Housing and Urban Development Policy

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Housing and Urban Development Policy
Public Housing
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Public Housing

• Federally built or bought dwelling units,
  managed by a local public housing authority, used
  to house lower-income households

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WWI

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

4
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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Public Housing1970s to 1990s

• Preferences to the very poor (paying gt50 of
  their income to rent)
• 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
• Deconcentration

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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 Today (Quercia Galster, 1997)

• 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 Goalsin Conflict

• 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