Maligned Public Housing Remains the Answer for Some

Fifty years ago Congress passed the National Housing Act, a landmark piece of legislation that was the beginning of the country’s low-rent public-housing program. Since then federal housing programs have been expanded to include a wide variety of other subsidy approaches, both publicly and privately administered.

The most recent strategies have shifted from traditional production subsidy programs, which directly support the construction of new housing often stigmatized as “projects,” to portable subsidy mechanisms to help families rent existing private apartments.

Out of this shift has emerged the glamour program of housing vouchers. Vouchers, which give the low-income family a means to subsidize the rent on a privately owned apartment, have been enthusiastically embraced by the Reagan Administration. Spokesmen like James C. Miller III, director of the Office of Management and Budget, argue that vouchers are much cheaper than building new housing, allow a more efficient way of directing federal aid and give the poor a wider range of options.

Yet there are real questions about the ability of the voucher program to work for everyone. In a hypothetical rental-housing market in which vacancies were evenly distributed to match needs and in which there were no property-owner biases against non-white participants and/or families with children, housing vouchers would work well. In such a scenario, locational choice opportunities for participants would be maximized, concentration of the poor in project settings could be avoided and federal subsidy could be precisely targeted to where need existed.

Unfortunately, in the real world vouchers do not reliably assist all of the needy. In fact, preliminary studies strongly suggest that housing vouchers work well only where there are significant vacancy rates in rental housing. Moreover, smaller white households obtain the greatest benefit, often paying as little as 10% of their incomes toward rental costs while larger minority families pay much higher proportions, if they find suitable housing at all.

Nor are housing vouchers really as inexpensive as the Administration claims. A recently completed study found that HUD paid an average of $23 more per voucher participant than it paid for Section 8 certificate program participants, a pre-Reagan-era subsidy program.

The savings envisaged come from the fact that the voucher program, as now structured, would make low-income participants absorb more of their rent increases while restricting the number of families qualifying for the program in the future.

Yet conventional production subsidy programs are not nearly so expensive as has been claimed, nor are they all replicas of the infamous Pruitt and Igoe projects in St. Louis, as program critics often imply.

Jordan Park, the oldest public-housing project in my city of St. Petersburg, Fla., contains 446 units (all low-rise). Since Jordan Park opened to the first residents in 1940, it has housed an estimated 10,464 households, an average of one new resident per unit every two years. The average per-household subsidy cost at Jordan Park, including debt service and capital improvement grants, has been $387 per year.

When all of St. Petersburg’s traditional public-housing units are considered and operating subsidies are included, the annual federal subsidy per unit is still only $1,512. By contrast, federal outlays for the housing-voucher program in St. Petersburg is just over $5,000 per unit per year. Because we own the traditional public housing, it will be a continuing affordable housing resource for low-income households, whereas vouchers establish no equity and provide no permanent resource.

If the Administration would now increase the too-low level of subsidies to conventional public housing, vast improvements could be made to render that program more viable for tenants. a

Some form of portable subsidy program should be in place to allow the use of available private units. But a balanced national housing strategy serving the needs of all low-income families must continue to offer subsidies for the production of new units. Bridging the affordability gap with portable subsidies alone will not solve the housing problem.