NCPA - National Center for Policy Analysis

"Hope" Housing: Luxury Homes And Perverse Incentives

August 3, 2000

In 1992, Congress authorized Housing Opportunities for People Everywhere, or HOPE, a program to raze and replace some of the nation's worst public housing projects. So far, the Department of Housing and Urban Development has handed out more than $3 billion to local public housing authorities under the program.

Critics complain that some of the new subsidized housing is so relatively luxurious that it sends the wrong message to working, low-income families who don't use public housing aid.

  • Some newly-constructed townhouses in a Los Angeles project are worth around $120,000 -- but public housing tenants can rent them for less than $200 a month.
  • At a HOPE project in Washington, D.C., new townhouses whose cost to build approaches $400,000 per unit will be sold for up to $260,000.
  • Observers note that HUD policies encourage housing authorities to avoid upkeep and let their properties disintegrate by handing out money to the most run-down projects first.

The program is also plagued with delays and bureaucratic red tape. The General Accounting Office has reported that, as of June 1998, fewer than 10 percent of the housing authorities that got HOPE grants in 1996 and 1997 had even begun demolition.

One unanswered question, critics say, is what makes proponents of improved public housing think the former tenants of failed projects will suddenly decide to keep up their new homes?

Source: James Bovard, "HOPE-less Policy: Big HUD Project Gives the Poor Keys to Posh Pads," Investor's Business Daily, August 3, 2000.


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