Capitalism Can’t End Homelessness

Homelessness is on the rise in the United States. This is especially evident in places where the housing and rental markets are booming, resulting in unaffordable prices for the working class. While the ruling class have proposed various half-measures to address this problem, none of them actually address the fundamental cause of the crisis—the capitalist system.

A prime example can be seen in Denver, CO where homelessness has risen by 800 people since January 2020. This has been accompanied by an increase in empty rental units. Between April 2020 and June 2022, vacant housing units increased by 1,682 units. With a total homeless population of 6,888 as of January 2022, there are now more than three empty rentals for each homeless person. At the same time, evictions have jumped 24% since June 2019. This is the irrational madness of capitalism in a nutshell.

Even with more than sufficient supply, rental seekers are being forced into bidding wars and to pay exorbitant prices. According to the Denver Metro Apartment Vacancy and Rent report for the second quarter of 2022, average rent for the Denver metro area is $1,859.51, an increase of $93.75 from last quarter. So although there is more supply than demand, homelessness not only still exists but is increasing. The reason for this is the nature of capitalism, which prioritizes profits over human need. Rather than lowering the price of rent until everyone is housed, the opposite is occurring—rents are increasing at the same time as homelessness and evictions are increasing.

The Biden/Harris administration proposed a national solution to address homelessness called the Housing Supply Action Plan, which primarily treats the housing problem as one of a lack of supply. But as can be seen with rentals in Denver, an increase in supply does not necessarily correspond with an increase in housed people. Even some bourgeois analysts, such as John Wake from Forbes, understand this: “The current conventional wisdom in the real estate industry treats supply like a magic wand that will solve the problem of high house prices and everything else wrong with the housing market. That’s convenient because it diverts attention away from a much bigger problem, but one we can easily reduce, investors jumping into the market for single-family houses and crowding out live-in buyers.”

In other words, when housing is seen as a method of accumulating profits rather than as a basic human right, the supply can surpass the demand and still leave workers living in the streets. Of course, as Wake also writes, the housing industry and the investment bankers are just “playing by the rules of the game” when they drive demand up and push the price of housing beyond what working-class families can afford.

The problem of homelessness is one that is endemic to the capitalist mode of production. As Friedrich Engels wrote in The Housing Question: “The house owner in his capacity as capitalist has not only the right, but, in view of the competition, to a certain extent also the duty of ruthlessly making as much out of his property in house rent as he possibly can. In such a society the housing shortage is no accident; it is a necessary institution and it can be abolished together with all its effects on health, etc., only if the whole social order from which it springs is fundamentally refashioned.”

Another method currently being used by the capitalists to address the problem comes through their use of state power. This is the preferred choice of former President Trump, who recommended at the America First Agenda Summit on July 27 that hundreds of thousands of homeless people be removed to the outer reaches of the city and placed in tents.

This is already being done in Denver, which is under Democratic Party control. Denver City Council voted in February to commit another $3.9 million toward “Safe Outdoor Spaces,” a so-called “homeless site” that offers people living homeless on the streets temporary shelter in ice fishing tents on fenced-in sites with portable toilets, power and Wi-Fi. This coming from a city that has had an urban camping ban since 2012. Their solution is to make camping illegal and then force the homeless into designated tent cities. But like the so-called “overflow facilities” for unaccompanied minors at the border, the Democrats like to sanitize the state’s callous attitude to the most vulnerable with euphemisms. Democratic Mayor Michael Hancock agrees with Trump on the solution to the housing crisis, because the two parties fundamentally agree on the need to protect capitalism at any cost.

Socialist Revolution has a different solution, one that would guarantee quality housing to everyone. This has been laid out in our program which includes capping rent at 10% of wages and nationalizing vacant housing. However, this plan will never happen under capitalism and homelessness will remain a festering sore on society. A system that requires poverty cannot solve poverty. Engels understood the solution: “As long as the capitalist mode of production continues to exist, it is folly to hope for an isolated solution of the housing question or of any other social question affecting the fate of the workers. The solution lies in the abolition of the capitalist mode of production and the appropriation of all the means of life and labor by the working class itself.”

In order to achieve this, we need a mass working-class party based on the theory of Marxism. Only revolutionary socialism can end homelessness and free all workers from the insanity of capitalism