness of capital. The result, of course, is that people are also distributed in an incoherent fashion from a bioregional perspective. Instead of putting people where they can make the best use of natural capital without undermining the conditions for their own survival, capital has distributed people where it is profitable for capitalists.

As daunting as it may seem to fix that problem, it creates a tremendous and timely opportunity. We usually think of homebuilding as an emissions intensive activity, and indeed it is under petro-capitalism.

The construction of a typical American home emits anywhere from 15-100 tons of CO2, depending on various factors. As for the sector as a whole: "New home construction in the U.S. creates over 50 million tons of embodied carbon emissions annually, equivalent to the emissions from 138 natural gas–fired power plants or the yearly emissions from entire countries such as Norway, Peru, and Sweden," according to a lifecycle analysis.

But if we step away from the assumptions that ungird our suicidal civilization, we find that homebuilding—and all building, for that matter—can instead be a means of sequestering carbon.

A home built by hand from natural materials sequesters carbon, rather than emitting it because it is made largely of carbon. A straw bale and wood frame house sequesters around 15 tons of CO2 for the life of the building; the reason being that straw and wood contain a great deal of carbon, and it doesn't break down while the house is standing. If, after a few hundred years, the house needs to be replaced, the carbon is simply re-sequestered.

You could be living here, along with a bunch of CO2, in the walls

Now let's match these individual statistics to the problem at scale. The Paris Agreement would require that 550 million tons of carbon be sequestered per year by 2030. At 15 tons of CO2 per straw bale house, that's only 36.6 million houses, on a planet with 8 billion inhabitants, or a new house for .5% of the total global population each year.

So, the task of creating a bioregional society, sequestering massive amounts of carbon, and ensuring that everybody lives in a wonderful home are all in alignment. The hurdles to this are exclusively political, not technical. We have the tools to solve the housing crisis and climate collapse in hand.

If we collectively decide to start working against the doomsday clock, against the immiserating contradictions of capitalism and the liberal state, and against ruinous industrialism, there is a better world awaiting us.

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