Harry Moroz

Whither Public Housing

On the heels of a report showing that 13 million low-income individuals have “worst-case” housing needs, HUD Secretary Shaun Donovan writes at The Huffington Post that the administration’s Transforming Rental Assistance initiative is critical to ensuring that affordable housing options remain available to low-income households.

Among other things, the initiative would – if all goes according to plan – create stability for owners of public housing, in turn allowing them to use private capital to replace and rehabilitate public housing properties. The hope is that private capital will plug the current $20-30 billion backlog of capital needs, a sum Congress will never fund. The failure to fill the hole is allowing more and more units to be lost to demolition or sale.

Secretary Donovan emphasizes that the initiative is part of an effort to “reset” national housing policy “to focus not only on homeownership, but to invest in quality rental housing as well.” Preserving affordable public housing is certainly part of this reset and finding a way to do so in an unfavorable fiscal climate is particularly laudable.

However, the significance of the reset must be qualified. Although the initiative does not privatize public housing, it brings into stark relief the resistance to a robust – and expensive – federal role in public housing. The need to marshal significant private resources to rehabilitate existing public housing stock makes construction of more public units seem a (needlessly) forgotten goal.

Finally, the initiative’s $350 million price tag is a drop in the ocean of federal funds. The mortgage interest tax deduction costs the federal government $80 billion a year. Putting just a fraction of these resources toward public housing and policies that benefit renters is the real reset that is needed. Secretary Donovan is obviously making due with the political and economic climate he has inherited, but it would be dangerous to ignore the significant challenges that still exist in refocusing the federal government on rental housing.

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Posted at 3:58 PM, May 27, 2010 in Housing
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