Marshal Silverman is barely getting by. The 74-year-old can hardly pay his rent with social security, eats thanks to the government’s SNAP food program and says his bank account is down to 30 bucks.

But Silverman, who suffers from Chronic Obstructive Pulmonary disease—better known as COPD—has been through worse. When he was evicted from his apartment in 2005, he became homeless for two and a half years.

His situation only improved when he qualified for social security as a retiree, using the newfound income to secure a studio apartment in the Westlake neighborhood of Los Angeles.

But over the last dozen years, a 4-percent annual rent increase has chipped away at his social security payment, which has enjoyed only symbolic increases. He now spends nearly all of his monthly $1,100 check on housing, leaving him reliant on SNAP “food stamps” to survive.

One of the many jobs Silverman has held was as a caseworker for food stamps applicants. So he has some frame of reference when he says: “I’m not getting the help I should be getting.”

The government is supposed to help people like Silverman, a poor fixed-income retiree who is slipping financially as he ages. Rental assistance programs like Section 8 guarantee that if recipients pay 30 percent of their income towards rent, taxpayers will cover the rest. For Silverman that would mean paying about $300 of his $900 monthly rent. Instead, he forks out three times that much, leaving him little to cover the cost of laundry, utilities, and Medical co-pays.

Life on the streets once again seems possible. “I need help,” he pleads.

The Affordable Housing System Is Broken

Silverman is one of millions of Americans who in recent years have watched rent eat up a fast-growing percentage of their income, leaving little money for other basic expenses.

The government sets aside what sounds like a lot of money to help such people. Of Housing and Urban Development’s $56.5 billion budget last year, $22 billion went directly to help Americans pay rent.

However, that spending has not kept up with the scale of poor renters’ needs, leaving a chasm between the promise of Section 8 and the reality. Low-income earners wait years just to get on wait lists, and more years—if not decades—to get to the front of the line where they can receive the rent assistance. There is simply not enough existing affordable housing to help them.

That is why the other $34.5 billion of HUD funds last year went to developers, to get them to build more housing. By giving out grants, near zero interest loans and rental assistance, the government aims to make it easier and profitable for private developers to attract investors and build housing.

In return, developers are required to charge less for rent on the housing they build. As with Section 8, low-income renters are supposed to pay a maximum of 30 percent of their income each month to their landlord.

With that guarantee of affordability comes scarcity and invariably, another waitlist. Once a new or refurbished apartment complex is ready, the developer sets up a lottery to select who can live there. Hundreds or thousands of people put their name in, but only a fraction are lucky enough to receive such “low-income housing.”

Experts, developers and many politicians tend to favor this method because it plays into the laws of supply and demand by increasing the total supply of housing. Their thinking might be summed up as: If you build enough, prices will fall. Basically, if developers increase the total amount of housing, it will catch up or even overrun the need, and help to bring rental prices down.

This only works if lots of new people aren’t moving into a given housing market. And even if that is the case, the subsidized building process can be painfully slow. It generally takes a very long time to win approval to build homes and apartments in California, even though the state desperately needs a huge surge in housing.

The consulting firm McKinsey and Co. calculated in 2016 that California needed 3.5 million new homes by 2025 to make up for a severe shortage of housing. Gov. Newsom promised during his 2018 electoral campaign that he would deliver that many new housing units. In the two years since, the state has constructed fewer than 100,000 units per year, which is less than one-fifth of what he said is needed.

Unaffordable Housing Isn’t Just for the Poor Anymore

For many people, the housing crisis may seem abstract. But look closely, its human toll is all around us—sleeping in parks and cars, bathing in library sinks, rustling in the tent cities under freeway overpasses.

Yet, this crisis isn’t just for the low-income. Pick a home almost anywhere in California and check the price; chances are it costs more than double what it did less than a decade ago. Over that same time period the typical household income has grown approximately $5,000, leaving millions of renters with less money to cover other costs.

What really is affordable housing? And why isn't there enough of it?

Margarita Lares, who works at the Housing Authority of Los Angeles, earns well over six-figures and oversees the Section 8 rental assistance program that Silverman and others are desperate to access.

She understands the problem well enough to worry about her own family’s future. “My children, even with a college education, will not be able to [afford] what I have, unless frankly they move away from California,” said Lares.

Her college-age children say that based on what their income might reasonably be, they won’t even be able to consider living without roommates in Los Angeles. As for saving enough money to purchase a home in California, they tell her, it is clearly not going to happen.

“Honestly, my house isn’t paid off, I’m far from that. I would love my children to stay once they're working, and help me pay the bills,” said Lares, who notes that she earns a solid income. “In my retirement years, I may need some help to be able to stay.”

A Desperate Plan

When I first met with Silverman last summer, Josh Madrid, his caretaker came with him. For three years the 36-year-old had earned the minimum wage, paid by LA County, to keep Silverman healthy, fed and organized. For Madrid it was a second job; he also worked at a movie theater. Between the two, he worked roughly 40 hours per week, which allowed him to pay a far-below market rent of $450 for a shared bedroom in a two-bedroom house with three roommates near Downtown Los Angeles. The good price was partly because he had lived there for six years.

Madrid knew he was lucky to pay such low rent, but sharing a bedroom at his age was getting old. It was time, he said, for a more dignified life. One where he could live on his own, with full independence and autonomy. That is something Madrid said he could not find in Los Angeles at his price point.

“I can't afford to live here,” he said. “They're building all these luxurious apartments all around, and there's a bunch of tents right outside. The system is broken.”

Silverman (left) looks on as Madrid (right) shares his story.

And so last summer he told Silverman his decision, he would be moving away. Both could relate to each other’s circumstances, even though Silverman said he would never consider relocating, particularly at his age. For Madrid, the decision to move spurred his longstanding resolve to help Silverman find affordable housing into overdrive. Each shift he cared for Silverman was spent asking, seeking, and knocking for affordable housing, but to no avail.

Finally, Madrid found out the City of Los Angeles was offering emergency Section 8 vouchers to people living on the streets, as part of its ramped-up response to the homeless crisis. A process that normally takes years or far longer would immediately open up for a select group of desperate people.

Madrid told Silverman that this was his chance. “Say that you are in a tent,” Madrid said. “Get your section 8.”

“I’m not a good liar,” Silverman replied.

He wouldn’t have to lie, Madrid made clear. He just needed to move into a tent. “The tent is on me. I’ll buy the tent. I’ll hook it up for you,” Madrid said.

There was one large flaw in the plan though, Silverman’s health. His COPD means that he requires a nebulizer, which pumps a treatment of fine mist into his lungs through a mask and requires an outlet. Otherwise, Silverman said he might have seriously considered moving into a tent to avoid a return to long-term homelessness.

California’s Affordable Housing Industrial Complex

When it comes to the housing crisis, California is trapped in a cycle of failure. Journalists highlight soaring rental costs, California’s politicians spend more tax dollars and developers build more. But the crisis gets worse, leaving more and more people in situations similar to Silverman’s.

Michael Costa, one of the leading affordable housing developers in the country, is building two 57-unit-each apartment buildings for formerly homeless people in South LA. To do so, he is using rental assistance from Lares at the L.A. Housing Authority and bond funds from Prop HHH—a $1.2 billion local measure passed by voters in 2016 that promised 10,000 apartment units for people without homes.

Rise Apartments for homeless, under construction in South LA

Experts argue however, that while new developments like Costa’s might improve the lives of the people who move in, such projects are tiny compared to a massive shortage.

“We're just not delivering enough housing units to keep the prices from continuing to escalate,” said Andrew Jakabovics, who heads policy development at Enterprise Community Partners, a nationwide non-profit affordable housing provider. “Given the demonstrated fiscal priorities of the country,” Jakabovics said, he can’t see how high-cost areas like urban California will ever become affordable again for lower-middle class residents, much less the working poor and people on low-level fixed incomes like Silverman.

But in business, crisis often presents opportunities for those who recognize them. For developers like Costa, unaffordability has helped bring about a steady flow of business over the decades.

Since the creation of the Low-Income Housing Tax Credit program in 1986, Costa has built a vast amount of government subsidized low-income housing. Today he controls a portfolio of more than 27,000 apartments scattered across the U.S. and the American territory of Puerto Rico.

“Doing well, by doing good,” Costa called it.

Costa is one of a dozen or so developers that together control the majority of affordable housing in California. Together he and 14 others oversee the California Council for Affordable Housing, a lobbying entity “dedicated to the expansion of affordable housing” in the state.

In response to the housing crisis, voters approved local measures like Prop HHH that, coupled with state bond measure totaling a few billion each, mean developers have more funding to create below-market price housing than ever before.

Yet, Costa and his counterparts see a process rife with problems. There is too much regulation, it is too hard to get local approval to build, it costs too much, there’s not enough profit to be worth the pain.

“It was just so much easier, believe it or not, in 1985, in 1990, and even 2000 to develop units than it is today,” Costa said.

Each developer has his or her unique take on how to solve the housing crisis. For people like Costa—and much of the ruling class of Los Angeles—it involves increasing the density of a city famous for its low-level sprawl. “If you go to places like Rome or London or Paris, look at the housing, what do you see?” he asks. “It's inevitable.”

Others lament a broken local approval process where cities that need affordable housing the most, such as San Francisco, create obstacles to building it due to “NIMBY” (Not in my backyard) sentiment. But all agree on one thing.

We're building more every year, but demand is growing faster,” said Costa.

Can the Crisis Spark a Housing Revolution?

“Let's call it what it is,” said Gavin Newsom, during his 2020 State of the State address. “A disgrace, that the richest state in the richest nation—succeeding across so many sectors—is failing to properly house, heal, and humanely treat so many of its own people.“

As millions of Californians who work jobs that keep the state functioning struggle to pay their rent and contemplate moving to states where incomes go further, a question needs to be answered: Is it possible to solve California’s housing crisis?

In crises, revolutionary change can sometimes happen. What once seemed too extreme suddenly seems better than the alternative. Look no further than the federal government’s response to Covid-19. Just weeks after the crisis hit, it passed a once-unimaginable $2 trillion stimulus package to rescue American businesses and unemployed workers. And that was just the beginning.

Like leaders then, leaders now could decide that California’s affordable housing crisis requires radical action akin to our response to the Coronavirus. But will they?

In 2020, the answer so far has been no. A housing bill known as SB-50, which would have required cities and counties to strip away local zoning laws to facilitate new, denser housing was reintroduced in January, just a month after it failed to pass at the end of 2019. But it died again after failing to win the support of state representatives from the Los Angeles area.

“The people who are most engaged and most organized and loudest are the obstructionist no-growthers who don't want to see anything built,” said Sen. Scott Wiener (D-San Francisco), the author of SB-50.

Despite the major defeat, Wiener said in a recent interview he is optimistic that California is starting to understand the gravity of this crisis and contemplate big attempts at solutions.

“If you look at SB-50, that bill came within a whisker of passing. Five or ten years ago that bill would have been laughed out of the Capitol the minute it was introduced. So we have already seen a sea of change in terms of what's possible in the legislature.”

All symbolic victories aside, can housing activists, politicians and the right developers actually turn the tide? Wiener paused. “I think it's possible. But it’s going to require legislators and the governor casting votes that make some people unhappy.”

Real action, if effective, might make some of the many people like Silverman much happier.

As for Madrid, his former caretaker, it is too late. He relocated to Las Vegas in December, where he said life is good, because it is more affordable.