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Public Housing

It is true that federal involvement in public housing predates 1937; however it was the Federal Public Housing Act of 1937 that gave public housing the features that are now recognized with it. Under the Act of 1937, the federal government was to work through local housing authorities. Its role was to offer the amounts essential to amortize the fall capital costs of the housing projects, projects that were to be built to accord with federally set standards of adequacy. These projects were to be owned and managed by the LHA.

(Deirdre Pfeiffer, pp 23) It was expected that tenant rents would cover the complete costs of the projects–operation, repairs and maintenance, as well as recovery of capital costs. Such costs included merely payment-in-lieu-of-taxes (PILOT) since the projects were to be exempt from local property taxes. The projects were expected to be that part of the local housing inventory available to families of low income needing standard housing. They usually were built near the city centre or in modest or poor income and even slum neighbourhoods.

To the extent, then, that they were replacements of rental units that would have been made available through negative sequent occupance, the public housing units symbolized direct intervention in the local housing market process. (John Charles Boger, Judith Welch Wegner, pp144) The nature of that direct intervention was not just, though, that an attempt was being made to tempt positive sequent occupance in particular neighbourhoods, though this obviously was the main purpose. It was as well that the LHA was to control the demand side of the process of sequent occupance.

The LHA was to find out who was eligible–not merely on the foundation of the criteria of need however as well of worthiness. It was also to find out how long a family might remain needy and worthy as its income, composition, and even behaviour changed. In a sense, for the reason that it was probable to be larger than any other landlord and definitely than any market maker (for example rental agent, real estate agency, management agency, and all that), the LHA was to set the pace in determining how the lower end of the local housing market might operate. (Deirdre Pfeiffer, pp 26)

Therefore it was not so much that the market process was to some extent to be socialized (that is, to be made directly responsive to social need as determined by a public agency) as that it was to be reformed. The private market had failed to offer sufficient housing. It had led to slum formation, and it had been disorderly, spreading blight at too quick a pace. LHAs were to operate to prevent these trends. Except for state-wide housing authorities in nine states, LHAs are basically local political agencies, operating at the margin of the general political processes.

Generally, there are public commissioners–elected or appointed to a governing board. This board selects the managing director as well as his chief assistants. It is the body accountable in the public eye for the operation of the housing projects. Merely in rare cases are these positions well paid, and hardly ever, certainly, has the holding of such a position served as a stepping-stone to higher political office. Though intended to be free from political interference, the net consequence has been to place the LHA in a political limbo.

As of December 1972, there were 2,883 LHAs, with almost half of them located in the south-eastern and south central states. These LHAs administered 10,248 projects containing 1,260,235 dwelling units that were under yearly contribution contracts with HUD. The majority LHAs are small–49 percent in 1972 had fewer than 100 units under management. Just 13 percent had 500 or more units supported under the federal program of yearly contribution contracts. The 140 largest LHAs manage more than 60 percent of all public housing units.

About 300 of the LHAs are in central cities. Another 450 are located elsewhere in SMSAs. The remainder are outside SMSAs. (Shlomo Angel, pp 88) Generalizing regarding LHA performance is clearly difficult. By 1972 the 1. 3 million public housing dwelling units in the local housing marketplace were occupied by over 3. 5 million persons. In 1971 the estimated total cost of providing the services–heat, light, occupancy, protection, interest, debt amortization, maintenance, social services, administration, and all that–of public housing came to about $2.

3 billion, or some $770 per occupant. The tenants bore just 26 percent of this cost directly. The remaining 74 percent was borne by the federal, state, and local governments. Merely 42 percent of these government costs emerge explicitly in the HUD appropriations–for such elements as yearly contribution contracts, operating subsidies, and social and rehabilitation grants–and expenditure records. Another 36 percent of the governmental cost can be traced to the tax-exempt status of the interest earned on local housing authority bonds.

The remaining 22 percent is a measure of the difference between what local property tax revenue would have been and the smaller PILOT payments made by LHAs to urban governments. (Shlomo Angel, pp 89-91) In recent years, the tenant composition of public housing has undergone several significant changes. During the period 1960-72, the median income of all U. S. families rose by 90 percent, whereas that of families moving into public housing rose just 21 percent. Consequently public housing tenants turned out to be comparatively poorer over this period.

In 1960, of all families moving into public housing, 35 percent were receiving public welfare assistance of some sort. The percentage in 1972 was 71 percent. In St. Louis, the Housing Authority reported in 1973 that while 52 percent of all tenant families depended on employment income in 1946 that proportion had fallen to 22 percent in the fall of 1972. Those depending on assistance only already had augmented in 1960 by 44 percent. By the fall of 1972, there had been a further 41 percent augment in order that 63 percent of St.

Louis LHA tenants were depending on welfare payments only. Another 15 percent received supplements to employment income from welfare sources. (Shlomo Angel, pp 95) The elderly proportion of the public housing population as well grew. From a level of 13 percent of all occupants in 1960, the proportion had reached 41 percent by 1972. During the same span of years, the minority proportion had gained too. By 1972, it was 60 percent nationwide. Public housing had become the “housing of last resort” in many communities.

In numerous larger cities, the public housing inventory is now approaching an average age of 20 to 25 years, is no longer well situated regarding lower-middle-class neighbourhoods, and is no longer “standard” in the eyes of most citizens. Having been introduced into the urban housing inventory merely hardly above the community standard-in many cases and this is by intention–the public housing units were by the second generation moving downward in a negative extensive sequent occupance process not unlike that of the rest of the urban housing market.

Unable or reluctant to expand public housing, the LHAs found themselves facing increasingly serious economic viability problems. The poorer the tenants, the less they could pay in rents and the more severe the economic plight of the LHA. Five major factors describe the altering status of public housing occupancy. First, tenant incomes, whereas rising, lagged behind the rate of increase in operating costs brought about by inflation. Second, the problems associated with inner-city decay as well tended to increase operating costs. Third, housing projects were sometimes poorly designed and, in many cases, poorly managed.

Fourth, legislative changes and legal decisions prevented LHAs from exercising discretion regarding tenant selection permitting and even encouraging an important increase in the proportion of problem families. Fifth, in some cases local communities failed to offer sufficient community services to the tenants of the public housing projects. A comprehensive national income maintenance strategy should take into account both the economic value of the relief benefit paid through public housing and the conditions under which that benefit is made available.

Public housing is a means test relief program assisting about 2. 5 million poor people by increasing the accessibility to them of a necessary commodity–low rent housing–inadequately supplied by private enterprise. There is no disputing the need of public housing tenants: median annual income of all families housed is $2,800; among elderly residents, who occupy over one-third of all dwelling units, it is $1,700. Nor can it be doubted that the program offers considerable relief.

Due to the public subsidy the median gross rent nationally for all families is $51 per month; for the elderly it is $37. Rents are 40 to 50 percent of those in unsubsidized private housing of comparable quality. Whether or not public housing is folded into a comprehensive public relief strategy, though, there are policy decisions to be made concerning the allocation of a restricted number of housing units between the well-adjusted, hard-luck poor and those poor people who are as well maladjusted or unconventional in their social patterns.

The universe of people poor enough to qualify for public housing includes both groups; however the number of available dwelling units is far smaller than is the universe of eligible poor. (Thomas D. Boston, pp 12) Providing decent, safe, and sanitary low cost housing for those who cannot afford to obtain it on the free market can be accomplished through an unrestricted cash payment to the poor adequate to meet the costs of standard housing plus other necessities, or through some form of subsidy paid to private enterprise or to poor people that is, in either case, earmarked solely for low income housing.

The earmarked subsidy can take the form of publicly financed and publicly owned new or rehabilitated dwellings, of publicly leased dwellings made available to low income persons at reduced rents, of guaranteed rent supplements to encourage nonprofit groups to enter the low income housing field as a public service, or of tax and other incentives that will make it attractive for private enterprise to produce low rent housing. The allocated subsidy, and mainly the publicly financed and publicly owned dwelling, has been and carries on to be the most common way of providing decent housing for low income persons and families.

One basis is that cash grants in lieu of standard housing units would not assure as large several families living in standard housing as does the public housing program since all of the cash subsidy would not necessarily be diverted to housing. Public policy presumes that it can more certainly improve housing conditions through publicly produced housing than through unrestricted cash subsidies equal to the costs of the public program. (Larry Keating, pp 32)

An additional cause for providing housing relief in kind rather than in cash is that many public housing tenants are multiproblem families measured undesirable tenants who would probable face a demand for premium rents from private landlords. Nonprofit private housing sponsored by church, fraternal, plus charitable groups with government subsidies of interest costs or of rents has turn out to be an alternative attractive to many who dislike publicly owned housing however recognize both the special difficulties of housing the multiproblem family and the reluctance of builders to construct very low income housing.

Nonprofit housing is a latecomer to the business, though, and suffers from a lack of necessary expediters, managers, and capital. Thus far, as a minimum, conventional public housing remains the leading form of housing relief. Whereas public housing may target its beneficiaries, that advantage can as well have toxic effects. Residents of public projects (other than those in single family units on scattered sites) are eagerly identifiable as people who are not very successful–if they were more successful, they would be obliged by regulations to vacate.

An antidote might be to open public housing projects and make them attractive to non-needy persons who can pay higher rents than can the very poor; however there are experts who doubt that middle income families could be convinced to cooperate. One such expert, Roger Starr, a New York housing and planning specialist, is sceptical that “higher-income white families are willing to pay higher rents in order to share an apartment house with lower-income Negro families who are paying lower rents.

” (John Charles Boger, Judith Welch Wegner, pp172) Even though the problem of social integration could be conquer, to make this kind of economic integration attractive to the middle class, more of the amenities would have to be built into public housing. Elevators, for instance, would have to stop at every floor somewhat than at every third floor, a common current economy. Under these conditions, costs would rise, subsidizing the poor would be more expensive, and the advantage of economy would disappear.

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