America's Housing Challenge The Problem of Policy

...Model Cities and neighborhood development programs hud will review these requests to insure that they are consistent with the broad objectives set forth in the bill, the funds may be used to acquire land for housing, for example, to construct sewer and water facilities, and for an undefined but presumably wide range of social development projects The cities are given two additional very welcome promises First, if hud does not report on a block-grant application within 75 days, it will be deemed approved, second, no city will receive less, initially, under this new scheme than it would have under the old urban categorical grants The shift in emphasis to local policy making could turn out to be illusory, however While the required speed of the hud review will make the maddeningly detailed inspection of past social programs impossible, other Federal agencies?especially in the area of environmental controls—retain the statutory right to set standards for the cities In a sense, the reduction of hud's role as overseer makes the cities more vulnerable to the imposition of rigid and unrealistic standards by officials who are not primarily dedicated to community development and housing This is an ominous threat, given the harm that the environmentalists are already doing to the cities and their economies A second, subtler threat in the block-grant technique follows from the prevailing weakness of city governments today, in the twilight of the political machine Their ability to accomplish the unpopular is limited Unsupported by the crutch of Federal standards, local municipalities must publish their own priorities for spending the grant money, thus inviting their various departments to battle each other for the spoils The danger to local autonomy is that ultimately the courts might be called on to rule which programs best fulfill the community development objectives of the act, or whether the choices made by the municipal government meet its standards for decision-making All of these possibilities, and many more, must be in the minds of hud officials as they draw up the regulations that will guide the department m administering the law Local administrators, experienced in dealing with the Federal government, are awaiting the final publication of the regulations, for these, more than the statute itself, will determine the impact of the Act Turning to the housing part of the bill, we find in it a vast expansion of an existing program—pubhc-housing leasing—that is essentially designed to augment the purchasing power of the low-income customer rather than to stimulate the production of more new or rehabilitated units The sponsors of the legislation would of course say that increasing consumer buying power will m time furnish an incentive to the producer Unhappily, this fails to take into account that the housing allowances proffered have but a five year lite, renewable for a maximum of 20 years, a term far too short to encourage mortgage lending Moreover, the bill's architects seem to have ignored the general demoralization among the owners of rental housing for investment purposes The new law falls far short ot providing the producer subsidies —low-cost mortgage loans, for instance, or higher permissible returns on equity investment in subsidized units—needed to strengthen the currently depressed housing industry It appears to have little bearing on the development of smaller, owner-occupied rental buildings And it commits what this observer regards as a colossal blunder by seeking to end, within a short period, any further development of publicly owned housing Taken in its entirety, the 1974 act offers little hope of a forceful institutional push for housing On the fiscal front, though, it does offer local governments the option of selling municipal bonds without the present tax-exemption feature, in return for a hud subsidy of up to one-third ot the interest cost How the precise amount would be negotiated is not stipulated, but clearly this is a move intended to substitute conscious policy-making tor the blindness of the past As for social policy, the bill's position is generally to remain silent But the abolition of public housing implies that representatives of different income levels will be intermingled in the same structures The stipulation of quite low income limits for the recipients of its housing allowance scheme seems intended to help the poor primarily But that, of course, will depend on the realism with which the size of the maximum rent subsidy is determined Most of the unrealistic social policy of the past 15 years (the obstacles to reasonable tenant selection, the insistence on positive integration that rules out much new construction in areas of minority concentration despite local wishes, etc ) remains in force In fact, as the bill stands today, under the community development section, municipalities may be encouraged to purchase prospective housing sites with Federal funds, only to find after acquisition that the land is not acceptable under the housing section Nevertheless, in repeahng the Brooke III amendment—so named after its sponsor...

...Senator Edward Brooke (R -Mass )—that had been attached to the previous housing act, the new measure makes one advance in the direction ot sound social policy Under Brooke III, welfare recipients in Federal low-rent public housing projects could not be required to pay more than 25 per cent ot their total welfare benefits as rent, even when the state included in their checks a sum exactly equal to their rent, in addition to the full family allowance for all other personal expenses This provision used to cost the New York City Housing Authority about $15 million per year in rent rebates to welfare recipients, and it caused an exodus of welfare tenants from the city's state-subsidized public housing projects Yet it was ineffectual as social policy, since it gave no serious inducements for improvement to states that were doing badly by their welfare recipients, it merely penalized the more generous states Most local officials have ambivalent feelings about the social policy objectives of the national government in housing Some of these policies would never have been widely accepted without the Federal initiative, and some have unintentionally worked to hinder the provision of good housing for those who need it most Requiring a project to accommodate people of widely disparate incomes, offering white families special inducements to inhabit an area so that its racial balance may be improved, establishing a set of "site selection criteria" that would ban Federal subsidies for building improvements in neighborhoods where nonwhite populations and political power are concentrated—these measures, whether dictated by the courts or the Congress, are properly blamed for adding to the difficulty of supplying decent homes for the poor The courts, in particular, have handed down a series of decisions that have complicated the management ot housing projects by impeding the eviction of troubled and troublesome families—to the distress of the neighbors ot those offending families The courts have proscribed the use of racially unbalanced sites for housing even though they themselves could not identify better ones They have also issued flagrantly conflicting opinions with respect to tenant selection for publicly assisted housing The effects of these decisions in the housing field urgently require examination by the legal scholar and the public official, their implications are obscure not only to the people as a whole but to those most concerned about social problems Yet even when the housing official throws up his hands in dismay at the footless invention ot new social policies, he cannot dismiss the significance of social policy per se in making national housing programs possible Congress must design its subsidy procedures realistically, it must encourage the emergence and survival ot a housing industry, it must appropriate ample funds to meet the goals and regulations it adopts At the same time, legislative devices must contain the expression of a policy—a sense of what is good and right One cannot prove that the United States will be measurably better off if the small part of the population not now adequately housed were to be given satisfactory homes Nor can one prove that it is only wasteful to try to house satisfactorily that much smaller group of families whose destructiveness imperils their neighbors and their physical surroundings The national policy must somehow be framed to assert the importance of housing the poor without promising that this achievement will solve all the other social problems ot the day A social policy based on such a theory is as absurd as attempting to alter the spinning of the earth by flicking one's finger at a compass needle and expecting it to move the north pole But without some sense of moral urgency, some dedication to the notion that it is important to do better for those inadequately served, some ot the challenge, the fervor, even the purpose of American life will have been allowed to rust...

...THE PROBLEM OF POLICY ' Revenue sharing" may represent an exit sign from the public theater in which the drama of Federal and local interaction on social policy is being played Handing over the money and letting the "cities do best what they know best how to do" offers a convenient way out for the Federal government, at least from its responsibility for prescribing local goals m community development activities Though housing financing programs continue to be controlled by Washington, the danger is that the national government will eventually choose to opt out of setting housing policy as well Or, worst of all, it may insist upon an unworkable policy and abdicate its financing responsibility The Housing and Community Development Act of 1974, signed by President Gerald Ford in late August, presents a mixed bag of promises and threats to the local housing administrator To start with the promises, one must immediately be grateful for its authorization of larger expenditures?11 9 billion over three years—than many urban officials had expected The community development part of the act gives cities, towns and other population groups, such as Indian tribes, the opportunity to seek "block" grants from the Federal government, no matching of local funds is required, as was the case with the specific "category" grants of the urban renewal...