Vouchers Are the Best Way to Help Poor Find Housing
Will building new federal housing projects help the poor find decent homes? Not really.
An ample supply of housing units already exists. According to the U.S. Census Bureau, rental vacancies for 1987 are at 7.4%--the highest first-quarter rate in 20 years. The problem is not that the poor can’t find homes, it is that they can’t afford them.
Yet Congress wants President Reagan to spend $12.3 billion of your tax dollars over the next two years to add to the nation’s housing surplus.
That’s the wrong way to attack the problem. Low-income housing projects have a dismal track record. Neighborhoods rarely welcome them, so typically they are built in areas where no one else wants to live. The poor who move in often find that they are cut off from good schools, job opportunities, shopping and transportation. In effect, they have been shunted into concrete ghettos.
And these ghettos are not cheap. Most of the government’s housing construction subsidy programs involve long-term spending commitments, which require annual federal subsidies for the same housing units over a 20-to-30-year period. These programs lock the federal government into spending more each year without helping any additional poor tenants.
When the Reagan Administration took office in 1981, we discovered that the federal government’s long-term housing commitments amounted to almost $240 billion. Nearly $240 billion tied to a policy that was, for the most part, a failure! We had to find a better way.
The Reagan Administration believes that the solution to our housing problems lies in providing assistance directly to the poor through vouchers. Vouchers are superior to federal housing projects in every respect: First, they cost taxpayers only about half as much as new construction, which means that the government can assist nearly twice as many people for the same amount of money. Second, they are a more effective means of targeting federal aid: With vouchers, 84 cents of every $1 that the government spends for housing goes directly to the poor; tenants in government-subsidized construction receive only 34 cents worth of benefit from every $1 spent. Most important, vouchers give the poor a much wider range of options in selecting a place to live.
The Reagan Administration did not invent the voucher concept. Similar experimental programs were tested and found successful during the last decade. However, we have made significant improvements. As the program was conceived and first implemented, needy families were given certificates equal to the difference between 30% of their incomes and the prevailing fair market value of the apartments that they wanted to rent.
Certificate holders may rent any available housing in their communities, but the program contains a number of unnecessary and counterproductive restrictions. Certificate holders cannot supplement their certificates from their own incomes to rent better or larger units. Nor may they keep the surplus if they are able to find units that rent for less. And, since the certificates must be used in the community where they are issued, recipients are discouraged from moving in order to take advantage of job opportunities elsewhere.
The Reagan Administration’s voucher plan eliminates these restrictions. Voucher recipients are free to choose where they want to live and how much of their incomes they want to devote to housing.
If they are able to rent acceptable dwellings for less than the value of their vouchers, they can keep the difference. This gives recipients the incentive to shop around, which helps keep rents competitive. If, on the other hand, they want to live in a better neighborhood to take advantage of quality schools or other services, they may supplement their vouchers from their own incomes. The Administration’s voucher program also permits recipients to take their vouchers with them if they want to move to another community.
Thus vouchers provide housing assistance directly to the needy, and they do so with a degree of flexibility that is lacking in other federal programs. It is time to replace government paternalism with individual choice.
The success of the voucher program proves that poor families want the freedom to choose where they live and that they benefit from having that freedom. It does the poor no good for us to continue the costly and ineffective policies of the past. Congress should recognize that the case for vouchers is conclusive, and endorse the Administration’s approach to helping our needy citizens find decent homes.
