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The Wall Street Journal
Thursday, August 4, 1994
Clinton's Wrecking Ball for the Suburbs
By James Bovard
Pamela Price was delighted when she found she
could use her new
government housing voucher to move into a luxurious apartment complex
with a heated swimming pool, four spas, six tennis courts and two
air-conditioned racquetball courts. "This is like Christmas," she
told
the Los Angeles Times last March.
Ms. Price is the beneficiary of a federal housing
policy called
"income integration" -- which consists largely of moving welfare
recipients into affluent neighborhoods, theoretically to improve their
prospects of leading safe and productive lives.
But these Section 8 vouchers from the Department
of Housing and Urban
Development end up sowing chaos in suburban neighborhoods, rewarding
dependence on the state and alienating middle class Americans who end
up paying for recipients to live in apartments that they themselves
could not afford. Amazingly, Congress is on the verge of passing a $60
billion housing act that will greatly expand this program.
Roberta Achtenberg, HUD's assistant secretary
for fair housing,
declared on National Public Radio in January: "We are compelled by
statutory prescription, as well as constitutional mandate, to see to it
that every American has open and free housing choice." Interpreting
choice in its own way, HUD offers rental subsidies in Stamford and
Norwalk, Conn., of up to $1,657 a month; in Westchester County, N.Y.,
of $1,513 a month; in Bergen, N.J., $1,481; in San Jose, Calif.,
$1,469. In Prince George's, Frederick, Calvert, and Charles counties,
Md., HUD will pay up to $1,385 a month in rental subsidies per
apartment -- even though there are few, if any, apartments in those
counties with such high rents.
Section 8 seeks to end the stigma of being on
welfare. At Manhattan
Plaza in New York City, Section 8 pays for apartments with wood parquet
floors and on-premise swimming, racquet and tennis facilities. The Elm
Street Plaza project in Chicago advertised that their Section 8
apartments included all the "luxury amenities one would expect." In
1993, Section 8 certificates were used to entitle welfare families to
move into an apartment complex in Silver Spring, Md., that includes a
heated pool with water jets, microwave ovens and "deluxe modern
kitchens with convenient breakfast bars."
This past May, HUD raised Section 8 subsidy
levels in Plano, Texas,
to $684 for a two-bedroom and $900 for a three-bedroom apartment.
According to HUD, the median rent in Plano, Texas, is only $586 a
month. Helen Macey, executive director of the Plano Housing Authority,
declared: "Our residents will be given better choices of where they can
live."
The unfairness of this hasn't gone unnoticed.
The U.S. General
Accounting Office concluded in a 1980 report: "The high rents and
quality of [Section 8] housing invite resentment on the part of the
taxpaying public who see their subsidized neighbors living in better
accommodations than they themselves can afford." The GAO also observed
that Section 8's goal of mixing the poor and the middle class is often
not achieved because Section 8 "housing is often so costly that . . .
even middle-income unassisted households cannot afford to live in it."
When newspapers in Ventura, Calif., and Davenport,
Iowa, published
articles last year on the level of HUD Section 8 subsidies, HUD was
bombarded by complaints from outraged private citizens. Bertha Conger
of Davenport, Iowa, complained: "Ordinary people may have a hard time
finding a place to rent because some landlord will only rent to
subsidized people because they can get twice the rent from them. . . .
The [Section 8] rates that HUD quotes are far and above what ordinary
people are able to pay."
Nevertheless, Housing Secretary Henry Cisneros
is expanding the
Section 8 program to mix rich and poor families. In April, Mr. Cisneros
launched the Moving to Opportunity program. It will provide $70 million
for 1,300 Section 8 rental vouchers to help people in public housing
projects in Los Angeles, Chicago, Boston, Baltimore and New York to
move into surrounding suburbs.
Section 8 is hailed by many liberals and some
conservatives for
giving lower-income people "freedom of choice" in housing. Chicago
has
distributed thousands of Section 8 certificates to public housing
residents, who have used them primarily to move to a handful of
communities on the city's southern edge. Mr. Cisneros has declared that
he hopes eventually to start a similar effort in every major city.
But, in reality, the Chicago experience shows
the danger of federal
social engineering. The flood of former public housing residents has
turned parts of some nearby towns into a "Section 8 corridor."
Officials in Pacesetter, Ill., claimed that "a sudden influx into the
neighborhood of subsidized families about six years ago turned a
borderline neighborhood into a slum," as one business journal reported.
Michael Roache, executive director of the Fair Housing Coalition of the
South Suburbs, observed: "The intent of the Section 8 program is not to
create Section 8 neighborhoods, but that's exactly what's happening."
Mr. Cisneros declared in June: "There are
almost no cases in America
where people resist Section 8." But public controversies over
misbehaving Section 8 recipients have exploded in New Orleans, Boston,
New Jersey and Maryland. Section 8 recipients can destroy neighborhoods
because of the paralyzing red tape that HUD imposes on private
landlords who want to evict deadbeat, hooligan and violent renters. And
in some cases landlords may not even have an incentive to evict them. A
Boston Globe editorial last year complained of Section 8 rent
recipients: "The majority occupy homes owned by absentee landlords who
are reluctant to evict tenants, even for the most egregious lease
violations. For landlords, the guaranteed subsidy payment proves a
stronger incentive than the desire to maintain a safe building."
In other cities, crime and declining property
values caused by
Section 8 clients have become a major political issue. In St. Louis in
January, Alderman Paul Beckerle publicly protested that neighborhoods
throughout his ward were being dragged down by a crime wave generated
by Section 8 clients who recently moved into the area. Lt. Joseph
Richardson of the St. Louis Police Department declared of one batch of
Section 8 renters: "There is evidence of drugs being sold there, and
ample evidence of gang activity responsible for the drug activity.
These are terrible neighbors. No one would want to live next door to
them." Members of the neighborhood loudly protested but, as the St.
Louis Post Dispatch noted: "Both sides [of the controversy] agree that
the rules for the Section 8 subsidized housing program make it
difficult to get rid of troublesome tenants. Section 8 recipients can't
be punished -- by losing their eligibility for rent subsidies, for
example -- for bad behavior."
Not only do Section 8 recipients receive a large
financial windfall,
but HUD forces landlords to treat Section 8 renters better than renters
who pay their own bills. HUD decreed that landlords can require only a
$50 security deposit from Section 8 renters -- instead of the usual
full month's rent deposit required for unsubsidized renters. It would
be difficult to concoct a rule better designed to maximize the
irresponsibility of a privileged class of renters.
Mr. Cisneros claims that redistributing poor
people from public
housing projects will make a better society. HUD's own studies show
that crime rates in public housing projects are up to 20 times higher
than the national average. Trouble-making public-housing residents will
not be transformed into angels simply by moving them into different
neighborhoods.
The Cisneros Section 8 steamroller will go into
overdrive if the
Senate enacts the administration's Housing Choice and Community
Investment Act. (The House has already approved a major housing bill.)
Mr. Cisneros said of the new housing bill: "HUD's Fair Housing efforts
would be greatly enhanced under the legislation by advancing the goals
of geographic mobility, neighborhood equity, and residential
diversity."
But the surest way to "economically isolate"
people (in Mr.
Cisneros's phrase) is to remove them from the work force and to
encourage them to become addicted to lavish federal handouts. The
notion that HUD can give away housing to some people without having any
adverse effects on their fellow citizens and neighbors is the ultimate
liberal pipedream.
---
Mr. Bovard writes often on public policy. Portions
of this essay are
adapted from a forthcoming American Spectator article.
(See related letter: "Letters to the Editor:
HUD Program Not Wrecking
Suburbs" -- WSJ August 17, 1994)
8/17/94 Wall St. J. A13
1994 WL-WSJ 340888
The Wall Street Journal
Copyright (c) 1994, Dow Jones & Co., Inc.
Wednesday, August 17, 1994
Letters to the Editor: HUD Program Not Wrecking Suburbs
I am concerned by James Bovard's critique of
the Department of
Housing and Urban Development's market-based housing assistance
program, "Clinton's Wrecking Ball for the Suburbs," (editorial page,
Aug. 4). The article contained serious factual errors and unfortunate
stereotyping of assisted-housing residents.
HUD's "Section 8" assisted-housing
program does not subsidize poor
people to live in housing unaffordable to average taxpayers, as was
suggested in the article. It is a conservative, cost-effective program
that has enabled many low-income Americans to gain access to decent
housing on the open market.
The program was created by President Nixon,
signed into law by
President Ford, and supported by presidents Carter, Reagan and Bush. It
relies principally on the private market, not government, to assist
low-income families with acute housing needs.
Through the "Section 8 certificate"
program, families pay 30% of
their income to live in private-market housing. The federal government
pays the difference between the amount tenants pay -- which averages
about a third of the total bill -- and the market rent. The maximum
rent HUD will subsidize is set at 5% below the median rent for any
rental market.
Nationwide, the average Section 8 fair-market
rent for a two-bedroom
unit is $561 a month, including utilities. The American taxpayer pays
about $375 of that amount. Furthermore, all rents subsidized with
Section 8 certificates must meet a local "reasonableness" test. Local
housing authorities may not subsidize -- and taxpayers are not asked to
support -- rents that are out of line with local market rates.
The high rents Mr. Bovard cited apply only to
four-bedroom units in
the nation's most expensive housing markets; nationwide, only 4% of
program participants actually live in four-bedroom units.
Two specific projects -- Manhattan Plaza in
New York City, and Elm
Street Plaza in Chicago -- were cited as further proof that HUD Section
8 assistance is paying for luxury apartments for poor people. These two
projects were built under a program which was discontinued in 1981 and
bears no relationship to the current Section 8 certificate program.
The Clinton administration strongly supports
the Section 8
certificate program. Residents pay their fair share and 54% of the
families using certificates are not on welfare but working. Half the
families in the program today have been receiving Section 8 rental
assistance for less than four years.
The Clinton administration is determined to
ensure that the Section 8
program rewards work and good citizenship. Our rules allow housing
authorities to give working families preference over nonworking
families. Under our new reauthorization bill, the "Housing Choice and
Community Investment Act" now before Congress, we have also proposed
rule changes that will make it easier for landlords to evict unruly and
destructive tenants.
The article's representation of the "Moving
to Opportunity" program
as a threat to suburban communities was unfortunate. Moving to
Opportunity is modeled on a Chicago program which has successfully
enabled more than 5,000 families to move to private-rental housing in
low-poverty communities without adversely impacting those communities.
The Chicago families have been good neighbors, and have been accepted
by these communities. Moreover, their children have fared much better
than children who stayed behind in inner-city public housing. They have
completed high school, continued on to college and found jobs in
proportionately far greater numbers than their inner-city counterparts.
HUD's assisted-housing program has enjoyed the
steady support of five
administrations and the Congress. The true message of 20 years'
experience under Section 8 is this: Decent, affordable housing gives
people hope, and when their lives are sustained by hope, they do
wonders to help themselves.
Henry G. Cisneros
Secretary
Housing and Urban Development
Washington