We did it for Welfare...Now Lets put limits on Public Housing
By Howard Husock

The recently enacted five-year time limit on cash public assistance closes one debate but suggests another. If welfare payments are to be limited, why not enact time limits on subsidized housing as well?

Such a change, already suggested in housing legislation before Congress, seems logical because of the significant overlap between those receiving welfare payments and those receiving housing assistance. It would allow housing subsidies to be directed to those in most immediate need rather than simply going to persons already in the system. A housing assistance time limit would also reconnect people of modest income with the disciplines and opportunities of the private housing market, which could help build better household values and a healthier social fabric in poor neighborhoods.

Let’s be clear about the extent of overlap between those receiving afdc and those living in "assisted" housing. The most recent good survey of subsidized tenants (published in 1992) shows that only 9 percent of public housing tenants are married couples. Fifty-five percent are single parents—a percentage that would be far higher were it not for the fact that 29 percent of tenants are low-income elderly persons. The latter, however, are heavily concentrated in their own, elderly-only apartment complexes. In large, big-city "family" projects, a very high percentage of tenants are usually single-parent welfare families.

Disturbingly, 48 percent of all households come to public housing each year not to escape "substandard" conditions but rather to establish their own new households. Once in, they tend to stay. More than 25 percent of project families have lived in their unit for more than 10 years, 47 percent more than five. These figures ought to concern us for what they suggest about long-term dependency on government, and also for what they imply about the equity of government benefits—since there are far more families waiting for housing assistance than currently get it.

In addition to the 1.3 million tenants living in publicly-owned housing, there are another 2.7 million tenants who either get housing vouchers from the government to help them make rent payments to private owners, or who live in privately-owned buildings where the landlord gets direct subsidies to house them. The Congressional Budget Office found in 1994 that the average income of these subsidized tenants is actually 62 percent higher than that of other eligible households who are unassisted. The cbo suggests that "the incomes of subsidized households may have increased after they started receiving subsidies." Given this evidence that tenants who receive housing assistance are subsequently able to advance on their own, it is entirely reasonable to expect that beneficiaries should surrender their subsidy within a limited period so that it can be passed along, temporarily, to someone else who is worse off.

Time limits would have other beneficial effects on the public housing projects that have become the locus of our country’s most concentrated social problems. For one thing, a time limit could reconcile our public housing policy with the way in which private housing markets are organized.

Market-rate housing is organized by an informal but powerful system which might be called the "housing ladder." The "ladder" works like this: Neighborhoods are not random collections of structures and people. They are roughly organized on the basis of the income and education levels of residents. This does not mean, of course, that everyone in a given neighborhood or census tract has the same income, only that income levels are grouped within a fairly narrow range. But the housing ladder is also a social system in which families strive to improve their economic position—to climb the ladder to a higher rung, or, at the least, to maintain their home (and hope their neighbors do the same) so they do not fall. There is no city in the nation (perhaps the world) in which neighborhoods are not stratified along income lines.

This social system matters a great deal at the lower rungs of the housing ladder. In the pre-subsidized housing era, poorer neighborhoods, despite being derided as slums, were places where many small property owners occupied their own inexpensive homes and rented out apartments or rooms on the side. Even tenants rented rooms to boarders. Owners had an incentive to maintain their property (they often lived on the premises or nearby); tenants often assisted in repairs and maintenance in order to keep their rents down. Property owners hoped to realize the value of their investment and move up the ladder to a better neighborhood; tenants hoped to become property owners.

Public housing and "assisted" housing have turned this chain of social progress on its head. Newly-built public housing projects draw tenants away from private landlords by offering amenities which tenants could not otherwise afford. Surrounding neighborhoods decline, while public housing lacks the self-sustaining qualities of the private market because no one has an incentive to maintain it. Even when subsidized housing is privately owned, there have been problems: Initially, owners were told they could place their units built with subsidies on the open market after a fixed period of time. In recent years, Congress has been reluctant to allow this, and has instead allocated millions of dollars to private owners to induce them to keep their units as "affordable" public shelters. Similar bailouts are likely for a new generation of subsidized apartment buildings now being run by non-profit community development corporations—who will not be able to maintain both property standards and "affordability" absent subsidies.

Giving out vouchers allows the government to bypass the hard costs of building and maintaining apartment buildings publicly. But these vouchers can do great damage to the social fabric. They generally catapult people to a neighborhood better than what they could otherwise afford, thus sending a message at odds with the prevailing (if seldom stated) view that one should work one’s way up the ladder. Even in poor neighborhoods, vouchers break the umbilical relationship between tenant and landlord. Property owners need not worry as much about the quality of their tenants because the rent will be paid by Washington (via the local housing authority). Conversely, tenants—who pay only 30 percent of the full rent—lack leverage in their dealings with landlords.

Given the arguments I’ve presented here, and our miserable history of government poverty programs, the best long-term solution to our public housing disaster may be to sell our projects off so that the residents can find their place in the private housing market like other Americans. Politically, however, this is not something likely to happen right away. A time limit on tenancy, though, may be another way to bring some of the social discipline of the housing market to public housing rentals.

Can a small change like time limits make much difference? I believe so. For such a reform would nicely reinforce the message soon to be sent by time limits on cash public assistance. New York Republican Congressman Rick Lazio’s recently proposed Housing Act of 1996 called for having all new public housing tenants sign a "self-sufficiency" contract to include a specific date at which they will "graduate" from public housing. A requirement like this would give tenants a powerful incentive to both seek work and save money for the day when they will have to enter the private market. In the meantime, our current public housing complexes could be made more humane by using funds currently spent on the voucher program to make physical improvements. The management of these projects could be vastly improved by replacing government housing authority employees with private real estate management firms.

Between 10 and 15 percent of all public housing units currently turn over every year. This provides an opening for transforming today’s projects into temporary waystations and the way to independence. Simply imposing a two-year limit on all new tenancies will quickly change public and privately-owned subsidized housing into places of transition and character formation, in the nineteenth century charitable tradition. (There is little point in avoiding the fact that housing projects are our contemporary poorhouses.)

The key detail to be worked out involves the fate of tenants after their time in public housing is up. It is crucial to encourage private builders and owners in poor neighborhoods to increase the supply of low-cost housing. These can be boarding houses run by an elderly homeowner; single-room occupancy "hotels" with small rooms and shared baths; simple attached row houses built on tax-foreclosed vacant land; minimally renovated older buildings—where costs are kept down in part by limiting the enforcement of government building and housing codes to items that concern safety, not amenities. This kind of expanded low-cost private housing market will encourage support-relationships and self-policing in neighborhoods as public ownership has not.

It may be true that not every household will be served by such a private low-cost market. But we do not want all households to be served. Criminal and anti-social households have no "right" to a spot in the community. We may also want to insist, for instance, that public housing units be open only to married couples. There may be other individuals whose behavioral problems are so severe that compassion dictates they live in supervised or group-housing settings. There will be difficulties in adjusting to a system of time limits on public housing. But we must bear in mind that millions of Americans are currently suffering in hellholes that we underwrite in a misguided attempt to "help."

Howard Husock is a housing expert at the Kennedy School of Government at Harvard University, and author of Repairing the Ladder: Toward a New Housing Policy Paradigm.