State policies and programs to preserve federally assisted low‐income housing

Abstract

Preservation of the existing assisted housing stock is likely to be a major housing issue throughout the 1990s and into the twenty‐first century. Federal legislation—the Emergency Low‐Income Housing Preservation Act and the Low‐Income Housing Preservation and Resident Homeownership Act—addresses the first wave of preservation needs and provides critically needed programs to maintain eligible units as assisted housing for the next 50 years.

This paper presents a brief review of federal preservation requirements and argues for state participation in the implementation of preservation programs. Seven areas are identified for state action, and leading state preservation programs are reviewed. Each state needs to ensure that a foundation is established to preserve these units over their useful life as decent, affordable housing. What the states learn from participating in the implementation of the federal preservation program will help them address future preservation needs and develop the capacity to manage the interdependent provision of assisted housing by the public, for‐profit, and nonprofit sectors.     

Public housing authorities: Determining an appropriate role in a national preservation strategy

Abstract

This paper examines the obstacles and issues involved in developing a comprehensive preservation agenda for public housing and explores the capacity of public housing authorities (PHAs) to meet the current and future demand for affordable housing. The paper discusses the current challenges facing the public housing program and PHAs and examines the roles and functions PHAs can assume in the current preservation and affordable housing crisis. Six specific roles for PHAs are included: resolving the equity/community dilemma, improving management, articulating modernization needs and carrying out modernization programs, preventing the loss of public housing units through sales and demolition, assuming management of privately owned subsidized housing, and developing new public housing. Although there is also much potential in nonprofits as providers of low‐income housing, they must be joined by PHAs in a comprehensive low‐income housing production and preservation strategy.     

The transportation-credit mortgage: a post-mortem

Abstract

Over the past decade, public housing has become the nation's “housing of last resort.” This article examines the emergence of this social role and describes the conditions of resident economic and social distress that have accompanied it. In this context, the article also evaluates the problem assessment and recommendations of the National Commission on Severely Distressed Public Housing, which released its final report in August 1992. This evaluation is used as the basis for proposing a new social role for public housing defined around the concept of social capital.

The commission correctly identified concentrations of resident distress, such as high proportions of extremely poor and female‐headed families, as a major problem facing distressed public housing. However, the recommendations of the commission were much less satisfying. Rather than confronting directly the tenant selection policies that have produced these aggregations of resident distress, the commission held to an unrealistic optimism that social services and economic development initiatives could relieve these conditions. For changes in public housing tenant selection policies to occur, an alternative social role for public housing must be defined. Under this alternative role, a primary objective of the public housing program would be to give residents access to social capital. Such an approach would ensure that families of the working poor are integrated with the nonworking poor in public housing developments, thereby fostering those sinews of community connection and trust the essential features of social capital and the sources of hope and opportunity.     

Preservation policies in perspective

Abstract

This paper looks at the housing stock serving low‐income households and provides recommendations for future analysis and action. It concludes that too little attention is being paid to preserving the stock of unassisted units affordable by very low‐income families. This stock has shrunk in recent years, while the number of poverty‐level families has increased. Several recommendations for action by local governments are enumerated. Moreover, while much attention is focused on preserving projects developed under early federal assistance programs, policies for preserving units developed under the Section 8 program are needed to preserve owners’ incentives for maintaining these projects. Additionally, preservation issues must be considered in designing any new production programs. The paper outlines one option for a new program with a radically simplified financing structure.     

Preserving the low‐income housing stock: What nonprofit organizations can do today and tomorrow

Abstract

In recent years, nonprofit organizations involved in housing have multiplied in number and expanded the size and scope of their activities in low‐income housing preservation. Newly available data show that nonprofits now constitute a significant sector in the upgrading, maintenance, and management of affordable housing and continue to focus their efforts on serving those most in need. Analysis also indicates that the potential exists for significant further expansion of their activities in the short and medium term. While nonprofits cannot by themselves meet the enormous needs for preserving low‐income housing, they can be major contributors, particularly if carefully designed expansion of federal support for projects and operations comes to complement their current resources.     

The challenges facing public housing authorities in a brave new world

Abstract

Public housing authorities (PHAs) are entering a brave new world. Major proposed changes to the public housing program will force PHAs to compete with private sector providers for tenants. To succeed, they will have to act more like entrepreneurial market participants: to change their management practices, the types of tenants they house, and the kinds of developments they operate, and to attract private capital for the development and operation of public‐private public housing ventures.

PHAs must confront the challenges of transformation while pursuing four mutually conflicting goals: housing the neediest, achieving diversity of tenantry, cross‐subsidizing by attracting unsubsidized tenants, and attracting private capital. Success, or even survival, may require sacrificing one or more of these goals. Whether PHAs can increase housing production to such an extent that they can provide sufficient housing for the neediest while fulfilling the other goals as well remains unclear.     

Homeownership and Wealth among Low- and Moderate-Income Households

Abstract

Although currently neither politically nor fiscally feasible, the notion that access to inexpensive, presumably high‐quality housing should be a government‐guaranteed universal right would be a terrible idea even if it were popular and affordable. The proposition fails on three counts. It isn't necessary. It doesn't make economic sense. And, most compelling, were such a policy to be implemented, its putative beneficiaries would not thank us.

Even if we should not promulgate “a right to decent, affordable housing,” we want to assure that all Americans have access to decent, affordable housing. Happily, we can count on the private housing market (coupled with rising prosperity) to serve 95 percent of the country's households. Serving the remaining 5 percent requires concerted measures to scale back onerous housing regulations that prevent the private housing sector from meeting the needs of lower‐income and untypical households.     

State and Local Fiscal Sustainability: The Challenges

At the state and local level, fiscal sustainability is the long‐run capability of a government to consistently meet its financial responsibilities. It reflects the adequacy of available revenues to ensure the continued provision of the service and capital levels that the public demands. After examining separate revenue and expenditure trends for state and local governments, this article identifies three specific sets of pressures that affect subnational fiscal sustainability—cyclical, structural, and intergovernmental. It then presents three specific examples of these pressures: Medicaid, pensions and retiree health benefits, and infrastructure. The author asserts that without changes in the fiscal system—in both revenues and expenditures—state and local fiscal sustainability will disappear. It concludes with some potential solutions but argues that the most difficult reform is to ensure that the public understands that there is no such thing as a free lunch.     

Comment on Jill Khadduri's “should the housing voucher program become a state‐administered block grant?” A housing voucher block grant is a bad idea

Abstract

Khadduri argues for a well‐designed voucher block grant, phased in over several years. But proposals under consideration are more likely to undermine the effectiveness of vouchers than address their limitations. The most important advantage of housing vouchers is that they give recipients the freedom to choose the kind of housing and the location that best meet their needs. Although the current program is not living up to its potential, strategies for making it work better can be implemented without a block grant. Supporters of block grants claim welfare reform as a model, but none of the factors that contributed to declining caseloads under Temporary Assistance to Needy Families apply to housing. The single biggest problem with the housing voucher program is that federal spending for affordable housing is woefully inadequate. Instead of addressing this issue, a block grant would make housing hardship a state rather than a federal problem.     

Changing occupant characteristics in rural public housing in the Great Plains: 1977 to 1996

Abstract

Housing quality and affordability are growing concerns in rural areas, particularly in regions affected by economic restructuring and population decline. This article uses data from the U.S. Department of Housing and Urban Development to assess changes in the characteristics of nonmetropolitan public housing residents in the Great Plains between 1977 and 1996.

Results indicate that public housing occupants were younger and more racially diverse in 1996 than in 1977. Also, a larger proportion received welfare benefits in addition to housing supplements. (In 1977, few households received both types of assistance.) Regression models reveal a significant positive relationship between changes in county population, unemployment rates, and economic designation and minority representation in public housing. Implications include the need for flexible measures that meet the changing needs of subsidized households. The characteristics of these households in the Great Plains region indicate the need for both region‐specific and coordinated housing and welfare policies.     

Does Urban Public Housing Diminish the Social Capital and Labor Force Activity of Its Tenants?

This paper investigates the effect of urban public housing on the social capital and labor force activity of its tenants using cross‐sectional survey data from the Multi‐City Study of Urban Inequality (MSCUI). A structural equation model of the hypothesized direct and indirect effects of public housing and neighborhood disadvantage on social capital and labor force activity is specified and fitted to these data. The modeling results suggest that urban public housing is strongly associated with neighborhood disadvantage but has little or no direct effect on either social capital or labor force activity. And while public housing may have indirect effects on social capital and labor force activity through neighborhood poverty, these indirect effects appear to be small. These findings have implications for the current emphasis in urban public housing policy on moving residents into the private housing market and reducing poverty concentration. © 2001 by the Association for Public Policy Analysis and Management.     

Shifting Priorities: Participatory Budgeting in New York City is Associated with Increased Investments in Schools,Street and Traffic Improvements,and Public Housing

ABSTRACT

In participatory budgeting (PB), residents instead of public officials decide how public money is spent. PB may reveal that residents prioritize different investments than public officials, which could lead to more socially just spending. However, little research has examined whether and how PB shifts spending priorities. This study leverages publicly available records on New York City council districts’ capital project allocations over ten years (2009 through 2018), comparing spending within and across PB and non-PB districts. Multi-level regression models show that, on average, when council districts adopted PB, greater proportions of their discretionary capital budgets were allocated to schools, streets and traffic improvements, and public housing. PB was associated with decreases in spending on parks and recreation projects and housing preservation and development projects. The article shows that priorities shift when residents are directly involved in budgeting. Implications for equity and community well-being, and directions for future research are discussed.     

RTC's affordable housing program: Reconciling competing goals

Abstract

Congress gave the Resolution Trust Corporation (RTC) authority to sell modestly valued housing at below‐market prices and with concessionary financing to enable lower income families to become homeowners and to expedite sales. Nonprofits and public agencies seeking to buy properties for occupancy by lower income people also qualified for these favorable terms. Setting a precedent for future housing policy initiatives, Congress conditioned access to this special program on the imposition of permanent low‐income use and affordability restrictions.

This paper considers whether the RTC can reconcile its mandate to maximize preservation of affordable housing with its duty to maximize return on assets and minimize negative impacts on local markets. This issue is addressed through a comparative review of property disposition programs administered by three other federal agencies. The author concludes that the RTC's three goals can be harmonized and suggests criteria for evaluating the RTC's performance in meeting its affordable housing mandate.     

Comment on David Listokin,Barbara Listokin,and Michael Lahr's “The contributions of historic preservation to housing and economic development”: Historic preservation in a neoliberal age

Abstract

Listokin, Listokin, and Lahr argue that historic preservation can function as a community development tool, but there are numerous deficiencies inherent in this method that make it a less‐than‐desirable way to revitalize. Historic preservation generally leads to gentrification that in turn displaces many low‐income households. The historic rehabilitation tax credit also represents a circuitous means of providing affordable housing that would be more effectively delivered through direct subsidy.     

Comment on Roberto G. Quercia and George C. Galster's “The challenges facing public housing authorities in a brave new world”

Abstract

We find Quercia and Galster's article on reforming public housing an intriguing academic exercise that contains some key insights useful to practitioners. However, the article fails to consider several key elements in the provision of assisted housing that make their “constrained quadrilemma” much less problematic than they assume.

The article ignores the tenant‐based certificate/voucher approach to meeting the housing needs of low‐income and very low income persons and households. This is a significant oversight, in that many public housing authorities (PHAs) manage a larger portfolio of certificates than of PHA‐owned housing. If the litmus test of the success of public housing's “reinvention” is the extent to which it is able to maximize both the number of low‐income households served and their social and geographic integration, then public housing's extensive use of certificate/voucher programs demonstrates a road out of the quadrilemma.     

The Gautreaux Legacy: What Might Mixed‐Income and Dispersal Strategies Mean for the Poorest Public Housing Tenants?

Abstract

The current transformation of public and assisted housing reflects the legacy of the Gautreaux case, which created the first mobility and scattered‐site programs. Mixed‐income and dispersal strategies now dominate federal housing policy, although their focus has shifted. Drawing on evidence from two preliminary studies of public housing transformation in Chicago, we argue that these new strategies seem to offer benefits for distressed public housing communities but also involve risks for the most vulnerable current tenants. Increased screening and/or the need to compete with private market tenants may force these families out of the assisted housing market.

Addressing the complex needs of the most troubled public housing tenants will call for a more comprehensive solution. The intent of the Gautreaux case was to increase opportunity and enhance quality of life for public housing tenants; policy makers should take steps to ensure that current programs reflect these fundamental goals.     

Public housing and the American dream: Residents’ views on buying into “the projects”

Abstract

This article examines residents’ attitudes toward homeownership in five large inner‐city public housing projects composed of multifamily apartment buildings. Based on 267 interviews with public housing residents in Boston, it contrasts their broad support for homeownership as a concept with their wholly mixed reaction to the idea of owning a public housing apartment. Interest in homeownership in public housing is shown to be independent of residents’ current employment status and closely tied to residents’ social investment in specific housing developments and to their perceptions about the quality of that development's management, maintenance, and security.

The findings cast renewed doubt on policies that would make public housing sales a centerpiece of national policy, but they provide qualified support for more modest efforts to increase homeownership in public housing developments and in low‐income neighborhoods around them.     

Combining historic preservation and income class integration: A case study of the butchers hill neighborhood of Baltimore

Abstract

For the past several decades in the United States, a tension has existed between the goals of historic preservation, the provision of affordable housing, and the creation of mixed‐income neighborhoods. Historic restoration for residential uses has often been associated with gentrification and the displacement of low‐income residents. This article examines the public and private sector support system for combining historic preservation with the creation of affordable and mixed‐income housing and neighborhoods and analyzes the strategies and experiences of the Baltimore neighborhood of Butchers Hill in taking this approach to community re‐vitalization.

Using historic preservation as a catalyst for community revitalization requires a comprehensive approach to prevent displacement of low‐income residents. In Butchers Hill, the mixed‐income community that was created was an outgrowth of conflict between two community‐based organizations. The case eludes simple typologies of gentrification and indicates the need for additional study of the dynamics and benefits of mixed‐income neighborhoods.     

Beneficiaries of federal housing programs: A data reconnaissance

Abstract

This article reports on a reconnaissance of information systems containing data on the beneficiaries of direct and indirect federal housing expenditures. It covers data in the U.S. Departments of Agriculture, Housing and Urban Development, Veterans Affairs, and the Treasury; the Resolution Trust Corporation; financial regulatory agencies; and secondary mortgage market actors.

Data varied widely across agencies in availability, accessibility, and quality. Data are more systematically collected for low‐income beneficiaries of housing programs than for the more affluent beneficiaries of indirect housing expenditures. The systems need improvements in data quality and coverage and database format, though they have improved recently. Many research topics can be explored with new and underused data systems: the characteristics of beneficiaries of rural housing programs, urban rental housing programs, low‐income homeownership programs, and mortgage guarantee and insurance programs. But the lack of information on the systems themselves makes data difficult to locate and access.     

The HOPE VI Program: What about the residents?

Abstract

During the 1990s, the federal government dramatically changed its policy on housing the poor. Under the HOPE VI (Housing Opportunities for People Everywhere) Program, the U.S. Department of Housing and Urban Development intended to address the concentration of troubled low‐income households in public housing by moving away from its reliance on project‐based assistance and promoting instead the construction of mixed‐income housing and the use of housing subsidies.

This article presents important evidence from two systematic, multicity studies on how the original residents of HOPE VI developments have been affected by this radical new approach to public housing. While many residents have clearly benefited, the findings raise critical questions about whether the transformation of public housing will achieve its potential as a powerful force for improving the lives of low‐income families.