Reviving Community Through Local Empowerment

Austria, subsidiarity, + corporatized community

When Alexander Hamilton laid out the subsidiarity principle at the heart of American federalism at the New York convention to ratify the Constitution, he presumed we would be a country made up of communities–what I call a federation of families. Hamilton said that, "There are certain social principles in human nature from which we may draw the most solid conclusions with respect to the conduct of individuals and of communities. We love our families more than our neighbors; we love our neighbors more than our countrymen in general. The human affections, like the solar heat, lose their intensity as they depart from the center and become languid in proportion to the expansion of the circle on which they act." He imagined strong communities as the bedrock of the republic on which the federalist system would be built and sustained. But today, American communities find themselves atomized and weaker than ever, and a large part of that is due to local governments having left communities prey to capitalism's worst features. 

A few years ago, I lived in a unique mixed-development community consisting of apartment towers and townhouses, all managed by the same company and sharing common amenities. It was a place where 1,500 people—retirees, singles, and young families like mine—lived and commuted together in the years before COVID-19. The rent was competitive with the surrounding areas, starting at $1,700 and gradually increasing to $2,200 over five years. Despite the rising costs, the community remained stable and connected. Neighbors knew each other, supported one another through difficult times, and celebrated together during better days. We even moved from an apartment to a townhouse as our family grew, and it seemed like others were doing the same.

The community had an old-school American spirit. The outdoor common areas were accessible year-round, featuring racquetball courts and a swimming pool. The L-shaped path between the townhouses and apartments encouraged spontaneous interactions, and frequent cookouts drew people together–thanks in part to the wafting smell of bratwurst during their commute home. Neighbors recognized each other's children, and the sense of community helped set boundaries for kids, knowing that familiar adults were always nearby.

Then, things began to change. The first sign was the breakdown of the community shuttle. This was not unusual, but it usually happened every other year and was always swiftly repaired. It was not a huge expense for the company because 1500 people shared one shuttle that only drove a mile-and-half one-way to the subway and then back, and only six hours a day. This time, however, it wasn't repaired. A vague email suggested that it might be fixed, but weeks passed with no action. I suspected what was coming next: Our community was being sold.

I had read about private equity and distant leasing companies buying properties across the country, raising prices beyond market necessity, and cutting costs to maximize profits. My suspicions grew when the sauna wasn't repaired, and then the official announcement came: We were being sold to a real estate company 2,000 miles away.

Once the sale went through, everything changed. The maintenance crew, whom we had known for years and who understood the intricacies of the buildings, was laid off. They were replaced by staff who managed multiple properties and struggled to keep up. The front desk personnel—who, among other things, coordinated with FedEx and Amazon to ensure our parcels actually made it through—got their walking papers. Slowly, the amenities that had made our community special disappeared.

I told my wife that the next step would be rent hikes designed to drive out old tenants and bring in new ones who wouldn't miss what they never had. It didn't make sense that rent would increase while services were being cut and staff was being laid off, but that's exactly what happened. When it came time to renew our lease, our rent jumped from $2,200 to $3,400 in one year. Many of our neighbors experienced the same. Everyone moved out, except for one family of five and a single man. The community was destroyed, the buildings remained.

Unchecked capitalism clearly dismantles the ties between Americans, creating communities of constant strangers and, therefore, instability. When distant, profit-driven entities prioritize financial gain over the well-being of residents, the social fabric of neighborhoods unravels, leaving behind isolation. However, throughout the US, what I describe is not seen as a problem by local government nor one they should solve. In America, the ethos of market-fundamentalism persuades local governments to see public housing as a tool to address poverty and not as a method for preserving or enhancing the well-being and sustainability of the whole community. For them, public housing and rules controlling rent and residential speculation are thought of as either socialist intrusions in the market that should be eliminated or government charity, rather than policies that enact a positive vision of how we want our communities to look and function. 

In recent years many Americans have rediscovered the principle of subsidiarity and they are excited about taking power back from Washington. But centralization of the American state is more a symptom than a cause. Subsidiarity is the idea that decisions should be made at the most local level possible, with higher authorities supporting rather than overriding the lower ones. So far, so good, but the problem we have is that local communities and states do not often have leaders with a subsidiarity mindset or the view that social well-being is their responsibility. They think in terms of maximizing the options available to capital, and on that metric, they are very successful. Subsidiarity cannot address the housing crisis without local communities first having a mindset that this is their problem to fix.

Housing programs should actively promote stable, affordable, and community-oriented living arrangements, ensuring that working- and middle-class families can thrive without the constant threat of displacement. But this first requires embracing empowered subsidiarity. For localities, this means having the authority, power, and will to protect and sustain their communities. Power is the combination of resources and competence. 

Furthermore, you need political will; that is, your leaders must affirmatively take responsibility for failure and success. Part of the weakness of the contemporary system of federalism is that politicians at the local and state levels would rather outsource policy and power to Washington to avoid responsibility for failure. However, intentional housing policies that center social well-being over market profits is possible and proven.

Internationally, Austria's capital is known for its century-old approach to residential development, where they use local power to shape their metropolis into a collection of affordable communities. Its public housing policy, known as "social housing" or gemeindebau, is celebrated for good reason. Around 60% of Vienna's residents live in subsidized housing, which includes both public housing and limited-profit housing associations. Unlike the general perception of public housing in many other cities, Vienna's social housing units are high quality, well-maintained, and architecturally appealing. Because the income caps for eligibility are relatively high, allowing even middle-class residents to qualify for social housing, the policy prevents segregation based on income. This promotes integrated communities where it is harder to disrespect someone based on income because residential addresses are not an immediate class indicator. For instance, the median income for an individual in Vienna is around €35,000, but the cap on social housing is set at €53,000. In America, the comparative cap would be something like €28,000. In America, you presume someone in public housing is poor; in Vienna, you could not make that assumption.

Keeping private equity and speculation out of the housing market does not require waiting for regulations from Washington, D.C. States, and local authorities can create rules and disincentives to prevent speculation and the hoarding of housing by private equity firms. They can also create incentives to create affordable housing for low- and middle-income residents, ending the housing crisis and allowing citizens to focus on their families and productivity. Workers and entrepreneurs can focus on their work better when their communities are sustainable and stable. 

Vienna's approach shows that local governments can create housing policies that serve the common good and protect communities from the whims of distant, profit-driven forces. By promoting such policies, localities can ensure that families thrive in neighborhoods where accountability, stability, and social ties are valued over profits. This is the essence of empowered subsidiarity: Local authorities must have the power to protect their communities and the commitment to use it effectively. The time for serious local commitment to sustainable housing and community policies is now.