Federal Housing Bill Is Legislative Jewel Obscured by Partisan Dust-Ups

When Congress and President Clinton agreed earlier this month on legislation to overhaul the nation’s troubled public housing system, they provided the rarest of Washington stories in 1998: one with a happy ending. But, fittingly in this year of high invective and low achievement, even the happy ending is bittersweet because it offers such a pointed example of what Congress and Clinton could have accomplished had this year been more about negotiation and less about investigation.

After three years of omnidirectional stalemate--Senate and House Republicans couldn’t agree with each other, and neither could agree with the administration--the housing bill’s passage represents a personal triumph for its chief negotiators: Rep. Rick Lazio (R-N.Y.), Housing and Urban Development Secretary Andrew Cuomo and Sens. Paul S. Sarbanes (D-Md.) and Connie Mack (R-Fla.), who patiently narrowed the distance between the combustible New Yorkers, Lazio and Cuomo.

Together they produced a bill that expands housing assistance, provides local housing authorities more flexibility to innovate and creates the opportunity to stabilize many public housing projects by attracting more working families. In the process, they demonstrated the way divided government should work, not with the two parties arguing to deadlock (as they’ve done on most issues this year), but with the contrasting priorities of each forcing the other toward new solutions and fresh approaches.

Each point in this triangular negotiation played a crucial role in the outcome. House Republicans, through their willingness to question the program’s basic principles, created momentum for fundamental reform. Senators of both parties moderated the House when it went too far. And Cuomo responded with both a commitment to the program’s historic mission of serving the needy and an openness to new means of achieving it.

The result was a sweeping, yet equitable, reform that neither side could have produced alone. Absent the need to negotiate with a Democratic president, the Republican Congress probably would not have maintained enough protection for the very poor. Absent the need to negotiate with a Republican Congress, the administration probably would not have gone far enough in reforming old arrangements protected by Democratic constituencies. “Had it been written purely by one side or the other, it would have been a less well-balanced bill,” says Rick Gentry, director of public housing programs at the Local Initiatives Support Corp.

This dynamic was most evident on the legislation’s most contentious section: the one intended to attract more working families back into public housing. Over the past 15 years, the working poor have been steadily driven from public housing by federal policies that gave preferences for new admissions to the most desperately poor and raised rents on residents as their incomes rose.

Although launched with the laudable goal of targeting resources toward the neediest, those policies instead isolated the very poor (most of them on welfare) in decaying and crime-ridden projects almost entirely without fathers or work or social stability. “The reality is that with well-motivated ideas, we ended up destroying public housing,” Mack says.

Henry G. Cisneros, Clinton’s first HUD secretary, was sensitive to the problem, but not so much so that he could change direction over the resistance of liberal groups that (with some cause) insisted on preserving the limited space in public housing for the neediest. The first impetus for broad reform came only in 1995, when Mack and Lazio advanced proposals to increase access to public housing for the working poor and reduce the share of vacancies reserved for the very poor. “We wanted to create an environment that made it much more likely that people could emerge from poverty,” Lazio says.

But Lazio’s plan went too far; under some circumstances, it would have allowed local housing authorities to direct virtually all vacancies to the working poor. With Cuomo arguing for the necessity of protecting the neediest and Mack playing a flywheel role, the two sides eventually reached a sensible compromise that reserves at least 40% of vacancies for the very poor (those making less than one-third of the median income).

Cuomo, who learned the importance of income-mixing during his days developing housing for the poor in New York, then improved the compromise by introducing a new element. It would do little good, he argued, to return working families to public housing if they were simply slotted into showcase new buildings away from the poor. He insisted on landmark language requiring housing authorities to integrate their projects by income and thus, effectively, by race as well.

This time, Republicans provided the necessary brake. Taken too far, Cuomo’s insight could prove counterproductive by forcing working families into the worst projects--with the result that few would actually return at all. Republicans reduced that risk with language preserving greater flexibility for families to choose the projects where they would live.

So it went throughout the bill, with each side challenging the other, and usually improving the result. The administration won a long-overdue increase in housing vouchers that help the poor pay rent in the private housing market, and fought off a misguided Republican effort to tilt that resource away from the neediest. Republicans won more freedom for housing authorities to set their own direction, free from micromanagement by HUD.

Most revealing were two far-reaching reforms that the two sides agreed upon without much argument. One was allowing poor people to use their housing vouchers not only to pay rent but also to buy homes; the other was protecting working families in public housing from rent hikes as their income rises. Both of those ideas underscore the potential of reform-oriented Republicans and Clintonite New Democrats to chart a common course around the principles of rewarding work and encouraging personal responsibility. That shared priority could allow for consensus on a broad range of other urban issues--if the two sides can sustain the commitment to results that allowed them to break ground on this promising new approach to housing the poor.