Make It Permanent

Confronted with big deficits and big demands, Congress is in no mood to approve major new government spending on housing. There is a way, however, to stimulate substantial private investment. Extend--permanently--the low-income housing tax credit.

Created by the Tax Reform Act of 1986, the credit has generated funds for an estimated 150,000 units of safe, decent and inexpensive housing. New apartments have been built; squalid and dilapidated units, refurbished. Poor families, senior citizens, disabled men and women and homeless people have benefited in nearly every state. There has been progress, but the need for additional rental housing at the very lowest end of the market has remained great.

Unless Congress acts, the tax credit is scheduled to expire this year. Senate Majority Leader George J. Mitchell (D-Me.) and Sen. John C. Danforth (R-Mo.) are taking the lead. Their bill, introduced Thursday, would make the tax credit permanent and make it easier to preserve the low rents for 30 years, double the original requirement. Identical legislation, introduced last week in the House by U.S. Rep. Charles B. Rangel (D-N.Y.), would assure more housing for the poorest Americans, those who must make ends meet with a welfare check, a disability check, a Social Security check or a paycheck based on the minimum wage.

Extending the tax credits is expected to cost $55 million in 1990, $220 million in 1991, $295 million in 1992 and $325 million in 1993, according to estimates from the Treasury Department. California’s lawmakers should require little convincing. Sen. Alan B. Cranston (D-Calif.) is among the 54 co-sponsors, and with good reason. Private investors have pumped $17 million into the California Equity Fund administered by the nonprofit Local Initiatives Support Corp. The result has been new or reclaimed housing at rents from $175 to $500 per month for nearly 3,000 very poor people, including families with children and homeless adults in Los Angeles, San Francisco and surrounding communities. And, more housing--hundreds of units--has been planned.

Thirty men and women are among the beneficiaries. They live at Genesis, a remodeled single-room-occupancy hotel, that was dedicated recently on Skid Row in downtown Los Angeles. An innovative partnership between two suburban congregations, All Saints Church in Pasadena and Leo Baeck Temple in West Los Angeles, prompted the renovation with guidance from the Los Angeles Community Design Center and Las Familias, which provides services for homeless families. Genesis was financed with private dollars raised through the California Equity Fund, gifts from private foundations, funds from the congregations, loans and public money allocated by the city’s Community Redevelopment Agency.

The renovated hotel is more than a set of rooms. Equipped with a kitchen, laundry room and community room, it is a safe and affordable oasis. It is a project worth repeating. The Church & Temple Housing Corp. is already at work on two additional Skid Row hotels. Others should follow that lead.

Millions of poor Americans need better and less expensive housing. Federal budget restraints--and politics--prohibit massive new spending. Tax credits, the only remaining federal tax incentive for low-income housing, generate greater private investment and stretch scarce local funds. Congress should make the low-income housing tax credit a permanent support.