Dear Editor

...discussion is that housing programs and policies are forced to bear far too many of life's social, economic and psychological problems to permit any housing enterprise no matter how effective to be adjudged a success Ironically the Federal government's most successful housing program in history was brought to l crashing halt not because of its inadequacies but because it had reached a level of output that frightened officials when they added up the budgetary costs Under the 1968 Housing Act, support tor subsidized construction was threatening to rise from about $1 billion to more than $8 billion annually over the decade In 1971-72 the Federally assisted output of nearly 500,000 housing units year actually approached the nation s goals with Section 235 and 236 leading the way After a year s deliberation and another year to legislate a new housing program what do we have...

...Dear Editor Housing Challenge Roger Starr and The New Leader have performed a valuable service in presenting the special issue on "America's Housing Challenge What It Is and How to Meet It" (September 30) Unquestionably one of the nation s leading authorities on housing Starr has an unusual capacity to make technical and complex questions understandable to laymen, and hopefully even to politicians Yet in my view we have a long, long way to go before we can begin to take solace in census figures that indicate we are making progress on the overall housing front At the moment I do not see any improvement in the situation in New York City—on the contrary it is deteriorating As most people are beginning to understand housing is not simply a matter of supplying shelter but rather involves a vast number of socioeconomic problems and relationships at almost every level of society Though defining these is worthwhile m itself the absence of definitive solutions remains frustrating Even if money were not an obstacle—and it is d. major one—there are no easy answers to many facets of the housing challenge For example an influx of cheap capital would not change the prejudices of those who don't want to live next to people of a different color or of u. lower income level And as former hud Secretary George Romney discovered, it takes more than Federal funds to change building patterns Government involvement has never worked perfectly Sometimes it works better than others, but in recent times it has not worked well at all Yet despite all the difficulties, we cannot give up trying to devise programs that will enable everyone to live in decency As much as anything else, we need the commitment to keep trying With that commitment there may be a viable housing policy for the nation m the future New- ioik City Harold Ostroff Executive Vice Piesulenf, United Housing Foundation Those who keep up with Roger Starr's writing (as I try to) have always been struck by his rare combination of brilliance and lugubnousness Like a gifted sculptor who is most inspired when commissioned to carve the statuary for a mausoleum or like one of those artists who make their point by painting a beautiful woman in front of a mirror that reflects back a deaths head, Starr is at his best when he deals with the grim realities beneath political cosmetics and public illusions Now, in bis latest masterful essay, he tells us that the nation has adopted housing goals well beyond its political and economic means Political, because e/en if we had sufficient funds to reach the numerical objective, we have erected so many barriers, all for excellent The New Leader welcomes comment and criticism on any of its features, but letters should not exceed 300 words reasons—no family displacement nondiscriminatory tenant selection, the lowest possible rent-income ratios, minority dispersion, costly building codes strict envronmental standards, and the like—that failure is a certainty Economic, because given the explosive inflation of construction and operating costs piled on top of an already very expensive product there is simply no conceivable way of paying the bills entailed by the promise of "a decent home in a decent environment' for everyone Starr covers these impediments so thoroughly that I can only add a few supplementary comments The first is thai housing has never—with the possible exception of the years immediately following World War II?had a substantial popular constituency True the Congressional housing block is well supported by trade unions construction firms, materials suppliers, and professional associations But these are intermediaries who earn their livelihood from the manufacture of the product and form a sort of nonmilitary-industrial complex No large and grateful constituency of affected voters exists as in the case of social security or veterans benefits This lack of a mass constituency is inherent in the nature of new subsidized housing, since its recipients are (1) relatively small in number and (2) more likely to be resentful of what they get than thankful A legislature having, for instance, $200 million to spend on politically rewarding programs would always do better to use it to insure low mass transit fares than to subsidize say half the capital cost of 8 000 new apartments The former could be traded for large numbers of potential votes, the latter would result in 8,000 angry occupants (the joofs leak the rents are higher than advertised and where is that promised school) at least two law suits and the displeasure of architectural critics With regard to economics, the hard fact is that all previous cost-estimates for an equitable and comprehensive national housing program are hopelessly obsolete The sum of the annual subsidies needed to reduce capital and operating expenditures to acceptable monthly levels is already staggering and becoming worse all the time Only a few years ago, housing economists were talking of u $600-per-year subsidy for each of 6 million underhoused, a total of $3 6 billion Today, the figure for new (or relatively new J housing is closer to $3,000 per unit per year (perhaps as much as $4 000 in New York City) which would aggregate to an $18 billion annual burden Consequently, if subsidies were to be extended to all the housing-deprived (including another 6 million families with excessive rent-income ratios), the total would become a budgetary fantasy What this means is that declared housing goals will not be met regardless of which political party controls the government (actually the Nixon Administration allocated far continued on next page Dear Editor more for housing subsidies in its first three years than the Kennedy and Johnson Administrations did in seven) The one moratorium that housing could benefit from is on exalted rhetoric by Federal state and city officials For the foreseeable future, quantitative achievements will be only a fraction of our goal, the housing burden will rise relative to income and mortgage credit will remain a continuing problem The housing cause will be served best not by those with a penchant for devising grand national strategies, but by the "disjointed incrementalists" who are willing to make the tough trade-offs between competing ends and to seize a diverse range of available opportunities, even small ones—a little more rehab in this neighborhood and a little more mortgage money in another We must concentrate on salvaging existing projects through improved management rather than proliferating paper plans for new town-in-town This may not be a terribly exciting agenda, yet the closer one gets to administering actual programs fas Starr now is) the more useful it appears New York City Louis Winnick Dniston of Urban and Metropolitan Development, The Foul Foundation Instead of expanding upon the admirable discussion in your special issue on housing, I think it more useful for me to focus upon a few stark facts and policy recommendations The annual rate of housing starts during the first eight months of this year was almost 36 per cent below the 1972 peak, and nearly 22 per cent below the level achieved in 1950 by a much smaller economy with a lesser need The August 1974 rate itself was moie than 52 per cent below 1972 and more than 42 per cent below 1950 The rate for the period from the beginning of 1969 through the first eight months of this year fell more than 20 per cent below the annual goal of 2,316 000 starts for 1974-80 proclaimed by the Nixon Administration That target figure is, in my judgment a reasonable one It involves 1,316 000 units of traditionally financed private housing for middle-and high-income families about 500,000 units of lower middle-income housing with low interest loans and cooperative housing, and about 500,000 units of low-rent and low-cost-sale housing with public subsidy The chronic housing default has had an immense impact upon the nation's economy The unemployment rate in contract construction (including nonresidential commercial building, but predominantly housing) has persistently been about 60 per cent higher than that for the economy at large Measured in 1970 dollars., the gap between actual and needed construction from 1953-72 amounted to about $215 billion With its ramifying effects, this accounted for a total national production loss of about $430 billion, and a forfeiture of about 10 million man-years of employment opportunity Unless there are drastic changes in our national economic and social policies, the prospects for 1973-80 are comparably devastating To get housing out of the mire and back on the road (the 1974 Act and President Ford s new proposals are lamentably insufficient), we must immediately undertake three lines of action First, the effective rates of interest for middle- and low-income housing need to be reduced to at least half of the present level The prevailing monetary policy is inflationary per se, breeds economic stagnation and unemployment, and allocates credit with no regard for national priorities Second, to support the various types of required subsidies, we should now increase the annual rate of Federal spending for housing and community development by about $7 billion, and maintain this higher level at least until 1980 This means abandoning the insupportable dogma that the Federal deficit has been an important cause of the kind of inflation we have experienced m recent years and recognizing that restoration of sustained full employment and production is the only path to a balanced budget If total spending becomes excessive?which does not now appear likely—we should use taxation to reduce nonpriority spending Third and most important, we have to discard the false premise that we should sacrifice economic growth, essential services and full employment in order to restrain inflation Even if the thesis were correct, the losses and risks far outweigh the assumed gains But all the empirical evidence of the past 20 years shows conclusively that—given the institutional structure of the TJ S economy—stagnation and recession, short of a real depression, generate far more inflation than optimum real economic growth and reasonably full use of resources Washington, D C Leon H Keyserling Consulting economist and attorney, President, Conference on Economic Progress, Former Chairman, Council of Economic Adviser's Roger Starr has provided ?valuable panoramic view of U S urban housing problems In seeking to cover such a complex subject m only 32 pages, however, he inevitably had to forgo in-depth analysis of some significant aspects, and state general goals rather than remedial-action proposals Starr's description of money-market operations as they relate to residential financing, for example, ends with the need to mobilize housing resources on a sufficient scale without so increasing the demand for capital that it contributes to a more serious inflation-cum-employment than we already have The lack of a more specific residential financing remedy accords with his earlier expressed belief that, "while interest is not a perfect measure of social utility, it provides a means for choosing between alternative uses of resources " This overlooks the fact that an affluent family may readily accept high interest rates in purchasing luxury goods or services at the same time that-moderate-income family may not be able to afford the high interest rates required to obtain decent housing though the latter has greater social utility Unless we adopt more selective credit allocation policies, instead ot relying upon general monetary policies and market forces, we will continue to have a shortage of adequate capital at feasible interest rates for housing At several points where Starr touches upon the role of labor, his analysis suffers from an omission of relevant facts He foresees the possibility that housing s labor needs might in time severely tax the available pool of workers while recognizing that with an overall unemployment rate above 5 per cent there would seem to be no current danger of a construction manpower shortage The danger appears to be even more remote, however if it is noted that the unemployment rate in the building trades is currently 12 4 per cent—meaning 568,000 idle workers Starr criticizes the rules for apprenticeship and admission to craft unions Yet if the demand for skilled construction labor is expected to increase there is a corresponding need for training The building trade unions have established many apprenticeship schools to teach the skills necessary for such technologically advanced structures as atomic energy plants, oil pipelines and modern sewer and water facilities Entry into the unions, furthermore, is not confined to the apprenticeship systems Large numbers of craftsmen learn their trade on the job and are subsequently granted membership The discussion of the entrance of minority-group members into the construction trades is probably more descriptive of conditions a decade ago than today The AFL-CIO and its building trade unions are intimately involved m Federally supported manpower outreach programs in 120 cities, where they are recruiting and preparing minority members for admission to the unions Some 15 per cent of the apprentices in construction are now from minority groups, and among new entrants, the figure is above 19 per cent In the section on materials and technology, Starr asserts that the unions are notoriously interested in assuring workers an accustomed minimum of hours for work that cannot be eliminated or simplified, and that technological advances have been wiped out in part by rising labor costs This presents an exaggerated notion of the labor component in housing costs The National Association of Home Builders (NAHB) recently released figures showing that construction labor costs as a percentage of the selling price of a single-family home declined from 17 per cent m 1969 to 15 per cent m 1974 As a percentage of the total costs of home ownership including mortgage interest, taxes insurance, and maintenance, on-site construction labor accounts for only 6 per cent I certainly agree with Starrs conclusion that national policy must assert the importance of housing the poor without promising that this will solve all other social ills Shouldnt we, therefore, call for reactivation of low-income housing programs still on the books (ie, Section 235, Section 236 conventional public housing, and Section 202 senior citizen housing), and simultaneously endorse approaches like expanded public service employment, national health insurance and income maintenance to deal with other socioeconomic problems'* Washington, D C Henry B Schechter Director, Department of Urban Affair, American Federation of Labor-Congress of Industrial Organizations Roger Starr has done a superb job of sorting out the tangled strands that comprise America's housing problem grossly inadequate living conditions for some (but not all) low-income urban families m a country characterized by very good—and rapidly improving—housing conditions in general He quite correctly points out that no one single policy instrument is capable of swiftly resolving the difficulties, although housing allowances constitute a considerably more important element in the appropriate array of policies th^n he grants even in New York Starr's argument for outright public, rather than pseudopnvate, ownership in situations where 80-90 per cent or more ot the economic costs of the housing are financed by the government can be put even more strongly Whenever programs involve so much public funding, there seems to be a political necessity to circumscribe stimulants or incentives to private parties by all sorts of depressants, including delaying features that often prove fatal Designed to screen out unworthy would-be "profiteers" and other nonpoor beneficiaries, the depressants usually do so only at the price of crippling the program The ' trickling-down" or filtration of housing over time from well-off to less-well-off consumers has a role m policy, for it does occur and on a large scale Thus it is a pity that Starr does not make a general case for expansion of the housing stock across the board and against a peculiar New York syndrome he knows all too well—opposition to and obstruction of almost any new un-subsidized or lightly subsidized housing, on the grounds that it is not for the poor, as if heavily subsidized housing for the poor were an available alternative in every such instance What is worse, this kind of populist opposition is not infrequently founded on the nonsensical proposition that an effective continued on next page Dear Editor national housing policy requires the extension of heavy subsidies fairly high up the income ladder so that no one devotes more than a very low proportion of his earnings to housing It should be noted that a fair share of the urban buildings abandoned in recent years is the end result of the chain of events that began with a rapid expansion of the housing stock It is consistent with Starrs overall argument to hold that abandonment of the worst parts of the existing stock—following the succession process initiated by additional investment m housing by and for the affluent—is good, not bad Of course this conflicts with another populist myth that old structures deserve to be retained in the housing stock forever New Yoik Cttv Dick Netze Dean, Gi actuate School of Public Administration New York University Few persons have managed to capture in so few words the incredible complexities of 'Americas Housing Challenge as did Roger Starr m your special issue What emerges most clearly from his...

...more than 155,000 families were on the waiting lists They were applying for decent safe, comfortable apartments, the kind of housing the public corporation I am now privileged to head has been providing for the last 40 years Today...

...Very simply a plan whose annual cost to the Federal government is expected to average $3,300 per family, more than double the figure for Section 236 This is a curious substitute for terminated housing programs that had become too "costly" and were considered ' inequitable" because their benefits reached too few persons One can be sure that, if the new legislation is fully financed and prosecuted with any vigor the same questions of cost and equity will be political issues in 1977-78 The 1974 Housing and Community Development Act nevertheless contains major corrections of its predecessor s faults The new Section 8 subsidy program breaks the linkage between housing production costs and a family's ability to pay that caused weird convolutions in administering Section 236 As inflation pushed monthly rents from $30-40 to $50-60 per room, the old plan was forced to service a progressively smaller, and to be sure the highest earning, portion of the "moderate-income" sector it was designed to help In contrast, Section 8 will service all families within a low-to moderate-income spectrum With only a single rent requirement —payment of 25 per cent, reduced to as little as 15 per cent in some cases, of family earnings for rent In a single stroke, this will wipe out the current problem of finding tenants able to afford new housing The tie-m of the 1974 Act's community development funds to housing is a major conceptual advance Yet the freedom of local officials to allocate these moneys as they wish cuts two ways, as Starr noted Communities that have some experience with housing and development programs should be able to manage their efforts more efficiently to save existing neighborhoods instead of letting them decay while frantically building new housing in other areas At the same time localities that lack the inclination or experience to deal with their housing and development problems will tend to waste their community development funds—food for the scandals ot 1976-77 Still, the increased availability of Federal resources at the local level certainly should help communities nurture a willingness as well as the capacity to address their needs New York City Frank S Kristof director Division of Economics and Housing Finance, New York State Urban Development Corporation Roger Starrs impressive review ot the American housing scene depicts with accuracy and eloquence our past and our present but seems reluctant to project for the future the fairly grim picture suggested by his own material In housing, as in education or the administration of criminal justice, we are beginning to realize that the difficulties are more intractable than they once appeared and that om euphoric expectations of just a few years ago were unrealistic As Starr notes complex social problems are not necessarily solvable by purely 'brick-and mortar" answers and the financial 'facts of life" ot the housing industry cannot be divorced from those of the economy at large The heart-breaking rise in construction costs ("both absolute and relative to average income ) is pricing not only the poor but larger and larger segments of the middle class out of the market for new housing and will increasingly make the two groups competitors for older buildings As a result, the preservation of the existing housing stock will become even more important in the years ahead (In this regard since use of "the stick" has reached the point of diminishing returns, I had hoped that Starr would offer some imaginative new "carrots") Meanwhile, the cost of maintaining existing structures—including fuel, utilities, labor, materials and the refinancing of expiring mortgages—has also undergone a truly staggering increase that casts ?frightening shadow into the future We seem destined to face lower housing standards, higher occupant densities (fewer square feet per person) and a higher percentage of gross income spent for shelter Governmental controls irate rent strikes and antilandlord editorials cannot stem the rise in housing costs or relieve the burden it places on the poor Indeed, at the moment we simply do not have solutions that are both effective and politically acceptable, Starr's excellent analysis highlights the desperate and continuing need for frank and realistic discussions that might help find them Nee York City Daniel Rose Rose Associates When Mayor John Lindsay appointed me Chairman of the New York City Housing Authority on June 1, 1973...

...17 turbulent, frequently discouraging months later, the lists are longer and the need for housing that low- and moderate-income families can afford is even greater These months have seen us pressing the Federal government for new construction and operating subsidies as never before Nothing less will make a meaningful dent in the nation's current housing crisis This is the context in which I read Roger Starr's extremely cogent analysis of "America's Housing Challenge,1 which deserves the wide circulation I am sure it will receive I know of no one more qualified than my old friend and colleague to evaluate the historic and contemporary issues that shape the problem—in both the private and public sectors As Starr points out, many professionals in the field are now awaiting hud's final regulations for the Housing and Community Development Act of 1974 Since this troubled year also marks the 40th anniversary of public housing, it seems appropriate to state some elementary truths about the program, at least as it has developed m New York since Mayor Florello LaGuardia founded the Housing Authority in 1934 Most important, for all its manifest problems, public housing has worked in this city And it has done so against tremendous odds, in the face of governmental indifference and, often, active hostility on the part of the general public Beginning the day I took office, I have repeatedly expressed my resolve to continue the effort of my predecessors to wage the most viable and effective war on slums this nation has yet produced I have sought, too, to counter openly and vigorously the perniciously unfair myths about public housing held, unfortunately, not by a tiny reactionary fringe but by a too large segment of the general population On another occasion, I believe, the readers of The New Leader would be well served by a more detailed assessment of public housing's triumphs and failures Starr has quite ably cited the tremendous difficulties we shall face in the 1970s It is my conviction that we shall solve them New York City Joseph J Christian Chairman, New York City Housing authority Roger Starr's dismal portrayal of America's housing quandary is clearly authenticated by his perceptive array of supporting data Despite the enormous capital investment in new units over the past 30 years, a discouragingly high percentage of our urban population still lives in substandard dwellings Moreover, physical shelter alone will not suffice, the "utility and social packages" referred to by Starr are taking on increased importance When the total costs of new construction are considered, the average American family can ill afford to pay a rent that fully covers operating and maintenance expenses The renovation of rehabilitation of existing structures has even proved too costly for tenants in the low- and middle-income brackets Small wonder, then that it is so difficult to attract profit-motivated owner-builders into the housing market, except within the narrow range of deluxe accommodations As a result, government has responded with a wide assortment of policies, ranging from public housing projects to broad subsidy programs Unfortunately these efforts have been only partially successful I agree with Starrs conclusion that in our attempts to house the poor we should not assume that we "will solve all the other social problems of the day " Perhaps it would help if we effected a complete separation of the production and distribution aspects of housing Where satisfactory dwelling units are in short supply, there could be all-out government subsidies to stimulate the construction industries to fill the gap by building a variety of structures at reasonable cost Once the housing supply is within range of local needs, the living quarters could be sold or leased (with suitable provision of government aid to owners and tenants) Eligibility for occupancy would be determined by income levels, size of family tenant discipline, tenure requirements, and other criteria While this proopsal is probably far from the ideal solution, it might at least reduce the present conflict between property owners (whose operating costs exceed gross rentals) and tenants (who cannot afford to pay fair market rents) Rockville Centre, N Y Edwin H Spengler Further comments on America's Housing Challenge' will appear in the next issue—Ed...