Housing and Urban Development Policy

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Housing and Urban Development Policy
Public Housing
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Public Housing Policy

• Public Housing Policy in America implemented the
  way it has over the last century has imposed
  contradictory pressures that are not well
  understood and lead to false understandings of
  how it operates today and how it can be improved.

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Background
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WWI

• Housing for defense contractor workers
• United States Shipping Board Emergency Fleet
  Corporation
• The United States Housing Corporation

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Great Depression

• Put people to work by doing construction and
  remove blight
• Public Works Administration (PWA)
• 22,000 units built
• majority built in the north and large cities
• most tenants were White and working (WWII
  stimulated the economy)

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Housing Act of 1937

• Set the Foundation for permanent public housing
• Allowed the creation of local public housing
  authorities that took over PWA housing

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Economic Efficiency of Public Housing

• Housing subsidies
• No new construction
• Stimulated demand too much for pre-existing low
  quality housing
• Conventional Public Ownership
• Construction spending put people to work
• New structures removed dilapidated buildings

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Housing Act of 1949

• Additional construction
• Limited to very low income
• Fewer units built than originally planned

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Economic Efficiency Argument falls apart--1950s
and 1960s

• No limit on price of land for public housing, but
  limit on cost per unit construction
• Result Politics determined location. Shoddy
  projects built
• Rents collected were linked to income of
  residents 30
• Result Not enough money to keep up the projects

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Devolution starting in the 1970s

• Federal government owned 1 million units in 1974.
  
• Types
• 80 Conventional Public Housing Government
  Built, Government Run
• 20 Turnkey Private sector built, Government
  Run
• Budget cuts new emphases
• Home Ownership 1990 Act encourages residents to
  buy their unit
• Decentralization Section 8

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Section 8

• Vouchers for poor to give to landlords for
  housing provision
• Long Waitlists
• Example Orange County Housing Authority
  (http//www.oc.ca.gov/housing/index.htm)
• Over 7,200 vouchers (66 for the elderly or
  disabled)
• Waitlist over 5,000
• Received grant to offer 740 additional
  certificates starting in June 2001.

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Challenges for Public Housing Authorities

• More pressure to be competitive
• Public Housing Management Program Criteria
• Ability to perform modernization, maintenance,
  inspections
• Ability to collect rent
• Ability to fill vacant units
• Ability to work with residents to provide
  programs
• Rating of 60 or less and authority is put on the
  troubled PHA list

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Public Housing Elements (Quercia Galster)

• Motive Maximize provision of affordable, decent
  housing for very poor
• Financial structure Deteriorating buildings,
  inability to raise rents
• Characteristics of stock in big cities they
  tend to be aging, high rise, high density
• Characteristics of tenants Very poor,
  frequently single headed households with children
• Management approach Follow federal regulations

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Private sector building of low-income housing

• Motive Maximize profit
• Financial structure Expect subsidy to house
  very poor who cannot pay market rate rents
• Characteristics of stock Unknown
• Characteristics of tenants Tend to be 50-60 of
  the median income (49,583 in OC)
• Management approach Asset management and
  competitionresponse to tenants

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Public Housing Reinvention

• Motive Provision of affordable, decent housing
  as well as improve tenants socio-economic
  wellbeing
• Financial structure Demolish bad units. Use
  the money to upkeep occupied, habitable units
• Characteristics of stock Smaller human-scale
  developments
• Characteristics of tenants Mixed income
• Management approach Asset management and cost
  effectiveness strategy on site to site basis

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Public Housing Quadrilemma

• Conflict 1 Investors see public housing as a
  risky investment due to delays by cities in
  making approvals, zoning, etc.
• Maximize geographic and social integration of
  poor and non-poor households vs.
• Maximize the amount of private capital invested
  in public housing authorities thereby reducing
  reliance on public subsidies

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Conflict 2

• Non-poor may not want to live with poor so
  benefits of having non-poor onsite are undercut
• Maximize geographic and social integration of
  poor and non-poor households vs.
• Maximize the value of cross-subsidies of non-poor
  subsidizing poor.

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Conflict 3

• Investors see poor tenants as risky prospects
  inability to collect rent, higher maintenance,
  etc.
• Maximize number of poor assisted by decent,
  affordable housing vs.
• Maximize the amount of private capital invested
  in public housing authorities thereby reducing
  reliance on public subsidies

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Conflict 4

• Too many non-poor tenants means fewer poor being
  helped
• Maximize number of poor assisted by decent,
  affordable housing vs.
• Maximize the value of cross-subsidies of non-poor
  subsidizing poor.

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Responses to Quadrilemma

• Accept the fact that not all of the goals of
  Public Housing can be accomplished
• Section 8 vouchers have strong potential for
  filling the gap
• This is a decision matrix to help identify what
  happens in which kinds of situations

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Residents of Public Housing

• Satisfaction
• Ambivalence