After decades of underfunding, neglect and political abuse, America’s public housing stock is a vestige of its former self, the remnants increasingly forced to rely on private developers to survive. In December, Congress tripled the size of the experimental Rental Assistance Demonstration (RAD) program, which will place 185,000 units of the nation’s public housing supply in the hands of private developers in exchange for capital improvements.
The program attempts to address the most egregious failures of previous public-private partnership policies. But many advocates remain ambivalent — particularly because private funds are needed only because Congress has continually cut funds for public housing.
RAD is just the latest policy in a decades-long push to subcontract the housing safety net to nonprofit or private sector actors because of the perceived inability of the public sector to maintain it. But contrary to widespread belief, there is strong evidence — as in two small postindustrial cities, Chester, Pennsylvania, and Camden, New Jersey — that well-run bureaucracies, when sufficiently funded, can provide better housing for the poor than the private market.
Crucial for struggling cities
There are few legacies of the New Deal that have been more broadly maligned than those that established America’s public housing. The initial flaws and missed opportunities of the Housing Act of 1937 handicapped our government-provided housing safety net but are rarely part of the conversation, as are the pervasive neglect and poorly crafted policies that followed, especially as public housing populations became blacker and poorer after the 1950s.
Still, in many cities nationwide, public housing remains an integral part of the safety net. Well-run housing authorities have an essential role to play both in hot real estate markets such as San Francisco and New York and in deeply depressed cities such as Chester and Camden.
The latter cities show how crucial public housing is and how it can work — when done right. Both suffer from astronomically high unemployment and poverty rates. Housing markets are correspondingly weak: The median home sale price in Chester in 2012 was just $20,000, and in Camden the median sale price fell from $65,000 in 2006 to $30,548 in 2013. The majority of residents rent in both cities (61.5 percent and 60.8 percent, respectively) and a majority of households spend more than 35 percent of their income on housing.
For private landlords in such markets, there aren’t many incentives to provide high-quality low-income housing. In such cities, “people who are poor cannot make ends meet while paying what it costs to live on the private market,” said Allan Mallach, a housing and planning expert with the Center for Community Progress. “That’s not a function of predatory landlords, although I’m sure there are plenty of them. It’s a function of the reality of what it costs to maintain housing.”
There are, of course, small-scale landlords who operate with integrity, though the imperatives of the marketplace do not make it easy for these good-faith actors. Housing authorities frequently subcontract some of their holdings to private management groups to save on labor costs. These often include the well-regarded, large-scale affordable-housing developers that have arisen as the federal government increasingly emphasizes public-private partnerships.
But affordable-housing developers rely on forms of government support that are less than comprehensive. The low-income housing tax credit (LIHTC), for instance, evaporates after 10 years; units can usually be targeted for a wider income bracket and need be affordable for only 15 years.
“You won’t be able to subsidize as much per unit, so you won’t be able to subsidize very low-income people,” said Edward Goetz, a housing policy expert and the director of the Center for Urban and Regional Affairs at the University of Minnesota, describing housing developed under the LIHTC program. “The advantages of project-based public housing are its permanence and the fact that the subsidies can reach those with the lowest incomes.”
Reform is possible
But there is an important caveat — and lesson learned — when it comes to Chester and Camden that applies to many other cities too. For much of the 20th century, the housing authorities of the two cities were anything but conscientious. Patronage appointees there grotesquely mismanaged public housing — a legacy of the 1937 legislation, which provided local political elites with impressive power over the location, staffing and management of public housing. It took serious-minded reform efforts, sparked by tenant protests, to turn both systems around.
Policymakers have learned the wrong lessons from the United States’ mid-20th-century experiment with government-provided housing.
According to the executive director of the Chester Housing Authority, Steve Fischer, for decades the city’s housing stock was so neglected that few people wanted to live under the authority’s purview. Similarly, in the 1980s and ’90s, roughly one-third of Camden’s public housing stock was allowed to fall into ruin by the agency, according to Tom Knoche, a professor affiliated with Rutgers University at Camden. He participated in actions in the ’80s in which activists broke into deserted authority buildings to prove that the heat, electricity and water still worked and they were being needlessly neglected.
In Chester reform was imposed by a judicial takeover of the housing authority in 1994, prompted by the tenant-initiated civil action Velez v. Chester Housing Authority. U.S. federal Judge Norma Shapiro restaffed the authority with effective bureaucrats who have overseen the rehabilitation or rebuilding of most of its housing stock. On Dec. 31, she announced that because of dramatic improvement in performance, the court was ending its oversight of the authority.
In Camden the housing authority was taken over by the Department of Housing and Urban Development (HUD) in 1997 after tenant protests. In 1999, HUD expelled the head of the authority, David A. Brown, after he used federal anti-drug money for a trip to Puerto Rico and purchased a fancy new car with public money for his official use.
Brown’s replacement, Maria Marquez, has overseen much-needed improvements to the housing stock, including rehabilitating or rebuilding many of the authority’s long-decrepit units. Today the housing authority is a more efficient operation. “Since Marquez has been the director, I think it’s been considerably better. There are a lot of people who are chronically poor and would be on the street if it weren’t for public housing,” said Knoche. “There is no question that the housing authority is critical in Camden.”
Time for Congress to act
Despite such stories of successful reform — and the continued, evident need for public housing — city authorities are being systemically starved of resources. According to HUD, the nation’s existing public housing stock requires $26 billion in repairs (PDF). But Congress is not only neglecting to allocate additional funds; it has cut funding as a result of sequestration. In an op-ed for The Philadelphia Inquirer, four small Pennsylvania authorities surrounding the city described losing 15 to 50 percent of their staff in recent years.
RAD is meant to address these manufactured budgetary shortfalls, but it will only preserve existing units and doesn’t expand the availability of affordable housing. In the midst of what former HUD Secretary Shaun Donovan has called “the worst rental affordability crisis this country has ever known,” RAD’s expansion is part of a budget that cuts many other HUD programs even further.
In depressed cities such as Camden and Chester, where nonsubsidized private sector landlords often fail to maintain properties, a well-run public entity is better suited to the task of providing and overseeing low-income housing. In booming cities such as New York, the public sector offers hundreds of thousands of units in neighborhoods low-income people would otherwise be unable to afford.
But policymakers have learned the wrong lessons from the United States’ mid-20th-century experiment with the sort of government-provided housing that has succeeded in many East Asian and Western European cities. In the public memory and in political discourse, examples of failure loom large — from the demolition of the Pruitt-Igoe housing project in St. Louis to Chicago’s Henry Horner homes, immortalized in Alex Kotlowitz’s book “There Are No Children Here.” This narrative ignores the flawed legislation that handicapped U.S. public housing from the start and the neglect and policy failure that followed. The lesson isn’t that government is incapable of constructing and maintaining a housing safety net but that as long as its housing authorities are underfunded and waterlogged by local politics, doing so is a Sisyphean task.