THE PHONY CASE AGAINST RENT CONTROL

...D. (A version of this article was first carried by Pacific News Service...

...The challenge for housing activists, however, is not only finding more money to allocate but ensuring that the money is well spent...

...Across the country, rents are skyrocketing...

...For New Right thinkers, the battle is part of the larger ideological assault on regulation of the private sector...

...11 Dallas's Common Ground Community Development Corporation has rehabilitated fifty inner-city homes slated to be bulldozed, using funds from churches, charitable donations, local government, and conventional bank loans...

...Those tenants who can hold on start to push for rent control...

...Subsidy funds—required to fill the gap between what working-class families can afford and what housing costs to build and operate—are scarce...

...Bozzotto has never been afraid to depart from traditional labor-management negotiations...

...Saunders owns this parking place valued at $37,000," the caption read...

...And any builder will confirm that the volume of new apartment construction depends less on rent control than on land prices, zoning laws, changes in interest rates, the income and employment of an area, and the availability of Government housing subsidies...

...Local 26 conducts its revival-like meetings in five languages (English, French, Portuguese, Spanish, and Chinese), reflecting its diverse membership...

...And the union threatened to strike when its contract with nine Boston hotel owners expired November 30 unless the trust-fund proposal was accepted...

...Still, some neoliberals claim that housing assistance, like Social Security, should be limited to the poor to make it more efficient and equitable...

...The burgeoning of the nonprofit housing movement began in earnest during the 1980s as Federal housing funds were slashed and the number of new low-income apartments declined from more than 200,000 a year to fewer than 15,000...

...The only roof that many can find is over a vacant building, or an abandoned car, or an emergency shelter...

...In fact, the arguments against rent control crumble when confronted with evidence based on experience...

...but will is what we need...

...Even the most penny-pinching nonprofit groups acknowledge that the Federal Government has to play a role if their local success stories are to expand to help relieve the national housing shortage...

...wing agenda on housing, he will only deepen that tragedy...

...Conservatives are hoping that Jack Kemp will withhold Federal housing funds from these municipalities until they eliminate rent control...

...With virtually no Federal funding, these nonprofit entrepreneurs have patched together financial support from local governments, private foundations, and churches to build and rehabilitate low-income housing...

...It Working with local parishes, the Archdiocese of St...

...Even with these allies, however, this bootstrap approach has its limits...

...In New York City, such critics as William Tucker complain that rent control helps Mia Farrow, Ed Koch, and other affluent tenants...

...in other words, they favor a means test...

...Just as the city's "linkage" program requires downtown developers to contribute $5 for every square foot of new office space into a city-run affordable housing fund, Local 26 would demand that employers contribute a specified amount (5 cents per employee per hour) into a union-sponsored housing trust fund...

...The Federal matching grants would help those communities that help themselves...

...Such a program would represent a radical departure in the nation's housing history as significant as the tenement-reform laws at the turn of the century or the public-housing acts of the 1930s...

...Arguing that rent control causes home-lessness is like arguing that the sun comes up because the rooster crows...

...But if Kemp pursues the rightJohn Atlas is president of the National Housing Institute and co-chair of New Jersey Citizen Action...

...The corporation has supported nonprofit groups in twenty-six cities that have produced more than 14,000 low-and moderate-income housing units...

...H In Santa Barbara, California, where the average home sold last year for more than $275,000, the nonprofit Community Housing Corporation has constructed 462 units for the city's low-income families and elderly residents...

...With their emphasis on self-help, entrepreneurship, and grass-roots initiative, these initiatives are a cost-effective way to address inner-city housing needs...

...One of these, attacking Governor Mario Cuomo's plan to retain rent control, was headlined Mr...

...But that would cost billions of Federal dollars and probably require a tax increase on the rich—policies conservatives and neoliberals don't like...

...In the 1970s, Federal assistance helped to build 200,000 to 300,000 new low-rent apartments a year...

...Ronald Reagan must bear much of the blame...

...Today, among the most urgent tasks are to defend rent control and to promote the construction of affordable housing for poor and working-class families...

...But the case against rent control is a fraud: Rent control is a scapegoat for the nation's housing ills and for the failure of free-market housing policy...

...Armstrong's measure required HUD to study how rent-control laws might be causing homelessness...

...By the mid-1980s, the booming Boston area had the nation's highest housing prices...

...Twice in the last two years, The New York Times has run editorials opposing rent control...

...Peter Dreier is the director of housing for the Boston Redevelopment Authority...

...In fact, about half of the low-income tenants who now receive vouchers return them unused because apartments are scarce and most landlords prefer more affluent tenants to the poor—even those with Government vouchers...

...IT In Boston, the bricklayers' union, using a low-interest loan from the bank that holds its pension funds, set up a nonprofit housing group that in two years has already built more than 200 town-houses—which sold at half their market value...

...The National Low-Income Housing Coalition wants Bush and Congress at least to double the housing budget (to about $20 billion) from its current level of 1 per cent of all Federal spending...

...Paul and Minneapolis has established twenty-four nonprofit groups which now manage 2,200 apartments for poor families, seniors, and handicapped persons...

...But the union still faces a major legal obstacle...

...Early last year, Local 26 found a vehicle to mobilize its membership around their housing woes...

...which contrasted its members' housing woes with the luxurious property owned by the individuals and firms that control the city's hotels—including such insurance giants as Prudential, John Hancock, Equitable, and Aetna, as well as local developers...

...In fact, the reverse is true...

...It also runs job-training and recycling efforts, a comprehensive health center, and home-care services for the elderly—programs that employ more than 300 local residents...

...That law—establishing a small-scale program to help private agencies and church groups create more shelters and soup kitchens-appears to be his favorite solution...

...Though he had demonstrated no prior expertise in housing policy, his initial study of rent control was funded by the libertarian Cato Institute and housed at the Manhattan Institute, another right-wing think tank that sponsored Charles Murray, whose Losing Ground attacked welfare as the cause of poverty...

...Such an increase—which few housing advocates on Capitol Hill expect will get a friendly reception in the White House-would still leave housing programs far poorer than they were when Reagan took office in 1981...

...Compare Medicare for the middle class with Medicaid for the poor...

...Rent control has helped slow down gen-trification, curb displacement of poor and working-class families, and minimize the disruption of neighborhoods that otherwise would have collapsed under the pressure of free-market forces...

...But programs that serve only the poor are demeaning and often less efficient, requiring an added bureaucracy to check for cheats and, more importantly, to undercut broad public support for the program itself...

...Many would-be home owners, especially couples with young children, are now reluctant renters...

...A few years ago, Boston's United Way began funding community-development corporations...

...Tenants are intensifying their demands for rent control, but the basic premise of rent control is under assault by right-wingers and their allies...

...A bill introduced by Representative Barney Frank, Democrat of Massachusetts, calling for an additional $ 15 billion for affordable housing, is considered a big-spending proposal in today's Gramm-Rudman climate...

...Last December, Local 26 of the Hotel Workers Union signed an innovative contract requiring Boston's hotel owners to pay $ 1 million over three years into a housing trust-fund to build affordable housing, help union members buy homes, and provide rent subsidies for low-wage hotel workers...

...Federal housing policy needs a major overhaul, based on the premise that decent affordable housing is a basic right...

...Like many rank-and-file initiatives, the housing trust-fund concept is new to the AFL-CIO leadership, which has other priorities in Congress...

...This year, the number will barely reach 15,000...

...Private foundations have played a key role in supporting the nonprofit housing sector...

...This nonprofit approach, ironically, could have a decidedly Republican appeal...

...And no one asks government utility boards to regulate the price of gas and electricity only for low-income consumers...

...By 1988, for every housing dollar, Washington spent more than $40 on the military...

...Where are we now...

...Cuomo Promotes Housing Crisis...

...The legislation lies waiting...

...At the moment, a key strategy must be to defend rent control...

...About 200 cities—including New York, Boston, Los Angeles, Washington, and San Francisco—have adopted some form of rent control...

...The emergence of this new wave of socially committed developers "may be the only silver lining in the dark cloud' of the housing crisis during the Reagan years," says Mayor Ray Flynn of Boston, where more than twenty-five nonprofit groups have built thousands of housing units...

...When the showdown came, the owners of Boston's nine unionized hotels acquiesced under pressure from Mayor Flynn, who wanted to avoid a strike while his colleagues from the National League of Cities were in town...

...For example, in New Jersey, which has about half of all cities in the country with rent control, developers continue to build as many apartments in communities with rent control as in communities without it...

...The bill would provide three Federal dollars for every dollar the nonprofits can raise from local sources...

...Rent control has had no adverse impact on new construction, housing maintenance, abandonment, or property taxes, conclude two social scientists, Richard Appelbaum of the University of California and John Gilderbloom of the University of Louisville, in their book, Rethinking Rental Housing...

...His most dramatic departure occurred after he and other union leaders realized they had to do something about housing costs for their members...

...In Cleveland, Boston, New York, Baltimore, Chicago, and other cities, corporate leaders have also joined with government officials and community activists to promote nonprofit housing projects...

...How will Bush and Kemp respond to the crisis...

...In cities across the country, thousands of community-based nonprofit housing developers are meeting the housing needs of poor and working-class people...

...A self-described leftist, Bozzotto turned around the do-nothing local, mobilizing the predominantly minority and female membership through community organizing, confrontational tactics, and tough bargaining...

...Bozzotto pledged to make the housing plan the key issue at the bargaining table...

...Kemp's most likely response will be to expand the Reagan program to give poor people "housing vouchers" to help them pay rent for apartments in the private market...

...According to a recent study by the Harvard Center for Housing Studies, rents are now at their highest level in two decades...

...One early test of Kemp's thinking will be his response to pressure from the real-estate industry, right-wing think tanks, and conservatives in Congress who are waging a holy war against rent control...

...The level of home ownership is declining for the first time in decades, and the rate of home-mortgage foreclosures is the highest in memory...

...In that way, they resemble a local gas or electric utility...

...Throughout 1988, the union garnered support for the unorthodox plan from community and religious leaders, including Mayor Ray Flynn...

...Homelessness is a national tragedy of appalling proportions," said Jack Kemp, George Bush's Secretary of Housing and Urban Development, at his confirmation hearings...

...These deductions cost the Federal Government more than $35 billion last year—four times the HUD budget...

...Here, housing activists have scored some successes...

...Yet, public-opinion polls sponsored by the National Housing Institute and other groups reveal widespread support for a renewed national housing program and even for tax increases to pay for such a program...

...In 1980, for every dollar spent on housing, the Federal Government spent $7 on the military...

...But even in New York City, most tenants pay more than they can afford: 70 per cent of all renters have household incomes of less than $25,000 a year...

...But it provides a vehicle for the steady growth in the nonprofit sector's capacity, so that within a few years it can have a major impact...

...Boston's exorbitant rates have LANE SMITH wiped out much of their members' hard-won wage increases...

...Tucker looked at fifty cities and found that seven out of nine with rent control also have the largest homeless populations...

...soon, quite a few were constructing multi-million-dollar developments—sophisticated builders with a social conscience...

...half do not claim them at all...

...These expressions of solidarity have paid off, as the local enjoys the support of community groups—an important bit of leverage for union members...

...11 Residents of New York City's decaying East Brooklyn neighborhood raised more than $8 million from local and national churches to create the Ne-hemiah Homes...

...controlled apartments...

...For example, 98 per cent make too little to purchase a market-rate home in Boston's hot real-estate market...

...Rent control was not designed to be a welfare program but a consumer-protection policy...

...And Bozzotto has put Local 26 squarely in support of other community struggles...

...So, having mobilized his members, community supporters, and local politicians, Bozzotto may now have to wage a campaign to convince his union colleagues in Washington to help make his housing trust fund a reality...

...Kemp, for his part, has pledged to hold the line...

...The Heritage Foundation claims that rent control actually causes homelessness...

...Local 26 simply out-organized the hotel magnates...

...In the December 12 Wall Street Journal, economist Edgar Olsen claimed that vouchers can serve more poor families for the same money than building new low-rent apartments...

...We have a deficit to bring down...

...Appelbaum and Gilderbloom demonstrate that despite the diversity of apartment ownership in many cities, landlords operate as a monopoly, setting price levels through networks such as real-estate boards...

...Tucker concedes that his analysis "cannot prove cause and effect"—it can only demonstrate coincidence...

...The National Coalition for the Homeless estimates the homeless population at between two and three million...

...P.D...

...Started by a local church ten years ago, the group has already built 400 homes, with 400 more in the pipeline...

...Rent control in Washington was found to have little impact on new construction, repairs, or housing values...

...What's behind this new attack on rent control...

...About $8 billion of that went to the 2 per cent of taxpayers who earn more than $ 100,000—with a bonus for those with two expensive homes...

...more than 1,000 houses—to be sold to lower-income families for less than $50,000—have already been built on thirty blocks of vacant land donated by the city...

...Indeed, Appelbaum and Gilderbloom have shown that some cities with rent control actually outpaced those without in the construction of new apartments...

...They could provide Jack Kemp, Secretary of Housing and Urban Development, with a promising direction for Federal housing policy...

...He is a clever propagandist...

...In 1981, Dom Bozzotto, a charismatic former waiter, organized a successful grass-roots challenge to the union's entrenched leadership and was elected president...

...On its own, this $500 million program is not an immediate solution to the national housing crisis," Kennedy says...

...Tenants, of course, whose incomes are on average half that of home owners, are not eligible...

...At the press conference announcing Kemp's appointment, Bush was asked point-blank whether he intended to exLook for the Union Label Labor unions are beginning to pick up the slack for the Government's disastrous housing policy...

...Most people, using common sense, recognize that rent control helps prevent homelessness...

...In an article in New York magazine, he offered readers $50 to send in examples of "rich and famous" New Yorkers living in rentLocal Success Stories During the past decade, a backyard revolution has been taking place in inner cities and rural areas across the United States...

...Rent control simply limits extreme rent increases where landlords can otherwise take advantage of tight housing markets...

...Tucker and the Right have made headway in their attack...

...Conservatives like the voucher approach because it relies on private market forces and is obviously cheaper than building new subsidized apartments...

...When there is a severe housing shortage and low vacancy rates, rents begin to escalate...

...Tucker has sold himself as a housing expert, and his articles have appeared in The American Spectator, The Wall Street Journal, and The New Republic, on the cover of William Buckley's National Review,, and on the op-ed pages of The New York Times...

...It distributed a glossy fourteen-page pamphlet, Who Profits from Boston's Housing Crisis...

...We're involved in improving people's lives too," explains Mary Nelson, a former teacher of English who now heads Bethel New Life, Inc., in Chicago's West Garfield Park neighborhood...

...Most home owners benefit minimally from such deductions...

...He told The Wall Street Journal on February 16 that he wants to use "the greatest tool that has ever been designed to battle poverty: entrepreneurial capitalism...

...But a comprehensive progressive housing program is unlikely to get serious attention in Congress so long as progressive forces are fragmented and isolated...

...The agreement represents an important precedent: It treats housing as a fringe benefit similar to health care and pensions...

...That experience was so successful that the United Way of America is now funding similar programs in Houston, Chicago, Pontiac, Rochester, and York, Pennsylvania...

...The Taft-Hartley Act needs to be amended to recognize housing trust funds as an allowable fringe benefit...

...Bush and Congress are in no mood to make additional expenditures...

...The brochure listed all of the hotel owners' local property holdings (and their appraised value), included photos of the employers' expensive suburban homes, and even inserted a photograph of a parked Volvo owned by Gary Saunders, whose family owns three downtown hotels...

...Workers near the poverty line are now paying more than half of their limited incomes just to keep a roof over their heads...

...Most groups began by fixing up a small building or two...

...He himself was arrested at a demonstration opposing the sale of South African Krugerrands...

...In addition to his home in Brookline, he owns a condominium, #1117, at 220 Boylston Street, worth $875,000...

...When Morton Downey Jr...

...Just a few days before Bush announced his choice of Kemp for Housing and Urban Development, the Heritage Foundation called a press conference and brought Tucker to the podium to remind the audience that the thousands of New Yorkers sleeping on grates and in shelters only had rent control (and its liberal proponents) to blame...

...And for some politicians, opposition to rent control is an easy—if obvious—way to curry favor with campaign contributors from the real-estate industry and win plaudits from conservative opinion-leaders...

...Our funds are low," he said...

...In his Inaugural Address, Bush talked about the tight Federal budget...

...But rent control can enable large numbers of poor and working Americans to have a roof over their heads...

...That is the least we can do...

...We have more will than wallet...

...Most local rent-control laws exempt all newly constructed housing, guarantee a fair and reasonable return on investment, and allow annual rent increases as necessary to cover increases in operating costs...

...Those who attack rent control because it assists the wealthy along with the poor should logically favor Federal housing entitlements for low-income tenants and a beefed-up Federally subsidized housing-production program...

...The victory is a credit to Local 26, which has become a model of progressive unionism...

...We're not just developers...

...In 1980, the Ford Foundation set up the Local Initiatives Support Corporation to channel corporate funds to nonprofits...

...His housing policy was designed to eliminate Federal subsidy programs, particularly those that helped build low-rent housing...

...On its own, it can't solve the housing crisis...

...For several years, Local 26 groped for a way to address its members' housing problems...

...But, he claims, "once correlations have been discovered, however, we can theorize about what the causal connections might be...

...it is, simply, one tool available to local government to deal with astronomical rents and a shortage created in Washington...

...Unfortunately, the political conditions do not exist to guarantee that every American has decent and affordable housing...

...Last year, Representative Joseph Kennedy, Democrat of Massachusetts, filed the Community Housing Partnership Act—legislation to provide Federal funding to community-based housing groups, and immediately found more than 100 cosponsors...

...Home ownership has actually declined in the 1980s, the first decade since World War II to register such a drop...

...While studies demonstrate that rent control allows apartment owners a reasonable profit, it does limit unbridled rent-gouging and real-estate speculation...

...Despite the withdrawal of Federal housing funds, nonprofit community-based groups have been building and renovating affordable housing...

...did a show on rent control, he invited Tucker, who dutifully bashed tenant activists...

...By some twisted logic, he then concluded that rent control causes homelessness...

...The union complemented the organizing drive with a high-profile propaganda campaign...

...The militant union, which will also contribute to the trust fund, was prepared to strike over the housing clause...

...The amendment passed, and HUD has until October to produce the report...

...The fact that forty-one of the cities with sizable homeless problems did not have rent control—proving that rent control doesn't cause homelessness—didn't bother Tucker...

...See Page 28...

...In housing, the invisible hand often carries an eviction notice...

...For landlords, it's a simple matter of greed...

...Reagan cut housing subsidies more than any other Federal pro-gram-from $33 billion in 1981 to $8 billion this year...

...And though he mentioned the problem of homelessness in his first budget speech in February, Bush continued to slight housing expenditures, implicitly endorsing Reagan's proposed $ 1 billion cutback...

...Low-income tenants get pushed into the streets and shelters...

...As a result, demand for apartments has increased and rents have skyrocketed, placing an extra burden on the poor, who now must compete for scarce apartment dwellings...

...Despite the obvious holes in Tucker's theorizing, he has become an intellectual stalking horse for the Right...

...As President Bush and Secretary Kemp will soon discover, the housing crisis is intensifying, not only for the poor but also for the middle class...

...And if fairness is the overriding issue, the Government should cap the homeowner tax deductions for mortgage interest and property taxes so that they primarily help poor and working-class families, not the wealthy, whom they currently favor...

...During organizing drives and contract talks, union members and community supporters can be seen wearing bright yellow buttons with the word Justice printed in English, Spanish, and Portuguese...

...Local 26 then refined the plan to mix the employer funds with the union's pension funds so that the plan could build housing as well as assist members with rent subsidies...

...Housing advocates hope that Kemp, who probably harbors greater political ambitions, will take a pragmatic rather than an ideological approach as a way of building a constituency among the poor, the housing industry, and big-city mayors...

...But because apartments are so scarce, that's like providing food stamps to the poor when the grocery shelves are empty...

...But Kemp is no New Dealer or Great Society advocate...

...One-third reported living in overcrowded apartments—with more than two persons per bedroom...

...The strategic question is what housing agenda is both politically possible and progressive—a stepping stone toward more fundamental reform...

...This sentiment must be transformed into political support before specific legislation can be enacted...

...It Thirty low-income families in Omaha have become home owners thanks to the Holy Name Housing Corporation, a church group that trains and employs neighborhood residents to rehabilitate abandoned buildings and sells them to the poor...

...Even an expanded voucher program won't work unless Washington helps enlarge the overall supply of affordable housing...

...Representative Ron Dellums, Democrat of California, has sponsored a bill that would provide direct Federal capital grants for public or nonprofit housing, an approach common in Europe...

...In a recent study prepared by right-wing journalist William Tucker, the Heritage Foundation purported to show that rent control makes housing "more scarce and expensive for everybody...

...The entire housing system—including the savings-and-loan industry—is in shambles, with the homeless only its most visible victims...

...Bush declined to answer the first question and, in response to the second, reaffirmed his support for the McKinney Act...

...A recent study of local rent control con-' ducted by the Urban Institute to evaluate the program in Washington, D.C., found that rent-control policy primarily benefited the elderly, the poor, and families with children, typically saving households $100 a month...

...He noticed a strong correlation between low vacancy rates and rent control...

...I don't believe we're going to balance the budget by cutting housing," he said at his first press conference with Bush...

...When the union conducted a survey asking its members to list their priorities for union action, housing topped the list: 75 per cent of the members reported housing problems...

...A 1 per cent decline in the vacancy rate was roughly associated with a 10 per cent increase in homelessness," he said...

...A 1987 city-sponsored study found that the Boston area had the widest gap between housing prices ($177,000 for a single-family home) and wages ($23,000) of any metropolitan area...

...An increasing percentage of these are families and the working poor who simply can't afford housing on their low wages...

...Today more than 2,000 nonprofit builders—with origins in community organizations, churches, tenant groups, social-service agencies, and unions—are trying to fill the vacuum, according to a just-completed survey by the Washington, D.C.-based National Congress for Community Economic Development...

...Congress may finally be willing to put the Federal Government back in the housing business if nonprofits play a significant role...

...And last May, conservative Senator William Armstrong, Republican of Colorado, added a last-minute amendment to the bill reauthorizing McKinney Act funds for the homeless...

...Bozzotto, a waiter's son who earned a master's degree in business while waiting on tables at Boston's fancy hotels, rose to leadership by mobilizing the "back of the house"—the bellhops, chambermaids, and kitchen help who had long been neglected by the union...

...More than two-thirds don't earn enough to afford a typical two-bedroom apartment...

...they view rent control as both an unwarranted interference with private-property rights and a misguided effort to preserve affordable housing...

...Despite all the talk about the cost-effectiveness of vouchers, the Reaganites last year provided only 100,000 vouchers nationwide—far from the six or seven million low-income households that potentially need subsidies in the private market...

...The group persuaded several local insurance companies to provide low-interest loans to reduce the fix-up costs...

...To turn these local efforts into a successful national housing program will require support from Washington...

...If the law isn't changed, the three-year $ 1 million fund targeted for housing would be diverted into the union's health-and-welfare fund...

...To free up the money, Congress would have to cut the military budget and increase taxes on big business and the wealthy, neither of which seems likely...

...pand the housing budget and how he expected to deal with the homeless problem...