Housing and Rent Control

Robert Kuttner (“We Need More Housing, Not a Federal Attack on Local Rent-Control Laws,” Op-Ed Page, Jan. 12) criticizes the Reagan Administration for proposing that federal dollars not be spent on rental housing rehabilitation in communities that control the rents charged by private rental property owners. He claims, first, that this violates the Administration’s commitment to federalism and local determination, and second, that the Administration’s housing policies add to the need for rent controls. Let me set the record straight.

First, a commitment to federalism does not dictate that the federal government spend taxpayer dollars in places where local policies defeat the purpose of that spending. Research is virtually unanimous in showing that rent control leads to housing shortages and a deteriorating rental stock by making further private investment unprofitable.

Second, the charge that Administration housing policies contribute to the need for rent control tortures both facts and logic. Under the Reagan Administration, the number of households receiving federal housing subsidies has increased by over 2 million. Kuttner incorrectly claims that spending for housing has gone down since 1981. Actual annual spending (outlays) for the Department of Housing and Urban Development’s subsidized housing programs increased from $5.4 million in fiscal year 1980 to $11.3 billion in fiscal year 1987.

Kuttner has confused budget outlays--the annual amounts spent on housing assistance--with multiyear budget authority annually appropriated by the Congress. It is true that Congress has substantially reduced the budget authority appropriated for HUD’s subsidized housing programs as it has responded to Administration proposals to shift from extremely expensive housing construction programs to housing vouchers.


Even more of the neediest households could be aided if all federal housing programs were as carefully targeted as HUD’s programs. The Farmers Home Administration’s largest housing program, which subsidizes home ownership for over 1.3 million families in rural areas, is not designed to serve very low-income renters.

Even as we and the Congress continue our efforts to control the growth of federal spending, the Administration’s fiscal year 1989 budget will provide again for an increase in the number of low-income households receiving federal housing subsidies.




Office of Management and Budget

Washington, D.C.