NCPA - National Center for Policy Analysis

Dealing With Public Housing Failures

May 14, 1996

Public housing proponents seem torn between two goals, professional observers note. Some see public housing as the shelter of last resort for the poor. The goal of others is to turn them into decent places which might attract a mixed-income variety of tenants -- but that would make them more like regular private housing and raise the question of whether the government should be in the housing business at all.

Republicans want to repeal the so-called Brooke Amendment, a 1969 law that limits public housing tenants' rents to 30 percent of their incomes. Proponents say repeal is necessary so that rents can be increased to meet operating and maintenance expenses at the projects.

Alternatively, Democratic Secretary of Housing and Urban Development Henry Cisneros is pushing for more capital investment in public housing through federal "modernization funds" -- budgeted at $2.8 billion in fiscal 1965. He wants to attract more families who are not on public assistance to public housing; but this could also mean that fewer of the nation's 1.3 million public housing units would be available to the very poor.

It has been almost 60 years since the birth of public housing and 30 years since it became a social problem, as higher-income working families left the projects and the poorest families were concentrated there.

  • The limited rents have forced the federal government to provide operating subsidies -- growing to $2.6 billion in 1994 from $6.5 million in 1969.
  • The 1.3 million public housing units are aging; rent caps and fuel price increases in the 1970s caused managers to defer maintenance.
  • In recent years the fastest growing group in public housing has been that of families earning 10 percent or less of median income -- in Chicago, the household average is $4,000 per year.
  • In 1988, Abt Associates estimated the cost of bringing public housing up to standard at some $30 billion.

Some researchers suggest a less regulated private market could make use of new technologies to provide inexpensive shelter even for the very poor, and public housing could be privately managed, sold off or simply demolished.

Source: Howard Hussock (Reason Foundation), "The Vain Search for Public Housing Fix," Wall Street Journal, May 14, 1996.


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