'Oundation For A New Social Age: R B M S C H

A Right to
HOUSING
'oundation for a New Social Age
EDITED BY
RACHEL G. BRATT MICHAEL E.

STONE CHESTER HARTMAN
A Right to Housing
A Right to Housing
Foundation for a New
Social Agenda
EDITED BY
Rachel G. Bratt, Michael E. Stone and

Chester Hartman
TEMPLE UNIVERSITY PRESS

Philadelphia
Temple University Press
1601 North Broad Street Philadelphia PA 19122 www.temple.edu/tempress
Copyright © 2006 by Temple University, except Chapters 2,4, 11 Copyright

© Michael E. Stone
All rights reserved Published 2006 Printed in the United States of America
© The paper used in this publication meets the requirements of the American National Standard for
Information Sciences—Permanence ofPaper for Printed Library Materials, ANSI Z39.48-1992
Library ofCongress Cataloging-in-Publication Data
A right to housing : foundation for a new social agenda / edited by Rachel G. Bratt, Michael E. Stone, and
Chester Hartman.
p. cm.
Includes bibliographical references and index.
ISBN 1-59213-431-9 (cloth : alk. paper)—ISBN 1-59213-432-7 (pbk. : alk. paper) 1. Housing policy
—United States. 2. Right to housing—United States.
3. Housing—United States-Finance. 4. Equality—United States.
5. Social justice—United States. I. Bratt, Rachel G., 1946- .
II. Stone, Michael E., 1942- . III. Hartman, Chester W.
HD7293.R46 2006
363.5'0973-dc22 2005050671
246897531
Contents
Acknowledgments viii
1 Why a Right to Housing Is Needed and Makes Sense: Editors' Introduction 1

The Economic Environment of Housing: Income Inequality and Insecurity Chris 20
Tilly
2
Housing Affordability: One-Third of a Nation Shelter-Poor 38
3 Michael E. Stone
Segregation and Discrimination in Housing 61

4 Nancy A. Denton
Pernicious Problems of Housing Finance 82

5 Michael E. Stone
105
6 Federal Housing Subsidies: Who Benefits and Why? Peter Dreier
The Permanent Housing Crisis: The Failures of Conservatism and the Limitations of
139
Liberalism
7 Peter Marcuse and W. Dennis Keating
Federally-Assisted Housing in Conflict: Privatization or Preservation? Emily

163
BOX Paradise Achtenberg
Privatizing Rural Rental Housing 171

8 Robert Wiener
The Case for a Right to Housing 177

9 Chester Hartman
193
The Role of the Courts and a Right to Housing David B. Bryson
vi Contents
10 Housing Organizing for the Long Haul: Building on Experience Larry Lamar Yates 213
11 Social Ownership 240

Michael E. Stone
12 Social Financing 261

Michael Swack
13 279
The Elderly and a Right to Housing Jon Pynoos and Christy M. Nishita
Opening Doors: What a Right to Housing Means for Women

14 296
Susan Saegert and Helene Clark
Responses to Homelessness: Past Policies, Future Directions, and a

15 Right to Housing 316
Rob Rosenthal and Maria Foscarinis
16 Community Development Corporations: Challenges in Supporting a Right to Housing 340

Rachel G. Bratt
BOX Old and New Challenges Facing Rural Housing Nonprofits
360
Robert Wiener
Between Devolution and the Deep Blue Sea: What's a City or State to Do? John
17 364
Emmeus Davis
Housing and Economic Security

18 399
Rachel G. Bratt
About the Contributors 427
Index 431
We dedicate this book to two extraordinary leaders in the fight for a Right to
Housing:
DAVID BRADY BRYSON (1941-1999) was a brilliant legal advocate and a

truly stalwart figure in the struggle to advance decent, affordable housing for
all. We and many others will remember and treasure David's long and valued
service at the National Housing Law Project. We are proud to include his last
written work in this volume.
CUSHING N. DOLBEARE ( 1926-2005), the founder and long-time director of

the National Low Income Housing Coalition, was a passionate advocate,
policy analyst and organizer. Her creative ways of communicating how
housing is “Out of Reach” to millions of households and her strong support of
a National Housing Trust Fund are but two of her numerous contributions to
realizing a Right to Housing.
Acknowledgments
FIRST, WE WANT to thank the authors of this volume. They were professionally adept and
personally supportive as we worked through the many stages involved in compiling this book. We are
especially grateful to Florence Roisman for selflessly taking on the task of updating David Bryson's
chapter. We also acknowledge and thank Mary Ellen Hombs, who participated in the book's original
conceptualization. We greatly appreciate her efforts and insights into a Right to Housing.
The book benefited from a significant amount of technical support. We are enormously grateful to
several staff members of the Poverty & Race Research Action Council—Rebekah Park and Daniel
Fleischmann in particular—for their work in entering the many revisions and copyediting marks accrued
during the back-and-forth as each chapter went through several versions and updates during the book's
lengthy gestation period. Maria Nicolau at Tufts University also provided support in the final stages of
this project by processing a number of the communications with authors; we gratefully acknowledge her
assistance. Teri Grimwood did her usual outstanding work in assisting with the creation of the index.
Peter Wissoker, our editor at Temple University Press, was supportive throughout our process, and
we thank him for his expertise in shepherding this large book into production. Joanne Bowser and those
she supervised in the copyediting process—always a more difficult task when many writers are involved
—were wonderful to work with.
We also thank our families, who have patiently and lovingly supported this effort: Michael Bratt and
Joanna and Jeremy Bratt; Ursula Stone; Amy Fine and Jeremy and Benjamin Hartman.
Most collaborative efforts involve a considerable amount of give-and-take among the participants,
and individual efforts often vary along the way. In producing this volume, we acknowledge the work
that was done by one or more of the editors at a number of critical points:
MES thanks CH and RGB for launching the project (along with Mary Ellen Hombs) more than a
decade ago, and for providing the initial conceptualization of the book's basic premise.
CH and RGB thank MES for joining the project after it had started and for providing a series of fresh
and critical insights.
MES and CH thank RGB for her key role in managing the overall project.
CH thanks MES and RGB for providing thoughtful and careful feedback to the authors prior to the
drafting of the near-final chapters.
And RGB and MES thank CH for carrying an enormous load of work during the final year before the
book went to press. CH's attention to detail and involvement in bringing each chapter to completion
constituted a significant contribution for which we are extremely grateful.
The non-alphabetical sequencing of the editors' names was agreed to for reasons internal to the
process and in no way reflects unequal contributions to the book.
Rachel G. Bratt, Michael E. Stone and Chester

Hartman
Why a Right to Housing Is Needed and Makes

Sense: Editors' Introduction
IT IS UNCONSCIONABLE that inthe 21st true democracy impossible.

century, upwards of 100 million people in Just over 60 yearsago,in his 1944 State of the
theUnitedStatesliveinhousingthatisphysically Union address to Congress, President Franklin
inadequate, in unsafe neighborhoods, overcrowded Delano Roosevelt declared that economic secu-
or way beyond what they realistically can afford. rityis a necessary ingredient for a democratic
Yet it could be quite different. We could and society.Hefurther asserted that there wasaneed for
should guarantee high-quality, truly affordable a wholeseries of economicand socialrights,
housingin“good”neighborhoodsfor all and thus including a Right to Housing. This is partofhis
finally achieve theNational Housing Goal of“a message:
decent home and asuitable living environment for
every American family,” as artic- We havecometoaclearrealizationof the fact that
ulatedbyCongressover a half-century ago inthe true individual freedom cannot exist without
economic security and independence. “Necessi-
1949 Housing Act andreaffirmedinsubsequent
tous men are not free men. . . . ” These economic
legislative initiatives.1 This book embraces the
truths have become accepted as self-evident. We
view that a commitment to a Right to Housing have accepted,sotospeak, a second Bill ofRights
should bethe foundation not only for housing under which anewbasisof security andprosper- ity
policy but also for anew social agenda. can be established for all—regardless of station,
The call to adopt and implement a Right to race, or creed. Among these are: the right to a
Housing not only has an ethical basis in principles useful and remunerative job ...the right to
ofjustice andidealsof a commonwealth.Itis also earnenoughtoprovideadequatefoodand clothing
based on a highly pragmatic perspective— the andrecreation...the righttoadequate medical
central role that housing plays in peoples' lives. care...the righttoagood education [and along with
several other enumerated rights] the right of every
Given the many ways in which housing is, or can
family to a decent home. All of these rights spell
be, the basic building block for a range of related security. And after this waris won we must be
benefits—personal health and safety, employment prepared to move forward in the implementation
opportunities, a decent education, security of of these rights, to new goals of human happiness
tenure, economic security—a host of new social and well-being. (Roosevelt 1944; see also
relationships and economic opportunities would Sunstein 2004)2
emerge if a Right to Housing were realized, and the
extensive negative impacts of poor housing would A bold, fresh approach to solv ing the nation's
largely disappear. A Rig ht to Housing would also housing problems is timely because
go a long way toward countering the pernicious
trend toward our society'sextremesof materialwell-
beingand opportunity—a trend that iscreating
larger and larger fissures between the nation's
richest and most of the rest of us—but most
especially the poorest among us—disparities that
have a clear racial dimension as well and that make
2 Rachel G. Bratt, Michael E. Stone and Chester Har tman
three-fourths of a century of government Congress as H.R. 1122 (A Bill to Provide an Af-

interventions and a multiplicity of strategies, both fordable, SecureandDecentHomeandSuitable
public and private, have not been devoted to truly Living Environment for Every American Family).
solving the problem. To be sure, gains have been Needless to say, it did not pass. At the end of a
made, and millions of households have been hearing on the Bill, Congressman Henry Gonzalez
assisted, but the gains and assistance have been of Texas, then Chair of the Banking, Finance &
partial, piecemeal and transitory at best. Any Urban Affairs Committee and Chair of the
examination of thearray and scale of housing and Subcommittee on Housing and Commu-
housing-related problems reveals clearly how nityDevelopment, remarked, “What your group
painful, pervasive and persistent are these haspresentedisinevitablygoingtohappen.............It
problems. Let us thus finally get past the illusion is imaginative, it is seminal, it is creative.” We
that merely tinkering with current policies and even agree and hope this book will hasten that day.
appropriating more money will be sufficient to
solve our housing problems. Fundamental change
is necessary and long overdue. THE PHYSICAL IMPORTANCE
This isnotanew or original insight and call. OF DECENT HOUSING
Back in 1989, the Washington, DC-based Institute
for Policy Studies assembled a Working Group on Where one lives—particularly if one is poor, and/or
Housing (in which this book's co-editors Chester a person of color—plays a critical role in fixing a
Hartman and Michael Stone as well as several ofits person's place in society andinthe local community.
contributors—Emily Achtenberg, Peter Dreier, Living in substandard housing ina“bad”
Peter Marcuse and Florence Roisman— neighborhood maylimit people's ability to
participated) that crafted a detailed housing secureanadequate education for their children,
program, put forward in The Right to Housing: A reduce chances of finding a decent job and deprive
Blueprint for Housing the Nation.3 them of decent public services and
That document provided an analysis of the communityfacilities. The quality of one's housing
failures of the private market and of government may also be an outward sign, as well as part of a
programs similar to what is put forward inthis person's self-image, that in some profound and
book.Andit included a detailedprogram for important ways one has not succeeded.
preserving affordable rental housing; promoting Housing has always been viewed as one of the
affordable homeownership; protecting the stock of necessities of life—a critical element of the
government-assisted housing; and “food,clothing and shelter” triumvirate. Stories
producing/financing new affordable housing. First- ofhomeless people freezing to death eachwinter
yearprogram costs—estimatedfor each element of provide stark reminders that housing isafun-
the program, with administrative costs added—at damental need. In earlier eras, events such as the
that time ranged from $29 billion to $88 billion, great Chicago fireof 1871 and the cholera
depending on howrapidly andfully specific epidemics that swept densely populated urban areas
program elements were introduced; by way of in the early and mid-19th Century dramatically
comparison, at the same time, the highly regressive made the link between poor housing conditions
income tax system for housing provided at least andhealth and safety (Friedman 1968). The public
$54 billion in tax breaks for high- income response was enactment of tenement house laws,
households. The thrust of the various elements was first inNew Yo rk City and followed by other large
to move substantial portions of the existing housing cities. The explicit goal was to regulate the
stock, as well as new additions, into the nonprofit “health,safety and moralsof tenants” (Wood 1934)
sector (publicaswell as private) as well as to protect the nonpoor who were living
—“decommodifying housing” was the catchword. in nearby neighborhoods.
Annual costs would steadily decrease Althoughhousing conditions have improved
as this fundamental shift inthe nation's housing dramatically since the 19th Century, poorqual-
stockprogressed.Congressman Ron Dellums of ityisstill a problem facing millions of Americans.
California introduced the program inthe 101st Fires due to inadequate wiring or faulty furnaces
Introduction 3
are still commonplace, and many households are cost-effectiveness of improved housing, physical
plagued by infestations of vermin and inadequate problems causedbypoor housing should not persist.
heating systems. In recent years, there have been
compelling demonstrations of the links between
THE EMOTIONAL AND SYMBOLIC
health and housing. For example, a project
IMPORTANCE OF HOUSING
undertaken under the auspices of the Boston
Medical Center underscored that poorly
In addition to protecting people from theele- ments
maintainedhousing isclosely linked to
and providing (or not providing) physical safety,
childhoodinjuries andleadpoisoning, and that damp,
housing fulfills a variety of critical functions
moldy interiors are associated with elevated
incontemporarysociety.5 Alandmark study
incidences of respiratory disease and asthma
preparedin 1966 for theU.S. Department of Health,
(Sandel et al. 1999, 25-26; see also Scientific
Education and Welfare (predecessor to the
American 1999,19-20; Bernstein 1999; Perez-Pena
Department of Health and Human Services)
2003).
investigated what was known about the relationship
Over the past 30 years, we have learned a great
between housing and the feelings andbehavior
deal about the impact oflead on children's
ofindividualsandfamilies. It concluded that “The
health.Leadpoisoninghasbeencalled“themost
evidence makes itclear that housing affects
commonanddevastatingenvironmentaldisease of
perception of one'sself,contributes to or relieves
young children” (U.S. General Accounting Office
stress, and affects health” (Schorr 1966, 3).
1993, 2). The Centers forDisease Control and
A decade later, a study of middle-income peo-
Prevention estimates that 434,000 children younger
pleaffirmed that an important aspect of the
than age six have blood-leadlev- elsabove the
meaning of one's house is
federal guideline (Avril 2003).4 Hazards due to lead
paint are most serious among poor, nonwhite the sense of permanence and security one could
households, who have a experience. ...In this regard, people spoke of
farhigherincidenceofleadpoisoningthantheir higher- “sinking roots,” “nesting,” and generally settling
income white counterparts (Leonard et al. down. The house...seemed to be a powerful
1993,8;NationalLowIncomeHousingCoali- tion symbol of order, continuity, physical safety, and a
2003). St. Louis, whichhas the nation's fourth sense ofplace orphysicalbelonging Closely
oldest housing stock, has childhoodlead poisoning connected ...was [another]aspect of the house's
meaning—the common notion that the house was
rates about six times the national average. In 1999,
a refuge from the outside world or even a bastion
thecity's leadpoisoning prevention program was
against that world ...: a desire to escape from other
scheduled to decontaminate about 500 low-income people and from social involvement, the
apartments. However, “at that rate, it will finish establishment of a place from which otherscould
deleading St. Louis in about 200 years” (Grunwald beexcluded,andwhere, consequently, one could
1999). truly be oneself, incontrol, “more of an
Additional evidence on the connections be- individual,” capable of loving, and fully human.
tween poor housing and health comes from a (Rakoff 1977, quoted in Stone 1993, 15)
controlled study carried out in England, which
revealed that residents living in high-quality public Feminist architectural historian Dolores Hayden
housing in West London were far less likely to has also emphasized the emotional importance
become sick than those living in low- qualitypublic ofhousing:“Whoever speaksofhous- ing must also
housing in East London. Further, researchers speak of home; the word means both the physical
concluded that “the costs offail- ing to provide space and the nurturing that takes place there”
decent homes in stable environments to families— (1984, 63). If housing is overcrowded, dilapidated
in the forms of ill health, underachievement, crime or otherwise inadequate, it is difficult, if not
and vandalism—will far exceed the investment in impossible, for family life to function smoothly.
adequate maintenance and repair of housing” (cited Empirical evidence demonstrating the importance
in Hynes et al. 2000, 35-36). Although there may of housing for emotional well-being comes from a
be room for improving our ability to measure the recent study of the impacts ofhousing quality on
mentalhealth; better- Congressionally-appointed bi-partisan Millennial

qualityhousingwasrelatedtolowerlevels Housing Commission:
ofpsychologicaldistress (Evans et al. 2000, 529).
Decent and affordable housing has a demonstrable
Jonathan Kozol's poignant account ofhomeless
impact on family stability and the life outcomes of
families inNew York City shelters underscores the children. Decent housing isanin- dispensable
extent to which grossly inadequate housing building block of healthy neighborhoods,and
conditions contribute to family dysfunction:6 A thus shapes the quality of community life. ...Better
lack ofprivacy creates stress for all family housing can lead to better outcomes for
members; the inability to have guests vastly individuals, communities, and American society as
constricts normal social access; children are unable a whole. (2002, 1)8
to do homework and adults live in constant fear
Housing has also been credited as providing asi
that their children will be endangered by the harsh
gni ficant b oost on th e economi c l a dde r due to
social and physical environments (Kozol 1988).
the opportunity it can present to build assets.
Further, recent research on impacts ofhome-
Although a key argument of this book is that
lessness on children has revealed that while “only 5
housing need not be viewed as the only or best
percent of children entering shelters had a
vehicle for promoting savings and wealth
developmental delay requiring specialist eval-
accumulation (see Stone 1993,195-196, for a
uation, . . . half of the children living in homeless
discussion of asocial alternative to wealth creation
shelters had one or more developmentalde- lays.”
through homeownership), and that much more
In addition, although nearly one-half the school-
housing can and should be socially and publicly
age children in homeless sheltersneeded special
owned, we acknowledge that, at least since theend
education evaluation, only 22 percent actually
of World War II, millions of households have been
received this testing. Children living in sheltersalso
abletogainafoothold inthe economy through their
missedfar more daysof school than did housed
ability to become homeowners. However, recent
children. And, finally, one-half of all children
research points to several important concerns and
insheltersshowed signs of anxiety and depression
risks related to low-income homeownership,
anddemonstrated significantly more behavioral
including the possibility of financiallosses (see
disturbances, such as tantrums and aggressive
Retsinas and Belsky 2002:Part 3). And of course a
behavior, than did poor housed children (cited in
central defect of the homeownership push is the
Sandel et al. 1999, 39).
enormous racial disparities that exist in home-
Although it may be difficult to prove that these
ownership rates andinthe wealth-generating
and other types of problems are caused by poor or
potential and actuality ofhome purchase (see
no housing,7 it is undeniable that, at the very least,
Chapter 3 and Shapiro 2004). 9 Beyond the effects
inadequate housing (including long-term residence
ofhousing itself, where people live, in terms of
in shelters) can exacerbate an already
neighborhood setting and locational advantage, has
problematicsituation. A key aspect of family well-
a great deal to do with access to both educational
being necessarily involves the provision of decent,
opportunities and employment and social networks
affordable housing (Bratt 2002). As a bi-partisan
(see Chapter 18).
task force report declared:
[A] decent place for a family to live becomes a
platform for dignity and self-respect and a base for IMPORTANCE OF HOUSING IN A
hope and improvement. A decent home al- NEIGHBORHOOD CONTEXT
lowspeopletotakeadvantageofopportunitiesin
education, health and employment—the means to
Even a cursory overview of this country's com-
get ahead in our society. A decent home is the
munity development initiatives reveals that housing
important beginning point for growth into the
has consistently been givenacentralpo- sition. In
mainstream of American life. (Report of the
theurban renewalprogram, for example, the earliest
National Housing Task Force 1988, 3).
focus was on “slum” clearance. Later, the emphasis
More recently, this assertion was echoed by the was on housing rehabilitation. As partof theModel
Introduction 5
Cities program of the mid-1960s, enforcing These are renter households who have incomes of
housing codes, developing “in-fill” housing on 50 percent orless of area median income, pay more
vacant land andrehabili- tating housing were key than 50 percent of their income for rent and utilities
components. The Community Development Block andwhomay also live in severely inadequate
Grant (CDBG) program, inexistence since 1974, quarters,10 yet do not receive federal assistance.
has supported avariety ofhousing initiatives, Slightly over 5 million of the nation's
withhousing responsible for the largest share of approximately 103 million households fall into this
CDBG expenditures (The Urban Institute 1995, iv). category (HUD 2003), with about 15 percent of
During the 1980s and 1990s, nonprofit de- them living in nonmetropolitan areas (NationalLow
velopment organizations proliferated across the Income Housing Coalition 2001). Yet this figure
country and have become central players in does not include many of those with serious
community revitalization efforts. Here, too, there is housing problems, such as the homeless. While
a significant focus on housing, with the vast estimates of the total number of homeless vary
majority of these groups involved with housing widely—in part a function of the inherent difficulty
production or rehabilitation (Vidal 1992, 5). The of counting these people—an often-cited figure is
National Congress for Community Economic that there are 800,000 homeless people
Development (NCCED) has estimated that intheUnitedStates on any given night. And, over
therearemorethan 3,600 community development the course of a year, some 3.5 million people may
corporations (CDCs), which isthe dominant type of be homeless for varying periods of time (National
nonprofit development organization (NCCED Low Income Housing Coalition 2005; see also
1999). Moreover, housing producedbyCDCs Chapter 15).
“isoften a foundation for such activities as business In addition to the literally and virtually
enterprise, economic development, job training, homeless are tens of thousands of people who are
health care and education” (NCCED 1999, 11). “pre-homeless” or nearly homeless. In New York
Although many CDCs are acknowledging that City (and doubtless in many other cities with large
their housing initiatives should be viewed inthe immigrant populations), there have been numerous
broader context of comprehensive community illegal conversions of basement space in single-
revitalization—including the provision of social family homes and apartment houses into small
services, employment training and referrals, health (typically, 5Z X 8Z) cubicles, with common kitchens
care and substance abuse programs, and enhancing and bathrooms, which present serious
educational opportunities (U.S. General fireandhealthhazards. Officials are reluctant to
Accounting Office 1995)—the quality ofhousing is clamp down on these living arrangements—even if
one of the most visible and concrete signs of they could systematically find them (estimates
neighborhood well-being. Housing is, and will range from 10,000 to 50,000 units inNew Yo rk
continue to be, a central component of virtually any City alone)—knowing that the consequence of
community's rebuilding efforts, and CDCs are enforcing housing codes would be serious increases
likely to continue to play a significant role (see inthe homelessness population (Wolff 1994).
Chapter 16). Moreover, illegal units of thissortare not confined
to central cities and immigrant populations
(Lambert 1996). Among the worst housed of the
OVERVIEW OF HOUSING NEEDS nearly homeless are migrant farmworkers
IN THE UNITED STATES (Greenhouse 1998).
Owning one's home isof course no guarantee
Despite theuniversalphysical needfor shelter,as that a family's residence will be problem- free.
well as the symbolic and emotional importance About 2 million homeowner households lived in
ofdecent housing, housing problems across our housing with moderate or severe problems in
nation areserious andwidespread.TheU.S. De- 1999,11 and more than 6 million home-
partment of Housing and Urban Development ownerhouseholds paid morethan 50 percent of their
(HUD), at the request of Congress, submits oc- income for housing. About 84 percent of all
casional reports on “worst case housing needs.” homeowners facing severe housing problems
earned less than 80 percent of area median income What isthe best estimate of the bottom line for
(NationalLow Income Housing Coalition 2001).12 all of the above housing problems? The National
Further, in 1999, about 2.6 million households Low Income Housing Coalition (2001) estimates
lived in units with more than one person per room that some 18.5 million homeowner households and
(the official measure of overcrowding); about one- 17.2 million renter households are facing either
half of this group faced overcrowding problems in moderate or severe housing problems. Of these
conjunction with problems of costs andquality 35.7 million households, about 19.5 million earned
(NationalLow Income Housing Coalition 2001). less than 50 percent of median income,16 and
Finally, and perhaps most depressing of all, the another 7.5 million
“worst case housing needs” figure does not include earned50to80percentofmedianincome.17 The Joint
the approximately 1.7 million households with Center for Housing Studies has reached a similar
severe problems living insubsidizedhousing conclusion, presented somewhat differently:
(NationalLow Income Housing Coalition 2001).13
Included here are public housing units that are A staggering three in ten US households have
waiting to be repaired or substantially rehabilitated housing affordability problems. Fully 14.3 million
as well as thousands of units of privately owned are severely cost-burdened (spend more than 50
percent of their incomes on housing) and another
subsidized housing that have a similar backlog of
17.3 million are moderately cost-burdened (spend
maintenance problems (see National Commission
30-50 percent of their incomes on housing). Some
on Severely Distressed Public Housing 1992; 9.3 million households live in overcrowded units
England-Joseph 1994; Finkel et al. 1999). or housing classified as physically inadequate. And
Three additional factors are relevant when a disheartening 3.7 million households face more
considering thescopeof ourhousing problems: First, thanone ofthese problems. (2003, 25)
in terms of quality, HUD and Census Bureau
criteria for “severely substandard” ignore Using his shelter poverty concept, Michael
thestricter,morerelevant,legallyenforceable local Stone has found a similarly massive number of
housing code standards. Incorporating such households (about 15 million renters and 17
standards into definitions of adequacy would million homeowners in 2001) facing serious
considerably increase the numbers of households housing affordability problems. However, his
living in “inadequate units.”14 Second, a residence analysis underscores “a significantly different
th at i s i n d ecent condit i on, of t h e proper size distribution of the problem: Not all households
for the household andwithintheir financial means shelter-poor are paying over 30 percent of their
may nonetheless be unacceptably dangerous, incomes forhousing, and not all households paying
isolating and unpleasant—hence substandard—if over 30 percent areshelter-poor.”18 Most strikingly,
thesurrounding residences and streets fail to meet his approach shows that families with children
minimal standards. And third, the affordability aremore likely to have affordabilityproblems, and
criterion embodied in HUD's that small middle-income households are less likely
“worstcase”datafailstorecognizethese- vere to have affordability problems, than is
budgetary problems facedbyrenterhouse- holds suggestedbythe conventional standard (see Chapter
with incomes above 50 percent of the area median 2).
who must spend more than one- half their income Another way of looking at housing needs is via
for rent. In addition, many other lower-income estimates of thenumber ofpoorhouseholds eligible
renter households who pay less than 50 percent of for housing assistance who do not receive it. About
their income for rent may still be paying way too two out of three renters with incomes below the
much. This is explored more fully in Chapter 2, poverty line do not receive any housing assistance
which argues that any fixed “proper” rent-to- (Daskal 1998, 35). And, using HUD's higher
income ratio standard ignores the realities that income limits of eligibility for housing assistance,
household size, income level and the need to pay far more low-income households could receive
for non-shelter basics all go into determining housing if such funding were available. At the very
whether a given unit is “affordable” for a given least, the5mil- lion households who have “worst
household.15 case housing needs” would be eligible for a subsidy
Introduction 7
from HUD. exemplified by the hundreds of thousands of

Housing needs can also be examinedbycom- Americans who, at any given point in time, are
paring the housing situation of those with the least without any private domestic space at all—the
housing opportunities and resources and those with country's homeless population.
the most, which are far from evenly distributed. As a society, we seem content to permit such
Housing needs among our poorest citizens, disparities. And the problems can only get worse,
discriminated-against racial groups andwomen as housing costs have been rising faster than
headsofhousehold aremuch more serious than incomes for most of the past 30 years. The Joint
among the population at large. For example, Centerfor Housing Studies has noted that “home
“regardless of income, the incidence of burdens is prices and rents have continued to outpace
higher among minorities than whites...” (Joint generalprice inflation” (2003, 25). (See also
Centerfor Housing Studies 2005, 25). Thus, Chapter 1 on income distribution trends and
housing is America's Great Divide. How and where Chapter 2 on housing affordability trends.)
one lives is the marker of one's socioeconomic and, Moreover, “welfare reform,” introduced in
to a large extent, racial status inthe society and the 1996, is having a nontrivial impact inthe housing
local community. Moreover, this divide runs area, although its full effects remain to be seen.
through all our major systems: education, health Whileagreat many TANF recipients (Temporary
care, employment, criminal justice—in other Assistance for Needy Families, formerly known as
words, we have developedinto a “have/secure” AFDC) have entered the workforce, the pay levels
and“have- not/insecure” society.(See Chapter for the majority of these jobs still is considerably
1onincome inequality, Chapter 2 on housing below what is needed to cover the cost of market
affordability, Chapter 3 on racial discrimination, rents for apartments. In addition, millions
Chapter 13 on the elderly and Chapter 14 on offamilies who have neverbeen on welfare, and
housing challenges facing women.) who earn minimum wages or somewhat above, are
The extremes of housing consumption are still unable to afford decent housing (see Chapter
staggering. On the one hand, housing isthe most 18).
conspicuous form of conspicuous consumption. The alarming loss of unsubsidized low-rent
Mega-mansions are commonplace in affluent units is another important factor contributing to
suburbs, often replacing more modest dwellings high rental housing costs. Between 1991 and 1997,
that are demolished.And these are not theexclusive thenumber of unsubsidized rental units
domains of the “rich andfamous,” as large numbers affordabletoextremely low-income households
of households rode the wave of economic growth (those with incomes 30 percent orless of area
and expansion during the 1990s. A New York median income) dropped by 370,000—a 5 percent
Times article described this Memphis scene: reduction. At the same time that the low- rent stock
has been decreasing, thenumber of households
The beige, three-story mansion fills a one-acre lot
...........Roof turrets, tall windows, columns that earning 30 percent orless of median income has
frame the front door at the head of a majestic, been increasing (HUD 2000, 22). According to the
sloping driveway all heighten the impression of a Joint Centerfor Housing Studies, “In 2001, the 9.9
p a l ace. . . . Th e r anch house next d oor seems, million renters in the bottom quintile [of income,
by comparison, like a shack. “Such houses,” ob- whichwas no more than $17,000] outnumbered the
serves KennethRosen, who headstheUniversity of supply of these [unsubsidized] units by fully 2
California'sFisher CenterforRealEstate, “are million. Reducing the pool even further, higher-
conspicuous proof that a family has achieved a income households occupied 2.7 million of the 7.9
level of wealth way beyond its physical needs. A
million lowest-cost units” (2003, 28).
mansion, more than luxury cars or any thing else,
Beyond these important trends, there are deeper
showseveryone inthecommunity that you are rich.”
(Uchitelle 1999) causes behind the staggering situation we are
observing.
On the other hand, millions of households are
facing serious problems securing andpaying for
decent shelter. The most extreme situation is THE ROOTS OF HOUSING PROBLEMS
Housing problems are deeply ingrained in the extent that it is not opposed entirely, has largely
operation of our economic system andinthe ways in shifted away from housing production to vouchers
which society functions, and they have not that ostensibly give recipients the freedom to shop
emergedin just the past fewdecades. Rather, this in the “free” housing market. Yet this market tends,
country has a long history of such problems (see, in many places, to have littleor nothing available,
for example, Stone 1993, Chapters 3, 4), the forcing recipients to returntheir vouchers unused,
consequence of certain basic institutional while in other places, it consists of exploitative
arrangements and characteristics of our society. landlords who reapwindfalls from the vouchers.
The most important factors include the workings of Rent control has been discredited as allegedly
the private housing market; widening income destroying market incentives forland- lords and
inequality; persistent and pervasive housing developers to maintain and produce unsubsidized
discrimination; overdependence on debt andcapital low-rent housing, thus (so theargument goes)
markets to finance housing; and public policies that causing decay and abandonment of great swaths of
are inadequate to counter these trends and, at worst, urban America. Government is
exacerbate them. blamedforrunawayhousing costs andinadequate
housing production, through imposition of
The Illusions of “the Market” exclusionary zoning and strict subdivision
andpermitting regulations. Ironically,totheex- tent
Throughout this nation's history,there has been that this latter critique has some legitimacy,
astruggle between those who believe that we have a thegovernments responsibleareunder thecon- trol of
collective responsibility,through, but not limited to, and acting on behalf of high-income people
government, to “promote the general welfare” and seeking to protect their wealthfrom the market.
those who assert that the generalwelfare isand It isour view that the ideology of thevirtu- ous
should be best achievedbyall pursuing their own market is largely a cynical and hypocritical
self-interest via “theMar- ket,”with government rationalization for selfish individualism and
doing as little as possible, apart from providing for widening inequality. Simplistic theories have been
the common defense. From theGreat Depression used to divert attention from theunderlying causes
through the 1970s, the formerviewpredominated, of housing and other social problems by focusing
albeit often tempered with ritual apologies for instead on admittedly flawed, inadequate and often
interfering with the alleged virtues of the market. contradictorygovernment responses to those
Over the past quarter-century, though, the problems. It appears that we have forgotten that
idealization of the market as the answer to nearly markets are social creations, operating on the basis
all social and economic problems has emerged as oflegal and economic incentives anddisincentives
the dominant established and enforced by governments. The
ideology,withgovernmentportrayednotonlyas biggest and most profitable businesses get that way
outrageously wasteful of “your money,” but indeed by ruthlessly driving out or buying up competitors
as thevery cause ofpoverty, anti-socialbehavior, in order to escape from the strictures ofthe
declining educational performance and so forth. competitive market whose virtues they proclaim.
Nowhere has thisshift been greater than with And they resist mightily government attempts to
regard to housing andhousing policy.(Afew of the rein in their monopolistic depredations
most rabid examples of attacks on government (cf.Microsoft). But when they fail, to whom do
interventions in housing are Salins 1980 and they turntobe bailed out? Why of course, the
Husock 2003.) Public housing has been attacked as government via the taxpayers (see discussion
an integral part of the culture of welfare ofthesavings and loan bailout and the crisis of
dependency as well as the worst of modern urban Fannie Mae and Freddie Mac in Chapter 4).
design. Never mind that most public housing does Furthermore, theefficiency thatintheoryat-
not fit the stereotypes and that relentless opposition taches to competitive “free markets” is at best a
from private real estate interests largely accounts one-dimensional efficiency that has no place for
for the failures ofdesign and siting that do exist. distributive justice and neighborhood effects. For
Government assistance for housing the poor, to the example, sharply escalating housing prices in
Introduction 9
manyparts of the country are in fact the response of KEY CAUSAL FACTORS OF HOUSING
the free housing market to demand from ever- PROBLEMS—BEYOND THE MARKET
richer households at the top of the increasingly
unequal income distribution (see Chapter 1and In addition to our view that the private housing
Chapter 4). While taxing away some of this market works at cross-purpose with the needs
speculative wealth would dampen price increases, ofprovidingdecent, truly affordable housing for
thereby making housing generally more affordable, all,anumber of other factors are at the root of
and generate some revenue that couldbe usedfor ourhousing problems. Since each of these is
low-income housing, such redistribution would developed more fully in the chapters ofthe book,
ostensibly reduce the efficiency of the housing the following offersanoverview ofthese critical
market. Yet, to add insult to injury, the tax system themes.
actuallyprovides incen-
tivesforsuchspeculation(seeChapter5).Ineffi- ciency Widening Income Inequality
on the upside ofthe market (for instance, windfall
profits that the market would not generate without Our housing problems are directly and closely
public assistance) does not seem to bother free- connectedwith theoverall structure ofour economic
market ideologues. system. In contrast with several decades post-
As for so-called neighborhood effects, or ex- World War II, when the gap between the rich and
ternalities, free-market ideology/theory either sees the poorwas shrinking, for the past 30
them as beneficial orignores them. For example, if yearsthistrendhas changed. We have been mired in
tearing down smaller, older houses to build mega- a period of sustained and growing income
mansions results in higherproperty values inequality, wherethe disparitybetween the upper
andhence higherproperty taxes and greater and lower tiers of the income distribution has
economic stress for older homeowners, free-market become ever wider. Moreover, various subgroups
ideology sees this as a positive externality (the of the population (such as persons of color and
latter are better off because their propertyvalues single-parent families) areexpe- riencing this
have risen), not as a negative ex- ternalitybecause disparity with a disproportionate frequency.
their quality oflife has diminished due to increased Beyond the inequality in income, for most
costs. If the free market produces massive houses households, the income side of the housing af-
on large lots sprawling across the landscape, the fordability equation is not keeping pace with the
costs to natural habitats and watersheds, as well as escalating costs of housing. Without adequate
the costs ofin- creased traffic and air pollution, are income, the ability ofhouseholds to cover the costs
largely externalized, imposed on others in the ofhousing is simply impossible. These trends have
present and future rather than being part of the not “just happened.” Instead, as discussed in
calculus of efficiency. Chapter 1, they are the outcome of specific
The housing market also treats housing as a policies, goals and initiatives ofboth government
commodity—an item that is bought and sold for and the corporate sector.
profit. For the low-income renter orhome- buyer,
this creates problems at every step ofthe housing
Persistent and Pervasive Housing Discrimination
production, development, distribution and
financing processes. The final cost ofhousing
Notonlydopeopleofcolorhavelowerincomes than
isthe total of all the many costs involved—
their white counterparts, they are less able to
including land, building supplies, labor, financing,
compete inthe housing market due to persistent
distribution and conveyance. At eachphase of the
discrimination.19 Housing discrimination is nothing
process, the goalis to maximize profits,
new (Loewen 2005). While it was a “given” before
whichinturn increases costs andreduces afford-
direct government intervention in housing during
ability.
the Great Depression, it became codified through
theguidelines of theFederal Housing
Administration. Indeed, the agency's 1938
underwriting manual advised FHA inspectors who Chapter 4 explains how these dilemmas have
were assessing properties for mortgage insurance to emerged andpoints toward some of the alternatives,
dotheir job, as follows: which are discussed in Chapter 12.
Areas surrounding a location are investigated to Flawed and Inadequate Public Policies
determine whether incompatible racial and social
groups are present, for the purpose of making a Despite and perhaps because of these trends, in
prediction regarding the probability of the location recentyears, housing equityissues have receded
being invaded by such groups. If a frompublicandpoliticalconcern.Thishasbeen
neighborhoodistoretain stability, it is necessary
accompanied by declines in government support
that the properties shall continue to beoccupied by
the same social andracial classes. A change in for housing programs and subsidies relative to the
social andracial occupancygenerallycontributes to growing needfor such support. As journalist Jason
instability and a decline in values. (1938, Section DeParle concluded in 1996 (and little has changed
937) since), “The Federal Government has essentially
conceded defeat in its decades-long drive to make
housing affordable to low-income Americans.
While ittook severaldecades for the FHA to
change both its guidelines as well as its mode of ...Housing has simply evaporated as a political
operation, the legacy ofhousing discrimination and, issue.” Almost no office holder or candidate for
indeed, various ongoing discriminatory practices, is office, at any level of government, gives prominent
still agrim fact of American life. Much moreoften attention to housing. The current Administration's
than not, neighborhoods are characterized by view was expressedinthe astounding comment
occupancy by one racial group or another. made by HUD Secretary Alphonso Jackson at a
Moreover, the activities and conscious decisions May 2004 hearing of the House Committee on Fi-
that have created these patterns arestill nancialServices. In response to a question from one
widelypracticed today.Thiscritical issue is explored of the committee members, Secretary Jackson
in Chapter3.But the role ofrace and the reality “stated that he doesn't talk about housing the poor
ofdiscrimination isatheme that runs throughout the because ‘being poor is a state of mind, not a
book. condition”' (Committee Members Decry HUD
Secretary's Comments on the Poor 2004).
Overdependence on Debt and Capital Markets But a lack of federal interest in housing was not
always the case. Although this interest often grew
Due to the intrinsic nature of housing (bulky, out of a desire to use housing as a vehicle to attack
durable, tied to land) and thesystem of private nonhousing problems (Marcuse 1986), for decades
ownership of almost all housing inthis country, the the federal government was a major player in
housing sector is extraordinarily dependent on the promoting housing for low- income households.
cost and availability ofborrowed money. Mortgage- What was historically the principal approach—
lending institutions have thus been a dominantforce low-rent housing developments built and managed
in the housing sector for the past century.Their by local housing authorities, with heavy federal
interests and evolution, including subsidies—has been under relentless attack since
theirperiodiccrisesandconsequentpublicpoli- cies, the 1960s. And the two-decade-long emphasis
have had an enormous impact on the phys- (from the early 1960s through theearly 1980s) in
icallandscapeof this country and on economic producing subsidized housing through the private
distribution and the stability of the overall econ- sector has also lost favor among federal officials.
omy.Onthe one hand, the mortgage system has “Shallower”subsidiesprovided through the Low
facilitated the construction of vast amounts of Income Housing Tax Credit (LIHTC) and the
housing and the spread of homeownership but has HOME Investment Partnership program have
also widened housing inequality, fostered debt added some new units but address only avery small
entrapment, destroyed neighborhoodsand made the fraction of the overall needs for housing
nation's economyincreas- ingly unstable and affordabletolow-income households—theyfail to
vulnerabletothe vagaries of global capital markets. reach far enough down the income distribution, and
Introduction 11
very few units are permanently affordable. related tax subsidies go to those earning over
Since its creation in 1986, the LIHTC has con- $86,000 (Dolbeare, Saraf and Crowley 2004; see
tributed to the production of about 1.8 million also Chapter 5). Including investor deductions, in
units, but many of these units are not availableto 2004 housing-related tax expenditures totalled
those withincomes below 30 percent of median $119.3 billion, four times the budget authority for
income (National Low Income Housing Coalition housing assistance (Dolbeare, Saraf and Crowley
2005).20 The HOME program has funded the 2004). In so many ways, the nation's housing
acquisition, construction and rehabilitation of about system reflects and undergirds the extreme and
800,000 units ofhousing since its inception in 1990, growing class and race divisions that characterize
but again, many of the residents are not the most the society as a whole.
needy,and most of theunits are not permanently Our flawed public policies are also causing a
affordable (National Low Income Housing net loss of subsidized units. Various sources
Coalition 2005). estimate that since the late 1980s, some 200,000
Between 1977 and 1994, the number of HUD- units have been removed from the inventory of
assisted households grew by 2.4 million. But assisted housing. This has been due to the loss of
thisnumber camouflages a troubling trend: During over 100,000 units through demolition of some
the period from 1977 to 1983, the annual average severely deteriorated subsidized housing and as a
increase was 215,000 units; however, between resultof theHOPE VI public housing re-
1984 and 1994, the average annual increase fell to development program (National Housing Law
82,000. From 1995 to 1998, no newfunds for Project et al. 2002; see also Chapter 11), as well as
assistedhousing were provided by Congress. the “expiring use” problem: There has been a l oss
Finally, however, starting in 1999, there was again of 60,000 uni ts i n some olde r sub s idize d
modest recognition of the need for additional housing developments wheretheownerhas prepaid
housing assistance, with the appropriation of funds the mortgage and converted the buildings into
for 50,000 new vouchers in that year, followed by market-rate dwellings, and a loss of about 40,000
60,000 and 79,000 in FY2000 and FY2001, units where owners have opted out of Section 8
respectively (Bratt 2003, based on Dolbeare and contracts (Achtenberg 2002; see also Chapter 7 text
Crowley 2002). In FY2002, funding for 26,000 and box).
new vouchers was appropriated, but Congress The result of all of this is a chronic insuffi-
approved no new vouchers in FY2003, FY2004 ciency of subsidizedlow-rent units. A recent es-
and FY2005, and HUDrequested none for FY2006 timate ofhousing needs comes from theMillen- nial
(NationalLow Income Housing Coalition 2005). Housing Commission, whose final report stated
It is no surprise that these dismal numbers that “The addition of 150,000 units annually would
concerning new households being assisted reflect make substantial progress toward meeting the
reductions inthe inflated-adjusted level of housing needsofELI[extremely low income; at or
appropriations for new housing units. Between below 30 percent of area median income]
1976 and 2004, net new annual federal budget households, but it would take annual production of
authorityfor assistedhousing droppedfrom $56.4 morethan 250,000 units for more than 20 years to
billion to $29.25 billion (in constant 2004 dollars) 21 close the gap” (2002, 18).
(Dolbeare, Saraf and Crowley 2004). In dramatic One impact of these shortages is long waits for
contrast, the largest form of federal housing aid— subsidized housing. Based on data collected
the indirect and highly regressive subsidy the tax between 1996 and 1998, HUD estimated that,
system provides to homeownersviathe nationally,theaverage wait for a public housing unit
homeownerdeduction (the ability to deduct from was 11 months, and for a Section 8 rental
one's taxable income base all property tax and assistance voucher, it was 28 months. For the
virtually all mortgage interest payments)—was largest public housing authorities (those with over
worth over $84 billion in 2004, with themajority of 30,000 units), the wait for a public housing unit
these subsidies going to households in the top two- was 33 months, and 42 months for a Section 8 cer
fifths of the in- tificate. In New York City, the wait for either a
comedistribution;nearly37percentofhousing- public housing unit or a Section 8 voucher can
beasmuch as eight years. Between 1998 and 1999, the labor movement, and theCivil Rights
the number of families waiting for assistance Movement particularly stand out. The women's
increased substantially. The combined waiting list movement, thegay and lesbian move- mentandthe
for a Section 8 voucher in 18 cities sampled grew disabilityrights movementare also notable forwhat
from just under 500,000 to 660,000 households. theyhave achieved, however imperfect and
The40 waiting lists from those cities examined in incomplete. Indeed, that these are all widely
the HUD study included about 1 million families. recognized as “movements” and referred to with
And HUD cautions that these figures maybean the definite article “the” attests in some measure to
underestimate because many housing authorities their potency, in striking contrast with housing.
have closed their waiting lists due to their Any viable strategy to achieve a Right to
overwhelming size (HUD 1999, 7-10). Housing must emerge through a dynamic and
The failings of our housing policies are, in part, participatoryprocess that includes the following
due to the government's desire to fulfill a number principles: understanding and confronting fun-
of economic, social and political goals, beyond the damental causes of housing problems; putting forth
desire to provide housing for the poor. In addition, avision of truly social housing provision;
housing policies are always greatly influenced and participating in alliances across issue
shapedbythe needsof the private for-profit housing lines;buildingorganizationscommittedtolead- ership
industry—an in- development and broadly inclusionary decision-
dustrythathasasophisticatedandwell-financed making; generating independent funding for skilled
lobbying component and that has been success- organizers and organizing; and building alliances
fulingaining federal support for their agenda (see with trade unions.
Chapter 5) . Itis little wonder,therefore,that housing
policies have fallen shortof the goal of providing
decent, affordable housing for those most in need. AN OVERVIEW OF THE BOOK'S CHAPTERS
While Chapter 6 asserts that our record of federal
intervention in housing has been disappointing, This book argues that what is neededisthe legal
regardless of the political party in power, it is mandate of a RighttoHousing andinstitutional
acknowledged that somewhat more has been changes to makethis mandate become reality. 22 In
accomplished underDemo- cratic than under thefirst portion, which includes Chapters1 to 7, we
Republican Administrations. present an array of analyses demonstrating that
beyond the litany ofhousing needs and problems,
there exist key structural determinants of housing
ORGANIZING FOR A RIGHT TO HOUSING injustice. Critical changes inthe labor market and
the resulting widening income inequality
Achieving the ambitious vision and goals put forth andinsecurity are discussed inChapter 1. Chapter 2
in this book certainly will require a housing reveals one of the most damaging impacts of our
strategy and a movement well beyond what has economic inequality, in demonstrating how shelter
been seen heretofore inthis country.For the most poverty afflicts tens of millions of American
part, housing organizing and activism in the United households, especially the most vulnerablegroups
States have been modest and constrainedintime, in society.The following three chapters explain
place and vision. Even inthose periods where howkey aspects of society and the housing system
housing activism has reached a national contribute to our housing problems. The role of
scaleandincluded aspects of a Rightto Housing in race/racism is explored in Chapter 3; the faulty
its vision, thestrategicapproachhas fallen far short structure of our housing finance system is explored
(see Chapter 10; see also Stone 1993, Chapters 11, in Chapter 4and the ways in which
12). ourfederalhousing subsidies have consistently
Past social movements have resultedinsub- favored the wealthy over the poor are
stantial expansions ofbasic rights farbeyond what detailedinChapter 5. The sometimes perverse but
has been achieved with regard to housing. nearly always inade-
Emancipation, women'ssuffrage, the many gains of quatehousingpoliciespromulgatedoverthelast 70
Introduction 13
years are discussed in Chapter 6. Chapter 7 andits which housing justice becomes linkedinan integral
accompanying box explore how one federal policy way with the many other struggles for justice,
around the issue of “expiring use restrictions”has opportunity and democratic participation.
evolved andhas impactedpoor residents of Of course, we recognize that in advocating a
subsidizedhousing. Taken together, these chapters Right to Housing, there are a host ofissues and
present a clearpictureof the ways in which concerns that need to beaddressed andresolved. For
inequality and housing problems are an outgrowth example, how much housing, ofwhat quality andin
of the nation's economy, financial structure, and what locations should constitute each person's
flawed government and private market practices. minimum “right”? Should a Rightto Housing
The secondportion of the book opens with include universal design features that would make
Chapter 8, which makes the “case for a Right to all units both accessible to people with physical
Housing.” It continues by highlighting broad infirmities, as well as to visitors who are physically
principles and strategies to achieve a Right to challenged?23 What responsibilities should be borne
Housing, including Chapter 9, on the past and by recipients, andhow would those expectations
potentialcontributionsofthecourts,andChap- ter 10, beenforced?
discussing organizing strategies forin- Withoutdiminishingthe importance ofsuch
corporatingaRighttoHousingintothepolitical questions, we believe that the time is ripe to re-
agenda. Chapters11and 12 offerproposalscon- visitaserious dialogue about theunderlying rationale
cerning how social ownership of housing and a for a Right to Housing. More than 60
more socially orientedfinance systemcouldcon- yearsafterFDRassertedthatthecountryneedsa second
tribute to that goal.The following three chapters Bill ofRights—one that includes a Right to
provide insights on how our current housing Housing—it is time to makethat promise come
system creates problems for three subgroups of the true.
population—the elderly (Chapter 13), women As this book goes to press, we acknowledge
(Chapter 14) and the homeless (Chapter 15)—as that the realization of a Right to Housing may seem
well as specific proposals forhow a Right to further away than ever. With hundreds of billions
Housing could substantially alleviate the suffering of dollars going to fight wars in Afghanistan and
of these vulnerable groups of people. Iraq,terrorism intheU.S.and abroad, as well as to
Chapters 16 to 18present furtherpolicyini- repair the damage left in the aftermath ofthe
tiatives that could contributetothe implementation August andSeptember 2005 hurricanes on the
of a Right to Housing. Chapter 16 underscores GulfCoast, theexpenditureof large sums of money
theaccomplishments andpotential of to implement a bold new domestic social policy
communitydevelopment corporations, and the box agenda may be off on a distant horizon.
provides an overview of this activity in rural areas. We believe that the health of a society can be
Chapter 17presents a detailed account of state and judged by the quality and affordability ofits
local government initiatives. And Chapter 18 housing for the one-third ofa nation least well-
examines the relationship between housing and off.Asocietyprofessingdeepconcernforhuman needs
economic security. The chapter concludes with the should not besoprofoundly deficient in this area.At
argument that a Right to Housing and anew social the start ofa new century, the United States isstill
contract between residents and government could, facing serious anddeeply ingrained housing
indeed, formthe basis for anew social agenda. problems. Housing is so fundamental to human life
It is beyondquestion that as a societywe have and well-being that meaningful progress toward
the resources to provide housingfor all that is de- achieving a Right to Housing provides an excellent
cent, truly affordable and in supportive commu- springboard for launching closely related social and
nities. What is required is an activistgovernment economic reforms. The logic is sound. But thecall
that has social justice as a prime goal. As well, it to action has been muffled, and key political actors
requires that housing policy and programs become have, for the most part, been unswayed and missing
central concerns and activities beyond the narrow in action. This book is aimed at changing the pre-
field of housing providers and housing vailing mind-set and stimulatinginnovative, ag-
advocates.What is neededis a social movement, in gressive and far-reaching responses to ourper-
sistent housing problems. impair children's intelligence at far lower levels than
current federalhealth guidelines. . . [N]ot only do small
amounts of thetoxic metallower achild's intelligence, but
each additional unitofleadhas a more dramatic effect than
NOTES at higher levels of exposure” (Avril 2003).
5. According to psychologist Abraham H.
1. The Quality Housing and Work Responsibility Maslow's hierarchy of human needs, the basic, “lowest”
Act of 1998 amended the National Housing Goal. It is need that housing provides is shelter or protection.
arguable as to whether the new language constitutes a “Higher” level needs providedbyhousinginclude safety or
major or a modest retreat from the original goal, security, a sense of belonging, self-esteem and self-
whichwas to be realized“as soon as feasible.” The 1998 fulfillment. “Lower needs” must be met before “higher
Act states “that the Federal Government cannot through needs” (discussedinMeeks 1980, 46-49).
its direct action alone provide for the housing of every 6. Ofcourse,ithardlyneedsmentioningthateven
American citizen, or even a majority of its citizens, but it worse than “grossly inadequate housing” is no housing or
isthe responsibility of the Government to promote shelter at all—the most dire form of a housing problem.
andprotect the independent and collective actions of 7. Even inthe case ofleadpoisoning, where lead-
private citizens to develop housing and strengthen their based paint can be found in peoples' homes, other
own neighborhoods.” And further, “that the Federal sourcesofleadintheenvironmentcanposehealthrisks (such
Government should act where there is a serious need that as leadinthesoil, gasoline, old schoolbuildings, water
private citizens or groups cannot or are not addressing contaminated by old lead pipes). Thus, one can
responsibly” and “that our Nation should promote the neverbecertain which contaminated source is producing
goal of providing decent and affordable housing for all the elevated lead levels that may be observed.
citizens through the efforts and encouragement of 8. Empirical evidence underscores this point. In a
Federal, State, and local governments, and by the longitudinal study of poor and homeless families inNew
independent and collective actions of private citizens, York City, researchers found that “regardless of social
organizations, and the private sector.” Title V, Section disorders, 80 percent of formerly homeless families who
505, Sec. 2 (2), (3) and (4). received subsidizedhousing stayed stably housed, i.e.,
2. While we have never come close to fully imple- livedintheir own residence for the previous twelve
menting FDR's second Bill of Rights, recent proposed months. In contrast, only 18 percent of the families who
legislationsuggeststhataRighttoHousingstillhaspo- litical did not receive subsidized housing were stable at the end
muscle. The Bringing America Home Act (H.R. 2897), of the study” (Shinn et al. 1998, as cited by National
filed in 2003, would provide affordable housing, job- Coalition for the Homeless 1999).
training, civil rights protections, vouchers for child 9. There are huge differences in how housing
careandpublictransportation, emergencyfunds for families ownership creates unearned wealth. Minority home-
facing eviction, increased access to health care for all and owners, who often live in areas with little value ap-
Congressional support for incomes high enough so that preciation, are sometimes fortunate if they can sell their
families can support themselves. It would also providethe home for what they paid ten or twenty years earlier
resourcestoenable local and state governments to end (Oliver and Shapiro 1995; Conley 1999; Shapiro 2004).
homelessness. Also intro- ducedin 2003, theNational White, middle-class homeowners frequently see their
Affordable Housing Trust Fund Act (H.R. 1102) would houses rise in value over the years by a factor of five, ten
establishwithintheTrea- sury Department a fund to and even more, producing equity that can be drawnupon
promote the development, rehabilitation and preservation to providecomfortable retirement and
of affordable and safe low-income housing through numerousbenefitstotheiroffspring:highereducation, a
grants to states andlocal jurisdictions. Thegoalistobuild substantial inheritance and, most tellingly, financial aid
andpreserve 1.5 million units ofrentalhousing for the so they can buy they own homes, thus perpetuating,
lowest-income families over a ten-year period. Initial intergenerationally, the widely disparate racial gaps that
sources of revenue for the Trust Fund would come from inhere in homeownership.
excess Federal Housing Administration insurance 10. Defined as units with any one of several serious
reserves and from excess funds generated by the physical deficiencies, such as plumbing—lacking piped
Government National Mortgage Association (Ginnie hot water or a flush toilet or lacking both bathtub and
Mae), a government- sponsored enterprise created in shower, for theexclusive use of the residents of
1968 to support subsidized mortgage lending. theunit;heating,includingmajor systems breakdowns or
3. The 69-page document, written by Dick Cluster, inadequacies; electrical—either completely lacking or
is available from Community Economics, Inc., major problems such as exposed wiring and lack of
[email protected]. outlets. Other inadequacies that would place a unit inthe
4. A recent study published in the New England “severely inadequate” category pertain to serious upkeep
Journal of Medicine suggests that “lead poisoning might problems and significant physical defects in building
Introduction 15
hallways. A housing unit is termed “moderately “affordable housing” ap-

inadequate” if it has none of the defects associatedwith pearsthroughoutmanyofthebook'schapters,givenits
aseverely inadequate unit but has significant plumbing prevalence in housing studies, popular writings, legis-
breakdowns; unvented heating units; fewer upkeep or lation, program titles and the like.
hallway problems than inthe “severely inadequate” 16. This is calculated as follows from NLIHC
category but still has significant deficits, and if it lacks a (2001): (1) 87 percent (percent of renter households
kitchen sink, range or refrigerator for exclusive use of the earning below 50 percent of area median income with
residents of the unit (HUD 2000, A28-A29. severe housing problems) X 7.9 million (number of renter
11. A moderate housing problem consists of a cost households with severe housing problems) =
burden between 30 percent and 50 percent ofincome, 6.87millionrenterhouseholds.(2)46percent(percent
occupancy of aunit with moderate physical problems, or ofrenter households earning below 50 percent ofarea
overcrowding (more than one person per room); people median income with moderate housing problems) X 9.3
who are homeless orwho have been displaced areviewed million (number ofrenter households with moderate
as havingasevere housing problem. Also in- cludedinthe housing problems) = 4.28 million renter households. (3)
latter categoryarethosewithcostburdens above 50 percent 70 percent (percent of owner households earning below
of income, or occupancy of housing with serious 50 percent ofarea median income with severe housing
physicalproblems (NationalLow Income Housing problems) X 7.6 million (number of owner households
Coalition 2005). with severe housing problems) = 5.32 million owner
12. This does not include homeowner households households with severe housing problems. (4) 28 percent
with less serious problems. More than 10 million (percent of owner households earning below 50 percent
homeowner households earning 80 percent or less of area ofarea media income with moderate housing problems) X
median income have nontrivial problems with 10.9 (number of owner households with moderate
theirunit,rangingfromopencracksinwallsor ceilings, housing problems) =3.05 million households with
inadequate heat andheating units, andwaterleaks in- moderate housing problems. Total (1) + (2) + (3) + (4) =
sidethe house (Joint Centerfor Housing Studies 1998, 19.52 million households earning less than 50 percent of
68). area median income with moderate or severe housing
13. According to the Joint Center for Housing problems.
Studies, adding those households with severe and 17. This is calculated as follows from NLIHC
moderate problems who live in assisted housing, the (2001): (1) 7 percent (percent of renter households
figure comes to some 3.7 million households (2003, 27). earning between 50 to 80 percent of area median income
14. A government report published over 30 years with severe housing problems) X 7.9 million (number of
ago still has relevance today: “It is readily apparent that renter households with severe housing problems) = .55
even the most conscientious user of Census data. . . million renter households . (2) 34 percent (percent
would arrive at a total ‘substandard' housing figure which ofrenter households earning between 50 to 80 percent of
grossly underestimated the number of dwelling units area median income with moderate housing problems) X
having serious housing codeviolations. To use a total thus 9.3 million (number ofrenter households with moderate
arrived at as a figure for substandard housing isgrossly housing problems) = 3.16 million renter households. (3)
inadequate and misleading, because it flies inthe face of 14 percent (percent of ownerhouseholdsearning
extensive consideration given by health experts, building between50to80percent of area median income with
officials, model code drafting organizations, and the severe housing problems) X 7.6 million (number ofowner
local, state and federal court system to what have become households with severe housing problems) = 1.06 million
over a period of many owner households with severehousingproblems. (4) 25
years,thesocially,politically,andlegallyaccepted minimum percent (percent of owner households earning between 50
standard for housing of human beings inthe United States to 80 percent of area median income with moderate
Even if public and private efforts eliminate all housing housing problems) X 10.9 (number ofowner households
whichissubstandard under most current federal with moderate housing problems) = 2.73 million house-
definitions, there will still be millions of dwelling units holds with moderate housing problems. Total (1) + (2) +
below code standard” (Sutermeister 1969, 83, 102). (3) + (4) = 7.5 million households earning between 50 to
15. The term “affordable housing” is widely used 80 percent of area median income with moderate or
and generallyunderstoodtoimplyaffordabletohouse- holds severe housing problems.
withlimitedincome,but,asdescribed more fully in Chapter 18. Stone (1993) has calculated that, utilizing con-
2, we regard affordability not as an inherent characteristic servativeestimatesofcostsfornonshelterbasics(such as
of housing but as a relationship between housing cost and food,clothing, transportation), a staggering 14 million
the income of the user household: A multimillion dollar U.S. households (almost three times the number
mansion is affordable to a multi-millionaire, a $200 per withworst case housing needs) cannot afford to spend a
month apartment is not affordable to someone with single cent for housing if they are to have enough income
monthly income of $300. Nonetheless, the term to cover these otherbasic living costs. Among the forty-
five major metropolitan areas analyzed in a Center on Achtenberg,EmilyP.2002.Stemmingthetide: A handbook

Budget and Policy Priorities study, the percentage ofpoor on preserving subsidized multifamily housing.
renters paying morethan 30 percent of their income for Washington, DC: Local Initiatives Support
housing—HUD's payment standard forfamilies living Corporation.
insubsidizedhousing—ranged from a low of 65 percent to Avril, Tom. 2003. Study sees increased lead-paint risk.
a high of 92 percent; all but five locales fell in the 70 to Boston Sunday Globe, April 20.
90 percent range; using the50percent ofincome yardstick, Bernstein, Nina. 1999. Asthma is foundin 38% of chil-
the range was from a low of 39 percent to a high of 81 dren in city shelters. New York Times, May 5.
percent; all but eleven locales fell inthe50to70percent Bratt, Rachel G. 2002. Housing andfamily well-being.
range. (Note that in this study the author uses a definition Housing Studies, Vol. 17, No. 1, 13-26.
of “poor” pegged to the official poverty line as opposed 2003. Housing for very low-income households: The
to HUD's definitions ofincome, which are in relation to record ofPresident Clinton, 1993-2000. Housing
area medians. In 1995, the poverty line for a family Studies, Vol. 18, No. 4, 607-635.
ofthree was $12,158 [Daskal 1998:Table A-1]). By 2005, Committee Members Decry HUD Secretary's Comments
the povertyline for a family ofthree hadrisen to $16,090. on the Poor. 2004. Press release from Rep. Barney
19. Theeditorshavechosentoalloweachauthorto use Frank (Dem. MA), Ranking Democratic Member,
whatever racial terms heorshe feels most comfortable May 24.
with (including issues of capitalization, hyphenation and Conley, Dalton. 1999. Being black, living in the red:
such) rather than imposing a single style, given the Race, wealth, and social policy in America. Berkeley
complex and personal/political considerations that andLos Angeles: University ofCalifornia Press.
underlie such choices. Daskal,Jennifer. 1998. In search ofshelter:The growing
20. The LIHTC program requires that either 20 shortage ofaffordable rentalhousing. Washington,
percent or moreof theunits inagiven development be DC: Center on Budget and Policy Priorities.
occupied by individuals whose income is below 50 DeParle, Jason. 1996. Slamming the door. New York
percent ofthe area median income, or at least 40 per- Times Magazine, Oct. 20.
centoftheunitsmustbeoccupiedbyindividualsbelow 60 Dolbeare, Cushing N., and Sheila Crowley. 2002.
percent ofthe area median income (National Low Income Changing priorities: The federal budget andhousing
Housing Coalition 2005). assistance, 1976-2007. Washington, DC: National
21. Anotherimportant measure ofthe level offederal Low Income Housing Coalition.
assistance forhousing is total dollar outlays. These are Dolbeare, Cushing N., Irene Basloe Saraf and Sheila
payments to maintain and operate the total subsidized Crowley. 2004. Changing priorities: The federal
housing inventory. This figure has grown significantly budget and housing assistance, 1976-2005.
since 1976, as the total stock ofassistedhousing grew Washington, DC: National Low Income Housing
during much of this period. However, between 2000 and Coalition.
2007, assisted housing outlays are projected to England-Joseph,Judy A. 1994. Federally assistedhous-
dropbynearly $l billion (Dolbeare, Saraf and Crowley ing: Condition ofsome properties receiving Section 8
2004). project-based assistance is below housing quality
22. All thechapters, with one exception, were written standards. Testimony before the Employment,
specifically for this volume. Chapter 8 is an update of an Housing and Aviation Subcommittee, Committee on
earlier published article. Government Operations, House of Representatives.
23. The Fair Housing Amendments of 1988 Washington, DC: U.S. General Accounting Office,
amended the 1968 Fair Housing Act, adding prohibitions GAO/T-RCED-94-273.
against discrimination in housing on the basis of Evans, Gary W., Hoi-Yan Erica Chan, Nancy M. Wells
disabilities; requiring that multifamily dwellings and Heidi Saltzman. 2000. Housing quality and
constructed after March 13, 1991, be accessibletoper- mental health. Journal of Consulting and Clinical
sons with disabilities; and establishing construction Psychology, 68 (3):526-530.
requirements concerning accessibility with regard to Federal Housing Administration. 1938. Underwriting and
building entrances, common andpublicspaces, doors, valuation procedures under Title II ofthe National
kitchens andbathrooms as well as otherdwelling com- Housing Act. Washington, DC.
ponents. There is question as to whether HUD abides by Finkel, Meryl, Donna DeMarco, Deborah Morse, Sandra
these guidelines. Nolden and Karen Rich. 1999. Status of HUD-
insured (or -held) multifamily rental housing in 1995.
Prepared for U.S. Department of Housing and Urban
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Introduction 17
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Greenhouse, Steven. 1998. As Economy Booms, Migrant Everywhere and Now Public Housing Residents
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miracles: 1988-1998. Christmas in April Tenth- Year meaning of the house. Politics andSociety, 7(1):85-
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2003. The state of the nation’s housing, 2003. decent place to live. Washington, DC.
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2005. The state of the nation’s housing, 2005. incomehomeownership:Examiningtheunexamined
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Kozol, Jonathan. 1988. Rachel and her children.New Roosevelt, Franklin Delano. 1944. Unless there is secu-
York: Fawcett Columbine. rity here at home, there cannot be lasting peace in
Lambert, Bruce. 1996. Raid on illegal housing shows the the world. Message to the Congress on the State of
plight of suburbs' working poor. New York Times, the Union. January 11. In The public papers and
December 7. addresses of Franklin D. Roosevelt, 1944-45. Victory
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DC: Center on Budget and Policy Priorities. Salins, Peter. 1980. The ecology ofhousing destruction:
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Marcuse, Peter. 1986. Housing policy and the myth of the Sandel, Megan, Joshua Sharfstein and Randy Shaw.
benevolent state. In Critical perspectives on 1999. There's no place like home: How ‘America's
housing,eds. Rachel G. Bratt, Chester Hartmanand housing crisis threatens our children. San Francisco:
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Millennial Housing Commission. 2002. Meeting our DC: U.S. Government Printing Office.
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Congress and the Secretary of Housing and Urban janovic, James R.Knickman, Lucila Jimenez, Lisa
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Sunstein, CassR. 2004. The secondBill ofRights: FDR’s 2001. Washington, DC.
unfinishedrevolutionandwhyweneeditmorethan ever. United States General Accounting Office. 1993. Lead-
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978-1 999: A report to Congress on worst case hous-
Chris Tilly
1 The Economic Environment of Housing: Income

Inequality and Insecurity
HOUSING AFFORDABILITY depends those of color have persisted.

crucially on household income, not just on the • Single-mother families suffer a particularly
price and availability of housing. Given that almost severe income disadvantage, and recent cut-
all housing is purchased in a private market, the backs in welfare have sharpened this disad-
distribution of income is the most important vantage.
determinant of the quantity and quality of housing
obtained by the rich, the poor and those in between. All of these changes mark the revers a lot post-
The average level of income; degree of income World War II trends toward broader prosperity,
inequality between high- and low-income families; reductions in poverty and inequality and
and income differences by race, gender and age all construction of a stronger, more inclusive welfare
translate directly into how well different groups are state. This is the downside of the much- touted
housed. Understanding trends and disparities in “new economy.” While the new patterns are
income is essential for understanding the same straightforward, the reasons behind them have been
with regard to housing. hotly debated. Many analysts hold that relatively
The reverse is also true. Housing is the largest impersonal, non political and inexorable forces of
single expenditure for most U.S. families. This globalization; technological change; and evolving
means that for housing, income is both chicken and family structure have driven these income changes.
egg: Income determines housing affordability, but I will argue instead that conscious business
the evolution of housing prices is the largest factor strategy and, to a lesser extent, public policy have
determining inflation— thus determining the greatly shaped globalization and technical change,
purchasing power of income. and have had additional direct effects on wages and
Basic income patterns reported in this chapter income. Employment strategies used by businesses
are straightforward: have squeezed housing affordability by way of
wages. Chapters 2 and 4 explore how business
strategies in terms of finance and housing develop-
• After controlling for inflation, average wages ment have reduced housing affordability and
have fallen over the last 20 years. security by other routes. To the extent that we can
• Household income has stagnated, and house- push business and government to adopt other
holds have had to put more members to work strategies and policies, the results in terms of
for more hours. housing afford ability and security could be quite
• Income instability has grown: Job displacement different.
and other sources of earnings losses have
become more common.
• Income inequality has grown: The rich have
become richer and the poor, poorer.
• Income gaps between white households and
The Economic Environment of Housing 21
THE GROWING DIVERGENCE BETWEEN that sustains the boom. Modest wage increases
BUSINESS AND WORKER FORTUNES guarantee that rising labor costs will not cut into
profit margins even as the economy expands.”
The U.S. economy has changed markedly over the Low labor costs resulted not just from sta-
last 30 years. Two large-scale shifts have radically tionary wages but also from corporate America's
altered the ways that prosperity is shared in the new habit of continuing to downsize even as sales
United States. The first concerns the relative rose. Over 8 million U.S. workers were displaced
fortunes of business and workers; the second from their jobs during the economic expansion
concerns the relative fortunes of the rich and poor. years from 1993 to 1995—not far different from
the 9 million who were laid off during the
Business and Workers Part Ways recession years from 1991 to 1993 (Uchitelle
1996). Although white-collar lay-offs captured
The first big shift: A business boom no longer headlines—and have indeed become more
means prosperity for working people. From the common—the bulk of those displaced remain rank-
early 1900s to the 1970s, business and worker and-file workers, not managers (Farber 1997).
fortunes rose and fell more or less in tandem. The profit rate is the ratio of annual profits to
TheGreat Depression was difficult for capitalists accumulated business investment in plant and
and workers; the boom during World War II and equipment—much as an interest rate isthe ratio of
the early post war years buoyed. profits and wages annual interest to principal. The bottom line
alike. When President John Kennedy declared that forbusiness: In themid to late 1990s, U.S. profit
“a rising tide lifts all boats,” he summarized the rates reached their highest levelin decades. U.S.
experience of the times. Of course, not all persons corporations received a dazzling $876 billion in
benefited equally from the rising tide: People of profits in 2000, or about one dollarinnine of total
color and women of all racial and eth- ingroups nationalincome, although the recession that
lagged behind in wages, and families with limited followed took some of theshine off profit figures
ability to take part in the labor market (notably, (U.S. Bureau of Economic Analysis 2002). The
elders and single mothers of young children) 1990s profit rate surge did not mean that busi-
depended on social welfare generosity rather than nesses were claiming a larger share of the eco-
on labor market dynamism. In general, however, nomic pie but rather that businesses tookhome
business cycle booms brought with them about the same share despite investing less to
significant upsurges in wages and employment. generate these profits. Businesses have continued
No more. The divergence between business and to reapprofits even though there have been fewer
worker prosperity, which began to appear in the additions to productive investment, which has
1970s, was particularly apparent during the most pushed the ratio upward. As well, corporations
recent completed economic expansion, which ran have won decreased corporate income tax rates
from 1991 to early 2001. This upturn saw business (Baker 1995). But U.S. workers and their
activity and profits lift despite, and to some extent households are paying the price in terms of wages,
because of, stagnant wages and initially slow income and employment.
employment growth. In fact, in the first two years
of this “boom,” virtually all job growth was Wages and Household Income
accounted for by involuntary parttime
employment, leading some to call it the “jobless The failure of businesses to make productive
recovery”—a label that applies equally to the first investments, along with their underinvestment in
few years of the expansion that began in late 2001. worker training (Marshall and Tucker 1992),
Even after actual job growth began in 1994, wages
remained flat until 1997 after controlling for
inflation. Business analysts attributed the “health”
of the expansion to low labor costs. “From the
perspective of business,” pointed out economist
John Miller (1995:9), “it is lagging wage growth
22 Chris Tilly
help to explain why wage

levels have remained flat—
and have even fallen
somewhat over the long run.
Productivity has grown
slowly, especially in
comparison with other
industrialized countries.
U.S. real output per worker
(a measure of productivity)
grew only about two- thirds
as fast as output in
Western Europe and one-
third as fast as in Japan
between 1979 and 1990
(Freeman 1994:26).
Productivity growth did
perk up at theend of the
20th century, driving
overall growth in output
per hour for all businesses
from 1990 to 2001 up 2.2
percent per year, well
above the 1.4 percent per
year crawl of 1979 to 1990
(U.S. Bureau of Labor
Statistics 2002a).
GrowthinU.S. manufacturing
output per hour still
lagged behind that of
France, Sweden, Korea and
Taiwan, among others, dur-
ing the 1990s (U.S. Bureau
of Labor Statistics 2002b).
Thus, the perworker“slice
ofpie” available to be
shared between labor and
management has expanded
relatively little.
Figure 1.1 shows one set of consequences for growth.

U.S. workers and households. The average real Several aspects of Figure 1.1 deserve comment.
(inflation-corrected) hourly wage, periodically Forinstance, why should there besomuch attention
beaten down over the 1970s, 1980s and 1990s, to wages? After all, households receive income
stoodin 2002 at only 95 percent ofits 1973 value (a from a variety of other sources: prop-
drop from $15.94 to $15.17 in 2002 dollars). This ertyincome,suchasdividends,interest,rentand
ended an unbroken string of real wage advances pensions; government transfers, such as Social
from the 1950s through 1973. Median real annual Security, unemployment insurance andwelfare; and
household income (the level ofincome in which transfers from otherhouseholds, such as alimony,
exactly one-half of U.S. households stand above, child support or gifts. Nonetheless, the labor
the other one-half below) also sputtered until market is by far the preponderant source
theearly 1990s yet grew significantly during the ofhousehold income, accounting for 78 percent of
1990s expansion, only to stall again when the total (Albelda and Tilly 1997, Table 3.2).
recession hit in 2001. Overall, household income Except for small groups of households that depend
gained only 14 percent between 1973 and 2002 primarily on other income sources, wages are
(rising from $37,092 to $42,409 in 2001 dollars, decisive in setting income.
growing an average of 1 p e rcent p e ryear )—agai If wages are so decisive, why has household
n, ending a “golden age” offar more rapid income income advanced (if modestly) over the past 30
Hourly wage
Household income
Year
FIGURE 1.1. Losing ground: Average hourly wage and median household income, adjusted for inflation,
1959-2002 (Index: 1973 value = 100).
Note: To put wages and income on the same scale, the figure uses an index of 1973 = 100, so an average wage
of 200 would mean two times the 1973 wage, whereas a wage of 50 would mean one-half of the 1973 wage.
Source: Average hourly wage is for production or nonsupervisory workers in private industry (U.S.
Council of Economic Advisors 2003, Table B-47). Median household income is from U.S. Census Bureau
(2003, Table A-1).
24 Chris Tilly
years while wages have regressed? The key is that their particular location
households have put more members— especially 2. involuntary part-time workers, who would
mothers—to work, partly inanat- tempttoovercome prefer full-time hours (over 4 million workers
wage declines (though growing numbers of women in 2002, according to the U.S. Bureau of Labor
have also entered the workforce because of Statistics! [Employment and Earnings, January
changing roles and attitudes). The percentage of 2003])
women working for pay (or actively looking for 3. those who are available for work but are not
work) rocketed from 38 percent in 1960 to 60 looking due to family,school orhealthissues
percent in 2002 (U.S. Council 4. those who want a jobbut have not lookedfor
ofEconomicAdvisors 2003, Table B-39). As of one inthe last year
1999, 45 percent of all U.S. households deployed 5. the enormous U.S. prison population, currently
twoor more earners (U.S. Census Bureau 2000a, around 2 million—we incarcerate
Table 2). In short, U.S. households have managed peopleattentimes the rate ofEuropean countries,
to win small increases in real income only by what temporarily keeping them off the un-
some observers have called a “family speed-up” employment lines (Baxandall 1996).
(Currie, Dunn and Fogarty 1980).
In October 2003, for example, theofficial un-
employment rate was 6 percent. However, by
Unemployment and Underemployment
adding in only those profiled in numbers 1 and 3
above, unemployment would have jump ed to over
In addition to growing slowly, income has become
12 percent, morethan doubling theofficial rate
more unstable in a variety of ways. The
(National Jobs for All Coalition 2003).
unemployment rate, which averaged 4.8 percent
Of course, even the official unemployment rate
inthe 1960s, climbed to an average of 6.2 percent
is much higher for some than for others.
inthe 1970s and to 7.3 percent inthe 1980s (Figure
Additionaldata from October 2003 revealed that
1.2). These are documented as averages because
Latinos were more than one-fifth more likely to be
the unemployment rate swings up and down over
unemployed than the average worker, blacks were
the business cycle. The 1990s were considerably
nearly twice as likely to be jobless and teens were
kinder, averaging 5.7 percent unemployment. In
almost three times as likely. (The
fact, as the economicexpan- sion continued,
businesses complained of a labor shortage, as they
did inthe late 1980s. The Wall Street Journal even
lamented “Dilbert's revenge,” using the well-
known comic strip character's disgruntled worker
persona to label a growing feeling among workers
that bargaining power was beginning to shift back
their way (Lublinand White 1997).
Anotherrecession struckin 2001, however, driving
unemployment above 6 percent by 2003 and
casting an uncertainshadow over the future. Inany
case, the 1999 rate of 4 percent, which many
economists at the time termed “full employment,”
still exceeded the low point of 3.5 percent inthe
late 1960s.
The official unemployment rate, moreover,
understates the true level of joblessness, leaving
out several groupsof the “hidden unemployed”:
1. “discouraged workers,” who still want a job but
have recently given uplooking because of a
poor job market for their par ticular skills or in
12 -r
10 Unemployment rate
Involuntary part-time
0
19 19 19
19 19 19
19 19 19
2 19 19 19
19 19 20
60 63 66 69 72 75 78 81 84 87 90 93 96 99 02
Year
FIGURE 1.2. Not enough jobs: Unemployment and involuntary part-time employment rates, 1960-2002.
Note: The Bureau of Labor Statistics changed the definition of involuntary part-time employment in 1994,
resulting in a one-time drop. (For a discussion of this changed definition, see Tilly 1996.) Source:
Unemployment from U.S. Council of Economic Advisors 2003, Table B-42. Involuntary part-time
employment from 1960 to 1993 from data provided by Thomas Nardone, U.S. Bureau of Labor Statistics,
updated from theU.S. Bureau of Labor Statistics, Employment and Earnings, various years.
unemployment rate of women was close to the over the decade of the 1970s; that proportion rose
nationalrate.) Joblessness followed a patchwork to one-third during the 1980s. Men and women
pattern across the country. In September 2003, crisscrossed: Men's likelihood of losing annual
unemployment rates ranged from a low of under 3 earnings increased, whereas women became less
percent inthe Dakotas to a high of 7.3 percent in likely to lose earnings. However, in terms ofhourly
Oregon and 12.2 percent in struggling Puerto Rico, wages (factoring out theeffect of changes in weeks
with depression levels of 10 percent and higher in and hours worked, which enter into annual
agricultural communities of California, Texas and earnings), both groups became more likely to
Arizona—reaching an astounding 30 percent in experience declines inthe 1980s.
Yuma, Arizona (U.S. Bureau of Labor Statistics AnnetteBernhardtandco-authors(2001)found
2003a). similar results when they followed two cohorts of
teenage white males—one group from 1966 to
Downward Mobility 1981 and another group from 1979 to 1994.
Permanent wage growth was 21 percent lower for
While unemployment offersonewindow on income the later group.
instability, we can also look at income instability What reduced average wage growth and
by examining how many people lost jobs or heightened the probability ofdownward mobility?
experienced dramatic earnings declines. Economy- Rose (1995) accounts for one-halfofmen's
wide, downward mobility has become markedly greaterprobabilityofanearningsdropbythein-
more common. Tracing thetra- creasedfrequencyofjobchanges.Bernhardtand co-
jectoriesofindividualprime-ageadults,Stephen Rose authors (2001) also found that even after taking
(1994) found that about one-fifth experi- into account thechanging characteristics of young
enceddeclines of 5 percent or more in real earnings white men, their oddsofchanging jobs in atwo-
26 Chris Tilly
yearperiodjumpedby43percentbetween the earlier among the rich, those with middle income and the
and later periods. Particular symptoms of poor.Figure 1.3 shows the shares ofto- tal income
heightened job insecurity are starkly visible. obtainedbythe richest5 percent, the next-richest 15
Temporary employment has exploded: percent, the middle 60 percent and the lowest 20
Employment in temporary help agencies has grown percent of U.S. households.1 In themid-1970s, the
twenty-fold since the 1960s (thoughit still amounts richest households began to gain, attheexpense
to only1 percent ofthe workforce; other forms of ofmiddle-income householdsand to a lesser extent
“contingent”workbring the total up to 9 percent— of the poorest. This upward shift of income
U.S.Bureau ofLabor Statistics 2001, Table 5). The accelerated during the 1980s, with the richest
Census Bureau's Displaced Worker Survey shows cashing inand everybody else—including the next-
that permanent layoffs have become more richest 15 percent— losing out. As with the U-turn
common(Farber 1996). Displacement rates from in wage levels, this marked a significant reversal:
1991 to 1993, nominally years of recovery from a During the 1950s and 1960s, income shares
mild recession, were higher than those during the remainedrela- tively stable, with a slight trend
deep recession years from 1981 to 1983. Middle- toward greater equality.
age men took the biggest hit. In turn, displacement Figure 1.4 translates income shares into
rates from 1980 to 1992 exceededjob loss rates (inflation-adjusted) dollar figures to illuminate
from1968to 1979, according to research based on thescopeof thenewwave ofincome inequality. In
the Panel Study of Income Dynamics (Boisjoly, 1970, on average, a household inthetop 5 percent
Duncan and Smeeding 1998). Between those two garnered $129,086 in income, 14 times as much as
periods, the percentage ofworkers who were laid theaverage household inthe bottom 20 percent,
off increased by one-third, and the percentage of who received $8,930 (figures areex- pressed in
workers who werefireddoubled. 2002 dollars). By 2002, households inthe richest 5
While the frequency ofjob changes increased, percent had moved ahead to a handsome $251,078
the benefits ofjob stability decreased at the same —putting them 25 times as highasthepoorestone-
time. The payoffto accumulating seniority with a fifthofhouseholds,who inched forward to $10,124.
single employer, long a standard featureof Themiddle60per-
compensation (Abraham and Medoff1980), di- centachievedamodestadvanceoverthis20-year
minished sharply during the 1980s (Chauvin 1994; period,withincomestartingat$31,774andend- ing up
Marcotte 1998). Both theopportunityfor long-term at $45,221. We see that although, on average,
job attachment, and the rewards for that realhousehold income advanced slightly, much
attachment, have declined. ofthe population sharedlittle inthisstep forward.
In short, workers' wages—on average—
continued to stagnate, and household income
recovered only modestly, even though the 1990s
were bountiful years for business. Rising prices
combined with flat incomes made housing
purchase or rental less affordable to the average
family. Growth in unemployment, contingent
employment and downward mobility fed insecurity
in housing tenure.
GROWINGINCOME INEQUALITY
All of the evidence so far spells out the results of

the divergence between business andworker
fortunes.However,therehasbeenasecondlarge
economic shift as well—the growth of inequality
HE Top
I Next 15%
5%
Middle 60%
Lowest 20%
Year
FIGURE 1.3. Trickle up: Shares of total U.S. income received by families at different income levels,
selected years 1967-2002.
Source: U.S. Census Bureau 2003, Table A-3.
—o— Top 5%
—n— Next 15%
Middle 60%
Lowest 20%
Year
FIGURE 1.4. Unequal gains: Average income levels (in thousands of 2000 dollars) for high-, middle-, and
low-income households, selected years 1967-2002.
Source: Calculated by author from U.S. Census Bureau 2003, Table A-1.
Figures 1.3 and 1.4 tell the story of income, the Shapiro 1995, Table 4.4; Shapiro 2004).
amount of money received in a given year, not It istempting to suppose that growing income
wealth, which is the total value of assets possessed and wealth inequality simply represent another
by a household. Wealth is even more unequally facet of the divergence between business and
distributed: In 1998, the top 5 percent of U.S. workers. To some extent, this is true: Given the
households controlled 68 percent of net financial ebullient stock market from the 1990s to 2001,
assets and 59 percent of total wealth, including dividends and capital gains have enriched the
homes and other assets (Wolff 2000).2 richest. Yet, income polarization involves more
Furthermore, inequality in wealth has been than labor-capital polarization for two reasons.
widening apace (although it did moderate slightly First, a keydeterminant ofhousehold income is
inthe late 1990s). The richest 1 percent, who held thecomposition of that household.Moreadults in a
20 percent of the nation's net worth in 1976, had household can contribute additional income
nearly doubled their share to 38 percent—almost (particularly earnings). A higher rate of Americans
the same share as the bottom 95 percent are living alone or as single parents whose earning
ofhouseholds—by 1998 (Wolff 1996, 2000). In the potentialiscurtailedbythetime demands of child care
early 1980s, 200 years after the United States threw (Albelda and Tilly 1997), therefore swelling the
out the British aristocracy, theU.S. distribution number of low-income households. At the same
became more unequal than that in Britain (Wolff time, rising rates ofpaid employment by wives and
1996). Moreover, racial differences in wealthloom mothers create more two-earner households,
large. Whites have an enormous wealth advantage frequently (though by no means always) at
overblacks, mostly because of unequal theupper end of the income distribution. Family
inheritances. In 1994 (the most recent year that structure itself shapes the contours of income.
researchers have examined), the median net worth A second reason why income p olarization goes
of white households was more than 50 times as beyond the labor-capitaldivide isthat even among
great as that of blacks ($52,000 vs. $1,000), and the the rich, most are working people. In 89 percent of
ratio has not changed since the early 1990s married-couple households with incomes of
(Gittleman and Wolff 2004).3 $100,000 or more, either the husband orwife works
For most U.S. families, a home is their only full-time year-round.Nearly one-half the time, both
significant asset. Of course, this leaves most of the work full-time year- round (calculated by author
one-third of U.S. households whoare tenants from U.S. Census Bureau 2000a, Table 6).
without any significant assets. While housing is the Therefore, most of the worsening of income
main form of wealth for the typical family, total inequality represents an increase in earnings
wealth figures are dominated by the super-rich, inequality. Between 1979 and 1999, the hourly
whose financialholdings dwarf their home values. earnings of a worker at the 90th percentile (earning
As a result, homes only account for 29 percent of more than 90 percent of otherworkers) relative to a
total wealth, and lower-income homeowners have worker at the 10th percentile increased by 21
considerably less home equity, on average, than do percent for men andby45 percent forwomen
high-income homeowners (Wolff 2000). (Mishel, Bernstein andSchmitt, 2001, Tables 2.7,
Differences in homeownership rates under- 2.8). Indeed,earnings inequality has increased in
lieracialdifferencesin wealth.White households are multiple areas, such as among occupations,
more than one-half as likely to own a home as are industries, racial and ethnic groups, and levels of
blacks, and on the average, white-owned homes are educational attainment (Freeman 1986).
worth almost one-half more than those that are As with household income, widening disparities
black-owned (Oliver andShapiro in earnings mean that the average hourly wage loss
1995,Table5.3).Evenmorestartlingisthe difference of 6 percent conceals enormous variation. Among
in holdings of financial assets such as stocks and men, for example, earners at the
bonds. Whereas the median white household 90thpercentilesawwages increase from $27 to $29
possesses $7,000 in net financial assets, the median per hour (in 1999 dollars) between 1979 and 1999;
black household has precisely zero—in other wages at the 10th percentile tumbled by one-tenth,
words, for one-half of black households, debts from $7.34 to $6.59 (Mishel, Bernstein and Schmitt
equal or exceed financial assets (Oliver and 2001, Table 2.7). Men with a high school education
28 Chris Tilly
or less suffered even sharper wage setbacks. Not all unalterable; rather,they areshaped to a large extent
wage earners lost, but those at the bottom lost a lot. by business strategy. Nor do these factors offer a
Low- wage workers did regain some lost ground as complete explanation of the current economic
the economy heated up and Congress boosted the distress. Instead, shifts in business strategy have
minimum wage inthe late 1990s, but not enough to broader effects extending beyond these two drivers.
offset earlier wage declines (Tilly 1998). U.S. businesses have predominantly pursued a
Wage earners who wereatthe 10th or 90th “low road” strategy designed to keep wages and
percentile in 1999 are not necessarily those who other costs low, rather than investing in higher
wereatthose levels in 1979. Comparing one-year productivity.
data over time overlooks the fact that workers' The context for all of these changes isthe
wages fluctuate. In fact, if everybody's earnings breakdown of the post-World War II “golden age”
varied from year to year but each worker averaged for U.S. capital and labor. That rosy era was based
the same income as every other over the long haul, on U.S. domination of global financial and goods
there would be far less cause for concern about markets. It also incorporated a “capital-labor
earnings inequality. However, most earnings accord,” in which unions inthe central mass
mobility is quite limited: Even averaging wages of production industries exchanged labor peace for
young adults (whose wages are expected to be most growing wages, and a “capitalcitizen accord,”
volatile) over ten yearsonly reduces overall bartering social peace for an array of social
inequality by about one-fourth. Also, wage programs such as Social Security and
mobility over time decreased between the 1970s unemployment insurance (Gordon, Edwards and
and 1980s, meaning that high andlow earners Reich 1982). By the 1970s, all three elements of
became more likely to be frozen atagiven wage the golden age were crum-
level—and that the increase in wage inequality bling.Atagloballevel,theU.S. industrialrivals,
capturedinaseries of snapshots Europe and Japan, had rebuilt from wartime
understatestheriseininequality among workers destruction. The Third World, from Vietnam to the
(Buchinsky and Hunt 1999). Organization of the Petroleum Exporting Countries
In summary, income and wealth disparities have (OPEC), began to assert itself as well. The two
widened.Those at thetophave flourished, those in domestic accords came under attack both from
the middle have struggled to stay even, and those at those who had been excluded—such as African
the bottom have suffered major setbacks. Americans, other people of color and women of all
Worsening income inequality translates directly races—and from businesses displeased that the
into growing inequality in housing affordability. concessions had been madeatall.Asthe postwar
More concentrated wealth-holding has serious economic order sputtered,then, three specific
implications for housing as well. Housing itself is mechanisms reshaped the U.S. wage structure:
one major form of wealth, and financial assets globalization, technological change and shifting
orinheritedhousing arethe prerequisites for business strategy.
homeownership. Wealth constitutes the cushion Globalization has two overlapping dimensions
preventing a household's short-term income losses that are crucial for U.S. employment and earnings.
from undermining housing security. As a small First, U.S. (and other) corporations have found
number of superrich claimagrowing shareofincome ways to produce goods—but even more
andwealth, housing affordability and security importantly, to subcontract or outsource parts of
diminish for the rest of the nation. the production process—in low-wage countries
REASONS FOR BUSINESS-WORKER such as Mexico, Guatemala, Haiti, Thailand,
DIVERGENCE AND GROWING INEQUALITY Malaysia and dozens of others. As Bluestone and
Harrison (1982) pointed out, new technologies of
Why have the rules of the economic game changed transportation and communication facilitated the
so dramatically? Many analysts point to the international coordination needed for this shift. The
importance of globalization and technological move to offshore production has particularly
advancement. These two factors are in- revolutionizedlight industries such as apparelbut
deedimportant contributorstothegrowing economic has also hadits effects in electronics, motor
divergences. But they are neither neutral nor vehicles and numerous types of heavier
manufacturing industries. Service industries are not among economists is that these effects have so far
immune to the effects of globalization, as many been relatively small (Freeman 1995).
U.S.companies rely on data entry performed in the Te c hnological change has also rocked the
English-speaking Caribbean countries or software boat. Businesses have worked hard to replace labor
programming in India (Harrison 1994). All of these with machines, whether by mechanizing tasks
processes shift growing numbers of jobs abroad. completely (as with robots) or by using machines
The second, even more important, dimension of to make workers more productive (as with personal
globalization is that producers based in the computers or supermarket scanners). Over the last
industrialized countries of North America, Europe 30 years, many businesses have been
and Asia are far more aggressively contesting each disproportionately successful in eliminating lower-
other's markets for a variety of items. In addition to skill jobs while creating more high-skill jobs, many
Western Europeand Japan, the newly industrialized of which involve interacting with new tools, such
countries of Asia, such as Taiwan and Korea, as computers, that require new know-how. The
increase the number of those involvedinthe result is that over this time period, both
renewed struggleover markets. In everyday life in themixofjobs inthe workforce and the task
the United States, import growth is most visible composition of particular jobs have shifted in the
inthe automotive andhome appliance markets, but direction of greater education and skill
it extendstoa variety of markets (as does export requirements (Howell and Wolff 1991; Osterman
growth). 1995; Moss and Tilly 2001). This displaces
The first shift, to offshore production, offers workers at the low-skill end of the labor market
companies more geographic choices. The second and shrinks the pool of jobs for which they
offers consumersmore product choices. However, compete while heightening demandforhigh-skill
bothremove the formerprotected status of many workers, stretching wages further apart.
companies and workers: Workers aresubject to Thetechnological twist can then help to explain
morecompetition from bothlow- wage and high- rising earnings inequality; it has no obvious
wage countries, and this competition exerts connection with the general lag in wages and
downward pressure on wages. The first shift incomes.
represents a strategic change for U.S. companies— Although technological change significantly
one that businesses take for grantedbut is by no affects income trends, as does globalization, its
means theonly option. The second represents a importance should not beoverstated.AsHowell
large and long-term strategic change by (1994) pointed out, theshifttoward higher-skill jobs
corporations the world over— something far less essentially halted after 1982, while inequality
within the control of U.S. businesses themselves. between low- and high-education workers
Both shifts have been facilitated by international continued increasing. A much-noted economic
trade treaties, such as the North American Free study (Krueger 1993) found a substantial wage
Trade Agreement (NAFTA) and the World Trade premiumassociatedwithworkingwithcomput- ers. A
Organization (WTO), that diminish trade more recent study (DiNardo and Pischke 1997,
restrictions, as well as laws that strictly constrain using German data), however, discovered that
international labor migration but leave capital approximately the same premium accrues to
migration unfettered. workers who use hand-held calculators, pens or
Overall, both changes in the global economy pencils, orwho work while sitting down. Economist
are relatively small contributors to the changing Steven Allen (2001) found that technological
structure of U.S. earnings. Despite the uproar over change accounted for less than one- third of
perceived effects of globalization, the sum of U.S. thegrowthinthe wage gapbetween college and high
imports and exports still amounts to less than one- school graduates during the 1980s—the piece
third of the nation's total domestic output; exports ofwage inequality that one would expect to be most
and imports each make up about one-half of this related to changes in technique. In short, themixed
fraction (U.S. Council ofEconomicAdvisors 2003). evidence on the linkbetween technological and
Though some analysts claimthat globalization has wage changes suggests that we must look
hadlarge effects on the wages of workers in elsewhere for the main forces behind the new
industrialized countries, the general consensus income trends (Mishel, Bernstein and Schmitt
30 Chris Tilly
1997). implementation of otherregulations, ranging from

Indeed, the rest of the industrialized world has environmental protection to occupational safety
experiencedincreased global competitiveness and andhealth.
speedier technological change. Yet despite This newly dominant strategy accelerates the
significant stress on their industrial relations erosion ofinstitutions such as unions, the minimum
systems, no otherrich country has experienced wage (which remained far below its 1970s level
theextentof collapse in job quality and surge in ofbuying power even after the 1996 increase and
wage and income inequality experienced by the erodes every year with inflation), and job ladders
United States (Freeman 1994). Explaining this within companies. Yet these are precisely the
difference isathird factor: U.S. businesses have institutions that historically have
largely responded to new competitive pressures by defendedworkerwage levels, particularly
cutting costs rather than by enhancing thoseofworkerswithlessindividualbargaining
quality.Thistranslates into a concerted effort to power, and have provided avenues for upward
keep wages low and minimize long-term mobility.
commitments to the workforce. Another corollary The “low road” is, at least to some extent, self-
ofthis “low road” strategy is the slow productivity perpetuating. Cutting wages and taxes restrains
growth already noted, resulting from sluggish consumer and governmentspending(although both
investment in both physical andhuman consumers and government have done their best to
capital.Furthermore, for manyU.S. businesses that borrow in order to continue spending). However,
have attempted to raise productivity, this attempt since exports still absorb only a small fraction
has been based on fear and speed-uprather than on ofoutput, businesses count on domestic
loyalty and training. demandfrom consumersand government. Weak
Thenew cost-cutting strategy incorporates demand spurs firms to seek more ways to cut costs,
keepingwageslow,relentlessdownsizingandex- and thecycle continues. To U.S. business as a
panding part-time and contingent labor.In fact, whole, the strategy is
although the number of workers in explicitly irrational.Yettoindividualbusinesses calculating
contingent statuses, such as temporary workers, their individual advantage, it makes perfect
still only amounts to about one-tenth of the sense.Even more important, itisbolsteredbythe
workforce, employers are increasingly classifying triumph of“free market”ideologyinU.S. politics,
all workers as contingent. As AT&T prepared to whichhas helped to sweep awaythe policies and
lay offan estimated 40,000 workers in early 1996, institutions that might discourage the low road.
Vice President for Human Resources James
Meadows told the New York Times, “People need
to look at themselves as selfemployed, asvendors
who come to this company to sell their skills.” He
added, “In AT&T, we have to promote the whole
concept ofthe workforce being contingent, though
most of the contingent workers are inside of our
walls.” Instead of“jobs,”people increasingly have
“projects” or
“fieldsofwork,”heremarked,leadingtoasociety that
is increasingly “jobless but not workless”
(Andrews 1996:D10).
Cost-cutting strategy also targets government-
imposed expenditures, such as taxes and regulation.
Corporate taxes as a percentage of profits, 40
percent in 1971, wereonly 31 per-
centin2002(U.S.CouncilofEconomicAdvisors
2003). Deregulation has loosened government
controls on industries such as telecommunications,
airlines and trucking, andhas weakened the
TWO KEY DIMENSIONS OF INCOME blacks and Latinos. Figure 1.5 shows median
CHANGES: RACE AND GENDER household income by the racial or ethnic group of
the household head, and Table 1.1 lists family
As globalization, technological change and the poverty rates by race, ethnicity and family
low-road strategy transform the economy, not all structure.
groups in the population are equally affected by Some elements of the racial-ethnic hierarchy
crumbling wages, sluggish income growth and are immediately clear from Figure 1.5 and Table
heightened economic polarization. Indeed, in the 1.1; others require further elaboration. The incomes
United States, high and low wages and high and of black and Latino households lag far behind those
low household incomes have never been sprinkled of white households, and the last 25 years have not
randomly among the populace. Historically, people brought them appreciably closer. Asians have a
of color and women of all racial groups have higher median income than whites. The Census
earned lower wages (when they have received Bureau does not publish equally detailed
wages at all). Single-mother households as well as information on Native Americans, but other Census
those headed by people of color also have received data reveal that the group had a median income
lower incomes. As such, these groups have most only $1000 above that of black households, and
often been poorly housed. The new changes in lower than any other racial group, in 1999 (U.S.
income reflect this legacy, preserving the divisions Department of Commerce 2005).
of race and gender. Table 1.1 confirms that black and Latino
In income terms, race and ethnicity continue to poverty rates are highest. Despite having a
divide America. Stagnant incomes and rising TABLE1.1 Poor, Poorer, Poorest: Percentage of
income in equality have struck particularly hard at Families in Poverty, by Race, Ethnicity and Family
Non-Latino White
Black
Latino
Asian
Year
FIGURE 1.5. Persistent gaps: Median annual household income by race and ethnicity, 1972-2001 (in 2002
dollars).
Source: U.S. Census Bureau 2003, Table A-2. Race definitions changed in 2002, so 2002 data are not
included.
32 Chris Tilly
Type, 1999 as likely to be employed as white males, and black

Single-Mother women were 105 percent as likely as white women
All Families Families (that is, more likely than white women). Two
White, non-Latino 5.5% 25.4% business cycle peaks later, in 1989, these per-
Black 21.9% 46.1% centages had slipped to 85 percent and 95 percent,
Latino 20.2% 46.6%
respectively. Even in the 2000 business cycle peak,
Asian 10.7% —
Total 9.3% 35.7% with unemployment at its lowest since the 1960s,
Source: U.S. Census Bureau 2000b, Table B-3. the percentages rose to only 86 percent for men and
Note: Latinos can beof any race. Single-mother families refers to 101 percent for women (U.S. Council of Economic
female householder, no husband present with children aged
Advisors 2003, Table B- 41). Latinos also fell
under 18. Families (unlike the households appearing in Figures
1.1 and 1.3 to 1.5) are limited to groups of twoor more people further behind non-Latinos in wages, though not
living together and related by birth, marriage or adoption. Data employment (Borjas 1994; Corcoran, Heflin and
with this level of detail were not reported in later years. Reyes 1998; Hinojosa- Ojeda, Carnoy and Daley
1991; Melendez 1993; author calculations based on
U.S. Bureau of Labor Statistics 2003b and U.S.
higher median income, Asians are more likely to be Bureau of Labor Statistics Employment and
poor than whites. Analysis of unpublished Census Earnings, January 2003).
data from earlier years shows that Native American Why? Part of the income story is one of family
poverty rates fall between those of whites and structure. Single-mother families have become
blacks (Albelda and Tilly 1997, Table 2.1). more common among all race and class groups but
The median incomes of Latinos and Asians are has grown most rapidly among black families.
somewhat deceptive, since incomes are highly Single mothers are also particularly common
polarized within both populations. The Asian among Puerto Ricans, though not among most
population, for example, includes high- income other Latino groups. As well, since single mothers
Japanese-American professionals but also low- have less opportunity to earn wages, they receive,
income recent immigrants and refugees from on average, lower incomes than any other type of
Southeast Asia and China. So, although the median family (Albelda and Tilly 1997). As Table 1.1
income of Asians exceeds that of whites, a greater shows, single-mother families are nearly four times
proportion of Asians fall below the poverty line. as likely to fall below the poverty line as the
Such income differences within racial groups are average family. The prevalence of this family
also highly correlated with differences in housing structure is in part the result of limited economic
tenure. opportunities available to black and Puerto Rican
Of particular interest are the changes in relative men and to the higher risks of imprisonment and
incomes over time. Over the past 20 years, as the early death in these populations (Wilson and
epochal shifts in the economy took place, Latinos Neckerman 1986).
have lost ground relative to non-Latinos. Black The widening gaps in hourly wages and em-
household incomes have actually caught up slightly ployment tell us that another important part of the
with white incomes, but the full picture is more problem derives from the labor market. In fact,
troublesome. Over the same period of time, a 30- blacks were hit particularly hard by the three
year trend of black hourly wages catching up with drivers of economic change: globalization,
white wages was reversed. In terms of hourly technological change and revised business strategy.
wages, controlling for education and labor market Globalization represents one aspect of increased
experience, black men fell fur- the behind white capital mobility within as well as between
men, and black women lagged behind white countries. As jobs have moved to the suburbs
women (Bound and Dresser 1998; Bound and within metropolitan areas, to Sunbelt regions
Freeman 1992; Corcoran 1998; author calculations within the country as a whole, and to new locations
based on U.S. Bureau of Labor Statistics 2003b and around the world, African- American communities
U.S. Bureau of Labor Statistics Employment and have been likely to end up stranded (Squires 1994).
Earnings, January 2003). The black-white Given the continuing power of racial residential
employment gap has also widened: In business segregation, African Americans have also been
cycle peak year 1973, black males were 88 percent singularly unable to move where jobs were
growing (Jencks and Mayer 1990; Massey and change has taken place primarily not because
Denton 1993; see also Chapter 3). women's real wages were rising, but because men's
As technological change increases the demand real wages were falling. With—on average—men's
for skills, the good news is that blacks are slowly wages lower and women's wages little higher, two
catching up with whites in educational attainment earners have become increasingly necessary to
and achievement. But the bad news is that, on support a family. This family speed-up is not an
average, blacks (and Latinos) still have lower improvement in the standard of living. In deed,the
levels of skill and education at a time when the fact that more women are working for pay cuts in
penalty for limited skills is growing. Employers are two directions. The paycheck is empowering for
also placing growing emphasis on “soft” or social women, but with it come the stresses and costs of
skills—attitude, ability to relate well with the “double shift”—one shift at the workplace and
customers and so on. And employers' assessments another caring for the home (Hochschild 1990,
of the soft skills of blacks and Latinos are tainted 1997). Part-time jobs are available as one option
by discrimination (Moss and Tilly 1996, 2001). for women (or men) carrying out this balancing act,
Blacks have also been hard hit by business re- but part-time schedules typically come as part of a
structuring. A Wall Street Journal study found that package that includes low wages, few or no fringe
among a sample of over 35,000 corporate benefits, and reduced job security (Tilly 1996).
employers during the 1990 to 1991 recession, black The group squeezed hardest by the continuing
employment was reducedby59,000 workers. gender wage gap and the family speed-up is single
Despite the recession, net employment for whites, mothers. Single motherhood has become more
Latinos and Asians grew; whites, for example, common, affecting 11 percent of U.S. children in
gained 71,000 jobs (Sharpe 1993). Although black- 1970 but 20 percent of U.S. children (and 23
white gaps in wages and employment did narrow at percent of mothers) in 2000 (calculated from U.S.
the peak of the 1990s boom (Cherry andRodgers Department of Commerce 1996, Tables 76, 79;
2000), they expanded once again in the subsequent 2001, Table 60). The reasons are many: Women
recession (author calculations based on U.S. have more hope of economic self-sufficiency, men
Bureau of Labor Statistics 2003b and U.S. Bureau have less to offer economically and values have
of Labor Statistics Employment and Earnings, changed to make it easier for women and men to
January 2003). separate. However, between the time demands of
The reasons for growing Latino disadvantage child care, the low wages of working women and
have not been studied as extensively as those for the minimal level of welfare benefits, single-
blacks. One major factor in the low wages of mother families end up with extremely low
Latinos is the influx of immigrants (many of whom incomes: In 1999, 36 percent of single-mother
earn low wages). There is evidence as well that families were in poverty (see Table 1.1);
many of the same trends are at work for blacks percentages were even higher for single mothers of
(Ortiz 1991; Melendez 1993). color. As single parents and their children grew to
In addition to race and ethnicity, gender power makeup a larger share of the poor population,
fully stratifies incomes and wages. The gender gap sociologist Diana Pearce (1978) described the
is one area in which wage inequality is falling process as the “feminization of poverty.”
rather than rising. In 1955, a woman working full- Economist Nancy Folbre( 1984) later suggested
time and year-round earned on average 64 percent that a more apt term might be the “pauperization of
as much as her male counterpart. In the 15 years motherhood.”
that followed, women lost ground, languishing at In this context, recent waves of state and federal
60 percent in the 1970s. But from the late 1970s “reform” have slashed away at acritical lifeline for
onward, women recouped their losses, advancing to single mothers, the program popularly known as
77 percent in 2002—still not earnings equality, but welfare (traditionally known as Aid to Families
a step in the right direction (Albelda and Tilly with Dependent Children [AFDC] and renamed
1997, Figure 1.3; U.S. Census Bureau 2003, Figure Temporary Assistance for Needy Families [TANF]
3). in 1996). Even before the most recent round of cuts
While a smaller gender gap in wages is a and restrictions, welfare had already become
welcome development, the problem is that this distinctly less generous. The typical state's average
34 Chris Tilly
monthly AFDC benefit for a family of three color and single mothers disproportionately
tumbled from $690 i n 1970 to $366 in 1994 (in struggle with housing affordability. Because they
1994 dollars; Parrott and Greenstein 1995 ). AFDC are more likely to endure irregular income and
covered 80 percent of poor children in 1973 but employment, African Americans, Latinos, Native
only 59 percent in 1990 (U.S. House of Americans and single mothers of all races face
Representatives 1994:399). greater risks for housing insecurity—in many cases
In fact, for years the United States has stood out leading to homelessness. As politicians chip away
among industrialized countries for the stinginess of at the parts of the welfare system that have most
its welfare benefits. A 1990 study (Smeeding, aided single mothers and low-income people of
O'Higgins and Rainwater 1990; see also McFate color, they also have cut back or eliminated the
1991) adopted an internationally consistent programs that subsidize housing for those with low
definition of the poverty line (one-half of a nation's income.
median income) and asked, of nonelderly families
in poverty before government aid and taxes, what
percentage were lifted above poverty by CONCLUSION: THE DOWNWARD SPIRAL
government assistance. In the late 1980s, the
government programs of France, the Netherlands, Recent economic trends in the United States tell a
Sweden and West Germany pulled about 50 story of income stagnation, growing income
percent of these potentially poor families out of insecurity and widening income inequalities. These
poverty. U.S. government action, embarrassingly, income setbacks worsen the built- in difficulties
pushed a small number of added families into and inequalities in the nation's for-profit housing
poverty: Taxes pushed more people below the system. They also form part of a self-perpetuating
poverty line than transfers lifted above it. economic cycle. Businesses feeling competitive
Unfortunately, the U.S. antipoverty policy pressure curb wages, thereby shrinking consumer
record is becoming even worse. The 1996 federal income and tightening competition still more.
welfare “reform” put into place lifetime limits, Businesses underinvest in knowledge and
harsh work requirements and an end to the federal equipment upgrading, thereby slowing productivity
guarantee to provide full funding for the growth and reducing the surplus available for
program(AlbeldaandTilly 1997). The impact of reinvestment.
cutting welfare extends well beyond welfare Housing economics also feed into this cycle.
recipients themselves. It weakens the safety net un- When incomes do not keep up with housing costs,
der all mothers, reducing their bargaining power families must devote more work time and money to
with bosses and spouses alike. As well, it floods paying for housing, thus reducing any surplus of
the labor market with women who have limited time or money that could be invested in education
skills and few alternatives. The predictable effects or training. This heightened housing insecurity
are job displacement and erosion of wage increases the chance of homelessness or frequent
standards, particularly among vulnerable workers relocations, making participation in the labor
who are already concentrated at the low end of the market all the more difficult for adults and
labor market—although the late 1990s economic disrupting education for children.
boom offset these effects for a time. At thetime of As troubling as this economic cycle may be, the
this writing (late 2005), Congress appears likely to political cycle is even more discouraging. The
pass an even more draconian version of welfare experience of sharpening income and housing
reform with stricter work requirements, at a time inequality, abetted by ubiquitous pro-market
when economic boom has turned to labor market ideology, divides low- and moderate-income
bust. people as they scramble to get closer to the haves
Housing patterns echo these income patterns, and to distance themselves from the have-nots.
sometimes in intensified fashion. As other chapters Those running to keep up on the economic
in this text explore in detail, people of color and treadmill, unable to counteract the changed rules of
single mothers suffer particularly acute housing the game, too often direct their resentment at those
problems. Because on average they earn lower still worse off—immigrants, recipients of welfare
wages and receive less total income, people of or housing subsidies, Mexican workers—who are
seen as competitors or undeserving beneficiaries of andbottomlesspits:Women'swork,women'spoverty.

taxpayer-funded aid. However, in the national and Boston: South End Press.
global market, weakening one's competitors simply Allen, Steven G. 2001. Technology and the wage struc-
ture. Journal of Labor Economics 19(2):440-483.
hastens the process of bidding down wages and job Andrews, Edmund L. 1996. Don't go away mad, just go
security; undermines any notions of universal away: Can AT&T be the nice guy as it cuts 40,000
rights to housing, employment or income; and jobs? NewYork Times,February 13, D1-D10.
divides the coalitions that could potentially resist Baker, Dean. 1995. The “profits = investment” scam.
the dangerous economic trends. Dollars and Sense, September/October:34-35.
Stopping this downward spiral requires building Baxandall, Phineas. 1996. Jobs vs. wages: The phony
trade-off. Dollars and Sense, July/August:8-11, 42.
politics and economics based on solidarity rather
Bernhardt, Annette, Martina Morris, Mark S. Handcock
than division. Politically and economically, the and MarcA.Scott.2001.Divergentpaths: Economic
target must be policies protecting the weakest and mobility in the new American labor market. New
bolstering living, housing and work standards for York: Russell Sage Foundation.
all workers. Without such policies, worsening Bluestone, Barry, and Bennett Harrison. 1982. The
economic inequality and insecurity is certain to deindustrialization of America. New York: Basic
continue. Books.
Boisjoly, Johanne, Greg J. Duncan and Timothy
Smeeding. 1998. The shifting incidence of invol-
untary job losses from 1968 to 1992. Industrial
NOTES Relations 37(2):207-231.
Borjas, George J. 1994. The economics ofimmigration.
Journal of Economic Literature 23:1667-1717.
1. Income distribution numbers used here and Bound, John, and Laura Dresser. 1998. The erosion of
throughout the chapter are based on the Current Pop- the relative earnings of young African American
ulation Survey (CPS), in which the U.S. Census Bureau women during the 1980s. In Latinas and African
annually surveys income. Because the CPS undercounts American women at work, ed. Irene Browne, 61-104.
property income, it understates income inequality. An New York: Russell Sage Foundation.
alternative source, the Survey of Consumer Finances Bound, John, and Richard Freeman. 1992. What went
(SCF), indicates that income is actually more unequally wrong? The erosion of relative earnings and em-
distributed.For example, according to the CPS, the richest ploymentforblacks.QuarterlyJournalofEconomics
one-fifth of households received 45 percent of total 107:201-232.
income in 1983 and 47 percent in 1989; according to the Buchinsky,Moshe, and Jennifer Hunt. 1999. Wage mo-
SCF, the figures were52percent and 56 percent. bilityintheUnitedStates. Review of Economics and
However, the CPS offers more detail and is available on Statistics 81(3):351-368.
an annual basis (and is the data source conventionally Chauvin, Keith. 1994. Firm-specific wage growth and
used for income analyses). changes inthe labor market for managers. Managerial
and Decision Economics 15:21-37.
Cherry, Robertand William M. Rodgers III, eds. 2000.
2. These figures are based on the U.S. Federal Re- Prosperity for all? The economic boom and African
serve System's Survey of Consumer Finances. Another Americans. New York: Russell Sage Foundation.
source of wealth data, the Survey of Income and Program Corcoran, Mary. 1998. The economic progress of African
Participation, shows somewhat more equal— though still American women. In Latinas and African American
very lopsided—distributions of wealth (Oliver and women at work, ed. Irene Browne, 35-60. New York:
Shapiro 1995, Table 4.1). Russell Sage Foundation.
3. I have adopted the shorthand of calling house- Corcoran, Mary, Colleen M. Heflin and Belinda I. Reyes.
holds headedbyblackpeople “black” households, and 1998. Latino women intheU.S.: The economic
soon.Giventhe limiteddegreeofintermarriageamong racial progress of Mexican andPuerto Rican women.
groups intheUnitedStates, thisshorthandis relatively InLatinasandAfricanAmericanwomenat work,ed.Irene
accurate though is becoming less so. Browne, 105-138. NewYork:Russell Sage
Foundation.
Currie, Elliott, RobertDunn andDavidFogarty. 1980.
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Michael E. Stone
2 Housing Affordabilit y: One-Third of a Nation

Shelter-Poor
IN HIS SECOND Inaugural Address, provides privacy and security against unwanted
March 1937, President Franklin D. Roosevelt ut- intrusions, both physical and emotional. It defines
teredhisnow-famous lament:“I see one-third of a our community and determines our access to jobs,
nati on ill- h oused .......”Du ring t h e h a lf- services, stores and networks of support. The
century residence isthe principal locus of family and
following the Great Depression and World War II, personal life, in which our personality, values and
the proportion of the nation ill-housed was many of our social roles are defined,shaped and
dramatically reduced, but the United States became experienced.Inits complexity and contradictions,
and has persistently remained one-third of a nation the housing environment maybethe setting of
“shelter-poor.” Even after the 1990s broughtthe anguish, abuse and violence, yet it nonetheless
longest period of economicgrowth inthe nation's continues to offer the hopeof security, love, and
history, the new century began with more than 32 expressive and aesthetic fulfillment.
million households inthe United States unable to Despite its intimate and profound significance,
meet their nonshelter needs at even a minimum adequate housing in the United States is not
level of adequacy because of thesqueeze between assured to all as a right. Rather, for most of us, the
their incomes and housing costs. housing we need has to be purchased in the
When one-third of a nation is shelter-poor, it is marketplace. What weareabletopay for housing
impossible to claim that those affected are an determines not only the quality of our dwelling but
unfortunate fewleft behindbypervasive and also the quality of our residential community
sustained prosperity. When the official unem- andindeedwhetherwe have housing at all. The cost
ployment rate isunder 6 percent, yet morethan 90 of housing is by far the largest singleexpenditure in
million people live in shelter poverty, 1 it is most families'budgets. Not only isthe cost large, it
impossible to claim that the labor market can is inflexible. Housing is usually thefirst thing paid
provide “good” jobs for all whoare willing to work. for out of disposable income. Other expenditures
When 32 million households cannot afford the have to be adjusted to fit whatever income is left
homes they are living in, it is impossible to claim over. To besure, inextreme emergencies, we will
that the housing market has the capacity to provide feed our kids even if it means not paying the rent.
“affordable housing” for all who areshelter- If this continues, however, eventually we will be
poorwithjust a littlemoresubsidy or a little less evicted—lucky to find another place but otherwise
regulation. Persistent and per vasive shelterpoverty homeless. That is, it is not ourincome alone but
challenges us to acknowledge the structural flaws income in relation to the cost ofhousing that is
in our institutions of housing provision and income decisive in determining our standard ofliving.
distribution. Housing affordabilityis central to the dilemmas
Howisthe problem of housing affordability any
different from that of health care, food and other
necessities? Housing has a pervasive impact on all
aspects of our lives. Ifit isadequate, housing
of inequality and insecurity confronting our trends since the 1970s. The major findings are not
society. The affirmation and realization of a Right especially surprising but perhaps are more dramatic
to Housing would thus mean, most basically, the than might beexpected; viz:
guarantee of true affordability, with pervasive
• Large and growing numbers of shelter-poor:
benefits and implications far beyond housing.
Thenumber of shelter-poor households has
This chapter examines the housing affordability
exceeded 30 million since the early 1990s, an
problem in the United States through the lens of
increase ofmore than 70 percent since 1970.
the shelter poverty concept. “Shelter poverty”
• Worse for larger households: Among families
challenges the conventional standard claiming that
with children, rates of shelter poverty are much
every household can reasonably afford up to a
higher and over the past several decades have
fixed percentage of income— currently 30 percent
risen faster than among households with just
—for housing. It offers instead a sliding scale of
one or two persons.
affordability that takes into account differences in
• Wo rse forrenters(but still badforhomeown-
household composition and income. In the
ers): Nearly one-halfofall renterhouseholds are
aggregate, the shelter poverty measure does not
shelter-poor, victims oflow incomes and rising
reveal amore extensive housing affordability
rents; most are headed by a woman and/or
problem than shown by the conventional
apersonofcolor.Nearlyone-quarter
approach.Itdoes, however, suggest a rather
ofhomeowner households are shelter-poor;
different distribution of the problem. Some very-
most are single-parent families or elderly.
low-income households andlargerhouseholds who
• Widening differences between renters and
payless than 30 percent of their incomes are
homeowners: Renters have experienced much
nonetheless shelterpoor because they still do not
greater increases than homeowners in their
have enough left over afterpaying for their housing
affordability problems; nearly two- thirds ofthe
to meet their nonshelter needs at a minimally
increase in shelter poverty since 1970 has been
adequate level. Bythesametoken,high-
among the one-third of all households whoare
incomehouseholdsand many small households
renters.
(especially the elderly) of middle income can
• Worse for households headed by a person of
afford to pay more than 30 percent ofincome
color: Renter households headedbya person of
forhousing yet arestill able to obtain adequate
colorhave about a 25 percent higher
levels of nonshelter necessities and thus are not
rateofshelterpovertythanrenterhouseholds
shelter-poor. The conventional percentage-of-
headedbywhites, with a smallerbut still sig-
income measures understate the affordability
nificant racial gap among homeowners.
problem of families with children and
• Worse for households headed by a woman:
otherlargerhouseholds incomparison
Morethan one-halfofall shelter-poorrenter
withhouseholdsof one and two persons as well as
householdsareheadedbyawoman,andtwo out of
understating theaffordabilityburdens of lower-
five shelter-poor homeowner households are
income households in comparison with those of
headedbya woman.
higher income. The shelter poverty ap-
• Wide inequality among elderly households:
proachisamore finely honed toolforidentifying
Shelter-poor elders are predominantly very
which segments of society are most vulnerable and
poorwomen living alone, renters and home-
where attention is most needed.
owners; elderly married couples, by contrast,
Before presenting the contours of shelter
have lowrates of shelter poverty.
poverty in the United States, some of the confusing
and inconsistent ways in which housing Other chapters in this text examine the un-
affordability is often understood and discussed will derlying sources ofpersistent and pervasive shelter
be examined. This leads to explication of the logic poverty in the economy and the housing system.
and methods underlying the shelter poverty Taken together,these analyses convincingly
standard of affordability. The balance of the demonstrate that realization of a Right to Housing
chapter then summarizes the housing affordability will require changes inthe prevailing waysof
situation at the start of the 21st century as well as thinking about housing ownership, production and
40 Michael E. Stone
financing, along with strategies to narrow income reasonably be considered to be living in inadequate
inequality. housing by choice. Thus, while housing
deprivation iscomplex and can take various forms,
the measurement of other forms of deprivation and
CONFUSION ABOUT THE MEANING OF their relationship to affordability is, in principle at
HOUSING AFFORDABILITY least, reasonably tractable.
On the other side, can it not be argued that those
In both academic and policy discussions, the notion households that do appear to haveanaf-
of housing affordability is often imprecise fordabilityproblem yet are “overhoused” might not
andinconsistent along a number ofdimen- sions: have an affordability problem if they were not
• Housing affordability versus housing standards overhoused? This question is the obverse of the
• Housing affordability versus “affordable one in the above paragraph and could in principle
housing” be answeredbyasimilar analytical
• A conceptually sound standard of affordability technique.Thedifficultyisofcoursearrivingata
versus the practicalpolicyimplications of such a reasonable, broadly acceptable operational def-
definition inition of“overhoused.” Although the relationship
• A normative standard of affordability versus between thenumber ofpersons inahouse- hold and
empirical analysisofhousing costs in relation to thenumber ofrooms orbedrooms in the dwelling is
incomes widelyused as an operational definition, in its
• Diverse and incompatible definitions of housing simplicity this definition tendsto be simplistic. For
affordability example, an apartment consisting oftwo tiny
bedrooms, a tiny living room and dining room, and
Housing Affordability versus Housing Standards a minuscule kitchenette could easily have less than
one-half the usable space ofaunit with one large
Housing deprivation can take a variety offorms, bedroom,agood- sized living room and an eat-in
ofwhichlackofaffordabilityisonlyone.People kitchen. Is it reasonabletoconsider a widowliving
maylive in housing that fails to meet physical inthe former to be overhousedbecause the
standards of “decency,” in overcrowded condi- apartment has five rooms, including two bedrooms,
tions, with insecure tenure, orin unsafe or in- but not in the latter because it has three rooms,
accessible locations. While each of these other including just one bedroom? Of greater subtlety,
forms of deprivation is logically distinct from the but as significant for assessing affordability, should
lack of affordability, in reality, most households households be considered overhoused if they have
whoexperience one or more ofthese other forms rooms for anticipated additional children, for
ofdeprivation dosobecause they cannot afford overnight visits from family andfriends, for study
satisfactory housing and residential environments. orhobbies, or for home-based business or
If otherforms of housing deprivation are largely employment? That is, thenumber ofhouseholds
due to the affordability squeeze, how should that appear to have an affordability problem, but
affordability assessments account for those would not have such a problem were they not
households who seem not to haveanaf- overhoused, is likely to be consider-
fordabilityproblem(asmeasuredonsomestan- dard ablylowerbased on application ofsome flexible
of affordability) yet do experience one or more standard rather than a simplistic person/room
other forms of housing deprivation? If the cost of orperson/bedroom definition ofwhat it means to be
obtaining satisfactory dwellings and residential overhoused.
environments withinthe same housing market area Insum,housingaffordabilityisnotreallysep-
exceeds what suchhouseholds could afford,then arable from housing standards. An analysis of the
they reasonably should be extent and distribution of housing affordability
consideredtohaveanaffordabilityproblemeven problems that takes into account the indirect effects
though not revealed by application of an economic of affordability on other forms of housing
affordability standard. Only if such a household deprivation would increase the number, while
actually could afford adequate housing might it adjustment for overhousing would decrease
thenumber ofhouseholds determined to have a “affordable” to the initial residents, after which it
“true” affordability problem. Because of these maybesold,notwithrestrictionstomaintainaf-
offsetting tendencies, and the difficulties of fordabilitybutintothespeculativemarketwhere even
definition, housing affordability studies ideally a semblance of affordability is lost.
should be iterative—such as applying an economic It thus seems that a far more accurate and
affordability standard inthefirst instance while honest termthan “affordable housing”would be
exploring ways of enhancing the precision of the “below-market housing.” The latterproperly de-
analysis to account for underhousing and notes identifiable segments of the housing stock,
overhousing. without making any unjustifiable general claim of
affordability.
Housing Affordability versus “Affordable
Housing”
A Conceptually Sound Definition of Affordability
Affordability is quite often expressed in terms of versus the Practical Policy Implications of Such a
“affordable housing.” But this term is at best Definition
meaningless and at worst misleading, as afford-
ability is not a characteristic of housing—it is a There seems to be some confusion between, on the
relationship between housing and people. For one hand, the importance of formulating a
some people, all housing is affordable, no matter conceptually sound affordability standard for
how expensive; for others, no housing is affordable analytical purposes and, on the other, the potential
unless it is free. “Affordable” housing only can consequences of adopting such a standard
have meaning (and utility) if three essential wholesale for purposes of policy. Although some
questions are answered: Affordable to whom? On people in the field recognize the conceptual
what standard of affordability? For how long? weaknesses of the conventional ratio(percent-of-
Indeed, in light of the discussion in the section income standard), most of those who do retreat
above, one might also add meeting what physical from fully embracing alternative approaches,
standard? declaring, for example, that such approaches are
Prior to the 1980s, subsidized housing (public “clearly moresophisticated,and therefore more
and private) was referred to as “low-income difficult to apply” (London Research Centre
housing” and “low- and moderate-income 1996:19; see also, for example, Budding 1980;
housing,” with explicit definitions of “low- Wilcox 1999).3
income” and “moderate-income.” Although such Acknowledgment that housing subsidy policy
terms and definitions are still used in de- inevitably will and should be shaped by factors
terminingeligibility under various housing policies other than conceptual clarity of the affordability
and programs in the United States, 2 inthe 1980s, standard (such as potential perverse incentives,
“affordable housing” came into vogue as part of fiscal constraints, political interests) should not
the retreat from public responsibilityfor the plight result in avoidance ofin- tellectual responsibility
of the poor and as affordability challenges moved for rigorous and sound conceptualization, both for
up the income distribution. The term has since purposes of analy- sisand as an important
achieved international stature yet still lacks precise consideration (if not the sole consideration) inthe
and consistent definition. As well, it has come to formulation of policy.
encompass not only socialhousing andlow-income
housing but also housing that includes financial
A Normative Standard of Affordability versus
assistance to middle-income households that findit
Empirical Analysis of Housing Costs in Relation to
diffi- culttopurchase houses inthe private
Incomes
speculative market. While the latter is touted as
“affordable housing,”in reality, it isaffordableonly
Studies of consumer expenditures have been car-
toanar- row spectrum of households (depending
ried out in Europeand North America since the late
upon the definition of affordability and local
19th century, yielding considerable information
housing market). Such housing is frequently only
42 Michael E. Stone
about how households have spent their incomes for Statements manifesting the first of these ap-
housing and other items. One way of summarizing proaches, the tautological, are not unusual. For
the data on housing costs has been to calculate the example: “[Affordability is] people's ability to
mean or median ratio of shelter expenditures to secure housing, to rent or to buy, based on their
income. It has then been assumed that because ability to pay either the rent or themortgage. . . .”
householdsonaverage actually spend such a Or, households with an affordability problem are
fraction of their incomes for shelter, ipso facto this those “who cannot meet the market cost of buying
percentage is justified as a standard of what is or renting housing from their own resources, i.e.,
reasonable to spend. those whose housing costs have to be subsidized
In reality, what most households actually pay ..............................”4 Such statements, however,
for housing is not what they realistically can are circular and of no practical use, as they imply a
afford: Many pay more, while some pay less, standard of affordabilitybut fail to provide any.
whether measured in money or as a percent of The relative approach is widely used by the
income. Who paysmoreandwho pays less than they mortgage lending and real estate industries to
realistically can afford is not random. An assess the residential sales market. It is simply an
affordability standard is a normative concept, empirical summary that enables twoor more points
which must have some independent logical or in time to be compared as to whether, on average,
theoretical basis, against which households' actual dwellings for sale have become relatively more or
circumstances can be measured.Otherwise, the less affordable. The technical sophistication of
standard is tautological or arbitrary, or affordability such affordability measures does vary, with
is purely subjective, as discussed in the next considerable discussion as to the most appropriate
section. definitions ofhousing cost and income to use in
constructing the measure as well as the
implications of different definitions (see Linneman
Diverse and Incompatible Definitions of Housing and Megbolugbe 1992; Pannell and Williams
Affordability 1994). Thisapproachpro- vides no normative
standard for assessing how much households
In practice, there appear to besix different ap- realistically can afford and thus fordetermining
proaches to defining housing affordability or lack how many and whichkinds ofhouseholds can and
thereof: cannot afford those prop- ertiesthatarefor sale.
Nordoes it provideanyba- sis for assessing
1. Tautological—ability or inability of households possibleaffordability stresses of households intheir
to pay for market-rate housing; current situations as owneroccupiers or renters.
2. Relative—changes inthe relationship between The subjective approachrests on the assumption
aggregate central tendency measures (medians of Homo economicus: Because households are
or means) of house prices or costs, on the one rational utility-maximizers, every household is by
hand, and summary measures of household definition paying just what it can afford for
incomes, on the other; housing. Some households may live in undesirable
3. Subjective—whatever individual households are conditions or some may have low incomes that
willing or choose to spend; give them few choices, but they make the choice
4. Behavioral—standards based on aggregate or that is best for them within their constraints. Thus,
average housing expenditure patterns, or from this perspective, housing affordability per se
alternatively on the characteristics of house- has no generalizable meaning: It is neither
holds in arrears; rationally possible nor socially desirable to
5. Ratio—normative standards of a maximum establish a normative standard of affordability
acceptable housing cost:income ratio; other than individual choice.
6. Residual—normative standards of aminimum More sophisticated versions of this perspective
income required to meet nonshelter needs at a do recognizethat the degree of financial flex-
basic level after paying for housing. ibilitydoes increase withincome. Kempson, for
example, has argued (1993:26-27) that:
[P]eople differ in the way they allocate their fromthefinancial squeeze betweenincomes and
money. Some choose to spend more on their housing costs, with analysis of household char-
housing and cut back on other expenditure; acteristics and circumstances potentially providing
whileothers keep their housing costs lowinorder to a basis for assessing risk. Mortgage default and
spend more on other things. The higher the
foreclosures, andrent arrearage and evictions for
income the less need there is for such choices.......
nonpayment, arethe most proximate manifestations
Linneman and Megbolugbe (1992:388) have of such affordability stress. Homelessness
expressed this perspective particularly point- (including doubling-up as well as shelter demand
edly.While they acknowledge a “real” affordability and street sleeping) is certainly theultimate
problem among low-income households— consequence for manyfamilies and individuals.
claiming, though, that it is “primarily a problem of However, while these latter phenomena are
income inadequacy”—they assert, in complex and have aspects that maybe difficult to
responsetowidespreadanguishaboutthecostof measure, for the most part they are extreme
achieving homeownership,that housing afford- behavioral responses to dire circumstances. Indeed,
abilityis “an issue manufacturedbymiddle-class and families with severe financial stress often continue
affluent young adults with ever growing to payfor their housing but live insubstandard
expectations ” housing and/orhave inadequate nutrition, with
While no one could disagree that higher- resulting threats to health and child development
income households have considerable discretion (see Doc4Kids 1998 and the sources cited therein).
about how to allocate their resources between As Kearns has similarly put it (1992:539):“A static
housing and otheritems, andhence for them af- rate of incidence of rent arrears could hide the fact
fordability maybe quite subjective, at the lower end that households may be adjusting their expenditure
of the income distribution, households are not priorities in order to meet their housing costs, and
simply choosing freely between housing and other as a result be suffering hardship inother areas ”
needs. Rather, since housing costs tend to Thus, at best, measures ofpayment arrearage and
makethefirst claimonahousehold's disposable loss ofhousing due to financial stress are
income, lower-income households have little usefulindi- cators of some of the consequences of
discretion in what they can spendfor nonhousing extreme lack of affordability but do not in
items. Thus, “subjectivity” of affordabilityis not themselves provide a sufficient basis for
only not universal, it is not even a continuum that establishing a normative standard of affordability.
increases with income. Instead, there is a threshold The ratio approach recognizes that what many
above which affordability may become households pay for housing in relation to their
increasingly subjective. The important questions income isthe result of difficult choices among
are what isthat threshold or transition zone below limited and often unsatisfactory alternatives. It
which affordability is not subjective andhow to asserts that if a household pays more for housing
define and measureobjective afford- abilitybelow than a certain percentage or fraction ofits income,
that threshold? These questions are not addressed then it will not have enough income left for other
within this perspective. necessities. It usually specifies an explicit ratio of
The fourth approach to conceptualizing housing housing cost to income as a norm against
affordability—the behavioral—has had two whichhouse- holds' actual circumstances can be
strands. One has focused on what households measured. This approach to a normative standard
actually spend; in practice, this has formed the has the longest history andwidest recognition and
basis for the ratio approach, although in principle a acceptance for assessing affordability throughout
residual income standard could also be defined most English-speaking countries—even though
behaviorally. This strand embodies perfectly there is no theoretical orlogicalfoundation for
theconfusion between empirical analysis and theconceptandtheparticularratioorratiosthat are
normative standards discussed in the preceding used.
section. How can one account for the existence and
Theother strandhas focused on payment ar- persistence of the fixed ratio or percent- of-income
rearage and involuntary displacement resulting affordability concept? Apart from the mathematical
44 Michael E. Stone
simplicity of the percent-ofincome standard, the poverty is a form ofpoverty that results from
rationale for the conventional standard (and the thesqueeze between incomes andhousing costs
rationalization for raising the acceptable level in rather than just limited incomes. On this basis,
the United States from 25 to 30 percent inthe onlyifahouseholdwouldstillbeunabletomeet its
1980s) has been built upon interpretations of nonshelter needs ifshelter costs were reduced to
empirical studies ofwhat households actually spend zero should its condition between regarded as
for housing, as noted above.Because ratios are pure absolute poverty rather than shelter poverty. Even
numbers, inthe latter circumstance, as long as housing costs
theycanbecomparedacrosstimeandspace,and thus are in fact notzero and do make the first claimon
are susceptible to being reified as universal sucha household's meager income, the depth
andlawful.Such“laws”thenbecomelegitimated as oftheir absolute poverty is determined by the
standards. (See Feins andLane 1981; Pedone squeeze between their income andhousing costs.
1988:9;Yip 1995:Chapter7; for a critique ofsuch What arethe implications ofthis logic for the
alleged“lawfulness,” see especially,Chaplin et al. amountandfractionofincomethathouseholds
1994:13-14.) realistically can afford? Consider, for example, two
Surely this is specious reasoning. Since a households with comparable disposable incomes.
housing affordability standard is intended to Suppose that one consists of a single person, while
measure whether housing costs makeanun- due the other is a couple with three children.
claim on household income in relation to Obviously,the largerhousehold would have to
otherneeds,basingsuchastandardonwhatpeo- ple spend substantiallymore forits nonshel-
actually pay provides no way of assessing whether ternecessitiesthanwouldthesmallhouseholdin order
they are in fact able to achieve some minimum to achieve a comparable material quality
standard for nonshelter necessities. Furthermore, oflife.Thisimpliesthatthelargerhouseholdcan afford
the notion that a household can adequately meet its to spend less forhousing than the small household
nonshelter needs if it has at least a certain of the same income. Now compare two households
percentage ofincome leftaf- ter paying for housing of the same size and composition but different
implies that the lower the income ofa family, the after-tax incomes. Both would
lower the amount of moneyit requires for needtospendaboutthesameamounttoachieve a
nonshelter needs, with no minimum comparable standard ofliving for nonshelter items.
whatsoever.These logical flaws inthe ratio The higherincome household could thus afford to
approach lead inexorably to the residual income spend more forhousing, in percentage of income as
approach to affordability,theonly truly logical well as in monetary terms.
normative approach,astaken upinthe next section. Generalizing from these examples, since the
nonhousing expenses of small households are, on
THE SHELTER POVERTY STANDARD average, less than those of large households (to
achieve a comparable basic standard of living),
The Residual Income Logic of Housing smaller households can reasonably devote a higher
Affordability percentage of income to housing than can larger
households with the same income. Since low-
The residual income approach to affordability— income and higher-income households of the same
including the shelter poverty standard I have size and type require about the same amount of
developed5—arises from the recognition that money to meet their nonhousing needs at a
housing costs tend to be inflexible and for most comparable basic standard of living, those with
households make the first claim on after-tax lower incomes can afford to devote a smaller
income—for instance, that nonhousing expen- percentage of income for housing than otherwise
ditures are limitedbyhow much income is left similar, higher-income households can afford. In
afterpaying for housing. This means that a this way, the shelter poverty scale emerges as a
household is “shelter-poor” if it cannot meet its sliding scale of housing affordability—with the
nonhousing needsatsomeminimum level of maximum affordable fraction ofincome varying
adequacy after paying for housing. That is, shelter withhousehold size, type and income—that is
logically sound and more realistic than the widely certainly maybe some philosophical debate. While
used ratio approach.The residualincome logic the experience of “poverty” is recognized as more
revealsthat any attempt to reduce affordability of than just the inability to secure a socially
housing to a single percentage ofincome, or even a determined minimum quantity and/orquality of
set of ratios, simply does not correspond to the essential goods and services, measurable material
reality of fundamental and obvious differences deprivation is certainly a central element in
among households. poverty. Furthermore, in societies where most
basic goods and services are commodities, it is
The Shelter Poverty Scale possible (at least in principle) to determine the
monetary cost of achieving such a basic
Operationalizing the shelter poverty standard materiallevel.This budget standards approach to
involves use of a conservative, socially defined poverty and in-
minimum standard of adequacy for nonshelter comeadequacyhasalongandhonorable history (see
necessities, scaled for differences in household size Bernstein et al. 2000; Bradshaw et al. 1987;
and type. It takes into account the actual cost of a Bradshaw 1993; Citro and Michaels 1995; Ruggles
standardized, basic “market basket” of nonshelter 1990).
necessities in determining the maximum amount of There are, however, conceptual problems in the
money households can afford to spendforhousing treatment of housing costs inthe budget standards
and still have enoughleftto pay for this basic methodology due to the inherent natureand
market basket of nonshelter necessities.6 Thus, variability ofhousing costs. If the budget amounts
while the logic of shelter poverty has broad for housing specified in the standard budgets really
validity, a particular shelter poverty scale is not do represent the amount of income needed for
universal; it is socially grounded in space and time. essentially any household to obtain physically
To illustrate, suppose a family of four persons adequate housing, then housing affordability has
has a disposable income of $2,000 a month. Their no independent meaning; forinstance, in principle,
out-of-pocket expenses forrent and utilities are, anyhousehold with an income no less than the total
say, $800 a month.They then have $l,200 a month budget should be
available for nonshelter expenses. If the abletomeetallofitsbasicneeds,includinghous- ing, at
basicminimum cost standard for nonshelter items at the physical quantity andqualityrepre- sentedbythe
some point in time were to be $1,500 a month for a budget standard. However, while the budget
household of four, then this family is “shelter- standard methodology is well conceptualized and
poor”: They are unable to meet their nonshelter operationalizedfor otheritems, it is flawed with
needsadequately at even a basic levelbecause regard to housing. The issue is revealed by
theyhave a deficitof $300 a month due to the contrasting the budgetstandardapproach andits
squeeze between their income and their shelter implications forfoodwith that of housing.
cost. That is, shelter poverty is ascertained by Forbothfood andhousing (and most other
considering actual income and actual shelter costs items),somecombinationofexpertopinion,social
against a monetary normative standard for surveysandfocus groups is used to establish
nonshelter items, not a normative standard for aminimalstandardoftype,quantityandquality,
shelter costs. inagiven social contextatagiven point in time. (The
The practical issue in translating the shelter physical standard will of course vary by household
poverty concept into an operational affordability type, and this qualifier applies to all ofthe
scale is how to specify the monetary level of a following.)The food standard can then be priced,
minimum standard of adequacy for nonshel- resulting in a monetary standard. Then, given the
teritems. Although every household has its own nature offood items—low price variance and high
unique conditions of life, there do exist historically supply elasticity—essentially any household could
and socially determined notions ofwhat constitutes in principle meet the physical food standard with
a minimum adequate ordecent standard of living. the amount represented by thespecific monetary
They represent norms around which a range of standard,atleast withina particular geographical
variations can be recognized and about which there region.
46 Michael E. Stone
Housing, by contrast, is highly inhomogeneous. an income of at least $38,000 to beabletoafford to

Because it is bulky, durable and tied to land, it spend 30 percent oftheir income forhousing and
shows high price variance and low elasticity of still meet other necessities at a minimallevel ofade-
supply—even withinagiven market area. How then quacy.Iftheirincome were $20,000 or less, they
to price the minimum standard for housing? could afford nothing for housing. A single parent
Ifprices are determined for a sample of housing with two children, working at a full-time job
units meeting the minimum physical standard, the paying$10 an hour,couldbarelyafford to spend 25
price distribution has a large variance. Which point percent ofherincome forhousing in 2001— and
on the distribution should then beselectedfor the onlyifherjobincludedhealthbenefits and she
monetary standard for housing? If thevery lowest hadsubsidizedchildcare;withoutthese benefits, she
cost is selected (say, the tenth percentile), then could afford only a much lower percentage for
most housing is more expensive, and therefore housing. An elderly couple with an income of
most households, despite their best efforts, will not $15,000 could afford just 25 percent oftheir income
be able to obtain physically adequate housing at the forhousing; but with an income of$17,000, they
monetary standard. That is, most households would could afford 35 percent.
needincome above the total spec- ifiedbythe The following sections summarizethe results of
monetary budget standard inorder to meet applying the shelter poverty standard to national
theminimum physical standard. If, on data on housing expenditures to determine the
theotherhand,themonetarystandardforhous- ing extent and distribution ofhousing affordability
weretobe set closer to the midpoint of the price problems, inthe aggregate andfor
distribution (say,the fortieth percentile, whichisthe varioussubsetsofthe population, over time and
definition of “Fair Market Rent” computed by the
U.S. Department of Housing
andUrbanDevelopmentandusedinrecentU.S.
budgetstandards;seeBernsteinetal.2000),then some
householdsareabletospendless than the monetary
standard for housing andhence need less income
than the totalbudget, through no virtue of their
own, while others would have to spend more
(though not as many as with a standard located at a
lowerpoint on the cost distribution). In sum,
housing isunique; the budget standard
methodology may be able to specify a reasonably
precise physical standard forhousing, but it
cannot establish a precise monetary standard.
Thus, the budget standards concepts and
methodology provide an appropriate basis for
establishing a normative standard for residual
income, but not for total income, given the dis-
tinctive nature of housing and housing costs. For
operationalizing the shelter poverty scale for the
United States, I have utilized as thenor- mative
standard for residual income the nonshelter costs
(other than taxes) inthe Bureau ofLabor Statistics
(BLS) Lower Budgets, appropriately scaled and
updated.7 Thisapproachre- veals, for example, that
in 2001, a married couple with two children and a
before-tax income of$30,000a year could afford
just21percentof their income for housing on the
shelter poverty standard. They would have needed
in comparison with the poor households in 2001, compared with 84

conventional percent- of- million people living in households paying 30
income measures of percent or moreofincome.9 The reason why the
number of persons in shelter-poor households
affordability. was6million greater than the number of persons in
households paying 30 percent or more—despite the
number of shelterpoorhouseholds being 2.5 million
SHELTER POVERTY IN THE UNITED fewer—isthe sensitivity of shelter poverty to
STATES8 household size and hence the relatively larger size
of the typical shelter-poor household. The median
Large Numbers of Shelter-Poor size of shelter-poor households was 2.5 persons,
compared with just 2.1 persons on the 30-percent
In 2001, there were about 106 million households standard. Thus, while 30 percent of all households
intheUnitedStates. Over 32 million were shelter- were shelter-poor in 2001, 33 percent of all persons
poor. Strikingly, about 2.5 million more livedin householdsthat wereshelter- poor.
households were paying 30 percent or more of their
incomes for housing (Figure 2.1). That is, the
Increasing Shelter Poverty
shelter poverty approach does not overstate the
extent of the housing affordability problem in
Between 1970 and the mid-1990s, the number of
comparison with the conventional measure. But, as
shelter-poor households grew by more than 70
weshall see, it does suggest a significantly different
percent. From under 19 million households in
distribution of the problem: Not all shelter-
poorhouseholdsare paying over 30 percent of their 1970, shelter poverty grew slowly during the 1970s
incomes for housing, and not all households paying and then rose sharply inthe long, deep recession of
over 30 percent are shelterpoor. the late 1970s to early 1980s, to a
There were 90 million persons living in shelter-
Shelter Poor Paying 25+% ------Paying 30+%
FIGURE 2.1. Affordability Trends in Number of Households, 1970-2001.

48 Michael E. Stone
temporary peak of a after which it again

littleover 27 million climbed past 30 percent in
households in 1983. During 2001 (Figure 2.2). The
the following six years of share of the population (as
economic growth, shelter distinguished from
poverty actually de- households) living in shel-
clinedby1.2 million terpovertyhasfluctuatedbetw
households. It then soared eenalowof about 31 percent
again in response to the intheearly and late 1970s
recession of the early and late 1980s andhighsof
1990s, reaching a new high 36 percent intheearly
of nearly 32 million in 1980s, 38 percent in the
1995. Over early 1990s and 33 percent
thenextfouryears, sustained as the decade turned.11
economic growth brought Shelter poverty is thus seen to be sensitive to
shelter poverty down to business cycle fluctuations, with swings up and
just over 30 million down as employment and incomes shift with the
overall economy. It is important to
households. With the sub-
keepinmind,though,that underlying these ups and
sequent decline inthe downs, there has been a persistent, longterm shelter
economy, shelter poverty poverty rate of about 30 percent of all households
climbed past 32 million —a rate that actually shows a slight upward trend
households by 2001, of about two percentage points over the last three
againsurpassing the decades of the 20th century, as Figure 2.2 reveals.
previous peak (Figure 2.1). About one-sixth of shelter poverty can be
considered cyclical— households who dropinto
Over this period, the rate
shelterpovertywhen the economy turns down,
of shelter poverty has also suffering jobloss and income decline, but who
fluctuated with the ups and emerge from shelter poverty with economic
downs of the overall upswings. The remaining five-sixths of shelter
economy. In 1970, 30 poverty is structural— households for whom
percent of households were growth in the overall economydoes not providethe
shelter-poor; the rate way out of shelter poverty.
showed little variation
from 1970 through 1979,
then increased steadily to
nearly 33 percent in 1983
before declining to 28
percent in 1989. 10
It in-
creased dramatically over
the next four years,
reaching a record high 33
percent in 1993, followed
by only a slight decline in
1995, before dropping to
almost 29 percent in 1999,
Strikingly, in comparison with the traditional ofhigher income are not,as they can afford more
percent-of-income measure, the shelter poverty than 25 percent of their incomes for housing
approach actually shows farless growth in without neglecting other needs.
affordability problems since 1970. Note that prior Unlike the gap that opened upwith the 25-
to the 1980s, the conventional affordability percent standard, there has been fairly close
standard was 25 percent of income, so this standard correspondence inthe aggregate number and
provides a long baseline comparison with shelter percent of households shelter-poor and those
poverty, supplemented by comparison with exceeding thenewer 30-percent-ofincome
thenewer 30-percent-ofincome standard since the standard—at least since the mid-1980s (Figures 2.1
mid-1980s. In 1970, the number of shelter-poor and 2.2). However, as has already been suggested
households exceeded the number paying over 25 andwillbe further exploredin the next section, this
percent their incomes for housing by over 1 remarkablecoincidence in the aggregate extent
million. Since1976,however,thenumberofshelter- ofthe problem as measured by these two
poor households has been less than the number affordability standards masks sizable differences in
pay- ingover25percent,withthedifferencebeing8to the experience oflarge and small households.
10 million householdssince the late 1980s (Figure
2.1). As thisgap opened up, the proportion
ofhouseholdspayingover25percentofincome Worse for Larger Households
hasexceeded40percentsincethelate 1970s,fully 10
percentage points higher than the rate ofshelter The relative stability in the underlying longterm
poverty (Figure 2.2). These trends suggest that, as rate ofshelter poverty masks a growing af-
housing costs rose and the 25-percent standard was fordability problem over the past three decades for
jettisoned as the basis forpublic and private families with children. This is because the overall
decision-making, more households have had to incidence is a mixture of trends inshelter poverty
accept paying over 25 percent of their incomes for for small (one-person and two- person) households
housing as a permanent state of affairs. While —forwhom there has been a significant downward
many of these households are shelter-poor,those trend in the underlying rate of shelter poverty since
— Shelter Poor Paying 25+% - - -Paying 30+%
FIGURE 2.2. Affordability Trends in Percent of Households, 1970-2001.

50 Michael E. Stone
1970—and larger households (containing three or

more people) forwhom the basic shelter poverty
rate has risen substantially during the same period.
In 1970, small households had a 3 percentage point
higher rate of shelter poverty than larger
households. By 1975, these rates had reversed, and
since then, the incidence of shelter poverty among
largerhouseholds has remained consistently above
that of small households—a differential reaching 8
percentage points by the late 1980s, then soaring to
15 percentage points inthemid-1990s before
narrowing to 10 to 11 points laterinthat decade
(Figure 2.3).
Ofhouseholds containing three or more persons,
the number who wereshelter-poorrose by 86
percent—from a little over 9 million in 1970 to
over 17 million by 1995, after which it dropped to
the 15 to 16 million range. Meanwhile, their rate of
shelter poverty rose from a low of 29 percent in
1970 to a relative peak of 36 percent in 1983. The
rate declined just a few percentage points in the
mid-1980s but surged toover41 percentfrom1993to
1995,afterwhich
itdeclinedtoabout36percent(Figure2.3).That is,
shelter poverty among households with three
persons or more—nearly all ofwhich contain
children—has risen to whereclose to twooutof
every five are shelter-poor.
In comparison, thenumber of small households
(one or two persons) who were shelterpoorrose 66
percent between 1970 and 1997, from slightly over
9 million to nearly 16 million, then declined a bit
before rising to 16.5 million in 2001. However,
because this increase was exceeded by enormous
growth in the number of small households
ofrelatively high income, the rate ofshelter poverty
among small households actuallydeclinedduring
the 1970s andremained less than 30 percent even
inthe recession ofthe early 1980s. It reached a low
of 24 percent in 1989 beforeturning up to 27
percent during the
recessionoftheearly1990s,fluctuatingbetween 25
and 27 percent thereafter (Figure 2.3).
The conventional measures, by contrast, show
no reversal in the affordability situations
1-2 Person HH Shelter Poor 1-2 Person HH Paying 30+%

■ 3+ Person HH Shelter Poor --------3+ Person HH Paying 30+%
FIGURE 2.3. Affordability Trends by Household Size, Percent of Households, 1970-2001.
of small andlargerhouseholds. The percent-of- percent since the early 1990s. By contrast,
income standards have consistently suggested that
approximately one-fourth of all homeowner
small householdsaresubstantially worse off thanhouseholds are shelter-poor, averaging about 24
larger households, although the difference percent over the same period (Figure 2.4). The
narrowed considerably in the early 1990s (Figure
primary reason for renters' much higher rate of
2.3). The reason the conventional measure shelter poverty is that they are poorer on average
continues to suggest that smallerhouseholdsare than homeowners: median income in 2001 of
more likely than larger ones to have affordability
about $25,000 for renter households compared
problems is that it gives undue weight to the with over $49,000 for homeowners. Also, unless
growing number of small middle-income they are protected by rent control or housing
households, many ofwhom are not necessarily subsidies, renters do not have the benefit of
shelter-poor, even if they are paying more than 25
relatively stable housing costs, unlike those many
or 30 percent of their incomes forhousing. Inhomeowners who have fixed-rate mortgages and
revealing the disproportionate growth of have not recently bought their homes or borrowed
affordability problems among larger households,against their equity.
theshelterpoverty approachrevealsmuch more In addition, shelter-poor renters are somewhat
clearly than the conventional approach how poorer than shelter-poor homeowners on average:
housing affordability is one of the principal causes
Shelter-poor renters had a median income of
and manifestations of the economic strains on $11,300 versus $16,300 for shelterpoor
families with children. homeowners in 2001. Indeed, 56 percent of
shelter-poorrenters (8.4 million households) can
Worse for Renters (but Bad for Homeowners) actually afford nothing for housing compared with
42 percent of shelter-poor homeowners (7.1
Nearly one-half of all renter households are million households). However, homeowners are
shelter-poor, the incidence averaging about 45 far more diverse economically
52 Michael E. Stone
Renter HH Shelter Poor --------Renter HH Paying 30+%

Homeowner HH Shelter Poor Homeowner HH Paying 30+%
FIGURE 2.4. Affordability Trends by Tenure, Percent of Households, 1970-2001.
than are renters: For example, single homeowners income of $13,900). As we have seen, though, the
have a median income of only $25,000; those with aggregate similarity in the extent of the problem on
three or more persons have a median income of the shelter poverty and 30percent standards masks
about $65,000. Homeowner shelter poverty also significant differences by household size. Unlike
reflects wide social inequality shelter poverty, the conventional measure suggests
amonghomeowners,withshelterpovertydiffer- ences virtually no difference inthe rates of affordability
by income andhousehold sizecorrelating strongly problems among renters by household size, thereby
with gender, race and age differences. understating the problems faced by families with
Morethan 15 million renterhouseholds were children while exaggerating the problems of small
shelter-poorin 2001. Morethan four out of five households. For renters with incomes below
hadincomes ofless than $20,000. Indeed, nearly 80 $10,000, thetwoapproaches show nearly all
percent of all renters with incomes under $20,000 households to have severe problems. At higher
were shelter-poor. Shelter poverty rises sharply incomes, however,shelterpovertyremains quite
with household size, ranging from 31 percent of serious among the largest households with incomes
one-person renters to nearly 73 percent of renter all the way up to $40,000 but among one- person
households with six persons or more (Figure 2.5). households is not serious above $15,000. The
This disproportionate burden on largerhouseholds conventional approach shows no such differences
means that the rate of renter shelterpoverty and hence, to repeat, isamuch coarser instrument
measuredinterms ofpersons was 52 percent in for understanding the problem and focusing
2001 (41 million people) compared with 44 percent resources wherethey are most needed.
of households. More than one-half of all shelter- A littl eover 17 million h omeow ne r s we re
poor renter households are headed by a woman, shelter-poor in 2001. Homeowner shelter poverty
and more than two-fifths are headed by a person of disproportionately afflicts households headed by
color. someone who is a woman and/or
By way of comparison, on the 30-percent- of-
income standard,about 47 percent ofrenters had an
affordability problem in 2001 (with a median
■ Shelter Poor
□ 30+% of
Income
□ 25+% of
Income
Household Size (# of persons)
FIGURE 2.5. Renter Affordability by Household Size, Percent of Households, 2001.
elderly and/or a person of color. The rates of number of shelter-poor renterhouseholds

shelter poverty among one- and two-person increasedby90 percent, from 8.4 million to 15.8
homeowner households were slightly above 20 million, andhas since fluctu- atedbetween 15 and
percent in 1997 but were much higher among 16 million. The incidence of shelterpoverty among
larger households—26 to 28 percent for three-, rentersgrewfrom 37 percent in 1970 to a temporary
four- and five-person households and 39 percent peak of over 45 percent in 1983. Renter shelter
for six-or-more-person households (Figure 2.6). poverty then fell steadily to just under 40 percent
That is, once again, the shelter poverty approach by 1989, but with the onset of recession, it then
reveals the greater affordability problems faced by soared to nearly 48 percent in 1993 anddeclined to
larger households, although the rate rises much a little under 44 percent in 1999 beforeturning
moresteeply forrenters. Among one-person upward again with the new century (Figure 2.4).
households, the incidence of shelter poverty among Single renters have experienced a substan-
renters is 10 percentage points higher than tialincrease inthenumberwhoareshelter-poor yet a
forhomeowners. For three-person households, long-term downward trend in the percent shelter-
renters have a shelterpovertyrate 26 percentage poor.Thistrendis dueprimarilytostrik- ing
points higher; for six-or-more person households, differencesinshelterpovertybetweenelderly and
the differential is 33 percentage points. nonelderly singles, and the enormous increase
inthe total number of nonelderly singles. Elderly
Widening Differences between Renters and singles, whoareoverwhelmingly female, have long
Homeowners been the poorest of all householdsand have faced
rents increasing faster than incomes; by themid-
Nearly two-thirds of the rise in shelter poverty 1980s, nearly one-half of suchhouseholds were
since 1970 has been among the one-third of all shelter-poor. Meanwhile, there has
households who are renters. In 1970, shelter-poor
renters accounted for 45 percent of all shelter-poor
households; since 1985, they have been a majority
nearly every year. From 1970 through 1993, the
54 Michael E. Stone
■ Shelter Poor
S3 30+% of
Income
0 25+% of
Income
Household Size (# of persons)
FIGURE 2.6. Homeowner Affordability by Household Size, Percent of Households, 2001.
been a rapid increase in the number of middle- million inthe late 1990s, followed by another sharp
income and higher-income nonelderly singles, increase of over 1.5 million in the number of
nearly all of whom are not shelter-poor. shelterpoor homeowners between 1999 and 2001
Themajority ofrenterhouseholds containing as the economy again headed downward. The in-
three persons or moreareshelter-poor andhave had cidence of shelter poverty among homeowners has
enormous increases in their rates of shelter shown fluctuations with the economy, ranging
poverty. Their incidence of shelter poverty rose between about 21 and 26 percent, against a
from 44 percent in 1970 to 61 percent intheearly background of a modest, long-term downward
1980s, followed by some improvement through the trend (Figure 2.4).
rest of the 1980s. Their plight again worsened with Homeowner households with one and two
the recession in the early and mid-1990s, when persons experienced sizable decreases in their rates
their rate of shelter poverty surpassed 66 percent. It of shelter poverty during the 1970s, with the rates
fell slowly thereafter to 58 percent in 2001. remaining nearly unchanged at about 20 percent
Meanwhile, the number of shelter-poor since the mid-1980s. Yet the number of small
homeowners grew by 64 percent between 1970 and homeowner households who are shelter- poor rose
2001—from slightly more than 10 million to 17 by 45 percent from 1970 to 1997. The resolution of
million households. Homeowner shelter poverty this apparent inconsis- tencyistobe found in the
has been more volatile than that of renters, more rapid increase inthenumber of small
reflecting fluctuating homeownership rates, rising homeownerhouseholds who are not shelter-poor.
mortgage debt burdens and widening inequality Some of the latter are “empty-nesters,”long-
among homeowners. There was an increase of termowners who benefit from relatively low
nearly 4 million shelter-poor households from housing costs plus incomes rising with inflation;
1970 through the early 1980s, followed by a many others are younger, higher-income
decline of 1.5 million households from 1983 households without children. By contrast, it is
through the late 1980s, and then another surge of primarily elderly and middle-aged female-
over 3.5 million households from 1987 through headedhouseholds who account for the increase in
1995. This was followed by a decline of under 1 the number of shelter-poor small
homeownerhouseholds. the next highest by non-Latino Blacks,
Larger homeowner households (three persons followedbyAsians. In 1997, 50 percent of Latino-
or more) have seen their rates of shelter poverty headed, 45 percent ofBlack-headed (non-Latino)
fluctuate with the economy.However, the and 35 percent of Asian-headed households were
variations are correlated with household size. shelter-poor, compared with 27 percent ofwhite-
Homeowner households with three and four headedhouseholds.
persons have hadfairly consistent shelter poverty When examined by tenure, the same relative
rates ofabout 20 percent since the mid- 1970s. severity in the incidence of shelter poverty by
Only the relatively small proportion of race/ethnicity is found for both renters and
homeowners with five persons or more have ex- homeowners.Amongrenterhouseholds,58per- cent
perienced high and rising shelter poverty rates ofLatinos, 52 percent ofBlacks and 46 percent of
since themid-1970s. Asians wereshelter-poorin 1997, comparedwith
Shelterpovertypatternsbytenuresuggestthe need 42 percent ofwhite renters. Among homeowners,
for particular attention to the problems of renters— 39 percent ofLatinos, 36 percent ofBlacks and 25
almost one-half ofwhom are shelterpoor andwho, percent ofAsians were shelterpoor comparedwith
for the most part, are suffering 21 percent ofwhite households.
simultaneouslyfromthe depredations ofthe pri- Notice that the differences inthe rates of shelter
vaterentalmarketalongwithlowandstagnating poverty by race/ethnicity are somewhat smaller,
incomes. They thereforeneed extensive and ef- controlling for tenure, because of differences inthe
fective strategies from both sides of the afford- proportions whoare renters and homeowners. That
ability squeeze. Homeowners, by contrast, are only is, households headedbya personofcoloraremore
one-half as likely to beshelter-poor,and those who likelytobe renters, and renters have higherrates
are shelter-poor mostly are afflicted by one ofshelter poverty. Over 57 percent of Latino
sideofthe housing cost/income squeeze or the households, 54 percent ofBlack households and 49
other. Specifically, one major segment of shelter- percent of Asian householdswere renters in 1997
poor homeowners consists of older, long- comparedwith just 28 percent ofwhite households.
termowners who have relativelylowhous- ing costs In addition,
but very lowincomes. Another group is single- Black,LatinoandAsianhouseholdsareasteadily
parent families, for whom dissolved relationships increasing proportion ofall renterhouseholdsof
leftthem with houses but with less income and three persons or moreand an even greater share
hence mortgage andproperty tax payments that ofthose who are shelter-poor.
aremuchless affordablethan before. Thethird major Certainly, one of the major factors accounting
group consists ofyounger, more recent buyersof for differential rates ofhomeownership between
moderate to middle income whoarecarrying huge households headedbya person of color andbya
mortgage burdens. white person are differences in income. But within
tenures, arethe higher rates of shelter poverty
Worse for Households Headed by People of among households headedbya person of color due
Color12 to lower average incomes and larger average
household size, or are they perhaps also due to
The majority of shelter-poor households are white, households of color paying more for housing?
but shelter poverty is disproportionately borne by Analyses of shelter poverty among Blacks and
households headedbya person of color. While Latinos (Stone 1993:52-53) and Asians (Stone
about 77 percent of all households were headedbya 1996:10-12) demonstrate that, controlling
white person in 1997, 66 percent of shelter-poor forincome andhousehold size, differences inthe
households were headed by a white. Conversely, rates of shelter poverty by race/ethnicity are not
about 23 percent of all households were headed by statistically significant for both renters and
a person of color, but 34 percent ofshelter-poor homeowners (and the same holds true for the
households were headedbya person ofcolor. conventional affordability standard). That is, a
Among households of color, the highest rates of household of agiven tenure, income and household
shelter poverty have been experienced by Latinos, size that is headed by a person of color is not more
56 Michael E. Stone
likely to be shelterpoor than is a white-headed percent of all homeowners. As with households
household of the same tenure, income and headed by a person of color, the differences are
household size. smaller within tenure categories because
However, the fact that Latinos, Blacks and households headedbywomen are more likely to be
Asians of a given tenure, income and household renters—44 percent offemale-
size pay, on average, comparable amounts for headedhouseholdsare rentersversus 34 percent of
housing as do whites of the same characteristics all households.
does not mean that they obtain housing of However,unlike households headedbya person
comparable quality.Analyses ofrates of physical of color, the differences in shelter poverty rates for
problems by race/ethnicity, controlling for income, female-headed households in comparison with
among Blacks, Latinos and Asians, reveal that other renters are explained entirely by differences
race/ethnicity is a highly significant factor in in average incomes, not at all by household size
determining the quality of housing occupied by a differences. Despite the fact that there
household of agiven income or paying a given isnodifference inmedian size, themedian income
amount. They further reveal that the situation is offemale-headedrenterhouseholds was $17,000 in
worse for Blacks than Latinos andworse forLatinos 1997 compared with $21,000 for all renters.
than Asians; Blackscontinue to be most Indeed, for every category ofhousehold size,
victimizedbyracism inthe housing market (Stone households headed by women are poorer than
1993:52-53; Stone 1996:10-12; see also Chapter otherrenters. Looking at shelterpovertyby
3). Combining this with the analysis of household size, female-headedhouseholds have
affordability demonstrates that there is not direct shelter poverty rates 3 to 6 percentage points
but insteadindirect price discrimination against higher than for all renters of the same size, except
households of color: Although households headed for two-person renters, for whom the rates are
by people of color are not more likely than white comparable. Of those who are shelter-poor, the
householdsof the same tenure, income and median income of female-headed households was
sizetobeshelter-poor, the former often get poorer just $8,900 in 1997 versus $9,600 for all shelter-
quality housing for their money.This means that poor renters. Among one- and two- person shelter-
even though elimination ofhousing discrimination poor households, the income differences are small,
would,all else being equal, have little direct impact but among all largerhousehold sizes, shelter-poor
on shelter poverty among households of color, it female-headed households have median incomes
would at least increase their chance of obtaining about $2,000 lower than that of all shelter-poor
decent housing. renters of the same size.
Household size does matter for femaleheaded
Worse for Households Headed by Women homeowners. Among homeowners, households
headed by women are smaller on average than all
Households headed by women comprised 38 households (1.8 vs. 2.4 persons). Fewer than two-
percent of all households in 1997. Yet they ac- thirdsof all homeowners who live alone are
countedfor 47 percent of all shelter-poorhouse- women; yet morethan three- fourths of shelter-poor
holdsand 48 percent ofhouseholds paying more homeowners who live alone are women; 27 percent
than 30 percent ofincome. Nearly 39 percent of all of female homeowners who live alone are shelter-
households headedbya woman wereshelter- poor poor, nearly twice the 14 percent of male
compared with a little over 31 percent of all homeowners living alone. Indeed, women living
households. alone are the
modal type of female homeowner household:
Among renters, 8.4 million female-headed Approximately 40 percent of all female-headed
households were shelter-poor in 1997—a little over homeowner households and almost 36 percent of
50 percent, compared with under 47 percent of all those shelter-poor consist of a woman living alone.
renters. Among homeowners, 6.2 million Nonetheless, the majority of homeowner
household headed by women were shelter- poor— households headed by a woman have more than
30 percent—compared with slightly more than 23 one person. The difference between female-headed
and otherhousehold types isthe smallest among households. There isonegroupwithincomes of
two-person homeownerhouseholds (about 5 under $15,000, most of whom are shelter-poor: It
percentage points). Among larger households, by includes the great majority of one-person renters
contrast, the differences are enormous: Female- (75 percent) and homeowners (60 percent); this
headed homeowner households containing three or group also includes a little under one-half of
more persons have shelter poverty rates that are married-couple renters and about a one-fourth of
more than 10 percentage points higher than for married-couple homeow ners. The other, relatively
other household types. Furthermore, these 2.5 high-income group of seniors consists mostly of
million larger shelter-poor households account for married-couple households: Among renters, about
about 40 percent of shelter poverty among female one-fourth of elderly households with twoor more
homeowners, and they account for nearly one-third persons have incomes of $30,000 or more; among
of all shelter poverty among all homeowner homeowners, close to one-half of elderly
households with three persons or more. This group households of twoor more persons have incomes of
of households is comprised mostly of women with $30,000 or more. (See Chapter 13 for further
children who are suffering financially as they try to discussion of the housing challenges of theelderly
support their families and avoid foreclosure. (See andpolicies for addressing them.)
Chapter 14 for further discussion of the housing
experiences of households headed by women and The Housing Affordability Gap
appropriate policies and strategies.)
In 2001, shelter-poor households faced agap of
Wide Inequality among Elderly Households about $450 a month, on average, between
whattheywere payingforhousingandwhatthey could
There wereabout 21 million households headed by afford. By contrast, theaverage affordability gap
a person at least 65 years of age in 1997. Of these, was about $345 a month if one uses the 30-percent-
nearly 6.5 million, or 31 percent, were shelter-poor of-income standard of affordability. Among
—just about the same percentage of all households renters, the shelter poverty affordability deficit
who are shelter-poor. Seniors do, however, have a averaged about $460 a month (about $5,500 a
higher rate of homeownership (79 percent in 1997) year), ranging from $370 a month for one-person
than do younger households (62 percent). So when households up to $530 for those of five-plus
disaggregated by tenure, elderly households are persons. The average affordability gap for shelter-
slightly more likely to beshelter-poor than are poor homeowners was about $450 a month (nearly
youngerhouse- holds. $5,400 a year), ranging from $390 a month for
Far more significant, though, for understanding one-person households up to $800 for households
shelter poverty among seniors isthe much smaller of six-plus persons.13
average size of elderly households. One-person
seniors—most ofwhom are women—have about Of course, these figures innoway measure the
twice the rate of shelter poverty as do younger physical adequacy of the homes that shelterpoor
people living alone: 49 percent of senior renters are families occupy or the quality of their residential
shelter-poor versus 25 percent of nonseniors; 30 environments. Some maybe housed quite well but
percent of elderly homeowners are shelter-poor are financially squeezed; others are housed quite
versus 15 percent of nonelderly households. Two- poorly but would have a considerably larger
or- more person seniorhouseholds—most ofwhom affordability gap if they were to obtain better
are married couples—show far less difference in housing inthe private market. In addition, this
their likelihood of being shelter-poor: indeed, figure does not include the tangible and intangible
among renters, 45 percent of the elderly and 45 costs of homelessness.
percent of the nonelderly are shelterpoor; among Thesumof the affordability gaps for all shelter-
homeowners, 24 percent of theelderly are shelter- poor households isthe national affordabilitydeficit.
poor versus 16 percent of the nonelderly. In 2001, it was about $170 billion when using the
These differences by household size are sug- shelter poverty standard and about $140 billion
gestive of the wide inequality among elderly when using the 30-percent standard. By way of
58 Michael E. Stone
comparison, at the end of the 1980s economic change.
boom, in 1989, the national shelter poverty The now-platitudinous National Housing Goal
affordability deficit was about $95 billion—$136 of “the realization as soon as feasible of a decent
billion if measured in 2001 dollars. That is, over home and a suitable living environment for
the 12 years from 1989 through 2001, the national everyAmericanfamily”makesnomen- tion of
housing affordability deficit grew 25 percent when affordability. Since these words were enshrined in
measured in constant (inflation-adjusted) dollars. the 1949 Housing Act, most of the U.S. population
Whilethenationalaffordabilitydeficitisstag- has come to occupy what would be called “a
gering in terms ofits economic and policy im- decent home,” but the ability to afford a decent
plications, it is less than 2 percent of the gross home has become more elusive. In recent decades,
domestic product (GDP) of the United States, less a considerable amount of ef- fortand an even
than 10 percent of total federal budget outlays, less greater amount ofrhetoric have been expendedin
than three-fifths of military spending andless than pursuitof affordabilityfor the
one-half ofSocialSecurity outlays (U.S. Census promised“decenthome”and“suitablelivingen-
Bureau 2001:Ta ble 463). vironment.” The dilemma isthat prevailing private
practices and public policies have not only failed to
bring about its realization, they have widened the
CONCLUSION gap between hope and reality even while ostensibly
addressing the problem. Public action and social
This nation has a long history of ambivalence at responsibility must move beyond the
best toward the poor. Periods such as the beginning hollowpromise ofpast policy to the establishment
of the 20th century,the 1930s and the 1960s, during of a legally enforceableandpublicly secured right
which there was fairly widespread support for to “a decent home and a suitable living
some efforts toward reducing inequality and environment.”
assuring a minimum adequate standard of living, Yet the persistence and scope of shelter poverty
have been followed by periods of retreat from such —one-third of the nation—and the magnitude of
concern. Each era of reform has, of course, not the housing affordability gap— $170 billion a year
only been in response to incontrovertible human —reveal not only this society's failuretomeetthe
needs, but in response to politi- housing needsof so manybut also the folly
calinsurgencybythose in need, with supportof those ofimagining that a Right to Housing for all could
in sympathy. The policies and programs adopted be realized if only there were more subsidies,
have provided a measure of relief for systemic additional construction and a bitof tinkering with
economic and political stresses as well as real the existing housing system. For if this society
benefits for some people in need. Yet at best the were to declare a Right to Housing,
programs have been partial and piecemeal, and at andweretointerpret that right primarily to mean the
worst stigmatizing and demeaning in practice if not right not to be shelter-poor,
in design. pouring$170billionayearintotheprivatehous- ing
If one were to believe in simple historical cy- market would not eliminate shelterpoverty. Much,
cles, heor she might have predicted that the 1990s if not most, of the funds would be swallowed up by
would have beenatime of slowing and even higher prices and higher profits. Dimensions of
ofreversing some of the widening inequality that affordability not capturedbythe $170 billion
began in the early 1970s. However, the 1990s affordability gap—such as elimination of
turned out to be a harsh extension of the 1980s'war homelessness—would also add to the price tag.
on the poor.Thesuffering and the injustice are real Many households would opt to move to more
and ultimately will be overcome only through satisfactory homes and communities that cost more
broad and sustained political action. Nonetheless, than their current places of residence. The total
we need to uncover, understand andpublicizethe claimonpublic resources would
natureand extent of this injustice and suffering if spiralupward,raisinglegitimateissuesaboutthe
there is ever to bethe moral and political strength efficiency and cost-effectiveness of such an ap-
for truly responsible reform and institutional proach.
More realistically, recognition of the scope and the statements.
persistence of shelter poverty, who is dis- 5. Theshelterpoverty concept was formulatedin the
proportionately afflicted by shelter poverty and the early 1970s and first appeared in print a few years later
(Stone 1975). Ways in which it could be adapted for use
magnitude of the affordability gap should compel in housing subsidy formulas first received attention in
us to confront the roots of this problem in widening Stone (1983), and the most extensive discussion of the
inequality of income, high and rising housing costs methodology and its implications maybe found in Stone
generated by the prevailing institutions of housing (1993). See Hancock (1993) for an independent,
ownership and finance, and perverse public theoretically grounded formulation of the residual
policies. Neither more nor less government income logic of affordability.
6. Household size isthe most decisive element of
tinkering can solve a problem that is rooted in the
household composition in distinguishing afford-
very structure of the housing and labor markets and ability.Other elements, particularly ages andrelation-
the inextricable weaving ofprivate profit ships, are also significant, though somewhat less so than
andpowerwithpublic policy. The resolution of this household size. The shelter poverty scale presented in
dilemma lies ina transformation of both the role of this chapter has been derived for nonelderly married-
government and the mechanisms of housing couple households, nonelderly single-adult households
provision. Rather than idealizing themarket and elderly households in order to take into account
elements other than just household size.
andproviding endless subsidies andbailouts to 7. See Stone (1993), Appendix A, for details. See
private capital, public policy must transcend the Stone (2003) for a detaileddiscussion of the derivation of
limits of the market and truly serve social a shelter poverty scale for the United Kingdom.
purposes. The chapters inthe second half of this 8. The extent and distribution of shelter poverty
book suggest some of the ways in which this can and conventionally defined affordabilityburdens have
happen. been computed from American Housing Survey data
foreveryyearfrom1975through2001andfromdecen- nial
census data for 1970. See Stone (1993:Appendix B) for
discussion of methods used to analyze these data.
9. The population base for determining the per-
NOTES
centage of people who are shelter-poor is the population
in households—-that is, the population occupying
1. The 32 million shelter-poor households con- housing units. By definition, this excludes the population
tained about 90 million people actually residing in living in group quarters (such as penal and custodial
housing units. This number does not include the literally institutions, nursing homes, boarding houses, military
homeless. barracks, college dormitories, fraternity and sorority
2. The term “moderate income” is one for which houses, monasteries, convents and ships) as well as the
there is no longer a precise definition for national policy homeless.
in the United States, although some state governments do 10. The mid-1980s decline in shelter poverty was
have explicit definitions. But “low in- not, however, merely a consequence of the recovery from
come,”“verylowincome,”and“extremelylowincome” are the recession of the early 1980s. Another significant
defined by federal statutes and regulations. Each year, factor was the dramatic decrease during the mid-1980s
the U.S. Department of Housing and Urban De- inthe total number ofhomeowners withincomes under
velopment(HUD) publishes the incomelimitsfor each of $20,000 andhence inthenumber shelterpoor. This was an
these categories, adjustedforhousehold size, for every ironic way for shelter poverty to decrease because it was
geographical area of the United States. See Stone 1994, really a result of worsening affordability for many
for a critique. people. For example, in some cases, adultchildren
3. For extensive discussion of debates about af- movedbackin with their parents because they could not
fordability concepts in the United States from the late afford to live on their own but inthe process somewhat
1960s to early 1990s andintheUKsince about 1990, see increased the household income. In other cases,
Stone 2003. foreclosures and forced sales in the face of job losses or
4. The two quoted statements have appeared in the other income problems led to former homeowners
public record in Britain (UK Parliament 2002), but moving in with others or into apartments costing less
similar statements are not unusual in the United States. than what they had paid as homeowners.
The authors of these quotations shall nonetheless remain 11. The reasonforhigherincidenceamongpersons
anonymous to avoid any embarrassment to them. While than households is that larger households are more likely
the authors might claim that I have taken their statements to beshelter-poor than smaller ones. Obviously, the larger
out of context, the contexts from which theyhave been the household, the greater the number of people it houses
taken do not dispel the essentially tautologic character of
60 Michael E. Stone
in shelter poverty. much for housing? Cambridge, MA: Abt Associates.
12. As of this writing (mid-2004), it has not yet been Hancock, Karen E. 1993. Can't pay? Won't pay? The
possible to update detailed analyses of shelter poverty by economic principles ofaffordability. Urban Studies
race/ethnicity, gender and age. Therefore, the results 30:1, 127-145.
presentedinthe following three sections are for 1997. Kearns, Ade. 1992. Affordability ofhousing association
13. Unfortunately, the American Housing Survey tenants. Journal of Social Policy 21:4, 523-547.
does not identify Native Americans, and even if it did, Kempson,Elaine. 1993. Householdbudgetsandhousing
the subsample would be too small to draw statistically costs. London: Policy Studies Institute.
valid conclusions. Even theAsian/Pacific Islander sub- Linneman, Peter D., and Isaac F. Megbolugbe. 1992.
sample is quite small, meaning that sampling errorsare Housing affordability: Myth or reality. Urban Stud-
quite large for the figures given for Asians. (See Stone ies 28:3/4, 369-392.
1996 for further discussion of this issue.) London Research Centre. 1996. Getting the measure of
14. The average affordability gap is so similar for affordability. London, UK:London Research Centre.
renters and homeowners, yet the range is so much greater Pannell, Bob,andPeter Williams. 1994. House prices and
for homeowners by household size, because one-half of affordability. Housing Finance (UK) No. 23, August.
all shelter-poor households among both Pedone, Carla. 1988. Currenthousingproblemsandpos-
rentersandhomeowners haveonlyoneor two persons, sible federal responses. Washington, DC: Congres-
while those with five persons or more account for just 14 sional Budget Office.
percent of those shelter-poor among both renters Ruggles, Patricia. 1990. Drawing the line: Alternative
andhomeowners. Large homeownerhouseholds have poverty measures and their implications for public
large affordability gaps because of the burden of mort- policy. Washington, DC: Urban Institute.
gage payments, yet theaverage gapfor all homeowners is Stone, Michael E. 1975. The housing crisis, mortgage
primarily a reflection of thesituations of small,older lending, and class struggle. Antipode 7:2, 2237.
homeowners with low housing costs but low incomes. Reprintedin Radical geography,ed. Richard Peet,
1978:144-179. Chicago andLondon: Maaro- ufa
Press.
1983. Housing and the economic crisis: An analysis
REFERENCES and emergencyprogram. In America's housing crisis:
What is to be done?, ed. Chester Hartman, 99-150.
Bernstein, Jared, Chaina Brocht and Maggie Spade Boston and London: Routledge and Kegan Paul.
Aguilar. 2000. How much is enough: Basic family 1993. Shelter poverty: New ideas on housing
budgets for working families. Washington, DC:Eco- affordability. Philadelphia: TempleUniversityPress.
nomic Policy Institute. ---------- 1994. Comment on Kathryn P. Nelson,
“Whose shortage of affordable housing?” Housing
Bradshaw, Jonathan, ed. 1993. Budget standards for the Policy Debate, 5:4, 443-458.
United Kingdom. Aldershot: Avebury/Ashgate. 1996. Shelter poverty among Asian-Americans.
Bradshaw, Jonathan, Deborah Mitchell and Jane Morgan. Boston: Institute for Asian-American Studies, Uni-
1987. Evaluating adequacy: The potential of budget versity of Massachusetts.
standards. Journal of Social Policy 16:2, 165181. 2003. Shelter poverty and social housing in the UK
Budding, David W. 1980. Housing deprivation among and US. London, UK: The Foreign and Com-
enrollees in the housing allowance demand experi- monwealth Office, Atlantic Fellowships in Public
ment. Cambridge, MA: Abt Associates. Policy.
Chaplin, Russell, Simon Martin, Jin Hong Yang and The United Kingdom Parliament. Select Committee on
Christine Whitehead. 1994. Affordability: Defini- Transport, Local Government and the Regions. 2002.
tions, measures and implications for lenders. Cam- Affordable housing inthe UK. Memoranda submitted
bridge, UK: Department of Land Economy, Uni- in testimony.
versity of Cambridge. http://www.publications
Citro,Constance,andRobertMichael,eds.1995.Mea- .parliament.uk/pa/cm200102/cmselect/cmtlgr/
suring poverty: A new approach. Washington, DC: 809/809m01.htm.
National Academy Press. U.S. Census Bureau. 2001. Statistical abstract of the
Doc4Kids. 1998. Not safe at home: How America's hous- United States, 1999. Washington, DC: U.S.Gov-
ing crisis threatens the health of its children. Boston: ernment Printing Office. http://www.census.gov/
The Doc4Kids Project, Boston Medical Center and prod/2002pubs/01statab/fedgov.pdf.
Children's Hospital. http://www. boston- Wilcox, Steve. 1999. The vexedquestion of affordability.
childhealth.org/research/Research/Doc4Kids/ Edinburgh, UK: Scottish Homes.
docs4kids_report.pdf. Yip, Ngai Ming. 1995. Housing affordability in England.
Feins, Judith, and Terry Saunders Lane. 1981. How D.Phil.Thesis. York, UK: Department of Social
Policy and Social Work, University of York.
Nancy A. Denton
3 Segregation and Discrimination in Housing
OVER A HALF-CENTURY has passed own homes, as did 53.4 percent of Asians, 55.5
since the 1949 Congress promulgated the National percent of Native Americans, 45.0 percent of
Housing Goal: “The implementation as soon as Native Hawaiians and OtherPacific Islanders, and
feasible of a decent home and a suitable living 46.3 percent of those who identified with more
environment for every American family.” More than one race.1 By 2002, homeownership was
recently, Chester Hartman has renewed almost at 68 percent, and both whites and blacks
theargument for a Right to Housing that “would had seen their ownership rates increase by 2
include affordability, physical quality of the unit, percent (JCHS 2003). Since people who do not
and the social and physical characteristics of the own homes must rent them, these figures indicate
neighborhood environment” (Hartman 1998:237; that people of color are more likely to be renters,
see also Chapter 8). While the overall quality of and affordability andpoorqualityissues areasevere
housing has improved greatly in the last 50 years, problem for renters (NLIHC 2003).
manylower-income peopleare facedwith These well-documented differentials in housing
theshortage oflow-cost units and the problematic affordability and homeownership (cf. Bratt et al.
conditions of the neighborhoods where they are 1986; Denton 2001; Hughes 1991, 1996; Stone
located. Even critics of the concept of “housing as 1993b)are linked to underlying patterns ofhousing
a right” concede that there remainsubstantial segregation anddiscrimination via neighborhoods.
numbersof U.S. residents for whom “a decent Neighborhoods determine school quality, job
home and asuitable living environment” is not a opportunities, safety, exposure to crime and asset
reality (Salins 1998). At low- income levels, accumulation, among a host of other things
particularly for people of color, it cannot be (Denton 2001; Jargowsky 1994, 1997; Massey and
assumed that “a decent home” will automatically Denton 1993; Wilson 1987, 1996). That the
imply “a suitable living environment” because of location of a house isas important as its
the long history of residential segregation and characteristics and condition has long been a real
discrimination inthe housing market (Massey and estate broker's axiom. That individuals'
Denton 1993). opportunities for success areatleast in
Housing segregation and discrimination define partafunctionofthekind of neighborhoodin which
and determine much of what happens in they live (and by implication the opportunities
neighborhood housing markets as well as what found there) has long been a commonsense notion
happens to neighborhood residents. Dramatic referred to when people give their reasons for
differences in homeownership by race and eth- moving.
nicitypersist intheUnitedStates despite the fact that However, when discussing the poor, partic-
the overall level of homeownership, over 66 ularly racial and ethnic minority poor, popular
percent, isatanall-time high.(U.S. Bureau of the discussions focus on their personal characteristics
Census 2000). In 2000, 72.4 percent of non- and see neighborhood conditions solely as
Hispanic whites compared with 46.3 percent of
blacks and 45.7 percent of Hispanics owned their
62 Nancy A. Denton
the results of individual behavior, ignoring the outcomes in terms of housing, family, education,
rolethat these neighborhoodlocations mayhave work and politics. African- Americans are most
playedin causing agroup's economicand social often used as the example in this section because
status. Particularly for those who are “shelter- they are the group most often identified with the
poor,”Stone'sterm for those who cannot afford problems associated with
bothhousing and other necessities of life(Stone concentratedpoverty.Fourth,the contem-
1993b and Chapter 2), the patterns of housing porarydynamicsof neighborhoodracial change are
segregation anddiscrimination result in limited discussed, focusing on the decline in allwhite
opportunities forpersonal advancement. Focusing neighborhoods and the increase in multiethnic
on the individual characteristics of the poor rather neighborhoods containing blacks, Hispanics and
than the structural effects of segregation Asians in addition to whites. These neighborhood
anddiscrimination too often enables politicians and changes provide for some optimism, since they
the public to assume that little can or should be decrease the number of allwhite places to which
done. This reversal of the causal logic has dramatic whites may flee. At the same time, they allow
implications for housing policy and for activists many whites to feel that housing segregation and
concerned about housing for the poor. People discrimination areno longer problems, a more
confined to segregated neighborhoods have been pessimistic implication. Finally, my implications
denied the opportunities to amass resources, via from these analyses are drawn as they relate to
housing appreciation, that would have helped them future housing research and policy aimed at
get ahead. Segregation has persisted for so long making a Right to Housing and Congress' 1949
that not only does it hamper the efforts of those promulgation realities.
working in segregated communities for which it is
hard to acquire resources, it istoooften
acceptedbypeople of color who use itasabasis for PATTERNS OF RESIDENTIAL SEGREGATION
building support for community-based housing
programs (Stone 1993b:299). In short, issues of Residential segregation by race in U.S. metro-
housing affordability and a Right to Housing are politan areas and cities is high, has been high in the
inextricably tied to questions of housing past and shows little sign of quickly abating inthe
discrimination and segregation because patterns of future, particularlyforAfrican-Americans (Harrison
segregation and discrimination in housing have led and Bennett 1995; Lewis Mumford Center 2001a;
to the race/ethnic differentials in people's access to Massey and Denton 1993; Farley and Frey 1994;
high-quality housing. Frey and Farley 1996; Taeuber and Taeuber 1965;
This chapter expands upon these preliminary Lieberson 1980). While such a sweeping
points inanumber of ways. First, for the three generalization obv iously is subject to many
largest minority groups, African- Americans, specific qualifications, discussedbelow, the truth of
Asians and Hispanics, it provides an overview of this statement demands emphasis. Our collective
contemporary patterns of residential segregation refusal to acknowledge segregation as a serious
from non-Hispanic whites by comparing problem, to talk about itand to seek strategies to
segregation by race with segregation based on combat it poses a challenge to anyone
other characteristics and across groups to explain concernedwith the futureof our nation, our cities
the uniquely high levels of African-American and our citizens. To talk about housing policy and
segregation. Second, it reviews the current state of the housing market without considering howpast
discrimination inthe housing market. Most of the andpresent segregative practices have structured
discussion in this sectionlooksatAfrican- them is particularly misleading. We combine our
Americansand Hispanics, since Asians were not myopia regarding segregation with a tendency to
included in the last national study of view it as somehow normal, as part of the growth
discrimination. Third, both the causes and of cities, the result of free choice,anexperience that
consequences of racial segregation and all groups have passed through as they blended into
discrimination are examined, relating them to the melting pot of American life. Unfortunately,
attitudes toward interracial contact and exploring none of these statements is true, and they are best
the linkages between neighborhoods and individual regarded as excuses or rationalizations for the
current situation and the current unmet housing not as blacks.2 To c a lculate the segregation index
needs of the poor (Denton 1996). shown, racialdata for all thecen- sus tracts in a
metropolitan area are used. Census tracts are small,
nonoverlapping geographic units, about 5,000
RESIDENTIAL SEGREGATION BY RACE IN people insize, that completely cover the
2000 metropolitan area and therefore can bethoughtof as
neighborhoods(U.S. Bureau of the Census 1991).
To begintoappreciatepatternsofresidential seg- The index in Table 3.1 isthe index of dissimilarity, 3
regation in U.S. metropolitan areas, it is necessary which varies between 0 and 100 and can be
to understand the measurement of segregation. interpreted as the percent of either group that
Table 3.1 presents the 2000 segregation would have to change neigh-
borhoodsinordertobeevenlydistributedacross
TABLE 3.1 Dissimilarity Index of Segregation theneighborhoodsinametropolitanarea.Thus,
Indices for Selected Metropolitan Areas, 2000 inametroarea that is 20 percent black, each
Non-Hispanic whites versus neighborhood would be 20 percent black in an
Metropolitan area Blacks Hispanics Asians even distribution, and the index of dissimilarity
Northern areas would be 0. Though a perfectly even distribution is
Boston 65.8 58.7 44.8 seldom found, nor would it necessarily be desirable
Chicago 79.7 61.1 42.4 given the wide variety of individual housing and
Cleveland 76.8 57.7 37.8 neighborhood preferences, highly uneven
Detroit 84.6 45.6 45.6
Los Angeles-Long
distributions, particularly by race, have been shown
66.4 63.1 47.7
Beach to result from social structural constraints on
New York 81.0 66.7 50.5 movement (Massey and Denton 1993). Values
Newark 80.1 65.0 35.5 below 30 are consid- eredlow,those between 30
Oakland 61.8 46.9 40.5 and 60 moderate and above 60 high.
Philadelphia 72.0 60.1 43.6
Riverside 44.9 42.5 36.0
A number of points are clear from an exam-
St. Louis 73.1 27.3 42.5 ination of the data in Table 3.1. First, in every
San Francisco 60.0 53.5 48.4 metropolitan area with the exception of River-
SanJose 39.9 51.3 52.5 sideandSan Jose (areas includedbecause of their
Southern areas large Hispanicand Asian populations), the level of
Atlanta 64.5 51.1 45.2 residential segregation of African-Americans is
Baltimore 67.5 35.8 38.9
substantially higher than that of Hispanics or
Charlotte 55.2 50.4 43.3
Dallas 58.7 53.7 45.0 Asians.Forexample,intheNewYorkmetropoli- tan
Ft. Lauderdale 60.8 31.0 28.2 area, African-American segregation is 81.0,
Houston 66.3 55.1 48.4 Hispanic segregation is 66.7 and Asian segregation
Memphis 68.7 47.9 37.7 is 50.5, so blacks are about 20 percent more
Miami 69.4 43.9 31.3
segregated than Hispanics and 60 percent more
New Orleans 68.4 35.8 48.0
Norfolk-Va. Beach 46.0 31.5 33.9 segregated than Asians. Second, all of the
Washington, DC 62.5 48.0 38.2 segregation scores in the column for African-
Sources: The dissimilarity index values come from Ice- Americans in metro areas in the North (again with
land,WeinbergandSteinmetz 2002. Since that report did not theexceptionofRiversideandSanJose)and eight of
provide them for all metro areas, the missing numbers were filled
the eleven inthe South areator above the cutoff of
in from the Lewis H. Mumford Center,
http://mumford1.dyndns.org/cen2000/data.html. 60, indicating high segregation. Among Hispanics,
indices for African-Americans, Hispanics and only five are that high, and none is that high for
Asians in selected metropolitan areas with the Asians. In fact, one of the Hispanic scores and one
largest black populations as well as those with the of the Asian scores is below 30, indicating low
most Asians and Hispanics. For each group, their segregation. It is clear that the three major
segregation from non-Hispanic whites is measured. race/ethnic groups experience different patterns
The groups are defined to be mutually exclusive: ofresidential segregation in these metropolitan
Thus, black Hispanics are counted as Hispanics, areas. Finally, the table shows a difference between
patterns of segregation in northern areas and
64 Nancy A. Denton
southern areas, with the latter likely to have lower (SeeMasseyandDenton 1993:67-74, 84-88,112-113
segregation, particularly for blacks. Segregation is for asummaryand referencestothe
also lower in metro areas inthe West. This regional 1980studies;seeLogan2003 for similar information
pattern isalong-standing phenomenon that reflects about 2000.)
the age of the metropolitan area, the way the city Toput segregation by race/ethnicityinto context,
grew, the force of industrialization and the pattern we need to knowhow groups aresegregated by
of southern living, where large boulevards were other characteristics. Examining segregation by
backedbysmaller alleyways whereservants lived income in 1990, Abramson, Tobinand Van-
(Massey and Denton 1993:41). derGoot (1995) report that inthe 100 largest
Having established the basic segregation pat- metropolitan areas, theaverage level of dissim-
terns for 2000, the most recent year for which ilarity for the poorfrom the nonpooris 36.1, a
segregation indices can be computed,4 we turn now moderate level of segregation. Segregation isat
to an examination ofpast changes in segregation asimilar average level for high school dropouts
inorder to formanopinion of thecurrent situation versus non—high school dropouts, welfare re-
and the potentialforfuturechange. We would expect cipients versus nonwelfare recipients and people
that, especially inthe years since the Civil Rights with limited English proficiency versus proficient
Movement, the segregation of African-Americans English speakers. Female-headed families versus
would have declined.Tothe extent that the non-female-headedfamilies andforeign- born
movement affected all persons of color,then it versus native-born dissimilarity indices are around
would beexpected that segregation for Hispanics 30, while the index for blue-collar workersversus
and Asians would have declined as well.(This is non-blue-collarworkersand the unemployed versus
less easy to predict, however,given the large the employed is about 20 (Abramson, Tobinand
number of immigrants since the 1965 change inthe VanderGoot 1995:53; White 1987:113). It
immigration preferences andquo- tas [Edmonston isclearfrom the low values ofthese indices that the
andPassell 1994] and the practical advantages degree ofsegregation by race/ethnicity is unique in
ofliving near membersof one's own group when the U.S. urban landscape.
one first arrives in a foreign country.) Segregation research showstwotrends inurban
Unfortunately, these expectations are not borne out areas: First, there is a tendency toward con-
by the research. vergence as black segregation declined in all
All analyses of the trends in segregation since metroareas between 1980 and 2000, while it in-
1970 agree that the declines in segregation for creased slightly forLatinos and somewhat more for
African Americans have been modest, at best, Asians (Iceland, Weinberg and Steinmetz 2002).
confined to areas outside the Northeast and Second, the decreases inthe segregation ofAfrican-
Midwest, and to areas with relatively small Americans aresmall, andthough the pace of change
blackpopulations (Iceland,Weinbergand Steinmetz isoften called slow,5 these small changes are
2002; Lewis Mumford Center 2001a; Massey cumulating over time. Analyses
andDenton 1993; Farley and Frey 1994; Harrison donebytheLewisMumfordCenter forCom- parative
and Bennett 1995). For Hispanics and Asians, Urban andRegionalResearch at SUNY Albany
segregation basically remained the same from 1970 show that “at this pace itmay take forty more years
to 1980, increased somewhat from 1980 to 1990 forblack-white segregation to come
andincreased again between 1990 and 2000,
reflecting the continued population growth of those
groups (Farley and Frey 1994; Frey and Farley
1996; Iceland, Weinberg and Steinmetz 2002).
Analyses completed in 1980 and 2000 show that,
while there is substantial within-group variation in
segregation among Hispanics and Asians, the
foreign-born are more segregated than the native-
born, and all groups are more segregated in center
cities than in suburbs. Thus, the conclusions
reached above remainthesame.
downeventothecurrent group's neighborhoods near the downtown of a

level of Hispanic-white metropolitan area and the clustering of a group's
segregation” (Lewis Mumford neighborhoods into a large, contiguous ghetto
(Massey andDenton 1993:74-78). The pattern of
Center 2001a:1). Though
high segregation for African-Americans is unique
this is a decided because it persists when segregation is
improvement over the 77 measuredinthese more complex ways. In areas
years that Massey and where blacksare highly segregated on four or all
Denton reported it would five ofthese dimensions ofsegregation, the ensuing
take for those in the pattern iscalled“hypersegregation.” Prior to 2000,
northern areas to fall this condition
wasfoundonlyforAfricanAmericansincertain metro
below 60 (1993:221-223),
areas (Denton 1994; Massey andDenton 1993), a
the average isun- doubtedly condition that persists in 2000. However, in 2000,
pulled down by the Hispanics are hypersegregated in Los Angeles and
inclusion of the southern New York, though Asians are not hypersegregated
areas, which have lower in any metro area.
segregation indices in
general.While the
segregation ofLatinos
andAsians tends to be much
lower, the direction
ofchange is currently
upward and thus in need
ofmonitoring to determine
whetherit isthe result of
immigration pressure or
true increasing segregation
ofthese groups.
Hypersegregation
Thusfar, we havebeenusingthe index ofdissim-

ilarityasthemeasureofsegregation.Itprovidesa
conceptually simple way to think about residential
segregation, namely how “evenly” the popu-
lationisdistributedacrosstheneighborhoodsin a
metropolitan area, withhigher values indicating less
“evenness” (really greater“unevenness” or more
segregation) inthe distribution ofpeople across
neighborhoods. In reality, however, the
phenomenon of segregation ismore complex. To
capture this complexity, we can think of five
separate dimensions of segregation, of which
evenness is the first. In addition to evenness, one
can measure segregation as a group's isolation
within neighborhoods, a group's concentration into
densely packed neighborhoods, centralization of a
66 Nancy A. Denton
Table 3.2 shows the metro areas that can be within the neighborhoods themselves orin nearby
classified as hypersegregated in 2000 and gives the neighborhoods—implying little personal contact
score for each ofthefivedimensions ofsegregation. with the largerworld ofU.S. society. “Ironically,
In accordance with the criteria fordetermining within a large, diverse and highly mobile
hypersegregation, all five or at least four of the five postindustrial society such as the United States,
indices areabove 60 for each of these areas. All blacks living in the heart ofthe ghetto are among
ofthese metropolitan areas were also the most isolated people on earth” (Massey and
hypersegregatedin 1990,6 and though their Denton 1993:77).
segregation in general declined between 1990 and Measures of segregation and hypersegregation
2000 on all dimensions, many of the declines were tell us much about where people are but
modest. Blacks in Miami and New Orleans nothingabouttheprocessofhowtheygotthere. The
experienced slight increases in evenness and next section considers contemporary patterns of
isolation; those in Atlanta, New York and discrimination inthe housing market that help
Washington, DC, saw increases in isolation as maintainthese segregatedpatterns over time.
well; while the black population of Houston, New
Orleans, New Yo rk, Newark, and St. Louis
experiencedincreases inclustering. This pattern
implies that while African Americans were able to CURRENT PATTERNS OF HOUSING
move to a larger number of neighborhoods, MARKET DISCRIMINATION
possibly more suburban ones, there is little evi-
dence ofdismantling of theghetto. The fact that Discrimination inthesaleandrental ofhousing in
twometroareas now showpatterns ofhyperseg- the United States was once complete, accepted and
regation for Hispanics is an ominous sign. must have been close to 100 percent. A white
The meaning of hypersegregation comes from person only needs to ask older relatives or do the
the combination of high scores for each dimension slightest amount of archival research to find that it
of segregation. Hypersegregation means living in was once consideredper-
large, contiguous, densely inhabited neighborhoods fectlyacceptabletotellsomeonethatyoudidnot rent or
packed tightly around the urban core, with almost sell to blacks. In 1933, the federally cre-
no residential contact with non-African-Americans atedHomeOwners'LoanCorporation(HOLC)
TABLE 3.2 Hypersegregated* Metropolitan Areas in 2000

Metro area Evenness Isolation Concentration Centralization Clustering
Hypersegregated for blacks
Atlanta 64.5 66.7 69.9 71.7 42.0
Baltimore 67.5 68.0 81.1 81.9 52.2
Chicago 79.7 77.6 84.4 66.3 73.4
Cleveland 76.8 72.1 87.4 85.6 66.0
Detroit 84.6 81.3 86.5 84.8 82.1
Houston 66.3 64.9 77.5 78.4 38.2
Los Angeles 66.4 65.2 78.7 72.1 55.8
Miami 69.4 78.2 83.1 67.7 43.5
Milwaukee 81.8 72.0 89.3 86.4 65.2
New Orleans 68.4 73.8 83.3 84.7 40.2
New York 81.0 82.7 83.4 76.5 46.9
Newark 80.1 78.1 88.6 63.9 81.4
Philadelphia 72.0 68.7 81.6 80.7 67.0
St. Louis 73.1 66.0 88.1 88.5 45.8
DC 62.5 65.4 77.9 72.4 45.7
Hypersegregated for Hispanics
Los Angeles 63.1 78.1 77.0 71.8 35.0
New York 66.7 70.8 79.3 81.2 34.7
Source: Iceland, Weinberg and Steinmetz 2002.
*
Hypersegregation is defined as a score greater than 60 on four or five of the dimensions of segregation.
created maps that coded areas as creditworthy dramatically inthe last 30 years, but subtle
based on the race of their occupants and the age of discrimination remains (Feins and Bratt 1983;
the housing stock. These maps, adopted in 1934 by Turner et al. 2002b). As a result, though the official
the Federal Housing Administration (FHA), and legal policies are long gone, the large black
established redlining, preventing residents in black ghettos they helped to create remain, and whites
neighborhoods from obtaining long-term still remember how quickly neighbor- hoodsturned
mortgages for their homes. Used together with all-black under these policies. We could think of
restrictive covenants, violence and blockbusting, these as vestigial effects of these official policies
they served to finalize the construction of theghetto that continue to exert their influence inthe way
(Jackson 1985:190-218; Squires 1992, 1994). housing is allocated today.
Racial effects of these governmental policies were Research shows that despite having become
well summarized by Charles Abrams (1955:229- more subtle, discrimination in the sales and rental
230): of housing remains significant and important
(Yinger 1998), and unlike segregation,
A government offering such bounty [in the form of discrimination is basically at the same level for
unconditionally insured mortgages] to builders and
blacks and Hispanics. The most recent national
lenders could have required compliance with a
study of discrimination, using matched pairs of
nondiscrimination policy. Or the agency could at
least have pursued a course of evasion, or hidden home seekers who differed only on race to inquire
behind the screen of local autonomy. Instead, FHA about housing, showed that both blacks and
adopted a racial policy that could well have been Hispanics experienced declines in unfavorable
culled from the Nuremberg laws. From its treatment during the 1990s, being treated
inception, FHA set itself up as the protector of the unfavorably comparedwith whites insimilar sit-
all-white neighborhood. It sent its agents into the uationsabout20percentof thetime on each visit to a
field to keep Negroes and other minorities from realtor (Turner et al. 2002b). The exact figures for
buying houses in white neighborhoods. It exerted the discrimination index in rentals are 21.6 percent
pressure against builders who dared to build for
forblacksand 25.7 percent for Hispanics, with rates
minorities, and against lenders willing to lend on
mortgages. This official agency not only kept of discrimination in sales at 17.0 and 19.7 percent,
Negroes in their place but pointed at Chinese, respectively (Turner et al. 2002b). Compared with
Mexicans, American Indians, and other minorities the Housing Discrimination Study ten years earlier,
as well. these numbers represent declines of almost 5
percentage points for black renters but no declines
While all-black areas still exist in most ofour for Hispanic renters, and declines of 12 and 7
urban areas, the official government sanction of percentage points forblack and Hispanic buyers.
redlining anddiscrimination inthe housing market Discrimination against Asians, a group not
has been attacked in the courts andby statute. The coveredinthe earlier study, is 21.5 in rentals and
1948 Supreme Court decision outlawing the 20.4 in sales (Turner and Ross 2003). Since for
enforcement ofracial covenants was followed by most people obtaining housing involves
the 1968 Fair Housing Act (subsequently amended multiplevisits to re- altorsorrental agents, even
in 1988), the 1975 Home Mortgage Disclosure Act these relatively small probabilities of
and the 1977 CommunityReinvestment Act. While discrimination quickly cumulate to high
none ofthese had immediate effects, and probabilities of discrimination over the course of
enforcement has always been farfrom adequate, those visits. However, these national discrimination
they did serve to move discrimination from the studies were not targeted to housing for the poor.
completely overtsitu- ation that had previously Stone has shown that lower-income blacks,
existed (Massey and Denton 1993:96-109, 195- Hispanics (1993b:50-54) and Asians (1996)
205). Despite delays between passage and nationally, as well as Latinos inthe Boston area
implementation of decisions and laws, and the fact (1993a), experience greater
that the U.S. Department of Housing and Urban difficultyingainingaccesstophysicallyadequate
Development (HUD) was as often a hindrance as a housing than do whites of comparable incomes.
help in implementing the Fair Housing Act, overt Stone's work clearly suggests that the problems
discrimination inthe housing market has decreased ofdiscrimination get worse at the bottom of the
68 Nancy A. Denton
income distribution, something reflected in the Black mortgage loan applicants are rejected at
addition of “source of income” as a protected class least twice as often as whites with comparable
inthe 1988 Fair Housing Amendments. It isclear incomes (Dedman 1989; Munnell et al. 1996;
that even today whites have far more opportunities Squires 1992), and a replication of the Dedman
intheir housing search than do persons of color. (1989) study of Atlanta a decade later showed no
It is interesting to askhow this differential change (Wyly and Holloway 1999). Other
treatment arises, given the fact that the law ex- researchhas shownthat mortgage rejections for
pressly forbids it. The answeristhat inthe years blacksand Hispanics are influencedbysegrega- tion
since passage of the Fair Housing Act, housing inthemortgage industry's workforce (Kim and
discrimination has become extremely subtle Squires 1998). As well, homeowner insurance, a
(FeinsandBratt1983).Forthe mostpart, housing, necessary condition of mortgages, isoften harder
banking andinsurance providerstreat peopleof for minorities to get due to redlining, agent location
color politely and courteously. Discrimi- and a host of other subtle discriminatory practices
nationoccursbecause whites are routinely given (Squires 1997). HUD is beginning to collect paired
more information, more help or more options, all testing data on mortgage discrimination, and a
of which enablethem to find housing faster. recent HUDpi- lot study conducted in Chicago and
Likewise, realtors will tell minorities that rents are Los Angeles focused on the initial stages of the
higher, downpayments are higher or that process: the cost of the home, the loan amount and
therearenoother units available, and they are not the loan products for which a buyer would beel-
called back as often as whites (Turner et al. 2002b; igible. It found significant patterns of unequal
Turner and Ross 2003; Yinger 1995:33— 42; treatment forbothblacksand Hispanics as com-
Feagin and Sikes 1994:223-252; Hamilton and paredwith whites. In some cases, minorities re-
Cogswell 1997). ceived no information at all because the loan
Furthermore, substantial evidence ofdis- officer would not deal with them until after a credit
crimination in the mortgage andhome insurance check had been made, something not re-
markets continues to exist (Turner et al. 2002a; quiredforwhites. Though the differences varied
Squires 1994:71-76; 1997; Yinger 1995:63-85). across city and group, across the six topics that
Banks are stricter about minority credit histories, were studied,7 both groups were treated signif-
quote higher down payments and less favorable icantly worse than whites on all but one topic in at
mortgage rates as well as refuse to make loans on least one of the two cities. For blacks, the topic on
low-valued properties (Turner et al. 2002a; Squires which they were treated the same as whites was
1994, 1997). The last is something that affects “loan amount and price,” while for Hispanics, it
particularly the blackpoor,astheir homes have not was no difference in “FHA encouragement”
appreciated as muchas those ofwhites, and they are (Turner et al. 2002a). While the FHA can help low-
twice as likely as whites to own homes valued at income people qualify for loans, FHA loans should
less than $50,000 (Squires 1997). Passage of the not be recommended for
Home Mortgage Disclosure Act (HMDA) in 1975 thosewhodonotneedthem,astheycarryhigher fees.
and the Community Reinvestment Act (CRA) in In short, the process of seeking housing is often
1977 have provided the data for measuring these long and complex for everyone, particularly so for
forms of discrimination. TheCRA in particu- larhas people of color and poor people in general.
been helpful in getting banks to service their entire Obtaining rental housing often involves
customerbase, but significant problems remain multiplevisits to realtorsor ads answered as well as
inall of these areas (Schwartz 1998; Squires 1992). credit checks and references. But this process pales
Campen (1992) documents the extensive amount of in comparison to the number of steps involved in
effort that a community must exert inorder to the sales of housing, which include not only
pressure banks into complying with the CRA, and dealings with realtors but also withbanks,
recent reports that he has completed for the appraisers, mortgage agents andin- surers. At each
Massachusetts Community andBanking Council point inthe process, there isthe opportunity to
(Campen 2003) show that predatory lending by discriminate, and the result of discrimination at any
companies not subject to CRA has increased in stage too often is denial of housing. Moreover,
Boston in recent years. discrimination at the early stage, when
basicmortgage information istaken (Turner et al. isseldom presented to them.

2002b), can discourage minorities from continuing From even this brief overview, it is abundantly
their housing search. Even if housing is obtained, clear that discrimination is still a fundamental
the discrimination means that black and Hispanic problem inthe metropolitan housing markets of the
households pay a “discrimination tax” that United States. Even though dis-
averages $4,000 every time they move (Yinger criminationhasshiftedfromoverttocovertand, as a
1997). result, ismuch more difficult forindividual blacks to
The subtlety of discriminatory practices means detect, its powerin structuring access to housing
that whiletheFair Housing Act is primarily aimed at opportunities remains.8 We arealong wayfrom
solving individual-leveldiscrimination complaints achieving the National Housing Goal that was set
(though this is less the case since the 1988 by Congress over 50 years ago and also a long
amendments), discrimination is difficult for an wayfromhavinga RighttoHousing.
individual home-seeker to detect. It also means that
whites do not see any examples of overt racism,
andbased on their own relative ease in finding CAUSES AND CONSEQUENCES OF
housing, they are able to persist intheir belief that RESIDENTIAL SEGREGATION AND
housing discrimination is not a pro blem. DISCRIMINATION
Whites also persist inthe impression that once a
few blacks enter a neighborhood, the Despite the evidence presented with regard to the
neighborhoodbegins the process ofrapid racial persistence of segregation and discrimination,
transition, an impression that is not without contemporary rhetoric about them, from
consequences, particularly the migration of whites peopleofcolor as well as whites, often downplays
out of cities (Adams et al. 1996). Whites do not see their importance. Though sometimes these ar-
the practice of steering peo- guments raise important issues of equity or fairness
pletoneighborhoodsalready containing people like —maintaining that minority neighborhoods have
them. For example, one African-American couple problems because they have been denied resources
interviewed by Hamilton and Cogswell (1997:111) (Calmore 1993)—segregation and discrimination
reported that they were shown at least 15 homes in have consequences that go beyond mere resource
primarily African-American areas, despite saying needs. That these neighborhoods have been
that they wanted a home in a different area that was systematically denied resources of every
mostly white. While overt steering is illegal, imaginable kindis well worth noting, as isthe
steering still occurs informally by realtors advising success that many community development
people that they would or would not “like” or “be corporations (CDCs) have had in improving
comfortable in” a particular neighborhood. The neighborhood conditions (Brown 1996; Keyes et
latest HUD discrimination study found that al. 1996; Squires 1992). But by focusing on
although other forms ofdiscrimination have resource denial, or neighborhoodbased initiatives
declined, there was evidence that geographic to reverse them, oneignoresthe underlying
steering was rising (Turner et al. 2002b;Turner structurethat initially caused the denial, namely the
andRoss 2003). Steering also occurs inthe way that segregative and discriminatory processes ofthe real
housing is advertised. Studies have shownthat estate industry and government described earlier.
housing for saleor rent is less likely to Enforcement oftheFair Housing Act has long been
beadvertisedifit is in integrated or minority areas inadequate (Massey and Denton 1993), a situation
(Turner and Wienk 1993:204-210; Turner et al. that persists to this day.Arecent analysis by
2002b), but advertised units are ones that realtors theCitizens' Commission on Civil Rights reveals
are willing to show anyone (Yinger 1995:51-61). that HUDis processing fewer complaints despite an
Manipulation ofthose units that are advertised and increase in their number; compensation to victims
those that are notworks to theadvantage ofwhites has declined;thetime ittakes to resolve complaints
and to the disadvantage of minorities. As a result, has increased and the use of administrative law
whites can beconfident that they will mainlybe judges has declined (Relman 2002). Thus, current
shown housing in mainly white areas, and the versions of segregation and discrimination still
opportunity to live inmore integrated settings operate, serving to undermine the efforts and effect
70 Nancy A. Denton
ofresources given to poor neighborhoods. housing in the cities. However, in one way,
A complete inventory of the causes ofresi- discussions about how much segregation is
dential segregation and discrimination, and the accounted for by income differences miss the
historical documentation to back it up, is be- point. Certainly, there are more blacks whocould
yondthescopeofthischapterbuthasbeen docu- afford to live in suburban areas than
mentedelsewhere(Farleyetal. 1993;Masseyand currentlydo,butin1980,blacksatalllevelsofin- come
Denton 1993; Jackson 1985; Turner and Wienk were highly segregated,as opposed to Hispanics
1993; Yinger 1995). While discussion andde- bate and Asians, whose segregation declined as their
abound about the amount of segregation accounted income rose (Dentonand Massey 1988), a pattern
for by each factor, there isconsid- erable agreement that was also found in 1990 (Massey and Fischer,
among researchers that contemporary segregation 1999). Furthermore, researchfrom
isthe result offour factors:discrimination 1980showedthatpoorwhitestendtoliveamong
(discussedinthe preceding section), differences in everyone else to a greater extent than do poor
suburbanization, income and attitudes. blacks (Massey andEggers 1990) andin 2000 Fis-
Suburbanization isthoughttobeanun- derlying cher (2003) found that poorblacksareuniquely
cause of segregation because of the postwar segregated. Taken together, these studies indicate
homebuilding boom inthesuburbs, which benefited that the role of income isatbest modest compared to
whites morethan blacks due to discriminatory that ofrace in explaining segregation.
practices ofthetime (Jackson 1985; Massey Attitudes, as expressed in residential prefer-
andDenton 1993:53; Oliver and Shapiro 1995:22). ences, are often cited as a cause of segregation.
Suburban areas, by virtue ofbeing independent White attitudes towardblacks in their neighbor-
municipalities, have also enacted a large variety of hoods have become much more positive over time,
“snob zoning” ordinances, such as minimum lot but there remains a substantial difference between
sizeandre- strictions on multifamily or low-cost attitudes in “principle,”whichhave improved a lot,
housing, which add to segregation and and attitudes in “practice,” which haveimproved
discrimination (Squires 1994; Schill and Wachter more slowly(Massey andDenton 1993:92; Farley et
1995). In 1990, theAfrican-American population al. 1993; Bledsoe et al. 1996). However, in the
was less suburbanized than other groups (Phelan most recentperiod,more whites have favored
and Schneider 1996), and with 39 percent of their implementation of an open housing law (Schuman
groupin the suburbs, comparedwith 58percent et al. 1997:134-135, 191192). What this means is
ofAsians,49percentofHispanics and71percent that whites agree in principle that blacks have the
ofnon-Hispanic whites, they are again the least righttolive anywhere they want and can afford to,
suburbanized in 2000 (Lewis Mumford Center but they are
2001b). In the suburbs, African-Americans tend to notinfavoroflawsthatwouldenforcethisprin- ciple in
be in lower-income, less desirable locales (Alba practice (Schuman et al. 1997).
and Logan 1993; Logan, Alba and Leung 1996). Attitudinal data also reveal whites' expectations
Since the segregation measures presented above of neighborhood transition in studies that ask
are computed across the entire metropolitan area, if whites if theywould be comfortable in
blacks are unabletomovetothe suburbs, they will neighborhoods with varying numbers ofblack
necessarily be more segregated than other groups. neighbors and if they would move out of or into
Leaving asidethe issue of access to the suburbs, such neighborhoods. Results from studies in
black segregation remains high in the suburbs, Detroit,Los Angeles,Atlanta andBoston confirm
albeitlower than that seen in the central cities that whites are uncomfortable with even a small
(Lewis MumfordCenter 2001b; Massey andDenton number of African-American neighbors, though
1993:69). Hispanics and Asians are both more they say theywould not move out as quickly as they
likely to be insuburban areas and to experience would refuse to move in (Farley et al. 1996). In
lower segregation there. Detroit in 1992, 56 percent of whites said they
Income differences certainly account for some would feel comfortable ina neighborhood where 5
ofthe differences in segregation levels because out of 15 homes were occupied by African-
housing in the suburbs, more often owner occupied Americans, whereas only 35 percent said
and single family, tends to be more expensive than theywould be comfortable in one where8outof 15
homes were occupied by blacks. Correspondingly, middleandworkingclasses,mostoftheirwealth is

29 percent said they would tryto move out ofa accumulated throughincreases inthevalue of their
5black-home neighborhood and 53 percent from an home, their largest asset. A study by Oliver and
8 black-home neighborhood,while 58percent and Shapiro revealed that during the period from 1967
71percent, respectively, would not move in (Farley to 1988, white homes increasedin eq-
et al. 1994:756). uityby$21,900 moreonaverage than did black
Black attitudes toward integration arealso homes. This amount can be directly attributed to
mixed, but studies in Detroit, Los Angeles, Boston bias in housing markets, and that accounts for
and Atlanta show that blacks remain about one-third of the black:white wealth
willingtoliveinneighborhoodsthatarebetween 90 difference amongmortgage-holders (Oliver and
percent and 10 percent white. However,their Shapiro 1995:148). Housing prices tripled in the
firstpreferencewouldbeforneighborhoodsthat 1970s, enabling white homeowners who took
are50:50 white and black (Farley et al. 1996). advantage ofdiscriminatory FHA financing policies
It is worth questioning the validity ofboth black to receive vastly increased equity in their homes.
and white preferences, however, since manyblacks Those excluded by such policies, primarily African
reportthat theywould prefer to be Americans, found themselves facing higher costs
inlargelyblackneighborhoodsordonotwantto of entry into the housing market (Oliver and
pioneer in all-white neighborhoods because of the Shapiro 1995:150). Whites often use home equity
fear ofovert racialhostility (Feagin andSikes loans to pay college tuition orhelp children with the
1994:252-264). Further, hardly any whites have down payment on their first homes. TheOliver and
actually had the experience ofliving with black (or Shapiro study estimated the cost ofthe combined
Asian or Hispanic) neighbors, andblack exposure effects ofmortgage discrimination andhousing
to integrated neighborhoods is likewise appreciation to the current generation ofblacksat
limited(BoboandZubrinsky1996).Itisimpos- sible to $82 billion, 71 percent ofwhichis due to the failure
know nowwhatpeoples' attitudes would be in a oftheir homes to appreciate (Oliver and Shapiro
more integrated world, but there is little reason to 1995:151). Denial of this home equity money not
assume that theywould remain as currently only limits blacks'human capital attainments, but
expressed. the cost of that lack of accumulation is paid by the
More important than these studies of the causes rest of societyinterms of loss ofproductivity.
ofdiscrimination and segregation are the While lack ofwealth accumulation via housing
consequences of segregation. Too often, we discuss is frequently overlooked, whereonelives determines
thesevere consequences of segregation in a wide array of other aspects about one's lifeand
underclass or poverty neighborhoods and on contributes to the costs of segregation (Galster and
housingquality(Wilson 1987, 1996),assegrega- tion Killen 1995). Neighborhoods determine school
concentrates poverty and otherfactorsthat lead to districts, and the crisis inthe public school systems
the development of these areas (Massey andDenton of our nation's cities is reported almost daily in the
1993:124).Buthousingsegregation media. In asocietywhere low-skilled jobs are
anddiscrimination also have disastrous individual, rapidly disappearing (Wilson 1996), the quality of
family, wealth and political consequences that one's education will determine one's lifechances
affect the lives of all who experience them, not just even moresothan inthe past. Youth, in particular,
the poor,and cost the society as a whole as well are disadvantaged by the lack of opportunity in
(Yinger 1995:89-103; Feagin and Sikes poor neighborhoods (Galster and Mikelsons
1994) . Lower segregation is also associatedwith 1995) . Segregated neighborhoods are also subject
better economic growth in both cities and suburbs to higher rates of unemployment andlack of access
during the 1990 to 1996 period (Wyly, Glickman to job networks and transportation (Hughes 1995),
and Lahr 1998; Rusk 1999). making it harder to find out about available jobs,
One hidden cost ofhousing segregation and even allowing for theeffects ofdiscrimination
discrimination comes from the accompanying lack inthe workplace (Wilson
of wealth accumulation by people denied full 1996) .Personslivinginhighlysegregatedneigh-
access to the housing market. For many Americans, borhoods also face higher mortality risks and
particularly those inthe lower- poorerhealth services, higher rates of teenage
72 Nancy A. Denton
pregnancy and single motherhood, and higher ence of all-white neighborhoods. These neigh-
crime rates (MasseyandDenton 1993:165ff).To the borhoods provide a place where whites can flee as
extent that one becomes thevictimof these effects, well as provide the “evidence” that when
one's life chances are worse. To the extent that neighborhoods integrate, theydo not remainas nice
neighborhoodsare homogeneous—that is, as the all-white ones. In a reverse manner, all-black
occupiedbymembersof only one group— political or all-Hispanic neighborhoods are often used as
leaders have safe seats but little power with which examples of the potential dangers associated with
to form coalitions or make deals to improve the integration.
situation for their constituents (Massey and Denton It isthus important that we follow theex-
1993:156-158). In short, the forces of segregation periences of these all-white neighborhoodsover
ensure that its main costs will fall on the victims time. If they aremaintaining themselves despite
themselves. changes in attitudes, the law and the arrival of large
All of these consequences lead to andrein- force numbers of newimmigrants, then the fu-
somethingItermthe “segregative system” (Denton tureofintegration is indeed as bleak as the seg-
1996). The best empirical research to demonstrate regationindicesthemselvesseemto indicate.On the
this isthat done by George Galster. In many other hand, if these “sentinel” white neigh-
articles, he has repeatedly shownthe interactive, borhoodsare becoming fewerinnumber,then we
self-reinforcing natureofresidential segregation in have evidence of the fact that at least one of the
the United States (Galster 1992, 1993; Galster and structural props supporting our separate societies is
Keeney 1 988). In what Galster (1992) calls the breaking down.9
“vicious circle of prejudice and In researchdone with my colleagues at SUNY
inequality,”segregationincreasesracialinequal- ities, Albany,Ihave updated some of my earlierwork on
whichinturn reinforce segregation. Racial patterns of neighborhood change in the large
inequalities lead to prejudice, which also supports metropolitan areas of the United States (Denton
segregation as well as leadstohousing dis- and Massey 1 99 1 ). Findings for the periodfrom
crimination, which supports continued segregation. 1970 to 199010 for sixof the largest metropolitan
The weightof ourpast history of segregation and the areas (NewYork, Philadelphia, Chicago, Miami,
processes that led to it loom large, but it is Houston andLos Angeles) mirror the pattern in all
constantly buttressed by the social, organizational metropolitan areas for the periodfrom 1970 to
and behavioral structures we have erected and 1980: All-white neighborhoodsare declining
within whichwe continue to operate. These greatly in number (Albaetal.1995; Denton and
structures occur in all areas of the housing Anderson 1995). In short, integrated neighbor-
marketing process—and in common-sense rules hoods, though still relatively rare, are becoming
that govern individual behaviors regarding more common, a finding that parallelsotherre-
neighborhood choice and abandonment—and are search on this topic (Ellen 1998; Nyden, Maly and
reinforcedbythe political system at all levels of Lukehart 1997).
government. Clearly, beating the “segregative The measurement issues behind that statement
system”isgoing to bea long, uphill, protracted are complex. The research uses census tracts, the
battle. units commonly usedfor measuring segregation, as
proxies for neighborhoods. While these may not
correspond to anyone's ideal, personal or
DECLINING ALL-WHITE NEIGHBORHOODS: experiential sense ofwhat aneighborhoodis, their
INTERRUPTING THE SEGREGATIVE statistical properties of mutual exclusivity,
SYSTEM coverage of the entire metropolitan area and
relatively small size make them appropriate for this
One of the factors maintaining the “segregative use. Categorizing a neighborhood as “all-white”
system”—the set of discriminatory attitudes in the involves defining whether or not a groupis present
population, the discriminatory practices by in the neighborhood. Denton and Massey (1991)
organizational actors and the carryover ofpast use an absolute rather than proportional cutoffof 30
segregation itself andpast discrimination by in- persons to indicate a group's presence or absence in
dividuals and organizational actors—is the pres- theneighborhood.The most recent work,using the
1990 Census, specifies that cutoff at 100 persons,

arguing that this number is large enough that the
persons would bevisible inagroup that averages
5,000 persons, as census tracts do. In a relatedpaper
on all-white suburban neighborhoods in the 50
largest metro areas in 1990, defining all-white
neighborhoodsasatleast 95 percent white yields
results that follow the same patterns as those
presented here (Denton and Alba 1998).
Table3.3presentssomeofthekeystatisticsfor the
metropolitan areas of New York, Philadelphia,
Chicago, Miami, Houston andLos Ange-
les.Theinterpretationofthesefindingsvariesby area,
and the process of neighborhood change is
74 Nancy A. Denton
TABLE 3.3 Summary of Neighborhood Race/Ethnic Composition Changes, 1970-1990, in New York,
Philadelphia, Chicago, Miami, Houston, and Los Angeles
New York Philadelphia Chicago Miami Houston Los Angeles
Panel A: Fate of all-white neighborhoods
No. tracts
inarea 3536 1043
All-white 1292 196 296 1404
in 1970 1007 576
Percent 396 6 52 44
remaining
all-white
in 1990 22.6 61.8
18.9 16.6 28.8 18.2
Panel B: Growth of multiethnic neighborhoods No. multiethnic
W-B-H-A*
in 1970 267 24 34 3 17 189
in 1990 925 111 193 50 107 691
Percent of total
in 1990 26.2 10.6 14.9 25.5 36.1 49.2
Panel C: 1990 Center City and suburban multiethnic neighborhoods (W-B-H-A)
Center City 26.1 14.7 10.5 5.9 47.7 49.4
Suburban 26.3 8.8 22.0 32.4 27.6 49.0
Panel D: 1990 all-minority neighborhoods
Percent of total 14.7 4.9 20.7 6.6 3.9 10.6
Percent all black 3.1 3.6 18.9 2.0 1.0 0.1
Source: Denton and Anderson 1995, Alba et al. 1995.
*
“W-B-H-A” refers to whites, blacks, Hispanics and Asians, whoare each counted as present in the tract if their population is at least
100 persons.
affected by the larger structural context of the tiethnic neighborhoods, shown in Panel B, is
metroarea itself: Is its population growing? Is it a equally dramatic. By 1990, nearly one-half ofLos
destination for many of the new immigrants or not? Angeles neighborhoods contained at least 100 of
Several points are relevant. First, the decline in each of the four population groups, as did over
the number of all-white neighborhoods is one-third of Houston'sneighborhoodsand over one-
substantial as shown in Panel A. In Chicago, Mi- fourth of those inNew York and Miami. The
ami and Los Angeles, fewer than 20 percent of the relative presence of Asians inthe metropolitan area
neighborhoods that were all-white in 1970 as a whole is particularly important in this regard:
remained so in 1990. In New York, just 22.6 Metropolitan areas like Philadelphia, Chicago and
percent of those remained the same as did 28.8 Miami that have low overall Asian proportions
percent of those in Houston. Only in Philadelphia cannot have many neighborhoods that house at
did a substantial 61.8 percent of the allwhite least 100 Asian residents. It is noteworthy that
neighborhoods in 1970 remainsoin 1990. From substantial white population remains in these
more detailed analyses not shown, it is clear that multiethnic neighborhoods: They are almost
many ofthese1970all-whiteneighbor- hoods by always on average over 50 percent white
1990 found themselves with African- American, andinsuburban areas maybeas high as 70 percent or
Asian and Hispanic residents, along with their 80 percent white. They are by no means all-
white residents. In fact, the entry of multiplegroups minority neighborhoods with only a few white
was more common than the entry of a single group residents. Yet since the cutoff was 100 persons
into the formerly all-white neighborhoods, ineach group, we know that they have at least 300
suggesting that once a neighborhood “opens up,” blacks, Hispanics and Asians. Only time will tell
all groups are welcome. If a group is excluded, whether these neighborhoodsare starting a racial
however, it is most often blacks. transition to all-minority. But the large number of
Second, the emergence of four-group mul- them, combined with the lack of evidence of
particularly rapid race/ethnic turnover in the (Jargowsky1997). While this trend is cause for
decade from 1970 to 1980 (Denton and Massey serious concern, it must be emphasized that these
1991), bodes well for the prospects of greater inte- neighborhoods, classified solely by race/ethnicity
gration overall because it is hard to imagine this and not income as well, comprise onlya small
many neighborhoodsundergoing racial transition. percent ofthe total num-
Third,thenumber of all-white neighborhoods is berofneighborhoodsineachmetropolitanarea, and
declining in the city as well as the sub- both thenumber ofhigh-poverty neighborhoods, as
urbs(Table3.3, Panel C). Multiethnicneighbor- well as thesizeofthe population living inthem, have
hoodsare emerging in both central cities and declined substantially since 1990 (Jargowsky
suburbs. It is not just theneighborhoods within 2003). Despite arguments that selfsegregation is a
thecitylimits that areseeing population diversi- natural tendencyfound among all groups, these data
fication. To the extent that suburban neighbor- point instead to the existence of a segregative
hoodsofferbetter schools, less violence, more job system that is particularly operant for blacks.
opportunities and the like, the emergence of these As noted previously, these analyses cannot be
more diverse neighborhoods in suburbs is an updated with 2000 data until neighborhood
indication that at least some people ofcolor boundaries are matched over time. However, it is
areableto avail themselves to these new worth noting that my examination of census tracts
opportunities. Research indicates improved life in 2000 by their race/ethnic composition shows a
chances and outcomes forpoorblacks whoare able continuation of these trends. In 2000, only one-
to move to low-poverty neighborhoods in the fourth of the tracts inthe50largest metroareas had
suburbs (Denton 2001; Goering and Feins 2003; only white residents (orwere white with less than 5
Rosenbaum 1995). percent of Hispanics or Asians or blacks), and
Finally, the neighborhood world of 1970 in the almost one-third had at least 5 percent of their
six metropolitan areas shown in Table 3.3 could be members from three or more groups, one of which
characterized as either all white or all black, was non-Hispanic white. All-minority
largely due to the small proportions of Hispanics neighborhoods, inanycom- bination, made up just
and Asians inthese areas at that time. Since these 7.5 percent of theto- tal neighborhoods found in
groups have grown substantially, it is reasonable to these metro areas. Therefore, it isclear that at
expect a corresponding rise in thenumber theneighborhood level, increasing diversity
ofneighborhoods that these groups claim, but the continued through the 1990s.
data do not reveal this. In general, Hispanics and This summary of analyses of race/ethnic
Asians in 1990 tended to live inneighborhoods compositional changes certainly shows the need for
with whites. Thegroup that remained in racially more detailed work on this topic and for study of a
homogeneous neighborhoods in 1990 is blacks, as larger number of metropolitan areas. However,
can be seen in PanelDof Table 3.3. It is impressive given the history ofracism and discrimination in
that the percent of all-minority neighborhoods housing, and theslow change inthe segregation
isaslow as it is, ranging from just over 20 percent indices reported earlier, the results are indeed
in Chicago to just under 4 percent in Houston. intriguing, though hard to interpret. On the one
However, thelast rowreveals that in Chicago and hand, more integrated neighborhoods are a sign
Philadelphia, most of these all-minority neigh- that the segregation inour urban areas is abating—a
borhoods areall black, thoughin theother cities they positive outcome. Given how high levels of racial
are not. Multiethnic but nonwhite neighborhoods segregation wereand are, one would expect that
are a possibility, of course, and the research did any change in those patterns would at first bevis-
find atendencyfor the number of black- ible as very low levels of integration. Multigroup
Hispanicneighborhoodstoincrease, particularly in neighborhoods also decrease the number ofall-
center city areas, especially inNew York, white neighborhoods to which whites can flee. On
Philadelphia and Chicago. This tendency was most the other hand, it is mathemati-
likely the result ofthe continued concentration callypossibleforeveryneighborhoodtocontain a few
ofpoverty that occurred during the 1980s, with its nonwhite residents while the majority of the
concomitant geographic expansion ofpoor areas nonwhite population remains highly segre-
76 Nancy A. Denton
gated.The integrated neighborhoods, by allowing Recognizing that thereare manyhous-

more and more whites to live in minimally ingpolicies,especiallythosethatseektoincrease the
integrated ones, could provide whites with the supply of low-cost or low-rent housing, which
evidence to believe that segregation isnolonger a result in small numbersof units, housing policies
problem, even though the research presented must evaluate both their own effect on income
documents its ongoing presence inour society. and/orracial segregation and theto- tality of their
proposed effect when combined with other projects
previously completed in the same area.
IMPLICATIONS FOR FUTURE HOUSING Researchers can help policy makers by determining
POLICY the best way to measure these effects and by
monitoring them once a policy is implemented.
What are the implications ofpatterns that show Linking approvalfor construction or rehabilitation
high levels of segregation and discrimination, oflow-cost housing to levels ofincome and
combinedwith an increase in multiethnic neigh- residential segregation isthe only way to guarantee
borhoods, for avolume arguing that housing should that we will not alleviate the low-cost housing
beafundamentalright for everyone, including the shortage at the expense of raising levels ofincome
poor? The prevalent policy implication isthe andracial segregation.
importance of defining the right to a good house to Putanotherway,allhousingprogramsmustfur- ther
embrace a good neighborhood as well,as is the the aims ofthe 1968 and 1988 Fair Housing Acts,
opinion ofHartman (1998 and Chapter 8). Any and housing assistance must be dispersed
social agendathat includes housing must throughout the metro area.
payparticular attention to the location ofthe 2. Housing policy concerned with low-cost
house.Research on segregation and discrimination housingmustexplicitlyconsiderrace/ethnicity.
makes abundantly clear that the best quality, most Programs for low-cost housing for specific groups
adequate house inaneigh- borhoodwitha high crime (poor, elderly, female-headed families) or certain
rate, bad schools, no jobs, no access to types of housing (owned, rental) must consider
publictransportation or other amenities does not fit how profoundly the U.S. hous-
the ideal ofagoodhome. To ensure that a Right to ingmarketisstructuredbyrace/ethnicity.While
Housing includes the righttoadecent itmaybe harder to garner political support forrace-
neighborhoodwillrequirethat housing policy aimed targetedorplace-targetedprogramsbe- cause they
at increasing the supply oflow-cost housing pay violate the assumptions of a “public good” (Vidal
attention to more than just the number ofunits. 1995), not taking race/ethnicity into account
Given the limited success in increasing the supply increases the likelihood that previous mistakes will
oflow-cost housing in recent decades, well be repeated.Inonediscussion surrounding the public
documentedinother chapters of this text, this housing bill in 1949, it was proposed that racial or
chapter's emphasis on race and neighborhood ethnic discrimination be forbidden inanypublic
amenities further complicates an already difficult housing project, a measurethat would have
task. However, ignoring the neighborhood dooms defeated the housing bill.Jackson(1985:226)
the housing efforts to long-term failure, as the describes how Senator Paul Douglas, whom he
concentration ofpovertyinsome ofthe nation's most describes to be “as decent a man as ever served on
infamous public housingprojects can more than Capitol Hill,” urged “his liberal colleagues to put
attest. As a result, paying serious attention to aside their principles temporarily” rather than
theneigh- borhoodimposes conditions on defeat the chance ofre-housing 4 million persons.
housingpolicy: Douglas had the short-term interests ofblack
Americans in mind and felt strongly that no
1. Housing policies and programs should persons of any race should betreated as second-
not increase income and racial segregation. class citizens. However,the disastrous long-
Housing policies or programs must demonstrate termeffects ofthe location ofpublic housing and
that they will not increase income and/or racial slum clearance forblacksare precisely the issues
segregation before they can be implemented. weare dealing with today. The mechanisms of the
housing market and peoples' expectation ofhow the somehow failed to work hard enough to
market works are affected by race inall areas. One beabletoafford adequate housing for themselves
of the fundamental underlying structures ofthe low- and their families.
cost housing submarket is race itself. A good part 5. Place-based and people-based strategies
of the reason that, as a society, we havesuchalow- are both important, and they complement each
costhousingcrisiscanbetraced to the fact that we do other. Improvement ofplaces, as revealedbythe
not particularly value the provision ofhousing for notableaccomplishments ofnumerous CDCs in
the poor, especially for blacks and other minorities, recentyears, is a necessary remedy for the lives of
and especially not in good neighborhoods. those who have been deniedresources bythe seg-
3. National audits to measure discrimina- regative system. At the same time, people-based
tion in housing rental and sales, as well as by mobility strategies offer choices to the poor that
mortgage and insurance providers, should be themiddleclassalreadyhave(Turner1998),and
carried out on a regular schedule. These should Gautreaux and Moving to Opportunity (MTO)
also includeacomponent that specifically mea- programs, which assist poorfamilies to move to
sures discrimination against the poor. Funding integrated andlowpoverty neighborhoods, pro-
to conduct audits in such a way that theyprovide videsuccessfulmodelsforthisapproach(Rosen- baum
evidence of the overall level of discrimination 1995; Turner 1998). Despite the fact that
needstobe regularly allocated by HUD. Since competition for declining resources too often pits
auditand testing data are used to prove advocates ofone approach against theother, the
discrimination in court cases, most metro areas magnitude ofthe problem is such that both are
have peopleand organizations well qualified to needed. Mobility programs will probably neverbe
conduct them, a fact that was used to great introduced on a scale large enough to help all of
advantage inthe last two rounds ofdiscrimination those in need,noris it reasonable to assume that
studies. Furthermore, Yinger (1995) proposes that every place in need will have an active enough
inaddition to regular testing of the entire housing community group to deal with its problems.
market, wealso need representative audit studies Further, interventions in places run thesevere risk
targeted to specific types of neighborhoods—for that their efforts in one place will be quickly
example, integrated ones orlower-income ones that overwhelmedbythesurrounding social and political
would serve to show ifdiscrimination was the same structures that currently support income and racial
across the income distribution. segregation. Debating this point allows persons not
4. Better enforcement of the Fair Housing concerned with housing for the poor at all to do
Act and strengthening the Community Rein- nothing, citing the internal conflicts and the fact
vestment Act to include mortgages companies is that what should be done is not known.
essential. Laws against discrimination inall aspects 6. More publicity regarding successfully in-
ofthe sale andrental ofhousing need to be tegrated neighborhoods is vital. The presence of
aggressively enforced. HUD's record in processing functioning racially and economically integrated
Fair Housing complaints (Relman 2002) combined neighborhoods must be highlighted and their
with the fact that nonbank mortgage lenders are not characteristics made widely known. They cannot
subject to CRA (Campen 2003), both discussed remain what Nyden, Maly andLukehart (1998) call
above, are defeating the efforts oflocal housing and “one of our Nation's best-kept secrets.” While local
communitydevelopment groups all over the nation. newspapers sometimes carry stories about this,
HUD needs to allocate money to these efforts if reports on the evening news programs too often
weareever to see improvements inthe wayin feature horror stories about the poor.To the extent
whichhousing is allocated, particularly now that that housing policy advocates and researchers are
housing discrimination issuch asubtle process that able to focus attention on successful
most whitesdo not even notice. The lack modelsofintegration and the beneficial outcomes of
ofaffordable housing must beviewed good housing in good neighborhoods, it can only
asastructuralproblem of the housing market and the help. Too much of what happens in contemporary
discrimination therein. It cannot be seen as a sign housing markets is the result of people's ignorance
that poorly housed or unhousedindividuals have ofhow neigh- borhoodschange now as opposed to
78 Nancy A. Denton
how they changedinthe blockbusting heydays of economic deprivation are not only oppressive, but
1955 or 1960 (Levine and Harmon 1992). they are also structural and institutional. Without
Contemporary housing choices do not reflect characterizing oppression as structural, and
preferences so much as they reflect a structural without developing an agenda that is oriented
toward destabilizing and disturbing this structure,
system that was builtonracism. Housing choices
any formal or individual progress will be largely
todayre- flect fear ofracial succession andfear rendered impotent by thegreaterinstitutional
ofintegra- tion. While this is most often thought of mechanisms. (powell 1995:910)
from the white perspective, it is increasingly
becoming true of blacks as well, adding yet another The implication of powell's words forlow- cost
to the long list of costs we have paid forresidential housing are clear. Increasing the supply of low-cost
segregation in this country. units without paying attention to the structural
7. Localprograms shouldbemodelsforna- context responsible for the shortage and the
tional programs. In some areas, local solutions to disadvantaged neighborhoodlocation of theunits is
provide low-costhousing and local neighbor- a short-term solution leading inevitably to a long-
hoodrenewalinitiatives seem to be working and term crisis. Via mortgage interest andproperty tax
maybetheonly option in the current political deductions, thegovernment subsidizes housing for
climate. However, this chapter has shown that the the wealthy. The poor and people of color deserve
segregation of African Americans is highin all equal treatment so that they can enjoy goodhousing
areas, even wherethey are not numerous, indicating inagood neighborhood.
that race operates inthe housing market on a
national, not local, basis. The impetus to
segregation from the HOLC/FHA redlining maps NOTES
and the realtors code of ethicswere also national,
not local.Itwas the federal government, in 1. Census 2000 was the first census where people
complicity with local governments, that created the could identify with more than one race. This choice was
segregatedhousing system we see today (Gabriel made by 2.4 percent of the population.
1996). Local efforts to deal with the issue of 2. It should be noted that these groups are
internally highly heterogeneous, including native- born
housing are taking on a national-level apparatus,
and recent immigrants, and combine Mexicans, Cubans,
and the ultimate challenge istode- sign national Puerto Ricans and other persons from Spanish-speaking
policies inthe 21st century that will countries under the umbrella term “Hispanic.” Likewise,
undotheerrorsof national policies of the 20th Chinese, Japanese, Thais, Indians, Filipinos, Vietnamese
century. and many other groups are combined in the Asian
In closing, this chapter points to the structural category. That we would see distinctions inthe
segregation index if we measured it for each group
natureof segregation and discrimination in the
separately is undeniable, but we can also learn about
current housing market. As john powell (1995:905) residential patterns by looking at the broader
has pointed out, civil rights efforts focused on groupsshown, which correspond to the race/ethnic
individuals and individual discrimination, and their classification used by the U.S. Census Bureau.
remedies were and are also individuated. In a 3. The formula for the index of dissimilarity is D =
world wheresegregation is high and discrimination .5* |(xi/X)(yi/Y)|*100, where xi and yi are the tract level
is subtle, individual remedies are not totals for groups x and y, X and Yare the metropolitan
area totals for the same groups, and the index is summed
enough.Lawyerjohn powell argues that thegoal of
across all tracts.
the post-civil rights agenda must be to attack the 4. Since segregation indices require data for all
system ofracialhierarchy and racial subordination parts of the metropolitan area, they can only be com-
in a group-based manner that addresses power putedforyears when the decennial census of population
disparities between groups. His concluding words and housing isconducted.
are worth quoting: 5. Note the subtitle of Farley and Frey's 1994 ar-
ticle: “Small steps towards a more racially integrated
The post-civil rights agenda must focus on sub- society.”
ordination and exclusion. The key to this focus is 6. According to the Iceland, Weinberg and Stein-
understanding that racial discrimination and metz report (2002), Hispanics were hypersegregated in
LosAngelesandNewYorkin 1990, though this was not Bobo, Lawrence, and Camille L. Zubrinsky. 1996. At-
reported earlier. titudes on residential integration: Perceived status
7. Thesixtopicswereinformationrequested;loan differences, mere in-grouppreference, orracial
amount and house price; number ofproducts; coaching to prejudice? Social Forces 74:883-909.
dealwith credit problems; follow-up contact and Bratt, Rachel G., Chester Hartman and Ann Meyerson,
encouragement of FHA mortgage. eds. 1986. Critical perspectives on housing. Philadel-
8. I have focused on white preferences because of phia: Temple University Press.
their greater influence and controlinthe real estate market Brown, Prudence. 1996. Comprehensive neighborhood
due to their larger population size. Black preferences initiatives. Cityscape: A Journal of Policy De-
show amuch different pattern from those of whites. velopment and Research 2:161-176.
Blacks are considerably more likely to prefer Calmore, John O. 1993. Spatial equality and the Kerner
neighborhoods where the racial mix is closer to 50:50, to Commission Report: A back-to-the-future essay.
dislike beingpioneers in an all-white neighborhood, but North Carolina Law Review 71:1487-1495.
they also indicate a willingness to move into neigh- Campen, Jim. 1992. The struggle for community in-
borhoods with all but the most extreme racial com- vestment in Boston, 1989-1991. In From red lining to
positions (Farley et al. 1994:763). Thus, it is unlikely that reinvestment: Community responses to urban
black preferences alone are creating the all-black disinvestment, ed. Gregory D. Squires, 38-72.
neighborhoods we see. Philadelphia: Temple University Press.
9. It should be noted that this focus on neigh- 2003. Borrowing troubles. Report for the
borhoods as the units of analysis is complementary to Massachusetts Community and Banking Council,
that of segregation indices, which focus on the popu- Boston. Accessed at www.mahahome.org.
lation in an entire MSA or city. The former looks at Dedman, Bill. 1989. Blacks denied S&L loans twice as
segregation from the point of view of a typical neigh- often as whites. Atlanta Journal and Constitution,
borhood, the latter from the point of view of a typical January 22.
person. Theoretically, it is possible for all neighbor- Denton,NancyA.1994.AreAfricanAmericansstillhy-
hoodstobe integrated at low levels—for instance, to have persegregated? In Residentialapartheid: TheAmeri-
some nonwhite residents—at the same time that the can legacy,eds. Robert D. Bullard,J. Eugene Grigsby
segregation indices remain high—that is, the bulk of the and Charles Lee, 49-81. Los Angeles: CAAS Publi-
nonwhite population lives in segregated neighborhoods. cations.
10. It is not yet possible to present these patterns for 1996. The persistence of segregation: Links between
1970 to 2000, as the process of matching the census tract residential segregation and school segregation.
boundaries is quite time-consuming. Minnesota Law Review4:795-824.
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Michael E. Stone
4 Per nicious Problems of Housing Finance
THE SYSTEM OF housing provision and been transformed, and what have been the
finance erected in the 1930s and fully implemented consequences? Thechapterbegins with an
after World War II was one of the pillarsof the examination of the structural changes inthe housing
postwarprosperity, sustaining and stabilizing the finance system and then explores several major
economy as well as transforming the nation's social areas ofimpact: first, theshiftofhous- ing production
and physical geography. However, during the toward more expensive houses, associated with
1960s, this postwar stability began to crumble. widening income inequality as well as with
Inflation tookhold,competition for credit standardization of lending; second, the recent,
increased, interest rates rose and the housing sector modest increase in middle-income homeownership,
suffered disproportionately. fueled not only by economic growthbut also by
Attempts to deal with these problems have specialprograms in response to advocacy and
contributed to worsening housing affordability, anxiety about discrimination and diminished
from both the income sideand the housing cost affordability in the mortgage system; and third,
side. On the one hand, responses by business and greater risk-taking by households and lenders,
the government to increasing globalization and the leading to greater household debt burdens, an
associated squeeze on corporate profitability have upward trend in residential mortgage foreclosures
generated widening income inequality: Those at and instability at the nation's (and the world's)
the bottom have experienced declining real largest mortgage institutions.
incomes; those in the middle have, at best, barely While the 1990s and early 2000s have been
kept up with inflation; while those celebrated as a period of low inflation and low
atthetophavesubstantiallyimprovedtheirstan- dard interest rates, the enthusiastic hucksters of the era
ofliving (see Chapter 1). Meanwhile, housing costs rarely acknowledge where these conditions came
have been driven to dizzying heights, causedin part from:draconian cuts ingovernment social spending,
by demandforhousing from ever richer households diminishing job security and globalization of
at the top of the income distribution, but also by corporate capitalism. The concentration,
runaway speculation in housing markets in many centralization andrationalization ofhousing
areas, perverse housing policies and a restructured finance may have been inevitable with the new
national mortgage system. economicorder. But the consequences have been
Since the late 1960s, the system of housing mixed,atbest, forhousing,householdsand
finance intheUnitedStates has undergone profound communities. Understanding the structure and
transformation. Once a relatively sepa- dynamics of the mortgage system is thus essen-
rate,protectedandlocallybased system, housing tialfor understanding the extent, depth andper-
finance has become integratedinto the national and sistence ofhousing problems—and the needfor
global capital markets, with massive institutions
becoming thecontrolling intermediaries between
distant capital markets andlocalhousing markets.
Why andhowhas the residential finance system
new models of housing finance in order to realize a the banks had invested in home loans that were not
Right to Housing. being repaid.With no new funds available for
investment, private residential construction
practically came to a halt, and the private housing
HOUSING FINANCE AND THE ECONOMY market nearly ceased functioning, adding to the
depth and duration of the Great Depression.
While new housing isof course costly to produce, When a new framework for housing finance
most housing is not new.Yetbecause housing is a was erected in the 1930s, it was still built around
commodity in this society, the market value of mortgage lending by private financial institutions—
well-maintained older housing is typically of the reflecting the power of those institutions and the
same order of magnitude as similar new housing, general philosophical commitment to have the
and most housing issold and resold and refinanced government assist rather than replace private
repeatedly over its lifetime. For most of these investment. Themajor and most profound and
transactions, the bulk of the cost is financed pervasive forms of federal support forhousing put
through mortgage loans. The financialburden into place inthe 1930s were therefore designed to
ofrepaying these loans withinterest constitutes by stimulate andprotect private institutionallending.
far the largest component of residents' housing They consisted of the system of centralbanking
costs for both renters (indirectly)andhomeowners. anddeposit insurance provided by the Federal
Most rentalhousing is mortgaged, with exception of Home Loan Bank system (FHLB); the mortgage
public housing and nonprofit elderly/handicapped insurance program of the Federal Housing
housing, and over 65 percent of all homeowners Administration (FHA) and,adecade
have mortgages on their homes (Kennickell, Starr- later,themortgage guarantee program of the
McCluer andSurette 2000:Ta ble11B). On average, Veterans Administration (VA); and the secondary
two-thirds of total monthly housing costs for mortgage market facilities of the Federal National
homeowners with mortgages goes for their Mortgage Association (FNMA, known as “Fannie
mortgage payments; the share of rents going Mae”).
toward mortgage payments is probably at least as Strategically,the rebuiltmortgage system fo-
great.1 The institutions and mechanisms of cused on wide promotion of debt-encumbered
mortgage lending thus have a contradictory role: homeownership through the creation oflow down
They have been essential to the functioning of the payment, long-term loans to replace the earlier type
private housing market but have also of large down payment, short-term mortgage loans
beenprimarysourcesofpersistentandpervasive that hadrestricted themarket to relatively well-off
housing affordability problems. groups inthe population. The new typeofloan
reduced monthly payments for agiven size loan and
Historical Background on Institutional Mortgage lessened the personal savings needed to purchase a
Lending2 home. But in doing so, it created the illusion of
ownership through the reality of debt. Furthermore,
During the first three decades of the 20th century, by making loans more easily available, the
mortgage lending by financial institutions moved to effective demand for houses was expected to
the center of the U.S. housing system, facilitating increase, thereby contributing to overall economic
expansion of residential construction and sales but growth as well as supporting the lending and
also imposing a rigidity on housing costs and construction industries in particular.
making the stability of the overall economy Of course, it took World War II to restart the
vulnerable to the ability of people to afford their economy and generate the savings needed to set the
housing payments. Thus, when the economy reconstructed mortgage system into operation.
collapsed at theend of the 1920s, themortgage Savings that had accumulated during the war, along
system was a big partof the debacle. Millions with housing needs virtually unmet since the start
ofhouseholds lost their homes to foreclosure of the Great Depression, provided the impetus
because they did not have the incomes to pay off forwhat became the postwar housing boom,
their mortgages. Millions lost their savings because facilitated by federal support for financial
84 Michael E. Stone
institutions to make the new long-term, low down masking—if not truly replacing— class differences
payment loans. The postwar suburban boom (Dean 1945; Perin 1977; Heskin 1983). Even for
produced some 30 million new housing units intwo many who have made it across the divide, the
decades, increasing the nation's homeownership struggle to achieve and sustain mortgaged
from about 40 percent at theend of the war to over homeownership can impose heavy costs—
60 percent by the 1960s. Housing construction ac- including family stress and exclusionary and
counted for one-third of all private investment and snobbish attitudes as well as financialhard- ship
nearly one-half of all publicandprivate construction and the risk for mortgage foreclosure— without
during this period. Housing debt represented the necessarily yielding the promised fulfillment and
biggest single component of a vast explosion of satisfaction (Rakoff 1977; Stone 1993:Chapter 1).
private borrowing. Yet despite the success of the The fourth major weakness built into the
new mortgage system in dealing with the housing mortgage system created in the 1930s was the
needs of a majority of Americans and contributing financial vulnerability of “thrift institutions”—
to prosperity, the system contained some inherent savings and loan associations (S&Ls) and mutual
flaws and weaknesses. savings banks—which were the mainstays of
First of all, even though mortgage lending residential lending. Since they put nearly all of
contributed to economic growth, it grew much their funds into long-term mortgage loans, if
faster than the overall economy, hence faster than interest rates on these loans were constant for the
consumers' ability to repay the debt. Between 1946 term of the loan, these lenders received a fairly
and 1965, residential mortgage debt grew about stable and predictable rate of return year after year,
three times as fast as gross domestic product (GDP) regardless of what happened to interest rates after
and disposable personal income. As more and more the loans were made. On theotherhand,thrifts
current income goes to paying past debts, the obtained most of the funds they loaned from
potentialforprofitable new lending to support savings deposits that could be withdrawn
continued economic growth without inflation withlittleor no notice. As long as interest rates on
becomes constrained. The mortgage system has savings accounts were competitive with other
thus been an important factorintheupsanddowns of investments and substantially higher than the rate
the business cycle. of inflation, the risk in “borrowing short and
Second, while the expansion of mortgage credit lending long” was not great. Thus, for two decades
has contributedimmensely to thegrowth and following World War II, thrift institutions were
profitability of the entire housing industry, the fairly successful at sustaining a steady inflow of
increasing dependence on credit made production funds into savings accounts, which they then used
of newhousing and the cost ofbuying and to support their own growth and a large fraction of
occupying both new and used housing increasingly the expansion of mortgage credit. As the major
sensitive to the supply and cost of mortgage suppliers of housing funds, the thrifts were
money. No other major industry isas dependent on relatively insulated from the rest of the capital
borrowedfunds, andfor no other major consumption markets and not dramatically affected by economic
item is price as sensitive to interest rates. fluctuations. In the 1960s, however, conditions
The third problem with thenew mortgage changed, exposing the inherent flaw in the financial
system has arisen from the promotion of (debt- structure of thrift institutions, generating two
encumbered) homeownership as the essence of “the decades of instability and bringing forth another set
American Dream.” Following World War of transformations inthe housing finance system—
II, homeownership became more than ever the changes that overcame the weakness in the
mark of full citizenship, the essential symbol of structure of thrift institutions but not in the housing
status inAmerican society.However, withwider finance system's other problems.
accessibility of homeownership, the insecurity
andlow social status ofrenting became sharper: Problems in the Late 1960s3
Tenure became an increasingly defining part of the
great divide between the haves and have- nots, The onset of sustained inflation and intense
strongly correlated with race and marital status, and competition for credit inthe second half of the
1960s had profound implications for the housing a two-pronged strategy. The first component,
finance system. Prior to the 1960s, savings andloan whichwas largely put into place between 1968 and
associations (whichwerethe principal suppliers of 1970, involved the reconceptualization and
mortgage credit), mutual savings banksand other expansion of government- sponsored secondary
mortgage lenders had sufficient funds from savings mortgage market institutions. The second element,
deposits and mortgage repayments to meet the whichwas only fully implemented in the early
demandfor new mortgage loans. So government- 1980s, was deregulation of the financial system.
supported capital infusions through the Federal With these changes, the housing finance system
Home Loan Banks and the Federal National embarked onanew eraof enormous complexity that
Mortgage Association were only aminorpartof the served to channel more funds and profits into the
total supply of housing credit. In theearly 1960s, industry— but at a cost. Higherinterest rates for
though,asthe economy and housing construction mortgages, stimulation ofreal estate speculation
expanded sharply,middle-income households andhouse price inflation, and worsening economic
weresaving less and spending more. With growing instability were among the consequences of these
housing demand, but savings accounts not corre- changes in housing finance (McIntyre 1991;
spondingly expanding, S&Lsturned to borrowing MacDonald 1995, 1996).
from theFederal Home Loan Banks inorder to
provide the funds needed for making new mortgage Government-Sponsored Secondary Mortgage
loans. The Federal Home Loan Bank system, in Markets
turn, raised the necessary funds by selling
securities inthe national capital markets. Under the pressure of the times, lenders and policy
As credit competition intensified after the mid- makers became increasingly interested in
1960s, thrift institutions began to suffer from the expanding residential financing through secondary
imbalance causedby“borrowing short and lending mortgage markets, so as not to beas dependent on
long,” described above. In order to keep mortgage savings accounts for funds. Secondary mortgage
rates low, savings institutions were limited by markets provide a way for locally based
federal regulators inthe rate of interest that they originatorsof mortgage loans (primary lenders) to
could pay on savings accounts. As long as there sell off some mortgages instead of holding them in
was little inflation and other interest rates were also their own portfolios.4 This provides primary lenders
low, this posed no problem for thrifts. But in the with additional funds to makemore loans. The
tight-money period of 1966, wealthier households buyersof mortgages in secondary mortgage markets
diverted morethan $16 billion of their savings into are large institutions that seek the financialbenefits
other types of investments paying higher rates ofin- of mortgage lending but do not want to be bothered
terest; in 1969, they diverted nearly $35 billion with investigating the capabilities of borrowers and
from savings accounts (U.S. League of Savings appraising the values of the properties prior to
Associations 1979:11). This sudden withdrawal loans being made, nor with collecting mortgage
oflarge amounts of moneyfrom savings institutions payments after loans have been made. Secondary
is termed “disintermediation.” In order to raise market investors traditionally have included
money to offset deposit withdrawals, S&Ls turned insurance companies, large commercial banks,
increasingly to the Federal Home Loan Banks for pension funds and government- sponsored entities
capital advances, while other lenders sold off their (GSEs) like Fannie Mae.
FHA-insured and VA-guaranteed mortgages to In order to stimulate more secondary mortgage
Fannie Mae. Mortgage interest rates, which had market investing, the 1968 Housing Act provided
rarely exceeded 6 percent prior to the 1960s, the authority to privatize Fannie Mae over atwo-
surpassed this levelin 1966 andby 1970 reached yearperiod. By 1970, FannieMaewas to become a
nearly 8.5 percent (U.S. Savings and Loan League profit-making corporation, withits own board of
1972:41). directors and the authority to sell stock and issue
The weakening of the traditional, locally based securities. Fannie Mae was to remain subject to
housing finance system led mortgage lenders and some federal supervision and had financial
their supporters inthe federal government to launch privileges available only to federal agencies; for
86 Michael E. Stone
example, even though Fannie Mae securities would Bank system to purchase both conventional and
not be backed explicitly by the federal government, insuredmortgages fromS&Ls and other members
it was assumed that theU.S. Treasury would repay ofthe system (Tuck 1979:415). S&Ls had pushed
investors if ever Fannie Mae itself could not do so for creation oftheir own federally sponsored
(Tuck 1979:406-408; FNMA 1972). secondary market institution because historically
The 1968 act also created the Government most ofthe mortgages pur-
National Mortgage Association (GNMA, “Gin- chasedbyFannieMaehadbeen originated not by
nieMae”), a government agencywithinthe De- S&Ls but by mortgage companies. Unlike thrift
partment of Housing and Urban Development institutions and commercialbanks, mortgage
thatretained FannieMae'smore risky functions, such companieshave no depositors; theysell into the
as financing for subsidized housing. More secondary market every loan they originate and are
importantly, though, Ginnie Mae was authorized to not part ofthe Federal Home Loan Bank system.
provide the federal government's full financial Despite these major policy changes establishing
guarantee to mortgage-backed securities (MBSs) a greatly expanded framework for secondary
issuedbyprivate companiesholding mortgage market activity, thrift institutions
FHAandVAmortgages.Mortgage-backedsecurities continued to bethe dominant element of the
are like shares in a mutual fund. Groups residential mortgage system through the 1970s. At
ofmortgages are batched together into “pools.” theend of the decade, they still held more than one-
Buyers of securities inagiven pool of mortgages are half of all outstanding mortgage debt on one- to
entitled to a shareof the aggregated principal four-family houses andwell over one-third of
andinterest payments from all of the borrowers multifamily mortgage debt—nearly all ofit in long-
whose mortgages are inthe pool. Private investors term fixed- rate loans (U.S. League of Savings
inthese new Ginnie Mae securities would put up Associations 1981:26-27). Partof the reason for this
money that would be invested in mortgage loans, was that Freddie Mac got into operation very
and they would be guaranteed profitable slowly during the decade, and so it did not yet
repayment, first by the FHA/VA protection on the provide substantial newfundstothrift institutions
individual mortgages and second by the full faith through buying up older long-term mortgages in
and creditof the U.S. govern- menton the securities thrifts' portfolios.5
(Tuck 1979:408-409). The Push for Deregulation in the 1970s
The Emergency Home Finance Act of 1970
added the final ingredients in this expanded public- As mentioned above, inthe period of tight money
private secondary market framework. Until this and rising open-market interest rates during 1966,
point, Fannie Mae had been limited to purchasing higher-income households diverted billions of
government-backed FHA/VA mortgages, which dollars insavingstomore lucrative investments,
had been a large shareof mortgages inthe including savings accounts at commercial banks.
immediate postwar era(Stone 1993:107-108). By Commercial banks could attract savings deposits
the 1960s, however, that proportion had dropped because they made mostly short-term business and
significantly, mainly because the interest-rate construction loans and hence were not locked into
ceiling on these loans remained below themarket longterm fixed-rate sources of income as were the
rate for long-term uninsured mortgages. This led to thrifts with theirportfoliosoflow-interestmort-
pressure for a secondary mortgage market for gages. Although the interest rates the commercial
conventional mortgages so that lenders could sell banks could offer depositors on savings accounts
off some of their growing number of mortgages weresubject to regulation, the regulators raised the
lacking FHA or VA backing. The 1970 act rates with the market, so savings accounts at
authorized FannieMaetopurchase uninsured commercial banks were an attractive (and safe, due
mortgages meeting certain standards. to government deposit insurance) alternative to
In addition,the 1970 act created another sec- savings accounts at thrifts. As a result of the
ondary mortgage market agency, the Federal Home disintermediation problem that this created for
Loan Mortgage Corporation (FHLMC, known as thrift institutions, in 1966, federal regulators put
“Freddie Mac”), within the Federal Home Loan tighter controls on commercial bank interest rates,
setting rate ceilings slightly lower for commercial From 1980 until 1983, the United States ex-
banks than for thrifts, thereby giving thrifts a slight perienced a recession muchdeeper andlonger than
edge in obtaining and retaining deposits. However, that of themid-1970s—so severethat even
in order to keep mortgage interest rates down, the mainstream economists and business people
interest rate ceilings on saving accounts were calleditadepression. It was in fact a double
usually set below open-market rates for nonbank recession, as the 1980 economic decline was fol-
investments (Carron 1982:5). Evidence that this lowed by a slight expansion despite rising un-
new level of regulatory assistance did not solve the employment in 1981, which was followed by a full
thrifts' stability problem is revealed by the large- across-the-board drop in 1982. It was so severe that
scale withdrawals of savings deposits during 1969 all of the institutional changes of the late 1960s and
to 1970, noted above, and a further round early 1970s were not sufficient to protect the
ofdisintermediation during 1973 to 1975. Interest housing finance system from the devastatingly tight
rate ceilings may have protected thrifts from money and high interest rates. First, housing
commercialbank competition for thesavings of production collapsed— largely (but not entirely)
relatively wealthy households but not from the because construction interest rates rose to nearly 20
financial alternatives offeredbybroker- age houses, percent, while demand dried up with rising
corporations and the U.S. Treasury. unemployment and falling realincomes. Although
The intensified competition for savings and thenew financial mechanisms were helpful in
competitive disadvantage facedbyregulatedin- getting some high-cost money into housing, credit
stitutions like thrifts (and to a lesser degree availability was still part of the problem.6
commercial banks) inthenew era of inflation Furthermore, withlots of old lower-rate mortgages
accelerated a movement toward financialdereg- still on their books, the residential finance industry
ulation that had begun inthe late 1950s and as a whole suffered a severe earnings squeeze in
received a big boost inthe wake of the disinter- 1980. Andin 1981 and 1982, the industry
mediation crisis of 1969 to 1970 (Florida 1986:
209-212; Meyerson 1986:471). The argument was experienced its first operating losses since the
thatifinterest rates on savings accounts were not Great Depression (U.S. League of Savings Asso-
subject to government regulation, thrifts could ciations 1989:52). Due to insolvencies and merg-
offerwhatevercompetitive rates were necessary to ers, thenumber offederally insuredS&Ls, which had
attract and retain deposits. But the only wayin been nearly constant at about 4,000 from 1975
which thrifts could afford to offer higher rates to through 1980, declined 22 percent from 1980
savers would betoraise mortgage interest rates through 1983 (U.S. League of Savings As-
because mortgage payments were, of course, their sociations 1989:47; Carron 1986:211ff.).
primarysource ofincome. Thus, deregulation had The crisis of the thrifts, together with depressed
the potential to help depository institutions but earnings of commercial banks and the weak
could have dire consequences for housing international position of the dollar, overwhelmed
affordability. remaining resistance to financial deregulation. In
Three major deregulation bills were introduced 1980, the Depository Institutions Deregulation and
into Congress in the mid-1970s but were not Monetary Control Act
enacted due to successful opposition from small (DIDMCA)waspassed,providing,amongother
financial institutions—fearing that they would be things, for phased decontrol of interest rates on
swallowed up—and real estate interests—fearing deposits and permission for thrifts to diversify
greater competition for credit and higher interest gradually out of mortgages (Florida 1986:217218;
rates (Florida 1986:212213). However, the Vartanian 1986:141; Fraser 1986:243ff). The
momentum was clearly toward deregulation— provisions of DIDMCA were too gradual to have
althoughittook theeco- nomiccollapse ofthe early much immediate impact on thethrift crisis,
1980s to bring about enactment of the necessary however. Also, Federal Home Loan Bank Board
legislation. advances ofnearly$60 billion a yearwere no
morethan stopgaps. As well,the Reagan Ad-
The Triumph of Deregulation in the 1980s ministration had little inclination to provide special
88 Michael E. Stone
assistance to housing finance (Florida 1986:219- taxpayers.

220). The continuing crisisandlong- developing Some thrifts responded to the phase-out of
deregulation agenda thus led to a ceilings on the rates that they could payfor deposits
secondlandmarkfinancialderegulationlaw,the Garn- by competing aggressively for funds; they then put
St. Germain Act of 1982. The law accelerated and the moneyinto highlyspeculative projects inorder to
expanded the process inthe following ways: paythe highrates and make profits. These
movingquicklytoward eliminating restrictions on institutions were quite successful at attracting “hot
the interest rates that institutions could offer money” depositors, wealthy investors who sought
depositors; facilitating variable-rate mortgages, big returns yet were pro-
with interest rates that go up and down with the tectedbyfederaldepositinsurance.Byandlarge, these
rates paid to attract deposits; allowing thrifts to were the thrifts that ended up collapsing
diversify into all sorts of nonhousing investments; inthenextandbigger crisis ofthe late 1980s—at
permitting conversion of mutually owned (i.e., public expense. Most thrifts did not so actively
depositor-owned) thrifts to stock pursue deposits inthis way but instead filled the
ownership;andproviding emergencyfi- nancial gapbetween their deposits and their desire to invest
assistance to distressedS&Ls (Meyerson 1986:467- by borrowing from theFederal Home Loan
469; Vartanian 1986:147ff).7 Banks.FHLBadvances,whichhadhelpedtosus- tain
With deregulation, many thrift institutions the savings institutions through the tight
moved aggressivelyinto alternative investments. moneyperiods of 1970, 1974 to 1975 and 1980 to
Many others remained active in housing finance, 1982, actually tripled in the 1982 to 1988 period,
but more as mortgage bankers—for instance, growing to nearly $300 billion, or 22 percent of
originating loans that were immediately sold to thrift liabilities (U.S. League ofSavings
secondary market institutions, buying mortgage- Associations 1989:50).8 That is, while deregulation
backed securities and swapping old mortgages for meant that thrifts werenolongerre- quired to
mortgage-backed securities. In 1970, 86 percent of provide moderate-rate mortgages for middle-
the assets offederally insured thrifts were inthe income homeownership, it did not mean that they
formofmortgage loans. In 1979, mortgages were gave up government protection: They still had the
still 82 percent of assets but thereafter dropped security of federal deposit insurance and Federal
below 80 percent Home Loan Bank advances.
andkeptdeclining,reaching54percentby1988. The
thrifts' fastest growing class of assets be- Mortgage Lending in the 1980s
camemortgage-backedsecurities,growingfrom less
than 4 percent at theend of the 1970s to nearly 16 In the broad financial explosion that began after
percent by 1988. Nonmortgage loans and other 1982, residential mortgage lending managed to
assets (including direct equitypartici- hold its own. With savings institutions moving
pationinrealestate but excluding cash and non- away from their traditional role as originators of
housing investment securities) grewfrom about 6 residential mortgages for their own portfolios and
percent at theend ofthe 1970s to over 16 percent by into mortgage banking and nonmortgage investing,
1988 (U.S. League of Savings Associations all sorts of other financial and nonfinancial
1989:49). Furthermore, during the 1980s, over 40 companies got into the business of originating
percent of mortgage loans for the purchase mortgage loans—the so-called primary mortgage
ofsingle-family homes had adjustable instead of market (Guttentag 1984:243247; Kane 1986:266).
fixed rates, including about 60 percent in 1984 and As thrifts themselves and
1988 (U.S.Office ofThrift Supervision 1989:D- theseotherinstitutionssoughttoturnoverthese loans
1).Thatis,bythe mid-1980s,thefi- nancialimbalance and obtain new funds for profitable lending,
ofthethrifts had largely been eliminated, in part federally sponsored housing credit grew
because they were diversifying out ofprimary exponentially, and the government-sponsored
residential lending, but even more because they secondary mortgage market institutions (Fan-
were passing many of the risks oflending onto nieMae,FreddieMac,GinnieMae)became the
borrowers, other investors and, as we shall see, principal sources of housing finance. In 1986,
thriftinstitutionsyieldedtheircentury-longrole as the The Savings and Loan Crisis and Bailout

dominant providers of home-mortgage credit, when
for thefirst time the residential mortgage As the 1980s drew to a close, hundredsof thrifts
debtheldbyfederallysupported agencies (directly) collapsed because they had invested in speculative
and their mortgage pools (indirectly) exceeded the land development projects and high-risk junk
totalheld by S&Ls and savings banks(U.S. League bonds that did not yield their promised high profits,
ofSavings Associations 1989 : 29). whichhadbeen the basis for offering very high
Of the federallysponsored secondary-market interest rates on savings accounts and certificates
institutions, Freddie Mac grew rapidly during the ofdeposit. Because these institutions nowhad on
1980s. Acting as a true secondary-market agency, it their books large volumes of nonperforming and
retained only a small portion of the mortgages that even worthless assets, not only could they not pay
it bought; it aggregated the rest into pools and high interest rates, they could not even return the
issued mortgage-backed securities against these deposits themselves to the unhappy savers who
pools, thereby bringing other investors into wanted their money back. The institutions were
theworldofhousingfinance.Fan- nie Mae, by insolvent, and as members of the Federal Home
contrast, continued its traditional role as buyer of Loan BankSystem, they were taken over by the
insured mortgages forits own portfolio during this FederalSavings andLoan Insurance Corporation
period while also taking on anewrole (FSLIC). Because the savings accounts were
inthe1980sasanissuer of mortgage- backed insured, FSLIC had to pay off the
securities. Fannie Mae's total contribu- depositorsanditself soon ran out offunds. The crisis
tiontotheresidentialfinancesystemwasslightly revealed all too clearly that deregulation had not
greater than that of FreddieMacbut grew more only failed to provide much help to the housing
slowly and involved somewhat less activity in industry; it had even failed to save much of the
mortgage-backed securities. Finally,thevolume of thrift industry.
privately issued securities backed by pools of In 1988, the S&L collapse became a source of
FHA/VA mortgages and guaranteed by Ginnie Mae daily headlines, but there was little action from the
grew at the fastest pace of all, since these MBSs Reagan Administration. Congress also moved
had the lowest risk, due to federal guarantees, as gingerly, as it too had enthusiastically
explained above.9 backedderegulation, and many membersof the
A vast array of new programs, institutions and banking committees had benefited from financial
techniques werethus created andput into placetotap industry ties and campaign contributions. With
the national andinternational capital markets for FSLIC insolvent anddemands being made for
housing, both directly andin- directly, and to general appropriations to pay off depositors,
provide thrift institutions with Congress finally began to move (U.S. General
moreflexibleassetandliabilitystructures.Inad- dition Accounting Office 1988a, 1988b), and soon af-
to financial deregulation and expansion terhis inauguration,PresidentBush(senior)an-
offederallysponsored secondarymortgage markets, nounced his bailout plan (White House 1989).
many state and some local governments also The S&L bailout legislation was debated for six
soughttodrawfunds for housing from the national months, with most attention devoted to questions
capital markets by creating housing finance ofwho would pay and how. Finally, on August 6,
agencies and issuing mortgage revenue bonds. 10 1989, theFinancial Institutions Reform,
Also, deregulation led many types of financial Recovery,andEnforcement Act (FIRREA) was
entities to become involved in housing finance, signed (Hershey 1989; Barth and Wiest 1989:1).
even outsideof thegovernment- sponsored agencies, The law's most significant feature was that most of
through the creation of sophisticated mortgage- the hundreds of billions of dollars for the bailout of
backed securities sold to wealthy private investors (mostly wealthy) depositors at failed thrifts would
and institutions. Even the commodities markets be paid for by the public through our taxes.
became involved, setting up mortgage “futures” FIRREAalso essentially eliminated the 55-year-old
trading to enable hedging and speculation in Federal Home Loan Bank system through the
mortgage interest rates. following changes: FSLIC was dissolved, and
90 Michael E. Stone
deposit insurance for thrifts was placed within the withinthe failedinstitu- tions, much of the deposit
solvent but shaky Fed- eralDeposit Insurance funds were in large “hot-money” accounts, so
Corporation (FDIC); the independent Federal taxpayers were forced to bail out depositors far
Home Loan Bank Board was replaced by an Office wealthier, on average, than themselves (Gosselin
of Thrift Supervision (OTS) within the Treasury 1990b). This massive two-level process of
Department; the regional Home Loan Banks, redistribution has only exacerbated widening
owned by member thrifts, were allowed to economic inequality.11
continue, but all regulatory functions were placed
directly within the federal government. The law The Illusion of Stability in the 1990s
established newrestrictions on thrift institutions
and gave regulators stronger enforcement powers; At the end of the 1980s, the economy spiraled into
as well, it mandatedsomesmall- anotherdeeprecession. It was the inevitable result of
scalemeasurestosupport slightly below-market the immense gap that had developed between
housing (Barth and Wiest 1989; Low Income soaring speculative values and mountains of debt
Housing Information Service 1989). It was all, of on one side and stagnant household incomes and
course, much too little and much too late. the underlying weaknesses of the U.S. economy on
The estimated cost of the S&L bailout con- the other. The official unemployment rate rose to
tinued to rise after FIRREA was passed, doubling about 7 percent by 1991, but the real impact was
by thespring of 1990 to an estimated $325 to $500 far worse, as millions of people gave up looking for
billion over a 10-year period (Gosselin 1990a). The work and therefore stopped being counted in the
S&L scandal generated understandable public official unemployment rate. The federal deficit
anger about the fraud, politicalpayoffs, lax jumped to $220 billion in FY1990, and then to
oversightand costs to the taxpayers but too often anewhigh of $270 billion in FY1991, as gov-
missed the deeper and longer-term roots of the ernment tax revenues plummeted with the re-
crisis. As we have seen, the processes of cession(U.S.Office ofManagement and Budget
deregulation and resulting chaos represented the 1992). In 1991, assets offailed banks (commercial
response to very real weaknesses inthe housing banks and thrifts) set a record as well—$64 billion
finance system—the contradiction between —and another record of over $100 billion in 1992,
providing long-term mortgages with relatively low as more big bankscollapsed under the weight of
and fixed rates, and the need to offer high rates on nonperforming real estate loans. Continuing
savings accounts to attract funds to lend. It was a bankfailures ofthis magnitude sent
bad response, but it was to a very real problem theFederalDeposit Insurance Corporation into
rooted ultimately inthe inability of U.S. capitalism bankruptcy by late 1991; it was itselfbailed out
to solve the problem ofhousing affordability only with new taxpayer-backed borrowing au-
through asystem of profit-driven mortgage-debt thority (Skidmore 1991).
financing, which inevitably passes much of the The recovery from the early 1990s' recession
costs and risks of financial instability and was much slower than in previous cycles, with
insecurity onto housing consumers and the housing/real estate/banking problems andfederal
government. budget deficits as major drags on growth during
Furthermore, the public bailout itself proved thefirst half of the decade. From 1992 through
highly inefficient and inequitable (Campen 1991). 1994, the economy grew at an average rate ofless
Considerable attention was focused on the regional than 3 percent a year,about one-half the rate of
redistribution of wealth resulting from the bailout, other recoveries over the past half- century.In the
from theNortheast and Northwest to the Southwest, second halfofthe decade,growth did accelerate,
especially Texas (Bailey 1990). Less attention was averaging 3.7 percent a yearfrom 1995 through
focused on the upward redistribution of wealth: 1999, but even this was modest by historical
This involved, at the first level, the hundreds of standards (Henwood 1999). Furthermore,
billions of dollars lent to developers, economicgrowthduring that decade was associated
speculatorsand financial manipulatorsthat will with the lowest rate of investment in real
neverbe repaid by them; but at the secondlevel, productive capacity and the highest rate of
investment in financial assets—the Wall Street typeof security, called collateralized mortgage
mania and debt-financed housing and consumer obligations (CMOs), backed by these securities.
spending binge—ofthe pastfive decades (Henwood CMOs, which had first been introduced by
1999; Moseley 1999). FreddieMacin 1984, divide the expected interest
Yet the economic expansion of the 1990s and payments and principal repayments from pools
early 2000s was the longest on record, facilitated ofmortgages into slices called“tranches.” Each
by remarkably low interest rates and low inflation, typeof CMO, which is very much like a bond,
even though the official unemployment rate fell to corresponds to a particular tranch; each has a
6 percent inthe fall of 1994 andbelow 5 percent unique combination ofinterest rate, term to
inthemiddleof1997 through the start of thenew maturity, rate ofrepayment ofprinci- pal andrisk.
millennium. How was this possible? The Because different kindsofinvestors have different
answeristobe foundin increasing economic financial goals, tax situations and tolerance for risk,
insecurity that kept wage pressures the diversity of CMOs has opened uphousing
downandwidenedincome inequality (see Chapter 1; finance to a whole array of wealthy individual and
see also Henwood 1999, placing U.S. inequality in institutional investors, including pension funds,
an international context). Associated with what was insurance companies, banksand Wall Street firms
occurring inthe labor market, government social themselves (Benson 1996; Lea 1996:167).
spending continued to be cut drastically: On the The marketfor these sophisticated mortgage-
one hand, budget cuts exacerbated the deterioration backed securities is, however, quite complexand
of living conditions for those at the bottom; on the unregulated,and even elaborate computer models
other hand, tight spending andrising revenues cannot anticipate all the possible risks. Thus,
caused steady reductions in federalbudget deficits inthemid-1990s,whentheeconomyandmort- gage
and by late inthe decade turned into surpluses, interest rates did not behave as predicted, there was
thereby limiting competition for creditandhelping chaos intheMBS markets. With the economy
to keep interest rates down. Furthermore, recovering slowly early inthe decade, mortgage
weaknesses inthe economies of most other nations rates dropped below 8 percent at the beginning of
meant that imported goods were relatively cheap, 1993 andbelow 7 percent briefly at the end of the
facilitating highrates ofconsumer spending with year (FHLMC 1999), triggering a rash of mortgage
low inflation inthe United States. refinancings by homeowners. In turn, this led
Housing finance was deeply enmeshed in toagreaterrate ofprepayments ofmortgage-
thecourse of the economy during the 1990s. While backedsecuritiesthanhadbeenan- ticipated. Then, in
the mortgage-backed securities (MBSs) market 1994, economic growth accelerated, leading to
hadbeen fully developed by the end of the 1980s, concerns about inflation, causing mortgage rates to
economic conditions of the 1990s brought the full climb to over 9 percentin late 1994 and early
fruition of MBSs, resulting in even 1995(FHLMC 1999). While suchhigherrates would
greaterintegration ofhousingfinance with the global have been attractive to investors buying newly
capital markets. In the early 1990s, new computer- issued MBSs, pessimism regarding inflation and
based techniques of investment analysis mated with potential reduction in mortgage demand from
relatively low interest rates andhighhousing consumers, as well as declining market values
demand to spawnacomplex array of attractive forpreviously
mortgage-backed securities. During the period issuedMBSs,ledtheMBSmarkettodryup.Sud- denly,
from 1991 through 1993, interest rates on MBSs lots of investors were trying to bail out. There was
were higher than corporate and Treasury bonds and a liquidity crisis in the market when buyers could
seemed virtually riskfree, due to the explicit not be found,and many investors sustained
government guarantee on Ginnie Mae securities substantial losses. What should have been obvious,
andimplicit guarantee but perhaps did not get much attention from
onFannieMaeandFreddieMacsecurities.Inre- promoters and high-flying investors, isthat
sponse, many major investment houses bought government backing associated with MBSs issued
MBSs issued by these government-sponsored by GSEs only protects investors against losses due
entities and then issued andpromoted another to homeowners not paying their mortgages, not
92 Michael E. Stone
fluctuations inthe market value of MBSs resulting SOME IMPLICATIONS OF THE NEW
from interest rate fluctuations inthecapital markets. HOUSING FINANCESYSTEM
So what hadlookedlikeverysafe,high-
yieldinvestments turned out to be almost like Over the entire postwar period, housing has
junkbonds in terms of risk (Benson 1996:62-64). beenthelargestsingleuserofcredit,butsincethe late
Eventually, after severalyearsoflower andrelatively 1970s, it has only been through thenew financing
stable mortgage rates, theMBS market recovered instruments andinstitutions that housing has been
but was no longer as profitableor as exuberant. able to compete effectively and obtain a large share
Thisex- perience reveals how very sensitive to of available credit. This, inturn, has come about
interest rates the housing finance system remains only because theU.S. Treasury has provided direct
and how unanticipated behavior by consumers can orimplicit backing for so much of the net increase
be transmitted to the capital markets. in residential mortgage lending.Inthe 1980s, almost
Whilethe discussion hereandin most of the 56 percent of the net increase in residential
literature has focused on the development of the mortgage debt was financed through
secondary mortgage market institutions and fi- FannieMae,Freddie Mac, Ginnie Mae and
nancing vehicles, the 1990s were also a period of theFederal Home Loan Banks, andinthe 1990s,
continuing changes at the “retail” primary market nearly 72 percent. In terms ofpotential obligations
where residential mortgages are originated and on theU.S.Trea- sury, this means that by theend of
serviced. By the late 1990s, mortgage banking 2002, federally sponsored housing credit accounted
companies (which, as notedpreviously, have no for nearly 50 percent of the federal government's
depositors and sell into the secondary market total publicly held liabilities (direct plus spon-
everyloan they originate) accountedfor 56 percent soreddebt) compared with less than 5 percent in
of all residential mortgage originations, an increase 1970, 22 percent in 1980 and 33 percent in 1990
from 35 percent of themarket in 1990 (Lereah (see Federal Reserve System 2003:Tables L-1, L-
1997; Averyet al. 1999). This is a highly 126; Stone 1993:Table 5.1).
competitive business that operates on thin profit The changes in mortgage financing that began
margins; it depends heavily on information inthe late 1960s had contradictory results. They did
technology to be able to profit from small, short- give a substantial boost to real growth inthe
term fluctuations in interest rates. This shift and the economybeforeand after the 1973to 1975, 1980 to
related consolidation of the bankingindustryhas 1982 and 1990 to 1992 recessions, but also gave a
raisedquestions aboutthe boost to theunprecedentedinflation ofthe 1970s and
responsivenessoftheconventionalmortgagein- theoverblowncredit bubbles of the past three
dustryto the needs oflow-income and minority decades. Thenew mortgage institutions, especially
borrowers and neighborhoods.12 the federally created andfed- erally backed
In addition, the servicing of residential agencies, have intensified compe-
mortgages—collecting and processing the pay- titionforcredit,whichledtoevenhigherinterest rates
ments of interest and principal as well as property throughout the system until the 1990s. Therefore,
tax and insurance escrows—has evolved into a the attempts of mortgage lenders to compete more
separate, specialized andhighly concentrated effectively forfunds have been relatively successful
business. As of theend of 1998, 25 so- called mega- but at a real cost. Most directly, for a long time, the
servicers held 47 percent of the market. Because higher costs were inthe form ofhigher mortgage
their portfolios are nationalin scope, theylack the interest rates. During the 1990s, nominal mortgage
firsthand knowledge and flexibility to anticipate interest rates fell to their lowest levels since the
and respond sensitively to local economic mid- 1960s—because ofwhat was happening with
conditions and individual borrower circumstances. the labor market, government spending and the
This raises questions about their capacity to handle global economy, as discussed previously—
mortgage delinquency and foreclosure problems at contributing to the boom in mortgage borrowing
a distance and across the country inthe event of and lending. Taking into account the low rate
asharp economic downturn (Lereah 1999). ofinflation throughout most ofthe decade, inflation-
adjusted mortgage interest rates were
actuallyconsiderablyhigher inthe 1 990s than in the ofnewsingle-family houses rose 32 percent more
1970s, but nonetheless, theywere wellbelow the than the Consumer Price Index (CPI), while the
rates during most ofthe 1980s. median price ofex- isting single-familyhouses rose
In short, residential finance is no longer a 39 percentmore than the CPI. But how much of this
relatively separate and insulated component of the consists of speculative increases inthemarket values
credit system. Housing finance has become almost ofthe same or similar houses, andhow much repre-
fully integrated with the national and international sents a shift toward bigger, more costly houses?
capital markets (see, for example, Hendershott and During the 1970s, there were ups and downs in
Van Order 1989; McIntyre 1991; Weicher 1994). real (i.e., inflation-adjusted) average con-
But what difference have these changes made for structioncosts for single-familyhousesbutonly a
housing affordability and the willingness and slight upward trend toward larger houses. By
ability of the prevailing institutions to meet the contrast, during the 1980s, there was a dramatic
housing needsof all Americans? The following rising trendinthe inflation-adjusted construction
sections examine how several major aspects of cost of new single-family housing— indicating a
housing affordability have been impacted by the historical shift over the decade
evolution of the finance system: First, new towardmoreextravagantnewhousesthatcorre-
construction has moved toward larger and more sponds to and exacerbates the affordability im-
expensive houses, as widening income inequality plications of growing income inequality. From
and mortgage standardization have shifted moreof 1990 to 1991, the recession brought a dip of 5
the housing market to higher-income households. percent inaverage real construction costs, fol-
Second, for the same reasons, homeownership lowedbyaclimbback to the previous level by mid-
declined for a while as moderate- and middle- decade and then a surge to new heights of about
income families foundit harder to af- $150,000 a unit in 1997 and 1998. 13 The average
fordhomesbutthenturnedupagainduetonew, riskier real construction cost of anew single-family house
lending programs and changing demographics. in 1998 was about 50 percent higher than it would
Third, the long-term changes andre- cent measures have been if houses similar to those from the late
to supportand expand mortgage lending have 1960s through the late 1970s hadbeen built. Since
created financial stress forhouse- holds, most middleincome households have seen little increase
especially for borrowers of modest income. in their realincomes, it has not been as profitable
Andfourth,the enormous growth of profit- fordeveloperstobuild housing for them. High-
motivated, government-sponsored secondary income households have experienced substan-
mortgage market enterprises (GSEs)has led to tialincreases intheir realincomes, so more luxurious
institutional arrogance,with great risks for and costly housing for them has been a growing
taxpayersand financial markets as well as for the share of new single-family housing.
institutions themselves. For new multifamily housing, changes inav-
erage realper unit construction cost have been
The Trend Toward Bigger, More Costly Houses morecomplex.Inthe recession of the early 1970s,
multifamily construction dropped precipitously,
The abundance of mortgage credit in recent and with it, the average construction cost of anew
decades has fueled accelerating turnover of houses unit fell to about $50,000 (in 1998 dollars), where
and increases in house prices. Until the mid-1970s, it remained until the late 1970s. Thereafter,through
about three existing single-family houses weresold twocycles of the economy,the inflation-adjusted
for every new one sold;since then, the ratio has cost rose over 70 percent, to a peak of nearly
risen to morethan five to one (U.S. Department of $86,000 (1998 dollars) in the early 1990s, before
Housing and Urban Development 2003). On dipping and settling at about $74,000 from themid-
average, prices of singlefamilyhouses have 1990s on. As with single-family housing, this trend
fluctuated with the economy but over the long term is indicative of the shift to construction forhigh-
have risen considerably more than inflation. Over incomehouseholds—inthe formofcondomini- ums
the 30 years from the highpoint of the late 1960s andluxury rentals.
through theend of the 1990s,the medianprice Theaffordabilityimplicationsof this analysis are
94 Michael E. Stone
fairly apparent. Development of newhousing is 1999:Table 29).Given thecontinuedideological and

responding to and reinforcing widening income economic bias toward homeownership (see Dean
inequality.Asa largerproportion of new housing is 1945; Rakoff 1977; Weicher 1994; Hughes
produced for higher-income households, people 1996;BersonandNeely1997),thiswasaremark- able
with more modest incomes compete for the historical shift. To a considerable extent, the
available supply of less luxurious olderhousing. decline in homeownership certainly was due to
This drives the prices and rents of older houses widening income inequality, the shift in housing
higher than they likely would be if a broader construction to the higher-income/higher- cost
spectrum of new housing were being produced. market and high interest rates. It was also due,
The result isthat in some locales even relatively though, to the changes inthe housing finance
modest housing is becoming less system. As noted earlier, the standardization
affordableandhence ismoving up the income requiredfor mortgages to bemarketable in the
distribution interms ofwho can buy andrent it. secondary mortgage markets, especially as imposed
Whilethese patterns are, to a considerable by the “duopoly” of Fannie Mae and Freddie Mac
extent, explained by widening income inequal- (Weicher 1994; see also McIntyre 1991), means
ity,the restructuring of mortgage markets is also an that local mortgage originatorsno longer have had
important part of the story. In order to minimize flexibility to make allowances for prospective
risks and transaction costs, secondary mortgage borrowers whose incomes, assets, debts and/or
market institutions would buy only highly credit histories are less than sterling (see also
standardized mortgages free of complexity or Chapter 12).
potential problems—at least until the 1990s, when Then, beginning in 1995, after a decadeand a
some special lending programs werecreated half of decline and stagnation, the homeownership
(discussed below). As MacDonald has put it rate began climbing again, reaching a new record
(1996:1184): “Underwriting guidelines established rate of 68 percent in 2002 (U.S. Department of
at the national rather than the local level were HUD 2003:Table 27). What happened? Was it just
aimed at filtering out borrowers and properties that the fruits oflowinflation andlow unemployment
posed higher (or unidentifiable) default risks, inor- eventually ripening? Not entirely. In large measure,
der to support the price MBSs would attract the expansion of homeownership inthe 1990s was
inthecapital markets.” These policies hadim- pacts the result of deliberate reactive andpre-emptive
on lending for multifamily rentalhousing as well as publicandprivate initiatives. First, advocacy groups,
single-family owner-occupied houses (MacDonald using data produced pursuant to the Home
1996:1185-1190). Thus, the shift to higher-end Mortgage Disclosure Act (HMDA) and lending
housing production is not only due to developers requirements of the Community Reinvestment Act
directly pursuing housing consumers with the most (CRA), became increasingly skilled and successful
money. It also reflects the kinds of projects for at getting primary lenderstoincrease mortgage lend-
which developers could most readily obtain ing to communities and households of color and/or
financing from primary lenders who wanted to low income (see, for example, Squires 1992;
beable place the mortgages expeditiously and Schwartz 1998; Avery, Bostic and Canner 2000).
profitably inthe secondary mortgage markets. Second, inthe wake of the S&L deba- cleof the
1980s, as well as in response to community
Housing Finance and Homeownership Trends advocacy, the Federal Housing Enterprises
Financial Safety and Soundness Act of 1992
The U.S. homeownership rate climbed steadily directed HUD to establish and monitor annual
fromthelate 1940suntil1980,whenitreacheda goals for Fannie Mae and Freddie Mac to purchase
recordlevelof65.8percent.Then,inthefirsthalf of the low- to moderate-income mortgages (Canner and
1980s, it declined steadily to 63.8 percent in 1986, Passmore 1995; MacDonald 1995, 1996; Eggers
the lowest level since the mid-1960s, and Burke 1996). Third, mortgage
andforthenextdecade,through 1994,remained activitybylenders providing subprime and
almostunchangedatabout64percent(U.S.De- manufactured home financing has accounted for a
partment of Housing and Urban Development growing share of all home purchase lending, but
most especially to low-income and minority little more than two percentage points since the
borrowers and neighborhoods (see Canner, early 1980s, while that of whites rose over five
Passmore and Laderman 1999).14 Finally, percentage points.
ideological support for expanding homeownership, Although lower incomes anddiscrimination by
especially among people of color, and more lenders certainly account for lower rates of
generally those of lower income, was provided by homeownership among households of color, these
the Clinton Administration beginning in 1995 factors do not fully account for thesub- stantial
(Berson and Neely 1997) and was continued by the declines in homeownershiprates among such
administration of George W. Bush, in keeping with households inthe 1980s. The standardization of
both presidents' records of rhetorical declarations mortgage underwriting imposedby FannieMaeand
of expanding opportunity despite substantive ac- FreddieMac,which eliminated flexibility in dealing
tions in housing and other areas that deepened with applicants whose income and/or credit
inequality. histories did not quite meet the standardized
With the conjuncture of these initiatives and criteria, most certainly had the effect of narrowing
favorable macroeconomic conditions, the major home-buying opportunities for households of
demographic components of the increase in the colorinthat period. By the same token, the increase
overall homeownership rate since the mid- 1990s in homeownership among peopleof color since the
can be examined in relation to the decreases inthe 1990s is disproportionately attributable to the
1980s and early 1990s. Among Black non- specially targeted mortgage programs and subprime
Hispanics, the homeownership rate first lending ofthe recent decade, even thoughlower-
decreasedfrom 46 percent intheearly 1980s to 42 income whitehouseholdshavealso
percent in 1989, changed little through 1993 and beenamongthepar- ticipants.
then increased to 48 percent by 2002. Among other The advent ofspecially targeted lending pro-
non-Hispanic householdsof color (mostly Asians, grams, as a way of offsetting some of thecon-
although the data do not separate Asians and sequences of mortgage standardization, does,
Native Americans), the homeownership rate however, suggest a disproportionate distribution
dropped from 53 percent in the early 1980s to ofrisk. These programs generally involve very
under 49 percent in 1987 and remained at around lowdown payments, which, studies suggest,
50 percent through the mid-1990s before rising to isastrong predictor of the likelihood of mortgage
55 percent by 2002. Among Latinos, default(Weicher 1994:60). Perhaps
homeownership declined from a little over 41 surprisingly,borrowerincome is notstronglyre- lated
percent intheearly 1980s to 39 percent in 1991. to loan performance, although triggering events
Thereafter, it rose fairly steadily to 48 percent by like job loss certainly are significant (Av-
2002. Among white non-Hispanics, eryetal.1996).Someinstitutionswithso-called
homeownership dipped slightly from 69 percent in “affordable” home-lending programs have reported
1983 to a bit over 68 percent in 1986 andhas that such programs do involve higher costs of
climbed ever since, even during theearly 1990s origination and servicing in contrast with
recession, to 74.5 percent in 2002 (U.S. conventional lending but not significantly higher
Department of Housing and Urban Development default rates if flexible acceptance criteria are
2003:Table 29). Clearly, the decline in applied carefully and ifthere is counseling and
homeownership was overwhelmingly borne by education ofborrowers.
people of color, not by whites. Yet the more recent On the other hand, early quantitative analyses
increase in homeownership rates has been nearly as of“affordable” lending by secondary mortgage
great among whites as among peopleof color. market institutions and private mortgage insurers
Although the changing homeownership rates do suggest somewhat higher rates of delinquency
forLatinos and Asians includethe impacts of high and default than those found in conventional
rates of immigration (most recent immigrants being lending. For example, a study of delinquency rates
renters), the contrast between Black non-Hispanics wherethe borrower madea 3 percent down payment
and whites is not explicable inthis way: The and anotherpartypaid
homeownership rate forBlacks had a net increase of theremaining2percentfoundratessignificantly higher
96 Michael E. Stone
than where the borrower put down the full 5 themselves reveal the burden ofdebt payments,
percent (Avery et al. 1996). The Freddie Mac which depend on interest rates andloan terms, not
experience with specialprograms that have looser just amount ofdebt; and aggregate statistics do not
underwriting standards has been that the loans reveal the distribution of debt burdens
show significantly higher default and foreclosure amongdifferenthouseholds. Estimates of actual
rates, especially on loans that have only 2 percent debtpayments in relation to disposable personal
downandwherethe bank often pays even this income show a cyclical variation, rising during
amount (Schnare 1996). Advocacy groups that periods of economic expansion and declining
have negotiated agreements with large banks to during recessions. In theearly 1990s, debt payments
channel mortgage loans through them, such as rose little, on average, despite rising debt:income
theNeighborhood Assistance Corporation ratios, because offalling interest rates
ofAmerica (NACA), have had great success at (Canner,Kennickell andLuckett 1 995:324325) .
facilitating homeownership for thousands Behind the cyclicalpattern, however,there has been
ofmoderate-income and minority borrowers but an upward trendin payments as households have
arealso being criticized for putting some people increased their debt in relation to income (Edelberg
into untenable financial situations. While most and Fisher 1997).
groups refuse to divulge their default rates, Disaggregateddata from the Surveysof Con-
mortgage industry officials estimate that the sumer Finances conducted by the Federal Re-
delinquency rate on NACA mortgages through serveBoardrevealsignificantdifferencesamong
Fleet Bank exceeds10per- cent compared with income groups inthe burdens and risks of debt
about 7 percent for other targeted Fleet mortgages overload. High-income households owe mostof the
and about 2 to 3 percent for conventional debt, but suchhouseholds(those with an-
mortgages (Browning 1999). Comparing the nualincomes of $100,000 or more) have a median
current programs with the abuses ratio ofdebtpayments to income (for mortgage
ofFHAhomeownership programs in theearly 1970s andhome equitydebt) farlower than for all
that resultedin widespreadfore- closures and otherincome groups. Through the 1980s, pay-
neighborhood destruction, Ann Schnare, Freddie ment:income ratios rose for all income groups, but
Mac vice president for Housing Economics, has since the late 1980s (according to Canner,
declared: “In my opinion, it is bad public policy to DurkinandLuckett 1999) or early 1990s (according
put individuals into houses they cannot afford to to Edelberg and Fisher 1997), the ratio has
support” (Schnare 1996 : 177). declined, on average, for higher-income households
but continued to rise forlower-and middle-income
Household Debt Burdens and Mortgage Stress households. Also, while households withincomes
of $50,000 to $100,000 have had the highest
Whileagreat deal ofattention has been focused on median ratio of housing debt payments to income,
the inability ofyoung families to buy their first the biggest increases inthe ratios since the late
home, the preceding discussion suggests 1980s have been among households with incomes
thatthemoreseriousproblemofhomeowneraf- under $25,000. Furthermore, in 1998, about one-
fordability is with the people who have bought fourth of all families with incomes of under
homes but are finding it harder and harder to $50,000 had total debt payments of more than 40
keepuptheirmortgagepayments.Thisisaprob- lem percent of their incomes compared with just 2
exacerbatedbyhome equityborrowing and, to some percent of those with incomes of $100,000 or more
extent, by refinancing that results in (Kennickell, Starr-McCluer and Surette 2000:Table
higherdebtburdens (see, for example, Cannner, 14). In 2001, 13.4 percent offamilies inthe lowest
Durkin and Luckett 1999; Brady et al. 2000; quintile of income haddebt payments that
Bradford 2002; Canner, Dynan and Passmore were60daysor more past due compared with 10.2
2002). percent of such families in 1995 (Aizcorbe,
Aggregate statistics on mortgage and con- Kennickell and Moore 2003:Table 14). Many of
sumerdebt in relation to disposable income are these families have taken on andbeen encouraged
suggestive ofpotential debt stress but do not in to assume high debt loads inorder to achieve
theAmerican Dream ofhomeownership, but at

what risk?
Among those expressing concern about the
dangersofrisingdebtburdensforlower-income
households has been the chief economist of the
Mortgage Bankers Association, amidst hisoth-
erwise broadly bullish comments on themortgage
industry (Lereah 1997, 1998, 1999). Some ofhis
comments are worth quoting (1999:5):
Bringing attention to these potential problems

isthe fact that the share of loans with loan-to-
value ratios greater than 90 percent has risen
substantially during the past five years(toabout 25
percent). This places greater burden on the quality
of loan portfolios in a period ofde- teriorating
economic performance. And if and when the
economy turns down, the first group to be hit with
lost jobs and unreliable wages will bethe lower-
income group. According to recent income and
debt data, the debt burden of low-income
households relative to higher- income households
is rising. If the economy falters, clearly many
households that are at the margin in terms of their
abilities to meet their monthly mortgage
obligations now will bring delinquency
andforeclosure problems for mort-
gageservicers.Thus,it isthe low-income families
that are experiencing heavy debt burdens, leav-
ingthemmorevulnerabletorecessionand meeting
their mortgage obligations, whilethe higher-
income groups are actually reducing their debt
burdens (via refinancings andhigherwages) and
lowering their mortgage obligations.
Long before the downturn, however, there

already was a long upward trend in mortgage
foreclosures since the late 1970s. During most of
the 1970s, the rate of foreclosures was less than
about 0.5 percent of all mortgages, actually
declining steadily after 1973 to a historic low of 0.3
percent in 1978 (see Figure4:1). The severe
doublerecessionofthelate 1970sandearly1980s
brought a surge in foreclosures, to morethan 0.8
percent in 1982, where it leveled off for two years.
Remarkably, though, the boom yearsof the late
1980s brought not a decline butasteady increase in
foreclosures, to nearly 1.1 percent in 1988. The
next recession brought another increase, to above
1.3 percent in 1989 and 1991 (with aslight dip in
between). The rest of the 1990s then recapitulated
the pattern of the late
98 Michael E. Stone
FIGURE 4.1. Residential Mortgage Foreclosure Rate, 1967-2004.

Source: Mortgage Bankers Association.
1980s but at a higher level: Despite steady eco- sponsored enterprises, theyhave an obligation to
nomic growth and declining unemployment, the provide some mortgage support for lower-income
rate of foreclosures remained nearly flat at about households and underserved geographical areas.
1.3 percent from 1992 through 1995 and then On the other hand, and far more significantly, their
began steadily climbing, reaching a new record special status means that their mortgage-backed
high of over 1.4 percent in 1998. Over the next two securities have had the implicit backing of the U.S.
years, as the long boom reached its culmination, Treasury,15 thus making these securities easy to
there was substantialreduction inthe foreclosure market and making Freddieand Fannie'sstockquite
rate to less than 1.2 percent. However,the onset attractive to Wa ll Street investors. Both entities
ofrecession broughtasharp reversal, with rate have thus become Fortune 500 companies, yet they
surging to a new high of 1.6 percent in 2003 are the only members of this club exempt from
(Figure 4.1). regulation by the Securities and Exchange
Thenew eraofhousing finance has ensured a Commission and thus exempt from the disclosure
highvolumeof mortgagemoneybycreatingnew requirements of other corporations with publicly
vehicles and opportunities forprofitable investment traded stock. As Fred Smith, president of the
in housing. But with thisabundant supply of Competitive Institute inWashington, has put it,
capitalhas come extensive promotion and ac- Fannie Mae and Freddie Mac are examples of
ceptance of dangerously high levels of debt for “profit-side capitalism and loss-side socialism”
buying homes, refinancing existing mortgages and (quoted in Berlau 2003).
tapping home equity. Fannie and Freddie's success and special status
have led toacertainamountofhubrisamong their
Instability in Freddie Mac and Fannie Mae executives. As a result, there was littleclose
scrutiny of their operations until the beginning of
Freddie Mac and Fannie Mae emerged as the 2003, when outside auditors raised issues about
“Pillars of Hercules” in the mortgage system some of FreddieMac's accounting procedures.
because their private profits are underpinned by Then, in June of 2003, Freddie's problems reached
public support. On the one hand, as government the level of scandal: Possible criminal probes were
announced as the board of Freddie Mac forced out rialDesk 2003). Adding substance to the debate
its three top executives, claiming they had about the implications of Fannie and Freddie's
obstructed a probe into the company's accounting. special status, just before Christmas, a Federal
But a growing number of critics say Reserve senior economist released the draftof a
thatthisismorethanatypicalcorporatescandal: It isa study of“TheGSE Implicit Subsidy and the Value
government-policy scandalfor which taxpayers of Government” (Passmore 2003). The study
could be left holding the bag. And many were estimated that the federal government's implicit
wonderingif the controversy over accounting issues subsidy amounts to between $119 and $164 billion,
at Freddie Mac will spill over to its older sister, with only about one-half of that going to borrowers
Fannie Mae (Berlau 2003). inthe form of lower interest rates, the rest going to
Indeed, inthe wakeof theFreddie Mac scandal, it shareholders. It also estimated that the reduction in
was soon revealed that FannieMaemight have mortgage interest rates due to public subsidy
suffered billions of dollars in losses over the amounts to only seven basis points, and, due to this
preceding two years that were obscured by the small impact on rates, the “implicitsubsidy does not
complexity ofits accounting procedures. appear to have substantially increased homeown-
Apparently, investors in Fannie Mae securities ership or homebuilding” overwhat they would be if
were unconcerned because theyhad thought the GSEs operated without government support.
thatthefederalgovernmentwouldprotectthem. Fannie Mae immediately disputed the study, while
Nonetheless, Fannie immediately responded that it Freddie Mac did not respond (Andrews 2003).
would take steps to reduce its risks, but some One final point of significance inthe saga of
outside analysts still felt that it was taking too Fannie and Freddie is revealed by the response of a
much risk and needed to disclose more about its leading housing advocate who was directly
mortgage operations (Berenson 2003). involved in helping to establish the so-called
Congressionalhearings were launchedinthe fall “affordable housing goals” of Fannie Mae and
of 2003, and the Bush Administration rec- Freddie Mac (Fishbein 2003). While fully ac-
ommended regulatory changes that would be the knowledging the internal problems at the agencies,
most substantial since the S&L crisis confronted he notes that their cost offundscould rise if there
thefirst Bush Administration a decade and half weretobe reduction inmarket confidence inthe
earlier.Itwas proposed that there bea new agencies and/or transfer ofregulation to a
regulatory agency within the Treasury Department TreasuryDepartment insensitive to the special
that would not onlyprovide oversight but also the housing purposes of Fannie and Freddie. He is
authority to set one of the two capital reserve concerned that an increase inthe cost offunds in the
requirements of Fannie and Freddie as well as capital markets could result in higher mortgage
approval authority for new lines of business. It was rates, therebyclosing offhomeowner- ship
not proposed to eliminate im- plicitgovernment opportunitiesforsome low-and moderateincome
backing for their debtand the indirect subsidies households. His stance isatelling illustration of one
associated with this backing and other protections of the devil's bargains that is
(Labaton 2003a). However, soon thereafter, the enteredintobyhousingadvocatesbecausewedo
Treasury Department raised the possibility of nothaveatrulysocialsystemofhousingfinance.
eliminating its special line of
credittothetwocompanies. But thener- vous reaction
of the capital markets to this trial CONCLUSION
balloon(Labaton2003b)revealedhowmuchthe
capital markets rely on “loss-side socialism” in the Thischapterhas examined thecontoursofhous- ing
mortgage system. finance and the economy since themiddle of the
Attheendof2003,Congresshadnotyetacted 20th century, inorder to elucidate some ofthe
onregulatoryreformofthemortgagegiants,ap- limitations, weaknesses andproblems of a housing
parently due to resistance of FreddieMacand finance system based on private capital markets,
Fannie Mae to some of the reforms being con- mortgage debtand speculative ownership of
sidered (Glater 2003; New York Times Edito- housing. It is a system that, to be sure, has
100 Michael E. Stone
facilitated the production of vast amounts of 1. In 2001, the median monthly total housing
housing and has provided access to homeownership payment forhomeowners with mortgages was $1,015,
for over two-thirdsof all U.S. households. At the while their median monthly mortgage payment was $676
(U.S. Department of Housing and Urban Development
same time, though, in idealizing conventional and U.S. Bureau of the Census 2002:Table 3-19). The
(debt-encumbered) homeownership, it has ratio is67percent. No comparable data are available
exacerbated the social stigma ofrenting, inhibited forrenters. However,the proportion ofrents that goes for
the exploration and expansion of forms of tenure mortgage payments is probably greater, on average,
other than conventional ownership and renting, and because interest rates are higher on the commercial loans
imposed enormous affordabilityburdens used to finance commercial properties, and landlords are
more likely to use multiple mortgages to cash out equity.
andrisksonmanywho have bought (and indeed
2. For detailed discussion of the development of the
many who rent). Furthermore, theexisting system housing finance system prior to the 1960s, including
ofhousing finance has been the source of theorigins of theFederal Home Loan BankSystem and
considerable institutional and financial instabilities. theFederal National Mortgage Association as well as full
Yet the problems manifested and generated by this discussion and citation of sources, see Stone
system have been dealt with not through 1993:Chapters 3,4.
fundamental reform and new approaches to 3. Thissectionand the followingsectionsthrough the
1980s are based on Stone 1993:Chapters 5,6.
housing finance but rather through public policies 4. After selling a loan inthe secondary market, the
that for the most part ensure private profits while primary lender usually continues to service the loan,
socializing investor risk. including collecting mortgage payments (and sending
Rather than idealizing the market and providing them on to the ultimate holder of the mortgage) and
endless subsidies and bailouts to private capital, ensuring that property taxes and insurance are paid. The
public policy must transcend the market and truly primary lender, or other servicer, receives a fee from the
ultimate holder of the mortgage for handling these
serve social purposes. Overcoming the extensive
activities.
and persistent problem of affordability will 5. Freddie Mac issued its first mortgage-backed
requiresubstantial and sustained publiccommitment security in 1975 and by the end of the decade had issued
to new concepts ofhousing about $10 billion of such securities (Berkman 1979:69).
financeaswellasalternativeapproachestohous- ing 6. The net growth of residential mortgage debt had
ownership and tenure. The most significant and accounted for 24 percent of the net increase in totaldebt
straightforward mechanism for overcoming from 1979 to 1980 but dropped to 15 percent and then 11
percent in 1981 and 1982, respectively, before
permanently the affordability burden of mortgage returningto20percentin1983(FederalReserve System
payments is by using direct public capital grants to 1999:Table 5.1).
finance the production and acquisition of 7. With deregulation, a frenzy of takeovers, con-
socialhousing.Inacomplementary way, though, it versions to stock ownership and a pushforquickprof- its
isalso essential to reformthe financial system in overwhelmed much of the thrift industry. Between 1980
order to deflate the overblown credit system, and 1989, the number of thrift institutions fur-
therdeclinedbyone-third, whiletheshareofindustry assets
reduce speculative uses of creditand assure an
held by the50largest institutions grew to 40 percent (from
adequate supply of low-cost credit—as a 25 percent in 1980). Stock-owned institutions increased
supplement to capital grants—for productive to 45 percent of all thrifts in 1989, from less than 20
investment in social housing and progressive percent in 1980, but these 45 percent of institutions held
economic development. This, though, will require 75 percent of the assets of the entire thrift
the imposition of social criteria on private capital industrycomparedwith 27 percent of assets held by
market participants and institutions. Chapter 12 stockholder institutions in 1980 (Barth and Wiest
1989:15).
explores various existing and potential models of 8. Outstanding advances had been $10.8 billion in
social financing, demonstrating what has been 1970 (6.3 percent of thrift liabilities), $24.6 billion in
done, what is possible and what is necessary (see 1974 (8.5 percent of liabilities), and $98.2 billion in 1982
also Stone 1993:Chapter 8). (14 percent of liabilities); by 1988, they were nearly
$299.2 billion (22.1 percent of liabilities) (U.S. League of
Savings Associations 1989:50).
9. Freddie Mac's total mortgage portfolio was $338
NOTES
billion in 1990, having grown from virtually nothing in
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Peter Dreier
5 Federal Housing Subsidies: Who Benefits and Why?
AJULY 6, 1990, ARTICLE appeared in relatively few low-income Americans receive

the New York Times (“Expanding the Choices in federal housing subsidies. In contrast, about three-
Million Dollar Homes”) that described the fourthsofwealthy Americans—manyliv- ing in very
Pinnacle, a cluster of new homes priced from large homes—get housing subsidies from
$975,000 to $1.3 million, in Purchase, New York, Washington inthe form of tax breaks. These tax
inthe heartof Westchester County's wealthbelt. breaks subsidize many households who can afford
The Times did not describe the Pinnacle as a to buy homes without it. Our policymakers and
“subsidized” housing project, but in its glowing opinion leaders, however, focus more attention on
description of the project, the paper unwittingly federal aid to the poor. These programs—such as
revealed how taxpayers underwrite the cost of public housing and rent subsidies—are much more
luxury housing. visible than the hidden tax subsidies to the affluent.
For example, a Lexis/Nexis search of major daily
Subsidy #1: “The project is on a 23-acresite,” the
newspapers for 1999 found 4,822 articles that
Times noted, “across thestreet from the 236-
mentioned “public housing”; 164 references to
acre Silver Lake Preserve, a county-owned
“Section 8”;and a scant 37 stories with acombi-
nature preserve.”
nation of “mortgage interest” and “deduction.”
Subsidy #2: Then, gushed the Times, “The project
As a result of housing's weak constituency,
is only a few minutes' drive from the White
Congress has not put low-income housing pro-
Plains train station, andis within earshot of
grams high on its priority list. Despite slight
Interstate 684.” (While the noise of the nearby
increases inthe late 1990s, federal funding for low-
freeway might detract somewhat from the pride
income housing has declined dramatically since the
of owning a million- dollarhome, theconvenient
late 1970s. Andduring the 1990s, some members
access to a major highway makes up for it.)
of Congress even proposed eliminating theU.S.
Subsidy #3: Likewise, the taxpayer-subsidized
Department of Housing and Urban Development
Metro North commuter rail lines add signif-
(HUD) altogether. Meanwhile, few politicians,
icantly to the value of the Pinnacle.
journalists or other opinionmakers worry about
The Times did not mention anotherlucrative tax getting wealthy mansiondwellers off government
subsidy—one that isavailabletohomeown- ers. “welfare.”
Pinnacle homebuyers would get huge tax breaks on This chapter first examines the magnitude of
both mortgage interest and property taxes. On a federal housing subsidies, focusing on the disparity
million-dollarhome—with a10per- cent down in the size of tax expenditures for
payment, a mortgage at 10 percent interest (the
prevailing rate at the time) and an estimated
$15,000 a yearin property taxes—the lucky
homeowner could expect an income tax savings (in
effect, a federal subsidy) of $35,000 in the first
year alone.
Most Americans think that federal housing
assistance is a poor people's program. In fact,
106 Peter Dreier
homeowners compared with housing subsidies of which are administered by HUD. But the largest
directed toward low-income households. To un- housing subsidies are much more invisible. These
derstand why these major disparities exist, the are subsidies that come through the tax code inthe
chapter provides a historical exploration into the form of tax breaks or tax expenditures.2
manybattles overhousing assistance for the poor. There are basically two kinds of housing
An apparent paradox is then presented: Why has subsidies—direct expenditures (administered by
the Low-Income Housing Tax Credit fared much government agencies) and indirect expenditures
better, in terms of marshaling support, than —“tax expenditures” (which are incorporated in
virtually any other federal housing program the federal tax code). As Table 5.7 reveals, in
targeted to low-income people? Given combination, various tax expenditures for housing
thesizeandinequity of the homeowners'deduc- comprise the largest tax expenditures interms
tions, it is not surprising that there have been a ofrevenue loss to the federal government. These
number of attempts over the years to reduce or tax subsidies for housing go either to homeowners
remove it altogether. The following section or to investors. The ta- blealso showsthat tax
presents an overview of these efforts and the ways expenditures account for over $118 billion—over
in which the real estate industry has harnessed its three-fourths (79.2 percent) of the federal
substantial power and effectively organized to government's housing subsidies. Put another way,
protect its “sacred cow.” tax expenditures cost almost four times as much as
direct housing subsidies. The Treasury Department
—not HUD— isthe largest government housing
THE MAGNITUDE OF FEDERAL HOUSING subsidy agency. Moreover, as the data in Table 5.2
SUBSIDIES show, the gap between direct housing subsidies
and tax expenditures has been widening since
In 2000, the federal government spent some $148.9 1976.3
billion (in 2001 dollars) for various housing These figures do not includethe direct housing
subsidies, as detailed in Table 5.1.1 Americans subsidies provided by the U.S. Department of
typically associate the phrase “housing subsidy” Defense for military members and their
with the poor.They think ofpublic housing projects,
homeless shelters or perhaps rent vouchers, most
TA BLE 5.1 Federal Housing Subsidies, 2000

(2001 $, in billions)
Direct Housing Subsidies
U.S. Department of Housing and Urban Development $30.82
U.S. Department of Agriculture 0.04
Subtotal 30.86
Indirect Housing Subsidies (Tax Expenditures)
Homeowner Subsidies
Deductibility of mortgage interest on owner-occupied residences 61.55
Deductibility of property tax on owner-occupied residences 22.61
Exclusion of capital gains on house sales 18.93
Investor Subsidies
Exclusion of interest on state and local government bonds for owner-occupied housing 0.80
Exclusion of interest on state and local government bonds for rental housing 0.16
Depreciation of rental housing in excess of alternative depreciation system 4.84
Low income housing tax credits 3.28
Deferral of income from post-1987 installment sales 1.03
Exemption from passive loss rules for $25,000 of rental loss 4.82
Subtotal 118.02
TOTAL 148.88
Source: Office of Management and Budget, Budget of the United States.

Federal Housing Subsidies: Who Benefits and Why? 107
TABLE 5.2 Federal Housing Subsidies by Program Category, 1976-2000

(2001 $, in millions)
Homeowner Investor
Year Subsidies Subsidies LIHTC HUD USDA Total
1976 $27,509 $1,898 — $18,522 $6,742 $54,671
1977 23,846 1,422 — 13,328 7,870 46,466
1978 32,483 1,170 — 16,237 8,786 58,676
1979 41,548 998 — 17,972 6,672 67,190
1980 48,644 2,936 — 22,629 7,148 81,357
1981 55,894 3,385 — 24,711 7,039 91,029
1982 57,036 2,234 — 24,230 6,788 90,288
1983 49,861 5,981 — 24,261 5,757 85,860
1984 53,097 5,047 — 24,746 5,312 88,202
1985 55,365 4,916 — 41,649 5,932 107,862
1986 61,502 8,759 — 19,955 4,754 94,970
1987 70,300 5,646 $42 21,161 1,202 98,351
1988 68,899 6,491 219 24,923 5,019 105,551
1989 78,279 12,832 375 24,961 4,838 121,285
1990 79,861 14,871 146 24,620 3,903 123,401
1991 82,148 14,015 989 27,066 4,037 128,255
1992 86,257 12,795 1,332 28,432 2,814 131,630
1993 92,548 12,543 1,795 28,640 1,791 137,317
1994 91,875 10,868 2,189 28,771 1,804 135,507
1995 92,058 10,275 2,516 31,699 2,343 138,891
1996 90,652 9,402 2,838 27,016 1,465 131,373
1997 97,107 9,699 2,462 29,055 1,175 139,498
1998 99,033 9,632 3,293 31,464 464 143,886
1999 100,068 11,534 2,935 33,429 330 148,296
2000 103,094 11,663 3,278 30,828 39 148,902
TOTAL $1,738,964 $191,012 $24,409 $640,305 $104,024 $2,698,714
Whether the federal government uses direct home sales ($18.9 billion).8 About 31.8 million
expenditures or tax breaks to subsidize housing is homeowners received at least one of these
not important on its ownterms. But the reality deductions. As Tables 5.3 and 5.4 reveal, these tax
isthat most of the direct subsidy programs go to breaksare quiteregressive.Thehighest- income
low- and moderate-income people, while most of taxpayers with the largest houses and biggest
the tax subsidies go to middle- and upperclass mortgages get a disproportionate share of these
people. federal tax expenditures. Over one-half (59
percent) of the mortgage interest deduction subsidy
Homeowner Tax Expenditures goes to the richest 10.2 percent of taxpayers, those
with incomes over $100,000.9 The 2.2 percent of
By far, the largest federal housing subsidies are the taxpayers with incomes over $200,000 received
tax breaks for homeowners, totaling $103.1 billion 22.4 percent of the entire amount.
in 2000 (in 2001 dollars).6 These include the Only 22.6 percent of all 140 million taxpayers
deductions on mortgage interest payments ($61.5 took the mortgage interest deduction, but this
billion),7 deductionsonpropertytaxpay- ments varies significantly with income. For example,
($22.6 billion) and the deferral of capital gains on 69.8 percent of taxpayers withincomes over
$200,000 took themortgage interest deduction,
TABLE 5.3 Distribution of Tax Benefits for Mortgage Interest Deductions, FY 2000
Average Value per

Number of Returns Value of all Mortgage Return for Those
Income Number of Returns All Taking Mortgage Interest Tax All Returns in Income Value of Mortgage Interest Interest Tax Deductions Taking Mortgage
(thousands) (thousands) Returns (%) Deduction (thousands) Category (%) Deductions (Millions) (%) Interest Deduction
Under $10 19,818 14.13 12 — $1 — $83
$10-20 23,803 16.97 Tn 1.1 105 — 386
$20-30 19,493 13.90 906 4.6 386 0.63 426
$30-40 16,210 11.56 2,141 13.2 1,194 1.96 557
$40-50 13,054 9.31 3,016 23.1 2,591 4.27 859
$50-75 21,557 15.37 8,071 37.4 8,165 13.47 1,011
$75-100 11,924 8.50 7,130 59.8 12,423 20.49 1,742
$100-200 11,253 8.02 8,097 71.9 22,131 36.51 2,733
Over $200 3,101 2.21 2,164 69.8 13,619 22.46 6,293
TOTAL 140,213 31,809 22.6 $60,615
Source: Calculated from data provided in “Estimates of federal tax expenditures for fiscal years 2001-2005,” Washington, DC: Joint Committee on Taxation, U.S. Congress, April 6, 2001.
TABLE 5.4 Distribution of Tax Benefits for Real Estate Property Tax Deduction, FY2000
Average Value per Return

Number of Returns Value of Real Estate Value of All Real Estate for Those Taking Real
Income Number of Returns All Taking Real Estate Property Tax All Returns in Income Property Tax Property Tax Deductions Estate Property Tax
(thousands) (thousands) Returns (%) Deduction (thousands) Category (%) Deductions (millions) (%) Deduction
Under $10 19,818 14.13 21 0.1 $1 — $42
$10-20 23,803 16.97 298 1.2 40 0.19 134
$20-30 19,493 13.90 930 4.8 152 0.75 163
$30-40 16,210 11.56 2,109 13.0 426 2.10 202
$40-50 13,054 9.31 3,107 23.8 819 4.05 263
$50-75 21,557 15.37 8,229 38.2 2,683 13.25 326
$75-100 11,924 8.50 7,332 61.5 3,833 18.94 522
$100-200 11,253 8.02 8,522 75.7 6,980 31.20 819
Over $200 3,101 2.21 2,396 77.3 5,303 26.20 2,213
TOTAL 140,213 32,944 23.5 $20,237
Source: Calculated from data provided in “Estimates of Federal Tax Expenditures for Fiscal Years 2001-2005,” Washington, DC: Joint Committee on Taxation, U.S. Congress, April 6, 2001.
110 Peter Dreier
TABLE 5.5 HUD Budget Authority, 1976-2000 the mortgage interest deduction offers littleor no
(2001 $, in millions) incentive to own rather than rent. For many of
Fiscal Year Budget Authority these taxpayers—who can only afford a modestly
1976 $76,978 priced house and are inalow tax bracket—the
1977 77,065 mortgage interest deduction (on its own and in
1978 80,643
combination with other itemized deductions) is
1979 60,704
1980 63,707 likely to be lower than the standard deduction.
1981 56,829 These tax breaks have significant social
1982 33,264 consequences. Themortgage interest deduction
1983 25,407 artificially inflates home prices, since both
1984 26,952
ownersand sellers impute thesubsidy into their
1985 45,533
1986 22,480 calculations. This isespecially the case at theup-
1987 20,031 per end, but it has ripple effects throughout the
1988 19,674 housing market. Since themortgage interest de-
1989 18,197 duction is proportional to the cost ofhousing, it
1990 21,138
encourages homebuyers to buy larger homes in
1991 32,875
1992 29,009 outlying areas rather than more modest homes in
1993 30,103 central cities and older suburbs (Gyourko and
1994 29,302 Voith 1997; Gyourko and Sinai 2001), thus
1995 21,610 promoting suburbanization and sprawl. Moderate-
1996 22,289
income homeowners, who cannot take advantage
1997 16,984
1998 21,882 of the deduction, are concentrated in older suburbs
1999 26,904 and central cities. The tax code provision
2000_____________________________________24,324 (eliminated in 1997) that al-
Source: OMB CD-ROM, Budget of the United States Gov- lowedhomeownerstodefer capital gains taxes if
ernment, Fiscal Year 2002, Historical Tables, Table 5.2—
Budget authority by agency: 1976-2006.
theypurchase a moreexpensive home, but not a
smaller one, exacerbated this tendency, encour-
aging the purchase of larger homes, typically in
with an average benefit of $6,293. In contrast, less
suburbs farther from the central city (Bier and
than one-fourth (23.1 percent) of those in the
Meric 1994). And so by encouraging the subur-
$40,000 to $50,000 bracket took the deduction;
banization of housing, the tax code contributes to
those who did so saved an average of $859 on their
the well-known costs of metropolitan sprawl—
taxes. Among those inthe $20,000 to $30,000
transportation gridlock, pollution, costly
income category, only 4.6 percent took the
infrastructure and related dilemmas. In other
deduction; those who did so received an average
words, the “cost” of these housing tax breaks
benefit of only $426.
exceeds the amount that appears inthe federal
Consider that among households with incomes
budget each year. There are related “external”
under $20,000, slightly more than half own their
costs to the environment, public health and
homes. Of those who own their homes, only 28.5
otherfactorsthat do not show upwhen policymakers
percent have mortgages. Of those who have
itemize the list of tax expenditures.
mortgages, only 6.8 percent itemize. Among
households inthe $60,000 to $100,000 income
bracket, more than 80 percent own their homes. Of
those who own their homes, about 78 percent have
EXPENDITURES FOR
mortgages. Of those who have mortgages, about 66
LOW-INCOME HOUSING
percent itemize. Among households inthe
$120,000 to $140,000 income bracket, almost 91
Low-income housing issupported throughboth
percent own their homes. Of those, about 82
direct and indirect subsidy programs. Direct
percent have mortgages. Among this group, about
subsidies are provided through the Department
92 percent itemize.10
For many low- and middle-income taxpayers,
TABLE 5.6 Housing Subsidy Levels of States and rental assistance to needy tenants. By 2000, most
HUD, 1978-1996 of HUD's budget authority was spending on
(2001 $, in millions) maintaining or improving theexisting inventory
Year States HUD oflow-income assistedhousing andrenewing
1978 $531 $65,223 subsidy contracts on existing
1979 598 47,044
subsidizeddevelopments rather than adding to the
1980 667 47,179
1981 629 40,736
inventory.
1982 555 21,590 Budget authority declined from a peak of $80.6
1983 384 13,978 billion in 1978 to a low of $18.2 billion in 1989 (in
1984 361 15,374 2001 dollars), then up to $32.9 billion in 1991,
1985 326 14,401
falling to $17 billion in 1997, then back up to
1986 440 12,688
1987 618 11,038 $24.3 billion in 2000. During the 1980s, in terms
1988 981 10,207 ofbudget authority,HUD shouldered the largest
1989 1,346 10,120 cutbacks of any major federal agency. As a resul t,
1990 1,484 11,553 th enumb e r o f newlo w - i ncome h ousi ng units
1991 1,308 20,188
subsidized by HUD funds declined from 300,500
1992 1,190 17,211
1993 1,198 18,340 in 1978 to 23,800 in 1996 (Dolbeare 1996:79).
1994 1,206 17,858 Housing assistance for the pooris not an en-
1995 1,178 11,194 titlement, like food stamps or Medicaid. The
1996 1,349 12,225 available funds can only serve a small fraction of
Source: U.S. Bureau of the Census, Government Finances those who meet eligibility criteria. In the late
Report, annual reports 1978-1996 ; 1998 Green Book. 1990s, about 15.8 million low-income renter
households were eligible for federal housing as-
sistance. However, only about 4 million house-
of Housing and Urban Development (HUD) and holds received HUD housing assistance. About
the Department of Agriculture. 1.14 million households lived in units owned by
local public housing authorities, 1.7 million
households lived in private, government-
subsidized developments owned by private or
nonprofit entities and 1.2 million households re-
HUD spent approximately $30.8 billion in housing
ceived tenant-basedrental certificates or vouchers
subsidies in 2000. HUD-assisted housing goes
that allowed them to pay for unsubsidized private
almost entirely to low-income households.
rental units.11 The distribution of HUD-
As Tables 5.5 and 5.6 reveal, HUD's budget
assistedhouseholds is uneven across the country
outlays (actual spending in each year) have ebbed
interms of the proportion ofpoorfamilies who
and flowed since 1976 (in 2001 dollars), while its
receive any form of housing subsidies (Kingsley
budget authority (the authorized amount of
1997).
obligations in eachyearregardless of when the
That leaves almost 12 million poor households
spending occurs—thus, an indicator of new
who were eligible for federal housing subsidies but
spending commitments) declined dramatically
did not receive them. They have to fend for
during the 1980s and crept up again inthe 1990s,
themselves inthe private marketplace. Among this
though still far from the peak in the late 1970s.
group, HUD in 1999 identified 4.9 million
During the 1970s and early 1980s, HUD outlays
households with “worst case” housing needs—
were usedboth to continue previous commitments
those who pay more than one- half of their incomes
and to add newhousing units to the inventory.
for housing and possibly live in seriously
Since then, HUD spending has disproportionately
substandard apartments as well (U.S. Dept. of
gone to extend prior commitments. In otherwords,
Housing and Urban Development 2001).
in 1976, HUD's budget authoritywas spent
Department of Agriculture
primarily on expanding the inventory of low-
income housing through the production of new
For many years, the Department of Agriculture
units, the rehabilitation of substandard units and
provided housing subsidies in rural areas under a
112 Peter Dreier
division called the Farmers Home Administration central cities and suburbs in not available, it is
—now called Rural Housing Services (RHS) (see generally recognized that MRBs have primarily
U.S. GAO 1995). In 2000, RHS spent benefited suburban homebuyers.
approximately $39 million for various housing
subsidies, an all-time low; the previous year,
itspent $330 million. The Department of LOW INCOME HOUSING TAX CREDIT
Agriculture's total rural housing budget fell from a
peak of $8.7 billion in 1978 (in 2001 dollars). 12 In the Tax Reform Act of 1986, Congress replaced
The Department's ruralhousing programs primarily existing tax incentives for construction of low-
target low- and moderateincome households. income housing (such as accelerated depreciation)
Between 1984 and 1997, the proportion of with the Low Income Housing Tax Credit(LIHTC).
Department of Agriculture- subsidized housing The LIHTC provides tax breaks to investors
targeted for low-income households ranged from (corporations and individuals) in
27.9 percent to 61.9 percent. 13 The number of new developmentstocoverpartof the cost ofhousing
housing units subsidized by the U.S. Department construction and rehabilitation.15 In exchange, rents
of Agriculture (USDA) dropped from 101,300 in are set at a level affordable to households with
1978 to 59,900 in 1996 (Dolbeare 1996; U.S. GAO modest incomes. At least 20 percent of the
1995). It has plummeted even further since then. apartments in each development must be rented to
households with incomes below 50 percent of
thearea median; at least 40 percent of the
TAX-EXEMPT HOUSING apartments in each development must be rented to
REVENUE BONDS households with incomes below 60 percent of
thearea median income. (In most areas, this is
The housing assisted by mortgage revenue bonds about twice the poverty level.) Under the federal
(MRBs) and rental housing bonds (both of which law, rents must be affordable to these target
are exempt from federal taxes) goes to a mix of income groups for at least 15 years, after
low-income, moderate-income and middle-income whichdevelopers can charge market rents. While
families. The investors in these bondsare primarily the earlier projects adhered to this minimum, by
affluent individuals who receive federal tax breaks 1995, the average lock-in period was 42 years
for their investment. In 2000, federal tax (E&Y Kenneth Leventhal Real Estate Group 1997;
expenditures for mortgage revenue bonds and Cummings and DiPasquale 1998).
rental housing revenue bonds cost the federal Since 1987, the LIHTC has been the largest
government $790 million and $160 million, federal program to stimulate housing production
respectively—about $950 million altogether (in forlow-income families. From its inception through
2001 dollars). This isasignificant decline from the 1995, it assisted in the production of approximately
peak of $4.79 billion in 1987 and even from the 900,000 units, with the numbers growing each year
$2.74 billion in 1997 (in 2001 dollars). MRBs can as states and developers learned how to utilize the
be used to purchase new or existing homes.14 program. (Because many of these units have other
Congress restricts MRB use to first-time federal subsidies, however, there is considerable
homebuyers who meet income limits andhome over- lapbetween LIHTC-assisted,HUD-assisted
price limits. Borrowers can earnnomorethan and USDA-assisted units.) In 2000, it cost the
thegreater of their statewideor area median income. federal government $3.2 billion in 2001 dollars.
(Families of three or more can earn up to 115
percent of this figure.) The cost of an MRB- The LIHTC program is not administered by any
financed home cannot exceed 90 percent of the federal agency.16 Instead, Congress authorizes
average home price in the area. (In a few strictly states (typically, state housing financing agencies)
defineddisadvantaged areas, income and home to allocate the tax credits to quali- fiedhousing
price limits are higher.) Most MRB loans go to development projects.17 Thesizeof each state's tax
families below these program limits. In 1996, 61 creditallocation is determinedby a f o r mul a b
percent of MRB-financed homes were in ased on p o p u l ati on size ($1.75 p e r state
metropolitan areas. Although the breakdown of
resident).18 housing assistance is a direct outcome of the

historical struggle to promote housing for this
group. To understand why these inequities persist,
WHO BENEFITS? we need to understand the historicalrolethat
housing has played in the United States. What
What isthe “bottom line” concerning who benefits emerges is the clear sense that we have always had
most from federal housing subsidies? First, federal an ambivalent and sometimes hostile attitude
spending for low-income housing has not kept toward providing housing assistance for the poor.
pace with growing needs. While overall funding The original vision of government- subsidized
has grown, mainly (since the 1980s) to pay for housing emerged from the progressive movement
prior commitments, new budget authority— in the early 1900s. Until the Great Depression,
capturing the rate of which new assisted units are reformers who advocated a strong federal
added—has fallen dramatically. government role in housing were a lonely voice
Second, tax expenditures forhousing, partic- inthe political wilderness. The depression—when
ularly those benefiting higher-income groups, far at least one-fourth of the workforce was
outweigh direct expenditures for housing. unemployed and many more experienced declining
Measured in constant (2001) dollars, tax ex- wages and the threat of lay-offs—convinced
penditures for homeowner subsidies and investor housing reformers and labor
subsidies increased almost 300 percent between unionorganizersthattheprivatemarketand private
1976 and 2000, from $29.4 billion to $117.6 philanthropy could not solve the eco-
billion. In contrast, federalfunds forlow- income nomicandhousing problems of the poor. Some of
housing—through HUD,theUSDAand the Low theearlierProgressive Era housing reformers like
Income Housing Tax Credit—increased only 135 EdithWood, joinedbya younger generation of
percent during that period. More telling, activists like Catherine Bauer, pushed for a strong
theHUDbudget authorityfor additional housing government-led response to housing problems.
units declined by 68 percent, from $76.9 billion to Along with the labor union movement, they
$24.3 billion. lobbied for a public housing program, union-
In light of the significant increase in low- sponsored cooperative housing, and new
income families and the widening gap between the communities guided by cooperative principles. The
supply of affordable rental housing and the need, early public housing advocates, like their European
these trends have exacerbated an already serious counterparts, initially envisioned public housing
problem. Moreover, while states have increased for the middle class as well as the poor, but the real
their spending on affordable housing, they have not estate industry, warning about the specter of
come close to filling the gap left by federal “socialism,” successfully lobbied to limit public
cutbacks, as Table 5.6 reveals. housing to the poor (Lubove 1962; Oberlander and
Newbrun 1999; Wright 1981; Radford 1996; von
Hoffman 1996).
THE ONGOING BATTLE OVER HOUSING The federalpublic housing program was cre-
ASSISTANCE FOR THE POOR atedin 1937 primarily to stimulate the economy,
In contrast to federal policies that promote

homeownership for the middle and upper classes,
programs to help house the poor and near-poor
have been continuously vulnerable to political
assault. Whereas programs to promote middle-
income and upper-income homeownership have
essentially been entitlements— available to all
those who meet the eligibility standards—housing
subsidies for the poorhave always been similar to a
lottery, available only to a small fraction of eligible
households. The weak support forlow-income
114 Peter Dreier
TABLE 5.7 Major Tax Expenditures in the Income Tax, Ranked by Revenue Loss, 2000
($ millions)
Rank Provision FY
1 Net exclusion ofpension contributions and earnings: Employer plans $84,350
2 Exclusion ofemployer contributions for medical insurance premiums and medical care 77,670
3 Deductibility ofmortgage interest on owner-occupied homes 55,100
4 Capital gains (except agriculture, timber, iron ore and coal) (normal tax method) 40,585
5 Deductibility of nonbusiness state and local taxes other than on owner-occupied homes 37,000
6 Accelerated depreciation ofmachinery and equipment (normal tax method) 35,465
7 Step-up basis ofcapital gainsatdeath 27,090
8 Deductibility ofcharitable contributions, total 25,850
9 Exclusion ofinterest on public purpose bonds 20,450
10 Deductibility ofstate and local property tax on owner-occupied homes 19,495
11 Child credit1 18,725
12 Capital gains exclusion on home sales 18,540
13 Exclusion ofSocial Security benefits for retired workers 18,125
14 Exclusion of interest on life insurance savings 14,990
15 Net exclusion ofpension contributions and earnings: Individual Retirement Accounts 11,170
16 Deferral of income from controlled foreign corporations (normal tax method) 6,200
17 Exclusion ofworkers' compensation benefits 5,475
18 Graduated corporation income tax rate (normal tax method) 5,360
19 Earned income tax credit2 4,971
20 HOPE tax credit 4,855
21 Exclusion ofinterest on non-public purpose state and local debt 4,635
22 Workers' compensation insurance premiums 4,585
23 Net exclusion ofpension contributions and earnings: Keogh plans 4,255
24 Exception from passive loss rules for $25,000 ofrental loss 4,215
25 Tax credit for corporations receiving income from doing business in the United States possessions 4,120
Source: Analytical perspectives: Budget of the United States Government: Fiscal year 2000, 114.
1
Thefiguresinthetableindicatetheeffectofthechildtaxcredit,onreceipts,notoutlays.Childtaxcreditsforindividuals with three or
morechildren maybe refundable and as such are paid by the federal government. This portion ofthe credit is included in outlays,
while the amount that offsets tax liabilities is shown as a tax expenditure.
2
The figures in the table indicate the effect ofthe earned income credit on receipts, not outlays. Earned income credits in excess
oftax liabilities maybe refundable to individuals and as such are paid by the federal government. This portion of the credit is
included in outlays, while the amount that offsets tax liabilities is shown as a tax expenditure.
not to address urban slums or housing afford- primarily near war industry sites and military
ability. From the program's inception, it was aimed bases. After the war, some Democrats sought to
at providing housing for the “submerged middle make the NHA a permanent agency responsible for
class”—those who could not find suitable housing housing and urban redevelopment, but in 1946, the
inthe private market—but not the very poor with Republican-controlled Congress rejected the idea
no means to pay rent. Senator Robert Wagner of under pressure from the National Association of
New York, principal author of the Housing Act of Real Estate Boards (later renamed the National
1937, declared, “Thereare some whom we cannot Association of Realtors), which strongly opposed
expect to serve ...those who cannot pay the rent” public housing.19 Recognizing the pent-up demand
(Friedman 1968; Freedman 1969; Hays 1995). For for housing and fearing competition from public
years, this ar- housing, the real estate industry sabotaged the
rangementworked.Publichousingwasoftenthe best public housing program by pressuring Congress to
housing availabletoworking-class families. By limit it to the very poor. That new rule, embodied
1942, 175,000 public housing apartments— most inthe 1949 Housing Act, was the beginning of the
intwo- to four-story buildings—hadbeen decline of public housing's political support,
constructedin 290 communities. During World exacerbated by the political climate of the
War II, the federal government created thetem- McCarthy era and the Cold War (Davies 1966;
porary National Housing Agency (NHA) to co- Friedman 1968; Radford 1996; Wright 1981; Keith
ordinate the government's efforts to provide 1973). Several other factors—including changing
housing for defense workers. By l946, another demographics, costs and design and location—
195,000 units of permanent housing were built, diminishedpolitical support forpublic housing
(Vale 1993). As a result, only 1.3 million units million units of privately ow ned subsidized
have been built inthe program's history. housing were built—almost double the overall
During the l950s and early l960s, Democrats in number ofpublic housing units. By contrast, be-
Congress—supported by big-city mayors, along tween 1968 and 1973, only 375,000 public housing
with the liberal National Housing Conference, a apartments were added.
coalition of labor unions and public housing During his first term (1969-1973), President
advocates—tried unsuccessfully to create a Nixon andhis HUD Secretary (former Michigan
cabinet-level agency to deal with urban problems20 governor George Romney), alongwith a Demo-
(Bratt and Keating 1993). After winning a cratic Congress, promoted a supply-side housing
landslide victory in 1964, President Johnson—with strategy to create a record number of new housing
the support of civil rights groups, big-city mayors, units built by the private sectorwith federal
labor unions and private developers (all key subsidies. Beginning in the mid-l970s, under
Democratic Party constituencies)—in 1965 created President Nixon, a number of urban- oriented
the Department of Housing and Urban programs were foldedinto theCom- munity
Development. Throughout its history, HUD has Development Block Grant (CDBG) program.
been controversial, fighting an uphill battle to win Grants under this program were distributed directly
political support for its mandate to help house the to cities, giving control to mayors
poor and revitalize cities. ratherthancommunity organizations.These
For about a decade following theCivil Rights fundscould be usedfor capital improvements,
Movement and theghetto uprisings of the l960s, human services andhousing. In 1974, Congress
HUD rode the wave of public sentiment to address also created the Section 8programto entice private
the problems of poverty and inner cities. Through developerstohouse the poorwith subsidies for new
the late l960s and early 1970s, HUD was able to construction, rehabilitation and rent supplements.
gain steady funding from Congress, thanks to the New housing starts set records inthe 1970s,
coalition of big-city mayors, sectors of the housing even if far short of the 26 million goal. Since the
and banking industry,unions, civil rights groups, late l960s, about 20,000 privately owned projects
advocates for the poor and business leaders with almost 2 million units ofprivately owned
concerned with revitalizing central business subsidizedhousing were built under
districts through theurban renewalprogram. severalfederalprograms.21 These programs have
SeveralPresidential reports on urban problems been criticized as being expensive bribes to
released in l968— including the National Advisory lendersanddevelopers.Inmanycases,construction
Commission on Civil Disorders (the Kerner and operating costs exceeded the per-unit costs of
Report)—all cited thecondition of ghettohousingas public housing. Moreover, the federal programs
a serious problem and recommended a major new gave theownersof many of these de-
commitment to low-income housing. These forces velopmentsanoptiontowithdrawafter20years. As
triggered anewround of federal housing initiatives. this ticking time bombbegan to explode in the late
Congress sought different approaches than public l980s, Congress passedlegislation allowing HUD
housing—enticing private developers to build to entice ownerstokeep their projects as subsidized
housing for the poor, providing low-income tenants housing but at a huge additional cost to taxpayers 22
with vouchers and funneling federal “block grant” (see Chapter 7).
funds to cities and community organizations. The During the l980s, the ideological assault on
Housing Act of 1968 established a housing government activism—by conservative politicians,
production goal of 26 million units withintenyears, think tanks and the media—helped to undermine
with 6million forlow-income households. Congress support of programs for the urban poor, including
turned to the private sector to build low-income housing (Edsall and Edsall 1991). When President
housing. Several programs gave private developers Reagan took office in 1981, the attack on HUD
low- interest mortgages, tax breaks and, later, intensified. The Reagan Administration
rental subsidies. A low-income homeownership soughttodismantle federal housing programs,
program (Section 235) provided low down pay- claiming that “free and deregulated markets” could
ment, low-interest mortgages. Eventually, over 2 address the nation's housing needs. It reduced the
116 Peter Dreier
budgets for most low-income programs, but low- acterized by slavish loyalty to non-performing
income housing suffered the largest cuts. As programs” (Raspberry 1995). Soon after the
Tables 5.5 and 5.6 reveal, federal support forlow- 1994 Congressional elections, Clinton, looking
income housing— in terms of additional spending for a way to cut federal spending, proposed putting
each year—has neverrecoveredfrom the Reagan- HUD on the chopping block. Cisneros, hoping to
era attack.Al- though the HUD budget increased save his agency, pledged to “reinvent” itand soon
during the Bush Iand Clinton years, in real terms produced a “blueprint” for reform that called for
(adjusting for inflation) it never came close to the dramatic reduction in HUD's mandate, including
pre-Reagan era. In 1980, the year before the the privatization of most federally subsidized
Reagan Administration took office, HUD budget housing developments. In
authoritywas $63.7 billion. By 1989, the last 1995 and 1996, Congress cut the HUD budget by
budget for whichReagan was responsible, it had more than 20 percent. After the 1996 election,
declined to $18.1 billion (in 2001 dollars). Al- Clinton asked Congress to increase HUD's budget,
though the Republican Party'sefforttodecimate or mostly to fund expiring Section 8 subsidy
dismantle HUD, or to sell off public housing contracts, but the GOP leadership balked at this
projects, never came to fruition, there was request. In October 1996, the New York Times
widespread public sentiment that HUD was a Magazine published acover story by Jason DeParle
wasteful and inefficient agency, a view exacer- entitled, “Slamming the Door,” claiming that “the
batedbyaHUD scandal, which involved revelations Federal Government has essentially conceded
of corruption and political favoritism during the defeat in its decades-long drive to make housing
Reagan Administration. affordable to low-income Americans” and that
By the time that Clinton took office in 1993, “housing has simply evaporated as a political
HUD was one of the least popular or respected issue” (DeParle 1996).
agencies of the federal government. After the How did this happen? One cannot simply blame
Republicans won control of Congress in 1994, they the country's changing mood toward the poor.
escalated their attack on HUD as a symbol of the After all, low-income programs such as food
problems of activist government. House Speaker stamps and Medicaid, while occasionally
NewtGingrich told theWashington Post, “You controversial, have not shared the same fate as
could abolish HUD tomorrow morning and federal housing programs. House Speaker Newt
improve life in most of America” (Cooper 1994). Gingrich was candid about the reasons for
A year later, the Post reported that, “Politically, HUD'svulnerability.Its“weakpolitical con-
HUD is about as popular as smallpox” (Gugliotta stituency,” he told the Washington Post in De-
1995:A4). That year, Republican Senator Lauch cember 1994, “makes itaprime candidate for cuts”
Faircloth of North Carolina, chair of the HUD (Gugliotta 1995). Many Americans now believe
oversight subcommittee, filed legislation to that federal low-income housing programs reward
eliminate HUD, asserting, “I think we need to put a combination of government bureaucrats,
this department to rest” (Adm'n Wins ... 1995). politically connected developers and people who
The 1996 Republican platform called for the engage in antisocial or selfdestructive behavior. In
elimination of HUD. The Party's presidential particular, stereotypes with regard to public
candidate that year, Bob Dole, drawing on housing and its residents as havens of social
popularbut misleading stereotypes ofpublic pathology have cast a long shadow on all federal
housing, calledit “one of the last bastions of housing programs for the poor.
socialism inthe world.” Local housing authorities, One can identify at least ten major factors that
hesaid, have become “landlords of misery” have contributed to the erosion of political support
(Gugliotta 1996:A5). for HUDin general and low-income housing
Not only conservative Republicans criticized programs in particular.
HUD. In 1989, following the HUD scandal, the First,the private housing and financialindus-
New Republic published an editorial entitled, tries' support for HUDhas primarily focused on
“Abolish HUD.” HUD secretary Henry Cisneros theFederal Housing Administration (FHA), not its
admitted that he hadinherited an agency“char- low-income housing programs. The industries have
used their political muscletomaintain support for though it has never had the resources or authority
FHA'smortgage insurance program, particularly the to address the vast array of urban problems. In fact,
segment that promotes homeownership, but has other agencies, especially the Department of
used little of their influence on behalf of HUD's Transportation (in terms of the emphasis on
low-income programs. highways over public transit) and the Department
Second, the business community's support for of Defense (in terms of the location of defense
HUD was limited to its role in revitalizing central facilities and contracts; see Markusen et al. 1991;
business districts through the urban renewal Anderson and Dreier 1993), play amuch greater
program. This program was torn by controversy role in determining the fate of urban areas. Even
during the l960s, especially among residents of during the height of the 1960s' War on Poverty, as
low-income neighborhoods opposed to bulldozer- illustrated by the short-lived Model Cities program,
style renewal.The controversy over urban renewal HUD has lacked the power to coordinate the
led to its demise in the early 1970s, eliminating the various agencies involvedin antipoverty efforts,
backing of local urban growth coalitions such as the Office of Economic Opportunity, the
(Mollenkopf 1983) from the HUD constituency. Labor Department and the Commerce Department.
Third,the politicalinfluence ofbig-city mayors Since then, HUD's efforts to trigger economic
(and urban voters) has waned as the nation has development incities have been ham- peredbyits
become (thanks in part to federal highway and lack of control over agencies withkey programs,
housing policies) increasingly suburbanized. In such as the Small Business Administration within
1992, for the first time, suburbanites represented an the Department of Commerce. Even within its
absolute majority of voters ina presidential narrow mandate to address hous-
election. Thegapbetween thegrowing number of ingproblems,HUDwasnotgivenauthorityover such
suburban Congressionaldistricts and the declining agencies as the Federal Home Loan Bank, the
number of central city Congressional districts has Veterans Administration housing programs and the
widened (Wolman and Marckini 1998; Sauerzopf Farmers Home Administration (Bratt and Keating
andSwanstrom 1999; Dreier,Mollenkopf 1993; Mitchell 1985; Scruggs 1995). At the same
andSwanstrom 2005). With the exception of the time, HUDisgiven littleor no credit for the nation's
FHA, HUD-funding formulas (such as the CDBG housing successes, including the improvement, in
program) have little to offer suburbanites, terms of size, amenities and the dramatic decline of
including blue-collar inner-ring suburbs.23 physically substandard housing, of the quality of
Fourth, HUD has typically been viewed as American housing since the 1960s.
primarily serving the very poor, with few benefits Sixth, many Americans identify HUD with
for the struggling working class. HUD programs public housing and consider HUD-subsidized
have increasingly been targeted to the poorest of developments as having contributed to urban
the poor. This is reflected in eligibility standards misery by warehousing the poor in high-rise
forpublicand assistedhousing. It is reflected in the “projects.” Newspaper stories consistently identify
visibility of HUD efforts to house the homeless. HUD-subsidized housing developments with
Nevertheless, HUDpro- vides significant support crime, welfare and social pathology, compounding
for middle-class families through its FHA themedia's general misleading stereotypes with
homeownership program. Perhaps few Americans regard to the poor (Gilens 1999; Gilliam et al.
identify the well-known FHA with HUD.Also, 1995; Entman and Rojecki 2000).
since HUDprograms are neither an entitlement for Seventh,HUDhas become increasingly iden-
the poor nor areavailable to many working- and tified as serving the interests ofracial minorities.
lower-middle-class people, many families who are Ironically, one criticism of HUDisthat its programs
not well served by the private housing market still segregate racial minorities and concentrate the
fall between the cracks of HUD's programs—a poor in urban ghettoes (Massey and Denton 1993;
recipe for resentment and weak political support. Schill and Wachter 1995a, 1995b; Goering,
Fifth, as American cities have declined, es- Kamely and Richardson 1994; Fischer n.d.;
pecially when they erupt in riots, HUD is often Hughes 1997; Jargowsky 1997). A more recent
blamed for failing to solve the “urban crisis,” even criticism is that HUD seeks to deconcentrate the
118 Peter Dreier
minority poor into white and more affluent areas. HUD, not only by the public, but also by those
When the Clinton Administration sought to private sector constituencies who had profited from
deconcentrate the poor through “Moving to them.
Opportunity”—a small pilot program to help Andin 1989, as noted previously, soon after
theghetto poor find apartments in better Reagan left office, the nation's media uncovered
neighborhoods—Republicans and conservative another HUD scandal, revealing that upper-
pundits attackeditas“social engineering” (Dreier levelReagan Administration officials had used
and Moberg 1996; Rockwell 1994; political favoritism to allocate HUD low- income
GoeringandFeins2003;Rubinowitz andRosen- housing production funds, activities whichlaterled
baum 2000; Turner 1998).24 to theconviction of several top officials (Howlett
Since the 1968 Fair Housing Act, one of HUD's 1993). General Accounting Office reports to
responsibilities has been to monitor racial Congress consistently highlighted HUD's terrible
discrimination by landlords, real estate agents, track record of monitoring its programs,
local governments and banks, and to punish contributing to its image as an outof-
violators. In recent years, HUD has also been controlbureaucracy.For morethan a decade, the
involvedin uncovering redlining by banks. taint of these scandals eroded public and
Although HUD has often been lax in carrying out Congressional support for HUD.
these responsibilities, this mandate has not Ninth, the consumers of HUD's low-income
endeared HUD to the real estate industry. programs have become increasingly fragmented
Eighth, HUD's low-income housing programs and politically isolated. HUD's current con-
have continuously been torn by corruption and stituency is composed primarily of those who have
mismanagement scandals. Already identified with a direct stake in housing the poor: big-city mayors
the poor, ghettoes and minorities, HUD also and local government housing bureaucrats; private
became identified with mismanagement and housing developers, landlordsand speculators; and
corruption. Since HUD began, politically poor people and their advocacy organizations.
connected developers have fed at its trough of These groups are politically weak, fragmented and
lucrative subsidies and mortgage insurance. generally viewed unfavorably. The various
Beginning inthe l960s, HUD shifted its emphasis segments of the housing constituency often work at
away from public housing toward reliance on the cross-purposes, lobbying for their own specific
private sector to provide low-income federally- piece of theHUD pie, weakening theoverall impact
assistedhousing. This led to abuses and rip-offs, of their efforts and undermining the likelihood of
exacerbated by HUD's inability or unwillingness to building broad support forfederalhousing programs
effectively monitor its programs. No sooner had (Dreier 2000). Themayorsandhousing bureaucrats
these programs started than members of Congress depend on HUD funding and programs. This
and themediaexposed numerous problems, includ- “urban lobby” (such as the U.S. Conference of
ing excessive profits, poor construction, razing Mayorsand the National Association of Housing
stable neighborhoods as part of “slum clearance” andRedevelopment Officials) has been steadily
and using HUD grants as political pay- losing clout for years, as cities come to represent a
offstocampaign contributors (Gans 1962; Fried smallerportion of the overall electorate and
1972; Boyer 1973; Liston 1974). The first major nationalPACs replace city-basedpo- litical
scandal, which emerged in the early 1970s, in- machines as the keys to winning urban seats in
volved the abuse of HUD's Sections 223(e) and Congress (Nardulli, Dalager and Greco 1996;
235 homeownership programs by realtors and Paget 1998). HUD's private-sector constituency
lendersaswell as the Section 236 rentalprogram by consists of landlords, developersand real estate
developers. “This scandal contributed to the quick lawyers. Advocacy groups—including
demise of these programs following the 1973 organizations liketheNational Coalition for the
Nixon moratorium on the construction of federally- Homeless, the National Low Income Housing
subsidized low-income housing” (Bratt and Coalition, Association of Community Organi-
Keating 1993:13). Theelimination of these zations forReformNow (ACORN), theNa- tional
programs further weakened political support for Community Reinvestment Coalition and the
National Congress for Community Economic The Paradox of the Low-Income Housing Tax
Development—are often referred to as the Credit
“housing movement” (Dreier 1984, 1996). Funded
primarily by liberal foundations, these public In terms of political support for low-income
interest organizations occasionally activate their housing, the federal Low-Income Housing Tax
loose networks of local housing activists (tenants Credit represents an interesting contrast to the
groups, homeless shelters, community and church programs sponsoredbyHUD. Since its creation in
organizations, nonprofit developers) to protect or 1986, the LIHTC has received growing support,
expand federal housing programs for the not only among low-income housing advocates but
poor.These advocacy groups have had some also among business leaders as well as the private
success in protecting and even improving HUD housing industry. In contrast to theHUDbudget,
programs, but they mostly put their fingers inthe LIHTC funding has increased, reaching
dike. approximately $3.2 billion in 2000. It isthe largest
Tenth,HUD's programs have increasingly re- federal subsidy for new construction and
sembled acrazy quilt, withnooverallcoherence. substantial rehabilitation of low- income housing
Theyhave been less ambitious andhave become (Newman and Schnare 1997).
increasingly narrow and balkanized. Since the What explains the LIHTC's success? Thereare
l960s, HUD has added a patchwork ofprograms to at least five factors that makethe LIHTC politi-
accommodate its various narrow constituencies. callyattractivetoabroadcoalitionofsupporters.
This makes itacumbersome and confusing First, it is relatively invisible. Like other tax
bureaucracy that is ripe for mismanagementand expenditures, it is a subsidy allocated through the
corruption. HUDhas many different pockets of tax code rather than through a federal government
money to help public housing agencies and an agency. In theory, it requires no bureaucracy, such
almost equal number of distinct programs as HUD or the Department of Agriculture. Thus, it
forprivate ownersof HUD-subsidizeddevelop- is not subject to the same political conflicts as
ments.HUD also has two programs allocated by programs tied to agencies. In fact, there are
formulas to municipal governments—the Com- administrative costs, primarily
munityDevelopment Block Grant and HOME, both
of which have various strings attached. There are borne by state housing finance agencies, but also
distinct programs for new housing construction, for borne by the Internal Revenue Service (IRS) in
moderate rehabilitation and for majorrehabilitation. monitoring the tax credits. 25 And although the
Thereareseparate programs to house the elderly, transaction costs are substantial, such costs do not
Native Americans, ruralpopulations, people with show upinthe federalbudget, thus masking the
AIDSandhomeless people as well as various LIHTC's inefficiencies.
subpopulations of the homeless (e.g., veterans, Second, per unit LIHTC subsidies are quite low
people with AIDS, the elderly, and women and ($27,300) compared with other federal housing
children). programs, making the LIHTC appear to be an
One byproduct of the gradual but steady attractive program. But this figure hides the real
shiftawayfrom production programs toward subsidy costs. Many LIHTC projects require
vouchers isthe further weakening of HUD's additional subsidies, including federal subsidies
constituency. Today, about one-third of the like Section 8 vouchers and certificates. The
households with HUD subsidies are renters with General Accounting Office estimates that “almost
vouchers. This proportion is likely to steadily three-fourths of the households in these projects
increase. Tenants who live in a building or benefitted either directly orin- directly from other
complex, or residents who live in a geographic housing assistance, such as rental assistance to
neighborhood, can bemobilized to defend their residents orloan subsidies to project owners” (U.S.
interests. But tenants with vouchers, scattered GAO 1997:4).26 Indeed, the patchwork of subsidies
across many buildings and neighborhoods, cannot necessary to “make the numbers work” is one of
easily be identified,muchless organized, to protect the major inefficiencies of the LIHTC program.
these subsidies from elimination by Congress. Some have argued that the structure of the LIHTC
120 Peter Dreier
is highly inefficient interms ofdelivering scarce projects utilizing the LIHTC are nonprofit or-
dollarsto the poor because the investors receive so ganizations, typically community development
much of the subsidy (Stegman 1990; Stanfield corporations,givingtheprogramapositivepub- lic
1994). The LIHTC has become more efficient over image of addressing community needs.27 CDCs
the years as state housing agencies and developers have become the “public face” of the LI- HTC
become more sophisticated in getting investors and andprovide legitimacy andpositive public relations.
syndicatorstoput more dollars backinto the housing They are built by “the community,” through
developments. Even so, one housing expert likened partnerships with the private sector. The LIHTC is
the LIHTC to “feeding thesparrows by feeding the thus not identified with the same stigmatizing
horses” (Hartman 1992)—an inefficient factors—government bureaucracy, large-scale
andindirect way to accomplish the goal of housing “projects”—as are HUD-subsidized housing
the poor. developments. CDC projects tend to be smaller in
Third, corporate investors earn substantial size (see Chapter 16). Also, because the LIHTC
profits through the tax credit—typically a 15 does not provide sufficient subsidies to cover
percent return on equity, and they, in turn, have theoperating costs for 100 percent low-income
become partof a powerfullobbying group. The projects, a significant number of LIHTC
LIHTC is not a form of corporate philanthropy, but developments are mixed-income (U.S. GAO
many corporations nevertheless also earn positive 1997).
publicityforinvesting in low- income housing and In combination, these factors help to explain
inner-city neighborhoods. LIHTC investors are why Congress has acted favorably in renewing and
recruited by syndicators, state housing finance expanding the LIHTC at the same time it has
agencies and other intermediaries. This has attacked HUD.
spawned an entire industry around the LIHTC:
syndicators, intermediaries, lawyers, accountants, Challenging the Housing Industry's Sacred Cow—
development consultants and others. Thus, in The Mortgage Interest Deduction
addition to some major corporations that act as
investors, this “LIHTC industry” has a vested Howdo we account for the huge gap between
interest in protecting the program when it comes federal housing subsidies for the affluent and
up for renewal in Congress. In addition, the LIHTC
industry is able to marshal support from the more
influential corporate investors, who represent For-
tune 500 and comparable firms. Further, the tax
credit constituency is also supported by two of the
major intermediaries that support housing
production using the tax code—the Enterprise
Foundation (founded by developer James Rouse)
and the Local Initiatives SupportCorporation,
which both provide technical assistance and
channel private and public resources to
communitydevelopment corporations (CDCs).
Fourth,the banking industry has played asig-
nificant role in lobbying on behalf of the LIHTC
inCongress. Banksthat utilizethe LIHTC as in-
vestors not only earn substantial profits, they also
get credit under the federal Community
Reinvestment Act for addressing thecredit needs
oflow-income communities and consumers. As a
resul t, b ank sareth ecorpo r ate sector most en-
gaged in LIHTC investment.
Fifth, many of the developers of housing
TABLE 5.8 Newspaper Citations for Mortgage component of federal policy to encourage
Interest Deduction, 1985-1999 homeownership.28 The original income tax applied
New York Los Angeles Washington only to the wealthiest 1 or 2 percent of the
Year All Times Times Post
population, so the deduction was clearly not
1999 37 4 1 4
1998 58 2 5 6
intended to broaden homeownership. But as the
1997 43 4 1 7 taxpaying population broadened, particularly after
1996 129 7 2 15 World War II, the deduction grew almost by
1995 109 2 8 11 accident, at first small and little noticed. By the
1994 77 2 5 6 time Brookings Institution, Urban Institute and
1993 50 6 5 4
other economists began suggesting inthe 1960s and
1992 83 6 6 4
1991 44 2 5 4 1970s (Aaron 1972; Surrey 1973; Andreassi
1990 58 7 8 7 andMacRae1981;Aaron and Galper 1985; Surrey
1989 62 2 6 11 and McDaniel 1985) that the homeowner
1988 56 4 11 17 deduction was inequitable and unnecessary,the real
1987 61 10 9 12
1986 49 14 6 14
estate industry was already declaring it sacrosanct
1985 54 10 12 11
(e.g., “Elimination of Mortgage Deduction” 1989).
Source: Lexis/Nexis. There is no evidence that when the income tax
on individuals was introduced in l913, its
those for the poor? Political power and ideology framersvieweditasavehicletopromote home-
are key factors in answering this question. The ownership. The initial bill made a distinction
disparity in federal housing subsidies for the well- between totalincome and taxable income; indi-
off and the pooris due primarily to the relative viduals were permitted to deduct from their total
political influence of the constituencies who income specific sources of income (e.g., gifts
benefit from these different subsidies. The real andinheritances andinterests on state andlocal
estate industry'sability to protect themortgage bonds) and specific expenses in order to generate a
interest deduction illustrates how the allocation of lower level of taxable income. Included in these
housing subsidies reflects inequalities of political expenses were interest paid of all indebtedness,
power rather than the provision of social needs. For including but not limited to home mortgages. At a
example, the industry is among the largest time when personal and business debt were highly
contributors to Congressional campaigns, as Tables comingled, in part because so many Americans
5.9 and 5.10 reveal. were engagedinagriculture, allowing individuals to
Although homeownership has long been a deduct all consumer debt was administratively
cornerstone of the American belief system (Heskin simpler than trying to
1981; Dreier 1982; Carliner 1998), tax breaks
forhomeowners initially were not viewed as a key
TABLE5.9 Largest Business Contributors to Federal Candidates andParties, 2000, by Industry ($

millions)
Category 2000 Democrats (%) Republicans (%)
Finance/Insurance/Real estate $303.2 41 59
Communications/Electronics 133.3 53 46
Lawyers and lobbyists 128.1 67 33
Health 96.4 39 60
Energy/Natural resources 67.0 25 74
Agriculture 59.2 26 74
Transportation 57.2 28 72
Construction 55.8 32 68
Defense 14.1 35 64
Miscellaneous business 173.7 38 60
Source: Center for Responsive Politics, http://www.crp.org.

Note: Totals include PAC, soft and individual contributions over $200 to federal candidates and parties.
122 Peter Dreier
TABLE5.10 Contributions to Federal Candidates and Parties by Finance, Insurance, Real Estate, and
Construction Industry Sectors, 2000
($ millions)
Category Total Democrats (%) Republicans (%)

Commercial banks $26.0 37 63
Savings & loans 2.5 43 56
Credit unions 2.4 47 52
Finance/credit companies 9.7 31 69
Securities & investment 91.8 44 55
Insurance 41.8 34 65
Real estate 79.8 45 55
Accountants 15.3 38 61
General contractors 20.1 30 69
Home builders 7.3 32 68
Special trade contractors 7.2 30 70
Construction services 11.8 45 54
Building materials/equipment 9.3 19 80
TOTAL $356.7 39.5 60.5
Source: Center for Responsive Politics, http://www.crp.org.
Note: Totals include PAC, soft and individual contributions over $200 to federal candidates and parties.
figureoutwhat was personaldebtandwhat was employees paid income taxes; by 1945, the figure
business debt (Howard 1997:53-54). had grown to 70 percent (Howard 1997).
The major tax break for homeowners—the In 1944, Congress enacted the standard de-
mortgage interest deduction—did not affect a large duction, which simplified the tax system and
proportion of the population until after World War lowered taxes for most families. Many home-
II. Beforethat time, it was a tinyitem in the overall owners used the standard deduction rather than
federal budget.29 But changes in tax policy and an itemized their deductions because their interest
expansion of homeownership gave a growing payments were relatively small. By the 1950s,
number of Americans a stake in the mortgage however, the standard deduction did not keep pace
interest deduction. Thanks to a strong economy, with increases in income and thesizeof mortgages;
rising incomes and feder al policies to promote so as incomes rose, and homebuying and
homeownership and suburbanization, homebuilding grew, more Americans took
homeownership increased significantly after World advantage of the homeowner deduction. They
War II. The homeownership rate increased steadily viewed this deduction as part of their calculation
from 43.6 percent in l940 to 55 percent in 1950 to when deciding whether to buy a home
62 percent in 1960. It then grew more slowly to andhowbigahome to buy.
65.6 percent in 1980. At several points during the latter half of the
During this three-decade period, the federal 20th century, whenever there was a suggestion to
governmentloweredthepersonalincometaxex- cut back on the mortgage interest deduction, there
emption andraised tax rates. In 1941, it lowered the was a strong wave of protest, led by the private real
personal exemption (which added 5million estate industry. The visibility of this issue was
additional taxpayers) andincreased the tax rate on increased when the concept of “tax expenditures”
the lowest brackets from 4.4 percent to 10 percent. reached the mainstream inthe 1970s. In January
A yearlater,Washington lowered the personal 1969, Joseph Barr, the outgoing secretary of the
exemption againandraised the tax rate on the Treasury under President Johnson, testified before
lowest bracket to 19 percent. These policy changes Congress, criticizing tax loopholes for the
meant that millions of middle-class and even wealthy.Heun- veiled the nation'sfirst “tax
working-class families who hadpreviously been expenditure budget,” which exposed the size of the
exempt from the federal income tax were now many tax loopholes and even noted how many
paying taxes. In 1939, only 6 percent of all millionaires had paid no income taxes because of
various tax breaks. One ofhis examples was the arena.

mortgage interest deduction, which, he said, cost For example, Stanley Surrey, who coined the
the government $1.9 billion a year and which term “tax expenditures” and became Assistant
disproportionately helped affluent taxpayers. A f e Secretary of the Treasury for Tax Policy under
wyear s l ater, Congress re q u ire d t h at th e list President Kennedy (Surrey 1973), helped to draft
of tax expenditures be published annually. As a JFK's April 1961 special message to Congress on
result, economists such as Henry Aaron (1972) and taxation, which called for limiting the number of
Joseph Pechman, echoed by others (Manvel 1991; tax preferences while reducing overall tax rates,
Poterba 1992; Follain and Ling 1991), began to which he claimed would stimulate economic
question the efficiency of the homeowner growth and also be fairer. These ideas were
deductions. Starting inthe 1980s, Cushing embodied in the Revenue Act of 1964, which
Dolbeare, founder of theNationalLow Income Kennedy submitted to Congress. One provision
Housing Coalition, persistently issued reports permitted taxpayers to deduct only those itemized
identifying the widening gap between housing expenses that exceeded 5 percent of their income.
subsidies for the poor and tax expenditures for the This would lead more taxpayers to take the
well-off (Dolbeare 1983), and a number of standard deduction and reduce the value of
journalists began paying attention to the issue itemized deductions for manywell-off taxpayers.
(Downey 1989; Garner 1991; Goodgame 1993; Kennedy's proposal ran into a political buzz saw.
Harney 1990, 1992; “Housing Subsidies for the For the first time, the major real estate industry
Well-Off” 1992; Marino 1998; Passell 1993; organizations— homebuilders, bankersandrealtors
Salmon 1992). In the late 1980s, Anthony Downs, —lobbied to protect the tax breaks for mortgage
a prominent Brookings Institution economist and interest and property taxes. These combined
housing expert, drafted a paper for a Senate task political forces killed the proposalinCongress. The
force on housing policy that pointedly noted the lobbying ef- fortover Kennedy's proposed tax
disparities in federal housing assistance. Downs reformserved as a warning that they needed to
wrote: protect tax benefits forhomeownership, which
theyhadprevi- ously taken for granted (Howard
[H]omeownership tax benefits provide enor-
1997).31
mously disproportionate aid to high-income
taxpayers, even though they need such aid least. In his 1984 State of the Union speech, President
Reducing only partly the amount of assistance Reagan announced that he had asked the Treasury
they receive would make substantially more funds Department to conduct a comprehensive review of
available for housing assistance to low-income the tax system, with the goal of lowering tax rates,
taxpayers without increasing federal deficits. It simplifying the system and reducing government.
would also increase the equity of housing Some Treasury staff were ready to propose
assistance considered as a whole. By reducing sweeping changes, ending or reducing many tax
homeownership tax benefits less than 20 percent breaks for business and wealthy individuals,
and taking almost all of that reduction from high-
including elimination of the mortgage interest
income householdstheUnitedStates government
could probably pay for a housing voucher
deduction.32 The real estate industry learned what
entitlement program serving all eligible very-low- Treasury officials werethinking andlaunched a
income renter households who applied. (Downs political offensive. They lobbied Reagan heavily.
1990:76) In May 1984, an election year, Reagan spoke
before the National Association of Realtors in
In 1991, the Twentieth Century Fund issued a Washington and was asked whether or not the
report, More Housing, More Fairly, that rec- mortgage interest deduction was in jeopardy.
ommended“shifting federal (housing) commit- Reagan stated: “In case there's still any doubt, I
ments to make current allocations fair,” in par- want you to know we will preserve the partof the
ticular the tax expenditures for housing.30 American dream which the home mortgage
These reports helped to lay the groundwork for deduction symbolizes” (McClure 1986:57).
elected officials and their advisers to inject the After the 1984 election, Reagan unveiledhis tax
issue ofhomeownerdeductions into the political reform plan, which called for eliminating
124 Peter Dreier
somekeytaxbreaks,includingcharitablecontri- it might snowball, leading Congress to lower the

butions and state and local taxes. It also limited the proposed cap again and again.
mortgage interest deduction to one home, and it Soon after taking office in 1989, President
eliminated the deduction for property taxes Bush, speaking at a National Association ofRe-
altogether. This proposal galvanized the real estate altors convention, vowed to defend the existing
industry in an unprecedented lobbying effort. homeowner subsidy. Even so, to ensure its support
Thevariousindustrylobbygroupshiredcon- in Congress, the industry's lobby escalated its
sultants to do studies demonstrating that any efforts, highlighting the disastrous consequences of
tampering with these tax breaks would hurt the eliminating the deduction (National Association of
economy, undermine the real estate market and Home Builders 1989). The industry initiated a
reduce homeownership. They argued that vacation nonbinding resolution, sponsored by
states would be hurt by eliminating tax breaks for Representative Marge Roukema (a Republican
second homes. They got state and local representing affluent New Jersey suburbs)
government officials to join them in claiming that andRepresentative Les AuCoin(aDemo- crat from
eliminating tax breaks forprop- erty taxes would lumber-intensive Oregon, whichpro- vides
hurt state and local governments. They organized a materialstothe housing industry), insupport of
grassroots lobbying campaign, mobilizing realtors, protecting the existing homeowner tax break.34
bankers, builders and others to arrange meetings Over one-half of the membersof the House of
with membersof Congress. They increased their Representatives (including many liberal
campaign contributions to these officeholders, and Democrats) signed on.
they threatened to run candidates for Congress An important partof thestory concerning the
against members who voted tocutrealestate tax debates about the mortgage interest deduction
breaks. Congress bowed to the pressure. Repre- involves the many proposals to reduce the federal
sentative FortneyStark,akey advocate for elim- deficit and the need to cut the budget. The Reagan
inating some of the tax breaks, observed: “I was era, by reducing taxes and expanding military
just outgunnedbya real estate lobby that knows no spending, leftalegacy of a ballooning deficit. By
limits to its greed” (Birnbaum and Murray the 1990s, conservatives and liberals alike began
1987:140). looking forwaystoreduce the federal deficit and get
Although Congress adopted much of the Rea- closer to a balanced budget. Conservatives
gan tax plan, reducing tax rates and eliminating soughttodo it by further slashing domestic
many tax breaks dear to business groups, it bowed socialprograms.Liberals looked toward raising
to the real estate industry's pressure by preserving taxes on the well-off as well as “reinventing
the mortgage interest and property tax deductions government” to be leaner and more efficient.
for homeowners.33 By lowering overall tax rates, Facedwith these dilemmas, both conservatives and
however, the Reagan plan actually reduced tax liberals began to look at the list of tax expenditures
expenditures, including the value of the as possible ways to achieve their goals. Not
homeowner tax breaks. Also, by increasing the surprisingly, bothpolit- ical camps noticed that one
standard deduction and the personal exemption, of the largest items on the list was the mortgage
and indexingboth to inflation, it reduced thenumber interest deduction. A growing number of public
of families who would utilizethemortgage interest officials, policy experts and media outlets began to
deduction. The real estate industry could not identify these homeowner tax breaks as being
publicly oppose these provisions to lower income possible targets for reducing the deficit.
taxes on ordinary families. Thus, the 1990s saw anewwave of concern
The industry got another big scare in 1987, about the mortgage interest deduction, fueled
when Congress limited the deduction to mortgage primarily by efforts to reduce the federaldeficit.
interest on just two homes and capped the subsidy The mainstreaming of this issue is reflected in a
at $1 million of principal eligible for the mortgage 1989 cover story in Forbes, a conservative busi-
interest deduction. These moves frightened the nessmagazine,entitled“IstheMortgageInterest
housing industry.The$1million cap itself affected Deduction Sacred?” The article quoted veteran
few taxpayers. But industry lobbyists worried that Congressman Sam Gibbons (D-FL), who said: “I
have no objections when the deduction goes for Times, included a critique of the regressivity of the
houses. When it comes to castles, I do.” mortgage interest deduction (DeParle 1994).
A L exi s/Nexi s sear ch o f maj o r ne w s p a p Secretary Henry Cisneros of HUD quickly
er s from 1985 through 1992 (see Table 5.8) responded that the Administration opposed
revealed that articles referring to the mortgage eliminating the deduction (“Mortgage Interest
interest deduction remained at a steady level except Deduction May be Target” 1994).
for two significant upward bumps—in 1992 (when After the Republicans took control of
presidential candidate Ross Perot and a number CongressinNovember1994,themomentumfor tax
ofpolicy advocacy organizations introduced the reform and deficit reduction—and the controversy
notion of revising the deduction to help reduce the over themortgage interest deduction— escalated.
federal budget deficit) and in the period from 1995 Soon after taking over as chairman of the
to 1996 (when the controversy over the flat tax was Finance Committee, Senator Bob Packwood (Rep-
injectedinto the presidential campaign). OR) proposed limiting the mortgage deduction to
During the 1992 presidential campaign, can- $250,000 in debt (Mariano 1995). Around the same
didates' proposals to reduce the deficit werea time, thenew House Majority Leader Dick Armey
serious issue, particularly since Reform Party (Rep-TX) proposed a 17 percent flat tax that would
candidate Ross Perot, a Texas billionaire, made it do away entirely with all deductions, including the
the focus on his platform. PartofPerot's deficit- homeowner breaks (Brownstein 1995). And a
reduction plan included limiting the homeowner report by the CongressionalBudget Office
tax break. During the campaign, two centrist policy presentedideas for cutting federal spending, among
organizations—the Democratic Leadership them several waystoreduce the deficit by limiting
Council's Progressive Policy Institute and the deductions for mortgage interest:
Concord Coalition (headed by former U.S. senators
Paul Tsongas, a Democrat, and Preferential treatment forhome ownership en-
WarrenRudman,aRepublican)—issuedreports courages people to become homeowners and to
calling for reform of the mortgage interest tax purchase largerhomes. Increasing home ownership
break to reduce the deficit. may contribute to social and political stability by
After the 1992 election, with deficit reduction a strengthening people's stake intheir communities
and governments. In addition, such preferential
major concern of key opinion makers, the issue
treatment may stabilize neighborhoods by
remained on the public agenda. A New York Times encouraging longer-term residence andhome
editorial argued that newly elected President improvement. The amount of preference,
Clinton “could also reduce deductions for however, is probably larger than needed to
mortgage interest” in his plan to reduce the maintain a high rate of home ownership. For
deficit(“The Economy” 1993). The Washington example, Canada, which grants preferential tax
Post editorialized that what Congress should do is treatment to capital gains from home sales but
“trimthe interest deduction from thetop and use the does not allow deductions for mortgage interest,
proceeds to support the poor” (“Upside Down has achieved about the same rate ofhome
ownership as the United States.
Housing Policy” 1994). Other mainstream media
outlets kept the story inthe pub- liceye(Starobin
1994; Peirce 1994; Inman 1994; Lehman 1994; “20 The CBO estimated that eliminating the
Ways to Deflate a Deficit” 1993). There was some mortgage interest deduction would save the federal
speculation that Clinton was eyeing the deduction government $313.3 billion between 1996 and
(particularly lowering the ceiling) as partofhis 2000. It also offered three more modest
deficit reduction plan, especially since one ofhis suggestions to limit this tax break for better-off
key economic advisersduringthecampaign,Robert homeowners.35
Reich, had criticized the deduction as a major In response to Senator Packwood's proposal to
loophole (Klott 1992; Church 1993; Samuelson lower the ceiling on the mortgage interest
1993). Controversy erupted in February 1994, deduction, Time magazine and the Cable
when a draftof aClinton Administration plan to NewsNetwork (CNN) commissioned a national
poll on the subject. This is perhaps the only poll
reduce homelessness, leaked to the New York
126 Peter Dreier
that has specifically asked about change in the others. The NAR political action committees have
mortgage interest deduction. Conducted by vast local networks and deep pockets. The National
YankelovichPartners inMay 1995, it found sub- Association of Realtors' political action committee
stantial support for a Packwood-style reform. It (PAC) isthe largest inthe country in terms of
asked 800 American adults: “As you may know, contributions. The real estate/finance/insurance
the tax codesubsidizes mortgage loans, even for the industry (through PACs andindividuals) isthe most
most expensive homes. One proposalwould generous contributor to Congress of any business
limitthe tax deduction to $300,000 inmortgage sector. As Tables 5.9 and 5.10 show, the industry
principal, and would save the Treasury $35 billion divides its contributions between Democrats and
over five years, whileaffecting only 1.2 million of Republicans. Few members of Congress want to
the wealthiest taxpayers. Would you favor or offend these generous donors or be labeled as
oppose such a limit?” Overall, 68 percent of the being anti-homeownership. According to one
respondents said they would favor it. There was account, the NAR spent $750,000 in 1995 de-
almost no difference between Democrats, fending the deduction (Shear 1995). During the
Republicans and independents. 1996 New Hampshireand Iowa presidentialpri-
The 1996 presidential elections brought the maries, FannieMaeand FreddieMacspent over
issue to the fore again, primarily in reaction to $100,000 inadvertising to attack the flat tax pro-
candidate Steve Forbes' proposal for a flat tax posals, arguing that it would drive down housing
(Gravelle 1996). Flat tax proponents produced values. One adput the flat tax inthe same category
studies claiming that lower tax rates would make as termites and tornadoes, labeling all three
homeowners and would-be homebuyers better off, “famous American home wreckers” (Haggerty
even without the mortgage interest deduction 1996).
(Seldon and Boyd 1996). The flat tax debate The tone of the industry's response suggests that
exacerbateddivisions among conservatives. Right- it was clearly on the defensive and that it sensed
wing think tanks like the Heritage Foundation and the public mood was changing. Stephen
the libertarian Cato Institute, along with Citizens Driesler,chieflobbyist for theNAR,told the Na-
for a Sound Economy (CSE), a conservative tional Journal, “It's fair to say that when it's the
advocacy group,supported the flat tax, including chairman of the major tax-writing committee
elimination of the mortgage interest deduction saying these things, it'salot moreserious than in the
(Rosin 1997). past, when it was usually just a member of the
Seeking to ambush any attempt to tamper with committee, or an isolated member” (Jacobson
this homeowner tax break,fivehousing industry 1995). An article in Mortgage Banking expressed
lobby groups—the National Association of concern that challenges to the mortgage interest
Homebuilders(NAHB), theNational Association of deduction indicated that “the quintessential
Realtors (NAR), the American Bankers American dream of owning one's home isunder
Association, the Mortgage Bankers Association attack” (England 1992)
(MBA) and America's Community Bankers— The NAHB's chief economist admitted that the
issued a 47-page study in March 1996 examining housing lobby was losing the public debate over
the impact of changing themortgage interest the mortgage interest deduction. In the February
deduction (Brinner et al.; The Impact ...1995). A 1995 issue of the NAHB's magazine, Builder,
month later, the MBA issued its own repor t, David F. Seiders acknowledged that the “once-
concluding that housing values could decline by as sacred” tax break was no longer sacrosanct
much as 25 percent under the flat tax proposed by (Seiders 1995:38). “Questions are being raised
Representative Armey (Isaac and Marigon 1996; about the deduction's costeffectiveness as a tool to
Sichelman 1996). broaden homeownership,”Seiders wrote. He
The industry also usedits political and financial admitted that “Frankly, it's possible to find
clout to protect the deduction. Unlike industries countries with homeownership rates comparable to
dominatedbya fewlarge corporations, the real those of the United States without deductions.”
estate industry is composed of tens of thousandsof Seiders also acknowledged that “it'salso hard to
firms—builders, real estate agents, lenders and defend the deduction interms of equality
orfairness.”“Some characterize the deduction as newspaper reporters and columnists have

‘welfare for the rich,'”Seiders noted, admitting that continued to beat the drum for reform (Johnston
“If the deduction were eliminated or capped even 1999; Nelson 2000). Most politicians who favor
lower, it would fit with the Clinton administration's tax reform, including a flat tax, have with a few
theory of ‘progressive restructuring' of the tax exceptions exempted the mortgage interest
system.”Seiders warnedhis readership ofhome- deduction from their proposals. During the 2000
builders that “[I]t's going to be hard to defend the presidential elections, only GOP candidate Steve
mortgage-interest deduction using only the old Forbes (who favored a flat tax that did not retainthe
arguments about homeownership and the deduction) andRalph Nader (who favored lowering
democratic process.” A few months later,NAHB the ceiling on the deduction and targeting the
president Jim Irvine warned his fellow home- savings for low-income housing) raised the issue
builders that the deduction is “seriously threatened (Garvey 2000; Brownstein 2000). Neither Al Gore
as Congress works to contain the deficit,” citing nor George Bush addressed the issue.
Packwood's proposal (Irvine 1995:48). At the same time, the nation's widening
But the real estate industry's intense lobbying economic disparities generated considerable
efforts paid off. Forced to take a position on the political and media attention during the mid- and
issue, the GOP candidates differed on the flat tax, late 1990s. Secretary of Labor Robert Reich
but even those who supported the flat tax (Forbes sparked a public debate in the mid-1990s when he
excepted) came out in support of exempting put the issue of “corporate welfare” on the nation's
deductions for mortgage interest and charitable agenda (see, e.g., Hage, Fischer and Black 1995).
contributions (Johnston 1996). During the 1996 Public debate over economic “fairness” is unlikely
campaign, both Dole and Clinton came out against to abate inthe near future. To the extent that the
the flat tax andin favor ofpre- serving the tax mortgage interest deduction is viewed as primarily
break. Speaking to the National Association of subsidizing the well-off without at least
Realtors, Dole said: comparable government assistance going to
themiddleclass andpoor, reform will continue to
When we were taking all the heat ...on the flat tax,
resonate within publicopinion, although whether
millions and millions of dollars of TV advertising
directed right at Bob Dole, I stood my ground and this translates into political change depends on
said I don'tcare what happens, we're going to keep many other factors.
the mortgage interest deduction. ...(Dole 1996)
The same day, President Clinton addressed the
NAR. He noted the increase in homeownership CONCLUSION
rates underhis presidency, toutedhis plan to expand
homeownership further and attacked the The United States has serious housing problems,
flattaxplanwhileimplicitlyendorsingthemort- gage not only among the poor but also among middle-
interest deduction: income households (Stegman 2000; Lipman 2001;
Joint Center for Housing Studies 2001; Harkness,
So we oughttobalance the budget, but I don't think
Newman and Lipman 2002). The widening gap
we should do it inaway that undermines the ability
between the rich and poor,the proliferation oflow-
ofpeopletoowntheir own home. If we can simplify
the tax code, I'mall forit. But I don't think we
wage jobsand the economic insecurity that even
ought to adopt a flat tax that will raise taxes on many middleincome families face inthenew
everybody making less than $100,000 a economy exacerbate our nationalhousing crisis (see
year,andput homeownership out of the reach of all Chapter 1).
the people in those categories. (Clinton 1996) The federal government's efforts to address this
problem have been shapedbythe realities of
Since the 1996 election, political interest in politicalpower.There has been much more fed-
revising the mortgage interest deduction has eralhousing assistance for the well-off than there
waned, although there have been occasional echoes has been for the poor and near-poor.HUDplays
of concern. A number of policy experts and only a small part inthe federal government's
128 Peter Dreier
housing puzzle. Despite its name, the agencyhas Congress to enact it.
much less impactonthe economic and physical In recent years, those who view the deduction
conditions of our cities and metropolitan areas than interms of economicunfairness have taken a
other federal agencies and policies. On its own, somewhat diffe rent approach , seeking to d esign a
HUD, with its limited authority and budget, can do progressive tax break for homeowners that would
little to address the current plight of our cities— reach households who do not benefit from the
including the concentration of poverty, the current tax provisions (Dreier and Atlas 1992,
suburbanization of people and jobs, suburban 1997; Green and Vandell 1996; Collins, Belsky
sprawl and the economic andracial segregation of and Retsinas 1999; Green and Reschovsky 2001).
our metropolitan areas (Markusen et al. 1991; The popularity of the Earned Income Tax Credit, a
Jackson 1985; Gyourko and Voith 1997; Gyourko refundable credit for the working poor, suggests
and Sinai 2001). that this approach has considerable support. A
Clearly,the battleoverfederalhousing subsidies homeowner tax credit has the advantage of using
must go beyond theHUDbudget to address the the same policy tool—tax expenditures—toward
disparities between assistance for the poor and the well- recognizedbenefit ofhomeownership. Still
assistance for the well-off. controversial is whether revenues for this approach
During the 1990s, efforts to revise the mortgage should come from reducing the ceiling on the
interest deduction emerged from three different current deduction (i.e., a revenue-neutral
directions. First, advocates ofdeficit reduction approach)orfrom another source inthe federal
sawinthe deduction a means to address the nation's budget. Regardless, advocates of this approach
budget dilemmas. Second, advocates of tax recognize that this tool is unlikely to benefit very-
simplification viewed the mortgage deduction as low-income households in many markets and that
an example of the complexities of the tax code. But increased direct federal housing subsidies for the
one proffered solution to this—the flat tax— poor arestill necessary.Nevertheless, it suggests
proved extremely controversial, particularly since that housing advocates have learned some political
its consequences would have been to make the tax and policy lessons from the past half-
code even more regressive while simplifying it. century'sexperience of trying to reformthis tax
The flat tax idea still has its advocates, but it has provision.
few strong political forces behind it. Third, Any effort to address this issue must calculate
advocates for the poor, spearheaded by the the political consequences—the winners and
National Low Income Housing Coalition (NLIHC) losers, the geographic impacts (by state and
and the National Housing Institute, soughttoredress Congressionaldistricts) and the intensity of support
thevertical inequalities reflected in the gap between and opposition among households in general and
federal tax expenditures for the well-off and lobby groups in particular. One analysis that
housing assistance for the poor (Lehman 1991; explored the consequences of substituting a tax
Burns 1998). The chief vehicle for this was a bill, credit for the current deduction found that losers
drafted by the Coalition, to create a national would be concentratedinonly a few states and
housing trust fund targeted for low-income Congressional districts, while the winners would
households. In its original version, the bill called bespread out geographically. It also found that a
for lowering the ceiling on the homeowners handful ofhouseholds would lose big, while a
deduction inorder to fund thetrust. TheCoali- tion much larger number of households would gain
abandoned that approach, and its current version benefits though those benefits would be relatively
focuses on other sources offunding (see small.Thecapacity to mobilize political support for
http://www.nhtf.org). In the early years of the 21st reform would be limited by these political
century, the Coalition built by the NLIHC has been calculations (Green and Reschovsky 2001).
more successfulin gettingasignificant number of Withinthe homebuilding industry, if amort-
persons in Congress as well as senators to support gage tax credit significantly helps builders of
a housing trust fund, a resultofbetter grassroots starter homes targeted for families earning, say,
organizing, but strong opposition from the Bush II less than $60,000, but hurts builders of luxury
Administration has stymied its efforts to get homes and secondhomes, that could potentially
dividethe homebuilding industry, depending in part coalitions. In particular, theyhitched their ideas to
on the internal dynamics of the industry's lobby the one political vehiclethat could effectively
groups (including thenumber and location mobilize the political power to enact progressive
ofbuilders that specialize in starterhomes). housing legislation—organized labor.AsCatherine
In lightof these political realities, advocates for Bauerwrote, “there would neverbearealhousing
reform have focused on adding a mortgage tax movement until workers and consumers organized
credit without eliminating the current deduction an effective demand: that housing is a major
(Collins, Belsky and Retsinas 1999; Green and political issue orit is nothing” (Oberlander and
Reschovsky 2001). President Bush proposed avery Newbrun 1999:106). Bauer's words remain true.
small homeowner tax credit in 2001 withbenefits
targeted to developers rather than consumers.
TheMillennial Housing Commission, a bipartisan
blue-ribbon taskforce appointed byCongress to NOTES
make recommendations to address the nation's
1. This analysisexcludes a number of otherforms of
housing problems, also
government-subsidized housing. It excludes housing
proposedahomeownershiptaxcreditinits2002 assistance provided by the U.S. Department ofDe- fense
report(Millennial Housing Commission 2002). The for military families who live on and off military bases
report briefly mentioned the disparities in federal intheU.S.and overseas. It also excludes federal
housing subsidies but did not recommend reducing antipoverty programs, such as AFDC/TANF and the
tax subsidies for the affluent. There is reason to Earned Income Tax Credit, whose recipients use part of
think that a well-crafted proposal could marshal this assistance to help pay their housing costs. It also
excludes the housing programs of the Federal Deposit
support to increase homeownership by revising the
Insurance Corporation, the government agency that
tax code inorder to benefit those left out by current insures banksthat makemortgage loans and whichdis-
regressive tax deductions. poses of the real estate assets offailedbanksandS&Ls.
The global assault on labor standards has Also excluded is the Federal Housing Administration
transformed theU.S. economy and produced (FHA); many middle-class Americans purchased their
growing economic inequality and deepening homes with mortgages insured by FHA, whichisadi-
vision of HUD.This insurance, backedbytheU.S.gov-
poverty.America's persistent economic disparities
ernment, allows bankstoreducethemonthlymortgage
are mirrored in the nation's housing conditions. payments, whichisaformof governmentsubsidy.Also
America's housing crisis is fundamentally about excluded are the Veterans Administration (VA, which
affordability: the gap between housing guarantees mortgages for veterans), Fannie Mae, the
costsandhouseholdincomes.Itrequiresmoney to fill Federal Reserve System and the Federal Home Loan
the gap. Only the federal government has the BankSystem. In addition to providing various housing
resourcestoaddress the problem, even subsidies, the federal government (primarily through the
Department of Justice but also through HUD) has sought
thoughfederalpolicyis implemented at the state,
to monitor andreduce housing discrimination, beginning
metropolitan andlocallevels. Some form of with the Fair Housing Act of 1968. These costs are also
government support is necessary to make housing not included in this analysis.
economically manageable for the poor as well as 2. Overall,the largest 25 tax expenditures cost the
for growing segments of the troubled middle class. federal government morethan $550 billion in 1999, as the
The current disparities in housing assistance for the data in Table 5.7 reveal. See also Howard 1997.
3. Unless otherwise specified, HUD figures used in
affluent and the poor exacerbate the nation's
this chapter are for HUD's budget outlays, most of which
inequities. are for low-income housing.
In earlierperiods, radical“housers”proposed 4. In 1996, the Department of Defense spent $5.7
bold alternatives to existing policies. Their de- billion to provide housing allowances for 569,000
mands were perhaps brazen, but they managed to military families in the United States. This covered 80
walk the political tightrope. In today'ster- percent of the typical family's total housing costs, with
minology, they thought “outside the box.” Not only the family paying the remaining portion. It also spent
about $3.9 billion to operate and maintain government-
did they think big, they organized well. They did
owned or -leased housing for 284,000 military families,
not sitonthesidelines and criticize. Theywere covering 100 percent of their housing costs. These
political activists. They built movements and
130 Peter Dreier
figures were provided by Pete Potochney and Dr. Saul ManagementandBudget.Whencomparingtaxexpen-

Pleter of the Department of Defense. See also U.S. GAO ditures with other housing subsidies, I use the OMB
1996; U.S. DepartmentofDefense1998. figures in Analytic perspectives: Budget of the United
5. Until Congress passed a “welfare reform” bill in States (2000). When examining the distribution of tax
1996, federal and state governments combined allocated benefits for mortgage interest andproperty taxes, I use the
about $21.6 billion annually for Aid to Families with JTC figures.
Dependent Children (AFDC), commonly called 7. In 32 of 42 states withindividualincome taxes,
“welfare,”distributedbythe Department of Health and mortgage interest is deducted in the calculation of state
Human Services (HHS). Recipients received monthly income tax liabilities, increasing the tax subsidy for
checks to cover some of their living expenses. One study manyhomeowners. These states areAlabama, Arizona,
(Newman 1999) estimated that about 30 percent of this Arkansas, California, Colorado, Delaware, Georgia,
amount—about $6.5 billion—was used to pay rent. Most Hawaii, Idaho, Iowa, Kansas, Kentucky, Louisiana,
AFDC recipients received no housing assistance andhad Maine, Maryland, Minnesota, Mississippi, Missouri,
to find accommodations inthe private market. Most of Montana, Nebraska, New Mexico, New Yo rk,North
this group paid at least one-half of their welfare check for Carolina, NorthDakota, Oklahoma, Oregon, Rhode
rent—and frequently much more. Since most welfare Island, South Carolina, Utah, Vermont, Virginia and
recipients also receive food stamps, they used most (or Wisconsin.
all) of their AFDC benefits to pay rent. But the variations 8. Prior to 1997, only homeowners over age 55
in housing costs across the country borealmost no andhomeowners whosold their homes and then pur-
relationship to variations in AFDC benefit levels. AFDC chased moreexpensive homes could exclude from their
payments covered only 35 percent of average rent levels federal taxes capital gains from thesaleof their homes. In
in Texas but covered 125 percent of average rents 1997, Congress changed the law to allow all home-
inAlaska. Nationwide, the median AFDC payment ownerstoexclude payment of capital gains taxes (up to
covered 66 percent of market rents. Even if most AFDC $250,000 for singles and $500,000 for couples) when
recipients found apartments cheaper than the average they sell their homes. They can only do so once every
market rent, the AFDC payment was insufficient to keep three years.
a roof over their heads and have enough left over for 9. The figures used in Table 5.7 for the mortgage
other neces- interestandproperty tax deductions are different from the
sities(Newman1999).Itishardlysurprisingthatmany figures usedinTables 5.3 and 5.4. TheOMB uses a
welfare recipients supplemented their AFDC payments different methodfor calculating tax expenditures than the
with work in the underground or informal economy Joint Committee on Taxation, but only the latter
(EdinandLein1997;Jencks1997).Slightlymorethan1 disaggregates the benefits by income class.
millionfamilies(about23percent)of AFDC recipients also 10. These data come from Green and Reschovsky
received HUD subsidies. They lived in public or private (1997).
government-assistedhousing orhad a rent certificate. 11. Different reports use different estimates ofboth
These families paid 30 percent of their welfare income the total number of households eligible for HUD as-
forrent, and HUDpaid the rest. These families were sistance and the total number of households receiving
betterhoused than those AFDC families without HUD HUD assistance. A HUD study (Casey 1992) using 1989
assistance. Because federal housing assistance is not an data estimated the number of poor renters eligible for
entitlement, the proportion of welfare recipients with HUD assistance at 13.8 million. A more recent HUD
housing subsidies varied considerably from state to state, report (McGough 1997) put the figure at
from 12.1 percent in California to 56.8 percent in North 15.8 million eligible households in 1993. A Harvard
Dakota. In seven states, fewer than one-fifth of welfare study (Joint Center for Housing Studies 1995) using
recipients receive federal housing subsidies. (See 1993 data put the figure at 13.4 million. The Congres-
Newman and Schnare 1994; Newman 1999.) Benefits sional Budget Office (1994) reports that 18.6 million
levels for AFDCandfood stampscom- binederoded households were eligible for aid in 1994. Regardless of
significantly beginning intheearly 1980s. Theyfell further which figures are used,the federal government'salloca-
andfurtherbelow theofficialpoverty line. In 1995, in tion of housing (via HUD) and income assistance (via
every state, AFDC benefits were less than the typical AFDC/TANF) for the poor is unequal and inefficient. Of
monthly rents (see Dolbeare 1996). the 13.4 million low-income renter households in 1993,
6. Each year, the Joint Committee on Taxation of 7.4 million did not receive income orhousing assistance;
Congress estimates the distribution of benefits of twoof 1.9 millionreceivedbothhousing andincome assistance;
the major tax expenditures—the deduction of mortgage the other 4.3 million received either housing or income
interest payment and the deduction for local property tax assistance (Joint Center for Housing Studies 1995;
payments. Unfortunately, the JTC's estimates of the Newman and Schnare 1994; Casey 1992; Congressional
overall cost of these expenditures differfrom other Budget Office 1994; Kingsley 1997; McGough 1997;
sources, including those of theOffice of U.S. Department of Housing and Urban Development
1996, 1998). York City) administer their own allocations.

12. Data provided by the Housing Assistance 18. This formula has not changed since the LIHTC
Council. was initiated, despite the claims by developers that
13. In 1985, the Department of Agriculture sub- development costs have risen and that the LIHTC's
sidized 88,228 housing units, 29.8 percent of which purchasing power has been reduced.
(24,428) were targeted to low-income households. In 19. Instead, Congress created a weak second-tier
1991, the figures were 45,873 total units, of which (rather than cabinet-level) agency called the Housing and
61.9 percent (28,383) were targeted to low-income Home Finance Agency to coordinate the public housing,
households. By 1995, the figures were 47,233 total mortgage insurance and urban renewal programs.
units,ofwhich 45.7 percent (21,569) were low-income. In 20. During the l960 elections, the Democratic
1997, the figures were 52,400 total units, 31.4 percent of platform called for replacing HHFA with anew cabinet-
which (16,456) weretargetedfor the poor—the lowest level agency. Upon his election, President Kennedy tried
number since the figures werefirst tabulatedfor 1984. to create a federaldepartment of urban affairs and
(The RuralHousingPrograminFiscalYear1997; 1998.) housing but was stymied by Congress. Much of the
14. States vary considerably inthe extent to which opposition came from Southern Democrats who feared
they favor MRBs compared with other bonds and in their that Kennedy would appoint RobertWeaver (HHFA
capacity and commitment to implement this program. administrator and the highest- ranking black in the
Fourteen state housing finance agencies accountedfor federal government) to run the new agency (Bratt and
morethan one-half (53.5 percent) the total number Keating 1993:6)—a fear that turned into reality in 1965
ofloans in 1997. This figure was calculatedby the when the Department of Housing and Urban
authorfrom data providedbytheNational Council of State Development was created (see text below), headed by
Housing Agencies. In descending order of number loans Weaver, the first African-American cabinet member in
closed, these states are Pennsylvania, California, the nation's history.
Virginia, Connecticut, Wisconsin, 21. Most HUD-subsidized projects—public and
Nebraska, New York, Idaho, Missouri, Minnesota, Ohio, private—are well run, but quite a few have been
Michigan, Iowa and Alabama. The fact that many states mismanaged by incompetent public housing agency
withlarge populations are not among this group indicates bureaucrats and private landlords who took the subsidies
that many large states prioritize uses other than housing but failed to maintain their properties. Over the years,
under their bond volume cap, while several small and HUD has used little leverage to make these inept or unfit
medium-size states prioritize housing over other uses. landlords (whether public or private) toe the line. In
15. The program grants investors a dollar-for- dollar some cases, private landlords milked these properties for
reduction in their federal tax liability in exchange for their tax breaks and then walked away from the
providing funds for the development of qualified, buildings, leaving HUD to foreclose andbecome
affordable rental housing. The return to the investors theowner of ghetto slum housing. Moreover, most HUD-
largely comes inthe form of tax credits, paid in roughly subsidized projects were sited in segregated
equal annual allotments over 10 years. Developers may neighborhoods, compounding the image of HUD housing
claim the credits, but they typically sell them to investors as a major factor in creating isolated ghettos (Goering,
for up-front cash that is put into the project's Kamely and Richardson 1994; Massey and Denton 1993;
development. The developer can sell the credits directly Schill and Wachter 1995a, 1995b). Local housing
to one or more investors but typically sells them to a agencies and landlords argue, with some justification,
syndicator, who acts as broker between the developer and that HUD rules requiring them to house only the very
investors; the syndicator then markets the credits to poor are responsible for some of the problems. Many
potential investors. A number of national and regional HUD-subsidizedprojects have, in fact, become ghettos
syndicators, both for-profit and nonprofit, now dominate filled with troubled families, some of whom engage in
the field. Investor profits on the LIHTC have ranged crime, join gangs, participate in the underground drug
from 10 percent to 18 percent. The proportion of the tax economy and live on welfare and food stamps (Keyes
credit that goes into the housing developments (the “net 1992). These “distressed” projects (as HUDlabelsthem)
equity”) increased from 42 percent to 65 percent between cast a giant shadow on the entire HUD enterprise,
1987 and 1996, according to a E&Y Kenneth Leventhal stigmatizing “government housing” as housing of last
Real Estate Group (1997) report, and to 75 percent, resort.
according to Cummings and DiPasquale (1997). (See 22. By the early 1990s, about 13,000 developments,
also Cummings and DiPasquale 1998.) with about 1.5 million units, remained in the inventory,
16. TheIRS oversees LIHTC compliance to ensure exposing the FHA insurance fund to more than $34
that states and investors do not use more tax credits than billion in insurance obligations (Pedone 1991; Sternlieb
authorized. and Hughes 1991; Wallace 1994).
17. The District of Columbia, the city of Chicago 23. Henry Cisneros sought to address this
and two agencies inNew York State (including New shortcoming by focusing attention on regional and
132 Peter Dreier
metropolitan problems and on the interdependence nation's expanding cities, the nature of property
between cities and suburbs. But neither the Clinton ownershipchangedfromanagrariantoanur- ban
Administration in general nor HUDin particular was able phenomenon, but property ownership continued to
to translate this political insight into a significant shift in beviewed as an indication of one'sability and moral
federal programs. worth. Around the turn of the century, with the first wave
24. Democratic senator Barbara Mikulski of of population movement away from the downtown
Maryland, fearing a voter backlash from Baltimore's industrial districts of cities, only the affluent middle class
blue-collar suburbs, withdrew her support for the MTO (thanks in part to the new trolleys) could afford to move
program after Republican politicians claimed it would to owner-occupied one- or two-family houses inthe
promote an exodus of public housing tenants into their “streetcar suburbs” (Warner 1962). But as the economy
communities (Mariano 1994). grew and the middle class expanded, homeownership
25. According to GAO, state oversight of the increasingly became not only a symbol of status and
LIHTC varies in terms of project costs, eligibility of achievement but also a goal that working-class families
residents and other matters. The IRS does not adequately could strive for.Itwas not until after World War II that
monitor state compliance of LIHTC projects (U.S. GAO this goal would be widely realized, but as early as
1997). theturnof the century, the ideology of homeownership as
26. Advocates of the LIHTC turn the program's the “American Dream” took root (Marcuse 1980).
inefficiencies into a benefit by claiming that thecredits Presidents Calvin Coolidge, Herbert Hoover and Franklin
“allow nonprofit and for-profit developers to leverage Roosevelt all waxed eloquent over the benefits of
additional money to make the housing affordable” and homeownership (see Dreier 1982 for evidence of this).
that “[b]ecause it depends on investor capital rather than Making the country a nation of homeowners became a
just direct government subsidies, the LIHTC has imposed central feature of public policy, since homeownership
a market discipline that makes these housing investments was seen as a bulwark of social stability. For example,
fundamentally sound for the long term” (Enterprise during the depression, the banking system collapsed,
Foundation 1996). andhomebuilding, homebuying andhomeownership
27. The IRS requires that at least 10 percent of each declined dramatically. Starting inthe depression, the
state's annual tax credit allocation be set aside for federal government created several institutions
projects partially or wholly owned by nonprofit (FannieMae,theFederalDeposit Insurance Corporation
organizations, but many states allocate a much larger and theFederal HousingAdministration)tostabi- lizethe
share. banking system and maketheflow of mortgage funds
28. Being a propertyless tenant has neverbeen part more dependable. These policies created a national
of the American Dream. Housing in the United States market for mortgages andinsuredindividual depositors'
issymbolizedbythe free-standingsingle-familyhome. accounts from bankfailures. These policies allowed
Opinion surveys consistently confirm Americans' strong lenders to make long-term (typically 30-year) mortgage
preference for homeownership (Fannie Mae 1995; loans with a relatively low (3 percent to 10 percent)
Koretz 1998). From the outset, European settlers sought down payment. After World War II, FHA and VA
to establish property relations as the legal and moral mortgageinsuranceand guarantees,alongwith federal
underpinning of the new colonies. The earliest settlers highway programs, increased homeownership and
came to escape oppressive landlords. The abundance suburbanization, especially among white middle-class
ofland created enthusiasm about the possibility of families. (For a discussion of this history, see Jackson
individual ownership and “nourished the first settlers' 1985; Mitchell 1985; Hays 1995; Stone 1993).
vision of land as a civil right, a right against the long- 29. This discussion of the history of the mortgage
standing obligations of a crumbling feudal society” interest deduction draws heavily on Howard (1997).
(Warner 1972:16). Support for homeownership has been 30. One member of the Twentieth Century Fund
a key element of our civic religion. James Madison task force—Austin Fitts, an investment banker who
believed that “the freeholders of the country would served as Federal Housing Administration Commissioner
bethesafest depositories ofRepublican liberty” from 1989 to 1990 under George H. Bush, told the
(quotedinMarcuse 1975:197). Thomas Jefferson, who Washington Post:“We are providing a lot of money for
was unusual in favoring tenant suffrage, nevertheless deductions for very big homes and for second homes.
held that “the small landholders are the precious partof a Ifyou drive around McLean [Virginia] and Chevy Chase
state” (Jefferson 1956). President Andrew Johnson [Maryland], all of those homes were built with subsidies
supported the Homestead Act to offer land ownership on from the federal government” (Salmon 1992).
the frontier because “it would create the strongest tie 31. Previously, the real estate industry had exercised
between thecitizen and theGovernment” (Johnson its political muscle to keep interest rates low, to get
1850:951). In thesix decades from theend of the Civil government insurance for mortgage loans and to limit
War to the Great Depression, as immigrants from abroad government subsidies for public housing that competed
and from rural areas in the United States flocked to the with private rental housing.
32. In fact, Charles E. McLure, Jr. (1986), an prospects of a beleaguered bureaucracy. Urban
economist who designed the Reagan Administration tax Affairs Revew, Vol. 29, No. 1, 3-27.
reform policy, later observed that, “[e]ven if one grants Brinner, RogerE., David Wyss and Mark Lasky. 1995.
the case for substantial tax preferences for owner- Residentialreal estate impacts of flat tax legislation.
occupied housing, it is impossible to justify this Prepared for the National Association of Realtors by
distributional pattern of benefits.” DRI/McGraw-Hill, May.
33. The same legislation reduced tax breaks for Brownstein, Ron. 1995. Republicans wary of land mines
investors in real estate, including apartments, but in its surrounding proposal for flat tax. Los Angeles Times,
place created the Low Income Housing Tax Credit, anew December 18.
tax break for investors in low-income housing. 2000. Slow to define his candidacy, Gore attacked
34. The resolution concludes with the following: from rightandleftalike. Los Angeles Times, October
“Resolved ...that it isthe sense of the Congress that the 30.
current Federal income tax deduction for interest paid on Burns, Scott. 1998. Home mortgage tax break helps
debt secured by a first or second home should not be wealthy borrowers most. Houston Chronicle, March
further restricted.” Memo from National Association of 23.
Home Builders in author's possession. Carliner, Michael S. 1998. Development of federal
35. According to the Congressional Budget Office homeownership “policy.” Housing Policy Debate,
(1997), removing deductions just for second homes Vol. 9, Issue 2, 299-321.
would increase federal revenues by $3.5 billion over the Casey, Connie. 1992. Characteristics of HUD-assisted
five-year period from 1998 to 2002. Limiting deductions renters and their units in 1989. Washington, DC: U.S.
to $12,000 per return (for single taxpayers) or $20,000 Department of Housing and Urban Development,
(for couples filing joint returns) would have added $19 Office of Policy Development and Research, March.
billion to the federal coffers. Reducing are the maximum Church, George J. 1993. A call to arms. Time, February
mortgage debt eligible for interest deductions from the 22.
current $1 million to $300,000 would generated $12.7 Clinton, Bill. 1996. Transcript of remarks by President
billion in additional revenue. The CBO noted that only a Clinton to the National Association of Realtors.
small fraction of homeowners—about one-half a million Washington, DC, April 29.
taxpayers— would be affected by the last policy Collins, J. Michael, Eric Belsky and Nicolas Retsi- nas.
recommendation. 1999. Towards a targeted homeownership tax
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Peter Marcuse and W. Dennis Keating
6 The Per manent Housing Crisis: The Failures of

Conservatism and the Limitations of Liberalism
HOUSING ISBOTH a necessity of life provision of“a decent home and a suitable liv ing
and, inour society, a commodity, provided for environment for every American family.”1 Thus,
profit (see Achtenberg and Marcuse 1983). The the housing problem appears to beapermanent
tension between the two underlies the vagaries of featureof the housing scene in the United States.
housing policy in the United States. Liberals and However, liberal and conservative policies do not
conservatives agree that the market should exhaust the range ofwhat a progressive housing
betheexpectedprovider ofhousing for all, with policy could in fact accomplish toward that goal;
thegovernment acting only wherethe for-profit bothdrawbackfrom confronting the
market “fails.” Theonly disagreement isonhow fundamentalproblems that need to be solved, and
serious that “failure” is and just what government both neglect feasible alternatives that could more
should do about it. The closeness of the two directlyaddressthoseproblems. Both draw back
positions can be seen if they are contrasted with a from a Right to Housing approach.
Right to Housing position in which government's We begin with a briefformulation of the prin-
first obligation is to see that all are decently ciples of the classic conservative and liberal ap-
housed,and the for-profit market must be managed proaches to housing. The bulk of the chapter is
so as to be subservient to that goal (see Chapter 8). then devoted to a historical review of key housing
Thus, for liberals and conservatives alike, the forpolicy developments over time, beginning with
profit market isthe default position, with public World War Iand ending with the second Bush
action limited to its failures; for those adopting a Administration, highlighting differences between
Right to Housing position, government support for conservative and liberalpolicies as well as the
decent housing for all who need it isthe default issues that neither of them address, which a Right
position, with the for-profit market functioning to Housing approach mig ht confront. We
where it does not interfere with that provision. The considerkey characteristics, testing the history
Right to Housing position is simple (if complex in against each of them to see how significant the
implementation): The first task is to guarantee the differences really were. We then returntore- view
provision of housing to those who need it; the the similarities and differences in the two
disposition of housing as a commodity must be approaches and conclude with a summary of the
subordinate to that priority. evidenceastothe failures, successes andlimita- tions
Housing policy in the United States has only at of these policies.
one or two times (in 1937 and 1949; see below) One generally accepted set of conservative
come to close to a Right to Housing position. principles might bethose embodiedinthe 1982
Overwhelmingly, it has alternatedbetween “liberal”
and “conservative” approaches. But differences
between thetwoareatthemar- gin, with conservative
policies often aggravating housing problems and
liberal policies rather tending to ameliorate them.
Neither has suc- ceededinachieving the
fundamental official National Housing Goal
establishedinthe Housing Act of 1949: the
Reportof the President's Commission on Housing, a purposes ofpublic policy

body appointed under one of the most ideologically • Give priority in social policy to meeting the
conservative of recent American presidents, Ronald needsof the poor, assuming that circumstances
Reagan, whose appointees primarilyreflected and not individual failure produce poverty
themajor elements of the real estate industry • Limit excess profits and price-gouging through
(Report of the President's Commission on Housing use of governmental regulation
1982; Hartman 1983a). Reformulated somewhat, • Influence the location and form of housing
those principles state the following: inorder to achieve public objectives
• Consider housing as a long-term investment
• Encourage free and deregulated housing
suitable for financing through borrowing
markets
• Promote homeownership as a major goal
• Minimize government intervention, using it
• Consider the excessive concentration of wealth
only to establish a safety net for the deserving
andpowerbeyond a certain point a danger to
poor
democracy, and acknowledge the fairness of a
• Rely on the private sector and its profit in-
certain degree of redistribution inorder to avoid
centives as the primary provider ofhousing
gross inequalities
• Practice enlightened federalism, with maximum
decentralization to local levels of government
We might add as further characteristic oflib-
• Permit subsidies to be used through the market
eralpolicies:
—for instance, on the demand side
• Assure maximum freedom ofhousing choice
• They rely on the Democratic Party2 for im-
• Achieve fiscal responsibility and monetary
plementation inthe political arena
stability in the economy
• They have the support of tenants, labor unions
• Promote homeownership as a major goal and advocates for socialhousing
• Stimulate private accumulation of wealth as a
stimulus to economic growth Whilethere seem to beclear differences between
• Encourage individual responsibility to provide thetwoapproaches that might be reflecteddur- ing
and improve housing various national administrations and Congresses in
We might add as further characteristics of dealing withhousing issues, both are at sharp
conservative policies: variance from what might be considered essential
principles of a Right to Housing approach.Wedo
• They rely on the Republican Party for imple- not put forth an outline ofthe full content of that
mentation inthe political arena approachhere but merely suggest howfarfrom such
• They have the support of the for-profit housing a position are both the conservative and the liberal
andreal estate industry approaches:
The liberal approach to housing policy and
• Provide housing as an entitlement to all in need
programs has never been authoritatively artic-
ofit rather than specifying in advance thenumber
ulated, but there might be consensus around the
of units to be provided
following principles connected with that
• Allow decisions as to the quantity and quality
philosophy:
ofhousing provided, and its location, to be made
• Rely on the private housing market as the democratically through the political process
primaryproviderofhousingbutwithlimited rather than through the market
intervention to achieve public goals • Recognize the desirability of motivations other
• Provide for an important but supplementary role than profit for supplying housing
for government and nonprofit agencies • Allocate housing that is publicly provided on
asdirectprovidersofhousing,assumingboth will the basisof need, as a right, not on the basis
act with benevolent motives of“worthiness”
• Use central government power to achieve the We m ightadd as further characteristics ofRight to
The Permanent Housing Crisis 141
Housing policies: without restrictions. No one arguedfor continuation

of public ownership orfurtherpublic construction,
• They are outside the mainstream of housing let alone expanding the program, despite theclear
policies considered tenable by most in political national housing shortage, as a Right to Housing
leadership positions approach might have suggested (Radford 1997:37-
• They are supported, except under conditions 45).
ofcrisis(depression, civil turmoil), onlybya Homeownership was the key theme ofRe-
small fraction ofhousing advocates and then publican President Herbert Hoover's housing
primarily in an ideological, rather than practical policy, as it has been consistently for conservative
political, context approaches. The President's Conference on Home
Building and Homeownership that he convened in
A review ofkey programs over the pasthalf- Washington, DC, in December 1931 was the
century leads us to conclude that there are re- beginning of a series offederal moves in support
markable similarities and continuities among the ofhomeownership, which included theFederal
policies implemented throughout this history, Home Loan Bank Act of 1932, establishing a
whether in presumptively liberal or conservative reserve banking institution forhome mortgage
regimes, but that the policies ofneither lending. The thrust of the effort continued
resembleaRighttoHousing approach norhave seamlessly with passage of the
theyhave been anywhere near adequate to meet the HomeOwners'LoanActof1933,designedtore-
nation's housing needs. finance home mortgage loans in default, passed
A review of major historical periods inU.S. with Hoover'ssupport inthefirst year ofthe fol-
housing policy supports these general conclusions. lowing liberalRooseveltAdministration. The fa-
We focus on national policy, for reasons ofspace. vored status accordedhomeownership was then
further enhancedwith bipartisan passage ofthe
National Housing Act of1934, creating theFed- eral
PRE-DEPRESSION (REPUBLICAN Housing Administration (FHA) to provide
PRESIDENT, REPUBLICAN CONGRESS) federalinsurance ofhome mortgages. These de-
velopments enshrined a preference for a particular
The first action by the United States government form of individualistic, private tenure in housing
directly to provide housing was to meet whose thrust has never been ques- tionedbyeither
thehousingneedsofthewareffortduringWorld War I. liberalsor conservatives to this day.3
Thus, the Emergency Fleet Corporation was Those whoadoptaRighttoHousing posi-
established to house the shipbuilding industry's tiontendbeskepticalofthestrongprioritygiven to
workers, and the United States Housing homeownership and to see it more as attrac-
Corporation was established to meet the tivebecauseofthesensethatitprovidessecurity of
needsofworkers essential to the national defense. occupancy.Theyworry about its ambiguous
Only positions for or against involvement inthe war consequences in mixing expanded assumed se-
effort divided proponents from opponents, and curity and controlwith commodification, making
there was general agreement that both programs occupancy dependent on attendant market
should be oflimited duration. The relevant conditions and market fluctuations, with all the
legislation explicitly required sale of the risks(Dean 1945;Kemeny 1981). Those risks are
constructed units immediately following theend of seen as especiallysharp for households oflowin-
the emergency. The programs were oflimited come (Marcuse 1974), and alternative forms of
scope: Only 15,183 family units were builtunderthe tenure, providing the securitywithout the risk, have
two programs combined(Colean 1940). After the been proposed (Institute forPolicyStudies 1989).
war, there was a significant difference as to THE 1930s: THE NEW DEAL (DEMOCRATIC
disposition ofwhat was acknowledged to be high- PRESIDENT, DEMOCRATIC CONGRESS)
qualityhousing (Schuman and Sclar 1996). Liberals
sought to have itsold to nonprofit groups, The National Industrial Recovery Act of 1933,
conservatives (who had their way) to private buyers adopted as an emergency measure at the height of
the Great Depression and rushed through Congress housing for union members. The 1937 act relied on
by President Franklin Delano Roosevelt in hisfirst direct public construction by local housing au-
100 days inoffice, included a vaguely worded thorities, which built, owned and managed the
provision for a housing program. Under it, a housing under federal government oversight. The
Housing Division was established within the Public Louisville decision had held that the federal
Works Administration (PWA), which directly built government could not use condemnation powers
some 21,121 units of housing (Fisher 1959), forhousing, but there was little question that state
initially available to anyone interested, although in governments could use itand could inturn delegate
1936, income limits were placed on admission. But the power to local authorities. Construction was
in 1936, a federal court ruled PWA's power to subject to the Davis-Bacon Act, adopted in 1935,
condemn land for housing construction so that workers would be paid prevailing wages in
unconstitutional (United States v. Certain Lands in order not to undercut union rates. Eminent domain
the City of Louisville 1935). That ruling essentially (with compensation) was usedbylocalhousing
ended direct construction by the Housing Division, authorities to assemble building sites, thus
but not because it was more difficult to build exercising thegovernment's legal powers to
desirable housing only on land voluntarily sold to compel private property owners to sell their
the division—in fact, progressive housing property for a public purpose. Conservatives
advocates like Catherine Bauer consistently argued vigorously fought the program tooth and nail, and it
for construction on “green fields,” empty land fur- was not pushed by the Democratic president,
therfrom theacity's center,asfaster and cheaper than effectively preventing it from becoming law until a
building on inner-city land that had to be year after the beginning of Roosevelt's second term
condemned. Rather, it ended the program of new in office.5
construction because the power of condemnation If public housing was, at its inception, the
was often usedinconjunction with slum clearance prototype of a liberal housing program, was it the
(28 of 51 project sites were on slum land), “opposite” of a conservative program? In key
whichinturnearneditthesupportof significant respects, no. Roosevelt's initiallack ofinterest in
sections of the real estate industry, for whom slum pressing for passage of the program was only in
clearance was an economic blessing in the Great part attributable to expected conservative op-
Depression. Without that support, Harold Ickes, position; his stance also reflected a substantive
Roosevelt's presumptively liberal head of the PWA hesitation about the program—at least as to its
, killed the program. Conservatives had most progressive or“radical” features. Thus, the bill
consistently opposed public construction of as finally adopted contained a number of
housing and without even the lure of slum conservative features. Most conspicuous was the
clearance were pleased with the result of the program's relation to the housing market. While it
litigation (Radford 1997:Chapter 4). provided for direct government involvement inthe
The labor and housing reform lobbies instead provision of housing, it severely limited that
pushed for what became the Housing Act of 1937, involvement—in fact, limited it explicitly to groups
adopted under President Roosevelt's Democratic who were not in the market anyway. The upper
Administration during the New Deal, the most limit placed on who could benefit from the housing
clearly liberal period in U.S. history. For the first provided under the program was initially set at 20
time, it established publicly owned and operated percent below the income level at which private
housing as a permanent part of the U.S. housing housing was affordable so as clearly to avoid any
scene. It ranks as perhaps the most liberal of any competition with the private housing market. Thus,
piece of currently effective federal housing a large buffer zone was established between the
legislation.4 But Congress supported it reluctantly, public and the private in order to make sure the
and only after great if belated pressure by former would innoway compete with the latter. If a
Roosevelt. It was drafted and vigorously lobbied family crossed that line, they were required to
for by the organized labor movement, which sawit move out and had to re-enter the private market. As
both as a way of creating jobs (thus backed in Senator Robert Wagner, the prominent liberal
particular by the construction trades) andproviding sponsor of the bill, told Congress in urging its
adoption: “The most important consideration local authorities, appointedbylocalpoliticalleaders,

[behind the bill] is, that public housing projects meant that in most communities, no aggressive
should not be brought into competition with private competition withlocalreal estate interests was likely
industry” (U.S. Senate 1936, quoted in Mitchell to occur (Hartman and Carr 1969).
1985:247). Policies substantially challenging this ap-
Realproperty owners not only were not hurt by proachwere not seriously consideredduring this
the program, they benefited from it. One of the period. In reality, while public housing scores
most contested issues was whether housing projects reasonably well as a liberal program, it is hardly at
should be built on slum land or open the opposite end of the spectrum from conservative
land.Asnotedpreviously,ownersof slum buildings principles. On each of the points described above—
saw the potential for being bailed out of properties income eligibility, slum sites, program scale—
which, given depression conditions, were not liberal proponents of the legislation were forced to
producing profit and so cooperated actively in tying compromise. Withrespect to income limits, for
slum clearance to public housing, whileadvocates instance, the legislation's proponents agreedwith
for the ill-housed, including the legislation's conservatives that public housing should not
leading proponents, pressed for use of sites outside beallowed to enterwhere the private market was
of slum areas. Proponents pointed to cost savings functioning (even if it was demonstrably
inusing vacant land and also argued that allowing functioning poorly). A progressive position might
market forces to depress the value of slum easily have criticized the performance and record
buildings, which could possibly lead to their of the private sector, showing how the workings of
abandonment, would produce far lower acquisition the private market in land andbuildings were
prices at a later date. This was one of the key issues producing speculative pricing, monopolistic
inthe debates between the progressive Langdon practices and slum conditions, all inthe context of
Post and the liberalRepublican Mayor Fiorello profit-making because ofprivate ownership of a
LaGuardia in New YorkCity on wheretolocate that basic resource in limited supply. Proponents might
city's public housing projects inthemid-1930s. Post have arguedfor a public housing program
took the same position that the progressive analogous to the Tennessee Valley Authority,
Catherine Bauer had taken with regard to the which brought low-cost electricity to rural areas of
earlier PWA Housing Division programs.6 the South, producing housing that was directly
Perhaps the most important feature limiting the competitive with the private market and was
program'scompetition with the private sector was operating as a yardstick for private market
that, from the outset, the level of funding was so activities, making the cost of housing fairer and
meager compared with the need that the more affordable for middle-income families as
potentialforinterfering with themarket was well. But that was not the liberalprogram. By the
minuscule: From 1938 to 1940, the three years after same token, while advocates ofpublic housing
the program was fully under way until the onset of wanted a largerpro- gram than the one they got, the
World War II, the dollar value of new public idea that itmight be a substantial element of the
construction was just $300 million compared with nation's housing supply, large enough to have a
$6.8 billion in private construction, only 4.2 realimpactonthe totalhousing market, was not
percent of housing construction (U.S. Department partof the liberal agenda. One does findinthe
of Commerce 1975:Ta bles N-4, N- 20). Thus, writings of some of themore radicalhousing
public housing was hardly a major interference reformersof the period indications of an aggressive
with the private market. All indications point to the agenda (Bauer 1934; Wood 1931; Birch 1976;
fact that the amount ofpublic construction would Oberlander and Newbrun 1999), even approaching
have virtually stopped after that had housing for a Right to Housing, which may have come about as
World War II war workers not become of concern close as iteverhas been in U.S. policy to inclusion
for nationaldefense purposes. Today, federal public in the mainstream of housing policy. That ap-
housing accounts for only 1.3 million units, just proach, however, wasnotreflectedinthe liberals'
over 1 percent of the nation's housing stock. And political practice.
the effective decentralization of the program to Conservatives notably did supportNewDeal
housing programs that were designed to rescue the groups, ideologically liberal members of Congress,
bankrupt private housing system. Agencies and labor unions—wanted to revive the public housing
programs with this goal—the Federal Home Loan program, in limbo after its defunding following a
Bank Board, the Home Owners' Loan Corporation, conservative upsurge in 1939 (Woodyatt 1968:193-
theFederal Housing Administration (FHA), 229; Freedman 1969) andits conversion to a war
theFederal National Mortgage Association (later to housing program after 1940. Conservatives wanted
become the essentially private Fannie Mae)—all a mechanism to aid the private market in
were eagerly embraced as means to bail out the reclaiming downtown real estate in urban centers,
savings and loan system, reform the home where business expansion was made difficultand
mortgage finance system to benefit housing moreexpensive bythe presence
producers and middle-income homebuyers and of“incompatible”land uses, often working-class
create a government-backed secondary mortgage housing and olderindus- trial and warehousing
market (Keith 1973). These new federal agencies activities. The compromise, acceptable to liberals,
were administered on the principles and practices was the 1949 legislation, in which Title I
of the private market, as best exemplified by the established theurban renewalprogram and Title III
FHA, which adopted the racist “ethics” of re-established the public housing program
theNational Association of authorizing long-term (six-year) funding for a total
RealEstateBoards,denyingminoritieseligibility of 810,000 additional units. Public housing as an
forparticipation in its mortgage insurance programs entitlement
via “redlining” practices (Abrams 1955; Jackson wasneverevenmarginallyconsideredinthe dis-
1985). In the 1930s, liberals and conservatives cussions, as a RighttoHousing approach might have
alike supported these programs; if their incentives suggested,evenwith stagedimplementation. Key
to do so varied slightly, their mutual commitment support for the actual compromise came from
to support homeownership was always Senator Robert Taft of Ohio(“Mr. Republican,” as
identical.Indeed, unanimity on the desirability of he was known—see Gelfand 1975; Freedman
the expansion of homeownership has been a 1969). Only a fewlone progressives voiced their
hallmark of U.S. policy under every administration doubts with regard to the impact of urban renewal
since Herbert Hoover (if not indeed since Thomas on housing forlow- income families. 7
Jefferson, albeit in the quite different political and In lateryears, extensive debate arose about that
economic setting of amore rural society), up to compromise, when it became obvious that
andin- cluding the current Bush Administration. TitleIand the liberal purposes of Title III were
That the appeal of homeownership might have the contradictory.Under TitleI,land on whichlow-
hope of financial speculative profit as its basis income people livedwas acquired with public
rather than housing preference; that it can have funds, the residents were forced to move, the
severely negative economic consequences for landwas resold to developers at write-down prices,
many, particularly those of lower income; that it and generally new higher-income residential or
can lead to massive unplanned suburban sprawl and business uses replaced their former homes. The
environmentalpollution and undercuts otherwise hopes of some that redevelopment and urban
desirable policies such as mass transit, is not renewalwould be used to expand the supply oflow-
recognized in either the liberal or the conservative rent housing were disappointed. In practice, under
worldview (Kemeny 1981; Marcuse 1972). both Democratic and Republican Administrations,
Title I was moreoften used to advance
commercial anddowntown business interests than
THE 1949 HOUSING ACT (DEMOCRATIC to provide public housing.8 As a result, by 1967,
PRESIDENT, DEMOCRATIC CONGRESS) approximately 400,000 residential units hadbeen
destroyed under TitleIand only 10,760 public
The 1949 Housing Act—the major piece of housing units builtontheir sites (National
postwar housing and urban legislation— was of Commission on Urban Problems 1968; Hirsch
mixed parentage. Liberal prohousing forces— 2000). Afterpublic protest—some of it militantly in
lower-income housing advocates, civil rights the streets as well as at the ballot boxes—
requirements to THE CIVIL RIGHTS ERA (DEMOCRATIC

providereplacementhousingforthosedisplaced were PRESIDENT, DEMOCRATIC CONGRESS)
added to the legislation. Ironically perhaps, Title III
was put to that use, becoming the new homes for The legislation of the Kennedy-Johnson years,
those displaced by Title I, who weregiven from 1961 to 1969, culminating in passage of the
priorityfor admission to public housing by 1968 Housing Act—the first majorpiece of housing
federallaw.Therefore, no significant expansion legislation since the immediate postwar period—
ofdecent housing available to those with low came in a political climate that was encouraging for
incomes was accomplished by the 1949 Housing liberal policies. TheCivil Rights Movement; the
Act. There was more likely a net reduction urban riots/revolts in major cities across the
(National Commission on Urban Problems country, which the report of the President's
1968:163; Hirsch 2000:158189). The benefits Commission on Civil Disturbances (the Kerner
redoundedrather to the real estate, development Commission) spokeof as raising the specter of“two
anddowntown business interests that profitedfrom societies, one black, one white—separate and
Title I's subsidies and unequal” and asolidly DemocraticCongress
localgovernmentpowers(inparticular, eminent andPresident all augured well for liberal housing
domain takings to assemble parcels for redevel- legislation. It brought to the forethe issues on
opment and their sale at written-down below- which liberals distinguished themselves from
market prices). conservatives,9 issues of civil rights andrace
Apositionsubstantiallychallengingthepost- war relations and the extent (but not the nature)
conservative push around urban redevelopment ofgovernment action in the housing field.
would have looked for a quite different result. As Both electoral politics and the turmoil of
with the 1930s, itmaybeargued that what actually thecivil rights andblack liberation movements
happenedwas forced on liberals as a matter pushed the Kennedy Administration—elected in
ofpolitical necessity. But that is not really true. 1960 by a slim margin with substantial backing
Liberals did not oppose the basic principles of from the African-American vote—to take an
urban redevelopment embodied in the 1949 act. affirmative posture toward housing issues. This
Under the legislation, private property was fully was first evidencedinthecivil rights arena. In 1962,
protected and private profit assured. Although President JohnF.Kennedy issued Executive Order
eminent domain (taking) powers werecentral, for #11063, banning racial discrimination in federally
the most part, the landwas bought from small assisted housing. Legislation followed, first the
property owners and resold at a considerably Civil Rights Act of 1964, then the Voting Rights
marked-down price to large real estate developers. Act of 1965, followed by Title VIII of theCivil
Planning for reuse of the assembled sites was Rights Act of 1968, incorporating into legislation
ineffect leftto the private sector: Local public prohibitions on discrimination in much ofprivate
redevelopment aswellaspub- licly assisted housing. Conservatives
agencies(whosecommissionersmostfrequently agreed in principle with liberals on the
representedbusiness interests [Hartman 2002a; undesirability of racial discrimination, and both
Mollenkopf 1983]) had to findprivate devel- political parties were divided (largely along North-
operstotakeover the rebuilding/investment process. South lines) on howfar the federal government
Land sold to such developers then produced should act in the area. In broad summary, both
projects constructed, owned and managed by sides agreed that direct discrimination by
profit-making entities. Liberals did not oppose this government based on race should be prohibited and
use ofpublic powers and funds to facilitate private that government should encourage
market development, and the progressive position nondiscrimination in private housing. Liberals
of some 1930s public housing advocates referred to weremuch morecon- cerned to pushfor enforcement
above favoring undeveloped sites over slum sites ofantidiscrimi- nation measures in private housing
was not pushed. and differed from conservatives on the means of
enforcement (testing and affirmative enforcement
vs. responding to complaints) and as to the budgets
and powers available to the enforcing arms of trade unions, architects, materials suppliers. A high
government. Conservatives sawfederal action numerical housing production goal of course suited
limited to prohibiting discrimination;liberals them well.The reliance on private construction was
vacillated in going beyond that position and unchallengedinthe act and fit wellwith conservative
pressing for integration as an affirmative policy ideology.Indeed, the bulk offederal government
goal.Neither camp,since the highpoint ofcon- cern involvement was through a writedown of the
inthis period, has made dealing with the race issue interest rate on privately originated loans (from
a priority for attention in a country whose housing market rate to as low as 1 percent)—that
ismore segregated than almost any other country istosay,government payment ofinterest to banks
inthe world, barring South Africa.10 and other lending institutions to finance private
The 1968 Housing and Urban Development Act construction andpur- chase ofhousing. The Kaiser
similarly was strongly influenced by the turmoil of Committee had furtherrecommended on an
the period.Two national commissions fed directly experimentalbasis what would later be called a
into its drafting: the President's Committee on housing allowance program, under which support
Urban Housing (the Kaiser Committee) and the would be provided to ownersof existing private
National Commission on Urban Problems (the rental hous-
Douglas Commission). What resulted was inginordertomakeitprofitableforthemtolease their
legislation about which liberals were uniformly units to low-income tenants. Those approaches, not
proud.The centerpiece of the act was formulation contested byliberals, laterbecame thecenterpiece of
and promulgation, for the first time, of a President Richard Nixon's conservative housing
quantitative housing production goalfor the nation, policies.
with specific targets forlower-income housing and The 1968 Housing Act's production goals for
specific governmental measures to achieve these subsidizedhousing lumped together moderate- and
targets: 26 million new units over ten years, 6 low-income households, and through the structure
million of them for low- and moderate-income ofthe programs established in the act strongly
households. The package sought by liberals favored those ofmoderate income and provided
included expansion ofpublic housing (not included little for those of low income. Implementation of
in the final legislation) plus a new program of the programs was left almost entirely with private
interest subsidies for rental housing, targeting initiative: Private developers under Sections 235
moderate-income households (Section 236). A and 236 applied for financing fordevelopments that
majority of Republican membersof Congress theyproposed, which then were reviewed locally
supported the legislation, including a program of and funded if they met federal guidelines and fell
low-interest loans for homeownership, also within HUD's available budgetary allocations.
addressedto moderate-income families(Section 235 Thus, the 1968 act, often seen as a highlight of
—see below regarding scandals under this liberal success in housing policy, did not sig-
program). Conservatives and liberals came to- nificantly challenge any of the key precepts of
getheronacoherentsetofpolicies;theonlyissue that conservative housing policy. Despite some general
set them apart was disagreement on the role calls for theadoption of asubstantive rights
ofpublic housing. Evenonthe issue ofdiscrimi- approachbyleaderssuch as Martin Luther King, Jr.,
nation in housing, broadfair housing legislation was a Right to Housing was nowhere near the
separately adopted, although hardly going as far as mainstream agenda. No major investment in
many wanted (see Chapter 3). publicly owned, nonmarket housing was proposed;
The substance of this seemingly remarkable private profit-motivateddevelopers were relied on
consensus bears closer examination, however. to implement the program, and the entitlement
TheKaiser Committee, which advanced the 26 approach of a RighttoHousing was not discussed;
million unitgoalfor new housing production, was a direct government involvement was severely
heavily business-dominated group, led by limited andbenefits weretargeted to those with
industrialist HenryJ. Kaiser, and included moderate incomes, rather than to the poor,
representatives of every major sector of the in- unemployed or those out of the workforce. The
dustry: builders, financial institutions, building provision setting production goals, modest as
theywere, had no teeth,and thegoals forlow- direct government provision of housing, and only a
income housing were never even approached. No fewprogressive voices questioned the approach
conflict with conservative ideology was involved, overall (Hartman 1983b, 1983c). The major
and the resulting package earned the ideological criticisms were that they would be ineffective in
andpolitical supportofRepublicans and the housing tight housing markets and/or would inflate the price
industry. With the change to an ideologically rigid of housing primarily to benefit landlords. A Right
conservative Republican Administration, the earlier to Housing approachwould have furtherquestioned
liberal Democratic sponsorship of the 1968 act the net result even of an expanded allowance
nevertheless was a major factor leading President program: that theallocation, location andprice
Nixon in 1973 to proclaim a moratorium on all ofhousing would be left for determination by the
housing programs, retroactively justified by a private market.
review of all federalhousing programs that indicted But the notion that drawing on existing housing
them for high costs, inefficiency and inequity (Bell was cheaper than new construction appealed to
1985; Hartman and Keating 1973; HUD 1974). The both sides. Andindeed on the face ofit, it wasa
end result was a full-scale shift to a demandside simpleandlogical approach. But as the history of
policy of subsidies to tenants, to be used in the Section 8 has demonstrated, where inadequate
private rental market. supply is a major cause of housing problems (as is
true in most metropolitan housing markets),
vouchersand certificates have proven to be an
THE 1974 HOUSING AND COMMUNITY inadequate substitute for construction programs,
DEVELOPMENT ACT (REPUBLICAN particularly for minorities (HUD 1999). High rates
PRESIDENT, DEMOCRATIC CONGRESS) of returned vouchers from searchers unable to find
a suitable unit, landlord resistance to accepting
Community Development Block Grants (CDBGs), subsidized tenants, substandard conditions of
embracing the conservatives' desire to extricate the Section 8-subsidized units and other market
federal government from direct involvement in realities as well as the vagaries of Congressional
urban issues, and the Section 8 program, the formal budgetary politics all are factors undermining this
adoption of housing allowances as the chief new approach.
form of subsidizing low-income households, The more liberal Congress, pressed by housing
werethetwomain features of the 1974 housing advocates andrepresentatives of the housing
legislation. TheCDBG approach followed the industry, negotiated a modification to the pure
consistent conservative preference for reduction of housingallowanceapproach,onethatpermitted
federal involvement in social welfare and was commitments for future Section 8 subsidies to be
acceptable to liberals in part because it seemed to assigned to a developer (or owner, forrehab),
be consistent with their ideological espousal of whothus could use them to assuresteady rental
grassroots democracy. In practice, it gave greater payments and thereby obtain financing for con-
freedom to local political and business interests to struction of newhousing: the so-calledSection 8
use federal funds with more flexibility than explicit new construction program. In the more con-
federal involvement would have provided. servative Congress of 1983 that adaptation of
The allowance approach, which has a long and Section 8 was ended.
checkered history, is ideologically the prototypical But a logical progressive alternative to housing
conservative concept of how subsidies should be allowances for lower-income families could have
handled, if indeed they aretobe paid at all been implemented. In situations where supply was
(Friedman 1962). Experience suggested it was adequate but effective demand was inadequate,
neither an efficient nor an equitable method of themarket could have been allowed to depreciate
subsidy (Struyk andBendick 1981), but it was the the price of existing housing and then buy it and
method that maximized the role of market forces retain it in public or other nonprofit
and minimized the need for direct government ownership.Wheresupply was inadequate,
action.Liberals did not oppose housing allowances construction ofpublic housing would have been a
orprotest against thesubstitution of allowances for log ical answer. That was the same logic originally
advocated by public housing proponents as the best rejection of a loan had sound business basis, it was
andleast expensive way to clear slums: Rather than permitted. By preserving the defense of sound
acquire them immediately via eminent domain, let business reasons for refusals to lend, lending
the market, with new public housing as practices were perhaps rationalized a bit but no
competition, drive their price down and then serious interference with market considerations was
acquirethem for clearance andrebuild- ing. In 1974 involved. Ironically, as far as is known, lenders
as well, using an expanded supply of public who have providedloans in inner-city neighbor-
housing to lower the market price of private hoods through Community Reinvestment Act
housing could have been tried, but no voices were (CRA) agreements have foundittobe profitable
raised from the liberal community for such an (Squires 2000.)
approach. It would not have bailed out private An approach differing radically from both the
landlordsandwould have interfered with making conservative and liberal approaches, such as a
profit inthe private housing market. No liberals RighttoHousing might encompass, might have
pushed for such a progressive alternative to the looked at the provision of mortgage financing as a
conservative approach. matter ofright, an entitlement much as, say, food
stamps are provided. Indeed, FHA mortgage
insurance is in effect a right, an entitlement,
THE CARTER INTERREGNUM extended to anyone who qualifies. The direct
(DEMOCRATIC PRESIDENT, DEMOCRATIC provision of mortgage financing by government (as
CONGRESS) in other programs, such as those administeredbythe
Small Business Administration) might have moved
The Home Mortgage Disclosure Act of 1975, towardaRightto Housing approach. Even the
pushed through in the weakened Republican possibility of amore progressive approach,under
Administration of Gerald Ford, followed by the which lending institutions might in fact play a
Community Reinvestment Act of 1977, passed redistributive role by using profits from mortgages
under the DemocraticAdministration of President in higher- income neighborhoods to subsidize
Jimmy Carter, represented victories by liberals in mortgages with more riskin lower-income
Congress, enacted after a number of years of strong neighbor-
agitation by National People's Action and civil hoods,wasneverseriouslyconsidered(Marcuse
rights groups. It was a high point inastrugglearound 1979).
the issue ofredlining, the discriminatory provision The most significant contribution of the Carter
of housing credit by lending institutions and the Administration, despite the fact that he
FHA based on race, pursuant to whichhousing in hadaDemocraticCongressduringallfouryears, was
wholeneighborhoods was written off as being promotion of theneighborhood self-help approach,
ineligible for consideration for loans. By first including creation of a formal division within the
requiring disclosure of where and to whom housing U.S. Department of Housing and Urban
loans were made and then setting standards for in- Development supporting that ap- proachand the
stitutions to give loans inall places where they did direct funding of a limited number of nonprofit
business, the freedom of private lending in- organizations. Funding was slightand did not
stitutions to use their own discretion in giving loans survive theCarterpresidency. The theme of a role
was significantly limited. Lendersand conservatives for nonprofit organizations in housing is, however,
opposed legislation along these lines, arguing one in which the conservative and liberal
instead for voluntary compliance and education, approaches come together but from very different
anddenying that discrimination was intentional. directions. For conservatives, nonprofit housing is
Conservatives and liberals consistently fought over a replacement for government action,astep toward
the provisions of legislation in this area. privatization. For liberals, nonprofit action is a
Yet the differences remained limited: The replacement for profit-motivated action, a step
obligation of private lending institutions was to not away from privatization. Conservatives look
discriminate on the basis of race or a geographical toward nonprofits ultimately as being entirely
surrogate for race; but both sides agreed that if the emancipated from reliance on government.
Liberals, when they are realistic, realize that a housing. A virulent anti-HUD mood prevailed
significant role for (HouseRepublicanshadopposedcreationofthe
nonprofitsdependsongovernmentsupport. Neither department in 1965), taking the formofheavy
side is willing to acknowledge—as nonprofit budget cuts and,via David Stockman'sOffice of
providers too well know—that they are dependent Management and Budget, ending authorityfor
on government subsidies for their significant future construction of low-income housing as well
contribution, and cannot touch the bulk of the as rescissions of HUD's existing appropriations
housing problems of low-income households. 11 For (Hartman 1986). Reagan's proposals for
conservatives, nonprofits are better than HUDsought to end all federally subsidized con-
government, andfor liberals, nonprofits are better struction programs (whichrequire long-termfi-
than the market—for neither isthere an nancial commitments) in favor of short-term
essentialdesiretoexpand thescopeof nonmarket housing vouchers. Opposition by low-income
housing, and neither side acknowl- edgesthe housing advocates and their Congressional and
importance of the linkbetween affordable state andlocal government allies created a stale-
nonprofithousing andgovernmentsubsidy. As well, mate.The resultwassomenewconstructionun- der
neither differentiates between charita- the Section 202 program for the elderly and
blenonprofits,ontheonehand,andcommunity and amodest new moderate-income construction
resident-based nonprofits, on the other. A Right to program forced on HUD—the Housing Devel-
Housing approach, by contrast, would see nonprofit opment Action Grant (HoDAG) program. Section 8
organization as a way of achieving residents' became the primary low-income federal housing
control over their own housing assistance program (Hays 1995). A fur-
andexcludingthespeculativeprofitmotivefrom therReaganAdministration blow to low-income
housing relationships. households was raising the portion of income that
THEREAGAN AND GEORGE H. W. BUSH tenants had to paywhile living in subsidized
ERAS (REPUBLICAN PRESIDENT, DIVIDED housing from 25 percent to 30 percent, a sav-
OR DEMOCRATIC CONGRESS) ingstothegovernment estimated over five years to
total $6 billion—that much taken out of the
The professed aimof the Reagan Administration inadequate family budgets of the low-income
was to reverse NewDeal social programs. In the beneficiaries of the federal housing programs
housing area, this meant cutting back drastically (Hartman 1986). While the worst of the pro-
andin some cases eliminating federal income- posedbudgetcutswerebluntedbyaDemocratic
targeted housing subsidy programs, leaving the Congress, thefights wereabout amounts rather than
private market to serve most lower-income about programs; liberals even ultimately tacitly
Americans. This formulation of course overlooks accepted the25percent to 30 percent increase, and
the contradiction that the so- called private housing at the turn ofthe century,a“liberal” HUD Secretary
market depends heavily on government support, inthe Democratic Clinton Administration raised the
from the massive tax breaks to homeowners (see threshold even higher by considering as the
Chapter 5) and landlords to support given to economic threshold for “worst case”housing
lendersthrough theTreasury,theFederal National expenditures paying over 50 percent ofincome
Mortgage Association (FNMA) and the Federal (HUD 2000a).
Reserve System. Tax “reform” was a majorpartof the con-
Ronald Reagan's 1982 President's Commission servative agenda. For low-income housing pro-
on Housing, a major source for the state- grams, it meant repeal of certain tax benefits earlier
mentoftheconservativepositiononhousing,as accorded to producersof eligible housing to be
outlined in the opening section of this chapter, was replaced in 1986 by the Low Income Housing Tax
the major jumping-off point for the accelerated and Credit (LIHTC), which provides a credit against
intensified version of theNixon Ad- federal income taxes in connection with the private
ministration'sapproach.Criticism andrejection of development ofhousing forlow-and moderate-
supply-side strategies were centralpoints, un- income households, the amount ofthe credit
derscoredbymoves to privatize existing public dependent on the proportion ofunits in a
development allocated to such groups. The credit supply of available low- renthousing, growthin
may then besold by the developer,and since it is povertyrates, structural changes inthe economy and
most useful to taxpayers in top income brackets, it the deinstitutionalization movement
has maximum appeal to upper tax bracket (unaccompaniedbyprovi- sion ofadequate
taxpayers and corporations. The LIHTC is clearly community mental health services) greatly
vulnerable to a number of criticisms: It is increased the need for homeless shelters, social
inordinately complicated, providing a bonanza for services and low-income housing (Baumohl 1996).
specializedinter- mediaries, lawyersand In the face of such a dramatically observable need
accountants, who reap a significant partofits for housing for the poor,the conservative response
benefits; it is regressive, in that its subsidies are was based on the ideological conviction that
channeled through benefits for upper-income conditions such as
taxpayers; andit does not provide deep enough homelessnesswereanindividual'sownproblem, for
subsidies to provide housing for very-low-income which the individual should be responsible.
households (Schwartz et al. 1988; Stegman 1992). Conservatives denied that homelessness was a
Yet liberals accepted it, despite their criticisms, and major social problem and rejected the notion
soon sawitas their best hope for financing new offederalresponsibility to address it. Consistent
construction, as did nonprofit housing sponsors. with their principled position against federal
Fundamental progressive criticism ofthe very involvement in social issues, they held this was a
concept was all but forgotten. Raising issues of a problem to be dealt withbylocal governments and
Right to Housing would have seemed to be “pure private charities as well as religious organizations.
pie in thesky” under the circumstances. Thus, the Reagan Administration sought to
Conservatives and liberals have tread very minimize its magnitude and re-
softly on the tax provision needing thegreatest sistedcallsfornewfederalprogramstoconstruct
reformof all,the massive collective deduction that emergency shelters. But the public moral shock at
homeowners receive for their payment ofreal estate homelessness, increasingly visible in almost all
taxes and mortgage interest, and nontaxation of the major cities, forced even that Administration to
imputed income from their ownership—what Peter approve ameliorative legislation, agreeing with
Dreier has strikinglyla- beled as the “mansion liberalsonits terms. That even (orpar- ticularly) the
subsidy.” It has been the progressives who have homeless had a right to decent, permanent, secure
pointed out the gross disparity between the subsidy housing in suitable neighborhoods, and that the
to upper-income households and that for lower- need could only be met by a large-scale program
income households. In 2000 (using 2001 dollars), for the construction of additionalhousing, was not
the total of direct HUD and Department of part ofeither party's consideration (Marcuse 1988).
Agriculture housing subsidies of approximately The ideological conservative opposition to a
$31 billion amounted to about one-fourth of the federal role on homelessness was partof a general
indirect housing subsidies of $118 billion to principled opposition, not only to federal
homeowners and investors. Serious challenges to affirmative actions on housing issues but to any
this regressive subsidy came only from form ofgovernmental regulation in which pro-
progressives (see Chapter 5), without resonance gressive socialpurposes interferedwithprivate
from liberals or conservatives. housing market profits. The attempt during this
Duringthis period,theonlysignificantlynew period to nullify local rent regulations by ty-
legislation12 proposed andpushed throughbya ingreceiptofvariousformsoffederal assistance to
DemocraticCongress over theobjections ofthe states and localities to the absence ofrent regulation
Reagan Administration was the 1987 McKinney illustrates this, ironically putting the two principles
Homeless Assistance Act (named after its chief in contradiction to each other. But pressures from
Republican sponsor, who diedfrom complications housing industry interests were enough to have the
of AIDS—Foscarinis 1996; Hays 1995). During the Reagan Administration attempt to use federal
1980s, homelessness had emerged as a major powers to override local decisions to controlrents.
national phenomenon for the first time since Ultimately, tenant action (more than liberal
theGreat Depression. A combination of the reduced political opposition) averted the Administration's
proposal to involvingthe postwarSection 608 program under

tiefederalassistanceforotherhousingandcom- munity which the FHA allowed developers to build
development programs to elimination ofrent essentially risk-free rentalprojects without any real
controls, but conservatives atlocallevels, ledbywell- equity investment on their part. Ris-
financedlandlord groups, succeeded in limiting or ingFHAforeclosuresledtoCongressionalinves-
repealing almost all rent regulations, certainlythe tigations, which revealed that lax oversight had
stronger ones(Keating 1998). The ideological given developers free rein to profit and then walk
justification relied on the conservative argument awayfrom these financially troubled projects
that the private, unregulated marketwill solve the (Welfeld 1988:68-69). Richard Nixon foundhis
housing affordabilityproblem by increasing the Administration miredinasimilarhousing scan-
housing supply at theupper ends, leaving dalintheearly 1970s. Congressional investigations
ittothefiltering-down process to takecareof those revealed widespread abuses inthenewly
with lower incomes (Salins and Mildner 1992). createdSections 223 and 235 (homeownership) and
Yet, again ironically,certain forms ofrent regulation Section 236 (rental housing) subsidy programs
are not so repugnant createdbythe 1968 Housing Act, both of
toconservativesthattheycannotendorsethem when whichinvolvedprivate construction with signif-
pragmatically as briefly necessary. Thus, icantprofitpotential.WidespreadlaxFHAover- sight
CalvinCoolidge in 1925 could be found endorsing and occasional corruption in the approval
the District of Columbia Rent Act (granted process led to extremely high foreclosure rates that
underpressure;seeHavlik 1930, citedinRadford cost the Treasury heavy sums in guaran-
1997:47, 223), and Richard Nixon in 1971 to 1973 teedbankbailouts and ruined the prospects
included rents in his price-control measures. forlower-income occupants ofthese subsidized
Examining the substance of the various forms units to obtain better housing (Hays 1995:113130).
ofrent regulation, however, it becomes clear The problems inthe private use of these programs
thatboth liberals and conservatives considered it then, ironically, were used to justify President
appropriate for rent regulation to guarantee a Nixon's 1973 moratorium on all governmental
“reasonable return” to landlords. The idea that housing subsidy programs and contributed to the
priority to landlord returns might have to give way demise offederal subsidies for permanent new low-
to larger social needs, theunderstand- income housing. The ironyis increasedbythe fact
ingofthelogicofrentregulation(Marcuse 1981, that the one housing program with the greatest
1986b) that might accompany a Right to Housing, direct federalin- volvement, public housing, has
was advanced by neither side. had virtually no widespread scandals in its
Both Democrats and Republicans encoun- administration over its more than 60 yearsof
teredissues ofcorruption intheadministration of existence. The answer to corruption in the
their housing programs, and for largely the same administration offederal housing programs would
reasons. Both relied overwhelmingly on the private thus logically be, consistent with the principles ofa
sector to build, finance and manage housing within RighttoHousing, to minimize the role ofprivate
an overwhelmingly private housing market. The profitinthe implementation ofpublic programs and
private sectoris, necessarily,concernedprimarily go inthe direction of direct governmental
with profit, not with social purpose. It will construction, ownership and management; but that
inevitably tailor its use ofpublic programs so as to progressive approach to corruption has not
maximize profits, and if persuading public officials foundfavor with either liberalsor conservatives.
to bend the rules in its favoris feasible, it will do so. The direct links between conservative housing
Since conservative administrations favor private policies and the real estate industry are strikingly
sectorinvolvement even more than do liberal ad- illustrated by the revolving doorbe- tween the
ministrations, corruption and mismanagement private sector and topfederalpolicy- making
scandals are marginally more likelyto occur under positions. Republican administrations have
Republican than under Democratic administrations. routinely recruited federal policymakers from the
The first major scandal ofthe postwar period housing industry, even when they opposed the very
occurredduring the Eisenhower Administration, programs that they aretoad-
minister.Forexample,AlbertCole,Administra- tor of frequently troubled for social, physical and

the Housing and Home Finance Agency management reasons. It is not competition between
(predecessor to thecabinet-levelDepartment of goodpublic, nonprofit and socially oriented housing
Housing and Urban Development) was a former and private, profit-oriented housing; rather, it
Congressman who had voted against the public simplylowers public housing into the functional
housing program (Keith 1973:110-111). Thefirst equivalent ofprivate housing, with no increase inthe
Bush Administration'sHUDSecretary, Jack Kemp, housingsupplythat might drive private sector prices
was ideologically opposed to public housing, down.
whichhe attempted to privatize. Labeling “homeownership” as turning over title
frompublichousing units to individualtenants fits
well into conservative ideology.Itwas a key
THE 1990 AFFORDABLE HOUSING ACT element in the conservative program offor- mer
(REPUBLICAN PRESIDENT, DEMOCRATIC HUD Secretary Jack Kemp that ended up as the
CONGRESS) Homeownership Opportunities forPeo- ple
Everywhere (HOPE) provisions ofthe 1990 act.
The 1990 Affordable Housing Act was the first in a There was early and soon justified skepticism
series of more recent continuing major legislative (Rohe and Stegman 1992;Peterman 1993) as to
and administrative moves to reduce andperhaps how manypublic housing tenants could or would
entirely dismantlethe federalpublic housing benefit from the program, but the program
program. Three initiatives were involved: the isambiguous withregard to liberal tenets. On the
“vouchering-out” of public housing; permitting one hand, the economic impact on tenants
public housing tenants to buy their own public isofdubious benefit to them. Forindividu- als
housing units on apparently very favorableterms; coming into “ownership,” there continue to be
and the programs to deal with “severely restrictions on their ability to make decisions about
distressed”projects, ending in the current HOPE VI their units, whether due to the multipleunit
program (see below). The remarkable thing about characteristics of most public housing de-
all three initiatives was that they were introduced in velopments or because of legal restrictions on
a quite conservative Republican Administration but profiting from government subsidies as a result of
expanded andpressedforward in a presumptively resale. Tenants get ownership only ina quite
liberal Democratic Administration. At the same restrictive meaning of the term. For low- income
time, the Republican legislation also households as a class, the total number of units
containedprovi- sions for supportive services available in the subsidized housing stock is reduced
insubsidizedhousing, a continuing liberal under this approach, since units converted to
approach. individual ownership are permanently
“Vouchering-out” gives public housing res- eliminatedfrom thestock availableto future income-
idents the cash equivalent of the government's eligibleclaimants. Therefore, liberals have reason to
public housing subsidy andlets them spendit inthe oppose the program. On the other hand,
private market, much as theywould use a Section 8 homeownership is a means of empowerment,
voucher,with the added wrinkle that it which has always been a concept appealing to
canbeusedforhomepurchaseaswellasrenting. It liberals. Thus, opposition to this 1990 program has
represents both marketization and subsidyfor focused moreondetailsthan on principle. But a
expanded homeownership, both conservative significant alternative has been neglected:
staples not much different from liberal goals. homeownership implemented in collective form,
Vouchering-out puts public housing squarely into such as a cooperative association in which all
the housing market: Public housing managers must tenants/shareholders would be participants, but free
compete with the private market for tenants, of market pressures to sell to the highest bidder on
without the private market having any ofthe public termination of occupancy, thus maintaining the
sector's obligations to provide housing for those units available to low-income residents and giving
most in need, using an existing, often them real powers of management. Such an
parsimoniously built housing stock that is arrangement would also avoid the regressive
distributional impact among public housing tenants management. There have been some good results
arising from the program, which gives with this program.13 But the dominant paradigm for
preferencetoten- ants with resources and initiative HOPE VI is demolishing parts or all
over those in greater difficulty. But such an of“distressedprojects,”reducing density,
approach, consistent with an effective Right to introducing mixed-income housing— all perhaps
Housing for all, runs counter to both conservative desirable if the reduced number of units
and liberal ideologies of homeownership as a availabletothose ingreatest needwere replaced (see
market- located, asset-building for-profit program. National Housing Law Project et al. 2002). But
A fur therinitiative that hadboth conser vative there no requirement to doso: An equivalent
and liberal support has apparently died, largely as a replacement provision in the originallegislation was
result of its own contradictions: tenant assumption subsequently deleted (Wexler 2001). Further, the
of public housing management responsibilities, program can serve to introduce or extend
presumably as a method of tenant empowerment. gentrification to whole neighborhoods, as the
Tenants in public housing had for years pressed for current program in Chicago is accused of doing. It
a greater role in decisionmaking over how public has been tenants at the grassroots level, not liberals
housing was run, and in the militant 1960s in Congress or at HUD, who have fought such uses
achieved some significant successes, ranging from of the program (see Smith 2000).
fairer formal leases to rent payments based on a The distinction between liberal and conser-
tenant's income up to a ceiling, regardless of the vative positions on housing policy, which we argue
project's varying capital costs and operating has always been a distinction within a limited range
expenses. Jack Kemp was a leading force pushing of positions—Right to Housing alternatives being
for creation of tenant management corporations in excluded from consideration by both—has
public housing projects, a position consistent with erodedfurtherinthe period since
the conservative philosophy that individuals should 1968.BythetimeoftheClintonAdministration, the
be responsible for their owncondition and that so- rangeofdifferenceswasincreasinglydifficult to
cial programs should be decentralized as much as detect (Meeropol 1998). Not much newhap-
possible. Thismovealso was a way to get gov- penedwithhousing during the centrist Democratic
ernment out of the public housing management Administration of President Bill Clinton. Faced in
business. After two widely touted “successes,” the the second half ofhisfirst term with a staunchly
federal government was increasingly reluctant to conservative Republican Congress, it is hard to tell
cede real control to tenants and give them the whether what was done should be entered on the
financial supportneeded to operate a project liberal or conservative sideof the ledger.The
successfully; tenant management today is more Empowerment Zone legislation (Marcuse 1994,
advisory on the smallerdetailsofhousing man- 2000), the major urban initiative during Clinton's
agement than a real decentralization of control over presidency,specifically excluded
the project (Peterman 1998). subsidiesforhousing construction or rehabilitation.
Indeed,Henry Cisneros, Clinton's first HUD
Secretary, put forward a program for “reinventing”
THE CLINTON YEARS (DEMOCRATIC his agency that many considered a substantial (if
PRESIDENT, DEMOCRATIC THEN tactical) capitulation to Republican pressures. On
REPUBLICAN CONGRESS) the liberal sideof the ledger, the dissolution of the
HOPE VI isthe latest in HUD's programs to deal was avoided, and the number of demand-side
with the public housing it has inherited. It could be housing vouchers and low-income housing tax
an excellent program, acceptable to both credits were increased, both measures quite
liberalsandresident tenants' groups. However, it consistent with the mainstream of conservative as
could raise conservatives' fiscal ire, for it provides well as liberal housing approaches. On the
funds for improving and modernizing public conservative side, the United States, under liberal
housing projects that maybe in poor physical shape, leadership, took a position at the United Nations'
deserted by tenants or suffering from bad 1994 Istanbul Habitat II conference, strongly
opposing inclusion of a Right to Housing in the in 2001 without a housing agenda. Bush's choice as
conference's finaldeclaration, rejecting inclusion
HUD Secretary, Mel Martinez, was an obscure
ofprogres- sive language supportedin principle by a
Florida official, presumably chosen in large part
majority of the delegates (see Chapter 8). At nobecause of his Hispanic background (like Clinton's
time inthe 1990s did housing or urban issues first HUD Secretary, Henry Cisneros, who,
appear as a matter of importance on either the however, was known nationally as mayor ofSan
liberal or the conservative agenda. Typically, tax
Antonio).
credits, which are a way both of obscuring sub- Under the Bush Administration, little attention
sidies for housing andproviding major benefits to
has been paid to housing. Thesinglemajor HUD
higher-income taxpayers and corporations, were far
initiative underBush and Martinez was the
greater than direct appropriations for HUD during
announcement in June 2002 of agoal to increase
the entire period, with the former overtwo-and-a-
minority homeownership by 5.5 million, with an
halftimesgreater thanthe latter as of 2001, theend of
emphasisonexpandedhomeownership for minorities
Clinton'sterm. The essential harmony between key(Washington 2004). Promoting
liberal and conservative housing principles has homeownershipisatraditionalconservativepo- sition.
remainedin place to this day; both the Clinton and
However,the liberal CongressionalBlack Caucus
the Gore 2000 platforms stayedfar awayfrom any also supports this goal,and one of the Clinton
confrontation with the nation'sserious housing Administration's highest housing policy goalsand
problems. cited achievements hadbeen to increase the rate of
To summarize the net effect of the Clinton homeownership, including that of minorities (HUD
period, “thenumber ofhouseholds facing worst case
2000b). It is hard to distinguish any significant
housing needsgrew,asdid the number of homeless; difference between the two viewpoints on this
thenumber of new households as- sistedperyearwaspolicy.
the lowest since 1977; there were several years in The report of the Congressionally formed
which no new funding forSection 8 certificates was
Millennial Housing Commission in 2002 did
provided” (Bratt 2003:626). littletomake housing a nationalpolicypriority. The
During the entire period beginning with Richard
Commission, “appointed by the chairs and ranking
Nixon'selection in 1968 and running through the minority membersof several House andSenate
end of the centurywithonlyaslight blip in Jimmy committees and subcommittees, was heavily
Carter'soneterm, an essentially conservative weighted toward the housing industry, developers,
approach has dominated the federal government's real estate investors, and bankers”; itoffered no
housing agenda. The liberal posture was moreand numerical goalsor targets, virtually ignored race
more defensive, confined not to challenging the issues as well as otherkey problem areas
keyprinciples of thecon- servative position but (ruralhousing, Native American reservations,
simply trying to squeeze a slightly less penurious
migrant workers, homelessness and the
level of funding out of the recalcitrant leadership
needsofthose withphysical and mental disabilities).
ofboth major politi-
Its report was justly ignoredby Congress,
calparties.Aserious,challengingalternativewas policymakers and most of the public (Hartman
indeedput forward by a few from time to time 2002b). “The State of the Nation's Housing
(Institute for Policy Studies 1989) and eventually
2002,”from theJoint Centerfor Housing Studies
even introduced as legislation in Congress byleft-
ofHarvard University, reported that 8.6 million
leaning Representative Ron Dellums, but it met rentersand 6.4 million homeowners among the
with no resonance within the liberalhousing lowest-income Americans were spending more
establishment. than 30 percent oftheir income on housing. The
Bush Administration has not
THE SECOND BUSH ADMINISTRATION onlyignoredthishousingaffordabilityproblem, but
(REPUBLICAN PRESIDENT, DIVIDED OR its 2003 HUDbudget proposed numerous cuts in
REPUBLICAN CONGRESS) programs intended to make housing more
affordable. Among these were reductions
TheAdministration of George W. Bush took office inoperating support forpublic housing, reductions
in Section 8 assistance to poor renters, conversion much, notwhat: Sharp as they maybe, such
ofthe housing voucherprogram into a block grant to disagreements take place within limited areas of
states and elimination of the HOPE VI program. substantive policy. Thus, the Bush Administration
TheAdministration ofself- described compassionate HUDbudget for FY2004 proposed significant cuts
conservative George W. Bush did not support in funding of the Section 8 program that could, for
creation of aNational Housing Trust Fund, which is thefirst time in its history, mean a loss for existing
the major liberalproposal to begin to address the beneficiaries. Liberals objected.While compromise
housing affordabilityproblem. Instead, itproposed is likely, no basic issues ofprincipleor approach are
a$50 mandatory minimum monthly payment of all involved. Some liberals, following an initiative of
public housing tenants and Section 8 recipients the National Low Income Housing Coalition, have
rather than retaining the30percent income standard, proposed a National Housing Trust Fund, one
which, for many families, yielded a lower rent for similar to the many state andlocalhousing trust
recipients of most federal low-income housing funds in ordertobuildorpreserve1.5millionrental
programs. If adopted, all ofthese proposals will units over a decade—150,000 a year, not an
make lifemoremiserable for millions ofpoor extrava-
Americans (Housing Law Bulletin 2003). gantgoalrecallingthe600,000annualadditional
unitsproposedintheHousingActof1968.The
CONCLUSION Coalition advocated use of the surplus inthe FHA
Mutual Mortgage Insurance Fund to finance the
Two significant points can be drawn from the trust fund. Bush's HUD opposes use
history we have recounted. First, despite significant ofthesefundsforthispurposebuthasnotpro- posed any
differences between liberal and conservative alternate funding. Thus, in a conservative period,
approaches to housing policy, those differences arguments between liberals and conservatives
remain within a narrow spectrum. Both approaches center on budget numbers; programs such as might
share certain basicand flawed assumptions, thereby be expected from a Right
excluding major alternatives that deserve toHousingapproachhavesimplybeensweptoff
seriousconsideration.Second, neither liberal nor thetable by both.
conservative approaches to housing policyhave Throughout this decades-long history, both
come close to solving the housing problems facing approaches were found to shareanumber ofas-
the American people, even though liberal policies sumptions andin common mold their different
have been more ameliorative than the conservative policy standsaround them. They include:
ones. Both leaveasituation ofpermanent housing
crisis for a substantial minority and a fluctuating 1. The primacy of the profit-driven market as
level of difficulty andinsecurityfor many others. both the instrument for the provision of housing
On the issue of protecting low-income and and the mechanism for its allocation. In both ap-
minority homeowners against predatory lending, proaches, government action has always been seen
there is some distinction inthe extent to which as being supplementary to what the private market
regulation was supported. Republicans in Congress accomplishes: asafety nettocatch those not well
tried to preempt state and local laws that were served by the market. Both approaches fail to the
enacted to regulate these practices in favor ofmuch recognizethat themarket relies on the profit motive
weaker federal oversight. Liberals and consumer for supplying housing, and thus neither approach
advocates opposed the Republican approach and will ever provide an adequate supply for those not
arguedfor greater protection in a position to produce profit in the market. Both
forthosewhoaremostvulnerableandcouldlose approaches fail to recognize the undesirable social
theirhomes.Theidea,consistentwithaRightto consequences of permitting themarket to allocate
Housing, that government should step in to provide housing—its location, quality and type—by the
financing or control ofprofits inthesitua- tions income and therefore by the profit-producing status
exploited by predatory lenders was raised by none ofits users; both will alwaystend to produce
ofthe major players. segregation, ugliness anddeterioration in large parts
Budget issues involve disagreements about how of themarket and an unconscionablegapbetween the
housing conditions ofthe rich and the poor. Both broadest possible strata of the population. Both
approaches refuse to acknowledge the defects of distribute considerable subsidies via tax policies,
the housing market even in those areas where it infrastructure and highway provision and financial
does supply adequate housing, including the aids in a highly regressive fashion among users of
limitations on competition under circumstances housing, andboth support environmentally
ofhousing shortage and the inherently monopolistic damaging and inefficient patterns ofland use.
commodity that is land, so neither will ever Neither supports serious consideration ofalter-
consistently provide housing at appropriate prices native forms oftenure as being positive goalsof
generally affordable to most users. public policy, whether tenant-owned nonprofit
2. A preference for demand-side as opposed to cooperatives,mutualhousing associations orso- cial
supply-side policies in those limited areas where housing such as is common in many other
government does act on housing issues. Thisflows countries.
from the primacy accorded themarket by both. In 5. Ideologicalrigidities,prominentlyincluding
both approaches, the direct provision of housing by opposition to government action as such and lim-
government, at whatever level— whetherin itation of moral concern to the “worthy” poor. In
planning, construction, financing or management— both approaches, andincreasinglysince theend
isheldtotheminimumpossible. ofWorld War II, government action in the social
Thus,bothapproachessurrenderpreciselythose tools sphere is seen as something “undesirable.” On
that would best enable them to overcome the ideological grounds, both approaches favorre-
weaknesses of profit-driven market domination duction ofgovernment expenditures, reduction
ofthe housing supply,andboth exclude even market- oftaxes, decentralization offederal government and
compatible steering mechanisms such as a reduction of regulation. Neither approach is willing
yardstick function or a limitation on excess profits to concede that it is an appropriate function of
or speculation that might render the market more government permanently to act to securethe
“social” in its results. provision of housing for any underserved
3. Subservience to the private real estate and group,and neitheris willing to confront the fact of a
housing industry in the formulation of policy. This permanent housing crisis inthe absence of adequate
is partial cause and partial consequence of the two and sustained government action.
approaches described, but in both approaches,
As a resultof these shared assumptions, the
itnarrowsthe discussion ofpossible alternatives in
following continuing failures are clear:14
dealing withhousing to those acceptable to
politically powerful interest groups. Neither can 1. Permanent exclusion at the bottom. There
rationally examine the pros and has neverbeen a time intheUnitedStates in which a
consofalternativesorlogicallydrawconclusions from substantial minority did not face a serious housing
the experience ofprior policies in shaping new crisis. Whetherwe look at the one-third of a nation
ones. Only in times ofsevere stress—when that President Roosevelt in 1937 acknowledged to
opposing political and economic forces clash, be without adequate shelter;the 6.2 million
whetherfrom tenants and homeowners facing households paying more than 50 percent of their
extreme hardship (as intheearly New Deal) orfrom incomes forrent or the 5.4 million households that
exigencies of a war (as in both world wars)—is the the Department of Housing and Urban
range of the possible expanded and open to Development identified in 2000, in a period of
consideration by either approach. unprecedented prosperity, as having “worst case
4. Homeownership as a cardinal goal of hous- housing needs” (including 10.9 million people,
ing policy. In both approaches, it is taken as a among them 3.6 million children, 1.4 million
matter offaith that homeownership isthe preferable elderly and some 1.3 million disabled adults—
formof tenureover any other. Both approaches HUD 2000a), the bottom rungs ofthe economic
consider increasing thenumber of homeowners to ladder in the United States have always been
be a major indicator of the success of housing excluded from
policy, and both devote substantial policy attention thebenefitsofadequatehousing.Whilebothlib- eral
to spreading that particular form of tenuretothe and conservative approaches claimconcern for
those who “through no faultof their own” (inthe bothin home heating and cooling and in
phrase accepted by both) are unableto transportation, increases air pollution from
obtainadequate housing, and liberalstend to be commuting and uses land and building resources
more generous intheir response than conservatives, inefficiently. Under both liberal and conservative
both cling to the importance of“self-help” (as in administrations, sprawl has been encouraged
welfare-to-work programs) and bypass through highway construction, tax policies and
confrontation with the social causes ofhousing financing subsidies (Jackson 1985; Baxandall and
problems, thus leaving homelessness, for example, Ewen 2000); neither has madea serious
a permanent part ofthe housing scene. attempttolimitsprawl orprovide for effective
2. Insecurity in housing occupancy. Housing environmentally oriented national land use
policy in the United States has neverbeen able to regulation.
avoid sharp fluctuations inthe housing cir- 5. Increasing problems of affordability. Much
cumstances of the majority of the population. In ismadeof the increasing quantity and quality of
periodsof economic depression orhigh un- housing in the United States, for which each
employment, evictions have always grown in administration, whether Democratic or Republican,
number, mortgage foreclosures have increased, takes credit. However, primarily the progress has
affordabilityhas dwindled,overcrowding has in- been made among those who have been in a
creased and quality (especially neighborhood position to obtain their housing through the private
quality) has deteriorated. Improvement has been market. As a consequence and inevitably, problems
sharpest inthe periodsof liberal Democratic of housing affordability have grown as problems of
government—for instance, the Roosevelt housing quality have declined. Housing
NewDeal,theTruman postwar Administration and affordability problems maybeatthe highest point
the Kennedy-Johnson years—but the improvement today since theGreat Depression.
has been more through having to confront
increasingly visible problems and efforts at their Have liberal and conservative housing policies,
amelioration rather than through steps to achieve then, both been net failures in meeting housing
long-term solutions. In conser- policy goals, if to different degrees? The
vativeperiods,thetendencyhasbeentodenythe answerdependsonhow those goalsare defined.
existence ofproblems and dealwith them in par- Conservative policies have certainly promoted their
tial,specializedsegments (Marcuse 1989),never particular goalsand efficient andprofitable
recognizing any systemic difficulties. functioning of the private housing market and the
3. Segregation and discrimination based on production oflarge amounts ofhigh-quality housing.
race. The problem of segregation anddiscrimi- Liberal housing policies, by their particular goals,
nation in housing has been ongoing inUnited States have had some successes. Some of the poorhave
historysince the founding ofthe Republic. Liberal obtainedbetterhousing than they would have
Democrats have been more forthright in hadinthe private market, there has been some
confronting the issue than have conservatives. limited redistribution accomplished within the
There have been advances, but the high level of housing sector and benevolence has been displayed
segregation and continued discrimination in toward some of the homeless and the most needy.
housing sales, rentals and financing is But if the goal is providing decent, affordable and
demonstrable. Neither liberal nor conservative socially oriented housing for all, both have clearly
approaches have given hope for a real solution to failed. If one judges liberal housing policies by that
either problem, and to many in the field, levelsof standard—attaining decent, affordable and socially
segregation and inequality based on race seem to distributedhousing—theverdict similarly is failure.
be unalterable (see the debate in Poverty & Race Judgedbythe possible implementation of a full-
1997, 1998; Massey and Denton 1993; Marcuse fledged Right to Housing (see Chapter 8), the
2002). conclusion on both sets of policies is negative
4. Environmental degradation. Sprawl is not indeed.
merely an issue of declining green spaces and As R. Allen Hays (1995:23) has noted:
natural habitat; it is wasteful of energyresources
......these two terms [liberal and conservative] purposes of the liberal/conservative distinction made
symbolize distinct interpretations of a common here, be considered squarely within the conservative
ideology, democratic capitalism...these ranks.
twooutlooksarefirmlyrootedinacommoncap- italist 3. For a succinct account of the encouragement
world view.Theyboth supportthecentral economic providedbyfederalpolicyforhomeownershipover the
institutional arrangements of capitalism, but they years, see Mitchell 1985:247. A more recent treatment is
differ as to how these institutions, and the social Retsinas and Belsky 2002.
order which supports them, can best be stabilized 4. It is debatableastowhether the public housing
program of today is still the same as that of the 1937 act;
and perpetuated.
see Marcuse 1995.
That is not to say that there is no difference 5. For a blow-by-blow account, see McDonnell
between liberal and conservative positions on 1957; Freedman 1969.
6. In fact, the main conservative opposition to New
housing—the history shows many such differences.
York City's pioneering, locally initiated public housing
It isonly to say that inthe full spectrum of program was related to its use of WPA labor in the
approachestoprovidingadequatehousingfor all, construction of First Houses rather than to its housing
those that are liberal and conservative seem to be aspects. See Marcuse 1986a. First Houses bailed out
almost equally far from an approach that would Vincent Astor, heir to the Astorfortune and one of New
guarantee a right to such housing for all. York's largest tenement landlords (Day 1999), from
Even within democraticcapitalism, there isa ownership of theunprofitableslum housing that had
existed on its site.
range of alternative policies for housing that is not
7. Catherine Bauer, for instance, called the com-
exhausted by policies advocated and implemented promise a “sell-out” (see Weiss 1980:78).
under the two rubrics, “conservative” and “liberal.” 8. In a detailed examination, Marc Weiss (1980)
While liberal remains preferable to conservative, a concludes that policy vis-a-vis Title I and its application
much broader range of possibilities exists and still was essentially the same under both Republican
remains to be explored bothintheory and certainly andDemocratic Administrations in its encouragement of
commercial use rather than low-income housing uses.
in practice. Decent, affordable housing has never
9. Civil rights issues did not always separate the
been available to everyone living the United States. two approaches. In the 1930s and 1940s, the FHA
Conservative housing policies have left the redlined, and public housing was segregated— both
permanent housing crisis virtually intact, and policies initiated under the liberal Roosevelt
liberal policies have only ameliorated it. Administration—and no serious dissent was raised about
Alternatives along the lines of a RighttoHousing either until after the war.
must be sought if the crisis is not indeed to be 10. For a detailed discussion of this and related
variations inthe direction and scope of federal action
permanent.
dealing with race in housing and a trenchant critique ofits
limitations, see Goering 1986:Section IV; Massey and
Denton 1993:Chapter 7.
NOTES 11. ForadiscussionofSection202,supportingpri-
vatenonprofitprovision ofhousingforthelow-income
1. The Quality Housing and Wo rk Responsibility elderly and introduced as partof the Housing Act of 1959,
Act of 1998 amended this statement. It is arguable as to see Chapter 13.
whether the new language constitutes a major or a modest 12. The Reagan Administration also sponsored
retreat from the original National Housing Goal, which legislation partially dealing with the expiring subsidies of
was to be realized “as soon as feasible.” In addition, existing programs; see Chapter 7.
while the original declaration of policy acknowledged the 13. “Transforming Public Housing: The Social and
need for participation by the private sector and local Physical Redevelopment of Boston's West Broadway
public bodies, the new legislation went further in Development.” Journal of Architectural and Planning
explicitly stating (Section 505) that the federal Research,12(3): 278-305(Autumn 1995).
government alone could not solve the nation's housing 14. For detailed figures on the dimensions of the
problems (Bratt 2003). For citations to the housing crisis housing crisis almost a century after the federal gov-
before the postwar period, see the appendix to Marcuse ernment began dealing directly with housing issues, see
(forthcoming). Joint Center for Housing Studies 2003; U.S. Department
of Housing and Urban Development 1996, 1999; Center
2. In the years beforethemid-1960s, a significant for Housing Policy 2000; National Low Income Housing
portion of the southern Democratic Party could, for Coalition 2000. Several of these reports are updated
annually. Carolina Press.

Hartman, Chester. 1983a. Review of “The Report of the
President's Commission on Housing.” Journal of
American Planning Association, 92-94, January.
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Emily Paradise Achtenberg
7 Federally-Assisted Housing in Conflict: Privatization

or Preservation?
UNTIL 1996, the attractive townhouses low- and moderate-income housing, under Section
known as Manassas Park Village in suburban 221(d)(3) and Section 236 of the National Housing
Virginia—20 minutes by commuter rail from Act. Conceived as an alternative to public housing,
Washington, DC—were home to 167 low- and these programs produced some 560,000 units
moderate-income families. Today, the “Glen at during the late 1960s and early 1970s.
White Pines”boasts newdishwashersanddryers and Inexchangeforfederallyinsuredloansatsub-
a computer room instead of a laundry, at double the sidizedinterest rates, tax incentives and virtually no
rent (Foong 1996:30). cash investment, developers were required to
In 1999, 110 low-income elderly and disabled restrict occupancy to low- and moderateincome
residents of three Iowa housing complexes learned families at regulated rents. As an added
that their rents would be going upby67 percent inducement, most owners were permitted to prepay
(Housing and Development Reporter 1999:661 and their 40-year subsidized mortgages after just 20
HUD 1999a:vii). With few other affordable years, terminate affordability restrictions, and
apartments in the vicinity, tenants faced the grim convert the property to its “highest and best” use.1
choice of sacrificing food, medicine and other Twenty years later, a typical project built for
necessities or leaving their friends, family and $20,000 per unit had a market value of $40,000 and
communities of 20 years. an outstanding mortgage debt ofjust $15,000,
Scenarios like these have been repeated all leaving a residual equity value of $25,000 per unit.
across the country, as private owners of The same project hadbecome a tax liabilit yforits
government-assisted projects exercise the right to ow ner,asdepleteddeprecia- tion and mortgage
prepay their subsidized mortgages or opt out of interest deductions no longer offset taxable income.
their expiring rent subsidy contracts and convert to Thiscreated asubstantial incentive for owners to
market-rate housing. They are the latest prepay, refinance and convert to market housing.
manifestations of a protracted struggle that has
been wagedfordecades inthe federalpolicy arena The Federal Preservation Program
between private propertyrights and social housing
needs in subsidized rental housing. In the late 1980s, the first wave of prepayments
galvanized tenants and sparked a heated na-
tionalpolicydebate over the futureof this at-risk
PREPAYMENT OF SUBSIDIZED housingstock.Ownersclaimed thatprepayment
MORTGAGES restrictions would constitute a breach of contract
and an unconstitutional taking of private
The Problem
The subsidized-mortgage prepayment problem

isthe legacy of the federal government's first
attempt to stimulate private-sector production of
164 Emily Paradise Achtenberg
property by the federal government. Preservation guarantees) created earlier to manage the conflict
advocates argued that the original social purpose of between private profit and socialhousing needs,
the housing should take precedence over paying which threatened to cause a budgetary and fiscal
windfall profits to owners that reflected crisis of massive proportions. A new federal
unanticipated changes inmarket circumstances. consensus was emerging around the notion of
Faced with the prospect of massive tenant deregulating the assisted housing stock,
displacement, Congress passed emergency leg- “vouchering out” existing tenants, and eliminating
islation in 1987,2 followed by a “permanent” any ongoing federal involvement with the real
statute in 1990,3 to address the prepayment estate. The preservation program, with its focus on
problem. The new program embraced the view that protecting the existing subsidizedhousing stock,
“preservation...is, by far, the most costeffective was completely at odds with this approach.
strategy available to the government and ...canbe Accordingly, in November 1994, the White
accomplished in a way that protects the interests of House's Office of Management and Budget (OMB)
theowners, the tenants and the communities in proposed to repeal the preservation program,
which the housing is located” (U.S. Congress restore owners' prepayment rights and provide
1990:107). affected tenants with vouchers (mobile tenant-
While effectively prohibiting mortgage pre- based subsidies—OMB 1994:30). OMB also
payment, the preservation program guaranteed sought to rescind funds that were previously
owners fair market value incentives to keep the appropriated for preservation. These efforts were
housing affordable to lower-income households for supported in varying degrees by the U.S. General
at least another 50 years, at the federal Accounting Office (GAO), the
government's expense. The U.S. Department of CongressionalBudget Office and HUD (see, for
Housing and Urban Development (HUD) provided example, HUD 1995).
additional mortgageinsurance,supported by project-
based rental subsidies, to finance the owner's Preservation and Social Ownership
“equity takeout” ($25,000 per unit in the previous
illustration). Owners could either retainownership During the summer of 1995, tenant organizations,
or sell the property on a priority basis to a tenant- nonprofit groups and housing advocates across the
or community-based nonprofit country mounted an unprecedented grassroots
purchaserwhoagreed to the same restrictions. campaign to save the preservation program. Using
nationally coordinated tactics, such as letter-
Privatization and Prepayment writing campaigns, press advocacy and lobbying
directed at key legislative targets, advocates sought
By 1991, the political consensus around this to “put a human face” on the preservation program
“permanent” preservation policy had begun to anddemonstrate theeco- nomic, social andpolitical
unravel. Not surprisingly, most owners preferred to costs ofprepayment.
secure the incentives for themselves rather than sell Against formidable odds, these efforts
their properties to nonprofits, andreports achievedremarkable success. Whilethe prepayment
oflucrative equity takeouts withlittleor no funds right was restoredinMarch 1996, making
reinvested in the property created the appearance preservation purely voluntary, the preservation
ofyet another boondoggle for the subsidized program was extended with an additional $624
housing industry (Grunwald 1994). TheHUD million in funding. This represented a 250 p e rcent
Inspector General called the program “an emerging i ncr ease over t h e prio ryear appropriation, while
scandal” that could cost taxpayers more than $74 the overall HUD budget was slashed by 25 percent
billion over 40 years (HUD 1994:2). (and funding for new housing vouchers was
After the 1994 Republican sweep of Congress, eliminated). Additionally,the
bipartisan efforts to discredit preservation began in revisedprogrameffectivelytar- geted preservation
earnest. Indeed, the Democratic Administration funds for sales to resident and community-based
was desperately seeking to abandon the now nonprofits and replaced HUD mortgage guarantees
dysfunctional props (rental subsidies and mortgage with direct capital grants—a far more cost-
Federally-Assisted Housing in Conflict 165
effective approach conducive to long-term EXPIRING SECTION 8 CONTRACTS

preservation.
Between 1996 and 1998, some 25,000 The Problem
prepayment-eligible units in more than 30 states
were converted to virtually debt-free social Starting in 1974, the federal government provided
ownership with permanent affordability a new incentive to private developers and
guarantees4—a transfer unprecedented in the ownersunderSection 8 of theNational Housing Act,
history of U.S. housing. The average cost of inthe formof a direct contracttosubsidize the
preservation sales with capital grants (including market rents oflow-and moderate-income tenants.
both equity takeout and rehabilitation costs) was These contracts were either “projectbased” (tied to
approximately $36,000 per unit (GAO 1997:60)— theunit) or“tenant-based” (mobile certificates or
less than one-half the cost of building new vouchers).
subsidized housing in most markets at that time. The Section 8 project-basedhousing stock—
Nevertheless, the GAO and OMB resumed their now larger than the inventory of traditional public
attacks with new vigor, charging the capital grant housing units—consists of 1.5 million units and
program with excessive rehabilitation costs and encompasses many different programs. Sixty
inadequate oversight (GAO 1997:60). The percent (900,000) of the units are also
subsidized housing industry, which no longer coveredbyHUD-insured mortgages. Some of the
derived significant benefits from preservation, lent properties originally were developed underSection
tacit support to this critique. HUD, threatened with 236 andSection 221(d)(3), withSec- tion 8
extinction by the Republican Congress and subsidies added later to make a portion of the units
abandoned by the Democratic Administration, was more affordable to lower-income
unwilling and unable to mount an adequate households.Theseprojectstypicallyhavebelow-
defense. In October 1997, all preservation funding market rents due to their subsidized mortgages and
was terminated. Some 50,000 units awaiting capital HUD rent regulation. Historically, these Section 8
grants and loans were left in the approved but contracts have been short-term (five- year
unfunded HUD preservation “queue” (HUD renewable).
1996b). In other projects originally built or substantially
rehabilitated with Section 8, HUD underwrote the
Post-Preservation Trends initial development by establishing rents high
enough to cover market interest rates and
In total, some 100,000 units were preserved under construction costs in difficult-to-develop areas. In
the various federal programs, including 33,000 these projects, HUD also permitted automatic
units transferred to new owners who were annualrent adjustments, with the result that rents
primarily nonprofit purchasers using capital grants often were above-market. These projects typically
(National Housing Trust n.d.). Since the demise of have long-term (20+ years) Section 8 contracts.
the preservation program, another 110,000 In the mid-1990s, the combination of longterm
subsidized units have been lost to mortgage and short-term Section 8 contracts expiring
prepayment (National Housing Trust 2002a). simultaneously inthe face of new budget
Forprepayments occurring before 1999, the constraints catapulted HUD into the spotlight of a
average rent increase was 57 percent (National looming fiscal crisis. Between FY1996 and
Housing Trust 2001). While low- income tenants FY1998, the cost of renewing all existing Section 8
whochoose to remainafterpre- payment can receive contracts was projected to grow from about $5
“enhanced” preservation vouchers (subject to billion to almost $14 billion, with an estimated 1.8
annual appropriations) at the prevailing market million units expiring—enough to consume the
rent, these units are permanently lost as housing entire HUD budget (Dunlap 1995:12). 5 At the same
affordable to lower- income households once the time, failure to renew contracts with above-market
original tenants move. rents could trigger widespread defaults and
foreclosures of HUD- insured mortgages, resulting
in massive claims on the HUD mortgage insurance
fund. ofdebt writedowns, the potentialloss of control over

their investments, and the generally increased risk
Mark to Market of requiring projects long reliant on HUD
guarantees to compete inthe open market
Struggling for survival, HUD developed a response (Grunwald 1995).
to the Section 8 crisis that was to become the In 1997, Congress finally enacted mark- to-
cornerstone ofits 1995 “reinvention” blueprint. market legislation with a decidedly more
HUD concluded that not only was the long-term preservation-oriented flavor.6 Under this program,
cost of continuing to provide Section 8 project- HUD was generally mandated to reduce rents
based assistance unsustainable, but thesubsidy andrestructure debt inabove-market properties with
system itself was “deeply flawed” because it expiring Section 8 contracts while renewing their
eschewed market principles. While above-market project-based subsidies. HUD would retain a
units wereoversubsidized, below- market units deferred second mortgage inthe amount of the debt
were undersubsidized and undercapitalized, writedown—a device not dissimilar to the
providing perverse incentives for owners. Tenants preservation capital grant, which would minimize
without market choices were trapped. The federal adverse tax consequences to owners while
government, as both subsidy provider and facilitating continued public control over the
mortgage insurer, was essentially shooting itself housing. Debt restructuring was required to be
inthe foot, forced to keep paying carried out by state andlocalpublic entities (such as
for“badhousing”inorder to avoid mortgage housing finance agencies) on a priority basis.
insurance claims (Retsinas 1995). In exchange for debt restructuring, owners were
Accordingly, HUD proposed that these con- required to extendlow-income affordability
tracts, upon expiration, would no longer be restrictions and renew their Section 8 contracts,
renewed. Instead, the projects would be subject to availability of appropriations, for 30
“vouchered out”withrents “marked to market” (up years. Tenants, nonprofits, and state and local
ordown) and completely deregulated, while governments were given the right to comment on
residents received tenant-based subsidies. HUD the restructuring plans.
would auction off its mortgages to the highest Once launched, the program encountered
private bidder (with a partial writedown claim substantial owner resistance. And with the general
against the insurance fund, if necessary), who tightening of rental markets during the late 1990s,
would restructure project finances, operations, fewer properties than HUD had originally
occupancy and, in some cases, ownership. In this anticipated appeared to be eligible for or in need of
way, HUD hoped to restore market discipline to a debt restructuring. The majority of owners who did
substantial portion of the federally- assisted participate elected to absorb voluntary rent
housing stock while ending the government's long- decreases without actually restructuring their
standing involvement with,and responsibilityfor,the mortgages, thereby avoiding any long-term
real estate (Retsinas 1995). affordability or tenant/ community participation
In response, preservation advocates charged requirements.
that HUD's proposalwould trigger massive tenant At the same time, the responsibility for ad-
displacement and loss of housing that was ministering mark to market shifted increasingly
affordabletolower-income householdsthrough from the public to the private sector. With
mortgage defaults and rent increases. Alternatively, alternative investment opportunitiesinthe
they noted, any savings from “marking down” improving economy, many of theoriginalhous- ing
rents in the above-market stock would be finance agencyparticipants balked at HUD's
outweighed by the cost of protecting tenants in restrictive compensation structureanddefected from
“below-market” units with new vouchers at the the program (Housing and Development Reporter
marked-up rents (Bodaken 1995). Joining the 2000:549). The new private entities replacing them
groundswell of opposition was a growing alliance lent tacit, if not explicit, support to mark to
of subsidized housing developers and investors market's drift toward private sector
concerned about the adverse tax consequences accommodation.
Frustrated by these tendencies, preservation outcome. A primary factor is the failure of the
advocates sought to restore some of the program's private administrative entities to adequately reflect
original social purpose by launching a campaign to propertyrehabilitation and operating requirements
facilitate thesaleof mark-to- market properties to inthe debt restructuring process, resulting inthe
nonprofit purchasers (National Association for need for nonprofits to raise additional funds to
Housing Partnerships andRecapitalization ensure long-term project viability.
Advisors, Inc. 1999). Many hoped that mark to
market—liketheearlierfed- eral preservation Section 8 Opt-Outs
programs—would provide an “exit strategy” for
private owners to transition the housing to While the 1997 statute focused primarily on
nonprofit ownership, supported by federal debt “above-market”Section 8 properties, italso per-
writedowns and long-term affordability mitted HUD to renew project-based contracts in
restrictions. “below-market” properties—but only at the
In September 2000, HUD announced anew owner's option. Additionally, to facilitate budgetary
package of incentives to make mark to market management and Congressional scrutiny, all
more profitable for private owners and encourage expiring Section 8 contracts were renewed only on
their participation inthe program (HUD 2000). At a year-to-year basis.
the same time, HUD agreed to forgive the deferred With rents escalating rapidly in most markets
second mortgage debt forqualified nonprofits that nationwide, an increasing number of owners found
purchased within three years of debt restructuring themselves with both motive and opportunity to
and to cover asignificant portion of their “opt-out” of their subsidy contracts at the point of
transaction costs. expiration. Between October 1996 and April 1999,
In recent years, this “owner-friendly” posture, morethan 30,000 units in 500 subsidizedproperties
combinedwith the general softening of the real were lost as housing affordable to lower-income
estate market, has generated an increased volume households when owners quit the Section 8
of mark-to-market activity.Many owners now program in search of higher market-rate rents
perceive mark to market as a beneficial opportunity (HUD 1999a).7
to put their projects on firmer economic footing, Once again, preservation advocates focused
with HUD continuing to absorb the risk through national attention on the problem through targeted
mortgage insurance and subsidies. Private media campaigns in key legislative districts. After
lendersaswell arenow comfortable with mark to the notorious and well-publicized Iowa opt-outs in
market, which enables them to earn fees—and early 1999, HUD acknowledged that the record-
Community Reinvestment Act (CRA) credits—for level “worst-case” housing needs documented by
refinancing and servicing their existing loans its own studies were attributable, in part, to federal
(Housing and Development Reporter 2003:115). policies that facilitated the loss of subsidized units
As of October 2003, 2,030 properties have (HUD 1999b). HUD noted that while Section 8
completed the mark-to-market process, with optouts had occurred in 47 states, regular replace-
another 679 inthe active pipeline (HUD 2003a). ment vouchers at the local housing authority's
While the inventory is heavily concentrated in the “payment standard” often did not protect tenants
heartland (e.g., Ohio, Pennsylvania, Kentucky), from displacement. Additionally, HUD found that
virtually every state has some mark-to-market opt-outs were threatening the best housing inthe
projects (HUD 2003b). In contrast to early program country affordable to lower- income households
trends, 63 percent of the completed properties have and located in good neighborhoods with good
undergone full debt restructuring, and 95 percent of schools and economic opportunities.
the pipeline projects have initially elected this In the spring of 1999, HUD developed an
option (HUD 2003a). emergency initiative, subsequently enacted into
While some nonprofit groups have succeeded in law,8 to stem the tide of Section 8 opt-outs. In most
buying mark-to-market properties using the new cases, HUD will nowrenewbelow-market Section 8
purchaser initiatives, the program as currently contracts at rents “marked up” to prevailing market
administered has not been conducive to this levels for at least a five-year term (subject to
annual appropriations). Whereown- erschoose to none of the benefits.

opt out instead, tenants will receive enhanced Increasingly, preservation advocates have
vouchers at prevailing market rents for the turned to state and local governments for more
property,similar to the prepayment program. permanent, cost-effective preservation solutions
Subject to appropriations, all enhanced vouchers, with some success (Achtenberg 2002; Galle 1999).
whetherforprepayments or opt-outs, For example, many states now earmark a portion of
arenowrequired to be renewed at market levels in their federal low-income housing tax credits, and,
future years. in some cases, taxexempt bond allocations as well,
Preliminaryindicationssuggestthatopt-outs have for subsidized housing preservation. Some states
slowed since theadvent of themark-up-to- market and cities have issued preservation bonds backed
program. As of July 2001, owners had opted out of by special appropriations or other non-
contracts covering some 47,000 assisted units federalrevenue sources. These resources generally
(National Housing Trust 2002b), reflecting an opt- are targeted to nonprofit purchasers in exchange for
out rate of 600 units per month since April 1999 longterm use restrictions, sometimes inconjunction
(down from 1,000 units per monthpreviously). with“rights of first refusal” orpurchase options if a
However, it is too soon to tell whether owners who federally subsidized property is sold. With these
participate in “mark up to market” view the additional funds and tools, federal programs such
program as a long-term commitment or as a as mark to market, mark up to market and even
convenient way to transition to market at the enhanced vouchers can be used to facilitate a more
government's expense. Additionally, while some permanent preservation solution through social
nonprofit purchasers have utilized mark-up-to- ownership conversion.
market to purchase Section 8 properties, without To besure, inthe context of state andlocalre-
additionalresourcestosup- port market-rate source constraints these preservation initiatives will
acquisition in strong market areas, the utility of this have limited impact and will succeed only at the
program as a tool for social ownership conversion expense of much-needed new construc-
is limited. tion.Inrecentyears,preservationadvocateshave
forged new alliances with city, state and grassroots
groups to press for a federal matching grant
CONCLUSION program that would reward state andlocal
preservation funding withfederaldollars. These
In a sense, with mark-up-to-market, federal proposals have gained bi-partisan support and
preservation efforts have come full circle. The arenow mergedwith an even broader campaign to
current cost of preserving a single subsidized unit create a federal housing trust fund for both
with market-determined subsidies (whether production andpreservation ofhousing affordable to
project-based or tenant-based) is approximately lower-income families.
$6,400 per year (U.S. Department of Housing and Yet, with renewed Republican efforts to di-
Urban Development 2003c: N-4). Over five-and-a- minish even further the federal government's role
half years, this is roughly the same as the average in subsidized housing, emerging alliances between
cost of the upfront capital grants provided to preservation advocates and state and local
nonprofits under the federal preservation programs governments will surely be put to the test. In early
($35,000). Over eleven years, market-based 2003, the Bush Administration proposed to convert
subsidies cost twice as much as preservation capital the entire Section 8 voucher program, including
grants, without considering theadditional cost of enhanced vouchers that protect tenants when
annualrent escalation. And while preservation owners prepay or opt out, to a state-administered
capital grants provided permanently affordable block grant with few federal standards and no
housing through social ownership, units marked up guaranteed funding levels. This is widely viewed
to market remain at risk every five years, despite as a strategy to reduce Section 8 funding while
the continued public investment inthe housing. In devolving political accountability to the states
effect, the current market-based strategy retains all (Sard and Fischer 2003). Since funding shortfalls
of the costs of socially orientedpreservation with will encourage states to reduce existing voucher
subsidy levels, market-based enhanced vouchers 1999,”Section 501 of the FY00 Departments of Veterans
could be especially vulnerable to attack. Affairs, HUD, and Independent Agencies Appropriations
With 30-yearhindsight, the failureoffederal Act, P.L. 106-74.
efforts to provideandpreserve housing forlow- and
moderate-income families through the private
sector is readily apparent. The conflict between REFERENCES
private propertyrights and socialhousing needs,
inherent in the original structure of the federally- Achtenberg, Emily P. 2002. Stemming the tide: A hand-
assisted housing programs, has never been resolved book on preserving subsidized multifamily housing.
New York: Local Initiatives Support Corporation.
but only managed in ways that have ultimately
Bodaken, Michael. 1995. We must preserve the nation's
served to exacerbate the conflict. Preservation has supply of affordable housing. Shelterforce,
been possible only when private interests are July/August.
served as well; when this is not expedient Dunlap, Helen M. 1995. Mark to market: A strategy to
orbecomes too costly, social needs are sacrificed. recapitalize HUD's assistedhousing inventory.
At the same time, the history of these federal Shelterforce, July/August.
Foong, L. Keat. 1996. Market-rate bandwagon. Multi-
programs shows how organized grassroots
housing news, October/November.
constituencies can sometimes fundamentally al- Galle, Brian. 1999. Preserving federally-assisted housing
terpoliticalprocesses andprogram outcomes to at the state and local level: A legislative toolkit.
create meaningful opportunities for socialhousing Housing Law Bulletin ,29:183.
ownership and finance, facilitating longterm Grunwald, Michael. 1994. MoreHUD moneyflowsto
preservation even under the most adverse of Boston landlords. Boston Globe, December 19.
circumstances—an equally important lesson for the 1995. Investors wary of HUD plan. Boston Globe,
July 5.
future.
Housing and DevelopmentReporter. 1999. Decision of
Iowa owners to terminate contracts raises concern
fortenants. CurrentDevelopments,Vol. 26, No. 42,
NOTES February 22.
2000. California, New York City opt out of mark-to-
1. Some categories of owners, including nonprofits market program. Current Developments, Vol. 27, No.
and for-profit developers who received special benefits 30, January 10.
such as direct federalrehabilitation loans (“flexible 2003. Mark-to-market program has made progress,
subsidy”) were prohibited from prepaying their mort- OMHAR director says. Current Develop- ments,Vol.
gages without HUD consent. 31, No. CD-4, February 17.
2. The Emergency Low Income Housing Preser- NationalAssociationforHousingPartnershipsandRe-
vation Act (ELIHPA), TitleIIof the Housing and capitalization Advisors, Inc. 1999. Mark to market
Community Development Act of 1987, P.L. 100-242, and non-profits: Results from the demonstration and
February 5, 1988, as amended. implications for the permanent program. Boston: The
3. The Low Income Housing Preservation andRes- Association.
ident Homeownership Act (LIHPRHA), Title II ofthe National Housing Trust. n.d. Funded Title II and VI
Cranston-Gonzalez National Affordable Housing Act, projects. Washington, DC: The Trust.
P.L. 101-625, November 28, 1990, as amended. 2001. Prepayment summary as of 12/31/98. May 7.
4. Extrapolated by the author from HUD 1996a, Washington, DC: TheTrust.
1997. 2002a. All mortgage prepayments by state as
5. This estimate includes both project-based and of12/31/01. June 27. Washington, DC: TheTrust.
tenant-based Section 8 subsidies. 2002b. All Section 8 optouts by state as of 7/31/01.
6. The Multifamily Assisted Housing Reform and June 27. Washington, DC: The Trust.
Affordability Act of 1997 (MAHRA), Title V of the OfficeofManagementandBudget. 1994.FY1996Pass-
FY98 VA, HUD, and Independent Agencies Appropri- back: Department ofHousing and Urban Develop-
ations Act, P.L. 105-65. ment, November 21.
7. This estimate does not include Section 8 units lost Retsinas,Nicholas,P. 1995.StatementbeforetheHous-
in conjunction with subsidized housing mortgage ing,Banking,andFinancialServicesSubcommittee
prepayments. onHousingandCommunityOpportunity,June 13.
8. “The Preserving Affordable Housing forSenior Sard,Barbara,andWillFischer. 2003. Housingvoucher
Citizens and Families into the 21st Century Act of block grant bills would jeopardize an effective pro-
gram and likely lead to cuts in assistance for low- 1999a. Opting in: Renewing America's commitment
income families. Washington, DC: Center on Budget to affordable housing. Washington, DC.
and Policy Priorities, May 14. 1999b. Waiting in vain: An update on America's
U.S.Congress. 1990.Managers'Report(JointExplana- rentalhousing crisis. Washington, DC.
toryStatement)—H.REP.No.922,101stCong.2nd 2000. Office of Multifamily Housing Assistance
Sess.,October 22. Restructuring. Initiatives for M2M owners and
U.S. Department of Housing and Urban Development. purchasers. Washington, DC, September 11.
1994. Office of Inspector General, review of 2003a. Office of Multifamily Housing Assistance
multifamily preservation programs. Office of Audit— Restructuring. Mark-to-market pipeline summary
Region X. Washington, DC, April 20. report. Washington, DC, October 30.
1995. Office of Inspector General, HUD's 2003b. Office of Multifamily Housing Assistance
Multifamily Preservation Program. Office of Audit— Restructuring. PAE and assigned property status
New England. Washington, DC, July 14. report. Washington, DC, October 31.
1996a. Office of Housing, projects funded in FY96. 2003c. Fiscal year 2004 budget: Congressional
Washington, DC, July 24. justifications for estimates. Washington, DC.
1996b. Office of Housing, preservation funding U.S. General Accounting Office (GAO). 1997. Hous-
queue. Washington, DC, November 12. ingpreservation: Policies and administrative problems
1997. 1997 preservation funding queue database. increase costs andhinderprogram operations.
Washington, DC, December 10. GAO/RCED 97-169, AppendixVIII, July.
Robert Wiener
Privatizing Rural Rental Housing
WHILE NATIONAL attention has later (in 1966) for any low-income household.
focused on losses of HUD-subsidized rental To meet the needfor capitalin rural areas,
housing through mortgage prepayment, no financing was inthe form of direct
rental housing produced with federal support government-subsidized loans, with interest
has been more vulnerable to prepayment than rates as low as 1 percent and maturities up to
the housing produced by the U.S. Department 50 years. Only nonprofit and public agency
of Agriculture's Rural Housing Service (RHS sponsorscould receive these loans. For-profit
—formerly known as Farmers Home sponsors could also participate inthe program,
Administration). From 1972 to 1986, in but they received insured loans at the
hundreds of small communities, over 1,000 government lending rate, to produce housing
RHS Section 515 rural rental housing loans targeted to a somewhat higher income group.
made prior to 1980 were quietly paid off by Congress had always intended that RHS
the private owners of this housing.1 Units act as a lender of last resort. Thus, by statute,
originally built and subsidized to serve elderly borrowershadtoagreetoa“graduation”pro-
and low-income tenants were wholly vision, which required that they acquire, or
privatized—freed of all government controls graduate to, non-RHS credit at the earliest
on rents and occupancy and converted to opportunity, whenever such credit could be
market-rate buildings, accompanied by in- secured on reasonableterms and conditions.
creased tenant rents and hardship. By the time The practical effect was that loans could be
Congress placed a moratorium on further prepaid at any time. When prepayment oc-
prepayments at the end of 1986, more than curred, not only was the RHS financing re-
7,600 units affordable to low-income tired, but the borrowerwas releasedfrom en-
households were permanentlylosttothe low- forceableagreements inthe note that enabled
income housing stock (Collings 1987). De- RHS to control the use of the housing. For
spite subsequent interventions by Congress, tenants, this meant the immediate cessation of
these properties continue to prepay to this day. all government regulation of admissions and
Prepayment isthe logical conclusion of a rents and withdrawal of all government
private sector strategy that has informed U.S. subsidies—the “shallow” subsidy provided
housing policy since the early 1960s, a strat- through the low-interest loan and, in some
egy within which the Section 515 program is cases, additional “deep” subsidies provided
firmly embedded. Created by the Senior Cit- through RHS's rental assistance program.
izens Housing Act of 1962, it was intended to Not until theearly 1970s, however, did the
stimulate the production of rental housing graduation provision emerge as a real threat
within markets and for populations not served
by conventional lenders. Financing under this
program was restricted to rural farmand
nonfarmareas, initially only for seniors and
171
to the housing and its residents. During the loans had been prepaid, most from 1977 to
program's first ten years, there was little 1979. The growing number of limitedprofit
possibility of prepayment, since nonprofit sponsors expected to reach their tax shelter
borrowers were unlikely to change the low- “burn-outs” augured an even larger wave of
income character of the housing or qualify for prepayments inthe 1980s. With this
private financing. For-profit borrowers held inmind,thefirst-everrestrictive prepayment
virtual market-rate loans that could be prepaid legislation was passed in 1979, after a highly
but with little impact on rents. Two ideological debate kept Congressional nego-
administrative decisions by RHSin 1971 and tiators at “swords' points”2 for more than four
1972, however, upset this scheme. First, the months. In 1980, however, opponents ledbythe
agency decided to forcibly reassert its homebuilding industry were able to repeal the
graduation policy because of unacceptably low legislation, arguing that retroactivity was
rates of graduation. Second, it adopted rule unduly harsh, unconstitutional and an
changes permitting limited-profit sponsors— overblown reaction to a minor problem.
typically, syndicated limited partnerships—to Instead, a 20-year prepayment restriction was
receive subsidized loans. In exchange for placed on all loans approved after December
favorable financing, they had to agree to 21, 1979, but earlier projects were still
methods of operation, income controls for allowed to prepay unilaterally.
tenant admissions andrents that would Not surprisingly to tenant advocates, pre-
ensureoccupancy by low- and moderate- payments of pre-1979 projects accelerated
income households. They also had to accept a during the 1980s. By 1987, prepayments had
limited return on their initial investment. occurred or were pending on 1,329 loans; 37
This second decision substantially altered percent (486) of these loans covering 5,377
the character of the program. Production units were prepaid from 1983 to 1986.
skyrocketed, as intended. But the inclusion of A Califor nia study of some 450 tenants
limited-profit sponsors also resulted in a who occupied five projects that prepaid in this
peculiar contr a diction. While seeking to period demonstrated the disruptions and harsh
expand the supply of units, RHS was still economic choices that often awaited tenants
mandated to accept, encourage and compel (Wiener 1993). Three- fourths of the
prepayment but without consideration of the households were involuntarily displaced prior
tragic consequences for the very- low-income to or upon prepayment because they could not
occupants whom thesubsidized loans were afford the higher rents; one-half of the
intended to help. Unlike before, prepayment displacees moved to nonassisted market-rate
by limited-profit borrowers was not only housing, including many who moved in with a
economically feasible but desirable once the family member or friend; the average shelter
main investment incentive— the tax- costs of displacees increased by 50 percent,
sheltereddepreciation benefits—had expired, causing huge rent burdens; and most
usually after ten years. Moreover, displacees were less satisfied with their new
somepropertieshad appreciatedinvalue and housing. Moreover, two years after
were worth more as conventional,asopposed to prepayment, the study found only marginal
subsidized, properties. In essence, RHS improvement. Most shocking was the high
opened the front door tolimitedprofitswith- out number of households indicating that they had
closing the back door. No other federal experienced a pro f ound sense of loss—l oss
housing program offeredborrowers both the of economi c independence, loss of family and
advantages of subsidized financing andquick community and,especially among theelderly,
egress from the obligations imposed by that loss of physical and mentalhealth—a
financing. phenomenon found in urban neighborhoods as
By theend of the 1970s, loan prepayments well (Fried 1963).
were on the rise, and Congress began to pay Growing concern about tenant displace-
attention. RHSdata indicated that about 500 ment forced Congress to revisit the pre-
payment issue in 1986, which resulted in a 12- Acomprehensive performance evaluation
month moratorium. This moratorium remained of the preservation program was undertaken in
in effect, with a few small gaps, until adoption 1992 by the National Task Force on Rural
of a “permanent” preservation scheme inthe Housing Preservation. At thetime ofthe Task
Emergency Low-Income Housing Force's evaluation, 110,383 pre-1979 and
Preservation Act (ELIHPA) of 1987. 256,211 post-1979 andpre-1989 units were
ELIHPA directs RHS to approve prepay- still at risk of prepayment—a total of 366,594
ments only after first offering owners in- at-risk units (National Task Force on Rural
centives to retain ownership and maintain Housing Preservation 1992:36, 38). RHS had
affordability of the housing: equityloans, in- received notices ofintent to prepay from
creased rates of return, access to project re- ownersof morethan 300 projects and offered
serves andRHSrental assistance. In the event incentives to at least 136 projects, nearly all of
that owners refuse these incentives, RHSis which involved owners staying with their
required to force a sale to a qualified nonprofit properties.
or public agency through provision of an Among other conclusions, theTask Force
acquisition loan. Prepayment approval can found that ELIHPA was achieving the goal
begranted only under certain limited ex- ofpreventing the wholesale prepayment and
ceptions: where owners agree to operate the loss of pre-1979 housing. Using a simulation
units withrestrictedrents until 20 years from model of owner choices, it predicted that
the date the loan was made and then transfer intheabsence of the law, the majority of
the property to a nonprofit purchaser; or where owners would prepay, since they held
there is no likelihood of tenant displacement properties that could support conversion to
or adverse impact on housing opportunities for conventional market rents. However, in many
minorities and local supplies of housing cases, RHSwas offering the maximum
affordable to low-income households. incentives to properties that appeared to have
Following the precedent set in ELIHPA, little market justification for conversion or
preservation of post-1979 projects was further only marginally more profitablecon- ventional
addressedinsubsequent legislation (Anders uses. And in exchange for these incentives,
1993:79-89). The HUD Reform Act of 1989 RHSwas leveraging only the bare minimum 20
prohibited prepayment ofany projects with yearsof additional restrictive use, although it
loans approved after December 15, 1989, for had discretion to negotiate muchlonger
the full termof the 50-year Section 515 commitments for units to stay affordable to
mortgage. Legislation adopted in 1992 low-income tenants.
extended the preservation scheme in ELIHPA Since that time, thenumber ofpre-1989 at-
to all projects with 20-year use restrictions risk properties has decreased. According to a
approved after December 21, 1979, and before report by the Housing Assistance Coun-
December 15, 1989. Projects may be prepaid cil,there were 11,114 pre-1989 projects with
at any time prior to theend ofthe restrictive-use 290,400 units still at risk of prepayment in
period, provided the owner agrees to comply 2002, representing 63 percent of all projects
with the ELIHPA prepayment exceptions. and 62 percent of all units remaining inthe
The 1992 legislation also directedRHS to Section 515 portfolio (Housing Assistance
establish the Office ofRental HousingPreser- Council 2002:1). The total number of units
vation to serve as a national clearinghouse for was 76,000 less than the number identified in
prepayment approval anddata tracking. 1992. It is unknown how many ofthese were
However, in violation of Congressional intent, preserved, allowed to prepay or the resultof
the agency waited until theend of1998 to staff miscounts.
the office, making it difficult initially for As of the mid-2000s, owners of Section
external assessment of the successes and 515 properties arestill subject to the ELIHPA
shortcomings ofthelawand RHSimplemen- preservation scheme, but ominous signs are on
tation. the horizon. Deep cuts in appropriations for
the overall Section 515 program and lack 2003a, 2003b, 2005). Since then, District
ofRHS enforcement have effectively crippled Courts in Idaho and Oregon, both in the
the program, with only a small number of the jurisdiction of the 9th Circuit, have granted
total eligible projects receiving incentive quiet title to owners related to those in
payments. RHS has admitted that it does not Kimberly. The 9th Circuit trend
have adequate funds to make equity loans to notwithstanding, in 2005, the United States
owners with agreements dating back to 1996 Court of Appeals for the 8th Circuit staked out
(Anders 2003a). Instead, it has attempted to a contrary position in Owens v. Charleston
find alternative funding mechanisms to Housing Authority, agreeing with a Missouri
limitthe budget impacts ofpreser- vation while District Court deci sion that the Charleston
continuing to approve prepayments, especially Housing Authority's plan to vacate, prepay and
inthe foreclosure process, without extending demolish a 50-unit project violated ELIHPA
use restrictions. and fair housing laws.
Based on a comprehensive assessment of Owners have also looked to the courts for
the Section 515 inventory commissioned by money damages, arguing that the ELIHPA
USDA in late 2004, RHS has also taken the prepayment restrictions impaired their con-
position that the most expensive, highest- risk tractual rights. In 2004, theU.S.Courtof
projects should be triaged—allowed to prepay Claims, in Franconia v. United States, agreed
and offered rental assistance. The assessment with theowners' claims. It required thegov-
concluded that 10.4 percent of prepayment- ernment to pay lost profits averaging about
eligible properties (1,648 properties) would be $400,000 per project to the owners of 32
economically viable to prepay (ICF 2004). 3 It projects. USDA decided not to appeal that de-
recommended debt restructuring, cision. Similar lawsuits by hundreds of other
recapitalization and rehabilitation of properties owners are pending, as of Fall 2005. If suc-
not imminently at risk of prepayment, while cessful, they are likely to encourage the Ad-
allowing prepayment in some properties where ministration and Congress to repealELIHPA in
tenants were pro- order to avoid additional damage claims.
tectedagainstrentincreasesbyrentvouchers. As Although the legislative, regulatory and
of Fall 2005, theAdministration isconsid- administrative decisions explaining the inci-
eringlegislationtorepealELIHPAaltogether; dence ofprepayment inthe RHSSection 515
repeal efforts failed in Congress in 2000 and program are unique, the ideological origins of
2002. the problem and its human consequences are
Several court decisions have the potential not. The RHS and HUD multifamily programs
to further weaken ELIHPA. In Kimberly were premised on thecorrect assumption that
Associates v. United States, the United States private, profit-motivated owners could be
Courtof Appeals for the9th Circuit reversed an enticed to build, own and operate low-income
Idaho District Court decision that initially rental housing in volume. In both instances,
barred an owner's “quiet title” action on however, there was little if any consideration
procedural grounds. In its opinion, the 9th of the consequences for tenants and thelong-
Circuit suggested that the owner maybe term preservationofthe housing when investor
entitled to relief under Idaho state quiet title incentives to remain inthe programs run out.
law. The Circuit Court also affirmed the lower The fact that owners were allowed to prepay
court's denial of the affected tenants' right to with impunity is consistentwith the
intervene inthe case, finding that because the logicofprivatization.Pre- payment isthe final
prepayment had been allowed to proceed, the link in the privatization chain.
case was moot. On remand to theIdaho District
Court,thecourtgranted the owner's request for
quiet title, effec- tivelyabrogatingthe ELIHPA
prepayment restrictions and allowing the
owner to prepay (Anders 2002a, 2002b,
sing
The flawed liberal policies of the 1960s prepayment restrictions until subsequent legislation.
reached their fullest expression within the See National Task Force on Rural Housing
HUDinventoryinthemid-1990sasthe result of Preservation 1992:5.
actions taken by Congress that exposed 2. Statement by Congressman Les AuCoin on
House floor, reprinted in Cong. Rec., 96th
hundreds of thousands of units to risk of
Congress,1stSess.(December19,1979),Vol.125, Part
conversion. In March 1996, the 104th 28, U.S. Government Printing Office, Washington,
Congress removed the prepayment restrictions DC, 1979, 36913.
first imposed on HUD rental housing by 3. A 2002 assessment by the U.S. General Ac-
ELIHPA and later in the Low-Income Housing counting Office, employing a different methodol-
Preservation and Resident Homeowners Act ogy, estimated that 24% ofproperties might have a
(LIHPRHA), which succeeded ELIHPA (see viable prepayment option.
main body of this chapter). In 1997, Congress
ended the sales program in LIHPRHA that
enabled tenant groups and tenant-endorsed
REFERENCES
nonprofits to acquire the housing as an
alternative to prepayment. The same economic Anders, Gideon. 1993. Preservation of FmHA
rationales that first moti- vatedRHS housing projects. Housing Law Bulletin
ownerstoprepayproperties inthe 1970s and (September/October). Oakland,CA: National
1980s are driving HUD owners to prepay in Housing Law Project, 79-89.
large numbers. 2002a. ELIHPA's prepayment restrictions may
Does the same fate await the Section 515 subject RHS to damages. Housing Law Bulletin
preservation program? Regrettably, rather than (February). Oakland, CA: National Housing
recognize the enormous public investment Law Project.
inthis housing, not to mention current and 2002b. RHS owners allowed to quiet title their
property in derogation of ELIHPA. Housing
future needs, we seem to be on a course that
Law Bulletin (November/December). Oakland,
will permanently and irrevocably dismantle CA: National Housing Law Project.
this vital national asset as well. The focus is on 2003a. 9th Circuit stays order allowing Section
“tenant protections”, e.g., rental vouchers, not 515 landlord to prepayloan. Housing Law
housing preservation. Bulletin (March). Oakland,CA: National
The experience of prepayment to date HousingLawProject.
shouldgivepausetothosewhowouldassume all 2003b. NHLP testifies on rural rental
too casually that the old system of longterm, housingpreservationissues.HousingLawBul-
project-based subsidy can be transformed letin (August). Oakland, CA: National Housing
seamlessly to a tenant-based system reliant on Law Project.
2005. Phone conversation with Gideon Anders,
short-termsubsidy.The hardships for tenants
September 27, 2005.
caused by owners' unwillingness to accept or Collings, Art. 1987. Displacement of tenants
continue tenancies with Section 8 vouchers, through prepayment of FmHA Section 515
plus other uncer tainties inherent inthe tenant- loans. Washington, DC: Housing Assistance
based system, belie that. The experience Council.
should also clarify the futility of policies thatFried, Marc. 1963. Grieving for a lost home. In The
still place the future affordability and urban condition,ed. Leonard J. Duhl, 151-172.
disposition of low-income housing inthe hands New York: Basic Books.
of for-profit owners. Housing Assistance Council. 2002. Rural rental
housing preservation and nonprofit capacity to
purchase andpreserve Section 515 projects.
Washington, DC: The Council.
NOTES National Task Force on Rural Housing Preservation.
1992. Preserving rural housing: Final re-
1. Approximately 110,000 Section 515 units, portoftheNationalTaskForceonRuralHous- ing
outof 400,000 Section 515 units nationwide, were Preservation. Washington, DC: Housing
financed between 1963 and 1979 and had no Assistance Council, California Coalition for
Rural Housing Project and National Housing family housing program: Fiscal Year October
Law Project. 1998-September 1999. Washington, DC: Office
ICF Kaiser. 2004. Rural Rental Housing— of Rental Housing Preservation.
Comprehensive Property Assessment and Wiener, Robert. 1993. Crisis inU.S. housingpolicy:
Portfolio Analysis: Final Study Report: Ap- The prepayment problem in FmHA's Rural
pendix. 8-17. Fairfax, VA. Rental Housing Program. Unpublished
Rural Housing Service. 1997. Year-end reports for dissertation, Graduate School ofArchitecture
FY 1995-1997. Washington, DC: Multifamily andUrban Planning, University ofCalifornia, Los
Housing Processing Division. Angeles.
1999. Summary: Preservation ofthe RHS multi-
Chester Hartman
8 The Case for a Rig ht to Housing
ALTHOUGH ESTABLISHING a right to issues, make new demands and organize politically
housing in the United States does not appear to be to assert and bring into being new elements to
immediately feasible, that political reality in no society's understanding and acceptance of what
way detracts from the argument that our society everyone should have.
ought to embrace it. I proceed from a normative, There are practical, cost-benefit reasons to
philosophical stance that asserts the wisdom advocate for a right to decent, affordable housing.
andjustice of such a rightaswell as our society's For those living in inadequate housing conditions,
clear ability to achieve it. they include, at a minimum, the multiple health and
After all, what have “rights”been historically insafety problems that arise from lead poisoning, rat
the United States if not an evolving societal sense bites, fires, asphyxiation (from poorly ventilated
ofjustice and entitlement, won always in political heating systems), communicable diseases, asthma
struggle (frequently undergirded by various (Rosenstreich et al. 1997), other forms of sickness
intellectual efforts)? The right of slaves to be freeand electric shock as well as the occasional
of bondage was won in that way via armed struggle dramatic event, such as thecollapse of an entire
and political action that produced amendments to building.1 Overcrowding (apart from the physical
our Constitution. The right of women to vote has a condition of the space) can produce or exacerbate
similar (albeit less violent) history.Workers won stress and
the righttoorganize, and federal legislation with familytensionsaswellasdisease(Nossiter1995). Poor
such guarantees was passed to codify that right. neighborhood conditions areoften associated with
Ending child labor, winning an eight-hour workday crime and a lack of personal safety. Housing
and securing unemployment benefits represent affordability problems clearly have an impact on
other labor victories. The Civil Rights Movement diet2 and,asaNew York Times headline put it,
of the 1960s produced a set of legal rights that did forpoor Americans, there is “AGrowing Choice:
not previously exist and changed profoundly at Housing or Food” (DeParle 1991). 3 Excessive
least the publiccultureandpractices withregard to housing costs also affect one's ability to secure
race. In all these instances, the appeal was to a higother of life's basics as well as various amenities
her sense ofjustice, to fundamentalprinciples of a that most of society takes for granted. Segregation,
democracy and to foundational documents discrimination and isolation based on race and
embodiedinthecreation of our country. ethnicity and also on class deprive residents of
The content of rights is thus a constantly access to employment, economic development
evolving drama, as those lacking what they per opportunities andpublic facilities, and may result
in less good opportunities and services—a
Reprinted with changes from “The case for a right to phenomenon that
housing,” Housing Policy Debate 1998, 9(2), 233-246.
ceive as fundamental entitlements, togetherwith
their intellectual and political supporters, raise new
178 Chester Hartman
Massey and Denton (1993) label “hypersegre- Beyond these mostly tangible, and in theory
gation.” Imperfect as the data may be, there are measurable, practicalimpactslies the notion that
ways of measuring these impacts, however political participation and political rights,
roughly. particularly in a democratic society, are closely
A second issue i n need o f quanti ficati on is dependent on satisfaction of basic economic
how these various costs suffered by residents rights.6 As Michael Stone (1993:314) writes, a
ofinadequate housing translate into costs borne by right to decent, affordable housing “builds as well
the rest of the community and society. The health upon recognition that the political and civil rights
problems of poor people caused and exacerbated for which we have struggled and continue to
by poor housing conditions require massive struggle have little practical meaning or utilityfor
subsidies through Medicaid and other public those among us whose material existence is
sources. Emergency fire and police costs, paid for precarious.” The issue here is dignity as well, inthe
largely via local taxes, are disproportionately high sense of asserting and receiving full respect for
for slum neighborhoods. membership in one's community andinthe society
The human and financial costs of crime affect at large (Miller 1993; Miller and Savoie 2002;
everyone, directly or indirectly, as victims and Sennett 2003). Suffrage in the United States has
potential victims. Homelessness is accompanied by had a history of property ownership prerequisites
disproportionate violence of various types (Hombs —a situation not unrelated to the
1994). The productivity lost as a result of the disenfranchisement of homeless persons forlack of
multiple impacts of poor housing conditions a “real” address, an issue that has recently been
negatively affects the standard of living for others. successfully fought inthe courts.7
Educational deficits attributable to inadequate
housing harm the entire society.4 The dominant
wayin whichwenow dealwith those suffering the SUPPORTIVE DOCUMENTS
most extreme housing problem, homelessness—
overnight shelter and emergency services— It is significant that some of the most powerful
requires public expenditures that far exceed the statements supporting a Right to Housing have
costs of amore rational and humane housing come from religious bodies (the same sources that
approach.5 provided leadership in the abolitionism and civil
The costs of poor housing and neighborhood rights movements), highlighting the deep moral
conditions—to those directly experiencing them as connections noted above. A 1975 statement from
well as to the broader community— have the U.S. Catholic Bishops asserts, “We begin with
neverbeen fully assessed or taken seriously as a the recognition that decent housing is a right” and
matter of public policy. Tracing the immediate and quotes the Second Vatican Council: “There must
long-range impacts of these housing and be made avail- abletoall men everything necessary
neighborhood defects—on health, family life(Bratt to live a life truly human, such as food, clothing
2002), crime, education, incomes and employment and shelter” (U.S. Catholic Conference 1975). A
as well as more subtle issues such as self-concept 1985 document from the U.S. Catholic Bishops as-
—is a huge and complex task. Likely,thereare serts,“[T]he rightstolife,food,clothing,shelter, rest
limitations on what can be reliably and and medical care...are absolutely basic to the
accuratelyquantified,butanimportant step toward protection ofhuman dignity ................These eco
building more widespread support for a right to nomic rights are as essential to human dignity as
decent, affordable housing would betocarry out are the political and civil freedoms granted pride of
whatever studies can be done in describing and place inthe Bill of Rights of the U.S. Constitution.”
attaching dollar amounts to these costs, as a way of
recognizing the direct and indirect costs of not Likewise, the Massachusetts Episcopal Dio-
fulfilling this right, and identifying what financial cese's Episcopal City Mission (1986) issued the
offsets should be made against the significant costs following statement:
of providing for such a right. That at least will
provide a starting point for some hard-nosed Shelterin decent, affordable housing is not a lux-
thinking about housing policy and programs. ury. It is a necessity upon which access to other
necessities and the development ofhealthy, probe noted that Canadaseveral years ago considered
ductive families and communities most often amending its Bill ofRights to include “the right of
depend.Nothing ismore essential to the welfare of the individual to proper housing, at a reasonable
men, women and children. Nothing is tied more cost and free of unreasonable barriers” (1st
directly to the recognition of the dignity, worth
Session, 36th Parl., 46-47, Elizabeth II, 1997-98).
and values of persons. Because housing is so
closely related to the welfare of persons and to
And the limitations of simply expressing such a
recognition of their value as persons, nothing right rhetorically, even inofficialdocuments
isamore basic right than the opportunity, re- andpronouncements, are obvious. A recent review
gardless ofincome or class, to live inthat kind of of the international housing rights situation notes
housing which supports the welfareof the family the following:
and community Whetherpersons oflimited income
have access to adequate shelter is thus for us at its The right to adequate housing finds legal sub-
heart both a question of justice, and a relig ious stance within more than a dozen international
and theological question of central importance. humanrightstexts . . . andhasbeenreaffirmedin
numerous international declaratory and policy-
A D ecemb e r 1987 r esol uti on from th e Gen- oriented instruments. More than fifty national
eral Board of the American Baptist Churches constitutions enshrine various formulations of
states, “We proclaimthat eachperson being created housing rights and other housing related state
in the image and likeness of God possesses an responsibilities...and a plethora of domestic laws
inherent dignityfrom which stems a basic human in nearly all countries have a bearing upon one or
more of the core elements of housing rights
right to shelter.” Pope John II, in his 1997 Lenten
Though on the surface a favourable situation, such
message, asserted, “The family, as the basic cell of
legal recognition at the international level has
society, has a full Right to Housing adequate to its rarely been transformed into effective domestic
needs, so that it can develop a genuine domestic legislative and policy measures seeking to apply
communion. The Church recognizes this and implement—in good faith—international
fundamental right and is aware ofher obligation to obligations relevant to housing rights
work togetherwith others in order to ensurethat it is Nogovernment could realistically proclaim that
recognizedin practice.” housing rights exist as much in fact as they do in
Therelevantprofessionsalsohaveissuedsim- ilar law. (Leckie 1994:1415; see also Herman 1994)
statements. For example, this from the National
In short, because housingissocentraltoone's life,
Association of Social Workers: “All individuals
it merits attaining the status ofa right. Itisat
and families have the right to housing that meets
thecoreof one's social andpersonal life, determining
their basic needs for a shelter at an affordable level
the kindsofinfluences andrelationships one has and
and provides for a rewarding community life”
access to key opportunities and services
(National Association ofSo- cial Workers 2000).
(education, employment, healthcare). Housing also
And politicians are adding their voice as well:
is an outward sign ofstatus and affects the health
Representative Jesse Jackson, Jr., “would amend
andwell-being ofthe surrounding community.
the Constitution to guarantee healthcare, education,
Probably only those who have
affordable housing, employment security, equal
experiencedhowhard it is to create and maintain
rights for women and minorities, and a clean
personal andfamily stability orland a job without a
environment” (Nichols 2000).
home, howhard it istokeep upwith schoolwork in
There is wide assertion or recognition of a
an overcrowded apartment, how much the sheer
Right to Housing in a plethora of international
pressure to make the rent can overwhelm the rest
documents8 as well as inthe laws of a great many
of one's life—experiences largely foreign to the
othercountries,oftenembodiedinconsti- tutional or
housing policy analysts, academics and bureaucrats
statutory language (see Leckie 2003), although the
who read and write scholarlyarticlessuchasthis—
legal, economic, social and political conditions in
canfullycompre- hendjust how centraldecent,
each country aresodifferent as to render this
affordable housing is, or might be, and how
dimension of interest and utility only as a general
limiting and burdensome is its absence.
context, not for any detailed application to
thesituation intheUnitedStates. However, itshould
180 Chester Hartman
WHY JUST HOUSING? To state the obvious, with respect to housing, we

have never even come close to providing all
The question maybe raised: Why housing? Why Americans with decent, affordable housing. A
not a righttodecent, affordable food? To health recitation of statistics on howfarweare from this
care? Why not guarantee people enoughincome so goalis unnecessary here.10 We certainly will not
that, likethemajority of Americans, they can move toward this goalinthecurrent (2005) political
purchase the housing, health careand otherba- sics era, turning ourback on past approaches. The anti-
they need in the market? I would answer as safety net political climate in Congress and the
follows. Administration can only make matters worse.
We certainly should have a righttodecent, af- While it would be foolish to maintainthat we can or
fordable food9 andhealth care(inthe latter case, the will move toward establishing a right to decent,
costs, itshould be noted, would be somewhat lower affordable housing inthe immediate future, there is
were housing-related detriments to good health need andwisdom in keeping alive the assertion of
eliminated); our failure to pass single- and advocacy for such a right. We must not lose
payerhealthreform legislation or otherwise pro- sight of what a society needs and can provide as
videthese guarantees isatragedy of massive pro- basic standards of decency simply because
portions. It is not an either/or proposition, and achieving these goals does not seem possibleatthe
movements forbasic rights must coalesce into a moment. Thismight be regarded as a preparation
more potent political force. period: engaging inthe systematicthinking, research
Housing has a special character, not only and scoping out of details as to how such a right
because it consumes so large a portion of the might be defined and implemented—issues that
household budget, especially for lower-income will be itemized below—during a “dark” period.
families, but because it is, as noted above, the As framed by MargeryTurner of
central setting for so much of one's personal and theUrbanInstitute,“Ifyou're going to advocate for a
family life as well as the locus of mobility right to housing,...I'd urge you to take the broadest
opportunities, access to community resources and approach to that concept that you possibly can
societal status (Hartman 1975). .........................................................[L]et's think
It would makethings far easierifeveryone in the about it in an ambitious way, and maybe whatever
United States had enough income to satisfy his or headway is made will be more ambitious headway”
her needs in the market, but that goal is even less (Turner 1991:132).
likely to be achieved than isthe goal of decent As all U.S. housing policy experts and many
housing for all. The structure of the job market and nonexperts well know,Congress in its preamble to
the shredding of the social safety net make it hard the 1949 Housing Act promulgated the National
to imagine how everyone could have Housing Goal of “the implementation as soon as
enoughincome to payforhous- ing and other feasible of a decent home and a suitable living
necessities. In fact, an increasingly large number of environment for every American family.” That
Americans are unable to attain a decent standard goalwas reiteratedinthe 1968 Housing Act and, in
ofliv ing as prices outstrip incomes (see Chapter 2). slightly different versions, inthe 1974 and 1990
Moreover,that approach misreads the nature of the Housing Acts.11 The word affordable is not
housing market. The profit-maximizing behavior mentioned in this formulation, but the postwar
of all actors in that market—landowners, context was “slum clearance”: The dominant and
developers, builders, materials suppliers, real estate most widely recognized housing problems were
brokers, landlords, even homeowners—at all points substandard conditions and the lack of enough
works against assuring that everyone has decent, decent housing. However, affordability nowisthe
affordable housing, absent a legally enforceable nation's dominant housing problem, andit isself-
Right to Housing and explicit commitment of evident that unless decent housing isaffordable,
resources to its realization. iteitheris unobtainable by lower-income persons or
can be secured only at the cost of slighting other
basic necessities. Yet a goalis not a right. Although
AMERICA'S PROGRESS ON HOUSING Congress promulgated thisgoal, itneverfollowed
upwith the programs or resources to attain it.
Nordo the statutory declarations provide the basis has long-standing status as a basic right in the
for litigation to compel allocation of the neededre- United States.
sources. The 1968 Housing Act took the brave step Thus, our nation has a historyofprovidinga
of setting forth a 10-year numerical target: 26 series ofrights that prepare and assist individuals to
million units, 6 million of which were to be participate in its economicand social order.
forlow-and moderate-income households, and Throughout the 19th century, educational and
year-by-year progress reports were mandated. But landreforms provided citizens with an expanding
it failedbya considerablemargin, and never again horizon of social and economicopportuni- ties. For
was Congress foolish enough to risk such example, the 1862 Homestead Act, under which
embarrassment. any settler could receive 160 acres of surveyedland
By contrast, inthe health and education areas, after five years'residence andpay- ment ofa $26 to
the nation has set specific goalsand timetables. A $34 registration fee, exemplifies America's
U.S. Department of Health and Human Services willingness to directly transfer materialresources to
publication (1993; McGinnis 1995) laid out ordinarypeople (Robbins 1976; Warner 1972). As
specific objectives in 22 areas of health and health the 21st century begins, we need to consider to
promotion to be achieved by the end of the century what equivalent economic and material rights an
for the population as a whole as well as for individual is entitled.
different age groups, racial and ethnic minorities, In the meantime, there remains no entitlement
and low-income persons. A follow-up report (U.S. to any of the direct government housing programs:
Department of Health and Human Services 2000) public housing,14 Section 8, Section 202 and so on.
updates andreports (This istrue for civilians. The military's family
progressonthesegoals,puttingforward467spe- cific housing program does incorporate, as partof the
objectives in 28 focus areas. And, maintaining the benefits structure and only for those eligible by
momentum, Healthy People 2010 goals were terms ofpay grade andlength of service, an
launched (Healthy People 2010 goals launched entitlement to either free housing or a housing
2000).InApril1994,Congressenacted the “Goals allowance [Hartman andDrayer 1990].) Something
2000: Educate America Act,” which identified approaching a Right to Housing exists in other
eight national educational goals pertaining to the government programs, albeit hidden andlargely
following: schoolreadiness; school completion; unexplored inthe literature. Thetemporary housing
student achievement and citizenship; teacher assistance offered under the disaster aid programs
education and professional development; ofthe FederalEmergency Management Admin-
mathematics and science; adult literacy and istration (FEMA) is ineffect an entitlement, 15
lifelong learning; safe, disciplined, and alcohol- although not that much moneyis involved and
and drug-free schools; and parental participation. much ofit is reimbursed by insurance proceeds.
Among other features, the act called for the high Federal aid forfoster care—ineffect a houser oflast
school graduation rate to increase to at least 90 resort for children from troubled families 16—may
percent by the year 2000, a dramatic reduction also be legitimately described as an entitlement;
inthe drop-out rate and elimination of thegapin almost 80 percent of the federal government's $4.7
high school graduation rates between students from billion child welfare expenditures go to foster care
minoritybackgrounds and their nonminority (Russakoff 1998). Finally,andperhaps most
counterparts (Goals 2000 1994).12 important, thesignif- icant portion of the Medicaid
(an entitlement) expenditure set aside for nursing
home care constitutes a quasi-Right to Housing
EXISTING ENTITLEMENTS based on age (Redfoot 1993).
Ourhousing system does, at various levelsof
As of 2005, we still have a number of entitlements government, incorporate some rights (orquasi-
inour economic and social system: the Earned rights) with respect to housing—for the most part,
Income Tax Credit, food stamps, Medicaid, rights againstcertainthings,negativerights not
Medicare, school breakfasts and lunches, Social affirmative ones.17 A partial list of these includes
Security and supplementary security income the following:
(SSI).13 And of course, free K-12 publiceducation
182 Chester Hartman
1. Local housing codes (which vary enormously amended to increase the level of protection to
with respect to coverage and standards) apartments costing $1,200 a month orless and
provide something of a right to decent also to offer some protection against mortgage
conditions—although in practice, enforcement foreclosure [Raskin 1991].)
is problematic, and attempting to enforce these 7. Tenants receiving public housing and Section 8
quality standardsmayresult in loss of theunit, assistance have the righttobecharged no more
eviction or a rent increase (Hartman, Kessler than 30 percent of their (adjusted) income for
and LeGates 1973). rent (a figure the government has revised
2. In many jurisdictions, there are, by statute or upward inthe past [Hartman 1986] and may
case law, “warranty of habitability” and rent- again raise, but that, whatever the extant
withholding provisions—but these, too, fall figure, embodies in principle a similar right).
shortofbeing a guarantee ofdecent housing 8. If they meet eligibility criteria, veterans pur-
conditions18 anddo not consider at all the issue chasing housing areentitled to U.S. Depart-
of affordability. ment of Veterans Affairs (VA) loans, inthe
3. In those fewlocalities that still have rent control form of government guarantee of private loans
ordinances, rent increases are limited, under or, in some cases, direct government loans (a
certain circumstances—although this is no feature introduced at the end of World War II).
guarantee of affordability. 9. The Community Reinvestment Act, which
4. Rights to quiet enjoyment of residential essentially forbids “redlining” (denial of loans)
premises exist vianuisance statutes, case law of minority and low-income neighborhoods,
and other legal documents. provides what in essence arecer- tain rights
5. The right not to be discriminated against inthe (geographically, not individually, oriented) to
purchase or rental of housing on the basis of housing finance.
race and other personal characteristics is 10. Various federal, state andlocallawsgive ex-
embodied in a large number of decades-old isting occupants ofrentalhousing the rights of
federal, state and local laws; additional rights first refusal regarding purchase of their units.
based on disability were contained in 1988 11. The various homeowners' income tax de-
Fair Housing Act Amendments (Mental Health ductions provide the federal government's only
Law Project 1989). true (civilian) housing entitlement “program”:
6. Due process must be followed in eviction and All homeowners are entitled to deduct from
foreclosure procedures. Beyond this, a their taxable income base virtually all
“righttostayput” (Hartman 1984) exists in mortgage interest and all property tax
various local condominium conversion payments and can in most cases avoid capital
ordinances andin “just (or good) cause” gains taxes altogether.19 While not all
eviction laws, which stipulatelegitimaterea- homeowners actually use this feature, it is
sons for eviction rather than allowing eviction available to all. When this “right” is chal-
for virtually any (or no stated) reason; the lenged, the howls from the (largely upper-
existence of many loopholes ineventhe most income) beneficiaries20 and their advocates
tightly drawnordinances substantially weakens inthe real estate world are deafening—and
this right. Residents of public and many other politically potent.21
forms of government-assisted housing have
due process rights with respect to eviction. Other legal steps that move inthe direction of a
(Military personnel receive special Right to Housing concern the issue of
consideration. In an effort to deal with housing homelessness—althoughherethe issue has been
problems when people are suddenly yanked “shelter,” not in its generic meaning ofhousing, but
out of civilian life and called upfor military temporary, overnight accommodations. In
service, the Soldiers andSailors Relief Act of Washington, DC, voters in 1984 passed by a 72-to-
1940 originally provided that anyperson 28-percentmarginaninitiative(placed on the ballot
serving inWorld War II could not be evicted by the Community for Creative NonViolence
from an apartment renting for less than $150 a [CCNV], headedbythe late MitchSny- der), which
month. During the Gulf War, that act was stated, “All persons inthe District of Columbia
shall have the right to adequate shel- HOW WOULD A RIGHT TO HOUSING
ter.Adequateshelteristhatwhichtoareasonable WORK?
degreemaintains,protects,and supportshuman
health, is accessible, safe, and sanitary, and has an Some Preliminary Thoughts
atmosphere of reasonable dignity.” While on the
surface a clearly established right, in fact, it had a Beyond the analytical issue of whether there
sad history.22 should be a right to decent, affordable housing, a
In New York City, a similar right to decent great variety of concrete questions must be
temporary shelterfor the homeless was won, but in answered with respect to how such a right should
this instance, the route was litigation: Asuit was be defined andimplemented.23 What are the
broughtunder the state constitution to compel the components of this right? I would include
city to guarantee decent shelter for any homeless affordability, physicalquality of theunit, the social
man; the case never went to trial but achievedits andphysical characteristics of theneighborhood
goal viaaconsentdecree.Alater step inthe litigation environment, and secure tenure.
expanded this righttohomeless women. What should the affordability standard be?
As in Washington, DC, however, New York Some version of Michael Stone's “shelter poverty”
City has been dragging its feet for well over 20 standard (see Chapter 2) is best, taking into
years (the case was brought in October 1979). account household size, household income and the
Advocates for the homeless have been back to cost of nonshelter basics, as opposed to a fixed
court many times seeking to require the City to percentage of income.24 What standards should be
meet its obligations. Exemplifying this dereliction, used for housing and neighborhood conditions?
a judge in 1996 held Mayor Rudolph Giuliani and Local housing codes vary enormously in coverage,
two city agencies in contempt of court and levied detail and standards. The best of these might form
more than $1 million in fines against thecity after the basis for a national code, or theU.S.
shemade an unannounced visittothecity's homeless Department of Housing and Urban Development's
processing center and discovered 254 people (HUD) Housing
sleeping on chairs and desks, even though“for
morethan a decade, the courts have barred Quality Standards might be used. There are few
thecityfrom housing homeless peopleovernight usable neighborhood quality standards at present,
intheoffices to which they go seeking shelter” and serious work must be undertaken to develop
(Swarns 1996). these. Overcrowding standards must guard, on the
In Massachusetts, a 1995 Superior Court ruling one hand, against cultural bias (Myers, Baer and
inaclass action case reaffirmed that state law gives Choi 1996; Pader 1994) and, on the other hand,
homeless families a “righttoshelter,” striking down against accepting dramatically lower standards for
a rule by Governor William Weld's administration the poor. Provision must be made for changing or
that denied shelter to families evicted from public rising standards. Anti-discrimination requirements
or subsidized housing for falling behind in rent should permit choice of neighborhoods: the option
(Lakshmanan 1995). But theWeld administration ofin- place as well as dispersion remedies for badly
appealed and obtained from the Supreme Judicial impacted inner-city neighborhoods.
Court a reversal of the Superior Court decision Secure tenure should also beakey element.
(Dowell v. McIntire, 424 Mass. 610 [1997]). Provision should be made, however, for legitimate
In several cities, what might be labeled a “right changes in land use that require removal of
not to freezetodeath” has been enactedin the form residents. Defined behavioral infractions can
of ordinances requiring public buildings to constitute grounds for eviction. Willful non-
beopened to homeless persons when the payment would be grounds for eviction or
temperature goes below a certain level. foreclosure, but systems should be established to
In short, the concept of some housing rights is provide needed emergency and longer-term
by no means foreign to our legal system or to subsidies if incomes are inadequate to pay con-
prevailing standards of justice. To this existing tracted housing costs, in order to avoid loss of
bundle, meaningful elements must be added.
one's home.
184 Chester Hartman
CAN WE AFFORD A RIGHT it is howwe choose to spend it. In the housing area,
TO HOUSING? hundredsof billions ofdollars wereappropriatedin
the 1990s to bail out thesavings andloan industry
To begin with, the costs of providing everyone (see Chapter 4). And while the basic needs of our
with decent, affordable housing are greatly affected people go unmet, nearly one-half of the country's
by the ways in which such a program would be FY2005 federalfunds outlay of $1,926 billion is
carried out. Relying on the profit- motivated devoted to past and current military expenditures
system that currently dominates the U.S. housing (War Resisters League n.d.).
scene is by far the most expensive way to go. A
vastly expanded social sector, withradically STRATEGIC APPROACHES
different financing, development, ownership and
management arrangements—as put forward inthe Laying out a detailed plan to establish a right to
Institute for Policy Studies (1989) andStone (1993) decent, affordable housing isalater step.The initial
—would makethe task far less costly.25 stepistosetforth the rationale for establishing such a
Beyond that, the question must be partly an- right and to challenge those who disagree to assert
swered in terms of the costs—to those directly their arguments and counterarguments. Some
affectedaswellastosocietyasawhole—of main- preliminary thoughts along these lines are,
taining the existing inadequate housing system. In however, appropriate.
otherwords, can weafford not to have a right to Community and housing organizing and its
decent, affordable housing? political activism component is one major tool.
But given that government budgetary outlays There clearly is a need for more housing organizers
must be far higher than current levels if the to work with and bring together tenant groups,
National Housing Goal (in its original incarnation) homeless advocacy organizations, community-
is to become a reality, isthe money there? That, I based nonprofit developers, church-based
submit, is not a fiscal question but a political one. institutions, neighborhood associations and civil
We do not have any wholly reliable estimates of rights and minority groups. “There are probably
what realizing a right to decent, affordable housing more housing lawyers for the poor than there are
would cost, but there are approaches that can offer organizers,” observed John Atlas, president of the
an order-of-magnitude estimate. For example, the National Housing Institute (Atlas 1991). Useful
detailed 10-yearprogram put forthbythe Institute thoughts on the strengths, weaknesses and potential
forPolicyStudies' Working Group on Housing of the country's housing movement areofferedby
(1989) has a first- year price tag of between $29 Stone (1993), Dreier (1997), Marcuse (1999),
and $88 billion (in 1989 dollars), depending on inChapter 10 andinChapter 5.
what mixture ofits differently priced elements is It is likely that a right to decent, affordable
chosen; over its life, required outlays are reduced housingcan be advanced only ifcoalitions are es-
annually. tablished that involve organic connections with
While the figure sounds high, such expenditures othergroupsfightingforprogressivereformand
represent a tiny percentage of the current federal advancement ofrights in health, food, education
budget. The above figure is in line with the amount and income support programs. Alliances also must
of subsidy that the government grants under bemadeacross class andrace lines, revealing the
themortgage interest deduction. According to housing system's inability to provide for the basic
theU.S.Congress (1997) Joint Committee on needsof an ever-growing portion of the population,
Taxation estimates, themortgage interest deduction connecting the problems ofthe poorwith the
alone will amount to $232.6 billion over the problems ofthe middle class and the problems
periodbetween fiscalyears 1998 and 2002. For the ofhomeowners withthe problems ofrenters.
same five-yearperiod,the deduction of property The housing question touches deeply on issues
taxes on owner-occupied residences is estimated to ofrace and racism. A full right to decent, affordable
cost $89.9 billion, and exclusion of capital gains on housing inevitably will involve a far greater degree
the sale of principal residences is estimated at of residential integration than nowisthe case.
$29.6 billion. In sum, it is not that there is no Majorresistance to dealing with the fundamental
available money to fund a Right to Housing; rather, flaws inthe nation's housing system may stem from
society's resistance to dealing with race issues. A CHALLENGE

There needs to be a recognition, andpublic
education to bring about that recognition, that Those who reject a right to decent, affordable
attaining a right to decent, affordable housing housing must ask themselves what future there is
requires major changes in the current housing for owners and renters—middle-, moderate- and
system withregard to ownership, financing and low-income—ifexisting trends continue, as they
production. Merely throwing more money at the surely must, absent serious andradicalin-
problem under the existing system—as with the tervention.
Section 8 voucher/certificate program— can have It has been argued (Carr 1998) that advocating
only limited results. The existing system of a Right to Housing isflawedinthat “it implicitly
production, ownership and finance has shown itself accepts the economic status quo of households
incapable of meeting the needsof an ever-growing trapped at the bottom of America's economic
portion of the population. We must ask honestly ladder and simply proposes to make that position
whether the for-profit system of production, in lifealittlemore bearable. ...[A] better solution
management and finance that overwhelmingly would be one that not only benefits households at
dominates the way housing is the bottom of the economic ladder but also
providedintheUnitedStates isconsistent with a right improves society as a whole.” In other words,
to decent, affordable housing; or whether, “declaring a ‘Right to Housing' and pursuing that
alternatively, this goal can be reached only through right as the primary goalfor a branch ofsocial
conscious and large-scale development policy ignores theunderlying causes behind
ofpublicand other nonprofit (nonmarket), concentrations ofshelterpoverty among certain
permanently affordable units—both new and units among certain populations and residents ofcertain
transferred from the existing geographicareas.”
stocktothissystem.Partofthispubliceducation Butthose ofus advocating a Right to Housing do
process involves stressing the ways in which and not ignore those underlying causes. Eradicating the
the extent to which virtually all housing inthe systematic forces that cause concentration
United States currently benefits from some kind of ofpovertyis ofcourse amore desirable goal, but one
indirect or direct government subsidy. Op- eds, that is even more elusive and difficult to achieve
study groups, year-long education projects such as politically than a Right to Housing. The basic
those done by the League of Women Voters and nature of housing gives itaspecial place as a social
many other creative waysofteaching theAmerican goal. And because, as noted above, housing is such
publicabout good andbadhous- ing policy are a a central financial burden for low-income people,
necessary foundation forbasic change ofthe type serious assistance inthat area can have important
advocated in this article. spillover effects
Selective litigation can beof assistance, al- inotherareasofone'slife:accesstogoodschools,
though the courts (in particular, the federal courts, employment opportunities, transportation, for
following the recentconservative judicial example—particularly if adequate attention is paid
appointmentsbyRepublicanpresidents) arenot to issues oflocation in implementing this
presently as amenable to advancing economic and rightsoastoavoid concentrations by poverty orrace.
social rights as they were inthe 1960s and 1970s. There is no reason, moreover,that organizers and
Major rights advances have been made this way, other activists cannot, and will not, pursue several
from ending legally sanctioned racial segregation social justice goals simultaneously. A focus on
in publicschools, to abolishing the poll tax, to housing need not distract attention and energyfrom
facilitating receipt ofwelfare support by other and deeper goals. Rights, as also noted
eliminating bars based on interstate movement, and above, also have a cumulative character: Rights
requiring due process hearings before aid is tend to beget rights, bothinterms of societal
terminated. Housing attorney Florence Roisman acceptance and the lessons ofmovement-building
has put forward a series of imaginative approaches and political struggle.
to housing rights, using then- existing public Yet another criticism of the Right to Housing
benefit, child welfareand mental health laws approach advocatedinthisarticle (again, Carr 1998)
(Roisman 1990). isthat “when housing is affordable due only to
186 Chester Hartman
government subsidy, residents of that housing helpful comments on a draft of this updated article. This
grow dependent.” But such criticism stems in part discussion owes a great deal to several efforts I have
froman unwarranted distrust ofgovernment (as participated in over the past few years: the Working
Group on Housing of the Institute for Policy Studies
opposed to the market) and ignores as well the (which produced the document cited in the references);
“dependency” that virtually everyone has, and the Right to Housing Working Group convened by the
should have, on government services and National Housing Law Project and the Legal Services
protections, not onlyin the housing area but Homelessness Task Force (NHLP 1995); and the
throughout our system. With respect to housing in Housing Trust Fund Committee of the National Low
particular, few seem to call the tax system's Income Housing Coalition, which produced the
legislation cited in note 21.
enormous and enormously regressive homeowner
1. See Kennedy (1995) for an account of a building
deduction “dependence.” There is no way a Right collapse inNew York'sHarlem, which killed three tenants
to Housing will beachieved without extensive andinjured seven others. Accidents of this sort areeven
government subsidies and programs. Local, more prevalent anddisastrous in other countries. In mid-
democratically participatory control of these 2000, the collapse of a massive garbage hill in Manila
programs will ensure they are carried out without buried ashantytown, killing hundreds of people: Some
unnecessary bureaucracy, corruption or rigidity. two hundred bodies were recovered, but “residents
estimate that up to four times that number may have died,
There is plenty ofroom for consumer choice and though a complete toll will probably never be known”
sovereigntywithinthe context ofbroad government (Mydans 2000).
policies. Pretending that “the market” alone can 2. A study by Meyers etal. ( 1 995) comparingnu-
provide these benefits ignores the real history of trition status of children living in subsidized housing
the housing market in the United States and howit with those living in unsubsidized housing—and whose
has disadvantaged and oppressed,and continues to families thus pay a farhigherproportion of their income
for rent—concluded as follows: “Receiving a housing
disadvantage and oppress, the vast number
subsidy is associated with increased growth in children
ofAmer- icans without the financial means to from low-income families, an effect that is consistent
function satisfactorily inthat market. with a protective effect ofhousing subsidies against
And so, I endwith achallenge. Let those who do childhood undernutrition.”
not believe that decent, affordable housing should 3. An intriguing andinstructive twist on this
be a right in American society put forward their dilemma was featured in a front-page New York Times
viewsand on what they are based. Let them also story about one Gangaram Mahes, a homeless New
Yorker whose modus operandi—a real life, albeit more
play out the scenario of current conditions and successful version of the gentleman portrayed in O.
trends: What happens to our society if present Henry's delightful short story “The Cop and the
levels of inequality, discrimination and deprivation Anthem”—is to slip on his best donated clothes as winter
are allowed to continue and intensify? arrives, eatagood meal atanice restaurant and then allow
Let them answer why it is better to have tax himself to be arrested after he announces his penniless
breaks for the rich rather than a society where state upon arrival of the check. He has done this at least
31 times, so as to spend the next 90 days with a
fundamental economic and living standards, and
guaranteed three meals aday and aclean bed. Legal aid
also political and civil rights, are guaranteed to all.
lawyers, according to the account, report agrowing
Responses to some of the detailed considerations number ofpeople who commit petty crimes with the
as to what this right should and intent of going to prison. While possibly a rational
wouldmeaninpractice, as well as howwe might strategy from the individual point of view, “it costs
moveinthis direction, also are welcome. Butthe taxpayers $162 a day to feed, clothe and house Mr.
dialogue at thefirst level should beabout the Mahes at Rikers Island. His 90-day sentence will cost
them $14,580 to punish him for refusing to pay a $51.31
concept itself. check.Infiveyears, he has cost them more than $250,000”
Let it begin. (Bragg1994). However, some localities now are
proposing to charge jail inmates forfood (Pan 1998;
Clines 2000; “Mass. County” 2002) .
4. Homelessness has proven to beabarrier to ad-
NOTES equate education for children. See Dohrn (1991) and
National Law Center on Homelessness and Poverty
Acknowledgments: The author thanks Rachel Bratt, ( 1997b) forreports, respectively, on the failureto meet
Mary Ellen Hombs, Steven Hornburg, Robert Lang, federal McKinney Act requirements that homeless
Peter Marcuse, Daniel Pearlman and Michael Stone for children in shelters receive an “adequate education”
andbarriers to preschool education forhomeless children. Workers Housing. For example, the International
See also National Law Center on Homelessness and Covenant on Economic, Social and Cultural Rights, to
Poverty (1990a, 1990b, 1991). Forhoused andhomeless which 145 states are bound as parties, states in Article
children in low-income households, frequent school 11(1), “The State parties to the present Covenant
changes (as often as three, four,and five timesayear) recognizethe rightof everyone to an adequate standard
duetohousinginstabilityclearlyaredetri- mental to learning ofliving forhimself andhis family, including adequate
(Hartman 2002). food,clothing andhousing, and to thecontinuous im-
5. An advertisement headed “Which Would You provement of living conditions.” (See, generally, Cen-
Invest In?” placed in the May 28, 1995, New York Times treonHousing Rights andEvictions [1994]). The June
by the New York City advocacy group Almost Home and 1996 UN Conference on Human Settlements (Habitat II)
signed by several dozen senior executives of corporations in Istanbul produced little progress and featured the
and financial institutions, such as Lehman Brothers, depressing, embarrassing spectacle of the United States
Lazard Freres, Merrill Lynch, Goldman delegation at first giving in to State Department
SachsandBankersTrust, andwell-known individuals instructions that it “must makeclearfor the record that the
(including Cyrus Vance, Vernon Jordan and Felix U.S. does not recognize the international human right to
Rohatyn), cited the comparative annual costs in housing” (Habitat II Brings Victories 1996). Then, under
NewYorkCityofapsychiatrichospitalbed ($1 13,000), a great pressure from nongovernmental organizations and
prison cell ($60,000), a shelter cot ($20,000) and a other governments, it acceded to a weak assertion of the
permanent home with supportive services ($12,500). “full and progressive [as opposed to prompt] realization
Holloway ( 1996) reportsannualshelterbedcostsasbe- of that right in the context of other international
tween$18,000and$23,000inNewYorkCity;bycom- documents.” The various UN-sponsored mega-
parison, per-unit HUD subsidies for public housing conferences on related issues— the United Nations
andSection8certificates/vouchersare inthe $6,000 to Conference on Environment and Development (Rio de
$8,000 range. A similar, more recent full-page adin the Janeiro, 1992), the World Conference on Human Rights
NewYorkTimes(January24,2001),bytheNationalAl- liance (Vienna, 1993), the Population Summit (Cairo, 1994),
to End Homelessness, opposing the increasing trend to the Social Development Summit (Copenhagen, 1995),
criminalize homelessness (thus headed, “At $112 a night, and the Women's Sum- mit(Beijing, 1995)—mayprovide
the homeless aren't the only ones pay- some fuelfor movement inthe direction of housing rights.
ingahighprice”),comparedthe$34pernightcostto provide 9. The basic necessity of food, as well as clothing,
permanent supportive housing with built-in services such is easier to come by than is housing, via various free or
as job training and mental health treatment with the per very inexpensive official, nonprofit and informal surplus
night cost ofputting a person in jail. Annualized, the and giveaway systems (food banks, secondhand clothing
difference is $12,410 versus $40,800. See also note 3. stores, hand-me-downs, yard sales and the like.). See
6. In recent years,agrowing number ofhuman rights Trebay (2000) as well as Mittal (2001).
organizations have expressed interest in initiating work 10. See, for example, Joint Center for Housing
on economic, social and cultural rights, expanding their Studies (2002); HUD (1998); Lazere (1995); National
legal theories and activism efforts more broadly and Low Income Housing Coalition (2001); DeParle (1996).
creating theoretical, legal and advocacy links between In his second Inaugural Address (1937), President
the two areas of concern. See International Human Franklin Rooseveltofferedhis famous lament that “one-
Rights Internship Program ( 1997). third of the nation is ill-housed, ill-fed, and ill- clothed.”
7. See NationalLaw Center on Homelessness and While enormous progress has unquestionably been made
Poverty(1996)andcasecitationstherein.Abilltocod- ify with respect to clothing and food, it can easily be shown
these rights (theVoting Rights of Homeless Citizens Act that one-third of American households still are ill-
of 1997[H.R. 74, Senateversion S. 1503]) has been housed, when physical condition, overcrowding and
introduced severaltimes, mostrecently in 1 997, buthas affordability are totaled up. And likely thetrajectory
gone nowhere, mainly out of Republican opposition, istoward even larger numbers and proportions. Although
since it is assumed that most homeless persons would there are no data comparing the depression-era homeless
vote Democratic. with the current situation, we are gradually realizing the
8. Among the important international documents full dimensions of that problem. Link et al. (1994)
wherein the right to adequate housing isex- plicitly reported that over the five-year period from 1985 to
recognized are the Universal Declaration on Human 1990, 5.7 million people were literally homeless at one
Rights ( 1948); the International Covenant on time or another (sleeping inshelters, bus and train
Economic,SocialandCulturalRights (1966);theCon- stations, abandoned
vention on the Elimination of All Forms of Racial buildings,etc.),while8.5millionpeoplereported some
Discrimination(1965);the International Convention on typeofhomelessness(stayingwithfriendsorrelatives).
the Rights of the Child (1989); the International Lifetime homeless figures were 13.5 million people(lit-
Convention on the Elimination of All Forms of Dis- eral homelessness) and 26 million people (all types of
crimination Against Women (1979) and the International homelessness). (See also Marcuse 1989.)
Labor Organization Recommendation No. 115 on 11. Congress, in a subtle and little noticed provision
188 Chester Hartman
of the Quality Housing and Work Responsibility Act of by the National Low Income Housing Coalition, was
1998 amended this statement, ludicrously maintaining introduced in Congress in 1994, but never garnered
that the government lacked the resources to address the Congressional support. The bill would have financed the
nation's housing needs so fully. (See Bratt 2003.) trust fund by reducing the mortgage interest tax
12. Overseeing this now-dissolved project was an deduction for well-to-do homeowners, which many
intergovernmental National Education Goals Panel, with analysts said doomed it from the start.
eight governors, four members of Congress, four state In 2000, the National Low Income Housing Coalition
legislators and two members appointed by the president. embarked on a campaign to establish a National Housing
See the Web site: www.negp.gov. However, in 2002, Trust Fund, based on legislation introduced by John
President George W. Bush signed the Education and Kerry (D-MA) inthe Senate and Bernie Sanders (I-VT)
Secondary School Act, which closed down the Education inthe House. These bills would have used surplus
Goals Panel. (See Hoff 2002 for a useful history and revenue from the FHA mortgage insurance program as
evaluation of the effort.) the dedicated revenue source for the trust fund and
13. A generaldiscussion of the entitlement concept is calledforproduction, preservation and rehabilitation of
found in Edelman (1991). 1.5 million units of rental housing affordable to the
14. For an argument that there should be a right to lowest-income families. The National Housing Trust
public housing, see Roisman (1971). Fund Campaign has been endorsed by over 5,400
15. The Robert T. Stafford Disaster Relief and organizations (www.nhtf.org).
Emergency Assistance Act (P.L. 93-288), as amended, The House bill, H.R. 1102, had 214 co-sponsors at
provides forresidents of areas wherethe president de- the close of the 108th Congress in 2004. Opposition from
clares a major disaster, among other benefits, temporary Republican leadership inthe House prevented the bill
relocation housing for up to 18 months; funding for from coming upfor consideration.
emergency repairs to damaged homes; long-term (up to In 2005, inthe 109th Congress, the NHTF campaign is
30 years), low-interest Small Business Administration pushing legislation to create a newfundfrom profits from
(SBA) loans (up to $240,000) for home repair and Fannie Mae and Freddie Mac to be used for the same
repair/replacement of furniture and personal possessions; purposes as a the National Housing Trust Fund.
and cash grants of up to $13,400 (a ceiling that is 22. The city government never took it seriously.
periodically increasedvia inflation indexing) for those Proponents had to takethecity to court inorder to get
who do not qualify for a loan (see FEMA n.d.; Suchocki action, with severe sanctions and fines imposed on the
1998; U.S. General Accounting Office 1997; SBA n.d.). city to get a response. In June 1990, the city council
While not explicitly labeled an entitlement program, in “amended” the initiative law to remove its effectiveness.
fact, if proper application procedures are followed and In response, CCNV took the issue to voters again in
eligibility criteria are met, such aid is giventoall who 1990, this time losing, 49 to 51 percent, partly the result
apply. of what has been labeled “compassion fatigue.” An
16. “Through foster care, the government [by the attempt to secure a constitutionally groundedright to
late 1990s] was mother oflast resort to a record 502,000 shelterinWashington, DC, yielded a positive ruling at
children nationally, almost double the number in1980” thetrial court levelbutwassubsequentlyoverturned by
(Russakoff 1998, Part1, A1). theU.S.Courtof Appeals for the D.C. Circuit(Locy 1997).
17. It has been ironically, and not entirely face- Recent years have seen a backlash against the homeless,
tiously, suggested that thenew emphasis on prison- which possibly bodes poorly for support of a rig h tto d
building and such punitive measures as “three strikes and ecent h ousi ng. Through out th e country, a r ange of
you're out” laws have created a “right” to affordable ordinances and police practices aimed at homeless
shelter with total security of tenure. See also note 3. persons are being enacted and carried out as a gener al t
18. In a1972 case, Lindsay v. Normet (405 U.S. 56), rend toward the criminalization of homelessness. See
the Supreme Court ruled that there is no constitu- National Law Center on Homelessness and Poverty
tionalrighttoshelter—but see the discussion below of (1994, 1997a).
temporaryshelterforthehomeless.Foranearlier,general 23. This list of issues is drawn from discussions and
discussion of a Right to Housing, see Michelman (1970). background papers of the National Housing Law
19. The 1997 tax reform legislation sweetened the Project/LegalServicesHomelessnessTaskForceWork- ing
capitalgainsfeatureforhomeownersenormously,pro- Group (see the author's acknowledgments under Notes).
viding a windfall predicted to benefit mostly affluent 24. “Shelter poverty” isatermand concept originated
homeowners to the tune of some $6 billion over the next by Michael Stone, referring to the relationship between
nine years. See Harney (1997). the cost of nonshelter basics and the cost of
20. Seventy percent of the mortgage interest housing.Inbrief,Stonearguesthatsincehousingtends to
deduction and 65 percent of the homeowners' property makethefirst claimonahousehold's disposable income, the
tax deduction went to taxpayers inthe $75,000-and-above most a household should be required to pay forhousing
income class in 1997 (U.S. Congress [1997], Joint isthat whichleaves itable to meet nonshelter basics at a
Committee on Taxation). minimum level of adequacy. The larger the family, the
21. A Housing Trust Fund bill—H.R. 1016, crafted more it has to pay for nonshelter basics
andthusthelessitcanaffordforhousing;similarly,the lower Urban Affairs and Research, Howard University.

the family's income, the less it can afford to pay for Episcopal City Mission. 1986. Housing: A basic human
housing, since nonshelter basics take up a higher right. Boston.
percentage of household income. Using this concept, Federal Emergency Management Agency. n.d.
updatedBureau ofLaborStatistics modelbudgets and FEMAFAX Document No. 91101.
actual data on household incomes and expenditures, Goals 2000: Educate America Act promises new aca-
Stone calculates that some 15 million U.S. households demic standards and opportunities for all students to
cannot afford one penny for housing and still have learn. 1994. Newsnotes, Publication of the Center for
enough funds remaining for nonshelter basics. (See Law and Education, No. 51, Summer.
Chapter 2). Habitat II Brings Victories, Opportunities. 1996. In Just
25. For anargumentonthewisdomof using capital Times, newsletter of the National Law Center on
grants as opposed to credit, see Chapter 4; Institute for Homelessness and Poverty, August.
Policy Studies (1989); Marcuse (1986). Harney, Kenneth. 1997. Home tax break comes at a big
cost for U.S., states. Washington Post, October 4.
Hartman, Chester. 1975. Housing and social policy.
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by Jean R.McRae and Michael U. Mbanaso. Spring 1
David B. Bryson"
9 The Role of the Cour ts and a Rig ht

to Housing
COURTS PLAY a central role in defining, THE ATTRIBUTES OF A RIGHT

declaring and enforcing legal rights, and courts in TO HOUSING
the United States already have made
significantcontributionstowarddevelopingand Chapter 8 explained in detail the nature of a Right
enforcing various aspects of a Right to Housing. to Housing that could serve as the foundation for
The chapter begins with consideration of the nature anew social agenda. However, to understand the
of a Right to Housing and, in particular, the role of courts, this discussion involves morethan
components of such a right. It then explores what just one undifferentiatedright. A h ome h as many
courts can do to develop and enforce rights. With asp ects, i ncl u ding i ts phys i cal condition, its
that background, the chapter explains what courts location, its cost, and the duration of and
have done with regard to housing rights, especially conditions attached to the residents'right to live in
inthe late 20th and early 21st centuries. Finally, it it. A Right to Housing is composed of a series of
suggests what courts can and should do inthe enti t l ements re l ated to each o f t h ese aspects.
future to contribute to the development and Various individuals and entities, both private
enforcement of housing rights. and public, maybe connected in one way
* David Brady Bryson, author of this chapter and one retained some points with which I disagree, notably
ofthe persons to whom this book has been dedicated, died David's skepticism about the desegregation cases.
on December 25, 1999, mournedbyhis family, friends Several other colleagues ofDavid's werevery help-
and colleagues inthe legal services andhousing fulintheediting process. I am particularly grateful to Julie
advocacy worlds. In his chapter, he acknowledged with Levin, who wrote the section on receivership;toGideon
gratitude the research assistance of Hallie Ness, Esq., his Anders, Julie Becker,Catherine Bishop, Sylvia M.
beloved daughter. Brennan, Lynn Cunningham, Michael M. Daniel, Fred
At the request of the editors of this book, I have Fuchs, George Gould, James Grow, Tom Kelley, Jack
undertaken to bring David's chapter up to date and to McCullough, Barbara Sard, Philip Tegeler,
perform the revising and editorial functions that fall to RichardTenenbaumandWilliamP.Wilen,allofwhom
any author prior to publication. In doing so, I provided needed information; to Katie Orton and Andrea
encountered several points about which I disagreed with Bonds for excellent research assistance; and to the editors
David, sometimes with respect to form, sometimes ofthis book.
emphasis and sometimes substance.Since David and —Florence Wagman Roisman
Ioften hadworked together on briefsand articles, I
hadwhatIthought was a good sense ofwhat I could
havepersuadedhimtochangeandwhathewouldhave
persuaded me to leave alone. In editing this chapter, my
standard was that I would not change anything I thought I
could not have persuaded David to change: this is, after
all, his essay, not mine. Using this standard, I have
194 David B. Bryson
or another to any home. There may be a landlord, a unwarranted invasions ofprivacy.

seller, a lender, neighbors, homeowner • A complete Right to Housing will recognize the
associations, utility companies, a local government importance oflocation ofthe housing and
with regulatory power and responsibility for guarantee the residents that the neighborhood
neighborhood conditions (including security from will be adequately secure from crime,
crime) and one or more other government agencies adequatelyprovidedwithmunicipalservices,
providing housing assistance. For each of the insulated from environmental hazards and other
resident's rights with respect to any aspect ofher negative conditions, and accessible to adequate
orhis home, there will be correlative obligations commercial and professional facilities.
imposed on one or more of these individuals or • Finally, housing with the preceding attributes
entities. mustbewithinthe residents' financialmeans.
To achieve the goal of a Right to Housing, They must be assured that they will not have to
everyone must be assured of a home that has the forego any ofthese essential characteristics of a
following fundamental attributes: decent home, orbe left without a home at all,
• It must be in decent physical condition: struc- because oflack of income. Nor must
turally sound; weather-tight; served by adequate theybecompelled to spend so much oftheir
electrical, heating, water and sewage systems; income on housing that they are unable to
free from dangerous conditions (including lead secure other necessities of life.
and environmental hazards), rodents and pests;
secure from criminal intrusion and adequately Areviewoftheseattributesofdecenthousing
sizedfor the occupants. willprovideexamplesoftherolesthatthecourts
• The residents must have security of tenure so haveplayedandcanplayincreatingandenforc- ing a
that they will not be forced to move from their Right to Housing. The reviewreveals, also, that the
homes by arbitrary evictions, mortgage courts' roles will vary from attribute to attribute
foreclosure for reasons beyond their control or and situation to situation. First, however, it is
the unreasonable exercise of the government's necessaryto explainmore generallythe various roles
power ofeminent domain. our courts playin developing and enforcing rights.
• Because of this country's history of slavery and
conquest, and our society's bias against people The Roles of the Courts in Our Society
from parts of the world other than Europe,
residential segregation anddiscriminatory Contributions made by the courts can be divided
housing practices based on race and ethnicity into two parts. The first might be called
are major ills in our nation. A Right to Housing “definitional,” in which the courts, along with other
must guarantee people that they will not be governmentalinstitutions, define who has a right to
excluded from neighborhoodsor treated what andwho has the obligation to provide
differently with regard to their housing choices whatever it istowhichpeople have a right. The
because oftheir race, ethnicity or heritage. second part is enforcement of the right, in which
• Because having a place to live is vital for ev- courts have a primary, but hardly exclusive, role.
eryone anddecent housing is inshortsupply, In the definitional stage, thecourts performa
there is enormous potential for landlords, variety of functions. At times, thecourts themselves
managers, lenders and government officials to define particular attributes ofthe right.In effect, and
abuse the power theyhave over tenants and sometimes very openly, they create the rights. That
homebuyers.ARighttoHousingmust,therefore, is particularly true with respect to rights that are
include protections for residents against such part ofthe common law, which comprises much of
abuses and guarantees offair treatment in the law of real property in most states. An example
matters that relate to their homes, including would be a tenant's right to habitable housing,
freedom from discrimination on grounds whichis guaranteedbythe judicially
ofreligion, age, disability, sexual orientation, createdimpliedwarranty ofhabitability (Javins).
source of income or the presence of children At other times, the courts define rights by
inthe family. Tenants must be free from deciding the meaning of laws created by other
oppressive management practices, including institutions—for instance, by interpreting con-
The Role of the Courts and a Right to Housing 195
stitutional provisions, statutes and regulations. governmentalinstitutions in a position to develop a

Although the courts do not write the original laws, solution that confers newrights. At times,
their role in interpreting laws is far from amech ani thecourts'role ismerely to acknowledge that
cal a pplicati on of dicti onary defini - tions to something is wrong and then assert that only the
words written by others. That is particularly true legislature, not the court, has the authority to
with the interpretation of federal or resolve the problem. Sev- eralfederal court
stateconstitutions.ThefederalConstitutionwas decisions involving limitations on tenants'rights
written and amendedinthe most general terms, for under theUniform Relocation Act illustrate such a
the most part one to two centuries ago. The same is judicial role as well as the Congress'responsive
true, although to a lesser extent, of the relevant role; these decisions eventually produced more
state constitutional provisions. It isup to the courts expansive Congressional amendments to the
to decide what these words mean in a variety of statute. At other times, a court may act more
situations and how those meanings evolve over affirmatively, either ordering a party to refrain
time as society changes. Under our system, from action that the court considers unlawful until
thecourts have the last word, inthe absence of an the legislature or the executive develops a just set
amendment to the Constitution, as to what each of rules, or contriving an initial solution on its own
constitutionalprovision means. Thecourts, that either encourages or forces the legislature or
inmaking those interpretations, are creating rights the administration to develop a resolution. An ex-
and duties or, at least, refining the rights and duties ample of this judicial role is provided by the New
created by others. In the housing area, the right not Jersey Supreme Court's various decisions inthe
to be evicted from public housing without the Mount Laurel litigation, dealing withzon- ing
opportunity for a prior hearing was produced from lawsthat precludeddevelopment oflow-and
the courts' interpretation of the due process clause moderate-incomehousing(SouthernBurlington
of the Constitution (Escalera). County N.A.A.C.P. [1983]).
Thecourts' creative definitionalrole does not end Beyond participating in the creation and de-
with constitutional interpretation. Statutes velopment ofhousing rights, thecourts also are
enactedbyCongress and the state legislatures, as crucial players inthe process of ensuring that those
well as regulations promulgatedbystate andfederal rights have reality in people's lives. Enforcement of
administrative agencies, present interpretative the lawisuniversally recognized as withinthe
questions similar to those raised by constitutional province of thecourts. Theyhave the responsibility
provisions. Because statutory language itself often to be sure that laws are complied with; that
is general and because every question cannot be violations are punished; that private individuals
anticipated before a statute is enacted, it is not and entities as well as public officials and agencies
always clear what a tenant's or homeowner's rights are ordered to do what the law requires of them;
are in a particular situation. Sometimes the courts and that people injured by a breach of the law are
decide from facts as well as a prevailing sense of compensated for the damages they suffer.
justice what the parties' rights and duties should Ofcourse,onehastorecognizethatthecourts alone
beand then attribute to the legislature an intent to do not have thecapacity to guarantee that
create those rights. An example of this is the courts' everyone's housing rights will be respected and that
interpretation of the federal housing statutes as any denial of those rights will be redressed. The
implicitly creating a right not to be evicted from courts can act only when cases are brought to them.
federally subsidizedhousing without good cause Even when matters are raised in the courts, judicial
(McQueen). At other times, the courts' role ismore resources pale in comparison to thenumber of
confined—for instance, determining from the situations in whichpeople's rights are infringed.
statutory language and legislative history who has The years that it takes to litigate a major housing
what rights in a specific situation, which may or case and the infinitesimal time that judges spend
may not have been anticipated during the hearing each eviction case (Hartman and Robinson
legislative process. Another wayin which courts 2003) both testify to the courts' limited capacity to
influence the development ofrights in general ensure that everyone's housing rights are realized.
andrights to housing in particular is to bring a Thus, full implementation of people's rights
certain injustice to the forefront andplace other tohousingobviouslycannotdependonenforce- ment
196 David B. Bryson
in court alone. In the vast majority of situations, not withhold rent in response to the landlord's
there must be voluntary compliance by public failure to maintain the premises; rather,the tenant
officials and agencies, acting out of a sense of duty. would have to bring an independent action to
There also must be voluntary compliance in most enforce any promise made by the landlord.
cases by private individualsand entities, either out Those original common law rules were based
of respect for other people's rights orfrom the upon the social context in which they were
deterrent effect ofju- dicial enforcement and large developed—namely,anagrarian societyin which the
damage awards in those cases the courts have the land that was the subject of a lease was the
capacity to handle. Beyond voluntary compliance, essential part of the transaction and any habitation
there must be additional enforcement by on the land was incidental. In addition, the houses
nonjudicial institutions, such as housing code were simple, single-family structures that the
inspection agencies and administrative agencies tenants werecapableof maintaining and repairing.
that provide relief for Fair Housing Act violations. The tenants lived on the landforlong periodsof
Finally, tenant organizations and neighborhood time, often for their entire lives, and thus it made
organizations have some power, through rent with- some sense for them to take responsibility for the
holding, media attention andpoliticalpressure, to residential structures on the land.
hold landlords, others inthe housing industry and As society changed and most residential tenants
governmental officials accountable for meeting came to live inurban areas, the landbecame an
their responsibilities to provide decent housing insignificant part of the transaction, and the
insuitableneighborhoods. In conjunction with these dwelling structure became the essence of res-
efforts, courts carrying out their law enforcement idential tenancies. In addition, the structures were
function can and will play asignificant role in transformed from simple, single-family dwellings
making real a Right to Housing that they and other with few amenities into modern, often multistoried,
governmental institutions develop. apartments with complicated electrical, plumbing
and heating systems. As modern life became more
specialized, fewer tenants had the skills necessary
THE COURTS' ROLES REGARDING to accomplish even the repairs routinely performed
DIFFERENT ATTRIBUTES OF A RIGHT TO by their agrarian ancestors; maintaining the
HOUSING housing was beyond the competence and financial
capacity of most tenants. Furthermore, people
Having considered the various attributes of a Right came to recognize that bad housing conditions af-
to Housing, wenow can consider what courts have fected not only the residents of the housing but also
done and can do with respect to each of those neighborsand others. In these changed
attributes. circumstances, a law that allowed landlords to
lease housing that was in bad condition seemed
Decent Physical Condition undesirable.
In response to these societal changes, some
Development of the implied warranty of habit- legislatures imposed on landlordstheobligation to
abilitydoctrine inthe late 1960s and early 1970s place and maintain rentalproperties in decent
isagood example of the courts' role in creating condition.Formanyyears,however,mostcourts
housing rights. Under the original common law interpreted suchlegislation as being enforceable
rules, which were themselves created by the courts, only by government authorities, not by tenants. But
absent a statute or agreement to the contrary, a when it became clear that government enforcement
landlord had no duty to provide or maintain was not effective, courts created new legalrules
property in habitable condition. Moreover,evenif that allowed tenants to enforce a duty on the
the landlord promised to doso andbroke his landlord to provide habitable property and excused
promise, the tenant'sobligation to payrent would the tenant from the obligation to pay full rent when
not beaffectedbythe landlord's dereliction. The the landlord breached this duty. Many courts did
landlord's promise was consid- eredindependent of this on their own, expressly acknowledging that
the tenant's promise to pay rent. The tenant could they were performing their common law function
of creating new legalrules to fit a new context, not
merely leaving ittothe legislature to create new created for homebuyers a Right to Housing that is
rights and duties to fit changed circumstances free of significant construction defects and a
(Javins; Green). righttorecoverdamages from the
The courts did not create the implied warranty buildersofdefective housing (Schipper).1 At least
of habitability in every state. In some, the one court extended that right to allow recovery
legislatures took the lead, enacting the tenants' from a party other than the builder,such as the
right to habitable housing as well as the tenants' lender that provided the financing that made the
right to enforce that entitlement. Even in those development possible (Connor). In doing so, the
states, however, development of the implied Supreme Court of California rejected an argument
warranty of habitability by the courts in other that it should wait for the legislaturetodecide what
jurisdictions as a matter of common law created the law should beand concluded that the court
aclimate in whichlegislatures weremore receptive would have to determine the lender's duties in
to taking the same step by statutory changes. terms of common law, but the California
It is important to recognizethat this doctrine legislature later specified that suchlenderliability
doesnotgofurtherandobligethegovernmentto should not be imposed inthe future (Aas, n.12).
warrant that everyone will have habitable housing. Here, again, the courts have created rights that
Indeed,thecourts have not even agreed that when a work only forpeople who have sufficient income to
government is a landlord it would be subject to an purchase homes, not for everyone. The parties
implied warranty of habitability that tenants could withduties corresponding to these housing rights
enforce (Alexander; Conille). This judicially are the builders and sometimes others, including
created right to habitable housing works for people lenders who finance thesales. But any person who
who have the money to rent. It does nothing, does not have enough income to buy a house does
however, for people who are so poor that they not have these warranty rights. Thecourts have
cannot get a landlord to rent to them. It does not redefined the rights that homebuyers can expect
necessarily help people who rent from government from sellers, builders, developers and lenders. By
agencies. And, in practice, it does little for poor limiting their focus to those parties and not looking
people who are unable to afford the minimum at government's obligations toward otherpeople,
amount of rent necessary to cover their landlords' thecourts have failed to create a righttodecent
costs of owning and maintaining housing in housing that extends to people who are not
habitable condition. When such persons cannot pay homebuyers.
that minimum rent level,the warranty ofhabitability The courts have tackled issues concerning the
leaves them with the choice of either no housing at obligations of the government to homebuyers when
all or settling for housing in undesirable condition. the government is involved in the sales transaction.
Only if the government were made subjecttoaduty In a 1961 case, a person who used aFederal
to provide habitable housing for all who need it Housing Administration (FHA)- insured mortgage
would people who cannot afford decent housing on to purchase a defectively constructed house sued
their own have a true Right to Housing. the United States, alleging that the FHA inspector
Beginning inthe 1960s, thecourts also devel- had been negligent when inspecting the property
oped a similar set of rules granting homeowners during construction. The U.S. Supreme Court
rights to well-constructed houses, judicially decided that the homebuyer had no right to collect
changing the previous common law that gave them compensation from the government because the
no such rights. Indeed, this change with respect to government was inspecting the construction to pro-
homeownership was one basis for the decisions tect itself, not the homebuyer (United States v.
with respect to tenancies. Originally, the common Neustadt). Twenty years later, however, a person
law did not hold manufacturersof products liable who purchased a home with a Farmers Home
fordefects intheir manufacture, and builders of Administration (FmHA)2 loan was able to secure
houses enjoyed such immunity for amuchlonger compensation from the federal government because
time than did sellersof goods. However, the courts the home was carelessly in- spectedduring the
eventually recognized that theold laws did not construction. In this case, the Court found a right to
make sense inthe context of the modern compensation because it concluded that Congress
construction and sale of houses. In doing so, they had intended that FmHA would protect the buyer's
198 David B. Bryson
interest when inspecting the property (Block). In people is not financially feasible, little has been
the intervening years, other courts had concluded achieved (Hartman, Kessler and LeGates 1974).
that pur- chasersofhomes with FHA mortgage New methods of enforcement must be devised and
insurance could secure injunctive reliefwhen FHA new theories ofliabilityde-
had not met its obligation to ensurethat the homes velopedtoimposeresponsibilityongovernmen- tal
were in compliance with local codes (Davis v. entities capableofbearing the financial costs.
Romney). In addition, when the U.S. Department of Newer theories have been used in the context of
Housing and Urban Development (HUD) has sold creating judicial oversight over public housing
defective houses that wereacquired through authorities (PHAs) that have violated their
foreclosure, courts have granted the buyers a right obligations to provide safe, decent, sanitary
to collect damages from HUD (City of housing for low-income people. Courts have
Philadelphia), holding that the impliedwarranty of placedPHAs in receivership,thereby mandating the
habitability is breached by the sale of a house with preservation of assets (housing developments and
hazardous lead-based paint. units) operated by the agencies (U.S. General
In these cases, thecourts are interpreting the Accounting Office 2003).
federal housing statutes in a fashion that increases The receiver replaces the current management
the homebuyers' rights to homes that are in decent of the local PHA in order to facilitate im-
condition. But the courts are not yet taking the next provements and to operate its programs. In the late
major step of saying that the government has a 20th century, the courts ordered four judi-
responsibility to ensure that everyone has a right to cialreceiverships(Velez; Perez; Tinsley; Pearson).
decent housing, even if heor she is not buying a These receiverships resulted from lawsuits filed
home from thegovernment or a government- bypublichousingresidentswhowereconcerned with
inspected home. Moreover, court decisions from the poor condition of their housing. The PHAs
the 1960s and 1970s will not necessarily be placed in judicial receivership had allowed the
followed by the generally more conservative housing to deteriorate, resulting inmultiple
judges sitting intheearly 21st century; even when vacancies and crime-ridden buildings.
decisions are from the U.S. Supreme Court, judges Therearenosetguidelinesforthedurationof a
often will find ways to distinguish and therefore receivership. Ofthe four judicial receiverships
not follow the earlier holdings. orderedbythecourts, onlytwo have been terminated
Even within the confines of the liability doc- (Perez; Pearson). The lack ofdefined standards has
trines that courts have created, there are major resulted in extended receivership periods. Ifthe
limits on what thecourts can accomplish.Many of receivership has produced favorable results,
the cases involving unsatisfactory conditions arise residents are unlikely to ask the court to terminate
in the eviction context, either because the tenant the receivership.
has withheld rent in response to poor conditions Judicial receiverships have resulted in signif-
orbecause the landlord isevicting in retaliation for icant improvements in public housing units.
the tenant's having complained to code Performance scores releasedbythe General Ac-
enforcement authorities. Each eviction case, counting Office and HUD show that judicialre-
however, generally is decidedbyacourt ina matter ceivershipsaveragedan84percentimprovement over
of minutes, not hours or days (Hartman and prior PHA performance from the entry into
Robinson 2003). That leaves little time for receivership to the last performance evaluation
assertionofthetenant'srighttohousingthatisin decent taken in 2002 (General Accounting Office 2003).
condition, much less strict enforcement of that For example, a decadeafter the inception of the
right. Furthermore, since tenants are not guaranteed receivership at the Housing Authority of Kansas
legal representation and usually do not have any, City,Missouri, in 1993, most ofits public housing
poor tenants are even less able to enforce their units hadbeen modernized or newly constructed,
rights incourt (Community Training andResource crime rates had dropped, and occupancy rates
Center &City-WideTask Force 1993; Scherer hadincreased significantly (General Accounting
1998). Moreover, if strict enforcement leads Office 2003:31; Luedtke 2002). When the Kansas
landlordstowithdrawfrom themarket because City case initiallywas filed, the
providing well-maintainedhousing to low-income HousingAuthorityhadavacancyrateof40per- cent
(Tinsley:1004). A decade later, its vacancy rate was tenants against evictions and other prejudicial
3 percent (Housing Authority ofKansas City, MO conduct, such as rent increases, imposedin
2004). retaliation for reporting housing code violations or
other activities, such as organizing tenants or
Security of Tenure exercising rights protected by other laws, such as
the federal Farm Labor Contracting Act (Hosey; S.
Thecourts have played amajorrole in developing P. Growers).
tenants' andhomeowners'rights not to lose their This defense creates two benefits for tenants.
homes forreasons beyond their control— that is, by First, it assures them that they can engage inthe
encouraging security of tenure. Historically, protected activity—complaining about codevi-
landlords have had the power to evict tenants at olations or organizing other tenants—without being
theend of their leases or on 30 days' notice for punished. Second, it strengthens their security that
month-to-month tenancies, without providing a they will not lose their homes for arbitrary reasons.
reason.Under the common law, tenants had no When creating this defense, thecourts looked at
guarantee that theywould beable to keep their the housing code legislation anddecided that
homes even if theykepttheir end of the bargain, by tenants who complained should have the right not
paying the stipulated rent on time and complying to be evicted for the complaint, as a matter of
with all otherprovisions of the lease. The law gave public policy and legislative interpretation, even
the landlord the power to takethe home back once though the legislation did not explicitly so provide.
thetermoftheten- ancy expired or to terminate a The following passage from one of theopinions is
periodic tenancy simply by giving proper notice. illustrative of theview that some courts took of
Thecourts have developed three inroads into the their role:
doctrine that landlords can evict tenants without
cause: protection against discrimina- toryeviction, In trying to effect the will of Congress and as
protection against retaliatoryevic- tion and acour tof equit y, we have the responsibilit y to
protection for tenants who live insubsidized consider the social context in which our decisions
will have operational effect. In light of the
housing.
appalling conditions and shortage of housing in
First, beginning in the early 1960s, courts
Washington DC, the expense of moving, the in-
developed a doctrine that prohibited evictions for equality ofbargaining powerbetween tenant and
various discriminatory reasons. In deciding those landlord, and the social and economic importance
cases, courts concluded that even though the law of assuring at least minimum standards in housing
did not require a landlord to have a good reason to conditions, we do not hesitate to declare that
evict a person, the law did prohibit eviction for a retaliatory eviction cannot be tolerated.
bad reason, such as registering to vote or racial (Edwards:701)
discrimination (United States v. Bruce; Abstract
Inv. Co.). (With some frequency, White landlords After a number of courts had recognized the
evicted Black tenants who attempted to register to retaliation defense, many legislatures enacted the
vote and White defense as well.Having recognized some ex-
tenantswhohadBlackvisitors.)Giventhegrow- ing ceptions to the general rule, the next step is for
number of types of discrimination being made courts (and legislatures) to establish anew general
unlawful by local, state and federal legislatures, rule—that landlords must have good cause for
this exception to the landlord's common lawpower eviction, a doctrine that they could develop inthe
to evict without cause significantly increases the same way that theydeveloped the implied warranty
tenant's security oftenure. of habitability. 3
Second, inthe late 1960s and early 1970s, courts Third, for tenants who live in federally subsi-
developed the retaliatory eviction defense, dized housing, courts have provided a stronger
whichprohibited a landlord from evicting a tenant guarantee of security of tenure than is available for
if the reason fordoing so was that the tenant had others. Unlike tenants in unsubsidized housing,
complained to housing code authorities about tenants in federally subsidized housing cannot be
housing code violations (Edwards; Schweiger). evicted from their homes unless they have
Over time, courts expanded that defense to protect breached their leases or their landlords have other
200 David B. Bryson
good cause for eviction. This right to security of subsidized tenants with the right not to be evicted
tenure was developed by the courts inthe 1970s, without cause. Without the courts' lead, however, it
virtually on their own, and not by Congress or the is unlikely, or at least uncertain, that such statutory
administrative agencies. In states with state or local rights ever would have been enacted.4
subsidized housing programs, some state courts The courts have played a similar leading role
developed similar rights. for homeowners who have federally assisted
The case that started the doctrine was McQueen mortgage loans by creating for them a right not to
v. Druker, decided in 1970. In that case, the lose their homes when they default on their
landlord sought to evict a tenant in a federally mortgages for reasons beyond their control. Both
subsidized building when the tenant's one- year the FHA and the FmHA long have had statutory
lease expired; the landlord claimed that he did not authority to protect homebuyers against
have to offer any reason for doing so. The court foreclosure, but neither agency had exercised that
rejected the landlord's claim, holding that the authority before the courts intervened. For the
tenant had a right not to be evicted without good FHA, the process began in 1973 with a case that
cause. Thecourt reached thisconclusion after came to betitled Ferrell v. United States Dept. of
reviewing the National Housing Goal, declared by Housing & Urban Dev. In that case, the court was
Congress in 1949, of“a decent home and a suitable strongly affected by the injustice suffered by
living environment for every American family”;the families who had temporarily fallen on hard times
purposes of the federal housing programs; the through no faultof their ownandlost their homes
difficulty that an evicted tenant would have in throughforeclosure by callous lenders. Those
securing alternative housing; the financial burdens borrowers had received no assistance from HUD,
and emo- tionalinjury ofbeing forced to move; the despite HUD guidelines suggesting foreclosure
injustice of a capricious eviction and the lack of avoidance insuch cases. The court refused to
any legitimate grounds for the subsidized landlord dismiss the homeowners' claim that the 1949
to expect that hecould evict the tenants arbitrarily Housing Act's National Housing Goal required
(McQueen; U.S. Congress 1949). Nothing in the HUD to create asy stem th at would protect th ose h
statute at that time stated that tenants had a rig omeow n- ers against foreclosure when the defaults
httobe protected from eviction except for good were for reasons beyond their control and there
cause. was a prospect for bring ing themor tgages current.
Fouryears later, another court wentthrough a As with the good-cause-for-eviction cases, the
similar reasoning process and reached the same court was willing to recognize such a right for the
conclusion, stating that “[t]he federal government. . homeowners, not because Congress had expressly
. hardly expected that a tenant could be evicted at created it in a statute, but because the court's
theend ofhistermsimply at the landlord's whim, perception of justice warranted that result in light
when substitute housing could be obtained, if at all, of the facts presented. A similar mortgage
only with delay, disruption in living habits and foreclosure avoidance system, called the
expense” (Lopez:948). moratorium program, was created for the Farmers
In defining this right of subsidized tenants not Home Administration, againasaresult of judicial
to beevictedwithout good cause, thecourts looked prodding (United States v. White).5
to the purposes of the housing programs State courts also have played a role in pre-
createdbyCongress and mentioned general venting mortgage foreclosures against persons
statutory language that lent supporttotheir undergoing financial hardship during difficult
conclusions. Ultimately, however, the courts economic times. In In Re: Order of Court Staying
granted tenants this right because of the courts' Sheriff Sales of Owner-Occupied Properties
ownappraisal of the facts and their own sense of (1983), a Pennsylvania state court, acting dur-
justice. Later, inthe late 1970s and the 1980s, the ingasevere economic recession, stayed allsheriff
executive branch and eventually Congress followed sales involving mortgage foreclosures on owner-
the lead of thecourts and enactedregula- occupied properties in Philadelphia for almost a y
tions(CodeofFederalRegulations2003,24:247) and ear until state l egi s l ati ve assi stance w as pro-
statutes (12 U.S.C. § 1715z-1b(b)(3); 42 U.S.C. § vided.Withregard to these homeowners'rights to
1437f(d)(1)(B)(ii)) that similarly provided avoid arbitrary foreclosure, the courts have played
an ongoing enforcement and redefinition role. responsibility to give meaning to the Constitution.
Numerous times, the Ferrell courtand other courts In doing so, they have accorded special
forced the FHA to live up to its responsibilities significance to property that servesasa home,
when it began to backslide. In addition, through a interpreting the Constitution to provide extra
series of cases, the courts refined the definition of protections against governmental exercise of power
circumstances in which the owner has a right to when a home is involved.
avoid foreclosure. The resultof this 30-yearbody For subsidized tenants, the courts developed the
oflitigation has been that more than 140,000 requirement that a governmental landlord could not
families have kept their homes despite mortgage take adverse action against a tenant without first
defaults. providing the tenant notice of the proposed action
Both the good-cause-for-eviction and fore- and a chance to present her or his side of the story.
closure avoidance cases also demonstrate the Those rights were devel- opedbythecourts in
fragility of some court-made law that creates different contexts, including evictions (Escalera);
housing rights. In 1996, Congress eliminated the mortgage foreclosures (United States v. White); the
good-cause-for-eviction requirement for decisions imposition of extra charges for damages (Chavez);
not to renew the leases of Section 8 certificate and termination or reduction of subsidies (Davis v.
voucherholders.6 In that same year, HUD finally Mansfield Metropolitan Hous. Auth.) and rent
succeeded in securing legislation that overturned increases (GenevaTowersTenantsOrg.).Ineach
the mortgage assignment program created by the case, from the 1960s through the 1980s, time after
Ferrell litigation7 (U.S. Congress 1996a; Ferrell v. time, the courts had to act first, interpreting the
U.S. Dept. of Housing & Urban Dev.). When Constitution as guaranteeing tenants or
courts create rights by determining what they deem homeowners a rig httobe heard inthese situations.
Congress to have intended,Congress is free to Only after the courts took the first steps did the
come backlater and revise the statutes to eliminate responsible governmental agencies begin following
those rights. the constitutional requirements.
Because being evicted from one's home may
The Right to Fair Treatment bethe most devastating deprivation of property
rights, since the early decades of the 20th century,
Historically, courts have recognized the importance the courts of many states have outlawed self-help
of people's homes, the sanctity of the privacy a evictions—that is, have determined that landlords
home creates and the disastrous consequences of have no right to evict a
being deprived of one's home. As a result, cour ts tenantwithoutfirstgoingtocourt(Jordan;Hart- man
have created rights designed to and Robinson 2003). In doing this, the courts were
protectagainsttheabuseof governmentalorpri- vate in part interpreting state statutes that created the
power over people's homes. judicial eviction processes. But, again, that
Because of the judicially developed right to interpretative process was not so much reading
privacy, the Supreme Court has restrained the what the legislatures had literally written as
government's power to regulate what people do in appraising the relevant facts and applying the
their homes (Lawrence; Stanley).8 It also has court's sense of justice, informed by experience,
placed significant restrictions on the government's reason, the decisions of other courts and
power to seize a home or to enter a home to search scholarship.Outof that process arose a right not to
for evidence of a crime or to arrest its occupants be evicted from one's home before being granted
(Soldal; Payton).9 When the government seeks to an opportunity to present one's side of the case to a
exercise its power to seize homes that allegedly court or other impartial decisionmaker. With such a
have been used for illegal purposes, the right, the landlord's power over the tenant was
government must grant the residents prior notice lessened and thechances for abuse reduced.
and an opportunity to be heard (United States v.
James Daniel Good Real Property; Richmond Freedom from Racial and Ethnic Discrimination
Tenants Organization). Discrimination against people because of their
In developing these rights connected to peo- racial or ethnic background, including the slavery
ple'shomes,thecourtshavebeenexercisingtheir
202 David B. Bryson
and conquest with which the discrimination began, incidence of substandard housing and generally are
isthe one of thegreatest illsof this country's history. viewed as less desirable in terms of public and
That discrimination continues to operate commercial services and security from crime.
throughout the housing market. It has involved In the development and enforcement ofpeo-
ple's right to be free from discrimination in
landlords' refusal to rent to people because of their
housing, courts have at bestamixedrecord.In the
race or ethnicity; homeowners' and brokers' refusal
early part of the 20th century, the Supreme Court
to sell; neighbors' violence designed to keep people outlawed local ordinances that required residential
of color out of white neighborhoods; city segregation (Buchanan), andinthe late 1940s, the
ordinances and restrictive covenants segregating Court outlawed judicial enforcement of racially
neighborhoods by race; policies of lenders, FHA, restrictive covenants that often replaced the local
FmHA, and the Veterans Administration (VA) not ordinances (Shelley). As we have seen, lower
to lend orin- sure loans to peopleof color orin courts sometimes prohibited hurtful conduct based
racially mixed neighborhoods; racialdiscrimination on race (Abstract Inv. Co.). In 1968, the Supreme
Court decided that the 1866 Civil Rights Act
by private insurance companies; local governments'
prohibitedprivate
use of zoning and other powers to concentrate
ownersfromdiscriminatingonracialgroundsin the
public and other governmentally assisted housing sale of real property, including homes, correcting
in nonwhite neighborhoods and the federal gov- earlier readings of that statute (Jones). But by the
ernment's support of such actions; exclusion of time of that decision, the Congress, having just
people of color from any such housing located in passed the 1968 Fair Housing Act (U.S.Congress
white neighborhoods; preventing individuals with 1968), was also actively prohibiting such
portable housing assistance from moving into discrimination.
white neighborhoods; and the provision of less In the late 1960s and early 1970s, the lower
federal courts, straightforwardly enforcing the
adequate services in neighborhoods to which
Constitution and somewhat creatively interpreting
people of color are confined.
a series of federal statutes, determined that
These discriminatory practices, and the res- discriminating in tenant assignment on the basis of
idential segregation and unequal housing and race and concentrating public and assisted housing
neighborhood conditions they create, have by no projects in racially segregated neighborhoods were
means been eradicated from our society. In some unlawful activities (Gautreaux; see also Shannon).
aspects of American life—for example, use of Those decisions led the other branches of the
commercial facilities, public services and federal government to establish systems
transportation systems—racialdiscrimination has purportedly designed to avoid such concentrations
virtually been eliminated. Housing, however, inthe future(Code of FederalRegulations 2003,
isattheother end of the spectrum. We still have 24:941.202; Tegeler 1994). However,given
highly segregated neighborhoods (Massey and thesharp reduction inthe development of subsidized
Denton 1993). People of color still encounter housing soon thereafter, it is hardly clearwhether
greater difficulties in renting andbuying homes the cases materially improvedhousing opportunities
andin securing loans andhomeowners' insurance forpeople of color.Totheextentthat the cases or
(Turner et al. 2002). We still have concentrations otherini- tiatives did direct new development into
of public and subsidized housing in minority areas not predominantly African-American, they
neighborhoods, and it still is more difficult to also had the effect of reducing the chances that
develop assisted housing in white, middle-income peopleof color could secure newly constructed or
neighborhoods. Individuals and families with rehabilitated subsidized housing in the neigh-
housing assistance encounter neighborhood and borhoods in which they were living, by choice or
local governmental opposition when they seek to otherwise.
use their subsidies inthose same Another series of lower federal court decisions
neighborhoods(Meyer 2000; Ru- binowitz and foundlocal government efforts to exclude
Perry 2002). The neighborhoods where low- subsidizedhousing from white, middle-income
income people of color live have a greater neighborhoodstobe both unconstitutional and
unlawful under the Fair Housing Act (Kennedy; assisted housing programs (Young; Walker v. City
Resident Advisory Board). But, again, the decline of Mesquite; Comer; Hollman;
in federal funding for production of assisted Thompson;Sanders;Davisv.NewYorkCityHous.
housing after 1973 reduced the effectiveness of Auth.; Langlois). The cases have challengedboth
these court cases in creating opportunities for the concentration of subsidized housing inminority
people of color to live in subsidized housing in neighborhoods and the exclusion from white
white, middle-income neighborhoods. The reduced jurisdictions of subsidized housing and people of
effectiveness of the courts also was exacerbated by color with housing assistance. The remedies
Supreme Court decisions confining constitutional include demolition of some assisted housing in
challenges to intentionaldiscrim- ination (as minority neighborhoods, improvement of other
contrasted to claims that the Constitution prohibits developments in those neighborhoods and opening
governmental action that has the effect of treating of opportunities for people of color with tenant-
groups differently, regardless of thegovernment based assistance to move into white, middle-
officials'intent) andlim- iting the standing of people income neighborhoods(Ro- isman 1999).
to challenge housing discrimination (Village of In a Dallas case challenging the maintenance of
Arlington Heights; Washington; Warth). a segregated subsidized housing system, part of the
Thecourtshavedonelittletocreateorenforce remedy soughtand securedwas a plan and funding
poorpeople's rights to live inadecent neighborhood, to fix up a West Dallas neighborhood in which
and the little they have done has been in the racially segregated public housing was
context of racial discrimination. In general, the concentrated (Walker v. HUD 1989, 1990; DHA
litigation dealing with location has focused upon Developments). The legal theory isthat the remedy
the rights of people to move into neighborhoods for the unlawful segregation must include the
that are in decent condition, neighborhoods from opportunity not only to live in a predominantly
which they have been excluded because of their white or racially integrated neighborhood but also
race. to have the neighborhood in which one lives
In theearly 1970s, theFifth Circuit decided a broughtup to a condition comparable to the
case challenging the failureof aMississippi town to neighborhoods from which one had been excluded.
provide equal municipal services—streets, At this point, it is not possible to determine
sidewalks and water and sewer systems—to the whether this use of the courts will improve the
African-American part of the town (Hawkins). The overall opportunities of people of color to secure
court held that the failure violated the decent housing. In most of the cases, one result has
equalprotection clause of the Constitution. This been the demolition of some minority
opened up the possibility of litigation to secure neighborhood housing that had served people of
improvedservicesandphysicalconditionsinthe long- color,albeit poorly.Inaddition, the litigation
neglected neighborhoods in which peopleof color certainly has contributed, along with other factors,
were living. However, the Supreme Court soon to the federal government's decision to demolish
thereafter established the principle that plaintiffs 100,000 units of public housing located in minority
complaining about equal protection violations must neighborhoods, allegedly because the units are too
prove that the government officials intended to deteriorated to salvage. On the other hand, these
deny them equalprotection. In the process, cases have committed the federal government and
theCourtcriticized theFifth Circuit's Hawkins some local governments to much more aggressive
decision, along with others, for relying upon the use of the Section 8 voucher program to gain
effects of the officials' actions without determining access to white, middle-income neighborhoods
whether those actions evi- forlow-income people of color, and some of the
dencedintentionalracialdiscrimination (Wash- cases have required one-for-one replacement of the
ington:244 n.12). That put a damper on equal- units that were demolished. Nonetheless, these
ization of municipal services litigation. cases sometimes have fueled hostility to the
Beginning inthe 1980s, a second wave of cases voucher program among elected officials, or at
was filed in many places, attacking the segregated least to its use outside low-income
anddiscriminatory fashion in which federal and neighborhoods.10
local governments have operated public and The significance of these litigation victories
204 David B. Bryson
began to diminish as Congress reduced appro- governments' efforts to keep out homes forpeople
priations for HUD, shifted HUD's emphasis from with disabilities and recovering alcoholics and
new development to vouchers and transferred addicts (City of Cleburne; City of Edmonds). The
federal funding for subsidized housing Court has, however, defined disability narrowly
development from HUD totheTreasuryDepart- (Sutton; Toyota Motor Mfg., Ky.), andlower courts
ment's Low Income Housing Tax Credit program. have divided about the breadth of the requirement
Several new forms of litigation have responded to of“reasonable accommodation” for persons with
those shifts. disabilities (Salute; Giebeler). The prohibition
First, in those states that have laws prohibiting against discrimination on the basisof sex has been
landlords from discriminating against applicants interpreted to include sexualharassment (Beliveau),
with housing subsidies, there has been some butsome courts have interpreted narrowlyboth that
litigation, generally successful,compelling provision (DiCenso) and the prohibition against
landlords to accept voucher holders (Commission discrimination on the basis of familial status
on Human Rights & Opportunities; Franklin (Mountain Side Mobile Home Estates P'ship). With
Tower One; Attorney General v. Brown; but see respect to all of these issues, the legislation leaves
Knapp). the courts flexibility ofinter-
Second, litigation has been aimed at creating a pretation;howindividualjudgesdecidedepends upon
rig ht for families subsidized with vouchers to live the facts of each case; the quality of the advocacy;
inany neighborhoods they choose (Comer; and the intellectual, social, psychological and
Langlois; Wallace). From 1974 through 1987, emotionalbackground ofthe judges (Cardozo 1921).
certificate holders had no portability rights, that is The most crucial attribute ofa Right to Housing,
no right to take their certificates outside the of course, is that the housing be within the person's
municipalities served by the local housing financial means. Unfortunately, it is withrespect to
authorities that issued them. Some litigation was this attribute that thecourts have contributed the
brought against public housing agencies that least. In the 1970s, some peo- plethoughtthecourts
refused to provide subsidies to applicants who were might develop a Rightto Housing as a matter
not already residents of their jurisdictions (Comer; offederal constitutionallaw (Michelman 1970;
Langlois). Although no litigation was brought Black 1986). But a series of decisions, some
challenging HUD's decision to allow PHAs to involving housing and othersof a more general
confine their subsidy holders to the PHAs' nature, soon made it clear that, at least for the time
jurisdictions and to allow towns that did not wish being, the Supreme Court is not going to read the
to have subsidy holders to exclude them, Congress federal Constitution as guaranteeing poor people a
made the subsidies portable; thus, those structural right to governmental assistance that will bring
barriers have been eliminated, but not because of decent housing within their financial means (James
court action. [housing]; Lindsey [housing]; Dandridge [welfare];
Third, withrespect to the Low Income Housing Jefferson [welfare]; San Antonio Ind. School Dist.
Tax Credit, litigation broughtattheturnof the 21st [education]).
century has invited the courts to prohibit racial Thecourts generally have been willing to al-
discrimination in the operation of that program (In lowlocal governments to use their police powers,
Re: Adoption of the 2003 Low Income Housing Tax primarily zoning powers, to create and
Credit Qualified Allocation Plan; Asylum Hill maintainmiddle- and upper-income neighborhoods
Problem Solving Assn.). that are well endowed with municipal services and
facilities, in good physical condition, secure from
Freedom from Discrimination on Bases Other than crime and, most significantly, exclusive. Early
Race and Ethnicity inthe 20th century, the Supreme Court sustained
local governments'zoning powers(Village of
Regarding housing discrimination on grounds other Euclid). In the 1970s, the Court upheld a locality's
than race, the courts have a mixed record with power to exclude unrelated individuals from
respect to the generosity with which theyhave neighborhoods zoned for single-family homes
interpreted the relevant statutes. The Supreme (Village of Belle Terre). The Supreme Court has
Court ruled favorably on challenges to local been fairly hostile to cases challenging local
governments' exclusion ofsubsidizedhousing from we shall continue—until the Legislature acts—to

their bor- dersor neighborhoods within them doourbest to uphold the constitutional obligation
(James; Warth; Village of Arlington Heights), that underlies the Mount Laurel doctrine. That
although greater success has been achieved in the isourduty.Wemay not build houses, but we do
enforce the Constitution (Southern Burlington
lower courts (for example, Metro. Hous. Dev.
County NAACP [1983]:417)
Corp.).
A slightly less ambitious effort involved lit-
The court's judgment required extensive on-
igation filedin numerous states to have courts
going enforcement. The court clarified that the
nullify localzoning lawsthat madethe develop-
localities' obligations reach beyond eliminating
mentofhousingmoreexpensiveandthuswithin the
zoning restrictions that preclude the development
financial means offewer people (Associated Home
of low-income housing, to include the obligation to
Builders; Appeal of Girsh). There werespo- radic
facilitate developers' securing housing subsidies
successes inthese efforts, the most well known
from other levels of government (Southern
ofwhich is the Mount Laurel litigation in New
Burlington County NAACP [1983]:262-265). The
Jersey (Mount Laurel Housing Symposium 1997).
court did not, however, create a duty on the local
The Mount Laurel suit involved a challenge to
governments to provide the necessary subsidies.
zoning lawsthat effectively excluded housing for
TheNew JerseySupreme Court's ruling sub-
lower-income people, even those who already
sequently was codified bythe NewJerseylegisla-
livedinthetown. The challenge
ture, and the resulting New Jersey Fair Housing
succeededonthetheorythatthestate'sconstitu- tion
Act has itselfbeen subject to ongoing interpretation
required all zoning to beundertaken for the
and enforcement in the courts (Bi-County Dev. of
generalwelfare. That, inturn, obliged each mu-
Clinton, Inc.; Toll Bros., Inc.).
nicipalitytoaffordarealisticopportunityforthe
A principle analogous to that of Mount Laurel
construction ofits fair shareofhousing forpeople
has been adopted by the New Hampshire Supreme
with all levels of income within the region,
Court (Britton) and by a number of state and local
includingpeopleoflowandmoderateincomes.
legislatures (Roisman 2001:71; Symposium 2001).
As the New Jersey Supreme Courtexplained
Court interpretation of the state and local
subsequently, theMountLaureldoctrine rests on the
legislation has been essential to securing broad
principlethat the state andits municipalities
application and effective implementation of the
cannotfavortherichoverthepoor.Itcannotrel- egate
legislation (Zoning Bd. of Appeals of Wellesley;
the poor to dilapidatedhomes intheurban
Board of Appeals [Hanover]).
ghettoesandalloweveryoneelsetosecuredecent
In other litigation involving economic dis-
housing elsewhere(Southern Burlington County
crimination, beginning inthe late 1980s, a series of
NAACP [1983]:209). The court explained why it
cases was brought by homeless people asking the
was taking responsibility for establishing this
state courts to interpret a variety of state laws, as
doctrine:
well as some federal welfare legislation, as
We act first and foremost because the Constitution imposing a duty on state governments to ensure
of our State requires protection of the interests that everyone, no matter how indigent, has a place
involved and because the Legislature has not to live so that there would in effect be a Right to
protected them. We recognize the social and Housing inthis country (Roisman 1990, 1991;
economic controversy (and its political Harris 2004). The laws in question include state
consequences) that has resulted in relatively little statutory and constitutionalprovisions for general
legislative action in this field. We understand the
assistance for the poor, protections forpeople
enormous difficulty achieving a political
consensus that might lead to significant legislation whoare homeless, statutes regarding care offoster
enforcing the constitutional mandate better than children and the federal and state statutes
we can, legislation that might completely remove governing the former Aid to Families with
this Court from these controversies. But Dependent Children and emergency assistance
enforcement of constitutional rights cannot await programs. Severalfavor- able decisions were
political consensus. So while we have always secured, including one that required the state to set
preferredlegislative to judicial action inthe field, the shelter component of welfare grants at a level
206 David B. Bryson
that would make decent housing affordable obligations of the providers of housing—the
(Jiggetts v. Grinker; see also McCain; Hanson; landlords, the developersand the financiers. In
Massachusetts Coalition for the Homeless) . developing the common law of real property (a
Although Congress eliminated the federal quintessential function of the judiciary), the courts,
entitlement to aid for families with dependent relying upon the constitutional or statutory
children, state cases can and sometimes do RighttoHousing, are likely to adjust the rights of
continue to provide relief (Jiggetts v. Dowling). landlords and tenants so as to require good cause
When Congress has enacted statutes that bring for all evictions, not only evictions from some
decent housing within the means ofpoor people, the subsidized housing, and thus create greater security
courts have been fairly effective in ensuring that of tenure. It also is likely that the courts would
the rights created by those statutes further develop the right to habitable conditions in
areenforced.When governmentallandlords have both rental and sales housing, as a matter of
sought to limit poorpeople's access to housing common law andinterpretation of
subsidies, the courts have kept them from doing so thenewRighttoHousing.
(Fletcher; Gholston). When public and private Anotherpartof the development andimple-
subsidized landlords have tried to charge more mentation of a Right to Housing will concern the
forrent than is allowable, the courts again have obligations of governments, local, state and
stepped in with protection (Wright; Barber). When federal.For example, litigation might eventually
the federal government refused to implement establish municipal liability for poor housing
subsidy programs that would make housing conditions. In cases whereacityhas cut back on
moreaffordableto poorpeople, the courts again codeenforcement, whichhas happenedin many
ordered thegov- cities with theshrinkage of municipalresources, one
ernmenttomeetitsobligations(Abrams).Inthis could ask courts to intervene to make code
supportive role, courts can anddo ensure that at enforcement effective. The first step would be to
least some people have a Right to Housing ask the court to order the code enforcement agency
withintheir means. to perform its statutory duties. If necessary, one
could ask that the agencies be placed into
The Courts' Role in the Future receivership,ashas been done withhousing
authorities, school districts and jails.
As the preceding review has shown, the courts Because strict codeenforcement can drive up
have played an important role in laying the the costs of housing beyond the reach of poor
groundwork for elements of a Right to Housing. people (Hartman, Kessler and LeGates 1974), it
The right has been recognized by international would be valuable to use the government's past
bodies (United Nations 1948, 1976; Craven 2003; failure to enforce the codes so as to establish
Leckie 2003), and Congress in 1949 declared the municipalresponsibility to fund neededre- pairs. Ifit
National Housing Goal to be “the realization as becomes impossible to secure funding from the
soon as feasible...of a decent home and asuitable local government in that fashion, one would have
living environment for every American family” to be careful to combine the litigation strategywith
(U.S. Congress 1949). Given this background, it is a plan to secure funds in otherways, possibly from
not unreasonable to anticipate that eventually the thecity's Community Development Block Grant
United States will make the judgment that program orfrom the state. That would lessen the
everyone is entitled to a decent home and that the risk that strict code enforcement would displace
societaljudgment will become embodied in a poor people from their homes. Coordinating the
constitutional amendment or a statutory enactment. litigation with the efforts of community-based
If that happens, the courts will have a significant nonprofits to acquire deteriorated buildings and
roletoplayin the further development, repair them would also guard against displacement.
implementation and realization of that Right to Relying upon a constitutional or statutory
Housing. declaration of a RighttoHousing could help lead to
The courts will have extensive responsibility to the imposition of financialliability upon local, state
work out the details of what such a right means. or federal governments.
Part of that responsibility will focus upon the From a constitutional Right to Housing, the
courts also may develop local governmental re- waste disposalfacilities and other uses withdele-
sponsibility to ensure security from crime. The terious consequences inor near neighborhoods
provider of housing may have certain respon- where people of color live, while withholding from
sibilities regarding security—for example, insuch neighborhoodstheservices andfunding that
stalling and maintaining adequate locks and they need to beequally decent places to live (see
lighting—but landlords' and developers' ability to South Camden Citizens in Action). A third isthe use
protect residents from criminal activities is limited. of state governmental power to establish separate
Courts interpreting a constitutional Right to local governments with their own taxing and
Housing would eventually have to decide what spending powersthat enablethe more wealthy,
obligations a local government must assume in that predominantly white communities to achieve
regard. residential environments that are in better physical
A similar analytical process would be under- condition, more secure from crime, better served
taken with respect to other neighborhood con- by governmental agencies, more endowed with
ditions. As attributes of a Right to Housing that commercial facilities and, of course, served by
relate to location work their way through the ju- better schools. Litigation based upon these theories
dicial system, there will be details regarding local would be ambitious to say the least, but achieving a
governments' obligations to ensureadequate RighttoHousing that includes freedom from
municipal services, insulation from environmental discrimination will add strength to the litigation
hazards and accessibility to commercial and theories.
professional facilities. New life may be breathed Perhaps the most important attribute of a
into the original equalization of municipal services RighttoHousing will bethe provision of financial
cases. assistance to low-income people by thegov-
More work also will be doneonthe remedies for ernment. Important, and likely necessary, steps can
those local governments and public housing be taken to restrain housing costs and to make the
authorities that have operated racially seg- provision of housing more efficient and thus less
regatedhousing systems since the 1930s. Strategies expensive. Ultimately, however, a government will
need to be developed, now that the federal have to stepintofill the gap between what poor
government is putting so much effort into tearing people can afford and what decent housing costs.
down large components of those systems, to Themajorrole withregard to those financial
impose liability upon the government agencies responsibilities will be that of the legislatures—that
involved to replace the demolished units with is, appropriating the fundsanddesigning effective
decent, affordable housing that ismadeavailable to housing assistance programs. But, as the
the individualsand groupsthat have suffered the experience with current housing programs
discrimination inthe past. demonstrates, thecourts also will have to become
It also maybe possible to expand the bases for actively involved. They will have the responsibility
governmental liability beyond their having to hold the legislatureac- countable for
operated segregated public and assisted housing performance ofits constitutional and statutory
programs. Many other governmentalactions have duties and to interpret the resulting legislative
contributed to racial segregation in housing and the guarantees of affordability in particular situations.
unequal neighborhood conditions that people of The courts also will have the responsibility of
color have suffered and are still suffering. One deciding whether legislative determinations are
example is stimulation of the development of consistent with constitutionalprovisions,
virtually all-white suburban neighborhoodsof particularly the due process and takings clauses,
single-family homes with racially restricted FHA which protect against deprivation of property
and VA mortgage insurance and guarantees, the without due process of law and against takings
funding of highways and other commuter save for public use and withjust compensation
transportation systems and the maintenance of the (Smizik andStone 1988; Budlender 2003).
federal and state mortgage interest deductions and Interpreting either the federal or state consti-
other tax deductions that made homeownership af- tutions early inthe 21st century, the courts also may
fordable to the white middle class. Another is establish that tenants cannot be evicted by state
government choice to locate highways, industry, courts unless they are representedbycoun- sel,
208 David B. Bryson
including appointed counsel for indigent tenants. In within the U.S. Department of Agriculture, has been
doing so, the courts would be building onthe renamed the Rural Housing Service.
20thcenturydoctrinetheyestablished that tenants 3. A few local and state legislatures have imposed
a requirement of good cause for evictions, usually in
cannot be evicted without court proceedings. connection withrent controllegislation (e.g., N.J. Stat.
Thestrongest cases would bethose in which Ann.2A:18-61.1;see447Associates;Bullard).Itislikely that
governmentallandlords, such as public housing thecourt decisions played a role in helping legislators feel
authorities, are seeking evictions. Then a favorable comfortable about enacting such protections.
ruling could eventually be carried over to other 4. For a recent illustration of acourt's playing this
landlords, on the grounds that use of the state role with respect to newer programs, see Carter.
5. Unfortunately, however, the courts have rejected
courts for eviction constitutes sufficient
effortstoimposeasimilarforeclosure-avoidance program
governmental action to bring the due process on the Department of Veterans Affairs (Rank).
clause into play. Eventually,the doctrine might be 6. The requirement of good cause at the expiration
extended to low-income homeowners facing of a voucher lease was first suspended in 1996 (U.S.
foreclosure of their mortgages. Congress 1996b). The suspension continued for twomore
If such rights were established, tenants and years, until Congress eliminated the requirement in 1998
homeowners would be much better able to enforce (U.S. Congress 1998).
7. The federal legislation did authorize a substitute
their housing rights. They would be better able to “loss mitigation” program (Ferrell v. U.S. Dept. of Hous.
defend against unlawful evictions, whether these & Urban Dev.). In Pennsylvania, the Homeowner's
were retaliatory, discriminatory or otherwise Emergency Mortgage Assistance Program (HEMAP), 35
unlawful.If a right not to beevicted without cause P.S. Sec. 1680.401c, continues to assist homeowners
were to be established, it could be enforced much facedwith mortgage foreclosure. The program, createdin
more effectively if the tenants were guaranteed 1983, was modeled after theHUD Mortgage Assignment
Program and has broad-based support in Pennsylvania.
legal representation. Tenants could moreeffectively
8. While Lawrence v. Texas, decided by the U.S.
enforce the warranty of habitability if counsel were Supreme Court in 2003, restricted the ability of gov-
available to raise breach of the warranty as a ernmenttoregulatesexual conductinthe home, a 2002
defense to evictions for nonpayment of rent. Supreme Court decision extended the government's
Homeowners could moreeffectively resist power of regulation over allegedly criminal conduct even
foreclosure in cases where the defaults are beyond of guests of public housing residents (Dept. of Hous. &
their control and alternatives to foreclosure are Urban Dev. v. Rucker).
9. The Supreme Court has, however, allowed what
available. Judicial establishment of a right to it considers “reasonable” home visits for public
counselin housing cases would be crucial to full assistance purposes (Wyman).
realization of any constitutional or statutory Right 10. [Ed.: When David was alive, heand Ivery much
to Housing. disagreed about the wisdom and utility of the housing
Until societyreaches the judgment that there desegregation cases, and I have had particular difficulty
isaRighttoHousing, thecourts will have many steps speculating about what I might have persuaded him to
change in this and the previous sentence. Unable to
to take regarding people's housing rights. If nothing
resolve the difficulty, I have left these two sentences just
else, thecourts will becalled upon to preserve as David wrote them and will make my points in this
various aspects of a Right to Housing inthe near footnote. I do not think anyone knows whether or to what
future, especially if Congress continues to extent the desegregation cases contributed to the decision
stepbackfrom its previous activism in developing to demolish hundreds of thousands of public housing
housing rights (Ferrell). Once the otherbranches units. With respect to replacement of demolished units, it
ofgovernment declareaRightto Housing, the courts is the fact that litigation that contemplated demolition
often also required one-for-replacement, even when there
will have a major, ifnotthe primary, was no statutory requirement for such replacement. See,
responsibilityto make that declaration a reality. for example, Walker v .HUD (1990). It is also the fact
that the one-for-one replacement requirement that
Congress created in 1990 was eliminated by Congress in
NOTES
1995 and 1996 (Henry Horner Mothers Guild; Reese;
National Housing Law Project et al. 2002)].
1. Some state legislatures now have codified war-
rantybenefits forhomebuyers, often following judicial
creation of suchwarranties (e.g., Indiana Code 32-272).
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Larry Lamar Yates
10 Housing Organizing for the Long Haul: Building on

Experience
THESTORYOFHOUSING organizing Stone wrote in Shelter Poverty:

inthe nation's lower-income communities is mainly
astory of local community struggles— rent strikes, For housing organizing to begin to realize its
fights against encroaching highways, hospitals and strategic potential, activists need a framework for
analysis, a developed vision of an alternative
universities, campaigns to build tenant
model of housing provision, and the willingness
organizations and many other battles—that are
and ability to connect people's direct experiences
hardly known except to those directly involved. in an effective way to a broader world view that is
There has been no Joe Hill to spread songs of different from that so forcefully propounded by the
housing struggle across the nation, no dominant cultural institutions. (Stone 1993:278)
TaylorBranch orRachel Carson to summarize
housing organizing's grand themes ina best-selling This chapter focuses on a method of action that
book,noglossy magazine like Ms. or Ebony to can enable housing organizing to effectively
validate the grassroots experiences of housing change fundamental conditions around housing and
organizers. realize a Right to Housing. This method in many
Housing organizing has been the arena for the ways complements the analytical framework that
hopes and desperate needs of millions of people other contributors to this volume have developed
acting in their communities. These people have and the housing development practice of
acted with ingenuity, courage and sophistication, community land trusts and limited-equity
andhave madesignificant changes in their cooperatives. It owes even more to
communities. Still, their efforts, largely because of communityleadersand organizers, especially those
their isolation andlack of a broad national context, who built the National Alliance of HUD Tenants,
rarely have explicitly confronted the underlying theNational Tenants Organization and theNational
financial, political and institutional structure of Unemployed Councils. Finally, it is consistent with
housing, as embodied in the interlocking powers of the exciting revival of organizing
real estate, government and finance. Thus, most exemplifiedbyactivists connected to groups like the
housing organizing involves fighting much the National Organizers Alliance, the Center for Third
same battles over and overin different places. Even World Organizing, the Southern Empowerment
the victories with lasting value across the nation Project and the activists whoare working hard to
have mostly been known only to those belonging to renew theU.S. labor movement.
one or another of the national networks discussed For those already committed to an organizing
in this chapter that have linked activists together. approach,thischapterwillprovidenotonlysup- port
The people fighting these fights, from the and comfort but also analytical tools and
neighborhood level to the national level, need and historicalbackground to supporttheir practice.
deserve a more effective and far-reaching strategic
approach to housing organizing. Such an overview
must be rootedinanunderstanding of the
largerpoliticaldynamicof this society.As Michael
214 Larry Lamar Yates
For those whoseek to meet housing needssolely by Tenants Alliance, one modelfor members ofthe
improving the techniques of housing agencies and National Alliance of HUD Tenants, have had
organizations, whilecurtailing or avoiding lasting movement-building impact farbeyond their
organizing and mobilization, some hard questions immediate communities.
will be raised. Above all, this chapter will put The Sidney Hill benchmarks, adapted to a more
housing issues inthe context of this nation's history contemporary vocabulary, and with the issue ofrace
of community andpolitical struggles in a practical added, are as follows:
and useful way.
Some 70 yearsago,the intensity andbreadth of 1. Resident Self-Defense: Housing organizing must
housing struggle during the Great Depression made focus on mobilizing residents to fight for their
possible a brilliantly clear vision of the own housing needs.
landscapeofhousing organizing. One housing 2. Technical Assistance: Housing organizing must
organizer, writing under the name ofSidney Hill benefit from the most current and accurate
(1935), in that historical moment outlined astr technical information and advice.
ategic organizing approach to housing issues. 3. Progressive Agenda: Housing organizing
Drawing on that analysis, thechapterpro- poses a agendas must be included in, and must connect
set of benchmarks for housing organizers to assess to, the demands and political work of the larger
the impact of their work—national and local—on progressive movements ofthe day.
the structural issues of housing injustice. 4. Right to Housing: Housing organizing must
These benchmarksare not organizing tipsor explicitly include the fight for a Right to
guidelines intended to ensure that a particular Housing andfor a large-scale and long-term
community or tenant organization wins its current social commitment to housing.
fight. There are already many publications that 5. Anti-racism: Housing organizing must ag-
providesuch advice1 as well as numerous training gressively attackinstitutional racism as a central
centers and organizing networks.2 Nor do these element ofhousing injustice, especially racism
benchmarks offer answers for all the questions that against African Americans, who have been most
serious housing organizing will face. The fact that harshly deniedhousing opportunities.
national housing- related movement organizations These benchmarks can serveasaguide through a
like the National Tenants Organization and the chronological overview of the history ofhousing
National Unemployed Councils, which clearly met organizing from the New Deal to today. Seven
these benchmarks, did not become viable postwardistinct periodsmaybe identified:
permanent organizations, or that powerful local
housing movements like those built inNew York I. 1933-1948: The New Deal and immediate
City in the 1930s and 1940s suffered serious postwar period—Mass left organizing around
setbacks in later days, points to the complexity labor, relief and other issues made housing a
ofbuilding a lasting housing movement. A critical significant national policy issue for thefirst
point is that the success ofhousing organizing is time inU.S. history.
inextricably linked to overall progressive activism II. 1949-1965: Themodernstructureofhous- ing
and that the history and examples citedhere can policy was developed with little organized
only be understood as partof the larger history of opposition.
power, privilege andpoverty ofthe last70years. III. 1966-1970:Broad-basedprogressive coalition
Localvictories,nomatterhowbravelyorbril- efforts, especially those ledby Dr. Martin
liantly fought, will always need to be won over Luther King, Jr., andbythe
again. The fruits ofdedicated volunteer andpro- BlackPantherParty,made housing one sig-
fessional careers will be corrupted or obliterated in nificant issue among many.
a political climate of disrespect for low- income
communities and communities ofcolor. Yet local IV. 1971-1988: Grassroots-based movements
successes with strategic direction, like developed housing policy experience and
theMuskegonCityrentstrikeof1968,discussed below began to build national networks.
as a bellwether for the National Tenants V. 1988-1993: National housing organizing
Organization, or the work of the Boston HUD efforts were framed but failed to fully emerge.
Housing Organizing for the Long Haul 215
VI. Mid-1990s: Housing policy leaves the na- (both estab- lishedin 1937) laid the groundwork for
tional stage, but local organizing blooms. today's rural and urban housing programs, andlo-
VII. 1997-2004: Organizing networkstakeup the cal public housing authorities were established
burden. across the nation.
How does the housing organizing of this pe-
riodfare when assessed by the contemporary
I.1933-1948:UNDENIABLENEED—AND Sidney Hill benchmarks?
ORGANIZING—PUT HOUSING ON THE New York City's depression-era resident self-
NATIONAL POLICY AGENDA defense was so strong that it was institutionalized
in the city's political life. The depression years
Housing organizing was a keyfocus of the created “a new form of citywide tenant federation
Communist Party and otherprogressive groups that employed a uniquely effective ‘mix' of tactics:
throughout theGreat Depression and NewDeal expert legalrepresenta- tion. . .
period. The National Unemployed Councils, reinforcedbyrentwithholdingandpick- eting; careful
formedin 1930 at the call of the Communist Party, research on housing issues, which led to legislation
took on “theorganization ofresis- tance to evictions. projecting a ‘tenant perspective'; and aggressive
Squadsof neighbors were organized to bar the way lobbying for tenant interests incooperation with
to the dispossessing officers. Whole neighborhoods liberal andleft wing organizations” (Lawson
were frequently mobilized to take part inthis 1986:95)—a progressive framework that has
mutual assistance” (Winter 1969:61). In New York survived, and continues to
City alone, “hundreds, possibly thousands, of such beeffective,intothe21stcentury.Atitscore,one writer
incidents occurred during theearly depression found, have been “working-class Jewish women
years” (Lawson 1986:101), and the tactic was associated with the Communist Party who kept
alsowidelyusedthroughouttheurbanMidwest. landlords on the defensive for three generations”
Another housing tactic, with greater longterm (Lawson 1986:7) andwho continue to dosotoday.
impact, was the rent strike. Even before the During theGreat Depression, resident self-defense
depression, Party cadres tried to organize a rent likethis was common in many communities, but in
strike in Harlem in 1929. In 1932 and 1933, thetwo most communities, it did not last into the postwar
tactics came togetherinNew York City,asevictions period.
ofrent strike leaders broughtas many as 4,000 The New Deal created a cadre of professionals
people into the streets in pitched battles with the in local and national housing agencies who founded
police (Lawson 1986:104-105). Inthe professional organizations still active today,
DeepSouth,CommunistParty organizers including the National Housing Conference
soughttoorganizetheSharecroppersUnionand (founded as the National Public Housing
reportedfrom rural Alabama in 1933 that the Union Conference), whose modern core membership
had successfully blocked evictions and forced consists of for-profit developers of subsidized
plantation owners to cancel the debts of housing.3 The National Association of Housing
sharecroppers(Winter 1969:75). Officials was the ancestor of today's National
Such direct action led to a realbut limited Association of Housing and Redevelopment
federal commitment to housing those most in need. Officials (Fish 1979:212). Not then (or now)
A contemporary commentator described President accountable to grassroots communities,
Roosevelt as “having no enthusiasm for anybona these groups work with opinion leaders to get
fide housing program” because it would require “a andkeephousing programs. During this period,
lavish outlay of federal funds” andbring “severe technical housing expertise grew but diverged from
damage to the private real-estate-mortgage grassroots organizing.
structure of the country” (Ward 1936:635). New Deal housing activism was carried on by a
Nevertheless, theNewDeal and war years saw the broad informal liberal and progressive alliance,
creation of new housing agencies. Until the New including liberal officials. In 1937, Tenement
Deal, low-income people in the United States had House CommissionerLangdon Post told
no federal housing assistance. The Farm Security NewYorkCity'sCity-WideTenantsCouncilthat
Agency and the United States Housing Authority “Nothing was ever gotten inthis country except
when the people forcedit” (Lawson 1986:95). As II. 1949-1965: THE MODERN HOUSING
much as inany otherperiod, housing organizers of POLICY FRAMEWORKIS CREATED
this period succeeded in integrating housing
organizing into a larger political agenda. As the By 1949, organized housing activism outside of a
New Deal continued, activists increasingly focused few urban centers of tenant organizing was pretty
on their local battles, paralleling the labor much limited to a few liberal and labor leaders—
movement, themajor socialjustice movement of the and to professionals employed by housing
New Deal period. Both continued to grow after organizations. This period was the low point for all
World War II but became more focused on aspects of housing organizing. We can quickly
consolidating its gains and creating an institutional review it in terms of the Sidney Hill benchmarks.
structure. Mobilization for a national Right to With no national organizing networksorpo-
Housing, never a major force, decreased. litical formations to support them, collective self-
The New Deal emerged during a period of defense actions by housing residents become
heightenedracism. The decadeafter World War invisible inthe postwarperiod.Neighbor- hoods
Isaw tremendous setbacks for racial justice, in- faced new threats that they had few tools to fight—
cluding unchecked mob attacks and lynchings highwaysthat isolated communities of color, public
directed against African Americans, the heyday of housing that concentratedpoverty and suburbs that
theKuKlux Klan and of nativist activism that led to gained their cachet from their distances from the
Asian immigration restrictions and other repressive poor and people of color. Caught off guard,
laws. JimCrowhadruled the Southfor 60 years, resident self-defense efforts were less effective and
andhousing segregation was increasing across the more poorly organized than either before or since.
nation, reinforced by the professionalization of real Moreand more, the public housing advocates
estate. during this period were administrators of existing
A “Black and White Uni te and F i g h t” anti - housing programs. There was no systematic
racism, though based on a superficial analysis of technical assistance to housing organizing. In fact,
race, was key to moving the labor movement inNew York City, and probably in other less-
forward.However, fewwhite organizerssaw an- studied cities, conflicts emerged between nonprofit
tiracist action as strategically central to their orhousing professionals and organized tenants.
ganizing.AfricanAmericansandotherpeopleof color Columbia University and other local nonprofit
saw little if any improvement in their position institutions formed Morningside Heights,
relative to whites during this period but did gain Incorporated, whichplannedwith city government
experience critical to their next steps toward to develop middle-income housing. Tenants in the
justice. As the modern housing policy framework site area, working with the city-wide United
was created, racial segregation was an essentially Community to Save Our Homes and the left-wing
unquestioned part of it. This fact, effectively American LaborParty, foughtthose plans, packing
unchallenged by New Deal housing organizing, had meetings with angry tenants and providing tenant
enormous consequences. counseling. Ultimately, the project was built, and
TheGreat Depression brought housing need to the Save Our Homes forces were “discounted as
the forefront ofpoliticaldecision-making ina way Communist- tainted by liberal housing reformers”
that engagedhundredsof thousandsofpeo- ple, at (Lawson 1986:158-160). Locally, as with the
least briefly, in major struggles around housing American LaborParty, housing issues were key to
issues. While most of these struggles were at best left agendas, but such local efforts were not
defensive, the inclusion of housing demands in a interconnected nationally.
larger progressive agenda led to a fundamental step This period did represent a high point of labor
forward in how the U.S. government dealt with union participation in housing development,
housing. However, the emergence of a body of including “a blossoming of labor involvement in
housing experts with no accountability to housing cooperatives in the post-World War II
communities, and the lack of asophisticated anti- period, especially of housing co-ops for seniors”
racist perspective, set the stage for future setbacks, and the work of “the United Housing
especially for low- income people and those in Foundation,aco-opsponsorthatworkedclosely with
communities of color. labor unions inNew York City to create many
thousands of units of cooperative housing” (Yates unwritten agreements and existing ‘tra-
1996). However, labor's housing efforts were ditions'ofsegregationuntil1968”(Wright1981: 248).
increasingly focused on benefits for current The fight against housing discrimination usually
members and retirees, not on building an inclusive focused on individual solutions, not collective
progressive movement. problems. For example, whileNewYork's pioneer
There werenosignificant nationalinitiatives for State Commission Against Discrimination (SCAD)
progressive housing organizing. In this period, identified theTitleIrelocation process as “one of the
liberals pressed for more housing andde- plored city's most serious minority housing
theabuse ofhousing programs; but they did not problems,”itchose to respond onlybe- hind the
question federalhousing policy's basic assumptions, scenes and not to takeon“any great responsibilities”
as radicals hadduring the depression. There was no on this issue (Lawson 1986: 158-159).
nationally organized effort that sought a Right to The housing activism of the 1950s and 1960s
Housing. did go further than the leftactivism of the 1930s on
As de jure segregation began to be weakened by race, reflecting the increasing organized push for
theCivil Rights Movement, racism in housing civil rights. However, without any connection to
became the bulwark of institutional racism. The grassroots organizing, successful legal assaults on
lack of an aggressive and effective anti-racist housing discrimination did not protect the vast
housing organizing agenda in grassroots com- majority of people of color from increasing
munities during this period was a determining segregation.
factorinthis nation's history. Themodern framework of housing policy was
The period's federal “slum clearance” pro- createdduring this period, but without the active
visions, Title I of the 1949 Act, made African- participation of agrassroots movement— and
American and Latino communities vulnerable to a without the suppressed voices of low- income
new andunprecedentedlevel of attack. Title communities of color.The longdeferred promise
Igavelocal authorities “power of anewimmen- ofReconstruction-eracivil rights principles began to
sity.TitleIof the Housing Act of 1949 extended the be fulfilled, an early effect of the emerging Civil
powerof eminentdomain, traditionallyused in Rights Movement. But for most of those excluded
America only for government-built projects, so from the suburban boom, this era stifled dissent,
drastically that governments could now condemn grossly limited opportunity and created ominous
land and turn it over to individuals”(Caro new restrictions.
1974:777).
Eventually, in every major city, those displaced
by this process crowded into existing or newly III. THE “SIXTIES”—HOUSING ISSUES KEY
created slums, some of them high-rise public TO EMPOWERMENT OF URBAN
housing ghettos to which theyhad admission COMMUNITIES OF COLOR
priority.
At the same time, people of colorwho could The urban rebellions of the 1960s were a major
afford to buyhomes outside of their “assigned” grassroots response to housing injustice. Though
neighborhoods gained support from the courts. often characterized as irrational outbursts of
However, the key legal victories invalidating racial violence, Platt's The Politics of Riot Commissions
covenants in real estate were won by the National (1971) and other sources show that these were
Association for theAd- vancement of Colored conscious political efforts, withbroad community
People (NAACP) and by Mexican-American civil support. Though illegal and semi- spontaneous,
rights groups. (Henry B. Gonzalez, at the time a these rebellions clearly were organized acts of
San Antonio activist andlater chair of theU.S. resident self-defense. While the usual trigger for
House BankingCommittee, was involved in one these rebellions was an act of violence against
case—Quinones 1990:57). But the Federal Housing African Americans, the relationship between the
Administra- rebellions and increased attention to housing and
tion(FHA),whichunderwrotethefinancingfor the other conditions by those in power was clear and
suburban development surge, had overtly public. For example, the New York Urban
segregationist policies until 1950 and“accepted Coalition, which put “millions of dollars donated
by the nation's largest corporations into poor range of movements, including tenant and housing
communities,” over 27 years, “was a direct movements, were linked and revitalized during this
response to the riots that had left many of the period and continued to move forward.
country's inner cities in cinders” (Kischenbaum Dr. King's murder ended that period's best
1994:16). chance for a broad unified social justice movement.
This period saw a heightened and more self- However, another such attempt was made by the
conscious level of resident self-defense. During this Black Panther Party, which sought a unitedfront
period, today's structure of technical assistance to against capitalism and racism. The fourth point of
communities was first created. Community Action the Black Panther Party's 1966 Ten Point Program
Agencies and Legal Aid received federalfunding to was:“We want decent housing, fit for the shelter of
assist communities on a variety of issues, including human beings. We believe that if the white
housing. These organizations took bold, sometimes landlords will not give decent housing to ourblack
unsophisticated, steps to assist communities, such community, then the housing and the land should
as providing legal assistance to tenants, helping bemade into cooperatives so that our community,
them to organize against landlords, often at first with government aid, can build and make decent
with little sense of the inherent political strings housing forits people” (Goodman 1970:211).
attached to federal funds. Allies of the Black Panthers, including the
When the Civil Rights Movement among Brown Berets in Chicano communities inthe West
southern African Americans, the central pro- and the Young Lords Organization in Puerto Rican
gressive effort of this era, emerged as a nationally communities inthe East and Midwest, took parallel
visible force, housing issues were not central to it. positions on housing. At the PoorPeoples' March,
However, the Civil Rights Movement “altered and which went on after Dr. King was killed, the
expanded American politics by providing other Brown Berets de-
oppressed groups with organizational and tactical manded“housingthatwouldmeetChicano cultural
models” (Morris 1984:286-287). The movement needs” (Quinones 1990:114). Housing was key to
revitalized the broad progressive agendathat was fights for communitypower and selfdefinition
stifledinthe previous period. wagedbycommunities ofcolorinthe late 1960s.
Among thefirst to benefit from this revital- While the BlackPanther Party did not conduct a
ization were northern urban African-American national mobilization for a Right to Housing, it
communities. For these communities, housing clearly took such a position. Its positions and those
segregation was central to their fight. When ofLatino and otherprogressive organizations set the
southern civil rights leaders, including Dr. Martin stage for the housing nonprofits that have since
Luther King, Jr., joined with existing Chicago been a key expression of community activism.
organizations to bring the movement north, housing In a periodin which African-American lead-
was central from the beginning. Dr. King led ership set thetonefor all progressive movements,
marches inthe summer of 1966 into “hostile” and anti-racism moved to the forefront of housing
“hate-filled” white suburbs of Chicago to protest organizing efforts. Thiswas a major and crucial
housing discrimination (Schulke and McPhee change in housing organizing. Forbetter or worse,
1986:234) The Southern Christian Leadership low-income housing, like “welfare,” had become
Conference, which Dr. King led,also participated in identifiedwith the aspirations of communities of
tenant organizing drives in Chicago and Cleveland, color.
which contributed directlyto the emergence in 1969 During the 1 960s, a number ofgroups took a
of the National Tenants Organization, described in head-on organizing approach to fighting housing
greater detail below (Marcuse 1980). discrimination. In 1966, in Washington's northern
As Manning Marable has written, Dr. King had Virginia suburbs, the Action Coordinating
“come closest to bringing together a bira- cial Committee to End Segregation inthe Suburbs
coalition demanding peace, civil rights, and basic (ACCESS) regularly faced arrest at a segregated
structural changes within the capitalist order,” and apartment complex and other sites, and calledfor
his murder “meant any linkages between these vital the denial of federal funds to Arlington County,
reform movements would bemuch more difficult to Virginia, because ofhousing segregation. In
achieve” (Marable 1984:117). However, a wide Baltimore, in 1969, theActivists, “acoalition
ofAfrican American and white civil rights activism had made an impact on those in power,
advocates,” demonstrated andwerear- rested at once again bringing low-income housing needs into
theoffice of a large real estate firm that their the light after 15 years of virtual invisibility.
research implicated “in the process ofchanging the Whether or not they “bred” despair, the slums
racial composition ofneighborhoods” (Orser hadbred activism that could not be ignored.
1994:133-136). Civil rights legislation, especially theFair
Eventually, such small cadres were worn down Housing Act of1968, put the issues ofrace and
and defeated or diverted. Facing high legal costs, housing into federallawfor thefirst time since
the Activists withdrew their civil suit against the Reconstruction. WhiletheFair Housing Act was
real estate firmthey targeted. ACCESS, after also a response to rebellion and protest, and a direct
several months ofrelatively balanced reporting and reaction to themurder ofDr.Martin Luther King, Jr.,
peaceful marches, sawin- creased police this law did not initially speak to the critical
harassment and press attacks, while Arlington needsof communities of color with the greatest
County's highest elected official stated he was “not housing needs.
unsympathetic” but was “powerless” to end To summarize, the “Sixties” period, specifically
housing segregation.4 Perhaps most important, the lastfive years ofthat decade, saw housing
these groups acted without mobilizing a strong organizing regainold strengthsand gainnew ones. In
communitybase ofpeople impactedbyhousing Malcolm X's famous phrase, “chickens came home
segregation. to roost”inthe 1960s as far as housing was
During this period,thegovernment response was concerned.Theghetto hadbeen sharply defined by
reactive andcanonlybeunderstoodincon- the postwar development process, and formal and
trasttotheperiod'sradicalactivism,whichques- tioned informal resistance to its exploitative and
all ofsociety, including the wholesystem isolatingcharacter erupted. While
ofsuburbsand ghettos. segregatedanddeficienthousingwasonlysome- times
While cruel repression of all kindsofpro- the mobilizing issue, the ghetto thus cre- atedwas
gressive activism was one major response, various the key arena of struggle. As intheNew Deal era,
reforms also went forward, many of them housing- government responded with a number of housing
related. HUD was created in 1965, in- programs. Organized housing activists lacked the
stitutionalizing its “programs concerned with power to winthe programs theyknewwere needed,
theNation's housing needs, fair housing oppor- but the overall activism of the day did win genuine
tunities and improvement and development of the resources and opportunities for some low-income
Nation's communities” (Office of theFed- households and communities. However, bridging
eralRegister1995:333).Between1966and1974, the enormous gap that hadbeen created between the
major newfederalhousing and community de- mostly white suburbsand the largelyAfrican-
velopment programs included theModel Cities American inner city would clearly be a
program, the Community Development Block generational task, which at least some of the
Grant program and severalprograms forfunding emerging generation were willing to takeon.
and financing multifamily housing development by
private developers. In general,these programs
moved away from widespread slum clearance IV. 1971-1988: GRASSROOTS HOUSING
efforts and toward at least a formal resident WORK GROWS
participation process.
The programs clearly were responses to the Theactivist response of this periodwas in parta
rebellions and activist challenges of the day. creative response to harshrepression. Two years
President Johnson wrote in his memoirs of“a new after the murder ofDr. King,facing brutal secret
approach ...based on the proposition that aslum is police tactics, the BlackPanther Party splintered
not merely decaying brick and mortar but also a and essentially ceased to operate in 1970. In that
breeding ground ofhuman failureand despair” year, the then-governor of California, Ronald
(Johnson 1971:330). The searchfor a new approach Reagan,answeredapressquestionabout“young
that went beyond slum clearance, as well as the dissenters” with the words, “Ifittakes a blood bath,
financial investmentthatwasmade, signaled that let's get it over with” (Goodman 1 970:502).
Withinamonth,studentactivistswereshotdead by complex” (NTIC 1995). Community organizing

authorities on the Jackson State and Kent State networks tend to work in isolation, not only from
campuses. each otherbut also from groups not taking a
Rather than respondin kind to the challenge community organizing approach. This means that
ofReaganandhisilk,withresultstantamountto a civil most local housing organizers benefit only from the
war, most activists narrowed their focus, either to limited cumulative experience and technical
one community or to one issue. Radical author and expertise of one network.
teacher Carl Boggs described the re- Housing organizing, however, found its highest
sultas“newmovements[that]uphold,indiffer- ent national strategic development intwo free-standing
ways, the ideal of transforming dailylife that was tenant networks—the National Tenants Union and
only implicit in the sixties” and,that, though the National Tenants Organization—which shared
typically “more ‘moderate' and less disruptive,” are membership and methods with the multi-issue
“a mature elaboration—not a reversal—of networks.
important sixties themes” (Bogg n.d.). Housing Tenant organizing inthe private market housing
justice was one of these themes. brought together the groups that formed the
National Tenants Union (NTU) in 1979 i n discussi
ons of nati onal rent contro l s.
Among the “new movements” that emerged or
TheNTUwasactiveuntil1985. Woody Widrow, then
grew substantially inthis period, there are four for
a housing organizer at the National Housing
which housing iscentral: thecommunity
Institute, who describes himself as “theclos- est to
organizing movement, the community development
paid staff that NTU had,” remembers that NTU
corporation network, national tenant organizing
members developed common policies “on
andfair housing work.
keyissues, such as rent control,eviction protections
Probably the most powerful of the four housing-
and security issues.” However, national rent control
related “new movements,” and one of the older
never moved forward, and state laws, which govern
ones, isthecommunity organizing movement, which
private tenancies, varied widely, in Widrow's
is often tracedback to organizing work inthe 1940s
words, “from okay to feudal.” This made it difficult
in Chicago by the Industrial Areas Foundation.
to find common ground. For example, rent control
This movement consists of multi-issue groups in
was a key issue inNew York,New Jersey,
lower-income neighborhoods in every partof the
Massachusetts and some localities inother states
nation as well as regional and national networks of
but was a utopian dream inthe South.
these groups.Theirgrowthinnumbershasmeantthat
Widrow sees “a lot of the growth of the CDC
many more low-income neighborhoods have had
[community development corporations, discussed
the techniques and supportneededfor effective
below] movement...in reaction to squatters, rents
resident self-defense. To mobilize people in their
strikes andrent control efforts.” 5 Rent control
communities, these groups must choose issues that
activists also played amajorrole in cities like Santa
lead to tangible victories at the neighborhood level
Monica and West Hollywoodin Californiaand state-
but often not to substantial changes inthe
wide inNew Jerseyin building a progressive
institutional framework around housing. The one
movement that also takes on non-housing issues.
major exception, the CommunityReinvestment Act
This process was described forSanta Monica as
(CRA), isapow- erful anti-racist tool,andis
“build[ing] bridges between various
described in that context below.
disenfranchised groups and bind[ing] them into an
National community organizing networks
organized body, demanding even greater economic
likeACORNand National People's Action have
and political change in other spheres of life.”
included tenant organizing in their work and have
However, by the late 1980s, rent regulation
taken strong housing positions. In 1972,
organizers and activists were “waging an
NationalPeople'sAction adopted a position that
increasingly defensive campaign simply to keep
“decent housing isthe right of all Americans” and
[rent control] alive where it already exists,” and
that their constituents “need not accept
many tenant groups had re-focused their work on
poorhousing and theabuse of a large and unre-
solutions like “large-scalecooper- ative housing
sponsive industrial-financial-political housing
programs forlow-and moderateincome persons”
(Gilderbloom and Appelbaum 1988:148). At the locallevel, housing organizing madea

The National Tenants Organization (NTO), in substantial difference. Both NTU and NTO pro-
contrast to the NTU, organized almost entirely in vided technical assistance and modelsof successful
public housing. Unlike most rentals, where organizing to local tenant groupsandhelped them to
landlords are “small operators of limited resources, win battles that they otherwise might not even have
unorganized, unsophisticated ...and not taken on. Both groups, especially NTO, also made
susceptibletopublic pressure,”public housing is some difference in nationalpolicy.However,the
“built withfederalfunds [and]controlled by federal resident self-defense that both groupsmobilized did
regulations.” For organizers, “the resources, the not become a consistently powerful national force.
political sensitivity, the number of tenants, the During this period, national community or-
visibility, were all there” (Marcuse 1980:53). For ganizing networks like ACORN and National
these reasons, NTO was more successful than NTU People's Action, as well as the Centerfor Com-
at developing a national strategy and has had a munity Change, a support center for low- income
much longer organizational life. However, NTO communities, began to providespecialized
faced the problem of any national network of low- assistance to housing organizing efforts.
income people—functioning with minimal TheNationalHousingLawProjectalsobecamea
resources. Inaddition,housingauthority keyresource for organized tenants, especiallyfor its
staffoftenseekto control or compromise public information on and advocacyfor the rights of
housing resident organizations. In some cases, federally-subsidized tenants, though the Project
“rival organizations wereorganized anddealt with” was not directly involved in organizing.
by housing authorities in response to the emergence This periodalsosawthefloweringof thecom-
oflocal NTO affiliates (Marcuse 1980:53). munity development corporation, a manifestation
NTO was formed in 1969 with assistance from of expertise at the local level, often as one outcome
the American Friends Service Committee. It grew oflocal organizing. Whilecommunity development
out of local organizing, including the Southern corporations, intheory, work on all aspects of
Christian Leadership Conference (SCLC)-initiated developing a community, housing has been their
effort in Chicago as well as the work of Jesse Gray, majorfocus. Born almost literally from the ashes of
a long-time progressive activist in Harlem (Lawson urban rebellions of the 1960s, community
1986:174-176). A key event for NTO was a public development corporations have been rediscovered
housing rent strike in Muskegon City, Michigan, as by successive waves of fundersand government
a result of which a well-organized tenant associa- leadersasasolution to inner-citypoverty. Thousands
tion won the replacement of housing authority ofunits ofbelow- market housing, many of them
commissioners with commissioners whom they with some degree of community control, have been
approved, including the association's president built by CDCs in projects inevery metropolitan area
(Neagu 1972:41). Thanks to these local actions and andin manyrural areas. According to theNa- tional
national advocacy with HUD,NTO“was able in Congress for Community Economic Development,
early 1971 to establish grievance procedures and a trade association for CDCs, there are about 2,200
a‘modellease'inall federally-funded public housing CDCs around the nation. (See Chapter 16.)
projects” (Burghardt 1972a:15). Through the 1970s Acomplex relationship exists between com-
and 1980s, NTO continued to be a nationalresource munity organizing and CDCs. In a 1995 interview,
forpublic housing residents but mostly as an Bob Brehm, the outgoing long-time executive
unstaffed organization. Still, public housing director of a Chicago CDC, noted that early in his
residents, thanks largely to the work of NTO, have CDC career “many of the people whogotinvolvedin
more rights and protections than most private local community housing organizations
market tenants around the nation. were...doing so as partof their activism, of their
Overall, housing organizing during this period part in a larger movement for social change and
more effectively supported resident selfdefense and social justice.” However, over time, CDCs had
re-legitimized resident self-defense nationally. The come to show “some of the provider mentality, too
community organizing networks, though not little of the activist mentality, and far too much of
focused on housing, created the conditions that a‘doing deals' mentality” (Chicago Rehab Network
made this possible. 1995).
This debate is not new. In 1978, the newsletter change by working with andfor organized
of the still-new Chicago Rehab Network responded communities. Alternatively, they have the capacity
to criticism of CDCs in Keep Strong, the magazine to undermine organizing, whether by “compet[ing]
of the Intercommunal Survival Collective, with an forpublic attention with organizing groups;” or
article entitled “Who's Got the Grassroots?” even by “delegitimiz[ing] theorganizing group by
According to the Rehab Network, Keep Strong had making itappear more militant” (Stoecker 1996).
accused “neighborhood development corporations” Urgency of need and limitation of resources is
of “play-acting as a surrogate grassroots leadership, another issue often raised by CDC advocates and
while not producing enough housing units or jobs other service providers, such as shelter op-
to make a difference.” TheNetwork defended theef- erators,who argue that theyhave no time for or-
forts ofits members to “develop participatory ganizing, or even advocacy, because so much as-
development organizations that are responsive to sistance isneededrightnowfrom organizations with
community needs” (Chicago Rehab Network minimal resources. But sometimes organizing for
1997). change can be not only more direct, but just as fast,
CDC professionals have been found to “[tend]to as theservice provider model in
lookwith disdain at community organizing's meetingpeople'sneeds. RandyStoecker,another
adversarial tactics” and to see organiz- CDC critic, answersthe “objection that people need
ingas“outmoded,”andperhapslessprofessional or housing now,...jobsnow,...services now” by arguing
even less mature (Delgado 1994:25), and to “argue that we canaseasily “helppeople occupy vacant
that the community organizing model— a more housing now,...help them march now on wealthy
confrontational, conflict-oriented political approach corporations laying off workers, . . . help
to addressing poverty—is no longer appropriate” themprotest now to politicians attemptingto
(Stoecker 1996). destroygovernmentateverylevel” (Stoecker 1996).
To Brehm, on the contrary, “organizing should By the early 1990s, theChicago Rehab Network
not beabig part of housing develop- had movedfrom defending its members' rolesto
ment”somuchas“housingdevelopmentshould be touting its organizing effort, the Chicago
abigpart of organizing” (Chicago Rehab Network AffordableHousingandCommunityJobsCam-
1995). Brehm's view, however, is hardly typical. paign,whichwonmillionsofdollarsincommit-
Most CDCs, and the networksthat serve them, such mentsfromtheCityofChicago.TheCampaign's
as the Local Initiatives SupportCorporation and the successintakingonChicago'sentrenchedpower
Enterprise Foundation, focus on the contribution of structure has not diminished the ability of the
their work to the housing supply and see Network orits members to develop housing or carry
themselves as technicians inthe housing “industry,” out technical assistance. In fact, theNet- work's
rather than seeing their work mainly as an adjunct newsletter notedin 1997, “shortly after the success
to institutional of the Chicago Affordable Housing and
changeandorganizing.Brehmcritiquedtheidea that Community Jobs Campaign HUD showed its faith
with “a fewhundred or a few thousand units in the Network with anew technical assistance
ofhousing, we can improve our community” as contract” (Chicago Rehab Network 1997:33). This
“absurd,” stating that “with the limited subsidies, occurred despite the fact that the brother of
the resources that are available today, we can never Chicago's mayor, the Campaign's main target, was
build more than a tiny percentage ofwhat is a member of President Clin- ton'scabinet. This is no
needed” (Chicago Rehab Network 1995). surprise to those who believe that good organizing
Of course, there isnoobjective measureasto causes opponents to have more respect for you and
whether housing development orjob creation is to be more, not less, likely to do business with you.
enough“to make a difference.” To the person Stoecker, in a 1996 paper,citesanum- ber of
benefiting,evenasingleaffordable housingunit is examples where organizing has led and nourished
immensely valuable. Still, nonprofit housing community development work:
groups do not have the capacity to even to come
In Boston, the DudleyStreet Neighborhood Ini-
close to meeting the housing needs inthis na-
tiative (DSNI) focused on organizing as the means
tionbydevelopingandmanaginghousing.They do, to development, while partnering to do actual
however, have the capacity to support institutional
physical redevelopment. In Minneapolis, the supported a broad Right to Housing. In 1984, the
Cedar-Riverside neighborhood residents placed National LowIncome Housing Coalition organized
neighborhood organizing and planning inthe hands a National Low Income Housing Conference at
of the Project Area Committee, limiting their CDC Howard University, co-sponsored by 45
to only implementing plans produced through the
organizations, from the National League of Cities
organizing process. In San Antonio, Communities
Organized for Public Service (COPS) resisted
to the Planners Network, and including ten national
pressure to become aCDC(inthe words of their faith organizations, theAFL- CIO and constituency-
lead organizer, Ernesto Cortes, “for the obvious based groups from the American Association
reasons”) after they achieved control of much ofRetired Persons to the National Council ofLa
ofSan Antonio's CDBG budget. (Stoecker 1996) Raza. (ACORNand National People's Action were
not sponsors.) This broad-based meeting affirmed a
CDCs can bridge the contradiction between
program that included:
their identities as professionalhousing provider and
as part of communities' struggle forjus- tice, but • “Make housing assistance an entitlement for all
only by being realisticabout theoverall needsof who needit,”
their community. When they exaggerate their own • “Provide resident control ofhousing through a
impact, CDCs are in effect belittling the urgent and strong role for tenant organizations, limited-
unmet needs for institutional change equity cooperatives, communitybased housing
inthecommunities in which they claimtoserve. groups, and homeownership,” and
Those needs will not be met by “business as usual” • “End displacement of low-income people.”
but by changes won by mobilized communities. (NLIHC 1984)
During this period, there was generally little
common progressive ground on housing. In Avarietyofothernationalhousingandcom- munity
particular, the connection to the labor movement development advocacy groups subsequently
that Sidney Hill had considered crucial became emerged, from the National Coalition for
only a formality at best for most housing activists. theHomeless to the Local Initiatives Support
The traditional New Deal connection between Corporation. Some groups represented specific
construction unions and housing programs constituencies, like the National Council ofLa
degenerated into frequent antagonism, since many Raza, whileothers, likethe Enterprise Foundation or
building trades unions were racially segregated, the Institute for CommunityEconomics, built new
while many housing agencies avoidedpaying union networks. Meanwhile, state housing coalitions, also
wages wheneverpos- sible. Norwereany clear mainly rooted in CDCs, emerged during the 1980s
connections forged between housing issues and the in a majority of states across the nation, primarily
issues of the in- to fight for state housing funding to partially
creasinglypowerfulfeministandenvironmental replace thatbeing lost at the federallevel.
movements. During this period, however, none of the
Beginning in the late 1970s, national housing national housing advocacy organizations conducted
advocacy organizations emerged, especially the a nationalpolitical mobilization around a Right to
National Low Income Housing Coalition and Housing or tried to move forward federal
theNationalRural Housing Coalition. While labor legislation to thiseffect. Instead, they focused on
and religious groups were key initiators of these the supposedly pragmatic path of advocating for
organizations, over time, their day-to-day policy specific programs ofbenefit to their constituents.
came to be dominated by CDCs. CDCs had an Most of these programs, of course, lost
increasing need to influence national policyfor their groundduring the period.
own benefit andhadincreasingly concrete and Communityorganizinggroupsandnetworks have
urgent needs, such as the preservation of the Low extensively used theCommunityReinvest- ment Act
Income Housing Tax Credit (a complex tax of 1977, itself a result of organizing by National
incentive to channel investment into low-cost People's Action and other groups, asatool to
housing that became themain means ofproducing negotiate community reinvestment agreements with
housing for many CDCs). lenders. Thetriggerfor this organizing has generally
In principle, these national organizations been research showing lenders engaged in race-
based denial ofresources to low-income daywhen communities and lenders will work
communities. Often, media coverage has followed, together without the threat of confrontation inthe
such as the “Color of Money” series inthe Atlanta background,everyone involved knows thatgood
Constitution (Dedman 1988), raisingthe usually community organizing and the
invisible issue ofinstitutional patterns ofracism with federallawsthatgrewoutofitarewhatmakesthe
a directness rarely seen inthis society. While disin- relationship work.However,except for CRAor-
vestment by lenders is not solely a racial issue, ganizing, explicitly anti-racist housing activism
communities of color have been inthe forefront of during this periodwas almost completely unrelated
fighting it, and institutional racism is to the other “new social movements” with housing
thecentralfactorin its persistence. Community agendas.
reinvestment data provide “the smoking gun on After the passage of federal civil rights legis-
lending discrimination” (Oliver andShapiro lation, a number of national organizations focused
1997:141). To refute theevidence ofCRA data,a on litigation and lobbying as tools to maintain and
recentconservativecritiqueofCRAfounditnec- broaden civil rights protections. Some of these
essary to slur inner-city communities, blaming organizations, like the NAACP, also had a mass
disinvestment on the defects of“single-parent base andwere involved in local battles, and
household[s],” whose members don't have “time to sometimes militant organizing efforts, but were not
do simple home improvement or maintenance involvedin nationalhousing policy issues.
projects” and of communities “in which roving Fair housing laws resulted in less confronta-
gangs paint graffiti on thesides ofhouses and tional and more professionalized fair housing work
buildings, and otherwise abuse the property focused on discrimination against individual
ofothers” (Center forNewBlackLeadership n.d.). households. Increasing federal funding forfair
The National Community Reinvestment housing, while a sign of growing concern on this
Coalition reported that by 1998, more than 250 issue, promoted a model ofhousing discrimination
CRA agreements had resulted in commitments of as due to insufficiently educated
over $400 billion, mostly for housing lending realestateprofessionalsratherthaninstitutional
(Silver n.d.). National People's Action celebrates racism. In addition, litigation has become a source
CRA organizing at its annual meetings with a rally- of substantial funds for many fair housing groups,
like display of the millions of dollars in agreements further validating efforts to seekle- gal redress for
that its members have individuals rather than redress in the streets for
made.ACORN,CCCandtheNationalCommu- nity communities. The beneficiaries offair housing
Reinvestment Coalition also offer support to work, like those of CRAac- tivism, are generally
community groups for communityreinvestment more likely to bethose who would be eligible to
work. buy homes and get loans but for their race, though
Community reinvestment work has been a increasingly more low-income households, such as
centerpiece of community organizing, andfor those headed by women, have made individual
goodreason. Even though the full $400 billion gains through fair housing work.
committed is unlikely to reach the intended Modern fair housing nonprofits aretypically
communities, this still represents a scale of re- very aggressive in their pursuit of justice for
sources otherwise farbeyond the reach of grassroots individuals. However, as Massey and Denton
communities. Community reinvestment organizing wroteinAmericanApartheid(1993:15),“aslong as the
enables neighborhood groups to sit downand Fair Housing Act is enforced individually rather
negotiate for realresources with some of the most than systemically, it is unlikely to be effective
powerfulpeople inour nation—the leadersof inovercoming the structural arrangements that
majorbanks. Although CRA research support segregation and sustain the ghetto.” Most
hasfocusedmainlyonsingle-familyhomemort- fair housing nonprofits hadlittle contact during
gages, CRA organizing has also produced mul- this period with either nonprofit housing producers
tifamily rental housing and other financial op- or housing organizers and were engaged in entirely
portunities for low-income communities and separate fields of national policy work. This
communities of color. functional division has meant that
While CDCs andbankers constantly anticipate a communitydevelopment corporations, and most
community organizers, have defined housing issues One key step was the establishment by the
in generally non- racial terms, while fair housing Center for Community Change (CCC) of the
organizations, with the responsibility and the CDBGMonitoring Project. The CDBG (Com-
analytical tools to munity Development Block Grant) program,
identifycontinuinghousingsegregation,have been created in 1974 for the benefit of low-income
isolated from the development of housing and from people, in many communities became a slush
the development of overall housing policy. fundfordowntown development and otherpo-
Ultimately,then,while communities of color litically popular uses. Such abuses led to grassroots
gained substantialresources forlocal fights during activism, such as the successful organizing by
this period, including the powerful CRA tool, these COPS in San Antonio, cited above. AC ORN in 1
resources did not coalesce into a strategically 979 took a nationalposition to “ban the use of
effective anti-racist component in national housing [CDBG] funds for downtown commercial projects
organizing efforts. until the basic needs of low- and moderate-income
During this era, new movements emerged as neighborhoods are met” and to “give
legacies of the 1960s upsurges. Several of them had democratically elected neighborhoods the power to
housing at thecenter of their agendas but had make decisions on how CDBG funds are spent
profoundly different approaches to the issue. They within the neighborhood” (ACORN 1979).
also had some serious work to do, as the housing CCC involved grassroots organizations ina
situation got worse for millions of Americans. At network that not only assisted local organizing on
the community level, some real accomplishments the issue but also fed the results of that organizing
were won, and housing networks began to emerge back into the national policy process. In 1986, local
to take on national and state-level issues. and national groups involved in the Project formed
the Coalition for Low-Income
CommunityDevelopment, whichhas fought for
V. 1988-1993: MOMENT OF changes intheCDBG program but also urges
OPPORTUNITYFORTHE HOUSING neighborhood groupsto“get involved and orga-
MOVEMENT nizearound gettingmoreCDBG dollars for their
communities,” noting that “publicofficialstend to
During these years, rival national public housing be far more interested in using CDBG funds to
organizations to NTO were formed, in line with the cover government's administrative expenses, basic
approach of George W. Bush's HUD Secretary, public services, downtown development projects
Jack Kemp, who undertook an idiosyncratic and and public works than in using them for low-
unrealistic crusade to make public housing tenants income housing and other low-income
into owners of their units. This further weakened neighborhoodpriorities” (Nilsson 1993). CCC's
NTO, since the rival organizations hadwell-known CDBG Monitoring Project provided amodelfor
resident leaders and were much better funded than national organizing-related activities of other
NTO. While public housing residents still provide organizations, especially those of the Low Income
some of the most effective localleadersonhous- ing Housing Information Service (then the sister
and other issues, NTO has not regained its strength organization to the National Low Income Housing
of the early 1980s. Coalition).
Many of the national groups that had emerged As the 1980s began, few states spent any rev-
in the 1980s, such as the National Low Income enues on low-income housing and shelter for the
Housing Coalition, hadmembergroups that had homeless. By theend of the decade, the majority of
fought effective local battles for resident self- states did so because, for thefirst time in this
defense. But staff andleaderstended to develop nation's history, in almost every state there was an
policy without much input from these grassroots organization of housing professionals committed to
groups—and to be ineffective at mobilizing housing advocacy, if not housing organizing.
grassroots action on issues. As the visibility of Thegrowing network of CDCs and otherlo-
resident self-defense efforts grew, some national calhousing nonprofits began to form state housing
groups began to seriously try to connect local work coalitions inthe 1 980s. (A 1 9 9 5 NationalLow
to national issues. Income Housing Coalition survey of state housing
coalitions found only six that had existed before 1 In addition, the Low-Income Housing
98 1 .) Most of these state coalitions were Preservation and Resident Homeownership Act, a
dominated by CDCs and were focused on gaining compromise among owners, tenants and Jack
funding streams for them—and state budgets Kemp's approach, included major tenant gains, won
hadbecome a likely source for suchfunding. by the groups that formed NAHT and the
Thecoalitionsused thetechnical expertise—and professionals working with them. These provisions
community credibility—of CDCs to become a assisted residents to purchase their build-
political force for housing. In some states, such as ingsontheir ownorwith nonprofits and created
New York, New Jersey and Indiana, the state notice requirements that have enabled tenants to
coalitions came to include a significant base of prepare for threatened conversions. NAHT has its
grassroots activists—usually tenant leaders or own technically skilled staff and has also
grassroots homelessness activists. workedwith anetwork of technical experts or-
The National Low Income Housing Coalition, in ganized as the National Preservation Working
order to engage the state housing coalitions that Group.
had accomplished this change in national and more The 1989 Housing Now! march, discussed
effective state advocacy, kicked off its National below, mobilized groups from across the pro-
Housing Policy Initiative in1993. TheInitiative gressive landscapetosupportthe housing issue.
strengthened networking among state coalitions, Whetherthismerelymeantthathousingwasthe “flavor
coordinated national activities for coalitions to ofthe month” orimplied moresolid connections was
participate inandpro- videdfunding to strategically never fully explored by national housing activists.
selected coalitions. Also, housing concerns began to more frequently
By 1988, a network of experts, some associated overlap with other concerns, such as AIDS, mental
with Legal Services, were working to head offor illness anddomestic violence. In the process,
mitigate theconversion ofprivately owned activists on such issues gainedhousing program
subsidizedhousing to upscale uses, as discussed knowledge.
above. TheNLIHC supplemented this work by Some of the most militant groups opposing
reaching out to grassroots organizers and tenant assaults on the poor,especially welfare repeal,
leaders, pulling together a network that constituted includedhousing justice as an element of their
itself in 1992 as the National Alliance of HUD struggle. Tent cities, like the Hoovervilles ofthe
Tenants (NAHT). At its core were tenant 1930s, again became a means ofdrama- tizing
organizing efforts in Chicago, Boston, Dallas, Los issues—and of meeting peoples' needs. In Boston, a
Angeles and other cities. tent city protest of a major downtown project
NAHT has had asubstantialimpact on housing ultimately won a large affordable housing complex,
policy, working with other national housing appropriately named Tent City. The Kensington
groups, often in “good cop, bad cop” cooperative Welfare Rights Union has “established Tent Cities
efforts. A 1996 academic report found that NAHT inNorth Philadelphia since 1991 to meet immediate
“achieved three major victories,” namely: housing needs” and, as important to them, to
politically “educate families turned
• “the creation of a Residents' Rights and awaybytheshelter system.”6
Responsibilities brochure, co-written with “Housing Is a Human Right” had been the
HUD” anddistributed to tenants all over the slogan of the National Low Income Housing
nation; Coalition since the 1970s. In Shelter Poverty, Stone
• “a new chapter for tenants in the HUD noted amid-1980s campaign to add this righttothe
Management handbook, spelling out tenants' Massachusetts state constitution and sawthe issue
rights clearly while making them a part ofthe “percolat[ing] into the realmofor- ganizing
process”; and andpolitical action” (Stone 1993:317). In 1989,
• “a $3 million training program funded by HUD” Congressman Ronald Dellums hadin- troduced
to inform tenants oftheir rights, since expanded legislation to establish auniversal socialhousing
to include a multiyear commitment of VISTA program, based on ideas developed by a working
positions to the network (Nyden 1996:33). group sponsoredbythe Institute for Policy Studies
(1989a, 1989b).
In 1988, the National Low Income Housing adding up to tens of thousands of postcards sent to
Coalition's sister organization, the Low Income Congress, and some national advocates feltthe
Housing Information Service (LIHIS), committed campaign helped to bring about the National
itself to “build a definable low-income Affordable Housing Act (see below). However,
constituency base for housing production and after the campaign, theNLIHC did not follow
advocacy” and to “involve the constituency in upimmediately with another mobilization effort.
development of proposals forpolicy change,” and Because fair housing was, for the most part,
stated as a goal “make housing recognized as a treated as a separate issue and advocacy effort, the
human right” (LIHIS 1988). LIHIS had established various new mobilization and organizing efforts
projects to support local antidisplacement efforts as during this period did not fundamentally attack the
well as support statewide housing coalitions—both institutional racism in housing. However, people of
aiming to build a nationalgrassroots- color did gain new positions of leadership at the
basedhousingconstituency. national level in and through organizations like the
As these efforts began, however, a new force National Low Income Housing Coalition and
for housing justice emerged. New nonprofit theCenterfor Community Change as well as in local
agencies had emerged in response to homelessness organizations, from CDCs to organizations
—many of them informal, egalitarian ofhomeless people.
andwithleaders driven by a deep moral calling. A Housing went back on the national agenda, with
significant few of these leaders displayed eloquent a charismatic cabinet member (Jack Kemp), a
prophetic anger against homelessness. Foremost national march on Washington and widespread
among them, because ofhis personal gifts andhis concern about homelessness. How- ever,there was
location inthe nation's capital, was Mitch Snyder. no national organizing effort that had thetoolsor the
Snyder, following some local political victories, strategy to seize this opportunity. Local and state
began to sharea vision of a national housing march, organizing on housing issues continued to grow.
which got such a positive reaction that it became an
inevitability. In October 1989, the Housing Now!
march brought tens of thousands of people to the VI. MIXED SIGNALS IN THE MID-1990s
nation's capital.
Likeall such marches, this one required a Following the failure to seize the national op-
massive logistical effort costing hundreds of portunity of theearly 1990s, there have been many
thousands of dollars. But themarch also required more local orlimited efforts that exemplify the
grassroots mobilization, which was largely done by Sidney Hill benchmarks. Homeless activism, while
the new breed of homelessness nonprofits. A list of not as visible as in 1989, has never stopped. The
contacts from the organizing effort for the march National Coalition for the Home-
shows that of 80 contacts around the nation whose lesshascontinuedtoprovideaconnectingpoint
affiliationscan be identified,35were working with forthiswork.Amajorfocusofthisworkhasbeen the
homelessness- focused organizations, mainly increasing pressure by urban governments to
shelters, 17 with other non-housing social service “criminalize the homeless.” In late 1997, the
agencies, and only 13 with housing nonprofits. 7 Yet Coalition announced the National Homeless Civil
CDCs had generally been aroundlonger, had more Rights Organizing Project to work on this
resources and were more numerous than home- issue,aclearformofresidentself-defense(Safety
lessness groups. Network 1997).
TheNationalLow Income Housing Coalition, In the latterpartof the 1990s, theearlier media
which played an important logistical role in the emphasis on white homeless families and the
march,used the occasion to launch itsfirst national “newpoor” was overwhelmed by the reality of
mass campaign—Two Cents for Housing. This persistent poverty in communities of color.
campaign calledfor the federal government to Moreand more, homeless activism, thoughdis-
increase its funding commitment to housing to two organized andsporadic, has elements ofresident
cents—2 percent—of the overall federal spending self-defense as well as charitable benevolence.
dollar. Some communities sent in hundreds of Homeless activism isalso a place where connec-
postcards with two pennies attached to them, tions between movements are made, since many
young activists in colleges and elsewhere spend prevent conversion of HUD-assistedhousing to

time working on homeless issues. market-rate housing; to provide protections when
In Seattle, homeless and formerly homeless conversion became inevitable; and to enable
people and their allies led direct action against resident groups, and nonprofits working with them,
development-driven downtown demolition of low- to purchase this housing inorder to preventits
cost housing. In 1991, “Operation Homestead, a conversion. NAHT,local and national nonprofit
loosely organized group of anarchists, independent developers (especially the National Housing Trust),
leftists, homeless people and housing activists,” and local and state governments have accomplished
carried out a four- and-a-half-day occupation of the the long-term preservation, in resident or nonprofit
abandoned Arion Court apartments in downtown ownership, of almost 85,000 units of housing in
Seattle. Working closely with more mainstream 736 housingcommunities around the nation
housing nonprofits, the occupiers got a commit- (Organizing Times 1998a). Thefighttosavethe
ment from the owner to donate the building for hundredsof thousands of units still at risk
self-managed housing (Oldham1992:32). continued.The Pennsylvania Housing Coalition's
Resident Education and Action Project is typical—
working with Pittsburgh community leaders to
Seattle's downtown, with its long tradition of low-
ensure that residents “play an important role
cost housing, has been an arena forpolicy
insaying what happens to these properties,” even
struggles, due to rapid speculative develop-
though federalprotections arenolongerin place
mentcontinuing over severaldecades. Although
(Moses andRussell 1998).
many housing units have been lost (the Seattle
NAHT's annual conferences in recent years
Displacement Coalition estimated that 1,500
brought together about 300 activists and supporters
downtown units were lost in three years inthe mid-
from NAHT's “130 to 140” tenant association
1980s), activists have succeededingaining
members, locatedfrom coast to coast (Basey 1997).
condominium conversion and housing preservation
A key NAHT focus was on the righttoorganize. At
laws, and ashort-lived moratorium on downtown
its 1998 conference, NAHT raised issues that
demolition.8
included the arrests of HUD tenant organizers in
Battles like these, with homeless peopleand
Los Angeles and got HUD support for“regulations
their allies fighting for their survivalinanat-
confirming the rightof tenants to leaflet and door-
mosphere of speculation, returned thefight for
knock their neighbors” and“the rightof organizers
housing as a human right to the public policy arena.
to leaflet and door-knock” (Organizing Times
All of the Sidney Hill benchmarksareev- ident
1998b). While NAHT's work is dependent on
inthis kind of organizing.
organizers and housing professionals, its approach
During this period, local activists have gained
to the is- suesinHUD-
some technical tools not controlled by housing
assistedpropertieshasalwaysbeen that “the people
professionals outside of the community. The
whocall these buildings home are the ones whose
ConsolidatedPlan requiredbyHUD, based on the
voices need to be heard” (Minnesota Housing
requirements of the 1990 National Affordable
Partnership 1998)
Housing Act, gave local activists detailed
NAHT's record fits the Sidney Hill benchmarks.
information on local housing needs. Several
Resident self-defense is at its core. It has organized
successful organizing efforts inthisarena are
one of the few national groups working on anyissue
detailed in the NLIHC report Slicing the Pie,
whose boardconsistsentirelyof low-
including an effort in Rock Island, Illinois, that
incomepeople,themajorityofthempeople of color. It
“used the city's planning process to save 225 units
effectively uses technical assistance, bothfrom its
of public housing slated for demolition” and funds
own staff and leading members and from outside
that were targeted more effectively to low-income
groups.
communities in Oakland, Akron and other cities
In the 1990s, the Institute for Community
(Wise 1995:20-21). HUD has also provided
Economics (ICE), a national organization that
moreand more suchinformation on theWorld
provides financing and technical assistance to
WideWeb and through other electronic means.9
community land trusts, proposed a conscious
NAHT, described above, continued to fight to
alliance ofhousing networksaround a set ofde-
finedprinciples. ICE'sleadershipincludedpeace and to discrimination”; and

justice activists as well as inner-cityleaders of • to seek “full funding at authorized levels for
communities of color. allcurrentlow-incomehousingprograms.”10
Community land trusts, along with mutual
housing associations and limited-equity housing As partof that campaign, Housing Justice Day
cooperatives, represented a “second wave” of brought housing activists to Springfield to lobby
housing nonprofits. Community land trusts hold Illinois legislators inMay 1994. That November,
land in trust inorder to reduce housing costs and the Washington State Housing Justice Campaign
increase community control. Like mutualhousing was kicked off by a formerly abused and formerly
associations andlimited-equity housing homeless woman living insubsidizedhousing, the
cooperatives, communityland trusts go beyond Director ofthe Tahoma Indian Center and the
assisted housing efforts of the past in severalways, Speaker of the State House. Similar activities
especially in resident participation andin removing occurredin Texas, Louisiana, Connecticut and
properties from thespeculative real estate market. elsewhere.
For these groups, the proposal ofthe Black Panther Legislation reflecting a detailed program
Party and its allies that “the housing and the land worked out by NLIHC members and leaders
should be made into cooperatives so that our wasintroducedinCongressinFebruary1995by
community, with government aid, can build and Congressman Major Owens, a leading progressive
make decent housing forits people”was still from New York. At NLIHC's annual conference,
relevant. Owens calledfor a broad progressive movement to
In 1995, ICEbegan a self-conscious effortto march on Washington on housing and other issues.
bring together these efforts as Permanently Af- In the same month, hundredsof militant
fordable Resident and Community Controlled Philadelphia public housing tenants and supporters,
(PARCC) housing. The model challenged this working with the Pennsylvania Low Income
nation's basic paradigm ofreal estate ownership. HousingCoalition,rallied in Washington.
But italso spoke to many ofthe public's known The election of a conservative Republican
concerns about low-income housing programs, Congress in 1994 led many housing advocates to
whichareseen,sometimescorrectly,aswasteful, feel that the Housing Justice Campaign was no
bureaucratic instructureand not based on local longer appropriate. In mid-1995, partly due
initiative. Among the groups that ICE reached out tolackoffunding,NLIHC'sfieldorganizingstaff
to inthiseffort was the National Association of waslaidofforleft,andmostoftheHousingJus- tice
Housing Cooperatives, which includes labor- Campaign'smediaand organizing activities came to
initiated cooperatives from as long ago as the a halt.
1920s. The PARCC effort, though not fully Since at least the time of the Brown Berets,
followedupon,wasabuildingblockinthe longterm whose 1968 demands were noted above, oppressed
process offorging a broader progressive movement ethnic and cultural groups inthe United States have
for change. fought for culturally appropriate housing. In the
In February 1994, the National Low Income Twin Cities, urban Indian groups gained low-
Housing Coalition approved a Housing Justice income housing designed in cooperation with the
Campaign with three main policy components: community. In Albuquerque, the long-established
Hispanic neighborhood of Sawmill has established
• to re-direct the home mortgage deduction tax a community land trust in a process that has used
subsidy for higher-income homeowners toward culture and history, especially mural art, as a tool.
“providing housing benefits to every low and In Stockton, California, a low- income housing
moderate income family”; development has enabled a Cambodian immigrant
• to “substantially strengthen the community- community to express its solidarity and maintain
based nonprofit sector involved . . . on behalf of some ofits culture (Yates 1996). The Tenants' and
greater housing opportunity,” especially by Workers'Sup- portCommittee in Alexandria,
directing resources to “frontline organizations Virginia, after succeeding in its twelve-year fight to
responsive to people of color, women, disabled establish a cooperative housing community
persons, low-income people, and others subject ownedlargely by Salvadoran immigrants, has
expanded its housing-based work to “those connecting tenants nationwide 13 years later. Such
problems that most affect the Latino community,” longevity is rare in housing organizing. NAHT
including living wage and health issues. (VOP continues to aggressively engage with HUD.For
1998). example, in September 2003, high- level HUD
Ethnicgroupsarenotaloneinfightingforap- officials turned down a request for a meeting of the
propriate housing. Contradictions among nonprofit kind that NAHT consistently was granted over the
housing groups surfaced when ADAPT (Americans last decade. In response,NAHT passed out a leaflet
Disabled for Attendant Programs Today)of “blasting” then-HUD Secretary Mel Martinez to
Philadelphia, partof a national network ofpersons HUD employees coming to work. NAHT reported
with disabilities, crashed a fundraising event for on its website that “The letter appeared to strike a
Habitat for Humanity, with demands for Habitat positive chord with many HUD
houses to be more accessible(ADAPT 1998:24). employees...equally frustrated with ...Bush
ADAPT's key fight since the 1990s has been for Administration political appointees.” As has been
their MiCASA proposal, “a national program of the case inthe past, NAHT did get a meeting with
home and community services so weare HUD officialsaf- ter once again taking a strong
notforcedintonursing homes” (ADAPT 1998:1). stand.
Such struggles will be key to future fair housing The second important development is that
fights. Fair housing must go beyond the right of NAHT has been joined by a parallel national
people from different ethnic groups to obtain their network—ENPHRONT—Everywhere and Now
share of the American Dream—such as suburban Public Housing Residents Organizing Nationally
homeownership.Many Americans, Together. Much as NAHT grew
includingthemajorityofAfricanAmericans,are not fromanetworkbroughttogetherbytheNational Low
likely to be included in that dream in their Income Housing Coalition, ENPHRONT came out
lifetimes. Other communities, like the Cambodians of an advisory committee broughtto- getherbythe
in Stockton, may have a dream different from that Centerfor Community Change. In
of the majority. 1997,thatadvisorycommitteeofpublic housing
While national awareness ofhousing as an issue residents came together as the Public Housing
diminished during this period, the fight for housing Residents National Organizing Campaign. That
justice continued at the local and state level, and Campaign focused on opposing devastating leg-
took more creative forms, benefiting at the islative changes to public housing programs and
community level from an uninterrupted 30-year won some fights around rent increases and tenant
tradition of housing organizing. Nationally, tenure . InNovember2001,ENPHRONTwas formed
however,the agendas of CDCs and their at a meeting ofpublic housing residents from
intermediaries are the only voices consistently around the nation. In the words of Ed Williams,
heard nationally, and those voices are but whispers founding president of ENPHRONT, its purpose
inthe national policy conversation. iscreate “a nationalinfrastructureof residents
throughout the nation to achieve what
weneedtoachieveinthiserawhereweare losing
VII. ORGANIZING NETWORKS TAKE UP ourhousing, standing in lines waiting for a place to
THEBURDEN: 1997-2004 live and being ‘relocated' to parts unknown.”
For the first time, there are parallel networks of
Theturnof the century,and the intensified con- the two largest populations of low-income tenants
servative dominance that has accompanied it, have —those in public housing and those in subsidized
not been kind to housing programs. But these housing. Ed Williams spoke to the 2003 NAHT
conditions have moved housing organizing Annual Convention, and his message of
networks, includinganew network ofpublic housing cooperation on common issues was welcomed by
residents, to the fore. NAHT membership and leadership. In addition,
In the area of resident self-defense, two de- both NAHT andENPHRONT have working
velopments stand out. One isthecontinued op- relationships with the Centerfor Community
eration of the National Alliance of HUD Tenants, Change, whichhas movedin recent years to take on
formedin 1991 and still meeting annually, national policy issues more aggressively. This
development, along with the relative longevity of otherretrogressive moves by those in powerhas
thecurrent tenant movement, is bringing tenant made defense a full-time job for progressives.
organizing more into themainstream of the However, housing groups frequently appear in the
broader community organizing movement. coalitions formedfor these purposes. For example,
At the same time that homelessness grows and the membership ofthe national coalition United for
threats to subsidized housing increase, Peace and Justice, organizer of several major
homeownership continues to grow. It appears that national anti-war events, includes such groups as
the influx of immigrants committed to investing in [NYC] City Council District 7 Housing Taskforce,
homes and thecontinuedlowinter- est rates are the Tenants' and Workers' Support Committee and
contributing factors. A lot of technical assistance the Center for Community Change. The coalition's
has focused on this area, given rallies regularly include the message that “money
theminimalresources availabletoprovide rental spent on the military action has meant less
housing for very-low-income people. In addition, moneywas available forhealth care, education
there have been no major innovations or technical andhousing,” as the New York Times reported in
changes in housing development programs, and so March 2004.
no basis for experts to devise new methods The PoorPeople's Economic Human Rights
ofproviding housing based on such changes. There Campaign, a nationally active network with its base
werethree main housing initiatives listed on the intheKensington Welfare Rights Union in
website ofthe Local Initiatives Support Corporation Philadelphia, announcedplans for aMarchfor
inMay 2004— theCen- terfor Home-Ownership, OurLives:Stop theWar at Home at the August 2004
the Housing Authority Resource Center and the Republican Convention, with an empha- sisonthe
Affordable Housing Preservation Initiative. While issues ofhealth care, housing, education and living
all three have worthy goals, none ofthem is aimed wage jobs. These plans included a Bushville
at increasing thestock of newly affordable rental shantytown inNew York City.
housing. Similarly, another major technical assis- Of course, housing policy groups continue to
tance network, NeighborWorks, listed five items on beactive andin fact have joined together inabroad
the home page ofits website during that same campaign for a National Housing Trust Fund. This
month, four of which dealt with homeowner- campaign, unitedbehind specific federal legislation,
ship.Whilethese technical assistance networks issupportedbya wide range of organizations.
continue to be active and to meet real needs, they However, the two central
do not appear to offer innovations in meeting the groupsaretheNationalLow Income Housing
most serious needs. Coalition and the National Coalition for the
The progressive agendaofthis period,onthe Homeless (NCH), which now share office space in
otherhand,isactiveandchangingbuthaslargely been Washington and coordinate closely. In 2001,
defensive. After all, even the business me- Donald Whiteheadbecame the Executive Director
diaareabitawed and concerned by the rise of ofNCH, the first formerly homeless person and
corporate powerinthis period,asinthis quote from thefirst African American to serve in that position.
thecover story for the September 11, 2000 issue (Whitehead was living on the street in
ofBusiness Week: 1996.)Sincehetookonthejob,NCHhasbegun to build
deeper and strongerlinkstocivil rights organizations
[N]o one's reining in business anymore. Most of around their common issues. For example, in 2003
the institutionsthathistoricallyservedasacoun- the Leadership Conference on Civil Rights joinedin
terweighttocorporate power—BigGovernment and
NCH's call for study by the General Accounting
strong unions—have lost clout since Ronald
Office ofhate crimes against the homeless. Well-
Reagan came to towncrusading forderegulation
and local control. The conservative ascendancy known activist figures like Jim Wallis ofSojourners
that followed discredited much of the New Deal and Martin Luther King III are building
social structure, leaving corporations to fill the relationships with NCH; Wallis was the keynote
vacuum. speaker at the October 2003 annual meeting
ofNCH. Another significant change at NCH was
The necessity of responding to oil wars, civil theunionization
liberties violations, environmentalrollback and ofthestaffin2000;perhapsasaresult,theAmer- ican
Federation ofLabor-Congress ofIndustrial fateofhousingpolicyislinkedtotheoverallstate of the

Organization's (AFL-CIO) Director ofOrganiz- ing progressive movement. There is unlikely to beany
also spoke to the October 2003 meeting. significant change in housing policy, especially
TheNational Housing Trust Fundlegislation is inthe resources devoted to housing, without a
not intended to establish a Right to Housing but has largerprogressive upsurge. However, if a reaction
an ambitious goal offunding 1.5 million units to the current conservative dominance does take
ofhousing by 2010. For NCH, though, the Trust place inthe near future, theorganizing-
Fund legislation is part of its Bringing America orientedelementsofthehousing movement appear to
Home campaign. The centerpiece of that campaign, be positioned to be benefit from it, and to move
the Bringing America Home Act(HR 2897),would housing issues forward in a way that has not been
establish aRight to Housing as well as universal seen for many years.
health care and a living wage or income. Taking a
widely comprehensive approach, NCH also
includes reauthorization of Head Start and the SUMMARY AND ANALYSIS
Individuals with
DisabilitiesEducationActinthiscampaign,em- The history recounted in thischapter showsthat
phasizingthe interrelatedness ofpoverty,unem- since1949 the multiplicity of community-based
ployment and housing needs. Whitehead, like Ed housing organizations and housing organizing
Williams, spoke to the 2003 NAHT Conference, efforts inthis country have not given rise to a
and NAHT is an active participant inthe Bringing continuing and well-focused effort to organize
America Home campaign. (In stating strategically around housing as a human right.
itssupportonitswebsite,NAHTemphasizesthe fact What arethe reasons for this disappointing reality?
that the campaign “references Housing as a human The Hill benchmarks can help us un- derstandit.
right.”)
Each of the key organizations described above Resident Self-Defense
—NAHT, ENPHRONT and NCH—has people of
color in leadership, either in staff or on the board, National and most state-wide housing organizations
or both. This has put the issue of racism at the have never put this activity at thecenter of their
forefront as it perhaps never has been before inthe work, preferring instead to act as bro-
housing movement, andhas brought anti-racist kersbetweencommunitydevelopmentcorpora- tions
figures like Martin Luther andpolicymakers. There have been some
KingIIIandJimWallisaswellasotherslikeCon- exceptions. The Housing Now!march,aswe
gressmanJohnConyers,tosupporttheirefforts. For haveseen,waslargelybasedingroupsorganizing with
the first time, people of color arethe face of homeless people and those who work di-
leadership, not just the face of the “victim.” The rectlywiththem,andwasintendedtostrengthen local
language of universal human rights, whichhas been organizing. Going further back, the National
key to the African-American community since the Unemployed Councilsand the BlackPanther Party
time ofMalcolmX and isalso critical to depended on and soughttoreinforce the activism of
thestruggleofindigenous people, isalso becoming poor people mobilized for selfdefense.
the language of the most dynamic elements of the The experience of the National Alliance of
housing movement. HUD Tenants and the National Tenants Orga-
To summarize, on the one hand, relatively little nization is especially instructive here. Though each
progress has been made on housing issues since the of these two organizations reached at best a few
late 1990s, given the conservative and corporate thousand of the hundreds of thousands of tenants
grip on powerinall branches of the U.S. eligible to join them, theyboth chose an organizing
government. On theotherhand,thecore organizing approach. By using their resources to build
components of the housing move- menthave clearly leadership and to focus on
grown in strategic position, in their focus on issuesthatmadeimmediatesensetolow-income
broader anddeeperissues, andin their links to larger tenants, NTO and NAHT each substantially
movements. changed the debate in a major housing policy area
As it hasbeensince the Great Depression, the while opening up new arenas for resident self-
defense. Housing advocacy campaigns that surance companies, lenders and developers, all to
mobilize one-time appealstopolicymakers some extent regulated and all withfair housing
sometimes winasinglevictory but do not build responsibilities under the law, possess massive
movements rooted in the communities where amounts of data that could illuminate for
housing need is greatest. communityleadersandresidentshowourhous- ing
system works. Hard evidence on howinsur- ance
Housing activists arearelatively small group companies, developers and other real estate
with a lot to do, and organizing is laborintensive. businesspeoplemaketheir decisions would provide
But housing activists would find sup- concrete details of the institutional racism and other
portfromotherorganizationsiftheyfocusedon unjustpracticesinthe housing sector. Facts, no
supportingandmobilizingresidentself-defense. matter how shocking, do not substitute for struggle,
Community organizing networks played a key but they make for more effective strategies andfor
roleinbuildinglocalcomponentsofNAHTand NTO more effective public education.
and can beexpected to be partof any good fight Communities will continue to need housing
inthe future. If housing issues offer such professionals whose groups develop housing,
opportunities again, networks likeACORNand working within the limitations of thecurrent
National People's Action will bethere. It is not housing system, as “nicheorganizations most
unlikely that the labor movement will beanally in usefulforbridging the gap between activists, service
future organizing efforts; currently, labor activists providers, and resource holders” (Stoecker 1996).
are looking for communityissues around which to But the greatest needgrassroots organizations have
build alliances at the same time that they are was namedbyNTO activists in1972—
reaching out to communities of color, women and professionalsworkingonresearchand planning
immigrant populations who have serious housing “under thefirm direction of a tenant
needs. union”(Burghardt 1972b:200). Such experts al-
Putting Hill'sfirst point in modern terms: readyareemployedtoprovidetechnicalsupport to
Nationalhousing policyeffortsmust be much more communities—where there has already been a
based in grassroots resident organizations, espe- political fight to make technical information
cially in communities of color. accessible, as with the Home Mortgage Disclo-
sureActor environmental Right-to-Know leg-
Technical Assistance islation. The reality is that progressive activists
workingonallissuesneed“damngoodresearch” tied
How can grassroots activists gain control of to “organizing expertise” (Pintado-Vertner 1998).
technical resources? As shown above, by orga- Restating Hill's second point for today: Na-
nizing based on ConsolidatedPlan information, we tional and local organizations should build pow-
are close to the point where communities can erful technical assistance systems to support orga-
rapidly call up government-provided information nizing and should press for accurate, current and
for the organizing needsof the immediate moment. detailed information from government and from the
But this isonly a small fraction of what is possible. private sector on housing needs at all levels in
The real estate, lending and insurance sectors have forms that can easily be used for local organizing.
by far the greatest amounts ofinformation on
housing. TheHome Mortgage Disclosure Act has Including Housing in Progressive Politics
made a large body of information on financing
practices accessible. In American Apartheid, Hill's pamphlet also suggested that “housing
Massey andDenton (1993:233) propose that demands” be in “the programs oflocallabor
“realtors serving black clients must begiven candidates for political office.” Not only today's
complete access to multiple listing services.” nascent LaborPartybut also other progressive forces
Activists opposing housing segregation should and alliances should becalled on to include housing
build on these partial steps and insist that demands in their programs, whether electoral or
information that is now proprietary to major not. The Progressive Challenge, the
housing-related private institu- IndependentProgressive Political Network and
tionsinfacthasprofoundsocialsignificance. In- theThird Parties '96 effort, all three of which
brought together anumber of parties and insider efforts alone, no matter how profoundly
groupsonthe left, have already done so. The thought out. Significant increases in resources to
Progressive Challenge agenda includes “increasing meet real housing needs have always been a
funds forlow-income housing assistance by roughly response to an upsurge of mass organizing and
half the cost of the entitlement to housing action around a broad range of progressive issues,
assistance enjoyed by upper income home owners” like those that forced the New Deal and theGreat
as one ofits demands for “Adequate Social Society programs into existence.
Investment”11—a demand that echoes the NLIHC's In today's national-level progressive world,
Housing Justice Campaign. dominated by single-issue organizations, housing
Community development corporations, in advocates may legitimately fear having their issue
particular,areoften loath to identifythemselves with submerged. Yet there is not, and never has been,
progressive political directions, casting themselves any other reliable source of support for housing
as technicians who would endanger their work by programs butastrong, broadbased and well-
getting involved with advo- mobilized progressive movement. Hopeful signs,
cacy.Yet,asBobBrehmnoted,housingnonprof- its such as the existence of multi-issue organizations
have never come close to providing enough likethe Black Radical Congress and the National
housing inany community in this nation. This is not Organizers Alliance, are beginning to emerge,
because CDCs are deficient but because ofpolitical while cross-cutting issues like environmental
conditions that will onlychange as a result ofthe justice and corporate welfare are raising
organizing and activism that CDCs eschew and community issues that intersect with the concerns
sometimes even block. of communities organized around housing. And, at
Nonprofit developers often justify political least at this moment, the labor movement is
inaction by asking for patience, claiming they moving, errat-
areontheverge of a “new age” of housing de- icallyperhaps,towardavisionthat,inthe words of one
velopment, in which theold methods have been put activist, “would embrace the economics of
behind,and the right partners, the right resources sustainable development that serves the entire
and the right programs are finally going to lead to community, rather than onlythose fortunate enough
the right solutions to ourhousing problems. Of to hold union jobs” and“with strong ties to
course, the demands of funders for innovative communities and to the various struggles against
projects andpoliticians' need to distinguish oppression of others” (Eisenscher 1998:47).
themselves from their predecessors motivate many Hill's third point, then, can be read today like
of these claims. The reality is that the “new age” this: The housing movement must put its main hope
always turns out to be basically a recycling of the in organizing and activism, and, as a small
same old relationships movement that is most effective when larger social
andpartnershipsofgovernment,for-profitsand movements are successful, it must make alliances
nonprofits, with no lasting benefit for thecom- with other progressive movements.
munities in need. Thus, for example,CityLimits, a
housing magazine, reported that as theNew York Housing as a Right
Urban Coalition was failing inthe 1980s, theNew
York City Partnership was emerging, and drawing Hill suggested that “a campaign...be waged to
“corporate backers who were once likely establishhousing as a partof state andfederal
prospects” for the older group, no doubt with much socialinsurance, so that tenure will be secure in the
ofthe same rhetoric (Kischenbaum 1994:17). event of unemployment, illness or old age.” In
The incremental and insider-oriented approach, modern jargon, this means the establishment
though well-intentioned, has allowed housing and ofhousing as a federal entitlement.
other resources for the poor to steadily diminish for Many housing professionals—and perhaps most
20 years, whileonly prisons and shelters grew observers of contemporary politics—will be quick
substantially as low- income housing providers. No to describe this as an “unrealistic” demand.
major expansion ofhousing subsidies and Recently, national housing advocates have learned,
ofprograms that have genuinely served low-income using focus group research, that there is deep
people's housing needs has ever come from such public cynicism about government and developer
housing programs, and even about the poor who distribute wealth along a racial continuum. The
need housing. This is important information. It is syndrome of “not inmy back yard” and of
vital that we recognize the power of the doubts, resistance to placement of low-income housing in
prejudices and fears that sustain the current system. middle-class neighborhoods, like housing
Perhaps it iseventrue that “housing as a human discrimination itself, are not mere civil rights
right is not an effective message any more,” one “problems.” They are key means of organizing
advocate's reaction to that focus group research people in this country so that class, caste and other
(Saasta 1998:43). divisions are maintained. As American Apartheid
Focus groups in 1932 would have shown a far states, “residential segregation isthe institutional
uglier picture, in a nation where the Klan paraded apparatus that supports otherracially discriminatory
openly and the majority of African Americans and processes and binds them together into a coherent
Mexican Americans were denied the right to vote. and uniquely effective system of racial subordi-
Franklin Roosevelt was elected on a platformthat nation” (Massey and Denton 1993:8).
reflected the “realism” ofhis Democratic Party Racial segregation is also the source of much of
before mass movements forced changes. It called the enormous asset base that real estate represents.
for “an immediate anddrastic reduction of This economic realityis not reflectedin the
governmental expenditures . . . to accomplish rhetoricof thecurrently existing fair housing groups,
asavings of not less than twenty-five percent inthe which is typified by statements like “it's
cost of federal government” (Commager goodbusiness to promote equalprofessional service
1963:237), a level of austerity ofwhich and to ensureobjectivityinunderwriting to African
contemporary budget cutters could only dream. Yet Americans and all consumers” (Berenbaum 1998).
in Roosevelt'sfirst administration, the radically The reality is that most businesses involved in real
innovative foundations of all current housing estate and related finance still findit profitable and
programs and of the welfare system, labor law and customary to discriminate, and to exploit the
many other reforms were laid down. weaknesses of lower- income communities and
The struggle for decent housing is a harsh and communities of color, if sometimes in more subtle
difficult one, perhaps decades away from ways than inthe past. Discrimination may not be
resolution. But the only strategy that has ever been “good business” from a moral point of view, but
effective on a large scale is the organizingbased until society decisively changes, apparently it is
approach outlined here. It must not be discarded to still “good” financially.
concentrate on dealsandprograms whose benefits The existing fair housing groups, aggressive
are washed away with each wave of conservatism. andsophisticatedastheyare, will not change this
Activists seeking only what today's decision- situation on their own. After all, inthe words of the
makers consider realistic will gain nothing worth National Fair Housing Alliance, the national
having. Housing organizers should be part of a association of these groups, “thirty years after the
conscious and long-term national grassroots-based passage of the federal Fair Housing Act, equal
campaign for a housing entitlement. access to apartments, homes, mortgage loans and
homeowners' insurance is not a realit yfor the vast
Anti-racism majority of people the law was designed to protect
against discriminatory practices” (NLIHC 1998).
This bringsustothe issue that even Hill'saudac- ity The Alliance goes on to appeal for more and better
did not allow him to fully face—race, which is targeted resources for fair housing complaints and
central to the way housing is provided in this decries current attacks on the fairhousinglawin
nation. Congress. But how likely is itthat “moreof the
same” will make a fundamental difference or, for
The real estate system has become a major that matter, that there will be significantly more
institution for hoarding the gains of centuries of resources forfair housing without a broad
white privilege—and its role in perpetuating mobilized political movement against housing
institutionalracism is not limited to storing up the discrimination?
gains of the past. Its central dynamic, the definition GroupslikeNAHTandtheneighborhoodor-
of “good” and “bad” neighborhoods, continues to ganizations that have fought the expansion of
hospitals and universities, bank redlining and to meeting housing needsonalarge scale.
gentrification must be recognized as the leading Sidney Hill's vision came to him inaterri- ble
forces infighting discrimination. Those who seek to moment of our history andwas partof a fierce and
oppose housing discrimination should look to such often simplistic left-wing analysisof what needed to
groups for leadership and offer them genuine be done. Millions paid in pain and thousands in
support. If liberalhousing advocates andhousing heroiceffort for the clarity that broughtabout
professionals had supported the New York City theNewDeal andimproved the lives oftheir children
tenants who fought Title Ire- location schemes 50 and grandchildren. We should, of course, all do
yearsago,and that fight had spread nationwide, what we can to reduce the prospects ofviolence and
wemight be looking at quite different nation today social disruption. But there is functional
—a nation without the racially concentrated truthintheslogan, “No justice, no peace.”
communities that nourish bothfearful conservative Most people whocareabout housing needs are
suburban majorities and the feared and maltreated not organizers. But all of us can contribute to
underclass. Opposition to discrimination in housing organizing that is resident-centered,
housing, especially against African Americans and technically informed, politically conscious, focused
other people of color, must be central to housing on a RighttoHousing and seriously antiracist. Some
organizing and activism—and organizing must be of us can provide information; some of us can
central to opposition to discrimination. provide resources; some of us can help build
coalitions. Some of us can create orrun housing
projects and programs that include resident power
CLOSING THOUGHTS in their design and that do not compromise on
questions ofrace and wealth.
In 1949, our nation's leaders stopped far short of Above all, we can all respect and support
their stated National Housing Goal of“a decent theefforts of tenants, of homeless people and
home and asuitable living environment for every oflower-income homeowners to defend themselves
American family.” They provided a public housing from a callous and often predatorysystem. We can
program that they knew could not meet the nation's all ask, whenever decisions are made, that those
full need for low-cost housing. The structure they who have been excluded from the six-decade-old
createdhas not been ableand will neverbeable to promise ofa decent home finally have an active part
meet the needsof “every American family,” inevery decision that affects them. We can
although it provided unprecedented housing wealth understand that the most responsible, and even the
to manyfamilies. Like the generation that won this most kind, step we can take istoalways remember
nation's independence and the generation that saved the quintessentialdemo- cratictruth that is inthe
the Union in our greatCivilWar, the generation that wordsthat close Housing Under Capitalism:
foughtthe war against fascism falteredwhen it came “Better housing will be achieved in the same
to providing “justice for all.” manner that workers have madeother gains, and
This chapter offers some benchmarks to the that is by organizing and fighting for them” (Hill
housing organizers of the future, based on ex- 1935:39).
perience. The central lesson itoffers isthat the
fundamental issues ofhousing will not be resolved
by housing technique, narrow changes in policy or NOTES
new programs. These issues are rooted in racism, in
1. Bobo, Kendall, and Max (1991) is one of the
lack of democracy and in maldistribution ofwealth.
best.
When these fundamental problems are attacked 2. The National Organizers Alliance, located in
with some success by organized action, successful Washington, DC, is a beginning point for learning about
housing programs are one result. When these them.
problems areneglected,the process ofmeeting 3. Information from the National Housing Con-
housing needsalso stagnates. Housing activism gets ference World Wide Web site at http://www.nhc.org.
boggeddown insaving existing housing programs. 4. Northern Virginia Sun, various articles, July and
August 1966.
Onlybyworking in partnership with organizing can
5. Interview of Woody Widrow by the author,
housing experts and professionals truly contribute
December 1997. Delgado, Gary. 1994. Beyond the politics of place: New
6. “March for our lives: Homeless march from directions in community organizing in the 1990s.
PhiladelphiatoNYC,” Kensington Welfare Rights Union, Oakland, CA: Applied Research Center.
[email protected]. Press Release: May 26, 1997; Eisenscher, Michael. 1998. Beyond mobilization:
received by the author from an Internet email list. Howlabor can transform itself. Working USA,
7. Theauthor's analysis, using the document “List March/April.
of housing now staff and regional contacts,” undated, but Fish, Gertrude, ed. 1979. The story of housing. New
from internalindications preparedbythe national office of York: Macmillan, sponsored by the Federal National
Housing Now! inthe summer of 1989. Mortgage Association.
8. Letter from Seattle Displacement Coalition, Gilderbloom, John I., and Richard P. Appelbaum. 1988.
April 23, 1990. Rent control and the tenants' movement. In
9. An example istheHUD Communities Infor- Rethinking rental housing,Chapter 7. Philadelphia:
mation World Wide Web site. http://www.hud.gov/ Temple University Press.
states.html. Goodman,Mitchell. 1970. Themovementtowardanew
10. “Housing justice campaign to fight for trust America. Philadelphia: The Pilgrim Press.
fund,” the Low Income Housing Information Service. Hill,Sidney. 1935. Housingundercapitalism.New York:
Roundup, March 1994, No. 165. International Pamphlets.
11. “The progressive challenge continues—A fair- Institute for Policy Studies. 1989a. [Richard P.
ness agenda for America” n.d. Appelbaum]. “A progressive housing program for
America.” In Housing issues of the 1990s, eds. Sara
Rosenberry and Chester Hartman, 313-331. New
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Michael E. Stone
11 Social Ownership
IN ORDER TO REALIZE a Right to andpiecemeal reform.

Housing, a large and increasing share of housing The chapter begins with an overview of the
must be treated as a social resource rather than as a social dimensions of all housing. This is followed
commodity yielding private windfalls. Indeed,all by a definition of the more particular concept of
housing contains both social andin- social ownership and explanation ofhow the
dividualrightsandinterests,differingonlyinthe nature housing tenure available to residents of socially
and extent of their social characteristics. It is thus owned housing differs from both conventional
appropriate and useful to conceptual- renting and conventional homeownership. The bulk
izeacontinuum ofhousing ownership forms. As of the chapter then examines the nature and scope
discussedinthischapter, “social ownership” en- of existing models of social ownership, grouped
compasses that portion of the spectrum where into two major categories: socially owned rental
theoverridingsocialinterestistoensuresecurity of housing, consisting of public housing, nonprofit
tenure and permanent affordability. rentalhousing and mutualhousing associations; and
Social ownership of housing and land may be nonspeculative homeownership, consisting of
traced back to neolithic villages and Native limited-equity cooperatives, ownership with
American cultures. Within the capitalist era, community land trusts and some resale-
various alternatives to the commodification of restrictedindividual ownership.Themodelsare
material life were put forth during the 19th century, evaluated in terms of differences inthe degree of
ranging from socialist revolution to utopian models social control. The chapter concludes with
of shared property and including a spectrum of identification of various routes through which the
working-class demands for cooperative and amount of socialhousing can be increased.2
socialhousing. ManyEuropean countries accepted
the notions of social ownership earlier andhave
gone muchfurther toward their realization than has THE SOCIAL COMPONENTS OF HOUSING
the United States (see Donnison 1967; Wynn 1984; OWNERSHIP
Gilderbloom and Appelbaum 1988: Chapter 8;
Harloe 1995; Fuerst 2000; Stone 2003). Even in While “property” is usually understood to mean
the United States, significant strandsof material things such as houses, land, cars and
nonspeculative and social ownership have furniture(aswellasnonmaterialformsofwealth such
emerged, despite the ideological domination and as “intellectual property”), inmore precise legal
political force of the purveyors of unfettered terms, property consists of socially created and
private ownership. They amount to a little over 4 enforcedrights and obligations regarding the
million housing units, about 4 percent of all acquisition, use and disposition of such
housing in this country.1 Their accomplishments
andpotential provide encouragement and hope,
while their limitations and contradictions
providevaluable lessons on the dilemmas ofpartial
Social Ownership 241
wealth. That is, even in an ostensibly “private free- the property—and sometimes criminal penalties for
market” economy, the terms under which someone violations. These rights include not only building
can obtainanddispose of a house (and other andhealth codes, zoning and subdivision
property) is not by individual (private) whim but regulations, fair housinglaws,landlord-
instead by procedures established by constitutions, tenantlawsandenviron- mental standards but also
statutes, common law, case law and administrative use restrictions and resale restrictions
regulation. The relationships accompanying receiptofpub- lic benefits. Such
betweenprivatepartiesregardingproperty ownership powers constitute an enforceable social interest
are socially governed.3 inall housing and otherreal estate.
Furthermore, even where there are extensive In addition to these legal and governmental
private rights within these social procedures of manifestations of social control ofhousing, there
ownership, the government, as the legal repre- are material and experientialways inwhich housing
sentative of the social interest, retains for itself is inherently social. Because housing is so durable
rights vis-a-vis private owners of houses, land and and long-lived (if reasonably well built and
other so-called real property. In the U.S. legal maintained), over the course ofits useful life, a
system, these arethe powersof taxation, eminent house accommodates the needsof
domain and police power. manydifferenthouseholds.Fewhousesare built in
The power to tax real property has long been response to the unique needs and requirementsofa
the prerogative of and principal means of revenue- particularhousehold.Eventhose that are so built
raising forlocal governments, implicitly if not typically undergo adaptations and modifications as
explicitly based on the premise that realpropertyhas different people live inand use the housing over
economic value, not merely because of the thecourse of generations and even centuries, giving
activities and investment of an individual ownerbut each dwelling a rich and complex social history
because ofthe activities of other owners and identity. Indeed, no other major item
(“neighborhood effects”) and the provision ofpersonal andfamily consumption is passed on
ofpublicservices that benefit private property inthis wayfrom user to user to user.That is, housing
owners, such as roads, publicsafety, schools and so is not only inherently social but uniquely social.
forth. Furthermore, the obligation on an otherwise
“private” property owner to pay assessedproperty
taxes creates a potential lien on the property—a THE CONCEPT OF SOCIAL OWNERSHIP
formofproperty right that is “owned” by
thegovernment and is legally superior to the rights Beyond the universal social elements possessed
of the nominal owner and any other private parties ofall housing, housing is definedhereassocially
with rights to the property (e.g., mortgage holders). owned ifit meets all of the following criteria:
Such tax liens constitute an old andwell-established
form of“resale restriction” on private property. • it is not owned and operated for profit;
Eminent domain isthe power of governments to • it cannot be sold for speculative gain; and
take property for public purposes. • it provides security of tenure for residents.
Whilegovernments must exercise due process and
provide compensation for seizing and ex- Social ownership embraces the notion that
tinguishing private property rights, the social housing should be permanently removed from the
power ofeminent domaintranscendsall private possibilityofresale inthespeculative private market.
rights and interests. This means that once the original cost of producing
The police power enables government to reg- or acquiring the housing is paid off, the only costs
ulate private property to protect the “health, safety would be for operations and any additions,
and morals” of the society and to “promote the alterations and capitalimprovements. Even if
generalwelfare.” The societyholdsan array ofsuch nothing else were to change, the substantial
rights that ownersofhousing, land and otherreal expansion of such a “social sector” of housing
estate are expected to acceptand abide by, with would, over time, mean a sizable reduction inthe
civil penalties—sometimes including forfeitureof housing costs for a growing proportion of the
population. It would also mean slowing and address thisaffordabilityburden directly, ideally the
eventually reducing the growth of mortgage debt as production and acquisition of socialhousing should
the mortgages on existing housing are paid off bethrough direct public capital grants rather than
once and for all. debt (see Chapter 12; see also Stone 1993:218-
There are many different forms that “social 224,258-261; Stone 2003:19-21, 56-58).4
housing” can take, including:
• ownership by public agencies, such as local
AN ALTERNATIVE FORM OF TENURE
andregionalhousing authorities;
• ownership by private nonprofit organizations;
Creation of a large socialhousing sector would
and
providehousingchoicesandbenefitsthatarenot now
• ownership by residents themselves, individually
available through the current alternatives ofprivate
or collectively, with resale restrictions that
rental, subsidized rental and conventional
permit, at most, a “limited-equity” return on
homeownership. A new form of tenure would be
investment.
established, providing people with security,
The unifying concept is not the particular autonomy, control and affordability. For the large
typeof entity owning the housing but the existence majority ofrenters who have no realistic prospects
of enforceable provisions preventing the housing of achieving conventional homeownership (andfor
from being sold inthespeculative private market. those renters who might some day afford but do not
Indeed, for housing to be fully social,these necessarily aspire to ownership), the advantages
provisions should apply “permanently,” “forever,” are substantial. Yet, even in relation to
or“in perpetuity” (the phrases most often used). conventionalhomeownership,the social and
Social housing clearly is not equivalent to economic benefits of this alternative tenure form
government ownership because theconcept in- would, on average and over the long term, beatleast
cludesnotonlypublichousingbutalsoso-called third- comparable and in several ways superior.
sector housing (Gilderbloom and Appel- baum All occupants of socialhousing should have the
1988; Davis 1994), which is housing outside of right of permanent occupancy and control over
both the private profit-driven market and public their living space. As long as they wish to remain,
ownership. Social housing also encompasses but is they should not be required to move, except for
broader than “permanently affordable resident or those few situations of otherwise un- resolvable
community controlled” or PARRC housing conflicts with neighborsor eminent domain for
(Institute for CommunityEconomics 1995), a legitimate public purposes. Indeed, with no
definition that excludes both public housing mortgage payments and no possibility of resale
andprivate nonprofit housing not into the private speculative market, residents would
controlledbyresidents or the local community. have security against eviction or displacement far
Nonetheless, it might beargued that social exceeding that enjoyed even byhomeownersunder
ownership should embrace the principleof sub- theexisting system, since there would benorisk of
stantial resident control of housing, including that mortgage default and foreclosure. Also, a
ownedbypublic housing agencies andprivate household should have the right to pass their unit
nonprofits. on to membersof their family as long as the heirs
Social housing could be produced and ac- meet general eligibility requirements and occupy
quiredwith mortgages, and most of theexisting the unit. In addition, secure tenure undoubtedly
socialhousing inthis country other than public would increase the kind of informal voluntary care-
housing ismortgaged.However,this means that even taking and improvement that for the most part is
though suchhousing is not sold andhence may associated with homeownership— including the
eventuallybe free ofits original mortgages, freedom to modify one's dwelling, make
thereisstilla20-to40-yearperiodduringwhich time repairsandrenovations oneself and use the house in
the housing is saddled by mortgage payments that waysthat personalize it, give it meaning and adapt
have to be borne bythe residents and as well may it to changing household needs and circumstances.
or may not be subsidized in some way.Inorder to Security of tenure in social housing might also
substantially reduce and possibly eliminate some of slip out of reach and for whom the tax benefits
the negative social attitudes and behaviors caused have been quite limited at best (see Chapter 5).
by the existing ownership system. Concern about Thethird and most significant economicad-
the protection of property values is a frequent vantage of conventional homeownership isthe
explanation given for the exclusionary behavior ability to build up wealth through ownership. A
that homeowners currently manifest against people homeow ner's equit yis established initially with
of color, low- income households and so-called the downpayment and is then increased through
incompatible developments and land uses. Absence mortgage principal payments and rising property
of anxiety about protecting one's investment values. As long as the choice is between renting in
(anxiety that often is based on misperception or on its present form and homeownership in its present
agitation by realtors and others) may reduce resis- form, equity build-up isareal economicadvantage
tance to increased neighborhood diversity and ofhomeownership, although the advantage is often
socially beneficial newdevelopment. Reduction of less than commonly believed. Social tenure, by
the locked-in feeling that homeownership now contrast, offers a way of accumulating wealth that
tends to produce—again out of concern for would be competitive with homeownership in most
protecting one's investment or reluctance to incur parts of the United States and over the long term.
high turnover costs such as brokers' commissions Suppose a moderate-income, prospective first-time
and other closing costs on selling andbuying— homebuyer had the choice between
mayprovide people with agreater sense of freedom conventionalhomeownership,onthe one hand, and,
to take advantage of employment opportunities on the other, occupancy of a comparable house
inotherlocales or otherwise pursue changes they with little or no downpayment and no mortgage
might like to make in their living situations. payments, with security of tenureand control but no
In addition to security of tenure, control over opportunity to re-sell the housing on the private
one's living space and the sense of social status, market. It turns out that, in general and on average,
conventionalhomeownership also offerssignif- the money saved by choosing the social housing
icant economic advantages over renting. To be a option more than compensates for giving up the
viable alter native to homeow nership, social tenure right to resell and reap a potential speculative profit
has to confront thestrength of thisappeal. Under the in the private market (see Stone 1993:196-198).
existing housing system, homeownership provides Andifthe limited income-tax benefits that the
three economicadvantages over renting. First, for current system provides to moderate-income
an identical house bought at the same time and the homeowners werealso eliminated or equalized for
same price, a homeowner will have somewhat renters, the advantages of this alternative tenure
lower monthly outlaysthan a renterbecause there form would beevengreater.A household choosing
isnopay ment for the landlord's cash flow profit and this formof tenure may be termed a “resident-
overhead costs. Yet a resident of social housing saver,” sinceavalid comparison with the equity-
would have much lower housing costs even than a accumulation benefits of conventional
homeowner— as much as two-thirds lower (see homeownership involves the assumption that such
Chapter 4)—if the housing is financedwith capital a household would place the money that otherwise
grants rather than mortgage loans. would have gone for a dow npay ment and monthly
The second economic advantage of home- mortgage payments into savings.
ownership consists of the income tax benefits If our society were to establish a large social
generated from being able to deduct mortgage sector of housing, this alternative tenure could
interest and property tax payments from taxable beavailable not only to shelter-poorhouseholds but
income (if one itemizes deductions rather than uses would be an option for moderate-income
the standard deduction). The cost savings available households closed out of conventional home-
in social housing with no mortgage payments ownership or able to achieve such homeownership
would much more than offset these benefits only with substantial personal sacrifice and risk.
receivedbyownersof conventionally-owned and - The existing homeownership market would still be
financed housing, especially forlower-middle- available for those who can afford itandwho, for
income households who have seen homeownership whatever reason—whether it bethe hopes of
speculative gainorideological attachment—prefer well-publicizedproblemswith some public housing

to obtain housing in that way.Those eligible for (Bratt 1986). Yet despite these problems and the
and choosing to enter the social housing sector too-successful attempts to discredit the concept of
would have all the benefits of homeownership but public housing (and social enterprise generally),
would not have to possess the personal savings more complete and balanced examinations reveal
neededfor a downpayment, and what savings they that for the most
might possess could accumulate at a faster and partpublichousinghashadaremarkablerecord of
more stable rate than if invested in buying a house, success in providing physically decent, non-
paying off amortgage andworrying about property speculative, mortgage-free and cost-effective
values. In addition, their savings would beavailable housingtopoorpeople (Bratt 1986, 1989:Chap- ter
when and as needed—not only for investment, but 3; Council ofLarge Public Housing Authorities
for consumption, college education for their 1986). “Public housing serves more tenants with
children, travel and the like—without having to extremely low incomes, more tenants who are
mortgage or sell their home. nonwhite and more households headedby a single
Also, with thecreation of a large social sector, parent than any other housing program” (National
theallocation of socialhousing could bethrough a Housing LawProject 1990:15). In addition, for
“social market” that would provide resident choice, several decades starting inthe late 1960s, a
eliminate bureaucratic procedures and achieve a combination of tenant organizing, lawsuits,
degree of efficiency never realized in the existing regulatory reforms and some (though inadequate)
housing market, rather than through current funding for modernization and operating subsidies
practices ofwaiting lists, priority categories brought about physicalimprovements in some older
andlotteries (see Stone 1993:214217 for discussion developments; more competent and responsible
ofhow such asocial market might work). management of a number oflocalhousing
authorities; a measure
oftenantprotectionintermsofleases,grievance
SOCIAL RENTAL HOUSING procedures and collective bargainingrights;and
inafew cities and individual developments, tenant
Public Housing membership on housing authority boards and even
tenant management.
Public housing is by far the most extensive and Public housing remains a vital resource despite
most malignedformof social ownership inthis its checkered history and reputation (Fuerst 2000).
country. As of 2001, local housing authorities Manyhousing authorities have more people on their
owned 2million housing units (U.S. Census waiting lists than are currently living in their
BureauandHUD2002:Table 1A-7),about2per- developments. Some have closed their waiting lists
centofallhousing: 1.3millionoftheseunderthe because the wait is as long as 20 years. In some
federalprogram (U.S. Department of Housing and cities, the turnover issolow that until deregulation
Urban Development 2000)—a reduction of about policies were put into effect in the mid-1990s,
100,000 from theearly 1990s (Dolbeare 1991)—the federal preferences successively established over
remaining 700,000 under various state the decades had limited new occupancy to those
andlocalprograms. In addition, the Department of who were victims of fireor other disaster, were able
Defense owns and operates about 400,000 family to demonstrate past denial of admission due to
housing units, the “other public housing program” racial discrimination, or were homeless or paying
(Hartman andDrayer 1990; Twiss and Martin over 50 percent of their incomes forhousing (Vale
1999). 1999:14). As a result, by 1997, the median annual
Theorigins ofpublic housing are well known, as income of public housing households was under
are the ways in which the real estate industry $7,000, less than 20 percent of the national median
fromtheoutsetattackedpublichousingideolog- ically income (CLPHA 2000).
and constrained it operationally through While giving priority for public housing to the
restrictions on design, location and management as most needy households is quite appropriate
well as funding, making virtually in- evitablethe inasocietywhere low-cost housing is scarce and
housing is not a right, the deepening concentration has proceeded apace, despite evidence that in many
of the poorest households in public housing added cases public housing demolished or
fuel to attacks on the very idea of public housing, slatedfordemolition was not physically unsound
blaming public ownership and management (and/or and that, contrary to prevailing beliefs, resident
the residents themselves) for the poverty of the satisfaction was often remarkably high prior to
residents (see, for example, Husock 1997; Evans redevelopment (Keating 2000; see also Varady and
1998; Hickman 1998 and the debate between Preiser 1998 on resident satisfaction). Indeed,
Timothy Ross [1997, 1998] and Tom Angotti despite being promoted as a vehicle for
[1997]). Furthermore, in some cities, large public redeveloping “severely distressed” public housing,
housing developments aresit- uatedinareas where, a federal audit inthemid-1990s concluded that
in recent decades, urban redevelopment and HOPE VI was increasingly targeting public
gentrification have raisedland values, making the housing in locations wherethere is a market for
sites ostensibly too valuable for poor people. Thus, profitable hig her-income housing rather than solid
since the 1980s, there have been increasingly evidence of “severe distress” (National Housing
strong forces working to reduce the amount of Law Project et al., 2002:ii).
public housing, through densityreduction inexisting In the introduction to their scathing critique of
projects, wholesale demolition, sale to private theHOPE VI program, theNational Housing Law
developers and conversion to mixed-income Project and its co-authors state (2002:ii):
(including marketrate) housing—without requiring
(since 1995) one-for-one replacement of lost units, HOPE VI plays upon the public housing program's
unfairly negative reputation and an exaggerated
let alone increasing the number of low-income
sense of crisis about the state of public housing in
units. In addition, behavioralrequirements
general to justify a drastic model of large-scale
forresidents, similar to those under welfare family displacement and housing redevelopment
“reform,” and greater autonomy for local housing that increasingly appears to do more harm than
authorities under the Quality Housing and Work good.
Responsibility Act of 1998, increase the likelihood
of many residents losing their homes even if their Their report provides extensive evidence re-
units are not physically lost (see, for example, garding a whole host of problems with HOPE VI,
Ranghelli 1999; Keating 2000). including the loose definition of “severe distress”;
During the 1980s, some public housing un- reduction inthe amount of housing affordable the
derwent renovation and revitalization, which, while lowest-income households; few meaningful
reducing the number of units, did retain public opportunities for resident participation; worsened
ownership of the housing for low- income people. housing situations fordis- placedresidents
Other cases, though, involved replacement of andinadequate record-keeping and monitoring by
public housing—wholesale physical and the U.S. Department of
socialtransformationintoprivately owned mixed- HousingandUrbanDevelopment(HUD).Also, afield
income housing, with the loss of units for low- report of residents' experiences under HOPE VI,
income families far exceeding the physical conductedbythe Center for Community Change for
reduction (Vale 1999:19). The prevailing public the national organization ofpublic housing tenants
housing policy of the 1990s and into thenew (ENPHRONT 2003), poignantly documents the
millennium—known as HOPE VI—largely human costs in residents'own words. Even
embodies the principles of public housing theUrban Institute's researchhas acknowledged
replacement, with substantialdisplace- ment and that while some public housing residents have been
loss of units even where local housing authorities helped by HOPE VI, “vulnerable families face
retain ownership (Pitcoff 1999; Vale 1999; Keating significant barriers” (2002; also, Popkin 2002).
2000; National Housing Law Project et al., 2002). While prevailing current sentiment gives little
As of the late 1990s, it was projected that encouragement, public housing is an essential
HOPE VI would result inthe demolition of about ingredient in addressing the housing crisis and
100,000 units, with a net loss of as many as 60,000 realizing a Right to Housing, in part because it is
low-income units (Keating 2000:385). This process unequivocally outside the speculative market and
also because it includes an established, operational an adequate legal and regulatory framework for
infrastructure for producing, financing and collective bargaining and shared decision-making
managing housing, including the power ofeminent with the housing authority is in place, public
domain. housing tenants can achieve these benefits while
The amount of public housing should be holding management and thegovernment
increased not only through new construction but operationally and financially accountable. Moving
even more expeditiously and cost- effectively into tenant management while the housing still
through acquisition of some existing housing. isunderpublic ownership may offer residents
Several housing authorities have acquired and certain further advantages interms of day-to-day
substantially rehabilitated older buildings or operational authority, skills development and
purchased rehabilitated buildings under “turnkey” collective responsibility but also certain pitfalls,
contracts with private developers. Some authorities interms of resource uncertainty andlack of control
have purchased existing housing units not in need over the larger context—economic and physical—
of rehabilitation. For example, the Houston that shapes the lives ofthe poor. Tenants maybe left
Housing Authority bought some Federal Housing administering their own dependency, with the
Administration (FHA)-foreclosed homes during the leadership becoming the focus ofblame for
mid-1980s' downturn inthe economy of the region. problems beyond their control. But as long as there
Some Massachusetts housing authorities purchased is publicownership,there isalso some legal and
condominium units in multifamily buildings that political leverage over government resources
hadbeen converted during that state's 1980s real andresponsibility (Peterman 1987).
estate boom. More recently,the Watertown, With real tenant power, adequate public re-
Massachusetts, housing authority purchased sources for modernization, adequate affordability
several two- and three-family houses asscattered- subsidies and agradual expansion oftheeco- nomic
sitepublichousingforlargefamilies (Stone, Werby mix ofresidents as the amount of social housing
and Friedman 2000:20). increases, public housing can be revitalized
In some instances, the possibility of non- physically and socially. These changes will not be
speculative resident ownership of some public easy to achieve, as trends have been in the opposite
housing (as mutual housing or limited-equity co- direction, but the accomplishments and potential of
ops—see below) should be considered, under public housing are still worth recognizing and
certain conditions: (1) physical modernization and fighting for.
tenant capacity development have taken place; (2)
thereareenforceable guarantees ofdeep affordability
subsidies and future modernization funding in Nonprofit Rental Housing
perpetuity; (3) residents are given full opportunity
to choose whether to take title on the basisoffull Unfortunately, there are fewprecise figures on how
independent evaluation ofthetrade-offsandrisk;and many housing units are under ownership by private
(4) resident ownership is nonspeculative forever. If nonprofits, due to the ambiguity of definitions,
these conditions were required by law, then tenant overlap of categories andlack of any entity (public
ownership ofpublic housing might contribute to the or private) that has been given or assumed
goal ofresident empowerment while si- responsibility for compiling anddis- seminating
multaneously retaining it as socialhousing and suchinformation. Nonetheless, I estimate that as of
enhancing it physically and economically.5 the early 21st century, there are about 1.3 to 1.7
As an alternative to selling public housing to million rental units in nonprofit ownership. This
residents, greatly increased resident power of- consists of about 1.1 to 1.3 million subsidizedrental
fersthe potential for improving conditions in the units, plus roughly 200,000 to 400,000 other rental
housing and developing a sense of dignity, self- units in nonprofit ownership that have received no
esteem and solidarity among some of the poorest government subsidies or possiblyjust capital
and most oppressed membersof society. Ifstrong assistance from nonfederalpublicorprivate sources.6
tenant organizations arecreated, if there are This is a significant number, but it is just slightly
sufficient technical and financial resources, and if over one-half thenumber of units ownedbylo-
calpublic housing authorities, and about 1 1/2 capital grant financing by the Housing Act of 1990.
percent of all housing units intheUnitedStates. Projects built since 1974 also receive Section 8
While ideological factors kept public housing rental subsidies. In addition, an owner may not sell
from our nation until the 1930s, inthe late 19th the housing into the speculative market, at least
century, moral righteousness and enlightened self- during the 40-year termof federal financing and
interest on the partof some capitalists stimulated a regulation. And even in the rare instances of
modest move toward “philanthropic housing.” foreclosure, Section 202 projects have been
Nonprofit projects were developedinanumber of transferred to other nonprofit owners. These
cities in the earlypart of the 20th century, totaling features, together with the capital grant financing
several thousand units (Abrams 1946:170ff). By and supportive services provided by the 1990
eliminating development and rental profits, the Housing Act, make the 202 program a premier
housing was slightly less expensive initially than model of privately owned nonspeculative housing
speculative new housing. But with construction (see also Bratt 1989:184-185). As of the late 1990s,
costs to be paid off from rents, theunits werestill there were about 200,000 units of Section 202
moreexpensive than the tenements housing (HUD2000).
occupiedbypoor and working-class people, so the Unfortunately, there does not exist a well-
residents were mostly of middle-income. Had these established model of nonelderly housing that
developments remained out of the speculative embodies all of the attractive features of 202
market, by today,they might be debt-free social housing. During the 1960s and early 1970s,
housing and hence muchless expensive than spec- socially motivated nonprofit developers did
ulatively owned apartments of the same vintage or produce nearly 200,000 housing units under the
newer. However, most were eventually FHA Section 221(d)(3) and 236
sold.AsCharlesAbramsaptlyputit(1946:175), interest-reduction programs that hadbeen created
“Philanthropy could no more solve the problem of primarily for profit-making developers. (Nonprofit
housing than itcould solve the problem of poverty.” production comprised over a one- fourth of the
In themodernera, private nonprofit housing has total under these programs— [Clay 1987:9].)
evolved and expanded through several phases, in However, many ended up defaulting on their
which the lessons of this historical experiment mortgages (as did many profit-motivated owners
have been learned gradually and un- but at a somewhat
evenlybutsufficientlytoholdthepromiseofan lowerrate).Thehousingwastakenoverorresold by
increasingly important role in the growth of the HUD, in some cases to speculative owners, so this
social sector ofhousing. experience does not offer the encouragement
The most clearly identifiable and longest- lived ofprovidedbythe Section 202 program. Also, apart
component of modern nonprofit ownership consists from weaknesses inthe federal programs
of federally financed and subsidized Section 202 themselves, nonprofit owners had to contend with
housing for the elderly and handicapped, a program inadequate resources, lack of experience, an
created in 1959 as thefirst of a series of subsidized unsympatheticHUD and the challenges of trying to
housing production programs forprivate serve and empower some of the neediest
development populations and communities (Bratt, 1989:185-
andownership.Unlikeallsubsequentprograms, 191). Nonetheless, approximately three-fourthsof
though, 202 has from the outset been restricted to these units remain in some formof nonprofit
development and ownership by nonprofit (and ownership.7
public) entities. The result has been the emergence Beginning inthe late 1960s, another type of
over the past four decades of a set of organizations nonprofit housing model was emerging, one that
specializing in such housing, although some has proven much more successful at producing and
regional and communitybased nonprofits have operating housing under thegov-
included 202s among their broaderhousing ernmentsubsidyprograms.However,inorderto be
repertoire. successful, these housing providers have had to
Section 202 housing was financed through buy into many of the rules of profit-making
below-market direct federal loans until changed to development and stretched the meaning of
nonprofit ownership. Communitydevelopment achieve true social ownership.

corporations, regional housing development
corporations and “intermediaries” providing Mutual Housing Associations
technical assistance have been set up, with staffs
that attempt to combine training and experience There is one other, more fully social model of
inbusinessandfinancewithsocialconcern. While nonprofit ownership—the mutual housing as-
these entities are themselves nonprofit sociation (MHA)—that began in Europe over a
corporations, and their housing commitment almost century ago but has only emerged in the
always istopermanent nonspeculative ownership, UnitedStates over the past two decades (Goetze
inorder to benefit from the financial incentives 1987; Bratt 1990). One version, the federated
provided through the Internal Revenue Code MHA, consists of a group ofresident-controlled
(notably the Low Income Housing Tax Credit), limited-equity co-ops (see below) or nonprofit
they have to enter into partnerships with profit- developments (Krinsky and Hovde 1996:10).
motivated investors. (See Chapter 16.) Theother version, referred to as an integrated
When a nonprofit organization needs to market MHA, has been promoted since the late 1970s by
its housing plans to potential investors and also the Neighborhood Reinvestment Corporation
meet the underwriting criteria of mortgage lenders (NRC) and differs from other models of social
to obtain financing, the needsof prospective ownership inseveral significant respects.
residents may at times have to be compromised. First, theNRC mutual housing approach
Once the housing is occupied, inorder to maintain hasdeliberatelyeschewedoutsideprofit-seeking
investor confidence inthe development and investors inorder to avoid roleconflict andpos- sible
theorganization, the housing may need to be pressure to sell the housing when the tax shelters
managed quite conservatively interms of tenants' run out. Second,NRC MHAs try to finance nearly
rights and rent levels. Even though these tensions all acquisition and development costs through
may be mitigated with deep, income-determined upfront capital grants, although often theyhave had
subsidies, a nonprofit owner can face disturbing to use some debt due to limited availability of grant
role conflicts between its obligations to the resources. Third, residents areexpected to
residents and the investors. Furthermore, because makeamodest initial capital contribution (often
the tax benefits areof finite duration (typically 15 waived for low-income people),whichis
to 20 years, depend- recoverable withinterest upon moving out but
inguponthetypeoftaxbenefit),downtheroad the cannot otherwise grow andis not a marketable
investors will want to bail out when they no property interest; the goalis for residents to put up
longerhave any financial incentives. Unless the 5 percent of the total cost, with capital grants
deal has been structured so that they can fully covering the rest. Fourth, a portion of each
recover their initial investments as well as their resident's monthly charges is supposed to go into a
profits from the tax shelters, the investors will fund that will provide partof thecapital grants for
expect to be bought out at this point— additional units, although generally only middle- to
necessitating saleof the housing to owners who high-income residents payhigh enough monthly
mightturn it into market-rate housing, unless charges to contribute to the capital fund. Fifth, the
financing is available for the nonprofit or the membership of each NRC mutual housing associa-
residents themselves to buy out the investors. tion consists of residents, prospective residents
In sum, thecurrent prevailing model of nonprofit andlocalpublicandcommunityofficials. A majority
development and ownership might more properly of the governing board consists ofresidents and
beunderstood to be “quasi-nonprofit” or even prospective residents, so the housing is largely
“compromised nonprofit” ownership. Only if social owned and controlled collectively by residents.
financing replaces dependence on profit-motivated Sixth, organizational development is emphasized
investors can the growing numberof these as much as the physical development of the
community-based andregional nonprofit housing housing, with residents required to participate and
providers have a viable alternative to partnerships expected to take care of minor maintenance of their
withprofit-motivatedin- vestorsand thus be able to units, even though professional management
isanintegralpartof the model. Finally, residents greater subtlety and more immediate relevance,
have lifetime security of tenure, as long as they though, concepts ofresi- dentialpropertyhave been
meet their financial and other membership undergoing considerableevolution so that the
obligations anddo not violate the rights of others. diverse forms of ownership, as well as their
They may designate a family orhousehold member combinations and modifications in practice, have
as the successor produced virtually a continuum on the dimensions
totheirunitbutmaynotsublet;thisensuresthat every of security of tenure, resident control and economic
resident is an association member who is expected benefits.
to participate in the organization. For example, even in private rental housing the
Because of the experimental nature of this history of tenant organizing, legislation and
mutual housing model and because it has attempted litigation reveals that there are significant objective
to operate outside prevailing government programs differences among tenancy-at-will, lease tenancy,
and financing mechanisms, it has grown slowly tenancywithformalresident organization and
and remains limited in scale despite early interest collective bargaining, and tenancywith statutory
and enthusiasm. As of late 2002, there wereonly and regulatory controls on conditions, evictions
eleven NRC mutual housing associations that andrents.
together owned about 8,300 occupied units Within existing subsidized rental housing, the
(NeighborWorks Network 2005). Nonetheless, an history ofpublic housing certainly demonstrates
encouraging analysis found that mutual housing how low-income residents can be
associations would bemore cost-effective to the disenfranchised,abused anddegraded almost as
federal government much by public as by private landlords. Yet in
thannearlyanyotherapproachinassistingvery- low- public housing, as discussed earlier, organizing and
income households on a long-term basis (Bratt advocacy led to legislative and administrative
1990). Thus, despite its extremely small scale so redefinition of thescopeofresidents'power andrights
far, there are compelling economic as well as and the meaning ofpublicownership, even if some
social advantages to the mutual housing of these rights have been undermined since the late
model.Itisanemerging approach that comes quite 1980s. Public owners have enforceable (though not
close to realizing many of the goalssetout here for always enforced, to be sure) legal, constitutional
true social housing. and financial obligations to residents greater than
can be imposed on private owners. Thus, resident
Resident Security, Power and Control in Socially ownership is not necessarily the only or best route
Owned Rental Housing to greater power, security and control.
For tenants in private nonprofit housing and
People who reside in housing ownedbypublic mutual housing associations, the legal leverage
agencies, nonprofit organizations and integrated andclaimsonpublicresourcesare,ofcourse,less than
mutual housing associations are legally tenants. for public housing residents. However, the
Some people regard this as a fundamental organizational circumstances are usually quite
weakness of these forms of ownership, as residents different as well. Certainly, some of the socially
ostensibly have no opportunity to realizeany of the oriented nonprofits that developed subsidized
psychological, social and economic benefits of housing inthe 1960s and 1970s lacked the financial
homeownership. It is important, though, to capacity and organizational ability to sustain their
challenge the notion of asharp binary social commitment to their tenants. When HUD
polarity,agreat divide, between rental and foreclosed on the federally insured mortgages, the
ownership. housing came into the public domain, where the
Even inthe private housing market, neither outcome for the residents has depended upon their
tenancy nor homeownership is a unitary concept. political strength and skill. In the best of
And previously suggested, an alternative formof circumstances, such as Boston's Methunion Manor,
tenureunder social ownership, in combination with with sophisticated organizing and technical
no debt costs, can yield resident benefits that are assistance the residents were able to force HUD to
competitive with conventional homeownership. Of absorb the outstanding mortgage debt and agree to
provide financing forrehabilitation and guarantee as well.

rental subsidies for at least 20 years. After winning
this agreement, they took titleasalimited-equity co-
op,at which point they were no longer tenants NONSPECULATIVE HOMEOWNERSHIP
(Stone 1986).
In contrast with many of the early nonprofits, Limited-Equity Cooperatives
some communitydevelopmentcorporations and all
mutualhousing associations have explicitly As of 2003, there wereapproximately 1.2 million
involved residents in decision-making and, in some housing units under cooperative ownership in the
cases, management and operation of the housing as United States. About 425,000 of these are limited-
an integral part of the philosophy of the equity or zero-equity co-ops, of which over one-
organizations. In such situations, there is not only half are inNew York. The remaining 765,000 are
objective resident power and security of tenure but market-rate cooperatives (National
also a considerable sense of “ownership” inthe AssociationofHousingCooperatives2003).The latter
psychological sense even if in formallegal terms group includes 550,000 conversions from
the residents are tenants. rentalhousing, mostlyinNewYorkCity,similar to
In addition, while residents do not build up any condoconversions inotherparts ofthe country. The
wealth through their housing, resident-savers can other 215,000 market-rate co-ops are mostly
on average do as well financially as conventional middle-income developments that originally had
owners, as explained above, depending upon the resale restrictions but in most cases nowpermit
financing and cost structureof the housing. memberstosell their shares at the market price.
Furthermore, residents ofparticipatory nonprofit During the 19th century, programs for coop-
rental housing can in principle have as much erative ownership ofworkplaces andresidences
autonomy to fix up and change their units as do were integral parts of the utopian andrevo-
residents of physically equivalent limitedequity co- lutionary critiques of capitalism in the United
ops or condominiums. Finally, what must be States as well as in Europe. In this country, as early
weighed against some formal differences in legal as 1869, Melusina FayPeirce advocated
status between participatory social rental and cooperative residential neighborhoods as part of
nonspeculative homeownership are differences in avision she shared with many feminists and some
financial risk. In the contemporary situation of socialists whosaw a seamless connection between
ownership by a community development the public and private and the productive and
corporation, mutual housing association or regional reproductive realms inarad- ically transformed
nonprofit housing corporation, theownership entity industrial society (Hayden 1984:29, 72-74).
transcends not only the individual unit but also the However, the earliest U.S. co- ops(inNew York
particularbuilding or development and usually is between 1876 and 1885) did not embody this
connected to an infrastructure of intermediaries radical vision but were instead a form
that have provided financial and technical ofhomeownership for high-income urbanites,
assistance. This means that the residents, most of presaging modern luxury co-ops and condos
whom are low-income people, do not have to carry (Siegler and Levy 1987:14).
fully by themselves the cost burdens of Itwas not until the 20th century that thefirst
unanticipated housing problems or changes in their nonspeculative, socially oriented co-op housing
own eco- nomiccircumstances or of their was developed. Most of these were inNew
fellowresidents, in contrast with individual private YorkCityandunder union auspices. In the early
ownership. partofthe century,severalworkers'housing co-
Along most dimensions, being a tenant in operatives were developed (Abrams 1946:181;
socially owned rental housing is not necessarily Siegler and Levy 1987:14), but most did not last.
inferior to being a nonspeculative homeowner—or In the late 1920s, New York State passed a limited-
speculative owner.Itmayhave real advantages and dividend housing law that, among other things,
attractions not only for those oflow or moderate facilitated co-ops for moderate- to middle-income
income but for many of those with higher income people (Siegler andLevy 1987:14). One ofthe first
was the Workers Cooperative Colony in the Bronx people who have a legal and financial stake inthe
developed by the Amalgamated Clothing Workers. housing.
With the first units completed in 1928, itgrew Interestingly, the growth of interest inthe
eventually to 1,400 units and still remains a co-op limited-equity co-op model over the past two
(Wright 1981:198-199; Hayden 1984:91; Siegler decades does not simply hark back to the early co-
andLevy1987:14; Krinsky and Hovde 1996:18). ops. It also rests upon a substantial but little known
However, despite state tax exemptions, theco- ops historicalfoundation ofseveralhun- dred thousand
developed by labor groups inNew York were co-op units developed in the three decades prior to
affordable only to higher-paid workers. 1980. Thegreat majority ofthese were
Furthermore, subletting and turnover tended to unsubsidized, middle-income cooperatives, with
undermine the socially oriented philosophical federal or state government mortgage insurance or
foundations (Abrams 1946:181-182). During the financing. In addition, an entire
1930s, depression conditions led to increased infrastructureevolved to undertake development
nationalinterestinco-ops,butpostwareraideo- logical andprovidetechnical assistance, ser-
and economic conditions shunted co-ops to vicesandtrainingforco-ophousing(Sieglerand Levy
themarginofhousing policy (Leavitt 1995). 1987:16-19; NationalAssociation ofHous-
Whilethese early housing cooperatives were ingCooperatives 1990).Indeed, afterWorldWar II,
structured to assure continued affordability to some progressive housers advocated a large- scale
membersof theaffinity group, there is nothing co-op program as part of urban redevelopment, to
intrinsically nonspeculative about cooperative complement public housing forhouse-
ownership. In any co-op,the housing isowned by holdswhocouldnotqualifyforthelatterandas
acorporation madeup of“cooperators,”with each amodelfor eventual conversion ofpublic housing to
share in the corporation corresponding to either a resident control (Abrams 1946:179-187). However,
particular dwelling unitor a proportion ofthe square as indicated above, from the mid- 1950s until the
footage ofthe entire building. Unless explicitly mid-1960s, interest in co-ops by middle-income
defined otherwise, a share is a marketable households wanedinthe face of“anti-
commodity that maybesold for whatever the owner collectivist”ideology and thesuburban triumph.
can get. Furthermore, although ownership ofco-op In the late 1960s andthe 1970s, severalfactors
shares is not legally equivalent to ownership ofthe led to renewed interest in nonspeculative housing
dwelling unit, for income-tax purposes the Internal cooperatives, withinarather different political and
Revenue Service (IRS)allows each shareowner to economic context. The emphasis on community
deduct the pro-rata share ofmortgage interest and control and resident empowerment inthe federal
property taxes attributable to that unit. In addition, antipoverty program (andin response to theurban
unless the co-op agreement requires theowner of riots) contributed to theel- igibility of co-ops for
shares to bearesident oftheunit, an owner may federal housing subsidies. About60,000co-
sublet theunitand charge whatever the market will opunitswerecreatedunderthe HUDSection 221 and
bear. 236 programs between the mid-1960s and mid-
Within this framework, the distinctly limited- 1970s (National Association of Housing
equityformofco-op emergedasahous- ing strategy Cooperatives 1990). Also, the emergence of the
for helping to maintain long-term affordability modern women's movement rekindled interest in
andresident controlforpeopleof moderate ifnot co-ops—integrally connected with supportive
lowincome. In a limited-equity co-op, the share services, as inthe 19th century feminist notions—as
price is set by formula, not by the market, inorder a residential model especiallywell suitedto the
to restrict or eliminate any speculative gain. The needs ofsingle women (young and elderly) and
co-op corporation retains a first-option right to women as single parents (Hayden 1984; Novac and
purchase a departing member's share at the formula Wekerle 1995).
price. In addition, occupancy and shareownership In addition, wholesale disinvestment and
are generally coterminous—apart perhaps from ap- abandonment of vast amounts of housing in major
proved temporary subletting—in order to prevent cities across the country led to some spontaneous,
“landlordism” and to ensure that residents are grassroots building takeovers of unoccupied
buildings and resident operation of occupied sisted,financinghasgenerallycomefromquasi- public

buildings. Especially inNew York City, where mortgage lenders (such as state housing finance
effective titleof many thousands of buildings agencies and the National Cooperative Bank) that
passed to the city, the movement demanded not offer terms slightly below market. Each co-ophas
only rehabilitation but also title to the buildings as tended to beunique, not onlyin thecircumstances
limited-equity co-ops (Kolodny 1973, 1986; that led to its creation but also inthe resident mix,
Schuman 1986; Lawson and Johnson 1986; Leavitt the financing sources and terms, and the limited-
and Saegert 1990). However, since the late 1970s, equity formula (Heskin
the limited-equity co-op movement has been andLeavitt1995).Whilethisuniquenessreflects an
impelled rather less by the housing needsof thevery encouraging creativity andresourcefulness, it also
poor than by declining opportunities for makes more difficult policies that could facilitate
conventional (or even condominium) more rapid expansion of the model.
homeownership among moderate- to middle- Limited-equity and zero-equity co-op housing
income people. Over this period,about 150,000 constitutes one of the three main pillarsof
additionallimited-equity co-op units have been socialhousingintheUnitedStates,theothertwo being
developed, with more than one-half of these being public housing and nonprofit housing. The
inNew York City (National Association of Housing cooperative model can make a significant
Cooperatives 2003). contribution to a Right to Housing—and real-
Ironically, the ideal of resident control in a izethevision of cooperation not only in legality but
limited-equity co-opincludes the risk that the in living—but only when it achieves strict equity
residents may at some point reorganize as a market limitation, permanence in nonspeculative
co-op. Because cooperatives are legally ownership and transcendence of debt and tax-
autonomous corporations, this possibility is real syndication financing.
andhas been occurring (Levy 1997). Only if the co-
op incorporation documents preclude such Ownership with Community Land Trusts
dissolution, orifthere is an entity that has some
legal leverage and a broaderpublic interest, can this Whiletheorigins of most of theother modelsof
riskbe avoided. Wherethere is public involvement nonspeculative ownership are primarily urban, the
—through, say, mortgage insurance, publicly communityland trust (CLT) has ruralroots. These
donated land orpublicgrants, loans or subsidies— traditions include Native American concepts as
then contractual requirements or deed restrictions well as several 1 9th century movements, most
can protect the limited-equity requirement indefi- notably utopian socialist experiments in common
nitely. The strongest legal protection ofperma- ownership of land and other productive resources;
nency,though, isthrough ownership of the land by Henry George's notions ofland as the principal
agovernment agency orbroadly based community locus of unearned wealth and social exploitation;
land trust (described in the next section). Under and aristocratic support for nongovernmental
such an arrangement, the co-op corporation owns nature preserves and parks (e.g., the Audubon
the structures but leases the land, with Society, the Massachusetts Trustees of
thegroundlease stipulating retention of the co-op's Reservations).
limited-equity character. Yet, despite its roots, the land trust movement
Nonspeculative co-op units have been created that began inthe 1960s and has been growing at an
through both new construction andbuild- ing accelerating rate since the late 1970s does not seek
conversions. Most have involved multifamily to restore a vanished past or optoutof modern
structures, but some, such as the Route 2 Coopin society. It operates within, while seeking to
Los Angeles (Heskin 1991), include one- transform, contemporary real estate law. It is
familyhouses. While income mixes vary, including concerned with the active productive uses of land,
some low-income and some higher-income people, including but not limited to residential use, in
the middle range prevails. Although some public opposition to speculative holding anduse
programs andpublic funds inthe formofland, loans ofland.Itis, inthis sense, concernedwithissues
and grants have often as- ofresponsible and active land use andplanning,
rather than preservation per se andresistance to ondebtfinancingandby residents' incomes.

development. Anditseeks to use land tenure as the The ways in which the community land trust
organizing locus for the expansion andre- alization approach distinguishes itself are, first, the dual
ofdemocratic decision-making (Insti- ownership structure, which explicitly accepts
tuteforCommunityEconomics1982:Chapter1; individual property rights while
Davis 1984; White and Matthei 1987; Krinsky and establishingandprotectingsocialorcommunity
Hovde 1996). rights. On the one side, the private ownership of
one's dwelling, opportunity to accumulate some
Themodel vests titletothe land itself ina wealth through homeownership and unrestricted
nonprofit community organization—the land trust right to pass the home to one's heirs enhance the
—to be held in nonspeculative ownership in appeal of the model by building on deeply rooted
perpetuity. Individuals are granted the right to use ideological traditions. On the other side, broad-
the landfor their own benefit and with considerable based land trusteeship is intended to provide a legal
individual autonomy. The formal legal link and social framework for maintaining
between the trust that owns the land and the nonspeculative ownership forever. The goal is to
peopleor organizations who use it isthe ground strengthen established— though weaker—
lease, which grants lifetime or 99-year tenure traditions of community, in waysthat skirt popular
(inheritable and renewable), subject to certain skepticism about government. The second
conditions. Thus, as it relates to housing, the distinctive feature isthe broader
formof ownership of the buildings maybe communitydevelopment and land reform agenda,
anywhere on the ownership spectrum depending which, it isargued, can facilitate economic
upon theterms of the ground lease under which the development and community empowerment
housing owners are allowed to use the andhence begin to address the income side ofthe
land.Inprinciple, the house owner could be a affordabilityissue and aspects of the quality of life
landlord renting the dwelling forwhatever the beyondjust housing itself (Institute for Community
marketrentmightbeorahomeownerfreetosell the Economics 1982:Chap- ter 2; Davis 1984:219-222;
house atthemarketprice (exclusive ofland). In White and Matthei 1987:47-64; Krinsky and
practice, the land trust movement has been Hovde 1996).
committed primarily to “permanently affordable However,justaseachoftheothersocialhous- ing
homeownership” (Davis and Demetrowitz 2003), models faces certain fairly distinctive con-
using the ground lease terms to enhance straints,sodoestheCLTapproach.First,because a
affordability, security of tenure, resident ownership CLT allows a leaseholder to ownthe build-
and nonspeculative transfer ofhouses in perpetuity. ingsonthe land, imposing a limited-equity and first-
The actual form and conditions of ownership of the option resale restriction on building own-
dwellings depend on the local context and ersmaylead to legal challenges as “restraints on
individual circumstances. alienation” (Davis 1984:223), although apparently
Community land trusts acquire landbydo- this concern has been overcome (Institute for
nation if possible, but often by purchase. There- Community Economics 2001).
fore,theirimmediateimpactonthecostofhous- ing Second, because the supply ofland that can
dependsupon their ability to obtain land at less than beacquired throughdonation orbelow-market
market prices, gain access to below- market purchase will always be small,and the ability of
financing forland acquisition that may include CLTsto purchase substantial amounts ofprivate
development as well and subsidize residents land at market prices will always be limited,only a
through resources theCLT receives as a charitable broader and more radical land reform agenda will
organization. Over the long term, housing costs are enabletheCLT movement to alter signifi- cantlythe
reducedprimarily by preventing resale of the land effects ofland speculation on housing costs.
andcontrolling the price at which the residential Finally, while the CLT model departs signif-
structures maybe resold. As with other forms of icantly from Henry George's 19th century pro-
nonspeculative ownership, deep affordability posals, theemphasisonland as the decisive element
remains constrained by continueddependence of wealth and power reflects some of the
“Georgist” neglect of financial, industrial and creation of permanently afford-

commercial wealth and associated power in the ablehomeownershiphousing,willundoubtedly
modern world.Those people who do not own great makethemodelincreasingly popular.
wealth but have considerable economic Resale-Restricted Individual Ownership
securityasmembersofthe “upper middleclass” have
not achieved their relative power and status Since the 1980s, the principal response to declining
because they own land, but through their opportunities for conventional homeownership has
occupational position. Their class, race, gen- not, in fact, been promotion of social ownership
derandassociatededucationalopportunityhave given programs but those public (and some private)
them access to employment income that in turn has programs to assist first-time homebuyers with
enabled them to accumulate equityin their mortgage financing at interest rates somewhat
residences (including the underlying land), not vice below market, “soft” second mortgages (i.e.,
versa. Therearecompelling reasons for trying to deferred repayment), reduced or waived closing
remove land from speculative ownership, but real costs and proposals for tax-exemptor tax-deferred
redistribution of power will require much broader saving fordownpayments. In addition, many
redistribution of wealth, withland as only one and localities have provided publicly owned land at
not necessarily the most decisive element. little or no cost and offered below-market
Given thegrandness of thevision, the recent construction financing and even some partial
emergence of the model and the lack ofpublic capital grants to stimulate construction of below-
programs andresources specifically forland ac- market housing forhomeownership. Because the
quisition, it is not surprising that the land trust participating homebuyer is able to obtain a house
movement is still modest in scale. Between the late with below-market financing, possibly at a below-
1960s and the mid-1980s, the number of market price, most programs impose some resale
community land trusts grew slowly, with some restrictions in order to lessen the potential for
losses along the way; in 1985, there were fewer owners to reap windfalls when they sell in the
than 20. Since 1985, though, the growth has speculative market.
beensubstantial,reachingalmost50in 1991 and 133 In most instances, however, the provisions are
in operation or development by 2001 (Institute for so weak that the housing may not be characterized
Community Economics 2002). This upsurge has as nonspeculative even for the initial owner, and
emerged directly out of the hous- generally the housing is fully inthe speculative
ingaffordabilitycrisis,aslandtrustsincreasingly have market with the second and subsequent owners.
been createdincities and towns, with“forever” The weakest restrictions permit the owner to sell
housing as their primary focus. Although CLTs freely in the speculative market but then repay the
have been establishedinall parts of the United subsidies out of the sales proceeds. 8 While this
States, about one-half are in New England, supposedly enables the fundstobe recycled to
whichhas experienced some of the most severe otherbuyers, repayment typically is interest-free
affordability problems and where grassroots (andinflation-free), and often the amount that must
organizing—both rural and urban—has long been a be repaid declines with time, so eventually no
way of life. recapture occurs. Another approach places limits
In the entire country, there were only about on the price for which the house maybesold,
6,000 housing units on CLT-owned land as of usually allowing an annual increment above the
theend of 2001 (Institute for Community Eco- original purchase price equal to the overall rate of
nomics 2002). Nonspeculative housing under inflation or some fixed rate, such as 5 percent. The
theCLTmodelisthus comparable in scale to mutual public agency then has a first option to purchase at
housing associations and ordersof magnitude less this price or mayrequiresaleatthis price to another
than public, nonprofit rental and limited-equity co- qualifiedbuyer.Whilethismightappear to prevent
ophousing. Nonetheless, again analogous to speculative windfalls, it does not, because of the
mutualhousing associations, the land trust financial leverage involved in low downpayment
emphasis on organizational development, residential purchases, even assuming modest
participation andpersonal growth, along with the market appreciation.9
Although rarely done in practice, there is no notnecessaryto sharethespace with the community
reason why the formula for resale-restricted “co-owner” nor be constrained by a landlord.
individual ownership could not be a limitedequity Third, potential income tax benefits from the
formula comparable to those used in limited-equity deductibility of mortgage interest and property
co-ops. Under such circumstances, it would be taxes. Fourth,norentpay- ments on the community's
possibletoachieve nonspeculative individual share of the property. Fifth, the opportunity to
ownership. There are, however, some legal build wealth on the homebuyer's share of the
andpracticalproblems with the enforcement of most property. What does the homebuyer not get? The
resale restrictions, whether mild or strong. right to sell the community's share and thereby
Recapture provisions pose the least difficulty appropriate forprivate gainthe wealth that rightly
because they are easily secured through property belongs to thecommunity.Nonspeculative
liens, which pose no legal or enforcement homeownership, with permanent limited-equity
difficulties, since theownerwould not be able to sell resale restrictions, is thus not only not
without discharging the lien. Price, equity and first- discriminatory but ismorethan fair to those who
option limitations are more problematical because participate in it.12
they generally involve deed covenants, which in
most states are legally limited in duration and
enforceability.10 The best approach is thus to allow INCREASING THE AMOUNT OF SOCIALLY
the buyer to own the house but not the land—to OWNED HOUSING
have the land ownedbya land trust or public
agency.11 How could the amount of social housing in our
Some might wonderwhya low-income family nation be expanded? Thereareavariety of routes,
should be forced to accept a resale restriction, and including:
especially a permanent limited-equity restriction,
inorder to achieve homeownership. Why shouldn't • production of new housing, by nonprofit or
suchhouseholds be permitted to accumulate publicdevelopers, orbyfor-profitdevelopers for
whateverwealth the real estate market provides, transfer upon completion to social ownership
just as higher-income households have been able to (see Chapters 16 and 17);
achieve? Are not resale restrictions a • preservation of existing subsidized rental
formofdiscrimination, against low- income housing,withtransferfromfor-profitowners to
homebuyers in general andhomebuyers of colorin social owners (see Chapter 7);
particular,asthe latterhave for so long been denied • conversion of private rental housing, where
homeownership through discriminatory sales and owners are irresponsible or are otherwise
lending practices? willingtosell,throughtheuseofreceivership,
Certainly,anyhousehold who wishes to have eminent domain and tenant buy-out rights
unrestricted homeownership should be able to do andassistance (see Stone 1993:228-231, 248-
so through conventional purchase and financing 249);
terms, without discrimination—but also without • foreclosure protection and equity conversion as
public or community financial as- an option for low-income and elderly
sistance.If,however,ahouseholdreceivesdown- homeowners in return for their agreeing to
payment grants, below-market loans andpossi- bly current or future transfer to social ownership
deferredpayment loans, that household is in effect (see Stone 1993:226-228, 238239; Stone 2002);
entering into shared ownership with the community • permanent limited-equity resale restrictions
—the community thus legitimately having certain with subsidized first-time homebuyer programs
rights to the property.What does the homebuyer get (see Stone 2002).
from such an arrangement? First, access to Historically, most of the social housing in the
homeownership, with the associated status and United States has been provided through publicly
security of tenure that presumably would not subsidized new construction and substantial
otherwise beaffordable. Second, exclusive use and rehabilitation, even though this isthe most capital-
control of the living space— forinstance, it is intensive, costly, time-consuming and complex of
the available routes. Recently, however, Fewer than 3 million of this total consist of federally
considerable attention has been focused on subsidized public and nonprofit housing units. The
strategies to preserve subsidizedhousing that was balance are nonspeculative units that either receive
subsidies from state and local governments or no gov-
built by private developers inthe 1960s and 1970s ernment subsidies.
and convert ittotrue social 2. This chapter is in part adapted and updated from
ownership(seeChapter7). However,todate, rel- portions of Stone (1993:Chapter 7, Chapter 9).
atively little effort has gone into the other routes, 3. For a thoughtful philosophical analysis of the
which are surely the most cost-effective waysof natureofproperty,critique of conventional notions of
achieving substantialincreases instock ofsocial private property and proposal for an egalitarian alter-
native, see Christman (1994).
housing.
4. For social housing owned by public agencies or
nonprofit organizations, grants could cover 100 percent
of the acquisition or development costs. For limited-
equity resident-owned housing, residents mightmake a
CONCLUSION small downpayment, with the rest of the cost covered by
upfront grants. See the discussion below of the mutual
The notion that housing can besituated outside housing association model, which uses this financing
thespeculativemarkethasalongandestablished albeit approach.
constrained and little-recognized history 5. Approximately 20,000 units of public housing in
intheUnitedStates. Various forms ofnonspecu- the United States have actually been converted into zero
equity or limited equity cooperatives (National
lative ownership exist in practice, andreal estate
Association of Housing Cooperatives 2003).
law continues to evolve to encompass new ideas 6. First, as indicated in the text, there were about
and new economic and political realities. Each 200,000 occupied 202 units in 1998 (U.S. Department of
form ofownership has its trade-offs, its partisans Housing and Urban Development 2000).
anditscritics. They differ in the degree to which Second, under the Section 221(d)(3) BMIR, Section
they are truly andpermanently nonspeculative 236 and Rent Supplement programs, 192,000 units
wereoriginally under nonprofit ownership (Clay 1987:9).
andshouldbeevaluatedalongthesedimensions.
However, due to financial difficulties in both for-profit
Nonetheless,thevariousformsofsociallyowned and nonprofit developments, HUD took over about one-
rental and nonspeculative homeownership have fourth of all the units. While there are differing figures
anumber of common components that distinguish on how many remain in direct nonprofit ownership, how
them from both conventional rental and speculative many arestill held by HUD and how many have been
homeownership and point toward true resident- resold to nonprofits (Clay 1987:9; U.S. General
controlled social ownership. The notion that Accounting Office 1986:23; Acht- enberg 1989:228-
229), I estimate conservatively that at least 150,000 units
housing should not and need not be a speculative
originally produced under the programs are still owned
commodity clearly is growing in legitimacy. As a by nonprofits.
practical matter, achievement of a RighttoHousing Third, about 180,000 units owned by nonprofits were
will requirethat socialhous- ingnotonlybecome developed under various early unsubsidized FHA
moreacceptable inconcept but will be greatly mortgage-insurance programs but subsequently re-
expanded in quantityandbe- come the attractive ceivedSection 8 subsidies, or, inavery few cases, other
subsidies (U.S. General Accounting Office 1986:23). No
alternative to conventional homeownership.
hard data are available on how many are still part of
thesubsidized nonprofit inventory, but I am assuming at
least 150,000.
Fourth, while there is virtually no official information
NOTES
on nonprofit ownership of units produced under the HUD
Section 8 and HOME production programs, the best
1. The sources and methods used to arrive at the estimates come from studies of communitybased
components of this estimate are included in the sections developers. A 1998 census of such developers revealed
below onvarioustypesof sociallyownedhousing. that they have produced about 550,000 below-market
units (National Congress for Community Economic
Development 2000). Given the history of these
organizations, most of these units have been rental
housing. However, as Rachel Bratt points out in Chapter
16, to some extent they have been producing units for far greater rate). If sold after six years, the net ap-
homeownership. Without hard data, there isnoway of preciation would be $33,000. Since 20 percent of this
knowing how many of the 550,000 CDC units are inthe would have to be repaid, the household would be left
latter category, but it is probably less than 100,000. So, I with a net gain of $26,400 as well as recovering their
am conservatively including 450,000 CDC units inthe initial $3,000—a compound rate of return of over 40
total of nonprofit rentals. percent.
Fifth,the latter group of organizations does not in- 9. For example, suppose a moderate-income
clude city-wide and regional nonprofits that do not fit the household isabletobuy a house for $100,000 with an out-
“community-based” definition. Such regional nonprofits of-pocket downpayment of $2,000 and a resale restriction
have produced or preserved over 300,000 below market on price increases of 5 percent a year. Suppose they sell
rental units (Housing Partnership Network 2002). It is after six years: The price is $134,000. Because this is a
likely that some of the at-risk subsidized housing such nonmarket sale, there will benobro- kerage fee, but there
entities have preserved from going to market-rate rents will be other closing costs of no more than $1,000.
includes some of the older nonprofit housing in the third Sotheyhave recovered their original $2,000 investment
category above. Sotobe conservative, I have assumed plus a gain of $33,000 (and a modest additional amount
their net addition to the total below market “social” rental for accumulated mortgage principal payments over the
housing stock to be 250,000 units. six years). This is a compound rate of return of 60
Combining the estimates for the five groups yields an percent per year on their original cash investment!
aggregate estimate of 1,200,000 subsidized units in 10. However, Massachusetts has a statute (Mass.
nonprofit ownership. Allowing for amarginof error of General Laws Chapter 184, Section 31), which defines an
100,000 units yields the text estimate of 1.1 to 1.3 “affordable housing restriction” as “a right, either in
million units. perpetuity orfor a specified number ofyears,...(a) limiting
Not includedinthis total arenonprofit rental units the use of all orpartof the land to occupancy by persons,
without subsidies developed under the various early or families oflow or moderate income in either rental
federal mortgage-insurance programs. No estimates are housing or other housing or (b) restricting the resale
available for the number of units in this category. Also priceofallorpartofthepropertyinorder to ensure its
not explicitly included in the estimate are Farmers Home affordability by future low and moderate income
Administration Section 515 subsidized rental units. There purchasers or (c) in any way limiting orre- stricting the
are about 300,000 units under this program (NationalLow use of enjoyment of all or any portion of the land for the
Income Housing Preservation Commission 1988:17). It is purpose of encouraging or assuring creation or retention
not known how many are under nonprofit ownership, but of rental and other housing for occupancy by low income
it is possiblethat some ifnotmostof these are persons and families.” I do not know whether any other
includedinthecategoriesabove. Note, finally, that the text states have also explicitly created such a legal
estimate does not include nonprofit housing produced or framework.
acquired without federal involvement, either under state 11. The first systematic evaluation of resale-
or local programs or with no government assistance at restricted homeownership using the land trust model has
all. Again, no estimates are available for this category. It yielded encouraging results (Davis and Demetrowitz
is thus likely that the actual total figure for nonprofit 2003). The study of 97 resales of homes and
rental units is somewhat higher. condominiums of the Burlington (VT) Community Land
7. This isavery rough estimate based on anecdotal Trust found, on the one hand, that the annualized rate of
evidence, since no systematic accounting is available. return on initial investment averaged 17 percent, yet on
8. Consider, for example, the purchase of a the other hand, affordability not only was preserved on
$100,000 house, involving the Massachusetts Housing resale, it was actually deepened: On average, at initial
Partnership “Soft Second Loan Program” (MHPF 2003). sale, the BCLT homes were af- fordabletohouseholds
There isarequirement of a5percent down payment, but with 62 percent of area median income (AMI), while on
only 3 percent must be out-of-pocket; the rest resale, they were affordable to households at 57 percent
maybeagiftor grant. So suppose the household of AMI.
putsdown$3,000,with the restasagrant.The remaining 12. Therearenofiguresavailablefor thenumber of
$95,000 is financed through a conventional mortgage for non-CLT individual homeownership units (including
$75,000 and a below-market second mortgage for condos) with long-term or permanent resale restrictions.
$20,000, with payments on the second mortgage limited It is unlikely, though, that it is more than a few tens of
to interest only until the propertyissold as well as a thousands.
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Michael Swack
12 Social Financing
AS DISCUSSED IN Chapter 4, housing institutional and individual, may vary in their need
has been extremely dependent on debt financing or desire for rates of return, but all
through private capital markets. High amounts of expecttoseesocialbenefits emerge from their
debt contribute to high housing costs and are a investments. Although thechapterfocuses primarily
major factor affecting the affordability of housing, on the suppliers of capital, it is important to note
thus as well contributing significantly to housing that financial capital is not the only factor needed
access problems. Social financing can reduce debt to create stablecommunities. Nurturing the demand
costs and make housing more affordable forlow- for credit by providing technical assistance to low-
and moderate-income people. This chapter income borrowers and nonprofit organizations is
examines the specific goals of social financing, also an important task of the many institutions that
then brieflyreviewsthestructure of the U.S. promote social financing.
mortgage system and the practice of underwriting In the housing field, social financing has four
housing loans. It then reviews models and goals:
examples of social financing institutions and
mechanisms, ranging from public financing to 1. To make housing more affordable by reducing
community development financial institutions or eliminating the cost of debt service;
(CDFIs) to programs developed by conventional 2. To provide financing forhousing andrelated
lenders. The chapter concludes by making community development needs that the private
recommendations about the most effective financial market does not meet due to factors
waystostructure social financing so as to overcome such as prejudice, high costs related to learning
some of the problems inthe nation's predominant about and transacting loans to certain individual
system of housing finance. The chapter addresses and organizational borrowers, and lack of
issues related both to singlefamily homeownership knowledge about how to underwrite certain
and the production of multifamily housing under a types of housing, such as cooperatives and land
variety of ownership structures. Although single- trusts;
family and multifamily housing share many 3. To reduce the dependence of housing on the
financing issues and problems, there are some vagaries of the global capital markets, which
important differences, which will be noted as are becoming increasingly centralized and
appropriate. standardized in their approach to housing
lending; and,
4. To provideopportunities forprivate financial
WHAT IS SOCIAL FINANCING? institutions andinvestorstobemoresocially
accountable.
Social financing is financing that is not motivated
exclusively, primarily or even at all on the basisof
earning market rates ofreturn. Socialinvestors, both
262 Michael Swack
These goals provideaframework to evaluate the returns. Thus, questions concerning social criteria
effectiveness of the social financing institutions or “what's best for a community” quickly faded
and mechanisms detailed below. from the mortgage business.
Primary and Secondary Markets

BASIC ELEMENTS OF THE MORTGAGE
SYSTEM The residential mortgage system in the United
States is composed of a primary market and a
The mortgage market has traditionally been a secondary market. The primary mortgage market
distinct segment of the capital markets because provides funds directly to the borrower. Mortgage
mortgages differfrom otherdebt instruments. A loans are provided by depository institutions, such
mortgage isapledge ofproperty as securityfor a as commercial banks or savings and loan
loantoanindividualor otherlegal entity to buy a institutions as well as by nondepository
house or units ofhousing or otherrealproperty. The institutions, such as mortgage companies. The
lenderis willing to lend moneybased on the value of secondary mortgage market is the market in which
the property.The borrowerpromises to repay the existing loans are bought and sold by investors.
loan over time. If the borrowerfailsto doso,the The two largest secondary market institutions in
lender can foreclose, take title to the property and the United States are the Federal National
sell it. The default risk of the loan depends on the Mortgage Association, known as FannieMae,and
change in the value of property and on the theFederal Home Loan Mortgage Corporation,
circumstances of the owner, such as jobloss known as Freddie Mac. Secondary market
orbankruptcy. Real estate markets were institutions such as Fannie Mae and Freddie Mac
traditionally seen as local markets, so evaluating a aggregate single- and multifamily housing loans
piece of real estate required local expert ise. Most into pools and then— with the pools of mortgages,
loans were held inthe portfolios of the local and ultimately the real estate, serving as collateral
lenders. Thus, mortgages weretypically illiquid, —create mortgage-backed securities (MBSs). The
and other investors were willing to buy loans securitization process attracts institutionalinvestors
fromlocallendersonlyiftheyhad the knowledge who provide the capital for home mortgage loans.
required to evaluate them. FannieMaeand Freddie Mac standardize
This system began to change dramatically inthe theunderwriting and servicing components related
1970s and 1980s. The 1970s saw enormous growth to the mortgage process, aggregate the loans into
in the federally supported secondary mortgage pools, maintain the credit risk of these loans on
markets, and the 1980s saw a tremendous grow their booksand sell themortgage- backed securities
thinthemor tgage bond and other mortgage-backed to investors at a fixed rate of return.
securities markets. Prior to the 1980s, many of the The idea underlying creation of the secondary
mortgage securities commonplace today did not market isthat while housing markets are
exist. However, with the creation of new financial local,thesystem of finance need notbe local: Na-
instruments, the underwriting criteria for mortgages tional capital markets can provide the funds for
changed. Locally based criteriathat tookinto ac- local housing markets. With the proceeds from
count the economic realities of a community or thesaleof mortgages, primary lenders replenish
region gave way to uniform criteria designed to their money supply and use ittomakemore loans.
satisfy the needs of the investors who would ul- Ifprimary lenders cannot sell their loans, they must
timately purchase these mortgage-backed secu- keep them intheir portfolios. It is important for
rities. Locallending institutions could no longer primary lenders to sell most of the loans they
rely upon their knowledge of local community originate inorder to maintain liquidity, or they will
conditions or even thecharacter of the borrower but be unable to serve the needs of new borrowers.
instead relied on the criteria of mortgage brokers
pooling mortgages for sale to investors. Any local For anumber ofreasons, primary lendersshy
lender resisting this trend found itself without away from loans aimed at creating housing af-
sufficient capital to make new loans or increase its fordable for low-income people:
Social Financing 263
1. The relatively small size of many below- market Underwriting

multifamily housing projects means that the
lender may not earn enoughincome to cover A briefdescription of several elements of the un-
staff costs. If the loan package is complicated derwriting process will illustrate how financial
(which is often characteristic of multifamily markets view the issue of risk in mortgagelending.
low-income housing), the costs of collecting The question of underwriting is important to the
information and understanding the financial field of social finance because institutions involved
structure of the project will exceed the lender's in social finance often modify standard
income (Lappin 1993); underwriting procedures in order to finance low-
2. Complex government subsidies for multifamily and moderate-income housing.
housing, such as those provided by the Low Underwriting isthe process of collecting and
Income Housing Tax Credit and the HOME analyzing data on a borrower, a property and a
Investments Partnership Program, add to communit y to determine the degree of risk
information costs by requiring the lender's staff presented by a loan or investment. Underwriting
to become familiar with the guidelines provide a basis for understanding how
workingsoftherangeoffederaland state programs; lenders view the risks associated with lending for
3. Manyprimary lenders perceive risksoflend- ing both single-family and multifamily
in particular neighborhoods to be too high; and, mortgages.Theguidelinesusedbymostprimary
4. Primary lenders may have trouble selling many lendersare dictated to a large extent by theguide-
financial packages for below-market housing lines used by the two major secondary market
because secondary markets for low- income, players, FannieMaeand FreddieMac.Their
multifamily housing debt are small and often guidelines areneitherlegislatively mandated nor
defined narrowly (Lappin 1993). For example, a regulated by any government institution—they
small multifamily housing unit with a simply are created by these institutions to make
commercial unit on the ground floorwould their operations as efficient as possible and
beexcludedfrom saletothe secondary market. maximize the marketability of their mortgage-
backed securities.
As noted above, in order for a national sec- A review of three of Fannie Mae's guidelines
ondary mortgage market to operate efficiently, —employment/income, creditworthiness and
mortgage loans must be standardized to a large savings/assets—illustrates some of the issues
extent, regardless of the local market in which they primary lenders face when underwriting loans.
are originated. In order to be priced, mortgages These guidelines apply to Fannie Mae's
must have similar structures and terms, with similar nonstandard, so-called communitylending and
borrower qualification requirements (DiPasquale neighborhood loans, which have somewhat more
and Wheaton 1996). But standardization isabig flexible terms than their conventional loans.
problem forlow-income borrowers and the Eligible borrowers under the community lending
organizations serving them. Much low-income and neighborhood programs include individuals
housing takes nonstandard forms (cooperatives, and approved nonprofit organizations and public
land trusts, single room occupancybuildings, etc.), agencies. Fannie Mae's communitylending
and these individual and organizationalborrowers mortgages generally must be secured by single-
do not necessarily meet the standard underwriting family residences and thus do not cover
guidelines. For example, individualborrowers multifamily projects. Guidelines for underwriting
generally cannot qualify for a mortgage if annual multifamily mortgages are similar to underwriting
housing expenses for that mortgage, plus taxes and standards on commercial property, which are
insurance, exceed 28 percent of annualhousehold considered higher-risk investments and thus
income. Additionally, much low-income housing aresubject to morestringent underwriting standards
has various kinds of subsidies and unique financing (e.g., in the appraisal method).
structures that conflict with the stan-
dardizedfeatures of the secondary market insti- 1. Employment/Income Documenting and
tutions. verifying employment stability can be somewhat
264 Michael Swack
tricky. Fannie Mae requires two consecutive years closingcostscanbequiteexpensivefor a

inthe same job as meeting its satisfactory conventionalprimary lender.Although Fannie Mae
employment standard for a mortgage applicant. allows some flexibility, many banks and private
Fannie Mae will consider less time in a j o bift h e mortgage insurance (PMI) companies hesitate to
reason f o r a j o b c h ange i stoi ncr ease use this flexibility (Valentine 1991). This last point
opportunity. Fannie Mae also allows primary is important because Fannie Mae requires all
lenders to consider borrowers with secondary mortgages originated under its communitylending
sources of income or seasonal jobs, if the income is products to carry mortgage insurance coverage.
consistent. However, a great many low- to IfPMI is unavailable, then the borrower cannot get
moderate-income people have several jobs of the commitment of a
variable duration and income from a variety of primarylenderwhowantstosellthemortgageto Fannie
formal and informal activities. Many low- to Mae.
moderate-income families have relatively stable The process ofprimary lendersunderwriting
income but not stable employment. Many rely on a loans to sell to Fannie Mae involves much more
range of part-time and seasonal jobs. They would than the above, but these examples begin to il-
prefer to have one stable, full-time job lustrate why conventional primary lenders may not
withbenefits, but this is not always possible. Often, be interested in making loans to low- and
the cost of documenting employment for people of moderate-income borrowers even when Fannie
low- and moderate-income ismore expensive to the Mae guidelines offer flexibility. It is important to
lender because of the varying sources ofincome. note that Fannie Mae, as well as a number of other
Documenting income of residents may also be a lenders, is increasingly relying on credit scoring to
problem in multifamily housing developments. For make loan decisions. Credit scoring isamethod
example, a nonprofit organization assisting a group used to make loan decisions based on a statistical
of tenants who wish to organize a cooperative must assessment of a person's creditworthiness. A credit
often verify the income of each tenant in order to scoring model considers a r ange of variables,
secure financing. including credit history, income, outstanding
2. Creditworthiness Fannie Mae allows pri- debtand avariety of other factors and assigns a
mary lenders to develop nontraditional credit score to the applicant. The rising importance of
histories for those borrowers who have either no creditscoring has begun to change the way Fannie
credit record (not atypical for low- and moderate- Mae and other lenders use any particular
income borrowers) or a derogatory credit rating. underwriting factor.
FannieMaeallows lenderstocon- sider a borrower's In sum, the costs and the perception of risk
record of payment of rent or utility bills. Some maybe high. Thus, a clear financing gap exists for
primary lendersare willing to look at this type of low-income borrowers, since they often do not
information and develop a nontraditional credit meet the various underwriting guidelines.
history,othersare not. Developing a history is often Insufficient downpayments, high debt ratios,
more expensive than simply relying on a standard unstable employment histories (but not necessarily
credit report issued by a credit bureau. unstable income) and complicated or insufficient
3. Savings/Assets For most of their “com- credit histories impedetheability of primary
munity loans,” Fannie Mae requires the borrower lenderstosell to the secondary market.
to makea3percent downpayment on the property
with funds from hisorher own assets. Assets
generally include bank accounts, proceeds from CONCEPTS, MODELS, AND EXAMPLES OF
thesaleof assets, government bonds or a previous SOCIAL FINANCING
home (Fannie Mae 1993). But sweat equity, cash-
on-hand and alternative savings plans (e.g., group In order to overcome the financing problems
savings systems practiced by some ethnic groups) presented so far, there needs to be a system of
generally do not count toward the downpayment. social financing substantial in scope, not driven by
Again, the cost of documenting and verifying funds profit-maximizing market criteria or current
fordownpayment and secondary market restrictions, making less use of
debt than does the current system and requiring a (CDBG) funds as well as HOME Investment
major public role. This section examines various Partnership funds to be used as capital grants for
social financing institutions, modelsand the development and rehabilitation oflow-and
mechanisms. A wide range of social financing moderate-income housing. Public housing
modelsand vehicles exist, from direct public development and housing for the elderly under the
intervention to communitydevelopment financial U.S. Department of Housing and Urban
institutions to initiatives developed by Development's (HUD) Section 202 program are
conventionallenders. It is important to note that the also financed with direct federal grants. Both
range of models and mechanisms described do not CDBG and HOME funds may also be usedforlow-
constitute a true system of social finance. Each interest loans and other types of subsidies and
embodies the goals of social financing to some credit enhancements.
extent and provides information and lessons on HOME funds are highly targeted: They cannot
how to promote the social financing of housing. be used to assist families with incomes greater than
For each model or institutional type, the goals cited 80 percent of the area median. In fact, nearly one in
above will be applied as an evaluative framework. three homebuyers, seven in ten homeowners and
The final section offers aset of recommend ati ons about nine in ten renters whom HOME assists earn
th at w ould promote development of a system of 50 percent or less of area median income. Many
social financing and better integrate the various states and localities
components described below. reportthattheycannotmeetdemandforHOME funds.
States receive 40 percent of HOMEfunds, localities
Public Intervention 60 percent. In 2002, Congress funded the HOME
program at $1.85 billion (National Council of State
Three basic types of public sector intervention Housing Agencies 2003).
affect housing finance: direct intervention Clearly, grants contribute equity that serves to
throughprovision of grants andloans; financial lower the overall debt burden and therefore allows
incentives to promote provision of equity and low-income people greater access to housing
credit from the private sector; and use of regulation opportunities. However, inthecur- rent funding
to promote private sector financing. environments at both the federal and state levels,
prospects for additional grant funding are slim. The
Direct Intervention: Grants. Housing that has some current political environment presents the greatest
degree of social ownership (i.e., housing that is not barrier to financing improvements that would have
completely market-oriented, such as land trust a positive effect on the creation of low-income
housing, limited-equity cooperatives, public housing. Indeed, government contributions towards
housing and nonprofit housing (see Chapter 11) equity in low-income housing increasingly em-
should be financed,asmuch as possible, with direct phasize use of tax credits rather than grants (see
public grants. Not only does grant financing have a below).
directly beneficial effect on affordability, it One source of grant or equity money for low-
istechnically less complicated and involves less income housing that may be available at the state
bureaucracy and administrative overhead than or local level is housing trust funds. These are
thevarious recurring subsidy programs and tax mechanisms created by state or local governments
schemes aimed at producing affordable housing that commit an ongoing source of revenue to a
(Stone 1993). special fund, used to provide equity or debt to
Most important, direct grants are “more cost- finance low-and moderateincome housing.
effective than debt financing over the long term, Nationwide, more than 280 housing trust funds
even though in the short term they must either exist (Center for Community Change 2003).
produce less housing impact for a given level of Housing trust funds can receive their revenue from
public spending or require greater public ap- a wide variety of sources, including taxes on real
propriations to achieve a given amount of social estate sales, interest on real estate escrow accounts,
housing” (Stone 1993:221). The federal govern- fees paid by developers of office buildings or
ment allows Community Development Block Grant repayments of government loans. Overall, housing
266 Michael Swack
trust funds commit over $750 million to housing major drawback to this approach isthe initial cost to
projects each year through dedicated revenue the publictreasury,although over the long term, the
streams, along with additional money through costs are lower because therearenointerest
appropriations and other designated funds (Center payments anddebtadmin- istration costs. Currently
for Community Change 2003). Housing trust funds (2004), grants to promote housing affordable
typically provide grants, loans or both to nonprofit forlow-and moderateincome people are not high on
housing development organizations, private the political agenda.
developers, local governments andindividuals.
One of the key characteristics of housing trust Direct Intervention: Loans. The public sector
funds is that they often support the types of provides debt financing for both single-family and
housing that conventional capital markets do not. multifamily housing, typically atasubsi- dized rate
In addition to focusing on low- and moderate- of interest. The difference between a market rate
income housing, many trust funds require housing ofinterest and the rate chargedrep- resents a
financedbythe fund to remainaf- fordable for long subsidy to the project or individual. One of the
periods of time. The Vermont most common mechanisms for providing public
HousingandConservationBoard(VHCB)gives sector debt to housing is through state housing
priority to projects with perpetual affordability finance agencies (HFAs). HFAs typically target a
clauses. This type of clause gives priority to shareof their resources to low- and moderate-
housing such as land trust housing, limitedequity income people through mixed- income projects that
cooperatives and nonprofit housing. Between 1987 combine below-market with market-rate units.
and 2002, the VHCBinvestedinthe construction and HFAs are able to provide relatively low-cost,
rehabilitation of 6,700 units of housing and the long-term, fixed-rate financing with money raised
conservation of more than 95,000 acres of by issuing tax-exempt bonds. The power to issue
agricultural land (Center for Community Change tax-exempt mortgage revenue bonds (MRBs)
2003). isgrantedbyCongress. Housing bonds are lumped
There have also been efforts to create a Na- under acap along with bonds for manufacturing,
tional Housing Trust Fund, most recently in 2003 environmental projects, redevelopment and student
(National Housing Trust Fund Campaign 2003). loans, limited in each state to $75 times its
The National Affordable Housing Trust Fund population (or $228 million total, if greater).
would be capitalized initially with excess revenues Between 1974 and 2002, state HFAs issued more
of Federal Housing Administra- than $145 billion in MRBs for nearly 2.2 million
tion(FHA)andtheGovernmentNationalMort- gage mortgage loans (National Council of State Housing
Association (Ginnie Mae). It would allocate funds Agencies 2003). Recent limitations on the issuance
to states and localities and would fund a variety of of MRBs have led some HFAs to issue 501(c)(3)
progr ams to promote homeow nership forlow- bonds, issued by an HFA on behalf of anonprofit,
income families and enablethe development of tax-exempt 501(c)(3) organization. These bondsare
low-income rental housing. The campaign aims to outside the caps imposed by Congress on tax-
generate sufficient funds for 1.5 million new, exempt MRBs but arestill exempt from federal
rehabbed and preserved low- income units over a taxation.
ten-year period. HFAs are often responsible for administering
Direct public intervention through the use of housing trust fund money and can mixand match
grants meets the identified goals of social fi- trust fund moneywithbond money,thus allowing
nancing: It makes housing more affordable by them to provide both equity and debt for a given
reducing debt service, andit provides financing not project. HFAs are often one of the few sources of
available from private financial markets. It also long-term, fixed-rate financing for nonprofit
provides opportunities for private financial housing development and special forms of below-
institutions to participate in financing affordable market housing, such as cooperatives, land trusts
housing through creating stronger individual and special needs housing.
andinstitutionalborrowers. That is, the provision Direct provision ofpublic sectordebt financing
ofpublicequityleverages private debt markets. The also meets the goals of social financing, but
inamore limited way than equity financing. Public from the tax credit; and (2) the large amount of
sector debt financing makes housing more gross equity raised from thesaleof the tax credit
affordable by reducing the cost of debtservice. that pays for the legal and accounting costs and
However, public sectordebt financing is dependent thus is not investedin housing.The dealsareoften
on private capital markets to buy the bonds issued; quite goodinvestments for the investor. In 1990,
thus, the public sector must underwrite its debt insti- tutionalinvestorsexpected an 18 percent
somewhat conservatively. Without the assistance of aggregate after-tax internal rate of return, although
public sector equity financing, housing financed by by 1999, that yield had fallen to approximately 8 p
public lending tends to serve moderate-income ercent (Rober ts and Har vey 1999). As noted
people, not low-income people. Additionally, pub- previously, tax credits are typically more costly
lic debtoften does not leverage private debt. Al- than if thegovernment simply gave the moneyin the
though conventional financial institutions may form of a capital grant. Another disadvantage to the
service loans originated by HFAs, they typically do nonprofit developer is that control of the property
not invest inthe same projects (Shabecoff 1994). for the 15-year syndication period is not with the
developer. Typically, there are no guarantees that
Public Sector: Incentives. The public sector can the nonprofit sponsor or the tenants will be able to
induce private institutions and individuals to maintain ownership of the property at theend of the
finance housing through the use of economic syndication period, although LIHTC-financed
incentives. The major form of incentive used by apartments must remain affordable to low-income
government is tax credits. A major source of equity people for 30 years. Finally,although a large
for housing is provided through the federal number of theunits financed using the LIHTC
government's Low Income Housing Tax Credit areavailable to low-income people, they are not
(LIHTC). The LIHTC allows corporations to lower affordableto truly poorfamilies. Fewer than 40
their federal tax liability by extending tax credits percent of tax credit units are rented by tenants
for investments inthecon- struction orrehabilitation with incomes at orbelow 30 percent of median
oflow-income rental housing. LIHTCs are allocated income, which is roughly equivalent to the
to states on the basis of $1.75 per capita. Under the povertyline. Most of the poorrenters who do live
LIHTC, investors in low-income rental housing inthese units receive a r ental sub s idy, such as a S
receive a credit of 9 percent of the total ecti on 8 vouch e r,to help them pay the rent
construction costs for new construction (Daskal 1998).
orrehabilitation. The credit decreases to 4 percent if Supporters of the LIHTC point out that the
the project receives any other federal subsidies or involvement ofprivate partners builds rigorinto the
any taxexempt financing. The LIHTC program has development and management of the housing; that
been used in the development of nearly 1million the formation of partnerships creates linkages and
rental housing units from 1986 through 2002. Over mutual interests among nonprofit corporations and
$10 billion in private funds were invested in for-profit investors; and that the program
LIHTC projects between 1986 and 2000; more than isnomorecomplex than otherfed- eral programs (see
$2 billion has been invested into nonprofit- Grogan and Roberts 1992; Committee for
developed housing during this same period Economic Development 1995; Roberts and Harvey
(http://lihtc.huduser.org/). 1999). The program has become significantly more
The LIHTC is widely used, due to lack of efficient over the years 1986 to 2000. Investor
alternate forms of equity, and it can be quite costly. demand for the credit drove up equity prices (the
It requires substantial amounts of organizational amount an investor is willing to pay up front for $1
time to put together, and a significant portion of of tax credit, spread over 15 years) from 42 cents to
funds raised goes to pay the expenses of lawyers close to 80 cents per dollar. Higher equity prices
and accountants. Stegman (1991) points out that mean that the credit is buying more private
thetwogreatest sources of inefficiency of the resources and costing the federal government less
LIHTC are (1) the difference between the cost of than inthe past. Competition for the credit has also
the tax credit to the federal government in terms of forced the private sector to accept longer afford-
foregone revenues and the amount of equity raised abilitylock-in periods, beyond the 30-year standard
268 Michael Swack
(Roberts and Harvey 1999). of the regular examinations all banks must
An alternative approach to the LIHTC isuti- undergo. Under the law, bank regulators assign one
lizedbytheNew Hampshire CommunityDevel- of four ratings: outstanding, satisfactory,
opment Finance Authority (CDFA). The CDFA needstoimprove or substantial noncompliance. A
underwrites various community economic de- rating of “needs to improve” or“substantial
velopment projects and ventures, including low- noncompliance”does not necessarily result
income housing. It then awards tax credits to inanypenalties to the bank. Rather, if a bank applies
businesses that donate propertyfor the housing or to merge with or acquire another bank, individuals
cash to develop the housing. The business may and organizations can challenge that application
then claim a tax credit of 75 percent of the value of based on the bank's poor lending record in low- and
the donation. Thenonprofit gains access to equity moderateincome communities. Although merger
financing, and the state foregoes revenue. applications are rarely denied, banks dislike the bad
However, the private donor is contributing 25 publicity that accompanies poor CRA ratings
percent of the cost of the donation, the process anddo not want to risk denial or delay of a merger
issimpletoadminister and almost all of the money application because of CRA noncompliance. Thus,
endsupinthe project. This tax credit raised over $35 the CRA regulation encourages banks to develop
million of equityforhousing and economic programs that lend specific amounts of moneyfor
development projects between 1994 and 2002 specific types ofprojects.
(New Hampshire CDFA 2002). From 1977 to 2005, banks and community
This formof tax credit has the advantage of organizations have entered into more than 428
requiring community organizations to participate agreements worth more than $4.2 trillion in
inthe housing project. It also encourages reinvestment dollars for traditionally underserved
bankstomake direct loans forlow-income housing populations. As part of a Treasury Department
by improving the overall capital structure of the study, Harvard University researchers documented
project. With more equity in the project, banks that lenders made more loans to low- and
have showngreater willingness to provide the moderate-income borrowers in geographical areas
debtcomponent of the project. The projects also in which theyhave negotiated CRA agreements
have lowerdebtservice costs, thus enabling them to with community groups (NCRC 2005). Examples
serve people with lower incomes. of CRAagreements include New Jersey Citizen
Incentives such as tax credits can meet some of Action, which negotiated a comprehensive
the goals of social financing. Incentives can help agreement with NatWest Bank in which the bank
raise equity, provide financing that the private agreed to provide over $151 million in below-
market would not otherwise provide and offer marketratemortgagesfor low-and moderate-income
opportunities for conventionallenders to participate families; discounted home improvement loans;
in financing affordable housing. However, loans for construction and permanent financing for
incentives maybe inefficient, are not well targeted nonprofit housing developers and loans to minority
and affect the structure of ownership of the housing and women-ownedbusinesses (Bohner 1995:13). In
itself. (The LIHTC, the primary source of equity 1999, Washington MutualBank made a ten-year
financing forhousing, can only be used to create commitment of $120 billion targeted to under-
rental housing.) served communities, including $81.6 billion in
affordable housing loans (California Reinvestment
Regulation. The government can use its power of Committee 2003).
regulation to steer private money into the housing Although CRA regulations have encouraged
sector. The best known regulatory approach for some lenders to increase their lending to low- and
steering money into low- and moderate-income moderate-income people and communities, the
housing is the Community Reinvestment Act loans are typically made at market interest rates.
(CRA). PassedbyCongress in 1977, theCRA Changes intheCRA instituted in 1995 have made
requires banksand thrifts to meet the credit needs of financial institutions more re-
low- and moderate-income communities. ceptivetoloanapplicationsfromprojectsin low-
Bankregulatorsconduct CRAex- aminations as part income communities, but this has not meant that
lenders have relaxed their standards for reviewing progr am for affordable housing mandated by
applications or their criteriaand conditions for Congress in FIRREA. The FHLB system was
approving loans. As noted earlier, bank lending for createdbyCongress in 1932 to promote home fi-
housing is often tied to Fannie Mae underwriting nance by providing financial services to banking
standards. institutions that commitasignificant portion of their
Banks also receive CRA credit by lending to assets to home mortgageloans. Institutions eligible
low-income housing projects through lending for membership include thrifts, commercial banks
consortia and bank-owned community devel- and credit unions. Members are the sole customers
opment corporations (CDCs). Bank consortia are and stockholders of this private corporation.
often able to provide permanent fixed-rate FIRREA includes provisions that create two
financing in situations where individual banks will community lending programs, the Affordable
not. The California Community Reinvestment Housing Program (AHP) and the Community
Corporation, a pooled fund of several banks, Investment Program. Under FIRREA, 10 percent of
provides fixed, market-rate mortgage financing each regional bank's net income is set aside each
with terms of 25 years. In 2002, JP-Morgan Chase, year to support subsidized advances and direct
in partnership with Fannie Mae, and using its subsidies. Between 1990 and 2001, FHLB's
subsidiary, the Chase Community Development Affordable Housing Program awarded $1.4 billion
Corporation, committed $35 billion forlow-and in subsidies to affordable housing initiatives
moderate-income housing and other (FHLB 2003).
communitydevelopment projects. Affordable Housing Program subsidies are
In 2005 the federal banking agencies eased channeled through member banks, usually to
CRA exam regulations forbanks with assets be- nonprofit organizations. The member bank works
tween $250 and $1 billion. Under thenewregu- with the nonprofit to preparetheapplica- tion and
lations, these mid-size banks will no longer need to then applies to theFHLB regionalbank in a
collect and report CRA loan data on small competition for the funds. The member bank
business, small farm, and community development awards funding to the project, often in the formof a
lending. Without access to annual data, it will grant—thus contributing equity to the project. AHP
become more difficulttomonitor the lending is an effective method for financing low-income
performance of financial institutions intra- housing. It provides equity and low-cost, long-term
ditionally underserved areas. debt financing at fixed rates. The FHLB provides
In addition, mid-sized banks will be evaluated technical assistance and training as well as markets
under a dual test system: the small bank lending the program aggressively both to banks and
test and anew community development test. The nonprofit entities. Themajorproblem with the
regulatorsclaimthat thecommu- nitydevelopment program is its modest size. Demandforfunds far
test will offer moreflexibility; but it is unclear how outweighs availability.
communities, especially those in remote rural Regulation meets some of the goals of social
areas, will benefit form this new framework. By financing, and certain types of regulation are more
lowering the banks' accountability, community effective than others. Regulations that encourage
groups are concerned that branches in low-and equity financing (e.g., FIRREA), target funds
moderate-income areas mayprovide effectively to low- and moderateincome individuals
fewerinvestments, services, and and allow flexibility (e.g., using funds for equity
communitydevelopment loans to theneighbor- and lower-cost debt) can greatly assist the
hoods they serve. (National Community Rein- financing of low- and moderate-housing. CRA
vestment Coalition 2005). financing tends to be most useful in meeting the
Another example of government regulation that housing needs of low- and moderate-income
has providedbothdebtand equityforlow- and individuals when it is combined with some other
moderate-income housing development is form of public or private subsidy that helpstolower
theFinancial Institutions Reform, Recovery and theoverall financing cost. AHP financing does
Enforcement Act (FIRREA) of 1989. Thetwelve make housing more affordable, provides capital not
regional Federal Home Loan Banks administer a available inthe private financial markets and
270 Michael Swack
promotes flexibility in financing that encourages 1. Predevelopment financing intheearly stages of a

private financial institutions to participate in project that allows it to reach the stage where it
financing affordable housing. However,theoverall is bankable;
lack of sufficient amounts of flexible capital 2. Cushioning conventional loans with junior
through various public sector mechanisms, such as financing above certain loan-to-value (LTV)
regulation, financialincentives and direct financing, ratios (e.g., loans over 75 percent LTV);
has given rise to a new set of private sector in- 3. Seasoning loans to demonstrate their safety so
termediaries. that conventional institutions can later purchase
or refinance them;
4. Demonstrating the effectiveness ofnewlend-
COMMUNITY DEVELOPMENT FINANCIAL ingapproaches,underwritingandloanprod- ucts
INSTITUTIONS (e.g., mobile home cooperatives) so that
conventional institutions can become com-
Increasingly,newintermediaries called commu- fortable with thenew approaches and products;
nitydevelopment financialinstitutions (CDFIs) are 5. Hightransactioncostloans:loansthataretoo small
entering the financial market. CDFIs are committed or complicated and thus cost too much because
to meeting the credit needs for low- income ofthetime involved;
housing and serving community-based 6. Loans that allow community development
development organizations. CDFIs aretypically organizations or entrepreneurstogainexpe-
community-based nonprofit organizations or rience and atrackrecord so that they can use
national intermediaries with local offices. They are conventional lenders inthe future; and,
sensitive to local needs, market-wise and able to 7. High-risk loans, in general, for reasons such as
develop loan and investment products that differ lack of organizational financial strength, lack of
from conventional loan products. CDFIs arealso take-out financing, difficult neighborhood,
sophisticatedintheir approach to meeting credit scattered sites or nontraditionalin- come stream.
needs and providing assistance to borrowers, both
organizational and individual. CDFIs that serve There does appear to beadifference between the
housing needs includecommu- default experience of conventional lenders and
nitydevelopmentloanfunds,communitydevel- those lendersthat focus on lending forlow- and
opment creditunions, communitydevelopment moderate-income housing, at least for multifamily
corporation loan funds and community devel- housing, with the specialized lenders, such as
opment banks. All except community development CDFIs, reporting much lower default rates
banks are structured as private, nonprofit (DiPasquale and Cummings 1992). The success of
corporations. CDFIs maybe due to special expertise in
CDFIs such as the Self-Help Credit Union of underwriting and management, and the fact that
Durham, North Carolina; the Reinvestment Fund of CDFIs spend more time on project management
Philadelphia; Coastal Enterprises of Wiscasset, and finance fewer projects than is true for
Maine; and the Local Initiatives Support conventional lenders (DiPasquale and Cummings
Corporation are examples of different kinds of 1992:A-27).
CDFIs. They share a commitment to providing Conventional lenders may hesitate to enter the
credit and technical assistance to nonconventional market for lending to low-income housing because
borrowers (i.e., low-income individuals and they possess insufficient information
community-based development organizations) and andinsufficient expertise to exploittheop-
filling capital gaps, gapsthat conventionallenders portunities. Lenders are unlikely to voluntarily
do not or cannot fill. Leibsohn (1995:3-4) lists the enter a market until they have some reasonable
following types of lending carried out by CDFIs in level of expectation that they will earn a profit
low-income communities: (Beshouri and Glennon 1996). If, however, this
reluctance is based upon prejudice rather than real
economic reasons, then advocates should pressure
government to bemore forceful with conventional
lenders. provides a secondary market forits localrevolving

loan funds. Theypurchase blocks of loans from
National CDFIs local programs and sells notes backed by these
loans to institutional investors, including insurance
CDFIs maybe local organizations, meaning that companies, savings and loans and pension funds.
they serve a specific city or region, or they may be NRC purchases the loans from its affiliates,
national intermediaries with local affiliates. accepting lowyields, and then seeks social
Thethree most prominent national CDFIs inthe investors to participate in providing fundstothe
field of low- and moderate-income housing are the localprograms at below- market rates (Widener
Enterprise Foundation, the Local Initiatives 1993). Since its inception in 1976 through theend
SupportCorporation (LISC) and theNeighbor- hood of 2000, NRC affiliates originated over $430
Reinvestment Corporation (NRC). The national million in loans (Neighborhood Housing Services
organizations help form partnerships to raise loan of America 2001).
and grant money for their local affiliates from
foundations, corporations and private individuals. Local CDFIs
The national organizations also provide technical
assistance and training for their local affiliates. All Local CDFIs come in many forms, including
three intermediaries have succeeded in attracting development banks, community development
investment credit unions (CDCUs) and community loan funds.
frommajorcorporations,andallhavedeveloped small Local CDFIs serve a specific geographical area,
secondary market mechanisms that purchase loans such asacity or a state. Some local CDFIs have a
originated by their local affiliates, other nonprofit broad lending focus that includes housing, small
developers and intermediaries such as CDFIs. business and commercial lending. Other local
The Enterprise Foundation has a national CDFIs specialize in a particular sector, such as
network of more than 2,400 organizations in 860 housing.
locations across the country. Enterprise borrows Development banks—for example, the South
money at below-market rates from national Shore Bank of Chicago—are government-
commercial banks, foundations and socially regulated financial institutions and typically have
minded corporations. From 1982 to 2002, the highest capitalization of the various CDFI
Enterprise and its related organizations raised and models. The ability to offer federal deposit
invested $4.4 billion in loans, equity (e.g., from the insurance attracts depositors. Operating within a
Low Income Housing Tax Credit) and grants to regulatory environment tends to make development
create 144,000 homes for low-income people banks somewhat more conservative than
(www.enterprisefoundation.org). unregulated community loan funds.
LISC was establishedbytheFord Foundation and Community development credit unions are
six community groups in 1980. It operates local regulated financial institutions, capitalized by
programs in 38 cities and rural programs in 37 member deposits, that mainly serve the consumer
states. The organization has raised over $4 billion banking needs of their members. Although some
from over 2,200 investors, lendersand donorsand, CDCUs (e.g., Self-Help Credit Union in North
working withlocal communitydevelopment Carolina) areabletodo mortgage-lending, many are
corporations, helped to build orre- habilitate too small to offer mortgage loans to their members.
128,000 units ofhousing from 1980 to 2002 Communityloan fundsaretypically unregulated
(www.lisc.org). financial intermediaries that attract social
The Neighborhood Reinvestment Corporation is investment capital from individuals, churches and
a Congressionally chartered corporation that works other socially motivated investors and lend to
through a network of over 220 local affiliates borrowers, such as community-based housing
called NeighborWorks organizations. Local organizations, at a below-market interest rate.
Neighborhood Works organizations lend at flexible Community loan funds often make the types of
rates and terms to neighborhoodresidents who do loans that banksareunwilling or unable to make
not qualify for conventional financing. NRCthen (e.g., junior mortgage loans or loans that
272 Michael Swack
aresubordinated toaseniorlender,such as a b an k ). capital markets (bothpri- mary and secondary

The development of CDFIs is still at an early markets) have developed slowly. CDFIs need to
stage. Most of them were created since 1980, and increase their own scale and capacity anddevelop
most remain small by conventional standards. strongerrelationships with conventional lenders if
However,theCDFI industry has begun to scale up. they are to have a significant impact on meeting the
The CDFI Data Project, a foundation- needs of borrowers. Partnerships between CDFIs
fundedinitiative, collects industry-wide data on and con- ventionallenderscangreatlyexpand the
CDFIs. As of the end of 2001, the CDFI Data amount of flexible capital necessary to promote
Project reported that there wereover 800 CDFIs thefi- nancing of low- and moderate-income
operating in the United States. The Project col- housing on a much larger scale.
lecteddatafrom512CDFIsin2001.Collectively, they
control a lending pool of $8.2 billion and financed
over 43,000 units in 2001. The CDFIs' net loan CONVENTIONAL LENDERS
losses were less than 1 percent of their outstanding
loans, and they had sufficient reserves and Conventional private lenders, particularly banks,
equitybases to cover those losses (National have become much more involved in financing
Community Capital Association 2003). low- and moderate-income housing over the past
The growth of CDFIs has accelerated since 20 years. Much of this involvement can betraced to
1995, due in large part to creation of the CDFI government incentives such as the Community
Fund, a program within the Treasury Department. Reinvestment Act. However, there are innovative
The Fund was established in 1994 to support models developed by banks for financing low-and
CDFIs and make capital available to CDFIs moderate-income housing initiatives. As mentioned
working with underserved communities and previously, banks have increasingly utilized the
individuals. The CDFI Fund is the largest source of consortium approach to lending. One of the first
funding for CDFIs, providing over $530 million in bank consortia was createdinCalifornia inthe
awards from 1995 to 2002 to community 1970s, and growth of consortia accelerated through
development financial institutions (CDFI Fund the 1990s. As of2001,there were loan consortia in
2003). 22 states and the District of Columbia. In 2001, the
CDFIs have met some of the goals of social Association of Reinvestment Consortia for
financing discussedpreviously.Many CDFIs are Housing (ARCH) was formed by bank consortia in
able to provide financing for housing that the 13 states. Collectively, ARCH represents over 400
private financial market does not provide, often at a commercial banks, thrifts and savings and loans
below-market interest rate. (Community loan with loan commitments totaling over $1.5 billion
funds, in particular, are likely to offer below- and over 60,000 units ofhousing financed (Mendez
market interest rates.) CDFIs are often 2002).
abletoreduce dependency on centralized global Some banks have also become more involved in
markets and are beginning to work effectively with financing low-and moderate-income housing. The
private financial institutions to finance affordable Socially Responsible Banking (SRB) Fund of
housing. However, manyissues need to Vermont's Chittenden Bankisthefirst state-wide
beaddressedinorder to strengthen thecapacity of commercial bank program inthe country that allows
CDFIs to provide capital in poor communities and customers to specify that their deposits be used
achieve scale in lending and operations. Most only for socially responsible loans. Chittenden
CDFIs are limited in the type of investments they BankisnotaCDFI; it is a conventional lender.
can make by their sources of funds. That is, they do However, through cre- ationofthe SRBFund,the
not necessarily have thetypeof capital, such as bankhas been able to develop some creative
equity,that is needed to makeequity investments or lending approaches. The Fund makes loans
long-term, fixed-rate, lowcost debt. CDFIs have infiveareas: affordable housing, the environment,
limited capital as an industry,and mostindividual agriculture, education and small business. As of
CDFIs areunderstaffed. Finally, relationships 2003, the SRB Fund was managing over 16,000
between CDFIs and conventionallendersand accounts with over $131 million in deposits and
over $105 million in outstanding loans (Chittenden private financialmarketdoes notmeet;to reduce the
Bank 2003). Loan officers inall of the bank's 31 dependency of the housing finance system on the
branches may make SRB Fund loans. The Fund vagaries ofthe global capital markets and to
provides technical assistance to the loan officers provideopportunities forprivate financialin-
inthe various branches, and Fund loans have stitutions to invest in socialhousing. Although each
consis- tentlyhadlowdelinquencyrates andhave of the goalsof social financing is met to some
experienced no delinquencies on loans to nonprofit extent through the range ofactivities car-
developers. riedoutbythepublic,privateandnonprofitsec- tors,
The SRB Fund differs from most conventional the overall effort falls significantly short of
lenders in several keyrespects: meeting the financial need. Government grant and
loan programs do not meet the demand for those
1. Although the SRB Fund typically lendsat funds, and conventional lenders and CDFI efforts
market interest rates, it commits time and are either too small or are not structured to meet the
resources to making low-and moderateincome needfor equity and low-cost, long-term debt. As
housing loans that generally ex- noted above, the range of
ceedthecommitmentmade forconventional modelsandmechanismsdonotconstituteatrue system
lending. The SRB Fund staff recognizes the of social finance. The financing of low- and
complex task oflow-and moderate-income moderate-income housing involves a patchwork of
housing lending, themixofpublicandpri- vate mechanisms and programs that are inadequate and
players, the multiple financing sources and the inefficient (Stegman 1991).
community input. Developing a system of social finance will
2. TheFundis willing to hold a limited number require commitment and innovation from all
oflong-term, fixed-rate affordable housing participants inthe housing finance system:
mortgages in its portfolio. conventional lenders, secondary market
3. The SRB Fund actively seeks to sell low- and institutions, CDFIs and government agencies. In
moderate-incomemultifamilyhousingloans to addition, the financial markets must address the
sociallyresponsible institutionalinvestors, issues of access and cost of capital in order to fully
essentially an alternative secondary market. address the problem of low-income housing
finance. There is a need for both equity (including
Many conventional lenders have begun to equityinthe formof grants) and long-term, low-cost,
develop loan products that are targeted to fixed-rate debt financing. Although this chapter has
moderate-income individuals. Relaxed under- cited examples ofinstitutions that address these
writing standards by FannieMaehave encour- financing problems with some degree of success,
agedbankstotryto serve moderate-income bor- themajorproblem is that the overall financial effort
rowers. On the whole,conventional lenders have is too modest. The most successful modelsof social
been more effective in providing financing that finance are far too small to meet the need. A true
meets the needs oflow- and moderate-income system of social finance needstoweave thevarious
individuals when they are responding to gov- sectors together in a way that is more coherent and
ernment incentives and regulations, such as the less ad hoc. Piecing together a system will require
CRAor the Low Income Housing Tax Credit. some experimentation, but perhaps the roles of the
institutional players can be clarified. Both CDFIs
and conventional lenders must individually and
A SYS TE MOFSOCIAL FINANCING— collectively formthe financialdelivery system.
RECOMMENDATIONS Government must provide substantial grant money
FOR SCALING-UP and credit enhancements both to lower housing
costs and facilitate the participation of the
The introduction to this chapter stated the four secondary market. The secondary market must
goals ofsocial financing: to make housing more creatively package loans originated by
affordable to low- and moderate-income indi- conventionallendersand CDFIssoastocre- ate the
viduals; to provide financing for needs that the appropriate markets for selling low- and moderate-
274 Michael Swack
income housing loans. The concluding section and origination. The specialized knowledge,
examines how these sectors, conventionallenders, expertise, flexibility and commitment of the best
the secondary market, CDFIs and the public sector locallenders demonstrates that low-
can expand their respective roles and develop a incomehousinglending,both single-family and
more systematic approach to promoting social multifamily, can be done safely. However, the
financing for low-income housing and begin to development of a strong, substantial and flexible
reach a scale appropriate to the need. secondary market is essential. Typically, secondary
markets are synonymous with standardization. It
The Private Sector has been mentioned that the danger of a
standardized secondary market is that it will
CDFIs will never have sufficient capital to meet all exclude the types of housing that often typify low-
the financing needs forlow-income housing, income housing developed by nonprofits, including
nordotheycurrentlyhavethecapacity to replace cooperatives, land trust housing, special needs
conventionallenders. Conventionallendersand housing and single room occupancy (SRO)
CDFIs must look for ways to create new part- housing. However, secondary markets could be
nerships that will provide access to appropriate customized to meet the needsof different types
types and amounts of capital for low-income oflow-income housing.
housing ventures. Possibilities include: Separateunderwritingstandards for specific cat-
egories of housing could be developed for the
1. Conventional lenders and CDFIs could develop secondary markets. Secondary markets could also
joint programs in which a pool of conventional move away from examining each loan, and several
lenders makes loans, while the CDFI undertakes intermediaries could be organized as conduits from
much of the cost of admin- primary lenders to secondary market agencies. The
istrationandunderwriting,inordertoreduce the Enterprise Foundation established an initiative to
lenders' costs. The conventional lenders would package loans forrental housing and sell them to
pool their funds in order to pool risk Fannie Mae. Conven- tionalprimary lenderscould
andincrease underwriting oversight. California's also providecredit enhancements, such as sharing
Low Income Investment Fund utilizes this the risk on a portion of each loan so that the
approach, working with a pool of 18 lenders secondary market would buy the loan more
inthe state (Low Income Investment Fund willingly.
2003). Fannie Mae and Freddie Mac could customize
2. Conventional lenders could increase their mortgage-backed securities where they can find a
support of CDFIs through grants, equity insocial investor to buy the MBS at a discounted
vestments and long-term, fixed-rate loans. This price. The benefit of this type of arrangement is
is discussed in greater detail below. that the investor takes the rate riskbut still has
3. Morecomplete partnershipscould becreated by principal andinterest payments guaranteed by
expanding participation beyond conventional Fannie Mae or Freddie Mac. In this way,
lenders, CDFIs and the public sector to include FannieMaeor FreddieMaccould help to create a
nonconventional lenders, such as pension funds, secondary market for below-market rate loans and
foundations andreligious institutions. Broad- be an effective conduit for investors whose main
based partnerships generate more resources for objective is preservation of principal (Kantor
CDFIs, fill gaps that go beyond the capacity of 1996). In addressing special types of low-income
smaller partnerships and create greater support housing, such as co-ops, land trusts andSROs, it is
for a range of communitydevelopment activities important to lookfor ways that Fannie Mae and
in local communities (Leibsohn 1995). Freddie Mac could securitize smaller affordable
housing projects, as many of these projects are
Secondary Markets inthe $200,000 to $2 million range, and the
secondary markets do not like to deal with projects
Successful lending and investment in low- income
this small.
housing must remain rooted in local underwriting
Community Development Financial Institutions scaling-up is unique. It can occur alone, with
(CDFI) CDFIs improving their management structures
while keeping their activities stable.
In order to become serious partners with con- However,organizational scaling-upisthecorol-
ventional institutions in providing capital to meet laryfor all other types of scaling-up (Uvin1995).
low-income housing needs, CDFIs need to scale up Increasing the scaleof CDFIs isakey element for
so as to expand their impact, moving beyond developing a system of social finance. Although
impact that is very localized and quite small in there are relatively few CDFIs and they control a re
volume and scope. In scaling-up, CDFIs enhance l ati vely small amount of money,sub s idizing
their ability to form legitimate, strong partnerships CDFIs to meet specialized housing needs and
with conventional financial institutions. Scaling-up target assistance to specific neighborhoods may be
can occur in four ways: quantitative scaling-up, more effective than mandating procedural
functional scaling-up, political scaling-up and requirements for existing conventional institutions
organizational scaling- up (Uvin 1995). (Calomiris et al. 1994).
Quantitative scaling-up refers to expansion,
increasing the geographicareas in which CDFIs The Role of Government
serve and the number of loans and investments that
they areabletooriginate and manage effectively. Even with a more substantial CDFI sector and
Functional scaling-up refers to the number and active private participation, government will
types of activities undertaken by CDFIs, including continue to play an essential role in social finance.
the ability to form effective partnerships with Government affects financing inamul- titude of
conventional lenders and secondary markets and ways, both passive and active. It can formulate
effective coalitions and alliances with other CDFIs regulations (such as the Community Reinvestment
and public agencies. Political scaling-up refers to Act); it can providevarious incentives to the private
the extent to which CDFIs move beyond the sector (e.g., through the tax system); andit can
delivery of services toward changing the structural intervene directly in financial markets by providing
causes of inadequate financial resources for both debt and equity to projects. What follows is a
housing and community development. Political range of policies available to various levels of
scaling-up also involves mobilizing politicalpower government:
so as to influence the flow offundsandresources to
CDFIs. Thistype of activity might focus on 1. Federal, state and local agencies could provide
extending the provisions of credit enhancements, such as mortgage
theCommunityReinvestment Act to insurance insurance programs or guarantees that are
companies, other nonbank lenders and mutual capitalizedbya dedicatedrevenue stream (as in
funds as well as influencing the flow of funds from housing trust funds), to provide insurance for
federal, state and local government to CDFIs. loans issued either by conventional lenders or
Finally, organizational scaling-up is necessary CDFIs. The nonprofit Community Preservation
to increase organizational strength, effectiveness Corporation inNew York City used city and
and sustainability of activities. Organizational state insurance programs to help direct over $3
scaling-up refers to increasing the degree of billion in lending from banks, insurance
financial sustainability of CDFIs, creating external companies and pension fundstolow-income
links with public and private intermediaries and housing from 1974 to 2002 (Community
improving the management capacity of staff. Preservation Corporation 2002).
Organizational scaling-up will involve developing 2. The federal government could establish a
a generation of appropriate managers and staff for nationalhousing trustfund,asdescribedpre-
CDFIs with the specialized knowledge, skills, viously. Such an entity could raise and allocate
commitment and ability to innovate and make funds from mandatory payments by all private
communitydevelopment lending successful. entities that engage in credit-market borrowing.
There is no particular order or hierarchy among The most progressive approach for capitalizing
these four types of scaling-up, but organizational such a fundwould beawealth tax on credit-
276 Michael Swack
market instruments held by all private financial There are a number of appropriate and useful
institutions. A tax of one- quarter of 1 percent actions that can be taken by conventional financial
would generate over $50 billion a year (Stone institutions, the private nonprofit sector and
2003). Another approach would betorequireall government to enhance the availability of capital
capital market participants to use a minimum for social housing. Many of these rec-
percentage of their net new funds to purchase ommendations are designed to operate within the
long-term, low- interest bonds issuedbythetrust present capital market system or to alter it
andbacked by the U.S. Treasury. It has been somewhat. Most of them rely upon some
estimated that such an approach could have government-backed incentives to make capital
raised between $20 and $25 billion a year as of investment in low-income housing attractive from
theearly 1990s if 10 percent of net new funds the standpoint of risk and return. Except for the
raised inthecreditmarkets by private financial Community Reinvestment Act, most of them do
sectorsand nonfinancialinstitutions would have not rely on the political power of the government to
been invested in these bonds (Stone 1993); force change. As the roleof nondeposit mortgage
currently, this would be closer to $50 billion a banks and bankers increases, the effectiveness of
year (Stone 2003). In the shor t run, these the Community Reinvestment Act to challenge
amounts would exceed the capacity of nonprofit behavior comes into question unless it is extended
developers and CDFIs, but inthe long run, to nonbank financial institutions.
theavailability of suchfunds would help to build We need a more substantial, effective and
capacity and aid inthe scaling-up process. A generous system for financing the production
national housing trust fund could allocate andrehabilitation oflow-and moderate-income
money to CDFIs andpublic agencies, for use as housing in the United States. The existing system
either equity orlow-cost, long-term debt. has insufficient capital; istooreliant on debt
3. The Federal Home Loan Bank could offer asp financing, particularly market-rate debt financing,
eci a l category o f memb e r s hip to CD FIs, andisoften inefficient inallocating existing capital.
thus giving CDFIs access to long-term, fixed- A concentrated and coordinated effort is needed to
rate financing at relatively affordable costs. The increase the availability of social finance, both
federal government could also mandate this equity anddebt. Such an effort must include
change, similar to the mandate in FIRREA that provision of flexiblegrant funds by federal, state
established the current affordable housing and local governments; a system of appropriate
programs at theFHLB in which a p o r t i on of t incentives and regulations for the private sector;
h e b ank's profits ar e d e dicated to low- increased creativity and participation by the private
income housing. sector, including not only banks but other nonbank
4. Federal tax laws could be changed to provide financial intermediaries, such as insurance
for tax-free interest income to individualsand companies, mortgage companies and mutualfunds;
corporations making below-market rate loans to and a larger,more sophisticated CDFI sector.
CDFIs. This would help attract funds to CDFIs,
but itmay not attract the long-
termcapitalthatismostneededforlow- income REFERENCES
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Jon Pynoos and Christy M. Nishita
13 The Elderly and a Right to Housing
ON THE SURFACE, it appears that the many settings have instead become a source of the
housing situation of older persons is a testament to problem itself. Third, despite their preference to
the success of American housing policy. For remain intheir own homes, many older persons
example, of householders age 55 or older, close to with low or moderate health or behavioral
80 percent own their homes, most having been problems must relocate to more institutionalized
supported by government-backed financing and tax settings.
advantages. Home equity represents about 44 The problems of affordability and suitability
percent of the assets of older households and underscore the need for housing to be an en-
provides a significant financial resource (HUD titlement. The home plays a disproportionately
1999a). Housing for older persons is generally in vitalrole inthe lives of older adults. Those older
good condition, and few older persons live in adults whoare frail anddisabled spend agreater
overcrowded conditions. Older persons have also amount of time at home. If older adults' eco-
been major beneficiaries of direct housing nomicand socialresources are limitedin late life, the
subsidies: Over 1 million elderly 1 households home and neighborhood play critical roles intheir
receive housing assistance inthe form of such lifechances andidentity (Saegert 1985). Moreover,
programs as public housing, Section 202 housing, housing is a major determinant of safety, ability to
Section 221d3 housing andSection 8 vouchers get out into the community, and the ability to
(HUD 1999a). With these findings inmind, it afford other basic necessities of life. This chapter
isunderstandablethat over two-thirdsofpersons 50 examines the current housing situations of older
yearsand olderin a national survey reported that people, then emphasizes the need for affordable
they were “very satisfied” with their housing and and suitable housing. In addressing these needs,
their neighborhoods (AARP 1996). promising and innovative residential programs for
These achievements, as impressive as they frail older persons will be discussed. The chapter
seem, present an overall picture of older adults that concludes with several strategies to improve the
maskstheserious housing-relatedproblems of housing situation of elderly persons inthe future.
specific subgroups and the difficulties of securing
housing and services. First, olderpersons THE HOUSING SITUATION OF OLDER
withlowincomes, women, minorities and those PERSONS
living alone warrant special attention because of
concerns related to housing affordability. These Homeowners versus Renters
older adults live on fixedincomes andhave limited
ability to increase earnings. Second, many older More than eight intenolder adults aged 45 and older
adults express a strong desire for continuity in their own their homes (AARP 2000). Although
living arrangements yet often live in physically
unsupportive environments, disconnected from
services. Instead of facilitating olderpersons' ability
togrowoldsafely, independently and with dignity,
280 Jon Pynoos and Christy M. Nishita
the rate of homeownership decreases with ad- no mortgage debt.

vanced age, the majority (78 percent) of older
adults over age 75 still own their own home (JCHS Housing Costs Remain a Serious Problem for
2003). Homeownership rates, however, are lower Older Persons
among the most economically disadvantaged
subpopulations. In 2002, 80 percent of whites age The most prevalent housing problem of the elderly
75 and older were homeowners compared with 74 isthe burden of excessive housing costs. The
percent of blacks, 65 percent of Hispanics and 59 conventional concept of affordability is the
percent of Asians (JCHS 2003). Homeownership is proportion of a household's income that can be
also lower among elderly women (70 percent— reasonably spent on housing, which the federal
HUD 1999b)and seniors withincomes below government has set at 30 percent. As of 1995, 17
$20,000 (62 percent— AARP 2003). percent of elderly households have moderate
In comparison to owners, the approximately 5 housing cost burdens (30 to 49 percent of their
million elde rly renter sar emore like ly to b e poor income spent on housing), while an additional 14
and comprised of women, minorities and persons percent spend more than 50 percent of their income
who live alone andhave hadlittleoppor- tunity for on housing, indicatingasevere housing cost burden
ownership. But this category also includes an (HUD 1999b).
estimated 1.57 million elderly renters who owned Affordabilityproblems are concentratedpri-
their previous residence. Some of these elderly marily among renters rather than homeowners.
were forced into a rental condition because of Renters are three times more likely to have severe
declining health, depletion of financialresources or housing costs. Fifty-seven percent of all renters
substandard housing conditions (HUD 1999a). havemoderatelytoseverelyhighhousing costs (HUD
About 8 percent of olderpersons, bothrenters 1999a). Although approximately 1.5 million
and owners, live in dwellings and neighborhoods elderly, low-income households live in
specifically planned for their exclusive occupancy. government-assisted housing, such housing
These range from accommodations assistance is farfrom adequate to meet the needs of
thatprimarilysupportapost-retirementleisure- all elderly, low-income individuals (HUD 1999a).
oriented lifestyle (active retirement communities) Fifty percent of homeowners with severe
to those that predominately cater to frail persons housing costs are still paying off a mortgage (HUD
who needpersonal assistance and nursing services 1999a). The other half own their homes free and
(Golant 1992; Pynoos and Golant 1996). clear, but many still report problems such as the
A major advantage of homeownership is ac- cost of utilities, taxes, insurance and maintenance.
cumulation of equity. Homeownership has pro- Overall, however, homeowners tend to have higher
vided many older persons with a valuable asset. incomes with which to address these cost issues.
The distribution of net worth, however, is bimodal, Certain demographicsubpopulations areex-
with 23 percent having a net worth under $25,000 tremely vulnerable to high housing costs. Ap-
and the same percentage having between $100,000 proximately two-thirds of senior households with
and $250,000 in net worth (Schafer 1999b). As severe housing cost burdens are women, and two-
noted, home equity accounts for 43.6 percent of thirds live alone (HUD 1999b). Sev- entypercent
accumulated assets. Comparing elderly ofblack and 53 percent of Hispanic
homeowners with elderly renters, the 1995 median elderlyhouseholdshaveseverehousingcostbur- dens
net worth for the former was $141,300 but just compared with 25 percent of white elderly
$6,460 for the latter (HUD 1999a). American households (HUD 1999a).
Housing Survey data for 1995 indicate that 48
percent ofrenters have incomes below $10,000 Howdothe housing cost problems of older
compared with only 19 percent of owners. adults compare with those of nonelderly
Homeownership can be potentially advantageous households who have the added burden of child-
because it provides security of occupancy, related expenses? Stone (1993 and Chapter 2)
residential control, low cash outlays for shelter and suggests an alternative view of affordabilitybased
a potential source ofincome for those with little or onwhetherindividualsorfamilieshave enough
The Elderly and a Right to Housing 281
money to pay for other necessities such as child in the inner city, skid row and edges of theurban
care, food or medical care after paying for housing. downtownareespe- cially socially marginalized.
Rather than a set percentage, the standard Even though most estimates suggest that theelderly
iscalculated on a sliding scale based on household arearelatively small proportion of the overall
size and income. Those who spend more than this homeless population (Weiss 1992), theyrepresent a
amount are considered shelterpoor. Examining the particularly difficult population to serve.
housing affordability issue from this perspective
revealsthat nonelderly households have higher rates Overhousing Has Been Raised as an Issue
of shelter poverty than elderly households, due to
their greater expenses andhigher taxes. Only infrequently are older households over-
Nonetheless, inthe lowest income bracket (less than crowded, defined by the U.S. Census as more than
$5,000), nearly all elderly and nonelderly are one person perroom. In fact, some analysts contend
shelter-poor. A significant portion (48 percent) of that over 5million olderhouseholdsare
shelter-poor el- dersaresingle women, most overhousedbecause theylive in dwelling units in
ofwhom live alone. Based on Stone's perspective, which bedrooms outnumber household members
fewer older adults areoverburdenedwithhousing by more than one (HUD 1999b). The majority of
costs compared with nonelderly households, but theoverhoused are homeowners, many of whom
these households are in much greater need than live inthe same home in which they raised their
indicated by conventional standards. children. It can beargued that better use could
bemadeof thisunderutilized space by older persons
The Physical Repair Needs of Housing sharing their homes with others orbymoving out
altogether.However, few such persons desire to
Excessive housing costs and low incomes can move because of their emotional attachment to the
prevent persons from maintaining their place of home, and most use extra bedrooms for family
residence. Older adults tend to live in older homes, visitors, storage and accommodations for a
usually built prior to 1960. Nearly 1.5 million older personprovidingservices (Pynoos and Golant
households live in dilapidated housing that is 1996).
insevere need ofphysicalrepairs related to such
housing systems as plumbing and heat. Among
these households, over 1million are homeowners HOUSING NEEDS OF OLDER ADULTS
and 400,000 are renters (HUD 1999a).
Althoughinadequate housing affects more owners The most significant housing needs of older adults
than renters, homeowners are more likely to be are affordability and suitability. The statistics on
able to afford repairs and have the authority to severe housing costs noted above highlight the
make them. Only a small percentage of owners need for more affordable senior housing. In
who need to repair their homes are poor. On the addition, there isaneedfor suitable housing, defined
other hand, more than one-half of elderly renters as housing that provides a supportive setting and
who need home repairs have incomes under services to older adults. A continuum of housing
$10,000 and no assets (HUD 1999a). options is needed so that older adults can find a
Inadequate housing conditions areespecially place that is suitable to their level of need.
concentrated among older households who are
poor, minorities (e.g., African-Americans and Affordability
Hispanics), widows, very old (85 yearsor older)
and frail (HUD 1999b). Elderly households living Federally Subsidized Housing Is in Short Supply.
in rural areas, and to a lesser extent those living Long waiting lists andlow vacancyrates for sub-
incentral cities of metropolitan areas, are also more sidizedhousing indicate a shortage of affordable
at risk of occupying housing in poor condition housing. Currently, the Section 202 program,
(Golant and La Greca 1994). Elderly persons living sponsored by nonprofit organizations, houses over
in low-priced, furnished rental units of residential 350,000 older persons in over 3,500 facilities
hotels, rooming houses or transient hotels located (Heumann, Winter-Nelson and Anderson 2001).
Residents of Section 202 housing, one of the encouraging stepinthe right direction was $683
government's best programs, have their own private million authorized by HUD for Section 202
apartments, and rents do not exceed 30 percent of housing production in FY2003, an increase of $4
tenant incomes. The buildings are generally well million over the previous year.
maintained,andresidents are highly satisfied with
their accommodations (Golant 1992). Over 1.2 Suitability
million rental households of all ages benefit from
Section 8 rental subsidies, including 500,000 older An Aging Society Needs Suitable Housing Linked
households (Kochera, Redfoot and Citro 2001). with Services. While housing costs and conditions
Federally subsidized housing for the elderly remain serious problems for a large number of
benefits a disproportionate number of low-income, older persons, the issue of suitable housing linked
older womenwholivealone,includingahighpercent- with services for frail older persons has risen
age of minorities; these residents cannot afford rapidly on the public agenda. Concern about
other housing options. housing for those persons is driven by the large
Nevertheless, in Section 202, Section 8 and increase intheold-old population and their needs for
public housing, there is a large gap between the supportive housing linked with services.
number of wait-listed applicants and the number of The rapid growth of theelderly population is
available housing units. It is common for applicants bynow common knowledge. By 2000, there were
to waitoverfouryears forSection 202 housing 36 million Americans over age 65. That population
(Pynoos et al. 1995). Some applicants cope by will expand to almost 70 million persons by the
cutting expenses, moving in with oth- ersor asking year 2030, at the height of the aging of the baby
relatives andfriends for assistance, but most have boom generation. Just as important in terms of
already reduced their expenses as much as possible housing policy, however, is the growth of the old-
(Pynoos et al. 1995). old segment of the population. From 1980 to 1990,
The problems oflow-income persons areex- the number of persons 85 and older increased 37
acerbated by losses from the current subsidized percent. In 2050, the oldest- old may make up 25
housing stock.Under HUD's Section 8 program, percent of the population aged 60 and older
landlords receive low-interest loans, subsidies and (Rogers 1999). The rates of disability and the need
otherincentives to house low-income families, the for supportive settings linkedwith services increase
disabled and theelderly. Some developers are significantly at such advanced old age.
paying off their loans early and converting to Approximately 29 percent of persons age 70
market rents or are opting not to renew their and older need help with at least one activity of
Section 8 contracts. It is estimated that daily living (ADL) (Schafer 1999a). Limitations
approximately 300,000 units were lost between include the performance of such basic ADLs as
1997 and 1999 (Commission 2002). At the same walking, bathing, feeding, eating and toileting. The
time, the current production rate of 5,000 to 6,000 prevalence of such physical disabilities increases
Section 202 units per year is far below the 20,000 with age. For example, nearly 19 percent of
units peryearinthe late 1970s (Commis- persons age 70 to 74 experience difficulties with
sion2002).The2002CommissiononAffordable ADLs, rising to 53 percent of those age 85 to 89
Housing and Health Facilities Needs forSeniors (Schafer 1999a). Rates of cognitive problems also
inthe 21st Century (also known as the Seniors increase with advanced old age: the prevalence of
Commission) was created by Congress to review cognitive impairment increases about 10 percent
current housing and health needs of older for every 10 years of age after age 65 (Unverzagt et
Americans and to make policy and legislation al. 2001).
recommendations forincreasing theavailability Despite functional and cognitive difficulties,
ofhousing and services. It recognized the loss of themajority of olderpersons express a strong desire
subsidized housing as a serious problem. The for continuity in their living arrangements. For
Seniors Commission acknowledged the need not example, inanAmerican Association ofRe- tired
only to preserve the existing housing stock but also Persons (AARP) (2000) survey of persons age 45
to renovate and refinance Section 202 projects. An and over, over 80 percent of respondents agreed
with the statement: “What I'd really like to do is homes has been increasing, most of the current
stay in my own home and never move.” Such housing stock is unsuitable for frail older persons
astrong attachment to place isunderstand- able or younger persons with disabilities.
when length of tenure istaken into account; in Approximately 1.14 million older persons with
1995, nearly one-half of all elderly homeowners health and mobility problems have unmet needs for
hadlivedinthe same home for more than 25 years. additional supportive features intheir dwelling units
For many such residents, their current housing (HUD 1999a)
represents a sense of security, proximity to friends In addition to physically supportive environ-
and familiar services, and memories of where they ments, older persons may also require personal
raised their families. In another AARP (2003) assistance in tasks such as preparing meals, am-
survey, 54 percent of respondents thought they bulating, bathing and shopping. Family members
would be able to stay in their current home for the continue to furnish approximately 80 percent of
rest of their life. such personal care, with 20 percent provided by
A living environment with suppor tive features outsiders, such as homemakers, home health aides,
can greatly benefit all older adults who prefer to nurses and personal companions (Kane, Kane and
age in place and especially those who are frail or Wilson 1998). In either case, caregiving is
disabled. It can enhance their ability to have facilitatedbyadequate spaces within which to assist
meaningful lives, exercise choice, maintain social in tasks (e.g., bathing) and supportive features
ties and carry out activities. However, the (e.g., grabbars, walk-in showers).
overwhelming proportion of single-family homes At some point, a physically supportive home
and apartment complexes in which older persons and personal assistance may not be enough to meet
live were developed for independent residents. an older adult's needs. If individuals have severe
These dwelling units have been referred to as healthproblems ordisability,athreshold maybe
“Peter Pan” housing, designed for persons who will reached whereby relocation to a more service-
never grow old. Such housing frequently has enriched setting maybe necessary. This threshold
barriers, such as stairs, that make getting into the can vary, depending on the severity of health or
unit and up toasec- ond floor difficult, and disability, the presence of behavior problems
bathrooms that are unsafe. stemming from Alzheimer's disease, the
Physically supportive settings provide acces- availability of a caregiver or the financial ability to
sibility inside the dwelling unit as well as to the afford nursing home care. For certain older adults,
outside and are adaptable to the limitations of their remaining at home may not make sense from a
residents. They include features that are resource allocation perspective, given their high
controllable by residents (e.g., individual level of need.
thermostats at appropriate heights); forgiving (e.g., Responsibility for providing supportive en-
carpeted floor surfaces that may reduce injuries vironments and services has become an especially
from falls); easy to use (e.g., places to sit while important issue ingovernment-subsidized housing
cooking) and supportive (e.g., grab bars and serving the elderly. However, most government-
handrails). Such settings can make it easier for subsidized housing hasamajor shortcoming: It was
older persons to carry out tasks and enhance safety. intended for independent older persons. Over time,
Persons with cognitive problems such as however, residents have aged in place and new
Alzheimer's disease may also benefit from living in tenants have moved inatanolder age. For example,
familiar environments that allow in 1999, managers of Section 202 projects reported
themtoexercisewhatevercapabilitiesremain for self- that 30 percent of residents were age 80 and older
direction. They may, however, need special and 22 percent ofresidents were frail(Heumann,
features that allow for safe wandering, devices that Winter-Nelson and Anderson 2001). Such residents
compensate for memory problems (shutoff devices need more physically supportive environments and
for stoves), visual cues that help them find their services than initially areavailable in most federally
way around the house and simplified environments assistedhousing inorder to avoid unnecessary
(e.g., removal of clutter). moves to more institutional settings, such as board-
Although the addition of supportive features in and-careor nursing homes. As will be discussed
later, until recently, HUD has taken only limited nursing home and institutional care (Wiener, Tilly
responsibility for assisting residents in aging in and Alecxih 2002). While nursing home care has
place. become a form of entitlement, community-based
care services are still optional. Medicaid does not
Legislation and Programs Present Barriers to pay for the full range ofhome careservices
Aging in Place. Despite the benefits of linking neededbymost persons who are functionally
housing and services to promote aging in place, dependent. Consequently, it has been easier for
legislation and programs hamper progress in this older persons in need of long-term care to become
direction. Government response to improving the eligible for Medicaid payments if they enter a
suitability of conventional housing has been slow nursing home, and Medicaid has traditionally
to evolve. The Fair Housing Amendments Act of covered more services in nursing homes than in
1988, themajorpiece offederalleg- islation that other settings.
requires physically accessible housing settings,
applies only to buildings of four or more dwelling
units, leaving out entirely singlefamily houses and PROMISING HOUSING STRATEGIES
smaller housing complexes, including most
townhouses. The section of the bill that refers to The lack of affordable and suitable housing is a
retrofitting existing multiunit dwellings calls for barrier to appropriate care for frail older persons. In
“reasonable accommodations” for persons with order to address these problems, there have been
disabilities and allows tenants to make adaptations several promising housing strategies that attempt to
but is vague on the responsibility of the owner to improve the affordability and suitability of elderly
pay for changes, even inthe common areas. housing:reverse mortgages, home modifications,
Programs that provide funds enabling elderly programs to make federally subsidized housing
people who live in their own homes to make more supportive, innovative community-based care
adaptations inthe physical environment are few and services, assisted living, small
far between, supported primarily by programs such groupresidentialfacilities and nontraditional
as CommunityDevelopment Block Grants, which housing options.
was created in 1974, and the Older Americans Act
of 1965, neither of which provides substantial
Reverse Mortgages as a Source of Income
resources to solve these problems. Medicare pays
for what are considered medically necessary
A reverse mor tgage enables older adults to use
devices, such as walkers and wheelchairs, but does
their home as a potential source of income to make
not cover features such as walk-in showers, stair
their long-term care, home repair or home
lifts or structural changes. Therefore, older persons
modification needsmoreaffordable. It allows older
have at their disposal only a patchwork delivery
persons to stay in their homes and draw down the
system of inadequately funded services. Many
cash value through a monthly stipend, a lump sum
olderpersons forego adaptations that could improve
payment or a line of credit (Scholen 2000). The
the quality of their lives because of the paucity of
loan is then repaid, with interest, when the home is
home modification programs and the difficulty of
vacated. Early proponents of reverse mortgages
having to pay out of pocket for many adaptations,
pointed out that almost one-half of the elderly at
especially those that are costly.
risk of needing health and personal care services
Home modification and other supportive
lived in single-family dwellings. The potential
services to facilitate aging in place are difficult to
market for such mortgages are persons over 62
achieve because the financing of long-term care is
years of age who own their homes free and clear or
biased toward institutional care. Medicaid,the
nearly so.
primary government- subsidized program that pays
Many analysts have been optimistic about
for long-term care services needed by chronically
reverse mortgages because of the high rate of
ill low- income elders, overwhelmingly funds nurs-
homeownership among the elderly. The aggregate
ing home care. In 2000, Medicaid spent $67 billion
amount of equity tied upin homes of theelderly is
on long-term care, 75 percent of which paid for
large (estimates range from $600 billion to $800 their expenditures for care from the equity in the
billion). Rasmussen, Megbolugbe and Morgan home. As Redfoot (1993) points out, such an
(1997) note that studies have estimated that outcome would discourage consumers from using
from3to5million elderly households are eligible for reverse mortgages, outweighing their advantages of
a reverse mortgage. promoting independence and choice. Another
In order to promote such mortgages, HUD in factor that discourages consumers are deceptive
1989 began to insure a specific type of loan practices of lenders who fail to disclose all fees,
referred toasaHomeEquity Conversion Mortgage charge exorbitantly high fees or ask borrowers to
(HECM). The HECM is available for persons 62 sign documents without fully reading or
years of age and older who own their homes with understanding them (Wong and Garcia 1999).
little to no mortgage debt. The HECM provides A recent initiative encour ages older home-
either for a monthly payment as long as the owners to use reverse mortgages to purchase long-
borrower resides inthe home, monthly payments term care insurance. Passage of the American
for a period of time set by the borrower, a line of Homeownership and Economic Opportunity Act of
credit or a combination of these options (HUD 2000 is a step in this direction. It waives the
2000a). Theaverage borrower in the HECM upfront fee for the mortgage insurance premium for
program is a 76-year-old widow with a median older Americans who use the money from an
income below 125 percent of the poverty level; HECM for long-term care insurance. This approach
however, recently a greater number of younger would lessen the re- lianceonMedicaid,adominant
retirees are beginning to use the program. A study payer of nursing home care. At the same time,
on the potential impact of reverse mortgages (Kutty older adults would not have to spend down and sell
1998) estimated that 564,080 households in 1991 their home in order to qualify for Medicaid. Older
would have been above the official poverty adults withlong-termcare insurance would have
threshold if they had obtained an HECM. The more options to remain at home with home health
HECM is just one of a diverse offering of reverse care services or move to an assisted living facility
mortgages available. The Fannie Mae Home (Scully 2003). This policy initiative represents an
Keeper program and otherbanks, mortgage emphasisonusing one'sown resources first to
companies or private lenders are beginning to offer support long-term care before relying on public
reverse mortgages to their existing clients. programs. Nevertheless, the use ofreverse
The uptake on HECMs has been somewhat mortgages for suchpurposes can be seen as
slow, but the program has expanded over the past anotherformof spending downtoreceive long-
few years partly because of lower interest rates and termcare. Thisapproach underscores the problem
declining retirement income from stocks and that neitherhousing norlong-termcareare
savings accounts. According to the Federal entitlements.
Housing Administration (FHA), since the
program's first closing in 1989, approximately Suitability: Supportive Environments and Services
75,000 HECMs have been insured and endorsed,
two-thirds of which have been endorsed in just the Home Modification and Repair. Home repair and
past three years alone. The slow growth of reverse modifications are physical adaptations to the living
mortgages of all types is related to their environment that improve the suit-
complicated nature, the reluctance of many older abilityofthehomeandfacilitate“agingin place.”
persons to tamper with a major asset, the high Repair involves fixing roofs, foundations and
closing costs that often accompany initiation of the equipment to make the home safer and more
mortgage, unwillingness to return to debtor status energy-efficient. Home modifications can range
and the relative newness of the concept. from inexpensive leverdoorhandles, hand-held
Nevertheless, accessing home equity by the poor showersand grabbarstomoreexpensive ramps, stair-
elderly with failing health is common, according to glides andfully remodeledbathrooms and kitchens.
HECM loan originators (Rasmussen, Megbolugbe On a daily basis, these modifications make it easier
and Morgan 1997). Such use raises a potentialprob- to carry out tasks such as cooking, using stairs and
lem: States may aggressively attempt to recover cleaning. Home modifications can also have long-
range benefits, such as increasing independence, handymen, medical supply companies and social
preventing accidents, facilitating caregiving and service agencies. These problems continue to act as
minimizing the need for costly institutional care. barriers to older adults who want to age in place.
Finally, home modifications play a role
inmultifactorialinterventions to prevent fallsthat Making Government-Subsidized Housing More
include risk assessment, exercise, educational Supportive. To improve the suitability of housing
materials and programming, andfollow-up for aging residents, service providers have begun to
(Shekelleetal. 2002). test the effectiveness of clustering services at
The majority of publicly funded home housing sites in order to take advantage of
modification and repair is funded through HUD's economies of scale in serving multiple clients with
Community Development Block Grants. fewer workers (Feldman, Latimer andDavidson
Nevertheless, there is an absence of federal 1996). The most concentrated efforts to make
direction and earmarked funding for home federally subsidizedhousing more supportive,
modification and repair. Several states and a large however, are found in HUD's Congregate Housing
number of localities have stepped into the breach to Services (CHSP) and service coordinator programs.
provide assistance for home modifications. For TheCHSP began in 1959 as a demonstration
example, the Minnesota Housing Finance Agency serving approximately 3,000 persons in63sites. The
(MHFA) uses housing revenue bonds to support a CHSP model uses a service coordinator to arrange
$20,000,000 Fix-up Fund to assist homeowners in assessments and pays for services such as meals,
increasing the livability, accessibility and energy transportation andhomemaking. The program is
efficiency of existing homes. The low-interest targeted toward very frail older persons
loans are made to homeowners by locally whoareexperiencing at least two problems with
participating banks, credit unions and housing activities of daily living. Participants receive many
agencies. The MHFA also has a deferredpayment benefits by participating inthe CHSP: They
Accessibility Loan program funded by state continue to live inaresidential environment, have
appropriations that targets households who have greater control of discretionary spending than they
one or more members with a long-term physical would in a nursing home and receive emergency
disability that substantially affects functioning and day-to-day assistance. Perhaps the greatest
inthe home. The Ohio State Department of Aging benefit is the ability to postpone or avoid moving
provides funds for housing specialists who provide into a nursing facility. With passage of the Housing
technical assistance and information about a variety and Community Development Act of 1992, the
of housing options, including home modifications. program expanded operations to almost doublethe
The Philadelphia Corporation on Aging, an Area number of original sites. However, instead of HUD
Agency on Aging, uses a variety of funds from paying for most of the basicservices, the revised
such sources as Community Development Block program requires a 50 percent matchfrom other
Grants and Medicaid waivers to provide a range of sources as well as 10 percent payment from resi-
modifications for older and younger persons with dents, changes that discouraged some potential
disabilities. projects from applying. Unfortunately,HUD no
Despite the existence of such comprehensive longer funds new programs, and the first contracts
programs, problems remain forpersons seeking to expired in 1998 (HUD 2000b).
modify their home. Significant gaps exist in the Based on theCHSP and a RobertWood Johnson
geographical coverage ofprograms, withru- ral Foundation Supportive Services in Senior Housing
areas particularly underserved. In addition, the Demonstration, Congress—through the Housing
existence of these programs is constantly and CommunityDevelopment Act of 1992—
threatened by a lack of stable sources of fund- authorized expenditures for a service coordinator
ing.Inareas without programs, older adults and their program. Service coordination isa less intensive
families face a difficult task of coordinating the model than the CHSP and relies more on linking
many different providersthat maybeneeded to play residents with services rather than providing them
a role in home modification, such as occupational directly. Unlike the CHSP, coordinators in this
therapists, remodelers, contractors, tradesmen, program do not have budgetary authority for
services, but they can serve a somewhat broader providing more intensive supportive and nursing
group of frail older residents. According to the services inagroup setting that is residential in
American Association ofService Coordinators, in character and appearance. It has the capacity to
2003, there wereapproximately 3,000 service meet unscheduled needs for assistance andis
coordinators in Section 202, public housing and managed in ways that aim to maximize the physical
other programs. An evaluation of the program and psychological independence of residents. ALis
revealed that service coordinators successfully intended to accommodate physically and mentally
marshaled a number of new services for residents, frail elderly people without imposing on them the
who report high levels of satisfaction with the heavily regulated, institutional environment found
program (KRA Corporation 1996). Services in many nursing homes (Redfoot 1993; Regnier
coordinated for residents include meals on wheels, 1994; Regnier, Hamilton and Yatabe 1995).
in-home supportive services, hospice care, home Thetypicalresident of an ALis female, age 83 or
health for those who meet Medicare or Medicaid over, widowed and requires help with 2.8 activities
eligibility, transportation services, on-site adult of daily living (ALFA 2001).
education and monthly blood pressure checks. The private sectorplayed asignificant role in
Although there is also assistance with locating developing AL.Inthe 1990s, the corporate sector
otherlivingarrangements,such as assistedliving or a aggressively constructed new buildings and
nursing home when it becomes necessary, the converted existingonesintoAL.Eventraditional
primary focus is on assisting residents to continue nursing home providers have shifted some of their
living in their current apartments. inventory toward AL.For example, Sunrise Senior
Despite the apparent success of CHSP and Living, formerly known as Sunrise Assisted
service coordination, bothprograms have faced a Living, is a publicly traded company that has
lack of HUD suppor tand difficulties in securing developed severalhundredproperties across the
funding. Foryears, HUDhas contended that the nation. Thecompanyhas recently shiftedits focus
provision of services restedwith other agencies, from property ownership to management. In 2003,
such as the Department of Health and Human the company acquired Marriott Senior Living
Services (HHS). However, there are some Services, a move that will increase the number of
promising developments. In FY2003, the HUD properties that Sunrise will manage to include
budget provided an additional $3 million for the nursing homes and independent living
service coordinator program, bringing the total to centers(Pristin 2003). The private-sector AL
$53 million. This increase is well-aligned with the industry has catered to middle-income persons who
Seniors Commission's recommendation to have had a pent-up demand for attractive
appropriately fund service coordination programs residential settings with available services and
in federally subsidized housing. The Seniors amenities. These companies prefer to operate in
Commission also called for increased unregulated or loosely regulated environments.
interdepartmental cooperation between HUD and Affordability of AL, however, remains a
theHHS to improve the linkbetween housing and problem because its average monthly cost is $2,159
services (Commission 2002). However, the (MetLife 2002). According to Redfoot (1993:519),
SeniorsCommission, along with many other “though assisted living isthe fastest growing
groups, has lamented the reduction of public segment of the senior housing industry, the costs
housing units and theexpiration ofhousing contracts associated with this type of service have generally
that have reduced the overall number of federally been out of reach for older persons withlow or
assisted units occupied by the elderly. moderate incomes.”Blanchette (1997) notes that
some policymakers are con-
Suitability: Providing a Greater Range of Housing cernedthatifstatessubsidizethecostsofservices in AL
Options for low-income persons, state long-term care costs
will increase. Consequently, the government would
Assisted Living: Housing for Frail Older Persons. be providing incentives for older persons to leave
Assisted living (AL) strives to improve the suit- their homes and enter assisted living, thereby
ability of housing for more frail older adults by avoiding less attractive options such as board-and-
care, foster care or nursing homes. for nursing home care. In an analysis of six studies
States have attempted to make AL more af- of AL residents, Golant (2004) found that despite
fordable and reduce nursing home costs by uti- wide variation in impairment level, older residents
lizing Medicaid to reimburse service costs. Cov- in assisted living were less physically and
erage maybe provided under theMedicaid state plan cognitively impaired than those in nursing homes.
or under a Home and Community-Based Services A nationally representative study found that among
(HCBS) waiver. These waivers provide flexibility residents who leave assisted living, most move to a
to states to develop innovative residential higher level of care; nearly 60 percent end up in
alternatives for Medicaid-eligible individuals who nursing homes (Phillips et al. 2003). However,
would otherwise needinstitutional care (Mollica Oregon's affordable AL program has lower rates of
and Jenkens 2001). As of 2000, 38 states used residents moving to nursing homes (20 percent)
Medicaid state plans or waivers to cover services in because of the state's liberal skilled nursing care
either AL or board-and- care facilities (Mollica provisionsand flexiblenurse delegation statutes
2000). Medicaid, however, does not cover room (Golant 1999). These statistics suggest that even
and board costs for AL. Medicaid recipients inOregon, whereALfacil- ities accommodate more
usually pay for room andboard costs physically and cognitively impaired residents, a
throughSupplementalSecurity Income (SSI) significant number of residents still relocate to
benefits and state supplements to SSI. Even here, nursing homes.
“double standards for the rich andpoorhave Thecloser that AL comes to housing nursing
emerged” as low-income frail elders often have to home-eligible residents, the more attention will be
share their residential units (Golant 1999:42). The paid to regulations that protect residents and ensure
SeniorsCommission recommended that Congress quality of care. These regulations could shiftAL
institute a Medicaid shelter allowance under the away from a social model to a “medi- calized”
Medicaid HCBS waiver programs with incentives approach. In any case, there is not an unlimited
for state implementation (Commission 2002). demand for AL. Most older people still prefer to
In 2000, HUD's budget included $50 million for age in place intheir own homes or apartments.
theconversion of entire buildings or floorsof Wahl and Gitlin (2003:293) predict that the
Section 202 housing for theelderly into ALfacil- “primacy of the private-home environment” will
ities, representing another attempt to make AL not only persist but become more significant for
more affordable. HUD also authorizes the use elders inthe future.
ofhousing vouchers inAL.Although these programs
will facilitate aging in place, they reduce Small Group Residential Facilities. Small group
thenumber of units for more independent older residential facilities are a housing option that meets
persons and raise concerns about regulating quality the needsandpreferences of certainolder adults.
of care. The experience of various states with When an AARP (1996) survey asked respondents
converting Section 202 into AL suggests that where they would prefer to live if theywere forced
projects increase residents' access to services and to move, 69 percent indicated a residential care
maintains a residential environment. However, facility. Among residential care facilities, older
projects need more stable sources of funding persons strongly preferred small homes providing
andface difficultyintegrating staff from care to a few people or apartment buildings with
bothhousing and servicesbackgrounds(Wilden services. Over the last 20 years, there has been a
andRedfoot 2002). In addition, complying with slow growth in small group homes, which arealso
building codes and other regulations associated knownasres- idential care facilities, board-and-care
with ALlicensure can be difficult(Hilton 2004). If homes and adult foster care homes (Streib, Folts
successful, such policies will make AL more and Hilker 1984; Hawes, Wildfire and Lux 1993).
available to low- and moderate-income older Golant(1999)suggeststhatmiddle-incomeper- sons
persons but still fall considerably short of the need. who have lived in board-and-care have gravitated
As states andfederalprograms attempttore- duce to more high-end AL facilities.
long-term care costs and make AL more affordable, While many small group homes are actually
there are concerns about whether AL is a substitute found in existing residential structures, there has
been a recent growth of newly built small group provides or coordinates social, educational,
homes. These range from sharedliving arrange- housekeeping, personal careandhealth services for
ments for moderate-income older persons ex- approximately 6,000 older residents of a large
periencing some limitations in activities ofdaily housing cooperative encompassing several
living to residences specially designed for persons buildings (Lanspery 1998). In 2003, the
with Alzheimer's disease. The latter often provide Administration on Aging awarded $5.6 million in
housingfor sixto eight residents in early to middle- grants to 12 cities in order to
stage dementia, including persons who are establishdemonstration programs that improve
nonverbal and incontinent. These small group access to health and supportive services for older
home facilities provides meals, personal care, adults in NORCs.
laundry and protective oversight for residents. Accessory apartments are complete living units,
They vary widely insizeand ambiance. including a private kitchen and bath, created within
Some are attractive and family-like, whileothers a larger single-family home. Older adults who rent
are sparse and institutional. Although most states out these apartments can earn additional income,
require the licensing of such homes, many places while the renter may pay lower than market rates in
remain unlicensed. For the most part, even the exchange for help with chores and other tasks.
licensed homes are loosely regulated (Hawes, Elder cottage housing opportunity units (ECHO),
WildfireandLux 1993). Moreover, residential care also known as
facilities continue to face zoning barriers. GrannyFlats,aresmall,portablehomesinstalled
adjacent to a single-family home. This option
Nontraditional Housing Approaches. The avail- enables older adults to be near their family but still
ability of a continuum ofhousing options will provides privacy. Nevertheless, the growth of these
enable older adults to choose a setting that is two options has been slow, partly due to consumer
suitable to their needs. Over the past decade, a reluctance, the physical difficulty of placing units
number of nontraditional housing approaches have in areas such as inner cities and inner suburbsand
been triedintheUnitedStates, from supporting neighborhood opposition reflectedin restrictive
naturally occurring retirement communities zoning codes. In California, a state law passed in
(NORCs) to accessory units and shared housing. 2003 eases restrictions on building these second
A considerable number of older people live in dwelling units in singlefamily and multifamily
buildings or communities populatedbylarge neighborhoods.
concentrations of the elderly.Twenty-seven percent Shared housing is an arrangement in which
of olderpeople live in a building or neigh- twoor more unrelated people share a home or
borhoodwheremorethan 50 percent of the residents apartment. This option can provide the elderly with
areover age 60 (AARP 1996). Some of these places additional income, companionship, social support
areneighborhoods in which aco- hort of once and security. However, the growth of sharedliving
younger persons has agedin place. Other settings residences and matching programs for older
include small rural towns and urban areas from persons has been slow. Most elderly do not want to
which there has been a large outmigration live with nonspouse relatives or other persons. On
ofyoungerpersons, leaving a concentration of elders the other hand, according to an AARP study
behind. Most of these NORCs were not (1996), 17 percent of respondents indicated they
intentionally planned for older persons, and they would contemplate moving in with a family
usually lack the services, amenities, facilities and member; 3 percent said they were seriously
housing types to adequately support aging in place. considering such amove. Nevertheless, with
NORCs offer theop- portunity to rebuild advancing age, especially for women, the
communities so that they are “elder-friendly” prevalence of shared housing with relatives
interms of facilities such as senior centers, increases. After age 85, one in four women live
available services, appropriate transportation and with a family member other than a spouse, and the
mutual helping networks. So far,the longest-lived frequency is hig her among black and Hispanic
andbest-knownNORC program isNew York City's women (Pynoos and Golant 1996). The elderly
Penn South Program for Seniors (PSPS). PSPS person may view thisasthe best of the limited
options available(Pynoos and Golant 1996). accommodate a wide spectrum of frail older
persons and younger persons with disabilities. At
the same time, it stresses the importance of having
FUTURE DIRECTIONS a wide spectrum of housing alternatives that allow
older persons choices in terms of settings that offer
Advances in areas such as reverse mortgages, home different levelsof on-
modifications, linking housing and services, siteservices,supervision,sociability,privacyand
community-based care, assistedliving and amenities.
nontraditional housing options have provided more
choices for frail older persons. These choices
For over 20 years, researchers and advocates for
reflect a greater awareness that older adults have a
the elderly have been proposing programs that
right to age in place in residential settings that are
extend the ability of housing types to support frail
physically supportive and suitable to their needs.
older persons and the creation of new alternatives
Nevertheless, such changes are incremental and
that provide service-rich, supportive environments.
leave the country unprepared to address the
Such proposals were main agenda items at the 1981
housing and service needs of the growing number
and 1995 White House conferences on aging.
of very old persons and the baby boom generation
These concepts have finally been addressed in
that will soon enter retirement. In order to progress
principle by HUD's Housing Security Plan for
more rapidly, several majorpolicy shifts are
Older Americans (HUD 1999a), which promotes
necessary: changing thecontinuum ofhousing
the concept of communities assembling and
paradigm, insuring the affordability of housing and
coordinating “a comprehensive continuum of care
long-term care, providing universally designed
to meet the changing housing and services needs of
housing, creating new models of housing and
their elders.”
reducing competition between the elderly and other
groups.
THE AFFORDABILITY OF HOUSING

AND SERVICES
THE CONTINUUM OF HOUSING: CHANGING
THE PARADIGM
Frail olderpersons are caught inadouble bindin
relation to living environments: Neither housing
There has been a long-standing assumption that as
nor long-term care are entitlements inour society.
persons become more frail,they need to move along
Housing itself isamajor expense for olderpersons,
a housing continuum from one setting to another.
especially for those who have low and moderate
Along this continuum are found a range of housing
incomes. When expenditures for needed personal
options, such as single-family homes, apartments,
services are added to housing costs, as inthe case of
congregate living, assisted living and board-and-
assisted living, the total amount escalates beyond
care homes, with the end point most frequently
the budgets of the great majority of older persons.
identified asanursing home (Kendig and Pynoos
While 64 percent of older persons have annual
1996).
incomes under $25,000, the average annual fee for
Although the continuum of housing identifies a
housing and
range of housing types, there is increasing
servicesinassistedlivingis$32,400(Schuetz 2003).
recognition that frail older persons do not
But in order to allow frail older persons to stay out
necessarily havetomovefrom one setting to another
of institutional settings, both parts of the equation
if they need assistance. Semi-dependent or
need to be addressed: The right to affordable
dependent older persons can live inavari- ety of
housing for olderpersons needsto
settings, including their own homes and apartments
beaccompaniedbythe righttoaffordable longterm
if the physical setting ismoresup- portive and
care. As discussed previously, long-term care
accessible. A revisedframework has therefore
policy in the United States has packaged services
emerged that emphasizes the elasticity of the
and housing assistance for older persons primarily
conventional housing stock in terms ofits ability to
through Medicaid, which pays forpersonal and itandwho will carry out the regulatory process.
nursing careaswell as costs associatedwith staying Although limits might still exist concerning the
inalicensed nursing home. Also, government extent to which services could beef- ficiently
support for services that allow someone to delivered to all settings, choice would be based
stayinother settings is quite limited. more on older persons' preferences for sociability,
One proposed approach to address the longterm privacy, activities, location and other lifestyle
care problem is to unbundle housing and long-term features rather than just the need for care. Some
care reimbursement so that housing and services frail older persons would choose group living
are paid for separately. Housing and service costs situations, such as assisted living, while others
could be subsidized using portable payment might prefer staying in their own homes or
methods, such as vouchers or cash grants, thereby apartments. The unbundling concept would work
providing older persons with a broad set of choices best if home care, adult day care and transportation
of where to live. Consequently, older persons with were more widely available. In addition, housing
moderate levels of needwould not necessarily would need to be accessible and affordable as well
havetomovetospe- cific service-rich settings such as contain supportive features.
as nursing homes or even assisted living in order to
obtain care.
Several countries, such as Denmark and PROVIDING UNIVERSAL HOUSING
Sweden, have developed a system based on
entitlements for both long-term care services and Many of the physical problems that existing
housing (Pynoos and Liebig 1995). They have housing and neighborhoods present for older
basically stopped building nursing homes persons would beeliminatedifappropriate sup-
andinstead allocate resources to help olderpersons portive and adaptable settings were built inthe first
stay at home or in service houses, which resemble place. Toward this end, a worldwide movement has
assisted living. Along these lines, the United States been advocating for adaptable housing and age-
has been experimenting with a voucher approach sensitive communities that benefit both the elderly
that funds both services and housing but does not and those with disabilities (Christenson 1999).
tie them to particular settings as well as Medicaid These homes and neighborhoods would be
waivers that pay for services in individualhomes, accessible to persons in wheelchairs and persons
small grouphomes and assisted living. with sight or hearing impairments as well as
The federal government, however, remains otherlimitations. Universaldesign emphasizes that
cautious in terms of funding such programs. Given the design of all products and environments be
that families still provide the bulk of personal care usable by all persons to thegreatest extent possible
for frail older persons living in the community, without the need for adaptation or
government budget analysts are concerned that specializeddesign. Although somewhat more costly
large numbers of families will come to depend initially, universal design, as applied to housing,
solely on the use of community-based services, will ultimately reduce later expenditures necessary
should theybecome widely available. for remodeling or retrofitting.
An equally perplexing problem in pursuing a In terms of housing, universal design is a broad
strategy of unbundling housing and ser v ices concept that emphasizes accessibilit y throughout
concerns regulations and licensure (Kane and the home. At a minimum, housing units of all types
Wilson 1993). Owing to the at-risk nature of their would includethe features enumerated in the Fair
residents and the roleof government, nursing Housing Amendments Act of 1988, such as
homes are subject to a plethora of state and accessible entrances, hallways, bathrooms and
federalregulations concerning the physicalfacilities, kitchens; raised electrical outlets and plywood
staffing and quality of care. Although the nursing backing in bathrooms for installing grabbars. In
home regulatory process has its problems, it is in theUnitedStates, there has been progress in this
place. The potentialproliferation of other care direction with the adoption of “visitability” codes
settings for frail older persons opens up a Pandora's in localities such as Atlanta, Austin, Urbana
box interms ofwhat to regulate, how to do (IL)andPima County (AZ) and states such as
Vermont, Georgia and Texas. Visitability is a custody do not qualify as “family” and therefore do
narrower concept that requires entrances and the not meet Section 8 eligibility requirements.
first floor of homes to be accessible. Such Policymakers need to re-examine existing
advances, however, continue to be resisted by requirements within seniorhousing to accommodate
developers, who argue that mandates will increase this rising trend.
the cost of housing andrequire buyerstopurchase
features that they do not want. Builders prefer
voluntary programs or incentives that waive build- REDUCING COMPETITION BETWEEN THE
ing permit fees. Progress in this area therefore ELDERLY AND OTHER GROUPS
requires an educated group of consumer advocates
whoareconvinced enough about the benefits of Competition among groups representing theel-
universal design to take on the building industry. derly, persons withdisabilities andfamilies with
children will continue inthe futureasthey fight for
the limited amount of subsidized housing. Some
CREATING NEW MODELS OF HOUSING critics argue that older adults receive more than
their fair share of such subsidies. They assert that
A broader,multigener ational conceptualization of elderly households are less likely to experience
senior housing is needed that better integrates older excessive housing costs than nonelderly
adults withinthecommunity.While age-specific households (Golant and La Greca 1995) and that
housing has many benefits associated with security families are more likely to have multiple housing
and mutual support among residents, it can be problems, often living in inadequate
overly insular and isolating. Increased flexibility in housing,overcrowded conditions orpaying over 50
the use of funds at the state and local levels would percent of their income for rent (Khadduri and
allow the creation of new models of housing that Nelson 1992). Nevertheless, as was pointed out
incorporate community spaces and provide services earlier, low-income seniorsareatadisadvan- tage in
to the adjacent neighborhood. More integrative that they live on fixed incomes. Critics also argue
models of elderly housing (e.g., service houses) in that seniors have had an advantage because it is
some European countries and a few locations in easier to get communities to approve elderly
this country (1) co-locate restaurants, shops, day housing developments as opposed to family
care, health clinics and senior cen- terssothat housing. However, even senior housing
housing for theelderly is better connected to developments have recently faced consider-
thecommunity; (2) provideservices to olderpersons ableoppositionfromneighborhood groups.De- spite
andyoungerpersons withdisabilities living in criticism, senior housing should be more broadly
adjacent neighborhoods and (3) create age- framed as an intergenerational issue that benefits
integrated housing. Age-integrated housing can persons of all ages. Senior housing offers a sense of
foster greater interaction between young and old security to families with older relatives. Affordable
and increase the vitality of the community. and suitable housing will lessen the strain on
New models of senior housing also need to families, especially low-income families, to
address changing living arrangements, such as the provide caregiving and economic support for older
growing trend of grandparents raising relatives. Furthermore, creating “elder-friendly”
grandchildren. During the 1990s, the number of homes and communities will ensure a more secure
grandparent-headed households increased due to old age for everyone.
drug abuse, AIDS and incarceration. However,
much of the nation's government- assisted housing
for the elderly has been developed for their CONCLUSION
exclusive occupancy and does not allow children.
In public housing, proof of legal guardianship is Our nation made important strides in improving
needed to prevent eviction, while grandparents housing for older persons during the 1990s.
living in senior housing can be evicted for taking in Nevertheless, many older persons still pay too
their grandchildren. Grandparents without legal much for housing and live in substandard con-
ditions. Just as troublesome are the increasing Understanding senior housing into the next century:
numbers of frail older persons who need physically Survey of consumer preferences, concerns, and
supportive housing linked with services. We can needs. Washington, DC: AARP.
2000. Fixing to stay: A national survey on housing
build upon our experience to preserve and enhance and home modification issues. Washington, DC:
existing multiunit housing for the elderly, AARP.
betterlinkhousing and services, expand 2003. These four walls: Americans 45 + talk about
assistedliving, increase home modifications and home and community. Washington, DC: AARP.
repairs, develop new types of housing and en- Assisted Living Federation of America (ALFA). 2001.
courage the appropriate use of reverse mortgages. The assisted living industry, 2001: An overview.
The federal government has taken an important Fairfax, VA: The Federation.
Blanchette, Katherine. 1997. New directions for state
step in this direction by announcing its Housing
long-term caresystems,VolumeIII:Supportivehous-
Security Plan for Older Americans in 1999, ing. Washington, DC: American Association of Re-
emphasizing a continuum of care. tired Persons.
However, government efforts so far have at- Christenson, Margaret A. 1999. Embracing universal
tempted only to remedy the housing and longterm design. OTPractice, 12-25.
care problems without addressing the needs for CommissiononAffordableHousingandHealth Needs for
more radical change in how the government Seniors inthe 21st Century. 2002. A quiet crisis in
America. Washington, DC: The Commission.
finances and provides housing and long-term care.
Feldman, Penny H., Eric Latimer and Harriet Davidson.
Future efforts should emphasize universal design, 1996. Medicaid-funded home care for the frail elderly
build on a new housing paradigm, create innovative and disabled: Evaluating the cost savings and
models of housing and ensure that both housing outcomes of a service delivery reform. Health
and long-term care services are affordable and Services Research, 31(4):489-508.
more widely available. Such radical change Golant, Stephen M. 1992. Housing America's elderly:
Many possibilities, few choices. Newbury Park, CA:
requires the government to recognize housing as a
Sage Publications.
fundamental rightof all persons, including 1999. The promise of assistedliving as a shelter and
theelderly,along- side health care, long-termcare, care alternative for frail American elders: A
andretirement income security. Affordable and cautionary essay. In Aging, autonomy, and archi-
suitable housing will not only honor the tecture: Advances in assisted living, eds. Benyamin
preferences of older adults to age in place but also Schwartz and Ruth Brent, 32-59. Baltimore: Johns
ensuretheir health and economic well-being. Hopkins University Press.
2004. Do impaired older persons with health needs
occupy U.S. assisted living facilities: An analysisof
six national studies. Journal ofGerontology,
59B(2):S68-S79.
NOTES Golant, Stephen M., and Anthony J. La Greca. 1994.
City-suburban, metro-nonmetro, and regional dif-
1. There is some ambiguity concerning the definition ferences inthe housing quality of U.S.elderly
of elderly. In this chapter, most of the statistics presented households. Research on Aging, 16:322-346.
use age 65 years or over. At times, an even younger age 1995. The relative deprivation of U.S. elderly
(45+) is used, but it is explicitly noted. However, this households as judged by their housing problems.
distinction is somewhat arbitrary. The definition of Journal ofGerontology, 50B(1):S13-S23.
“elderly” can vary within the U.S. government from Hawes, Catherine, Judith WildfireandLinda Lux. 1993.
agency to agency and even from program to program The regulations ofboard and care homes: Results ofa
within a given agency. Also, there is considerable age survey in the 50 states and the District of Columbia.
diversitywithintheolderpopulation itself. Thus, some of Washington, DC: AARP.
the statistics make the distinction between the young-old Heumann, Leonard F., Karen Winter-Nelson and James
(those age 65 to 74), the middle-old (those age 75 to 84) R.Anderson. 2001. The 1999 survey of Section 202
and the old-old (those 85+)—categories used to denote elderly housing. Washington, DC: AARP.
groups of elderly in terms of their likely health status and Hilton, Lisette. 2004. Making affordable assisted living
needforpersonal care services. viable. Practices, March/April, 34-37.
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Susan Saegert and Helene Clark
14 Opening Doors: What a Right to Housing Means for

Women
GENDER DIFFERENCES in access to from 1 in8in 1973 to 1 in4in 1993 (U.S.

money andpower as well as gender-specific cultural Department of Commerce 2000).
norms and social roles affect options for stability First, we review women's domestic roles in
and achievement as well as in finding housing. providing homes for others and then delineate the
Culturally and statistically, women are many ways in which women are economically
domestically central to the making of homes and disadvantaged in achieving a basic Right to
economically marginal comparedwith men (Franck Housing. In order for this chapter to be relevant to
2002; Hayden 2002). By domestic centrality, we public policy, we need to do more than illustrate
mean that women bear most of the responsibility the layersofdisadvantage conveyedby gender in
for taking care of the home, children, and obtaining housing. Therefore, weex- amine the
dependent parents. (Domosh and Seager 2001; ways in which public policy both reinforces and
Hayden 2002). Women's economic marginality lies institutionalizes disadvantage and the ways in
inthe lower wages they most often receive inthe whichpolicy can dotheopposite:redress cultural
economic marketplace as well as the remnants of and economic forces and provide opportunities
their historical role as a reserve labor force forwomen to findhousing that is appropriate to
(Costello, Wight and Stone 2002; Hayden 2002). diverse and changing lifestyles.
The combination of domestic centrality and We also examine the ways in which the absence
economic marginality of a Right to Housing in the United States
makesthemfrequentlydependentonmenorthe state to particularly undermines women's access to housing
provide housing. In a cultureand epoch in which because it combines with female economic
dependency is a very risky situation, women often disadvantage, especially when magnified by racial
have to make do with inadequate and unsafe disadvantage and responsibility for children. To
housing or become homeless. some extent, opposition to a RighttoHousing
This chapter examines the ways in which derives from the same cultural assumptions that
women's access to housing iseclipsedbycultural and make women's domestic centrality a disadvantage
economicstructures that mitigate opportunities to inthe labor and housing markets: Domestic life is a
obtainaffordableand suitable housing. The deep “private” responsibility. The consequences of these
cultural and historical roots of these barriers to assumptions for access to housing and jobs are
housing mean that access to decent housing for manifested in public policies related to wages, the
women would require more than a legal status rig structure of paid work, and the provision of public
ht. It would also require basic changes in the services and housing. Workplace and public service
culturally accepted understanding and practices policies affect women's abilities to earn the income
concerning gendered domestic responsibilities. We necessary to obtain housing. Housing and
begin by taking a look at women'scurrent position community development patterns set
inthe housing market in the United States, a context
in which multiperson
householdsmaintainedbysingle women increased
What a Right to Housing Means for Women 297
the time-space matrix within which this difficult by the failure of either the public or private sector
balancing act must be accomplished. Data on the to providesupport for combining homemaking
housing conditions of single women, especially withwork outsidethe home. Employment and
when their participation inthe labor and housing educationalpolicies andpractices that facilitate
markets is further compromised by membership in women's entry and advancement inthe workplace
disadvantaged ethnic groups and responsibility for and child care that nurtures both the child and the
children, are presented to illustrate the most woman's employment opportunities remain elusive
extreme gender-related consequences of the even for the most privileged women (Goldin 1997).
absence of a Right to Housing. Finally, we examine “Good enough” solutions achievedbysome women
ways in whichpublic policy and community often exploitotherwomen whoarealso marginal-
planning can redress cultural and economic forces izedbytheir race, immigration and educational
that constrain not only women's access to decent status and class (Amott and Matthaei 1996; Do-
housing but also the development of communities mosh and Seager 2001). The strains inherent in
that support the diverse and changing lives that individual solutions to institutional shortcomings
Americans are living. also taketheir toll on family lifethroughdi- vorce
The conflicts and constraints associatedwith and stress (Goldin 1997; SpainandBianchi 1996).
women's social and economic position are nested Forpoorhouseholds, child care, welfare,
within other social categories, especially race and employment and housing policies have exacerbated
marital status. In general, being mar- riedimproves rather than resolved the conflict between working
women's economic position, leaving unmarried outsidethe home and the need to make a h ome f o r
women at a disadvantage in the housing market and c hildren and men (Edin and Le i n 1997; Spain and
unmarried mothers over-demanded at home and Bianchi 1996). These institu- tionalpractices
under-supported economically. In addition to these andpolicies do not require gender conformity, but
practical constraints, lesbians face further stigma they structure the rewards and obstacles for men
anddiscrimination in both the job and housing and women.
markets. However, even for women with male part-
ners, the racial, social and economic status of the
men with whom women become involved affects A R IGHT TO HOUS ING
the kind of housing that they attain and the sorts of
homes they can make. When women's Given the disproportionate number of women who
partnersabuse them, their choice isoften between are homeless, the frequent dependency on men to
physical and psychological danger and provide housing, the need to balance child care
homelessness (Rollins, Saris and Johnston- with work and the poverty of many female-headed
Robledo 2001). Women come to their homes in the households, a Right to Housing would be a giant
process of making their lives from within the leap in providing safety from the dangers and
specific social, historical, geographical and instability of homelessness and poverty, as well as
biographical positions they occupy. The dilemmas providing independence. However, because of
faced by women in attempting to obtain and create women's dual role as homemakersandworkers, and
decent, affordable housing provide a lens through the persistence of poverty for many women, we are
which to view the cultural definitions and the concerned that a Right to Housing is not enough.
political and economic arrangements within which A Rig ht to Housing could relieve women of the
we all strive to make our homes. burden of staying in abusive or unsatisfying
What is general about women'ssituation with relationships just to have a roof over their heads.
regard to housing isthe wayin which gender Comparedwith theexisting subsidy preferences, a
becomes institutionalized in policies relating to universal Right to Housing could provide housing
income, work, housing, child careand the myriad access for young women and childless women that
other intersections of the “private lives” they now lack. It might also contribute to greater
ofhouseholdsand the public regulation of these housing security in old age, a benefit that would be
lives (Garber and Turner 1995). Women's domestic important to older women who suffer most from
centrality and economic marginality are reinforced poverty in their late years (Saegert and McCarthy
298 Susan Saegert and Helene Clark
1998). However, for women to improve the quality members—for public approval. In other words,
of their lives, they need access to housing that con- producing the home means upholding in some
tributes to their nurturing, maintenance and public sense the status of the family
income-producing activities. household...women inmy study were engaged
continually and routinely inthis kind of process.
An approach to a Right to Housing needs to
(Mason 1989:120)
recognizethe different forms ofhousing women
need to improve their lives as well as to care for For women, homemaking includes an intensely
their home and their children. To the extent that and ambivalently personal side. Several studies
public housing has physically reinforced have indicated that women more often invest the
women'ssocialdisadvantage, these burdens have home with their personalidentity but that identity is
been borne disproportionately by women of color, often of a relational rather than individual nature
compounding other disadvantages with regard to (Hunt 1989; Saegertand Winkel 1980). The work
education, employment andwealth accumulation. of making a home nurtures both the homemaker
To theextentthat a Right to Housing fails to and her household, as it also uses upher time and
challenge and change the racialized and gendered energy and restricts her other activities.
order of education, employment, wealth Some of the ambivalence and constraint in-
accumulation and access to services, its volvedin homemaking arise from the socialdef-
contribution to the improvement of women's lives inition of both mothering and homemaking as
would be limited.Finally,aRight to Housing alone private activities outsideof the economy. Home-
will not correct the many problems women face making isachore forindividualhouseholds, and
when public policies are developed around an ethic within those households, primarily for women. But
and discourse based on individual rights and a homemaking depends on having a home.
reliance on the market for basic needs. A Right to Traditionally, providing for the home has been a
Housing would provide asubstantial materialbenefit man's j o b. Despite ch anges i n h ouseh o ld fo r m
and a platform for future development ofwomen's that require more women to provide their own
lives. It is a necessary, but not complete, step in homes or contribute to the household income that
securing housing that supports personal provides housing and other needs, women are
development for all people. disadvantaged in the housing market. Men,
especially white men, are better positioned in the
economy to obtain housing in what is inthe United
THE POSITION OF WOMENINTHE UNITED States the most economically rewarding, legally
STATES' HOUSING MARKET secure and socially valued form— owning. When
homeownership is not possible, the control over
Domestic Centrality
housing that is a necessary precondition of making
a home becomes more precarious.
The cultural dictum that “a woman's place is inthe
Jarrett's (1995) research on how black single
home” is lived out in the empirical reality that
mothers think about their relationships with men
women spend more time at home, do more
contains poignant discussions of the close
housework andin some cultures may not leave the
association between finding a good breadwinning
home without a culturally designated male escort
maletomarry and having the home of one's dreams.
(Ardener 1981; Berk 1980; Darke 1994; Domosh
When these single mothers spoke of aspiring to the
and Seager 2001; Robinson and Godbey 1997). In
mainstream ideal of marriage, that idealincluded a
many, perhaps most, cultures, women literally
man whoearned agoodliving and
make a house a home. Mason sums up the
couldprovideahomefor them. But as one of them
publicaspect of this process nicely:
stated, “It was just a little white girl's dream.” The
The production of the home for public reality they faced was
scrutiny...does not mean simply making the thatthementheybecameinvolvedwithwerenot in a
physical environment look nice for visitors, position to provide for either the relationship or the
although that isanelement of the procedure. Rather, home of their fantasies. Many of the men continued
it means producing the home— including its to live with their mothers and hold episodic jobs.
Many sojourned in prison for at least some period homeownership mortgage deduction. (However,
of time. The women found that theywere better the homeownership program aimed at those with
abletosecure housing on their own, often through the worst risk profile includes 40 percent female-
the use of welfare housing allowances, other headed households—Quercia et al. 2002).
housing subsidies or public housing. Yet the rented Therefore, changes inthese programs mostly affect
housing alternatives they were able to obtain were women. For example, in 1996, 76 percent of
often seen, if not by them then by the broader soci- families in public housing intheUnitedStates were
ety, as “not real homes.” And certainly, the current femaleheaded households (CLPHA 1996). Thus,
public discourse presents them as “not real the reduction of the public housing supply going on
homemakers.” inour nation since that time most affects the lives
of female-headed households.
Economic Marginality Women who head their own households are
most exposed to the negative consequences of
Expectations that women will marry, stay at home domestic centrality combined with economic
and take care of their children, men and homes marginality. In 2000, there wereover 31 million
provide the foundation, consciously or not, for households headed by women, an increase of
many aspects of U.S. public policy that marginalize 2.5millionsincethe1990Censusand an increase of
women economically. This assumption, which was almost 8 million since 1980 (Simmons 1997; U.S.
never valid for poor and working-class women, has Department of Commerce 2000). Overall, the
been increasingly at odds with reality for the U.S. percentage offemale-headedhouseholds has been
population as a whole. Between 1975 and 2000, the edging up for decades (Costello, Wight and Stone
proportion of married women inthe paid labor force 2002). Economically, the changes are much more
rose from 30 percent to 71 percent (Farley 1996; dramatic, reflecting not a trend but acrisis. Twenty-
Costello, Wight and Stone 2002). At the same time, seven percent offemale-headed families with
the number of married-couple households has children under the age of 18 were living in
declined, while householdsofwomen with children povertyin 2000 comparedwith 14 percent of all
have increased substantially, as have single families with children (U.S. Department of
individualhouseholds forboth men and women. Commerce 2000). According to the Department of
(The proportion of male-headed households with Housing and Urban Development (HUD), the
children has increaseddramat- ically, but the number of very-low-income families with worst-
absolute numbers remain small relative to female- case housing needs was 5.3 million in 1997 and
headed1 households.) Femaleheaded households, 4.86 million in 1999, with crisislevel need
with and without children, have grown rapidly and increasing by 400,000 households per year through
arethe most likely to be poor (Farley 1996; McFate, 1995, and remaining constant thereafter. By 1997,
Lawson and Wilson 1995; Costello, Wight and 59 percent of households withworst-case needs
Stone 2002). were female-headed householdsorwomen living
Marriage increases thechances that a woman or alone (U.S. Department of Commerce and the U.S.
man will have a higher household income and Department of Housing and Urban Development
better housing. While single men and male-headed 2001). In 2003, women continued to live in homes
households are less affluent than married-couple with more housing problems, a trend
households, the risk of poverty isgreatest exacerbatedfor single mothers (Joint Center for
forwomen who headtheirownhouse- Housing Studies 2003).
holds.Povertyisof course associatedwithlower- Homeownership provides the major economic
qualityhousing.Inthe 1980s, numerous authors asset for most Americans (Joint Center for Housing
empirically demonstrated the overwhelming Studies 2003). Married couples are far more likely
preponderance of women living in poverty and in than other types ofhouseholdsto own their housing
substandard housing. Since then, both the numbers (Domash and Seager 2001). The 2000 U.S. Census
and proportions of female-headed families have indicated that marriage rather than gender made the
increased. Female-headed households are the major biggest difference in homeownershiprates.Eighty-
users of housing programs of any type, except for threepercentof married couples owned their homes
low-income homeownership loan programs and the
compared with 45 percent of single women and 51 cost burdens andlesser accumulation of wealth
percent of single male households. Women living through homeownership.
alone more frequently owned their homes than did
single men, probably because women often keep Magnifying Marginality: Minority Female-Headed
the homefollowingadivorceand often outlive Households
theirspouses.Whileoverallhomeownership rates
were lower for blacks and Hispanics, couples in The burgeoning literature on the urban underclass
these populations were also much more likely to indicates that minority female-headed households
own homes. suffer extreme economic marginalization
For families with children, the marriage gap (Jargowsky 1997; Wilson 1987). In fact, it is
inownership isgreater: In 2001, 79 percent of all commonplace to use the presence of large numbers
households with children under age 18 owned their of female-headed households ina community as an
home compared with less than 39 percent of single- indicator of social malaise (Wilson 1987). Racial
parent families with children under age 18. segregation and discrimination are deeply
Whilethese figures areaverages for all Americans, interwoven with both the higherprevalence
and available sources do not report data by both offemale-headedhouseholds in black communities
gender ofhousehold head and the presence of and their spatial concentration (Galster and Hill
children, itappearsthat there isagender gapin 1992; Massey andDen- ton 1993). By 2000, 43
housing ownershipfor single parents. percent of black households were headed by
In 2000, as in earlier years, renters were poorer women, while 23 percent of Hispanicand 14
than owners, withfemale-headedhouse- holdsthat percent ofwhite households were female-headed
rentedbyfar the most likely to live in poverty (Costello et al. 2002).
(Table 14.1). However, single women living alone These studies and others(Oliver andShapiro
whoowned their homes weremore likely to live in 1995) identify institutional practices related to
poverty than couples or maleheaded households housing that perpetuate racial inequality. Gov-
who rented. As Table 14.2 shows, the lower ernment policies, as well as real estate, financial
incomes of female-headed households often andinsuranceindustrypractices,haverestricted
resulted in their spending 30 percent of their access ofblackstohomeownership, contributed to
income forhousing, whereas their male the lower economicvalue of their homes and
counterparts paid about 25 percent, and couples steadily supported racial segregation. Discrimi-
averaged only 16 percent. nation in educational institutions and the labor
Taken together, population statistics show that
the economic conditions of women
TABLE 14.1 Percent in Poverty for Renters and
Owners by Household Composition
Renters (%) Owners (%)
Married Households 16 6
Unmarried Multiperson
Households
Male-Headed 16 8
Female-Headed 36 16
One-Person Households
Male 20 1
Female 29 20
Source: Calculated from American Housing Survey (2001), U.S.
Department of Commerce and U.S. Department of Housing and
Urban Development.
continue to lag behind those of men, especially for

unmarried women. This economic marginality
translates into poorerhousing conditions, greater
TABLE 14.2 Housing Cost Burden for Total Population and Minority Populations
Total population Hispanic population Black population

Total Median Total Median Total Median
income monthly Median median monthly Median median monthly Median
(%) rent income (%) rent income (%) rent income
Married Households 16 $783 $56,698 22 $742 $40,716 18 $730 $49,252
Multiperson Unmarried
Households
Male-Headed 25 700 33,933 30 683 27,243 28 639 27,294
Female-Headed 30 639 25,167 37 658 21,221 33 572 20,675
One Person Households
Male 22 531 29,426 26 555 25,660 29 478 19,795
Female 30 455 17,911 44 512 14,007 37 455 14,685
market have contributed to lower incomes. At the gender gapforblack and Hispanic households.
same time, programs to assist the poor, such as The double marginality of minority women
public housing and welfare, have mirrored and translates into poorer housing conditions. Table
reinforced racial segregation and labor force 14.4 shows that while minority households
disadvantage while perpetuating inequalityin asset reported more housing problems overall, couples in
accumulation. All of these institu- tionalforces these populations generally reported fewer housing
write thescript for gender andrace problems than other minority households. Going
intheUnitedStates. The backdrop ofpatriarchal back to Table 14.2, we see that housing cost
expectations, plus lowerincomes among blacks, has burdens were higher for Hispanic households,
made it harder for black men to play the following the same pattern of greater burdens for
breadwinner role, making marriage less attractive female-headed households and single women.
for both themselves and the women who might Higher housing costs werealso prevalent among
marry them. Meanwhile, the economic advantages blackfemale-headed households and single women.
for adults and for their children of living inacouple Gender and ethnicity both contribute to the risk
household have led to a larger and larger divide in for homelessness. Grimm and Maldonado (1995)
quality of life and expectations for the future in estimated that one-half of all homeless people in
which single household heads, especially women, the mid-1990s were women, compared with one-
lose (Angel and Angel 1993; Edin and Lein 1997; fourth ten years previously. They also reported that
Jarrett 1995; Wilson 1987). The association of one-half of all homeless persons were black, about
marriage andrace with homeownership contributes one-third were white and the remaining were
to the intergenerational magnification of thegapin Latino, Native American and Asian. Interestingly,
wealth in the United States favoring whites (Joint they found that age and ethnicity intersected for
Center for Housing Studies 2003). homeless women. In a survey of 27 cities, it was
While minority male-headed and couple found that 14 percent of the homeless population
households experience higher rates of poverty and was comprised of single women, and 67 percent
housing disadvantage than white households, were single-parent families. Fifty percent of home-
minority women who head their households clearly less persons wereAfrican-American and 35 percent
occupy the intersection of disadvantage. Table 14.3 were white. The remaining 15 percent were
documents the difference in percent ofhouseholds Hispanic, Asian and Native American (National
in poverty as a function of household type and race.
In 2001, 35 percent of blackfemale-
headedhouseholdsand 34 percent of Hispanic
female-headed households lived below the poverty
line. Thirty-six percent of Hispanic and 31 percent
of black single females were poor. If poverty rates
for similar types of male- and female-headed
households are compared, we see an even larger
TA BLE 14.3 Distribution of Household Types for Total Population and Minority Populations Broken
Down by Percent in Poverty
Total population Hispanic population Black population

%of Total % Poor %of Total % Poor %of Total % Poor
Married Households 52 5 54 14 32 6
Multiperson Unmarried
Households
Male-Headed 4 12 8 13 6 16
Female-Headed 12 25 18 34 28 35
Male 11 17 7 24 12 29
Female 15 24 8 36 16 31
Source: Calculated from American Housing Survey (2001), U.S. Department of Commerce and U.S. Department of Housing and
Urban Development.
Note: Percentages do not add to 100% because certain forms of residences such as institutions are not included.
LawCenteronHomelessnessandPoverty 2001). almost one-half of the 25.3 million immigrants

Youngerhomeless women weremore likely to be coming to the United States since 1980 (Joint
black with dependent children; older homeless Center for Housing Studies 2003). Even
women were more likely to be white with mental immigration is too simple a term to characterize the
illness and substance abuse problems. For women, international flow of populations. This flow
pregnancy, recent childbirth and domestic abuse ofpopulations reflects andperpetuates cultural
frequently precipitate the loss of a home, connections ofwomen withdomestic (and sexual)
illustrating again the risks to housing access related service and economic marginality. The “maid
to women's domesticties (Rollins, Saris and trade” has been estimated at approximately 1.7
Johnston-Robledo 2001). million women who work as domestic servants
When culture is taken into account, in addition outside their home country at any one time
to the transgenerational impact of institutional (Domash and Seager 2001). They are joined by
practices, the extreme economic marginalization of millions of female refugees and unknown numbers
minority female-headed households is even more of girls and women inthe sex trade (Domash and
complex than most of the literature on race and Seager 2001). Some return home, many are illegal
gender suggests. The terms “black,”“Hispanic” and immigrants; many have children inthe different
“white” are really inadequate categories for theU.S. countries that they enter and leave. Since
population. In 1991, the number of foreigners who household form and the implications of gender are
emigrated to the United States was six times as heavily culturally determined, a real understanding
many as of these various intersections requires attention to
entered in 1950 (Farley 1996). Hispanics make up both the statistics and the lived reality in particular
TA BLE 14.4 Percent of Different Household Types with Housing Problems, Total and Minority
Populations
Total population (%) Hispanic population (%) Black population (%)
Married Households 4 9 9
Multiperson Unmarried Households
Male-Headed 7 10 13
Female-Headed 10 14 15
Male 10 12 17
Female 7 9 1
Source: Calculated from American Housing Survey (2001), U.S. Department of Commerce and U.S. Department of Housing and
Urban Development.
locales.2 Reduction in the supply of public housing in

order to improve what is left means a net loss in
units for the many women who are its tenants.
Many will be displaced as a direct result of
CURRENT HOUSING POLICIES
renovation and demolition. Presumably, they will
AND WOMEN
be eligible for rental vouchers, so their housing
costs will not become unaffordable, but they may
The economic marginality of women makes them
not be able to find adequate housing through
less well servedbythe housing market, and
vouchers. Those currently not in public housing,
historically their domesticcentralityinthe form of
but who are in precarious living situations, will not
responsibility for children has made them most
have public housing as an option if they lose their
often the targets for low-income housing policies.
otherhousing possibilities. Overall, while some
Clearly, national policy and local implementation
women will benefit by improvements to their
are moving away from the direct government
communities through renovation of public housing,
provision ofhousing as a safety net for poor or
the availability, flexibility, term limits and
single-parent families. This change of direction
outcomes of individual vouchersarecritical areas
reflects the national, and even international, trend
forhousing policy to monitor and evaluate.
against direct provision of government services in
Public housing illustrates some of the dilemmas
favor of greater reliance on the market to meet all
that must be facedin implementing a Right to
human needs. However, many women cannot
Housing, both politically and functionally. Public
obtain secure and adequate housing through the
housing has consistently provided better housing
market. Policies based on a Right to Housing
forpoor, frequently female-headed and
would look drastically different from current
minorityhouseholdsthan they could otherwise
housing policies. The critical examination that
obtain (Stockard 1998). Yet spatial concentration
follows of major current policies and trends
of housing for those with the most need can lead to
helpstoreveal some elements ofhow a Right to
locational disadvantages and prevent access to
Housing could be implemented in a way that would
jobs, community resources and integration into
build on the good ideas embedded in different
communities of opportunity. The long list of
approaches while eliminating the basic flaws of
distressed public housing in the United States
limited access and insufficient funding.
shows that housing for those in most need may lack
the political support to assure high-quality,
Public Housing and Vouchers decently maintained buildings. The ways in which
these dilemmas are resolved will particularly affect
Changes ofhistoricsignificance have taken place in women, who most often head the neediest
public housing, and the impact on women is households with the least chance of moving to
enormous, based on the overwhelming proportion other types ofhousing (Freeman 1998).
of women and single mothers in public housing and The negative effects of concentrations of
on women's limited access to other economic poverty such as that found in public housing and
resources. Whilethespecifics of these changes have many neighborhoods is intended to be offset by
variedfrom year to year since 1996, the directions vouchers. However, vouchers may create other
have been constant. Public housing policies no problems for women, even if they are attainable.
longerdefine success by the number ofpoorfamilies Ifwomen move awayfrom the housing and
servedbut ratherbythe extent to whichproblems of neighborhoods wheretheir social networks are
crime, isolation and concentrations ofpoverty located, the support of family and friends who
associatedwith existing developments are provide the real safety net for many poor women
improved. Public housing, bothinabsolute and their children maybe disrupted.
numbersof units andinthe proportion of the poor it While vouchers appear more compatible with a
houses, is being dismantled.Thestock that remains market-based approach to a Right to Housing, the
inthenexttenyears as public housing, if current cost of such an approach would likely be high,
experiments succeed, will be substantially smaller possibly unleashing the same political backlash that
and increasingly mixed-income.
undermined the growth of Section 8 vouchers in constraints on minorityhomeownership tell the

previous years. Unless cou- pledwith the stories of female-headed households as examples
development oflow-cost housing, vouchers alone of the difficulties encountered but interpret the
cannot solve the problem of access to housing in problem solely in relationship to race (Oliver and
many parts of the country with tight housing Shapiro 1995; Ratner 1996).
markets. The domestic demands experienced by women
are also likely to be affected by homeownership.
Homeownership Programs According to Rossi and Weber's (1996) analysis,
wives andhusbands whoowned their homes
Since 1994, Fannie Mae has committed itself to reported that the wives did more hoursofwork
developing new programs that make home- around the home comparedwith the reported hours
ownership more widely accessibletoAmericans of domestic work for wives who rent. There were
(Eggers and Burke 1996). Decreasing the own- no significant differences for men's domestic labor.
ership gap between lower- and higher-income The absence of convenient public transportation
groups and between white and minority households and public amenities in some suburban
has been identified as a particularly important goal. environments also burden women more than men
However, analyses of how gender of household when women are left without a car and with
head relates to the feasibility and desirability of this responsibility for providing care and amusement
strategy are largely absent. The record on for children as well as provisioning the home.
homeownership suggests that within racial and Kasarda and Ting (1996) identify similar issues as
income groups, couples would be by far the most impediments to the employment of poor women in
likely type of household to increase central cities who findit hard to combine their
homeownership rates. It is also likely that the kinds domestic and care-taking responsibilities with a
of homeownership different types of households reverse commute. These ecological factors,
would choose would be influenced by their combined with affordability problems, may also
incomes. Thus, the increase in ownership of mobile keep lower- income, especially minority, women
homes might be expected to accrue out of the suburban housing market. A study of
disproportionately to young couples and suburban women's housing preferences found that
households headed by women under 45, who in single female heads of households preferred the
1995 had the highest rates of mobile home shared services, amenities and convenience of
ownership (U.S. Department of Commerce 1996), planned unit developments (Rothblatt, Garr and
while couple households with children were more Sprague 1979). Women historically have been
likely to purchase single-family homes. A national found to prefer denser settlement patterns, older
policy that disproportionately encourages suburbs, closer to work locations, places with
homeownership also produces a shift in population better public transportation and a greater supply of
from central cities to suburbs, creating services and public amenities (reviewed in Saegert
neighborhood problems for those left behind 1982).3 Promotion of homeownership may thus
(EggersandBurke 1996). There isalso evidence that shift more women into environments that do not
the move to homeownership reinforces racial well support their double duties. For this reason,
segregation, even while dispersing ethnic programs and policies that support homeownership
minorities to suburbs (Joint Center for Housing opportunities in multifamily housing andin inner-
Studies 2003). Some cities are developing city and older, denser suburbs are especially
homeownership programs of their own in one- to important for women. Aging and shrinking smaller
four-unit buildings in order to encourage people to city downtowns and even older, no longer
stay in their communities. competitive shopping malls provide development
The most likely downsideofhomeownership opportunities, bothforhomeowner- ship and
strategies for female-headed households, especially housing projects of community development
in minority populations, isthe inability to keep corporations (Hayden 2002).
upwith mortgage, property tax and repair costs. On the other hand, for women who share in or
Two ethnographic studies that examine the hold title outright to housing, andwho can afford
the costs of upkeep and service provision, Act of 1998 allowed the use of Section 8 vouchers
ownership can beasignificant step up economically, for homeownership programs sponsoredbythe
giving them both control over housing costs and a localpublic housing authority, including lease
valuable, fungible property. Homeless women as purchase and purchase of cooperatives. Research in
well as women with substantial means aspire to New York City has documented that residents of
homeownership (Darke 1994; Rollins, Sarisand limited-equity co-ops most often say that the right
Johnston-Robledo 2001). And the to remain in their housing is what makes co-op
economicchallenges women face may make ownership most valuable (Clark et al. 1990; Rae
housing equity especially important. For example, 1997; Saegert 1993,1995;Saegertand Winkel
a large study of the elderly in Florida found that 1999). Their previous experience with landlord
olderwomen living alone neededboth economic ownership, the long waits forpublic housing and
assets and a jobinorder to escape poverty (Hardy the prevalence of homelessness in their
and Hazelrigg 1993). communities contrast
However, that study also revealed the high stronglywiththesenseofsecurityfelt bylimited-
levels of poverty among elderly women living equityresidents withregard to their cooperative
alone and the obvious fact that with advanced age, tenure—feelings that are validated by the much
continued employment isoften impossible. While longerlengthsofresidence common inthisown-
assets plus Social Security allowed most couples ership form when comparedwith other types of
and single men to avoid poverty,elderly single low-income housing.
women lived onamuch thinner edge. For many Studies of Canadian limited-equity co-ops have
minoritywomen not incouples, their lower incomes demonstrated that they can work well for female-
and higher housing costs make entry into headed households because of the small equity
homeownership difficult. With the demands of investment and the collective provision of housing
maintenance costs, they face an increased and service amenities be- yondwhat they could
likelihood ofhaving to sell their home to meet other otherwise afford (Wekerle 1988). Canadian studies
needs compared with couples, men and white also indicate that many younger households benefit
women. The feasibility and usefulness from the ability to save money while in relatively
ofhomeownership forwomen without men might inexpensive housing, thus making future
begreatly increased through creative uses homeownership more possible.
ofreversemortgages,notonlyfor theelderly (see The relationship of co-op ownership to wealth
Chapter 13) but to support investments in human varies, depending on the degree of limitations on
capital and, in some cases, simply to avoid poverty equity. Restrictions on the use of property for
(Rasmussen, Megbolugbe and Morgan 1997). income-generating activities are governed by
In 1996, theWhite House Office for Women's zoning ordinances and sometimes by co-op rules.
Initiatives and Outreach partnered with the However, inour experience, apartments are freely
National Partners in Homeownership to create a used for home-based businesses. Some co-ops
joint initiative promoting homeownership include commercial spaces. While some co-ops
forwomen. Homeownership Opportunities for have used these properties to anchor needed
Women (HOW) includes English and Spanish services in the community and to generate income
information hotlines, a mentoring program and for building improvement, others located in
training for women on how to navigate credit and distressed neighborhoods have not been able to
loans. The program also uses peer counselors to make these spaces work well financially or
work with women who are making the transition socially.
from welfare to work. The salience of gender in low-income limited-
Limited-equity co-ops and mutual housing equity co-ops is quite different from what it is in
associations are alternative forms of ownership public housing. Not surprisingly, given the low
thatseemtoprovidesomeofthebenefitsofown- ership incomes of residents, the majority of households
without the same level of financialinvestment are female-headed when they begin their quest for
andrisk (SaegertandBenitez 2003; see also Chapter ownership. The high housing quality, safety,
11). The Quality Housing and WorkResponsibility security of tenure and affordability of limited-
equity co-ops offers a unique market niche for below the median and at or near the poverty level
meeting the needs of female householders. Women, and often locate in minority communities. Female-
especially elderly minority women, also play key headedhouseholds with children are prevalent in
leadership roles inthe development and operation this segment of the population. Women with
of limited-equity co-ops (Saegert 1989). However, children have had better access to Section 8
over time, limited-equity co-ops tend to have more certificates and other rental subsidies as well as
male-headed households than do buildings inthe past receivingashelter allowance as part of
ownedbycommunity groups(Saegert 1993, 1995). welfare. This combination of need and rental
Reasons for the difference include less subsidy allows CDCs to fulfill their social mission
dependenceongovernmental subsidies that give while sustaining financial solvency. Since many
preference to female-headed households. Although CDCs provide programs in job-training,
we do not have specific data on the topic, itmay employment counseling, job-matching, micro-
also be that the ownership and self-help aspects of enterprise and youth employment, they are likely to
co-opresidency appeal more to male-headed continue to target female-headed households with
households than do other low- income housing children.
options. Case studies of buildings suggest that A holistic approach to the needs of families
when tenant organizing for ownership begins especially helps women who must juggle child
before or soon after landlord abandonment, male- care, the personal needs of the whole household
headedhouseholdsare less likely to move out in andwork.Gittell andher colleagues (1994, 1999)
search of better options (Leavitt and Saegert 1990). have found that gender andraceplayapart in CDCs'
decisions to offer various programs. They found
The Not-for-Profit Housing Sector that the CDCs providing a range of services
beyondhousing had more board members and staff
Locally based community development organi- who were women and members of racial
zations have filled part of the gap left between the minorities.
cutbacks to the public housing sector and the Women-led CDCs have pioneered the inte-
private market. Evaluations of the effectiveness of gration of housing, schools, child care, adult
this sector vary (Cowan, RoheandBaku 1999; education and job training and placement. The
Gittell and Wilder 1999; Glickman and Servon Boston- and Rhode Island-based Women's Housing
1999). The share of rental housing developed by and Development Corporation began such an effort
community development corporations (CDCs) is inthe 1970s. Similar efforts occurred in Canada and
less significant (Schill 1994) than their rising England at that time. Since then, newwomen-led
importance inthe federally funded low-income CDCs have sprung up, such as the Women's
stock (Koshinsky 1998). The roleof nonprofit Housing and Economic Development Corporation
housing has increased since 1970 and generally inthe South Bronx. These groups foreshadowed ap-
appeals to conservatives and liberals alike, as it proaches that have gained increased attention as a
does not require direct government involvement result of welfare reform.
and provides a lot of latitude for local needs and In the 1990s, Comprehensive Community
decision-making. However, recent CDC failures, Initiatives were launched across the country,
downsizing and mergersmay threaten this source mostly by foundations. These initiatives usually
ofhousing (RoheandBratt 2003; see also Chapter seek to address the needs of children and youth, to
16). If this trend continues, women's residential promote education and employment for adults and
choices would be especially reduced. to improve thesafety of thecommunity at the same
Women appear to particularly benefit from time that they promote decent housing at below-
CDC housing. While we know of no statistics on market costs and the development of new local
the proportion offemale-headedhouseholds living businesses (Connell et al. 1995). In the absence of
in housing built by CDCs, experience with public funding of services and amenities, these
CDCsaround the country indicates that female- initiatives may especially contribute to building
headed households do have access to this form of communities that support women'scaregiving and
housing. Most CDCs target families with incomes social obligations while assisting them with
housing and income generation. while providing high-quality services. Much could
The increasedpopularity andimpact of CDC be learned by CDCs' productively engaging women
housing does not at all ensure its survival orits who have had the job of balancing the needs of
evolution to more fully meet women's needs. their households against a tight budget in planning
Nonprofits often depend on tax credits, which are anddecision- making.
currently finite, as well as on the availability of
rental vouchers and public assistance for rents, also Lessons from Current Housing Policies
finite. Theshortfall between needfor these subsidies
and supply leaves CDCs vulnerable to financial The successes and failures of existing housing
failure and complicates the demands on them. The policies provide a number of lessons for imple-
complexity and difficulty of putting together menting a Right to Housing.
financing for development often distracts from
program development in other areas. Changing 1. Female-headedhouseholdsare dispropor-
formulas for financing and rental subsidies can also tionately the beneficiaries of housing policies and
undermine tenant security and participation in programs meant to serve those who are left out of
tenant selection and other housing decisions by the market. A Right to Housing would undoubtedly
requiring theCDCtoseek out new tenants whofitthe serve these women and others who have failed to
requirements (Saegert and Winkel 1999). Welfare seek orqualify forpublicsubsidies or subsidized
reform raises new challenges by forcing CDCs to housing. Yet, eligibility requirements that favor
cope with possibly lower tenant incomes due to female-headed households disrupt family ties and
loss of welfare benefits inacontextof shrinking and often exclude poor, especially poor
restructured federal support for subsidized housing, minority,menfrom forming families. Income limits
self-sufficiencyprograms that demand large-scale can act as a disincentive for improving income in
and quick results, and complex new relationships tight housing markets with many low-wage jobs.
as housing programs devolve to states (Bratt and Thus, public housing has had the undesirable
Keyes 1998). Changes in housing markets, consequence of concentrating and isolating
management and leadership, the local political and uniformly poor populations (Goering, Kamely and
economic context, and even the very successes of Richardson 1997), whilethe financialdemands on
the CDC may threaten its continued viability (Rohe nonprofit housing can lead to “churning” the tenant
and Bratt 2003). population in pursuit of new, deeper subsidies or
A Rig h t to Housi ng could potenti a lly fuel a families with greaterrent-paying ability (Saegert
large expansion of the nonprofit housing sec- and Winkel 1999).
torifthe mechanisms included both capital and 2. Access to subsidized housing is important in
operating subsidies. As we describe below, women helping poor women enter and stay in the job
stand to benefit from this form of implementation market (Edin and Lein 1997; Saegert et al. 2000).
because of the holistic approach to community Further, the proximity to friends and relatives that
development that it might sup- portandbecause of many public housing developments provide for
the potentialfor greaterpar- ticipation in housing women residents can help poorwomen
decisions, in the absence of strikeabalance among thecompet- ing demands of
traditionalhomeownership. Since CDCs also parenting, working, contributing to the well-being
provide many types of transitional and service- of others inthe family and community, and
enriched housing (Koschinsky 1998), this approach attempting to advance educationally and
could not only increase the volume of housing occupationally (Saegertetal. 2000). A Right to
suitabletothe needsofwomen but also Housing would allow g reater access and,
providecontinuitybetweenthe righttoimmedi- ate depending on implementation, greater security of
shelterin an emergency and the righttoshelter tenure not just for individuals but for more
appropriate for long-term habitation. The greatest extended networks of family, friends and
challenge for CDCs inserving women's needs is neighbors.
most likely in the area of promoting democratic 3. Location of subsidized housing substantially
control of housing and strong social networks affects the safety, educational opportunities and job
opportunities of residents (Leventhal andBrooks-
Gunn 2000; Rosenbaum 1991). Implementation of featureof co-op ownership (Rae 1997). However,
a Right to Housing needs to take context and tenure most residents of public housing and the scholars
into account. A Right to Housing that provides who studied them would, we believe, concludethat
theequivalent of shelters for homeless people or residents' control of their lives and space in public
victims of domestic violence, which are housing has usually been seriously compromised.
notoriously hard to site, is not the same as the How ownership of housing is organized presents
social provision of a large and non- important implementation challenges for a Right to
stigmatizedproportion of the housing market (Stone Housing.
1993).
4. By most estimates, the quality of housing Implementing a Right to Housing
available to poor households varies by ownership
type, but the wayin which it varies de- pendsonthe Implementing a Right to Housing by expanding the
history ofhousing and the state of the housing “social” or nonprofit housing sector (c.f. Dreier
market in particular locales. Judging from media 1997; Stone 1993) appears most likely to benefit
reports andpublicopinion, privately owned housing households in need ofimproved housing and lower
is generally regarded as being superior to public costs while also providing other services these
housing. Yet inspecific areas, studies ofhousing households need. Women could particularly
qualityreveal theoppo- site (c.f. Schill and Scafidi benefit, bothbecause of their lower incomes and
1997). Although the evidence is limited, CDC their traditional, and by no means extinct,
housing and tenant- owned cooperatives appear to requirements for combining domestic work,
provide higher- quality housing than other options caretaking and paid employment. However, larger
available to their residents (Briggs and Mueller changes would be required for women to benefit
1997; Saegert and Winkel 1999). As Evans, Wells equally from a Right to Housing and to avoid being
and Moch (2003) document intheir extensive litera- ghettoized. Women carry much of the burden of
ture review, the quality of housing is important for providing work considered not economically
the well-being of women, children and (no doubt) productive that is undervalued by cultural as well
men, although fewer studies have examined as economic systems. Changing this unequal
housing quality consequences for men. But the division of labor and devaluing of the work of
dimensions ofhousing that Evans, Wells and Moch caring would bea fundamental cultural and
(2003) found to affect mental health and child economic challenge. Innovative physical, financial
development were not the simple inadequacies and institutional forms of housing are required to
measured in the Census and most housing surveys. support caregiving, the production ofhome life,
They included the number of stories inthe building, daily maintenance and multiple demands on time
floor level, architectural features and general and to avoid the potentialfor cumulative
housing quality, such as dampness, reliability of disadvantage inherent in pursuing other than
plumbing and other housing services, indoor economic goals. Implementationof
temperature and the more subtle dimension of evenalimitedRighttoHous- ing would
resident control over housing. Implementation of a disproportionately benefit individual women. But
Right to Housing must seriously address decisions in a constricted and minimalform, such a right
about the definition of and standards for housing would perpetuate gender-based in-
quality employed. equalitybyshunting women inneedinto places,
5. Ownership form has historically been re- financial arrangements and institutional forms that
lated to the extent to which occupants can control makethecaretaking work that theyperform harder
their housing. While private ownership has often and their financial marginality greater as well as
been seen as the ultimate formof control of limiting their control of their lives. Concerns about
housing, research on poor women suggests that the the perpetuation of gender inequality lead to
cost of owning plus maintenance demands may several principles that would be important to
limit this value. In fact, the collective responsibility observe in implementing a Right to Housing.
for housing upkeep has been citedbylow-income
co-opresidents, most often women, as a positive A Large and Flexible Social Housing Market
Exercising a Right to Housing must not restrict the which the physical and institutional forms that not-
kinds of households that have access to a full range for-profits have developed to replace single room
of housing options. This goalwillbe difficult to occupancy housing have created their own
achieve because family size and composition help dilemmas. On the one hand, they do provide better
to define the sort of housing that serves the needs —although still spatially minimal—housing for
of different households; households' needs change those who have been or whoareatriskforbeing
over time and the ability of households to pay homeless. Theservices, communal kitchens and
influences what they can obtain. This criterion amenities support a fuller lifeand often
implies a large, well-financed social housing sector nurturecommunity.Onthe other hand, these
accommodating needs as diverse as immediate facilities often confine residents and define them as
emergency shelter for households of all types, being “different.” Un- likethe SROs that
without requiring the households to break up, to theyreplace, theyrequire deep subsidies to build and
homeownership opportunities for households in operate. Knecht proposes applying some of the
which the adults devote time to caregiving and the design and programming techniques that have
development of human capital, sometimes at the supported individual and community growth to
expense of economic productivity. Starting from neighborhood-level design and planning, and
where we are now, women more often maintain looking for small-scale, market-based strategies to
responsibility for children through emergencies and obviate the need for high-level subsidies.
at theex- pense of economicachievement. If there Enriched Networks of Support
isalow- rent, barely acceptable formofhousing
meant to betemporary, poorwomen, especially As long as women continue to rely on andbe relied
minority women, are likely to be stuck there. A on by their social networks for supportof all kinds,
Right to Housing must be defined as a access to variedhousing forms should be found at
righttopermanent and adequate housing, not be the neighborhood or proximal community level. At
used to encourage exacerbating a system of the same time, helping networksthat supportchild-
development in which cheap, isolated and rearing, careof thesick and assistance for theelderly
stigmatized housing is cre- atedfor those lowest should beenriched through public and not-for-profit
inthe social and economic strata. agencies in order to reduce the burden on women.
Unless the financial benefits of homeownership Social housing and service providers must work
over generations change, implementation of a with the business community and other employers
Right to Housing that excludes ownership for profit to allow time and space for caregiving activities
will not only disadvantage specific families headed and to supportalternatives, both financially and
by women but perpetuate the collective economic through the services that they provide.
disadvantage of blacks and any other groupin Housingandprogramsthatsupportthetran- sition
whichfemale-headedhouseholds are common. At from childhood to adulthood for both men and
the moment, the pressures toward an ever larger women are especially lacking for poor households.
reliance on homeownership suggest that it is Young minority men who go to prison, and their
important to find ways for women to benefit female counterparts, risk homelessness or live in
equally from financing and other innovations unstable doubled- up quarters with extended family
designed to promote homeownership. At present, members. Middle-class and wealthy households
this is not the case (Quercia et al. 2002). If a Right find ways to balance the independence and
to Housing excludes ownership, then alternate and supervision needs of adolescents through summer
equally productive asset accumulation strategies camps, school sports, music, and arts programs,
must be developed and pursued to avoid adding to class trips and residential colleges. These same
the cumulative disadvantage of those who benefit needs forpooryouth are mostly neglected.Many of
from this right. the young men and women who now can be found
Housing policies andpractices, subsidies and the insheltersand transitionalfacilities forrunaway and
physical housing itself must be configured so as to homeless youth, shelters for mothers with young
promote stability of social ties while providing children andprisons seem to have gotten there
choice. Knecht (1999) has analyzed the ways in because of the same impulses, immature decisions
and experiments that wealthier youth safely live Most existing housing and settlement patterns
throughintheir college dorms. In the absence of do not support the combination ofdo- mestic life
settings forpeer support with trained but limited and paid employment for women. Suburban single-
supervision, good health services and counseling, family homes and landscapes increase the
and educational advancement, the residential competing demands of domestic life and work for
careersoflow-income, especially minority, youth pay when they isolate women from work
diverge in gender-specific ways that work neither opportunities because of location, zoning or
to the advantage of women nor men. A Right to transportation; requiregreaterinvest- ment in
Housing should include groupliving opportunities domestic chores and chauffeuring; and culturally
that supportand enhance youthdevelopment and support a more traditional definition of gender.
engage parents as well as youthinfinding successful Urban environments are associated forwomen
and satisfying niches for the next stages of their withfear of crime anddissatisfaction with housing
lives. and outdoor space for family life and child-rearing,
Mothers of young children face other, espe- but with greater satisfaction with and access to
cially daunting challenges as welfare and public work and cultural opportunities and less gender
housing reform require them to work outside the stereotyping. Feminist designs forliving emphasize
home (Newman 1999). Social housing can provide community,clustered housing, flexible work spaces
a secure setting for child-rearing. But in order for inand near the home, nearby nature and play
children to get the attention and engagement they spaces, integration of communal or commercial
need for healthy development, andfor services with
motherstocombine the demands of parenting, residencesandhousingthatcanadapttochanges in
employment and advancing their own education, family composition andincome.
social networks among mothers, their extended The dominant patterns of development that
families and the larger community need to be segregate residences and workplaces anddis- perse
nurtured. A study of mothers inNew York City services make housing that supports productive
public housing found that those who worked on lives for women hard to find even when housing
and off, or at part-time jobs, were better abletobe cost is not the major factor. The type of housing,
involved with children's school progress, advance zoning, cost, density and patterns ofland use,
their own education and obtain jobs with benefits. services and transportation can make it easier or
They also contributed more both to more difficult forwomen and men to balance
informalhelping networks and to more formal domestic life and paid employment (Franck 2002;
voluntary associations that improved the quality of Hayden 2002; Saegert 1982; Saegert and Winkel
life and civic engagement of their communities 1980; Wright 1983). While
(Saegertetal. 2000). This group of women seemed electroniccommunication offers some potential for
to especially benefit from long-term residence in easing the time/space constraints of multiple duties,
public housing developments where many kin and those most in need—for example, welfare-to-work
friends werealso living. This suggests that orga- mothers inthe inner city—are least likely to have
nizations providing both housing and services the knowledge, access and money to take
should try to find ways to support, legitimate and advantage of the job and service provision from
make economically feasible the social and human such sources. Even single, childless women face an
capital-creating activities of these mothers and their unlevel playing field in their search for satisfactory
networks. housing due to their lower wages compared with
similar men. Their disadvantage thus often worsens
Housing and Urban Design for Gender Equality because of deficits inthesafety, social acceptance
and satisfying leisure activities as well as access to
For at least the last two-and-a-half decades, employmentintheresidentialcommunitiesthat they
scholars have explored the landscapes andhouse can afford. Poorwomen in many areas face
forms that better support women in their domestic theadditional trade-off oflow-cost housing versus
lives and offer the possibility of greater economic proximity to jobs that fit their skill levels, a
equality (Appleton 1995; Birch 1985; Hayden problemcompoundedbytheirrelianceoninad- equate
1980, 1984; Saegert 1982).
publictransportation (c.f.Coulton, Leete andBania would need to exist along with traditional private
1999). For minority women, racial discrimination homeownership intheUnitedStates, but it may also
further constrains their ability to live near good reduce the attractiveness of that alternative
work opportunities. Whileminority men also suffer andpoint out its limitations. Homeownership inour
from these constraints, womenmaybe lesslikelyto country is assumed to provide the greatest amount
workat allwhen the choice between domestic duties of control overhousing and the greatest freedom to
and paid employment is a stark one. enjoy one's property and to use it for personal gain.
Kasarda and Ting (1996) examined the impact However, forwomen, these benefits not only
of skills and spatial mismatches as well as welfare maybecompromisedby
dependency separately for men and women
andforblacksand whites. They conclude that both forms of development at the local or regional scale
factors affect poverty andjob- lessness. However, that impose time/space dilemmas, but the house
both race and gender differentiate theirfindings. forms themselves may assume patterns of use and
Blacks show a higher association between preference deriving from idealized and patriarchal
joblessness and welfare receipt, which Kasarda and assumptions about a “good” house and what will
Ting relate to continuing prejudicial practices inthe sell. Friedman's studies (1999) of upper-middle-
job market. Regarding gender, they observed the class andwealthy women who have commissioned
following: their own homes from architects reveal their
struggles to achieve less patriarchal house forms.
The powerful effect of spatial mismatch on female These women clients wanted to mix spaces for
joblessness suggests that gender bias in urban
their “work”: domestic labor and relaxation—
design and transportation services also needstobe
including family and servants, inside and outside,
considered.The deconcentration of metropolitan
jobs, togetherwithre- stricted transport choice, in unconventional ways. While they achieved novel
differentially impacts the least mobile—that is, housing forms, these forms embodied compromises
less-educated inner- city women. These women with convention required by finance and insurance
are most likely to (1) depend entirely on institutions and resale concerns. Feldman's dis-
publictransportation, (2) travel close to home, (3) cussion (1999) of a participatory design process
seek only jobs with short commute times, (4) with the women leadersandresidents of a public
avoid work that requires traveling through nearby housing development reveals both the psycho-
dangerous areas (especially after dark), and (5) logical and social significance of being involved in
need to balance multiple domestic responsibilities
design decisions. The process also demonstrates
with work schedules. As a result, job options for
these women tend to bemuch more restricted the difficulties of finding solutions that break out of
spatially and temporally, often limiting them to stereotypical building forms, suit the residents'
low-paying and part-time work closer to home. image of their hoped-for future and are financially
These constraints no doubt pose strong work viable.
disincentives Perhaps the greatest policy challenge Implementation of a Right to Housing may
to facilitating the transition to work is overcoming open up new forms of ownership, such as limited-
spatial and temporal constraints that prevent equity cooperatives, that increase women's freedom
women with children from accommodating their to enjoy their homes, pursue their goals in life and
domestic and work responsibilities. (412413)
feel secure about their futures. But this will happen
As Susana Torre (1999) points out, overcoming only if the bureaucratic and institutional control of
the time/space constraints confronted by poor housing that has been the norm for public housing
women requires more than design schemes. The and many not-for-profit developments is
racial and economic segregation inherentinthe replacedby successful methods of involving users
political,institutionalandfinan- cial processes of in design decisions, residents in housing
housing development must be successfully governance and citizens in housing development
challenged. and allocation processes. All too often, public
housing authorities' control over tenants'lives has
Ownership, Control, Participation been demonstrated in acts of unexplained
interference with legitimate uses ofpublic housing
A government-implemented Right to Housing property,such as shutting tenants out of community
spaces, refusing permission for economic Commerce and U.S. Department of Housing and
development ventures and undermining or ignoring Urban Development.
democratically elected leadership (Feldman 1999). Amott, Teresa, and Julie Matthaei. 1996. Race, gender
and work, Rev. Ed. Boston: South End Press.
Genuinely involving larger numbers of women
Angel, RonaldJ.,and JacquelineL.Angel.1993.Painful
inthe provision and control ofhousing at every level inheritance: Health and the new generations of
would probably help. But control usually comes fatherless families. Madison: University of Wisconsin
down to financial capacity and economic Press.
ownership, whether at the individual or collective Appleton, Lynn M. 1995. Thegenderregime of American
level. Social housing has pioneered some cities. In Gender in urban research, eds. Judith A.
promising forms ofdevelopment, but the dom- Garber and Robyne S. Turner, 44-59. Thousand
Oaks, CA: Sage Publications, Inc.
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legal and economic responsibilities need to be Berk, Sarah F. 1980. The household as workplace:
redefined. For women to truly benefit from a Right Wives, husbands, and children. In New Space for
to Housing, women residents must have access to Women,eds. GerdaWekerle, Rebecca Peterson and
leadership positions as bureaucrats, CDC David Morley, 65-81. Boulder,CO: WestviewPress.
Birch, Eugenie Ladner. 1985. The unsheltered woman:
leadersand staff andpublicoffi- cials. They also
Women and housing in the 80s.NewBrunswick,NJ:
must be involvedfully in debates and discussions, Rutgers University Press.
such as the ones that sparked the creation of this Bratt, Rachel G., and Langley C. Keyes. 1998. Chal-
book and those it will presumably generate. lenges confronting nonprofit housing organizations'
self-sufficiencyprograms. Housing Policy Debate,
9(4):795-824.
Briggs, Xavier de Souza, and Elisabeth Mueller (with
NOTES Mercer Sullivan). 1997. From Neighborhood to
community: Evidence of the social effects of com-
1. Most households that designate themselves as munity development. New York: Community De-
being female-headed are headed by single, separated, velopment Research Center,NewSchoolforSocial
divorced or widowed women. However, a small but Research.
increasing percent of married households choose the Clark, Helene, Susan Saegert, Eric K.Glunt and William
designation female-headed (Meyers 1992). Roane. 1990. The future of limited equity housing
2. One of the major factors in increasing immi- inNew York City: Residents struggle for stability.
gration to theUnitedStates isthe impact of economic New York: Center for Human Environments.
restructuringbothhereand abroad. Economicrestruc- Connell, James P., Anne C. Kubisch, Lisbeth B. Schorr
turing also affects the housing options forwomen. For and Carol H. Weiss. 1995. New approaches to evalu-
example, the influx ofimmigrants innortheasternand ating community initiatives: Concepts, methods, and
western U.S. cities and suburbs has resulted in higher contexts. Washington, DC: The Aspen Institute.
levels of residential crowding and housing costs, both Costello, Cynthia B., Vanessa R.Wightand Anne J.
conditions that can especially affect women because of Stone. 2002. The American woman 2003-2004. New
the greater time they spend in the home and their York: Palgrave Macmillan.
lowerincomes. However,the replacement of an industrial Coulton, Claudia, Laura Leete and Neil Bania. 1999.
economy with a higher-tech economy in Boston and Housing, transportation, and access to suburban jobs
Pittsburgh allowed women to gain higher paid and more by welfare recipients in the Cleveland area. InThe
professional jobs, improving their position inthe housing homefront: Implications of welfare reform for
market as well as their economic standing (Jezierski housing policy, ed. Sandra Newman. Washington,
1995). DC: The Urban Institute Press.
3. Most of the studies of women's preferences for Council of Large Public Housing Authorities (CLPHA).
housing and amenities date back to the 1970s and 1980s, 1996. Summary tenant statistics. Washington, DC:
when women were entering the labor force in great CLPHA.
numbers. Cowan, Spencer M., William M. Rohe and Esmail Baku.
1999. Factors influencing the performance of
community development corporations. Journal of
Urban Affairs, 21(3):325-340.
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Rob Rosenthal and Maria Foscarinis
15 Responses to Homelessness: Past Policies, Future

Directions, and a Right to Housing
WHEN HOMELESSNESS reemerged as a homelessness have done thus far.

significant social issue in the United States inthe
late 1970s and early 1980s, three questions
dominatedpublic debate:how many, who and why? THE 1980s: EARLY QUESTIONS, DEBATE
The range of answers to these questions AND POLICY RESPONSES
corresponded to a variety of proposed responses to
homelessness, from those that stressed changes The question of the size of the homeless population
inthe behavior of individual homeless people to generated much controversy in the early 1980s, at
those that called for systemic, social solutions. times dominating public debate on the issue. As a
Since that time, a degree of consensus has been political matter,thesizeof the homeless population
reached on those initial key questions, and the need had important policy implications: If there were
for some form of government response is accepted; only a few homeless people, locally or
with that evolution, debate has shifted to a nationally,then itcould beargued that government
discussion of the nature of that response. In the had little or no obligation to act. But by the late
early years of the new century,aresurgence 1980s, even those who had at first minimized the
ofinterest in policyresponses has begun to come problem could no longer deny that the numbers
forth at the federal, state and local levels, along were quite large in comparison to the preceding 40
with anewfocus on policies to end and prevent years. By most accounts, between half a million
homelessness. and a million Americans were “literally homeless”
This chapter begins with a discussion of the (meaning in shelters or on the streets) every night
initial debates dominating the response to —perhaps several millions if the count were
homelessness and their implications for policy. We expanded to include “hidden homeless”populations
then briefly discuss the ways in which local, state as well.Astudy by Bruce Link and his colleagues
and federal governments have helped to create (1994) estimated that an astounding 3 percent of
large-scale homelessness and then examine the U.S. population had been literally homeless at
responses to thecrisis. We consider the extent to some time between 1985 and 1990.
which these responses aimed at ameliorating Who,then,werethesehomelesspeople?Were they
theconditions ofhomeless life, aiding exit from hippies, alcoholics and addicts? Mothers with
homelessness or preventing homelessness, and children or unemployed working people? Werethey
discuss the evolution of government responses to membersof the “deserving” or“undeserving”
homelessness, noting that the limited amount of poor? Again, there were policy implications. For
funding available has made true prevention instance, if homeless people were “transients,” then
strategies relatively rare. In the last half of the local government could argue that it had little
chapter, we discuss the strategies that are most responsibility to them. If
promising, building on existing programmatic
successes but emphasizing the roleofhousing to a
far greater extent than gover nment responses to
Responses to Homelessness 317
they were alcoholics and addicts whose substance Displacement theorists generally argued that of
abuse was ostensibly achosen way of life, then all all the social causes involved, the crisis of low-
levels of government could argue that they had income housing was the most significant (Hopper
little claim to government aid. and Hamburg 1986; Wright 1989; Hoch and
This was tied to the third question: Why Slayton 1989). Specifically, the gap between
werethese people homeless?Public discourse— tenants'incomes andrents that grew so rapidly inthe
framed within the individualistic tradition that 1970s and 1980s was most severe for those on the
generally informs American public debate, based lowest end of the income spectrum; at the same
on inherited folk wisdom and reacting to the most time, it was at the bottom of the housing market
visible homeless people—initially attributed that thenumber of units declined most severely,
homelessness almost entirely to personal particularly insingle room occupancy (SRO) hotels
characteristics, perhaps involuntary (such as those (Hartman and Zigas 1991). The result, inevitably,
resulting from mental illness), but often was an explosion of homelessness for a segment of
“voluntary” (where homelessness isacho- sen the poorest Americans, caught inagameof musical
lifestyle; or resulting from substance abuse, as a chairs in which there were simply not enough
failure of self-control). This emphasis on the affordable units to go around.
individual fit fairly well with the major academic This is not to say that those who ended up
theory inherited from the last wave of concern with homeless were only random victims of structural
homelessness (skid rows inthe 1950s and 1960s), problems: Many had other problems as well. But
“Disaffiliation Theory,”which stressed the resources for dealing with such
themoreorless voluntary withdrawal of people from “personalproblems”—substance abuse, domestic
mainstream society for avariety of reasons— battering, lack ofjob training and the like—
social incompetence, desire to drink, fear of werealso inshortsupply; ineach area, there was a
disclosure of homosexuality and so forth.1 game of musical chairs. As inany such game,
By the mid- to late 1980s, researchers, ad- personal characteristics—preparation, sobriety,
vocates and homeless activists had increasingly skill as well as luck—play a role in who ends up
challenged suchindividually based explanations of with and without a chair. But the situation itself
homelessness with another perspective that stressed mandates that some will be caught without a chair
the involuntary displacement of people from —or, in this case, a home. For many displacement
housed lives by large social processes over which theorists and some homelessness activists, the
they had little control—in particular, the scarcity of centrality of the connection between homelessness
low-income housing, deindustrialization, and the dearth of low-income housing raised the
deinstitutionalization, increasing holes inthe question of establishing a Right to Housing
welfare safety net and changes in family structures. (Roisman 1991).
Disaffiliation, when itappeared, was described By the late 1980s, this more structural view of
moreoften as a resultofhomelessness rather than the homelessness had become increasingly common in
cause ofit. public discourse, changing public perceptions of
Theexplosion ofhomelessness inthefirst half of possible solutions. If larger social causes
the 1980s was powerful evidence for this “dis- weretoblame, homeless people werethen to be seen
placement” perspective. By any measure or def- as victims rather than villains responsible for their
inition, it was clear that the number of people who fallen state. Thus, the first of three major lines of
were homeless by 1985 was several times as great argument against aiding homeless people—the
as just a decade before, this being after 40 years of “moral question”— seemed largely overcome. That
relative stability in the size of the homeless is, if it could be shown that homeless people had
population nationally. To accept created their problems themselves or maybe had no
personalincompetence orirresponsibility as the desire to escapetheir condition, theyhad no moral
primary cause of homelessness required believing claim on the goodwill of government or the general
that hundreds of thousands—probably millions—of citizenry. But once homelessness is granted to be at
people had suddenly caught incompetence or least in part due to social processes beyond the
irresponsibility like the flu. Such an explanation control of those who become homeless, a sense of
was not convincing. decency demands governmental response, much as
318 Rob Rosenthal and Maria Foscarinis
weaid victims of naturaldisasters. In fact, the solutions, governmentalresponse remained tor-

agency responsible for initial overview of federal turously slow at all levels. Though the “moral
programs in this area was the Federal Emergency question” might bemuted,twoother“practical”
Management Agency (FEMA). Ironically,FEMA arguments were harder to overcome, especially at
(nowpartof the Department of Homeland Security) the local level: the “magnet theory” and the “cost
responded to the massive homelessness caused by argument.”
Hurricane Katrina yet, as of this writing, is The magnet (or Mecca) theory argues that
providing housing assistance only to those made providing services will attract more homeless
homeless by this disaster, not to those who were people to a locality, thus worsening the problem
previously homeless.2 locally.There is littleevidence that homeless people
as a group are significantly more mobile than
housed people (Rosenthal 1994:144; Burt 2001), 3
THE 1990s: BACKLASH AND PROGRESS and strong evidence that those who leave
thecommunitywheretheybecame homeless do so
Despite increasing government aid inthe 1990s, largely because of lack of jobs and affordable
homelessness did not go away. Public opinion, housing, not lack of social services; but availability
fluid and malleable, continued to show support in of services maybe one of several factors in
polls for more socially oriented approaches but choosing the community to which they move (Burt
often supported more punitive approaches when 2001). The fear of becoming a magnet for
these were advanced by politicians (Link et al. homeless people was—and still is—a regularly
1995; Guzicki and Toro 2002). At the local level, cited rationale for cities' limitations on aid and
new ordinances penalizing acts such as begging or programs for homeless people, including
sleeping in public were enactedin some places prohibition of efforts by private individuals and
(NationalLaw Center on Homeless- organizations to offer aid or establishhousing and
nessandPoverty [hereafter NLCHP] 1991, 1993, otherprograms. This suggests that both prevention
1994, 1996, 1999). Clearly, the public wanted strategies and regional approaches to services for
something done, and the very failure to solve the those who do become homeless areultimately likely
problem engendered resentment. to makemore sense forlocal governments.
In academicandpolicy circles, the 1990s saw Local governments have also often made the
some backlash against the displacement emphasis cost argument: Whatever their sympathies or
as well. Some researchers accused displacement wishes, they simply do not have money to meet
theorists of denying the existence of any pathology existing need (let alone help those who might be
among homeless people (Baum and Burnes 1993) attracted by the town's generosity). In fact, local
and stressed the importance of individual governments were often spending considerably
disaffiliation (as cause as well as effect). While more than they realized, since while they were
some continued to stress individuals' lack of aware of their manifest costs dealing
“independent living skills” (Institute for Children withhomelessness (such as emergency shelters),
and Poverty [hereinafter ICP] 1998a; Grunberg they may have been unaware of a wide range of
1998), by the mid- to late 1990s, many theorists hidden costs, from police costs for arrests to
argued that homelessness could best be explained medical costs incurred at local emergency rooms
by some combination of macro and micro factors (Research Atlanta 1984; Rosenthal 1994). During
(Jencks 1994; Main 1998). Recognizing that at the 1990s, evidence began to accumulate that
least some homeless people needed more than progressive social solutions to homelessness
simply housing and seeking to establish firmer (discussedbelow) would be cost-effective for so-
links to a broader anti-povertyplatform, advocates ciety at large and, inthe long run, for localities as
developedpol- icy proposals that included the full well (Rosenthal 1994; Lindblom 1996). More
range ofissues that needed to be addressed to truly recently, a 2002 study demonstrated that the cost
end homelessness: housing, income and social ser- ofproviding supportive housing—housing with
vices (NLCHP 1992). services, such as mental health care, substance
Yet even when and where homelessness had abuse treatment, case management—for even the
been accepted as a social issue requiring social most troubled homeless people would be nearly
offset by savings in crisis responses such as GOVERNMENT'S ROLE: CREATING AND

emergency room use and incarceration (Culhane, RESPONDING TO HOMELESSNESS
Metreaux and Hadley 2002:135-140).
These calculations, however, rest also on the Throughout the 1980s, activists and advocates
question ofwhat level of response is intended. argued that farfrom helping to resolve home-
Programs maybeaimed at amelioration—that is, lessness, government at all levels hadplayed an
easing the lives of those already homeless (such as enormous role in helping to create large-scale
sheltersor soup kitchens); they may be designed to homelessness. Federal housing and fiscal policies,
facilitate exit from homelessness for those already in particular, were crucial. Many of these are
homeless (such as housing); they maybeaimed at discussed in detail elsewhere in this text: tax laws
prevention of homelessness (such as creation of that traditionally rewarded practices that led to
additional low-rent housing, rent control and escalating housing costs; failure to control interest
eviction protections). Up through the 1990s, rates, a key variable inthe demise of low-income
government responses to homelessness focused housing inthe 1980s; and most prominently, the
primarily on amelioration. Yet they did not provide slashing of the federal housing budget during the
even enough shelter beds, for instance, to meet Reagan/Bush I years as the low-income housing
need, leaving littleor nothing for exit and market crumbled. Despite the Clinton
prevention programs. Administration's early denunciations of these cuts
in housing programs, it retreated in the face of the
Republican Congressional victory of 1994, and
THE 2000s TO DATE: CURRENT DEBATE FY1996, FY1997 and FY1998 budgets
AND FOCUS submittedbythe President maintained those cuts;
the FY1999 budget reversed thistrend somewhat,
With the beginning of thecurrent decade, however, continuing through the FY2001 budget. The
there has been a newdrive to prevent and end proposed budget for FY2002, thefirst
homelessness. A proposal to endhomelessness in presentedbythenewBush Administration, signaled
ten years, advanced by the National Alliance to the startof anewdown- ward trend, with significant
End Homelessness (NAEH), emphasizes the cuts innewSection 8units requested.The
importance of engaging the mainstream anti- mostcurrent (mid-2005) proposal, for FY2006, was
poverty programs as well as loweryet, calling for cutting the total HUDbudget
building“infrastructure,”incorporatingthe earlier by over $5 billion, or11.5 percent, and included a
call forhousing, income and services. While proposal to eliminate the
theNAEH plan outlines a general framework rather CommunityDevelopmentBlockGrant (CDBG)
than specific proposals, it identifies as a first program and move those functions to the
priority ending homelessness for chronically Department of Commerce without any as-
homeless people through increased supportive surancethathousingwouldcontinuetobeanel- igible
housing, citing recent research indicating that a activity. (NLIHC 2005). Further, retroactive
disproportionate amount of services are administrative changes caused low-income people
consumedbythis population (NAEH 2002; Culhane across the country to lose their housing: In April
2002). Othersargue that policy must aim to end all 2004, the Department of Housing and Urban
forms ofhomelessness and that to do this the much Development (HUD) announced that it would no
bigger issue of the affordable housing crisis must longer pay for the full cost of existing vouchers.
be addressed (NAACP et al. 2003). Omnibus This is not to say that it has been only federal
legislation introduced in Congress in 2003, the housing policies that helped to create and
Bringing America Home Act, contains a wide exacerbate homelessness on a large scale. Local
range of proposals that explore the need for governments, especially those facing financial
housing, income and social services—including disaster as their middle classes fled to surrounding
health and child care—and that calls for a Right to suburbs, have played asignificant role, encouraging
Housing. the wave of gentrification that destroyed so much
of the low-rent housing stockin many cities,
particularly SROs, without providing for the
relocation of those displaced. Social service and other immediate assistance to homeless people.
policies—at all levels of government— have also Similar suits werefiledinother jurisdictions,
been involved.Inthe 1960s and 1970s, the mental including AtlanticCity (NJ),West Virginia and Los
health policy of deinstitutionalization, though Angeles; in Washington, DC, a ballot initiative led
laudably intended to improve the lives and to a right to shelter in that cityin 1984. Parallel to
treatment of mental health patients by greatly the litigation, other advocacy initiatives, coupled
expanding their treatment options, foundered on with early federal emergency appropriations,
the federal failure to fully fund promised resultedin some aid, primarily emergencyin nature
residential treatment facilities, cou- (U.S. GAO 1985:40-42).Inthemid-tolate
pledwithlocalresistance to thecreation of such 1980s,localgov- ernment responses to
facilities. The resultinggapingholesincoordina- tion homelessnessincreased as the first significant
and servicesledtoasharpincreasein homelessness federal dollars for social approaches to
among mentally ill people. Assistance levels in homelessness began to reach the locallevel.
means-tested entitlement programs not indexed to Beginning in the early 1990s, however, some
inflation dropped too low to cover housing costs localities began to adopt or reinstitute more
and other necessities; tightened eligibility and punitive approaches to homelessness. Despite the
application requirements initiated in the early increasedfunding, shelter space was not sufficient
1980s prevented many from receiving assistance at to meet the need, leaving many homeless people
all. Discretionary social service programs aided living in public spaces. In response, many localities
only a small fraction of those eligible. Nor has this began adopting the “leafblower approach” (as one
changed much: Currently, for example, about local official referred to it, cited in Simon
three-fourths of those who are eligible do not 1994:152), attempting to move homeless
receive any federal housing assistance (Sard and peopleawayfrom their streets, neighborhoods or
Fischer 2003). The repeal of the federal welfare communities. Treating homelessness as a police
entitlement for families, along with the denial of matter, local governments passed or resurrected
supplemental security income (SSI) benefits to laws that criminalized activities such as
those disabled by drug and alcohol addiction—both “publicsleeping,” “illegal camping” and
the result of the 1996 welfare reform legislation— “aggressive panhandling”; in practice, police of-
contributed to increases in homelessness among ficers often used these laws to require homeless
those who lost these forms of assistance (NAEH peopleto“move along” or else face arrest. These
2003; Norris et al. 2003 ). lawsand enforcement practices spurred numerous
THE LOCAL AND STATE RESPONSE court challenges to their constitutionality, leading
to several court rulings striking them down. At the
Until the mid-1980s, shelters and soup kitchens— same time, some of the gains of the 1980s were
almost always operated by nonprofits, mainly restricted or reversed. The already inadequate
religious groups—were the only direct response to availability of shelter was fur- therdiminishedwith
homelessness in most places, as they had been for newrestrictions and eligibilityrequirements,
40 years at least. But one indicator of the including time limits, work requirements and proof
seriousness of the explosion of homelessness inthe that homelessness was not the result of “fault”; in
1980s—and the success of activists and advocates 1994, Washington, DC, repealed its right to shelter
in pressing demands on government—was that by law (Foscarinis 2004).
1996 (the most recent year for which data are While these punitive approaches continue
available), government had become the primary (NLCHP and NCH 2001; NLCHP 2003), more
conduit for funding and organizing the delivery of constructive approaches are also emerging in some
most services for homeless people (Burt 2001:260- localities, at least partly in response to advocacy
261). and litigation. The leading case challenging the
Initially, the burden fell primarily on local “criminalization” of homelessness, Pottinger v.
government. Starting inNew York City with a suit Miami, resulted in a favorable court ruling striking
to establish a “right to shelter,” ultimately down the city's policies as unconstitutional; that
formalized in a consent decree, lawsuits established ruling led to a consent decree that included a “no
some state and local obligations to provide shelter bed, no arrest” provision, marking some
recognition of shelter as a minimum necessity. Conference of Mayors 2003b). According to the

Moreover, following the litigation, Miami's Dade Council, as of Febru-
Countypassed aspecial meal tax to fund aid—both ary2004,over80citieshadmadecommitments to
short- and longer- term—for homeless people, develop such plans.
raising some $7.5 million annually for shelter, Among the cities that have developed or are
housing, employment service and substance abuse currently developing such plans are New York,
treatment (Rohter 1993; Foscarinis 1996a). Atlanta, Washington, DC, San Francisco and
Nonetheless, regardless of the approach, it is Chicago as well as state plans from California,
unrealistic to expect local efforts alone to meet the Rhode Island, Minnesota and Georgia, and a
crisis adequately. An inevitable diffusion of variety of counties, such as Maricopa County
financial responsibility (since who bears the (Arizona), Montgomery County (Maryland)and
eventual cost is not necessarily tied to who could Columbus and Franklin Counties (Ohio). Whilethe
prevent the original problem), coupled with the plans vary significantly in level ofdetail and
limits on local resources, all too often interferes approach, many empha- sizethe importance
with a proactive approach that would make sense ofpreventing homelessness and increasing housing
financially, socially and morally as well. Local resources. In particular, many include preventing
governments, operating withinfixed time frames institutionalized persons from being discharged
and financial constraint, have argued that the costs into homelessness and support for the “housing
of homelessness, hidden or manifest—to first” model that emphasizes speedy placement in
ameliorate, exit or prevent homelessness—are permanent housing, circumventing insofar as possi-
more than they can bear alone inthe immediate ble emergency shelter and transitional housing ( L
present, even with the best of intentions. o w e 2004).
By and large, state governments have not filled Some plans also call for additional state or local
the gap. Beginning in the mid-1990s, the federal resources, both government and private. For
Continuum of Careapproach (described below) has example, the Atlanta plan includes proposals for
greatly encouraged states to design collaborative additional cityfunding, “as resources permit.” San
plans and match federal dollars. These initiatives Francisco's plan includes a proposal for city
are important, but states remain generally incentives to developers to build supportive
“middlemen,” allocating money from Washington. housing. Nevertheless, while the plans have
A few states— including Massachusetts, New galvanized state and local efforts and refocused
Jersey and New York (Watson 1996; Lindblom their attention on homelessness and the
1996:191-192; Culhane 2002)—have launched relatedissues ofhousing, income and supportive
significant initiatives, investing their own resources services, much of the focus of the state and city
in preventing and ending homelessness. Following plans is on strategies to engage the resources of
welfare reform, at least some states have used themainstream—mainly federal—anti-poverty
TemporaryAssistanceforNeedyFamiliesfunds for programs. Indeed, homeless initiatives of any
homelessness prevention (Culhane 2002). magnitude are largely dependent on the federal
In the past fewyears,anumber of state and local government for funding.
governments have developed plans to end
“chronic” homelessness in their communities.
Much of thiseffort has been spurred by the 2002 THE FEDERAL RESPONSE
White House announcement of agoal to end
chronic homelessness in ten years (OMB 2002:171; In the early 1980s, the initial position of the
2003:164, 169),followedbyacallfrom the Reagan Administration was that homelessness
Interagency Council on Homelessness to cities and simply did not exist; in 1982, an Administration
states to develop plans to do so (ICH n.d.). The official stated publicly that “no one is living on the
Council challenged the nation's 100 largest cities to streets” (Hopper and Hamburg 1986). The federal
develop plans by January 2003 to end chronic Interagency Task Force on Food and Shelter for the
homelessness, and theU.S.Con- ference of Mayors Homeless, created in 1983, stated in its charter that
subsequently adopted a resolution to work with the “[h]omelessness is essentially a local problem” and
Bush Administration to meet that goal (U.S. that “[n]ew federal programs for the homeless are
not the answer” (GAO 1985). In 1984, President attention also allowed states to overlook new
Reagan expressed the view that homelessness was federal obligations that the McKinney Act imposed
not a social problem at all but that people were on states, such as Title VII's guarantee of access to
homeless “by choice” (Boston Globe 1984). education for homeless children; litigation also was
Nevertheless, in response to the growing crisis, needed to enforce these provisions (Foscarinis
Congress appropriated $140 million for food and 2004). But over the years, while some
shelter for homeless people in 1983; an additional implementation problems have remained, there has
$70 million was appropriated the following year. been undeniably significant progress.
These funds were to be administered by FEMA, the In 1993, the incoming Clinton Administration
entity responsible for responding to natural declared homelessness a top priority for HUD.
disasters such as floods and earthquakes; no Funding for McKinney Act programs increased
separate program was authorized. But as pressure significantly, reaching a high of $1.377 billion in
mounted from advocates, homeless people and FY1995. The Republican Congressional gains in
local governments, the federal response improved. 1994 slowed the growth of some initiatives and
The Stewart B. McKinney Homeless Assistance reversed the growth of others, with total funding
Act of 1987, the watershed event in federal declining to $1.031 billion in FY1996, then
support, authorized a littlemorethan a billion beginning to rise again, reaching just over $1.62
dollars over a two-year period for changes in seven billion in FY2003 and just over $1.68 billion in
existing programs and creation of fifteen new FY2004. TheAdministration's FY2006 budget
programs providing aid to homeless people. Actual request included an increase ofjust over $200
appropriations were $350 million in 1987 and $362 million from FY2005 to $1.78 billion.
million in 1988 (Foscarinis 1996b). Later named The direction offunding also began to change
McKinney-Vento,4 the act provided primarily significantly. In the mid- and late 1980s, the bulk
emergency aid, with most of the funding going to of funding went primarily to emergency aid, such
emergency shelter and food. As enacted, the as shelter, food,mobile health careand some
McKinney Act was essentially the first part—titled transitionalhousing. Thenumber of shelters and
emergency relief—of an ambitious legislative food programs, and their capacities, grew rapidly; a
agenda drafted by advocates; parts two and three, decade later, many communities reported doubled
which provided for preventative relief (mainly to tripled shelter capacity (Burt 2001:243-245),
discharge planning and eviction prevention) and although across the country need remained greater
long-term solutions (mainly housing) were not than resources (U.S. Conference of Mayors 2003a).
enacted. Given the political context at thetime, Activists and advocates were not satisfied with this
advocates pressedfor the most immediate relief, approach, however,nor did the problem go
which also had thegreater likelihood ofbeing away.For one thing, despite thegreat increase in
passed. During the debate on the legislation, funding, considerably more was needed to cover
Congressional supporters noted that theMcKinney even sufficient emergency aid. But a more
Act should be seen as only afirst stepinthe fundamental problem remained: If the game of
federalresponse to homelessness (Foscarinis musical chairs was not to go on forever,theultimate
1993).5 object had to be to prevent and end homelessness
Implementation of federal programs inthe early rather than attempt to make it easier to tolerate for
years was characterized by the General Accounting those already caught up in its whirlwind.
Office as “inadequate” (U.S. GAO 1990:2), with Beginning in the early 1990s, changes to the
federal agencies delaying or refusing to implement McKinney Act shifted the emphasis of some of the
them despite statutory timelines and mandates. Key programs away from emergency aid and toward
provisions, such as a program to make exit and prevention. The 1990 McKinney
underutilized properties available to local Amendments included anew“Shel- ter Plus Care”
governments and nonprofit organizations to assist program which provided housing assistance tied to
homeless people, were ignored. Implementation, services for homeless people withdisabilities;
still inadequate, began through acourtorder that addedprevention activities as an eligible use within
remains ineffect and that has been supplemented by the Emergency Shelter Grants program; and
additional enforcement orders. Inadequate federal strengthened the newly re-
namedProjectsforAssistanceinTransitionfrom ploded,”from“basicallynonein1988to274,200 by
Homelessness(PATH) Program, aimed atmen- tally 1996.” According to these data, by 1996, per-
ill homeless people. These changes stressed manent housing accounted for almost 19 percent of
coordinationofservicesandprograms,andend- ing all HUD McKinney programs (shelter, transitional
and preventing homelessness, as opposed to housing and permanent housing) serving homeless
amelioration. Thistrendwas continued and ex- people (Burt 2001:243-244).
pandedwith the Clinton Administration's adoption Much of the initial emphasis of theCoC strategy
of a “Continuum of Care” (CoC) approach was on transitional housing. For example, in 1995,
fortheMcKinneyhousingandshelterprograms, the proposed number of persons to be assisted in
beginning in 1994 (ICH 1994:68-75). As ini- transitional housing initiatives was about four times
tiallyformulated,theCoCapproachemphasized as great as the number to be assisted in permanent
community-wide coordination andlinkages be- housing, only in part a reflection of the greater
tweenhousingandservices(Barnard-Columbia turnover in transitional programs; growth in the
1996:1). By awarding most funding to programs number of people supplied with permanent hous-
that applied as part of a “consolidated” CoC ing, whilevery impressive, was only about two-
application submitted by a local or state-wide thirds that of growth in transitional housing
coalition, the federal government drastically altered (Barnard-Columbia 1996:18). Most of the per-
the wayin which local communities were manent housing created was for those already
approaching homelessness, effectively requiring homeless, rather than for prevention. Of the four
communities to come together,minimize dupli- major McKinney HUDprograms, only the smallest,
cation and turf wars, andplan how to matchlocal the Section 8 Moderate Rehabilitation Single Room
funds to federal dollars (Burt et al. 2002:5-7). Occupancy Program, had as at least one partofits
Under CoC, the Emergency Shelter Grants mandate creation ofpermanent housing for people
program remained as a formula program, but whomay not yet be homeless. Through themid-
funding was combinedfor thethree competitive 1990s, theother programs grew three to nine times
McKinney programs administered by HUD: as quickly; the largest (Supportive Housing) served
Supportive Housing (mainly for creation of a hundred times asmanypeople (calculatedfromdata
transitional housing with services forfamilies in Barnard-Columbia 1996:29).
anddisabledpeople); Shelter Plus Care (mainly The CoC process evolved through the 1990s
aimedatprovidingpermanenthousingwithser- vices and beyond. While initially the main goal of CoC
for homeless people with disabilities); and was “to assist homeless individuals and families to
Section8Moderate Rehabilitation Single Room move to self-sufficiency, tothe extent possible, and
OccupancyProgram (to increase the supply of SRO to permanent housing” (Barnard- Columbia 1996:9,
units; supportive services are optional). Vastly emphasisadded), as currently formulated, a full
increasedfunding was pledged,especially from CoC ideally also includes prevention. 6 According
HUD, much ofit forprograms that went beyond to a 2002 Urban Institute study of 25 CoCs, most
amelioration. Whereas one-fourth of McKinney of thesystems studied incorporated prevention
HUD allocations in 1990 went to strategies; some also included efforts to incorporate
emergencyhousing and one-half to transitional mainstream services inthe CoC (Burt et al. 2002).7
housing, by 1995, only 16 percent of new These changes were driven by new federal policies
allocations were going to emergency housing, 37 and incentives: In 2000, Congress required that 30
percent to transitional housing and almost 50 percent of McKinney shelter and housing funds be
percent to permanent housing (calculated from data used to provide permanent supportive housing
in Barnard-Columbia 1996:22). The National forhomeless persons andre-
Survey of Homeless Assistance Providers and quiredgranteestocoordinateandintegrate their
Clients, the most comprehensive national survey to programs with “mainstream” programs, again
date, found that while emergency shelter units had through amendments to the appropriations bill, thus
grown by 21 percent from 1988 to 1996, the seeking to connect assistance to homeless
number of transitional and permanent housing units peopletothemuch greater resources provided by the
for homeless peoplecreatedwith McKinneyfunding “mainstream” anti-poverty programs. Congress
had“ex- also added discharge planning activities as an
eligible use of emergency shelter grants. Homelessness” to fund additional supportive

Amendments to the McKinney Education of housing fordisabled homeless people, cobbled
Homeless Children and Youth program, made as together from discretionary funds from HUD,the
partofits reauthorization in 2001, shifted that Department of Health and Human Services
program's focus as well. Requirements that (HHS)and the Department of Veterans Affairs 8; an
homeless children be integrated into themain- additional $13.5 million inHUD andDepartment
stream public school system—rather than seg- ofLabor funds has been made available forhousing
regatedinseparate schools—werestrengthened, as and employmentprogramsforpersonsexperiencing
were requirements that children be allowed to chronic homelessness. In FY2005, the Admin-
continue intheschool they attended before istration requested a $70 million appropriation
becoming homeless rather than made to transfer to forits “Samaritan” initiative, which would continue
a school in whatever district they were then living. this effort, with $50 million proposed for HUD and
Also strengthened was a requirement that schools $10 million eachfor HHS and the Department of
coordinate school placement with shelter or other Veterans Affairs; however, this
housing placement, laying the groundwork for requestwasnotfundedbyCongress.Asoutlined
greater overall coordination of homeless families' above,proposedFY2006fundingforMcKinney-
needs. Funding for the program was increased Vento includes an increase of just over $200
substantially as well (Jullianelleand Foscarinis million; most of this would go to an expansion of
2003). the HUD McKinney-Vento programs.
Perhaps most dramatically, in 2002, Presi- Further,the revitalized Interagency Council on
dentBush (in proposing the FY2003 HUDbud- get) Homelessness has devoted most ofits efforts to
declared “ending chronic homelessness in the next pressing state and local governments to respond to
decade a top objective” of his administration homelessness. Following the White House
(OMB 2002:179). This policy emphasis was commitment to end chronic homelessness in ten
accompanied by revitalization of theIn- teragency years, the Council challenged cities
Council on the Homeless, whichhad lost its funding todevelopplanstodoso;accordingtotheCoun- cil,as
andlain dormant foryears, and the appointment of a of this writing, 200 have committed to develop
homeless advocate to direct it. While limited to suchplans.9 Advocates have criticized the Council
“chronically” homeless people—those whoare for this focus, noting that the Council's primary,
homeless overlong periods of time and generally statutorily mandated mission is to coordinate and
have multiple problems, such as mental disability lead the federal response to homelessness. In fact,
or substance abuse—and thus excluding the vast however, despite theAd- ministration's emphasis on
majority of homeless families and children, these plans to endhomelessness, there is no
steps are significant. suchfederalplan in place or in process.
As publicly stated commitments, at least, these At the same time, Administration actions and
mark a shift in national policy and area proposals affecting anti-poverty and social
dramaticcontrasttothepolicyofthe earliercon- programs threaten increases to the causes of
servative administration ofRonald Reagan. The homelessness. The demolition of public housing
newrhetoric helpsshift public debate awayfrom without one-for-one replacement pushes more low-
merely ameliorating the conditions ofhomeless income people into homelessness. The increases in
lifetoaiding exit from homelessness and ultimately numbers of relatively higher-income residents
prevention of homelessness altogether. As such, admitted to public housing means fewer units
they present opportunities for advocates to press available for those most at risk. Changes in
for new policies and funding to meet these goals. Supplementary Security Income (SSI) and Social
Nonetheless, these commitments have remained Security Disability Insurance (SSDI) disability
rhetorical. They have not been accompanied by benefits (and therefore access to Medicaid) that
significant new funding; indeed, the Administration disqualify disability
has actually proposed cuts in McKinney-Vento basedonsubstanceabusehaveledtoincreasesin
programs. To date (mid-2005), theAdministration homelessnessandotherhardship(Norris2003). The
has announced $55 million in funds forits new repeal of welfare as an entitlement in 1996 has in
“Collaborative Initiative to End Chronic some cases led to increases in family homelessness
(Chicago Coalitionfor the Home- particular, a Right to Housing must be

less2000;NAEH2003). As discussed above, the incorporated.
Administration's proposed FY2006 budget for low- While homelessness is complex, both as a mass
income housing programs as a whole includes phenomenon andinthe lifeof a family or individual,
significant cuts in funding. And the most recent tax the keylesson of the displacement school remains
cuts anddefense expenditures—as well as the true: Housing lies at its crux. At the most simplistic
consequent tremendous increase in the deficit— level, if you have housing, whatever else your
raise the political hurdles for efforts to increase problems, you are not homeless; if that housing and
funding for discretionary antipovertyprograms. your tenure in itare relatively stable, you are farless
Given this context, simply allocating limited likely to become homeless inthe foreseeable future.
McKinney and other federal homeless dol- For instance, Shinn et al. found that “having one's
larstopermanent housing creates an untenable own apartment andhaving subsidized housing were
conflict between two necessary tasks: aiding those protective” against homelessness; personal
already homeless and preventing those at risk from characteristics, such as high school graduation, teen
becoming homeless.10 Engaging the “mainstream” motherhood, work experience and “measures of
anti-povertyprograms—and insisting that they disorder” made insignificant contributions to their
address the needs of home- lesspeople— predictive model ( 1998: 1653). As stated by Burt
wouldcertainlyhelpprogrammat- ically; engaging and colleagues, reviewing her ownand others' past
those resources and the communities that care research: “Every available study indicates that
about them would also help to build political giving homeless people housing, through shelter
support. However, these pro- plus care, vouchers, group homes, or any other
gramsareultimatelythemselvesinadequate,and those mechanism, helps ensurethat they will not be
inadequacies—such as benefit levels that are too homeless any more” (Burt et al. 2001:323).
low to support housing costs—can contribute to But housing isalso crucial because many of
causing rather than ending andpre- venting theotherproblemsthatmay contribute to,exacerbate
homelessness. To really end andprevent and prolong homelessness—joblessness, substance
homelessness, these larger failures must also be abuse, mental illness, physical abuse, family break-
addressed. up—are bothfar easier to withstand when housed,
and aremore likely and more damaging when
housing is unstable or lacking and the downward
WHAT IS TO BE DONE? cycles of homelessness have set in. As Shinn et al.
note, “Whereties to the housing market are fragile,
Some theorists have argued that market economies disruptions mayprecipitate crises” ( 1 9 98: 1 665).
will inevitably produce some homelessness Once an individual orfamily becomes homeless, an
(Hopeand Young 1986:269), just as they will extra layer of problems is created on top of
inevitably produce some unemployment. Yet the whatever led to the homelessness inthefirst place,
great variation in the extent of homelessness including the searchfor temporary shelter, declining
foundin Western industrialized countries (Burt health, depression, threat ofloss of children and
2001:329; UN Centre for Human Settlements loss ofdocuments and resources.Exitinghome-
2000:40-43) suggests that enlightened social lessness becomes more difficult as the need to
policies can make a significant difference. What simply satisfy daily basic needs, intensified and
follows isaproposalfor a number of such policies to vastly complicatedbyhomeless status, interferes
ameliorate, aid exit from and prevent withjob training, education andjob orhousing
homelessness. While housing policies are central, searches. Further, dealing with a homeless indi-
other areas—particularly public assistance, vidual'sorfamily's personalproblems,whatever they
employment, education and health care—are also maybe, is almost impossible without the stability
important. Policies for exiting and preventing provided by reliable housing (Oakley and Dennis
homelessness must be envisioned in a larger 1996; Fosburg et al. 1997). These downward cycles
context, which in turn requires the federal may explain in part why losing one's housing can
government to play a leading role. But crucially, beginagenerational cycle of homelessness:
housing policy must be re-thought and, in Childhood homelessness increases the risk of adult
homelessness later (Burt 2001:224-232; Better modernization funding is absolutely necessary, as

Homes Fund 1999:33). In short, prevention of is prohibiting the demolition of public housing
homelessness is necessary for ending units without prior or simultaneous one-for-one re-
homelessness; and ensuring enough low-cost placement. But even more promising isthe wide
housing to meet actual (not market) needisthe key array of other models for expanding the supply of
to preventing homelessness. housing permanently outside the private market,
controlled by those living within it (see Chapter
Prevention: Housing Strategies 11).
The component of Section 8 that has led most
Our goal must bethe realization of the human Right directly to production—project-based subsidized
to Housing—in essence, the fulfillment of the 1949 (but privately owned) housing—has achieved some
Housing Act's goal of“a decent home and a suitable modest success in spurring production of below-
living environment” for all Americans. This market housing, but much of that housing faces
requires, first, protection of existing housing and threat of reversion to unregulated status, and thus
the tenancy of those already in place. On the one market-level rents, through expiring use and
hand, this means protecting theunits themselves contracts. Beginning in 2000, housing, anti-
and maintaining them as low-cost housing, whether homelessness and other anti-poverty advocates
this requires controlling demolition and conversion launched a campaign for a National Housing Trust
of privately owned housing or preventing gov- Fund, with the goal of producing, rehabilitating and
ernment destruction ofpublic housing without preserving a total of 1.5 million additional units of
concomitant one-for-one replacement of low-income housing over ten years; a key element
comparably sized units. On the other hand, this of the proposal is creation of a dedicated federal
means protection of tenants living in low- rent funding stream for low-income housing. While this
units, including protections against unjust alone would not close the gap between need for
evictions, legal assistance and mediation in and availability of affordable housing—estimated
landlord/tenant disputes, referral to appropriate at 4.7 million units (Joint Center for Housing
entitlement programs and, as a final safety net, Studies of Harvard University 2003:28)—it would
providing emergency rental and utility assis- be a major step forward. Legislation based on the
tancewhen necessary.Inability to paytherentor proposal was introduced in Congress in 2002 and
being forced to leave by the landlord are among 2003 (BernsteinandSaraf 2003) and as of mid-2005
thetopfour reasons for leaving the last residence is pending.
prior to becoming homeless (ICH 1999:30-31; Regulatory reforms are required in order to
Burt2001:66-68;HartmanandRobinson2003). ensure that, once funded, affordable housing can
Numerous studies—for example, Shinn et al. actually be sited. Local exclusionary zoning laws
(1998), Burt (2001) and those cited therein— have designed to prevent “undesirable” kinds of housing
demonstrated the crucial role subsidized housing (such as supportive housing, shared housing or
plays in whether a family avoidsor exits low-income housing in general) should be modified
homelessness. Section 8 and other “demand” at the state or federal level, and existing fair
programs augment a tenant household's effective housing protections should be better enforced.
demand for housing by increasing the amount Models that emphasize community outreach and
ofrent it can pay; in theory, this can lead to new education, with aview toward nonadversarial
construction as the demand calls forth new supply resolution of Not In My Back Yard (NIMBY)
from themarket. But although crucial at this time, opposition, should be promoted as well. More
support for demand programs must be seen as a proactively, inclusionary zoning laws should be en-
stop-gap measure. Supply programs would be far acted to promote the development of affordable
more efficient. The most famous of these—public housing.
housing— has been widely condemned in this Some policies confront important but mutually
country as a total disaster, but this is a wildly contradictory goals. For instance, diversifying the
inaccurate assessment ofits actual effect (Bratt income levels of those in public housing, as
1986). Preserving decent public housing through mandated in the 1998 Housing Act, is certainly a
providing realisticoperating subsidies and good idea for many reasons—as it would be inany
community. Yet instituting such a policy through in order to earn enough income to beabletorent
lowering the percentage of very-low-income theaverage two-bedroom apartment available on
applicants who get priority in a project will the open market while spending only 30 percent of
undoubtedly expose more vulnerable families to that income onhousing(the legal maximum in
homelessness, while slightly better-off families get federalhousing programs such as Section8and
availableunits. When a pie is too small,there public housing as well as thegovernment's sug-
willalways be suchirresolvable dilemmas. This is gestedlimit for others) was $15.37, almost three
true of regulations governing who should get times the minimum wage. (NLIHC 2004a).
priority for scarce units, as it is for competition Adequate income is the other side of housing
between the funding needs for forms ofhousing affordability: No housing unit is affordable if a
aimed at amelioration, exitor prevention. Without person's income is too low in relation to its cost. To
the realization of the human Right to Housing (see prevent homelessness, theminimum wage should
Chapter 8), we will continue to play a game of be set at a level that ensures that, when combined
musical chairs. with the Earned Income Tax Credit, households
can afford adequate housing in their area without
Prevention: Nonhousing Strategies paying more than 30 percent of their income on
rent. The conservative fear that raising the
Housing is a necessary condition for ending minimum wage will lead to economic chaos has
homelessness but not sufficient fordealing with the proven unfounded each time it has been raised
manyproblems that underlieor accompany (Bernstein and Schmitt 2000:19-
homelessness and poverty generally. The most 20;Harrington1984:111).Inaddition, the Earned
promising initiatives to prevent homelessness Income Tax Credit can be further increased to
combine housing with programs aimed at em- ensure that income is sufficient to pay for housing
ployment, public assistance, social services and and prevent homelessness, and expanded outreach
health services. is necessary to make poor people aware of the
The issues involved arecomplex andinterre- credit and assist them in claiming it when eligible.
lated.This istrue not only for those immediately Training and education must also be available
confronting homelessness but also for those a step to ensurethat those whoarecapableofworking can
or two away. Homelessness prevention initiatives actually do so; this not only helpstopre- vent
necessarily involve measures that deal withpoverty homelessness, italso makes eminent sense
andits components generally, policies that affect societally. For such efforts to succeed, however,
the far larger pool of people from which the the conditions that make training and education
significant but relatively small group of people possible must be met: adequate training pay,
who actually become homeless is drawn.Whilethe affordable child care11 and transportation
policies for ameliorating and exiting homelessness assistance. Moreover,training must be linked to
discussed below have important components tied to placement in jobs that pay wages sufficient to
the homeless state of the people forwhom they afford housing either through hiring incentives or
areaimed, prevention policies are much more other inducements to the private sector or through
broadly based and apply to far greater numbers government-created jobs.12
within the general population. For employment strategies to effectively prevent
homelessness, training and education can
Employment. Over the course of a month, 44 onlybeafirststep.Healthcare,childcare,trans-
percent of homeless people report working full- or portation and adequate wages must be assured,
part-time, according to the most recent asillustratedbystudiesoftheimpactofthe1996 welfare
comprehensivenationalsurveyonhomelessness (ICH reform legislation. For example, an Illinois study
1999:29). Clearly, employment inand of itself may reported that of those families who left welfare for
not prevent homelessness. According to an analysis work, only 37 percent were employed continuously
of 2002 Census data, nearly two-thirds of all poor six to eight months later,
families with children included a worker in that 25percenthaddifficultybuyingfood, 31 percent had
year (Center on Budget and Policy Priorities 2003). difficulty paying for child care, 30 percent
In 2004, the average hourly wage a worker needed hadnohealthinsuranceand21percentreported being
unable to pay the rent at least one time since Harrison 2002:7); millions moreare released from
exiting Temporary Assistance for Needy Families jails. (National Commission on Correctional Health
(TANF) (Lewisetal. 2000). Without such supports, Care 2002). Persons in state systems of care, such
training alone risks creating another game of as youth aging out of foster care, should also be
musical chairs in which a few are able to gain the included in discharge planning. This is especially
employment sufficient to prevent homelessness, important, since childhood experience offoster care
whileothersare left behind in low-wage jobs is known to be a risk factor for later homelessness
without support—and at risk of homelessness. (Burt 2001:332; ICH 1999:52).
A pre-release program established by fed-
Public Assistance and Social Services. For those erallawin 1986 allows eligible institutionalized
whoare unabletowork,safety net programs are persons to apply forSSI, SSDIorfood stamps prior
essential to preventing homelessness. Economic to release, with the explicit aim of preventing such
growth alone cannot provide for those whose persons from becoming home-
ability to work is diminished or precludedbyin- less(HomelessEligibilityClarificationAct 1986;
dividual orfamily problems ordisabilities. Current NLCHP 2003). However, the program isvolun-
safety net programs must be reformed so that tary; to implement it, institutions must enter into
theyprovidetrue protection against homelessness agreementswithsocialservice agencies, and
and so those in need of them are actually able to fewhave done sotodate(Rosenetal.2001). This
receive them. program should beexpanded to include housing
Key programs include SSIand SSDI fordis- inthe prerelease process, anditshould be publicized
abled people. Despite the high proportion of and have incentives established so that all
physically and mentally disabled people among the institutions participate in it. Planning foryouth
homeless population, only 14 percent receive these exiting foster care should also include planning for
benefits; because Medicaid or Medicare generally housing, job training andplace- ment or education
follow, this gap is doubly significant. and anybenefits for which the youthiseligible
FoodstampsandTANFarealsoimportantsafety net (Massachusetts Shelter and Housing Alliance
programs, but homeless people often fail to receive 1999).
these as well. Complicated application processes,
lack of information about the programs and address Mental Illness and Substance Abuse. As with
requirements keep eligible homeless people from public assistance and social service programs
receiving benefits under these programs (Rosen generally, keyissues for prevention ofhome-
2001; U.S. GAO 2000). Reform efforts are under lessness among those with mental illnesses and
way to makethese resources problems of substance abuse are coordination,
moreavailabletohomeless people: For example, in organization and availability of services, levels of
response to advocacy and Congressional directive, aid and outreach. Deinstitutionalization led to a
the Social Security Administration in 2002 released vacuum ofresponsibilityin which there was little
a plan to remove barriers to SSI and SSDI overall direction or coordination from the federal to
forhomeless people. In 2003, Congress local level.
appropriated $8 million to fund demonstration Deinstitutionalization as a national policy was
grants for outreach and application assistance based on the premise that 2,000 community board-
(House Report 2003). and-care facilities would be built; fewer than 800
Discharge planning for those whoare in- actually materialized (Torrey 1995). A crucial
stitutionalizedis another important prevention component for acoherent policy is the willingness
strategy, as those being releasedfrom hospitals, of communities to allow supportive housing to be
mental institutions, prisons orjails without re- established locally so that there is an alternative to
sources or housing are at imminent risk ofbe- thestreets for those discharged from mental
coming homeless. The dramatic increase inthe hospitals and other institutions who cannot move
prison andjail populations inthe last decade makes back with family. The great success of McKinney
this concern particularly pressing: According to the Act Supportive Housing andPATH programs in
most recent data, eachyear some 600,000 prisoners caring for mentally ill homeless people illustrates
are released from prisons (Beck, Karberg and the necessity ofhaving adequate supportive
housing for those at riskofhomelessness. Humane sistance should be delivered through universal
and cost-efficient substance abuse policies follow programs (with varying benefit levels defined by
along these same lines: Help should be universally need). A single income support program, such as a
available (as opposed to our present two-tier negative income tax, would bea far simpler and
system in which poorer people have little chance of more complete way of accomplishing income
receiving realhelp); intervention and outreach stability (Ellwood 1988; Tobin 1966). Universal
should be stressed. programs would also help to counter the
Of course, one of the most important steps divisiveness and stigma now associated with
toward prevention of homelessness associated with welfare and otherpublic assistance programs, and
substance abuse and mental healthproblems— emphasize that in contemporary society no one is
andphysicalhealthproblems as well—would be truly “self-sufficient” (see Chapter 18).
establishment of universal health coverage.
Inability to work and exorbitantmedical costs due
toanyof these disabilities means disaster, EXITING HOMELESSNESS FOR THOSE
includingthe possibilityof even- tualhomelessness, CURRENTLY HOMELESS
for themorethan 24 percent of all low-income
people without health insurance (Center on Budget While prevention strategies by their very nature are
and Policy Priorities 2003). In the meantime, aimed at all those who are at risk of homelessness,
access to Medicaid and Medicare must be exit strategies can be aimed at a much smaller
increased,and theaid provided must be expanded. group and thus requirecompara- tively modest
Overall,anumber of principles regarding programs. But homelessness itself so complicates
supportive services are important for anypre- the lives of those it catches that solutions become
vention strategy: much more difficulttoimple- ment.
First, earlyintervention is essential; increased Exitinghomelessnessforthosealreadyhome- less
outreach and application assistance, if needed, for must begin with finding housing of some sort, from
all programs can help to ensurethis. shelter to transitional to long-term. Housing
Second, at each level of government, simpli- provides the stability and sense ofper- manence
fication and coordination of services should be necessaryfor gathering the energy and resources
maximized. Caseworkers should be assigned to needed to make the journey back to independence.
clients, not to programs: Having a single case- Take employment, for example. Studies indicate
worker who a client can turn to, whatever the that the vast majority ofhomeless people want to
issueorprogram,greatlyincreasesthelikelihood that a work, and that in fact many do (Rosenthal
client will receive the services to which heor she is 1994:215nn; ICH 1999:29; ). But whilethe housed
entitled, avoiding crisis (Rosenthal 1994:156- poor job-seeker may need training, day care
157;ChicagoCoalitionfortheHome- less 2000). help,transportation and even training pay, each of
Third,benefitlevelsshouldbesufficienttoal- these is likely to be more critical andharder to meet
lowrecipients to afford housing and otherbasic for the homeless jobseeker. Beyond that, heor she
necessities, and should be indexed to inflation; will also need a place to get clean, do laundry, get
accumulation of savings should not affect eli- some rest, perhapstypeup a resume andprovide
gibility or assistance levels until they are great a“home” phoneand address to put on an application
enough to assure a family of stability, should —all to give the appearance of stability and
unforeseen crises arise. reliability that an employer will demand. Finally,
Fourth, family integrity must betruly supported. time will need to be devoted to survival needs, such
Policies that encourage the breakup of families or as finding food and shelter. Thus, the most suc-
other mutually supportive households— cessful job-training and employment programs for
suchasmovingchildrenfromim- poverished but homeless people(including programs for those with
otherwise viable families into foster homes while substance abuse problems or mental illness) are
their parents go to emergency shelters, instead of those that also supply housing and other
supplying emergency financial assistance to necessaryservices (NLCHP 1995:2333; ICP
avoideviction—shouldbe discontinued.13 1998b:19-25; Rog and Holupka 1998; Pew
Finally, to the greatest extent possible, as- Partnership 2002). Of course, job training
withoutjobcreationandjobplacementisinsuf- ficient. often requires paying first andlast months' rent and
Similarly, social services that are linked to a depositupfront, homeless people in particular
housing aremuch more successful than services should not have entitlements cut due to savings
offered alone.14 Agrowing “housing first” approach needed to cover three times rent plus a reasonable
by some providers and policy advocates posits that, contingency fund for emergencies. Further, social
rather than requiring people to move sequentially services and material aid should remain in place for
from shelter to transitional housing to permanent a period of time after permanent housing has been
housing, permanent housing should be provided as obtained, in order to help prevent relapse into
quickly as possible and any needed services should poverty and homelessness. These strategies must
be provided at that housing (BeyondShelter 2003; seek to support families (however defined); social
PewPartnership 2002). Treatment for ailments, service policies should always en-
from respiratory disease to mental illness to drug couragefamiliesorothersupportivehouseholds to
abuse, is difficult, if not impossible, without stay together and never offer incentives for
providing some kind of stability for patients; desertion.
indeed, it does little good to treat any illnesses if The mentally disabled homeless population is
the basic survival needs ofpeople are not met arguably the most difficult to aid. Outreach can be
(Garrett 1989; Shipleyetal. 1989).Follow- most difficult here but also most crucial. Again,
upcasemanagement isalso essential. housing (as well as other necessities) is essential,
Beyond services, homeless people need money, bothforits psychic importance and because it
but they are less likely to be receiving the public provides the chance for an ongoing patient-doctor
assistance they are entitled to than are other poor relationship. Programs specifically aimed at
people (Rosenthal 1994; ICH 1999:29-30; Burt creating supportive housing for mentally disabled
2001:202).Centralization and coordination of people and those which create orpreserve
assistance programs is perhaps even more essential thetypeofhous- ing traditionally used by mentally
to reach homeless people than precariously housed ill people (such as SROs) mustbeprotected and
poor people, and hav- expanded; for some, transitioning into independent
ingasingleentrypoint,easilyaccessibleandwith living is an unrealistic hope, andlong-termsup-
minimal screening barriers, is extremely valuable. portive housing is necessary. In either case,
Worker-client ties must supersede workerprogram ensuring that homeless people receive the disability
ties. Aggressive outreach, not only to those in and health care benefits to which they are entitled
shelters but to those on the streets, is necessary, but under the Social Security Act is crucial.
outreach to doubled-up families and others hiding Exiting homelessness for those whoare de-
within more traditional residences needstobe pendent on substances requires similar steps:
pursuedin waysthat will not expose them to outreach on their home turfs, stable housing asafirst
eviction should their presence come to the attention step, ensuring receipt of assistance for which they
of private landlords orpublic housing authorities. areeligibleand combining substance abuse
Exit through the treatment with other necessary social services—all
publicassistancesystemwouldalsobefacilitated if all within a coordinated system that ties
local offices were realistic about themis- match of workerstoclients anddelegates responsibility from a
some regulations to theconditions of homelessness, central agency. The success of substance abuse
in particular relaxing proof-of- residency treatment is severely restricted when those
requirements, regulations regarding documentation completing a program have no stable housing to
(such as birth certificates) that homeless people are return to and therefore no nexus of support services
unlikely to be able to readily provideandrestrictions (Wittman 1989; Shipley et al. 1989; Rog
on savings (NLCHP 2004a). andHolupka 1998; PewPartnership 2002).
But mostpeoplewill notbeableto exithome- Therefore, housing linked to postdetoxification
lessness through public assistance alone, given the services is imperative. At the federal level, a small
levels now established. To make this possible, demonstration program to fund substance abuse
benefits should be set at levels that allow renting treatment specifically for
ofdecent housing by spending 30 percent orless of homelesspeoplewascreatedin2001;expanding these
household income. Given that renting a new home resourcestomeetthe needwould advance the health
and well-being ofbothhoused and homeless people. needed and appropriate.

Finally,exiting homelessness maybethought Second, food and clothing.
ofin the long term.Between 900,000 and 1.4 mil- Third, centralization oflocal services inasin- gle
lionchildrenarehomelessannually(Burt2001). office to the greatest extent possible.
Childhood homelessness increases the risk of adult Fourth, health care, particularly preventative
homelessness (Burt 2001). Increasing the health care. The healthprofileofhomeless pop-
stabilityofthesechildren,andensuringtheired- ulations is truly shocking: The infant mortality rate
ucation, would help to prevent them from be- for children born to homeless mothers inNew York
coming homeless adults. The McKinney-Vento City is twice that of the population in general (ICP
Act, especially after the 2001 amendments, isan 1998a:6), while over one- half of homeless children
important toolfor ensuring that homeless children suffer from a chronic health condition (ICP
have access to school and school services, such as 1998a:60). Homeless people in general sufferfrom
meals. Federal funding to local schools to provide very poorhealth (Burt 2001:80). The greatest
extraordinary attention to homeless children's preventive health measure wecould
school needs, including nutrition, booksand providetohomeless people would be to assurethem
transportation, should continue and be expanded, of the basic necessities offood, clothing and
and federal oversight to ensure state and local housing; inthe meantime, health care needs to be
implementation should be increased. guided by two (by now familiar)overarching
principles:prevention and outreach. Homeless
people often avoid treatment until their medical
AMELIORATING HOMELESSNESS conditions become too serious to ignore, causing
distress to themselves and additional costs to
Ifweare not to play musical chairs forever, our taxpayers for eventual treatment. As with public
approach to homelessness must emphasize assistance and mental health work, outreach must
prevention strategies. And yet this involves a extend to where homeless people are rather than
dilemma, since the needissoreal and immediate for waiting for
those already homeless. Homelessness is a severely themtoavailthemselvesofthoseservicesthatare in
traumatic event for virtually all who experience it. place. Treatment programs must allow easy entry
That trauma is easily seen by looking at homeless without invasion of privacy or significant monetary
children—for example, 47 percent manifest costs. Further, health care will never be successful
problems such as depression, anxiety and without stable housing for recovering patients
withdrawal (Better Homes Fund 1999:13); children which affords protection from the elements as well
who change schools due to unplanned moves, such as the possibilityfor a stable relationship with a
as those associatedwith homelessness, score lower health care professional. Until such time as
on standardized tests and have lower academic universalhealth care becomes a reality, and perhaps
achievement (Better Homes Fund 1999:23; even beyond, health care for homeless people will
Julianelle and Foscarinis 2003:42). Homeless requireagreat deal of flexibility and outreach,
adults show similarly dis- tressedportraits, in some already apparent in many of the projects funded by
cases the cause of their homelessness but also as a the McKinney Health Care for the Homeless
result. Both themoral imperative and the social and Program and the related Consolidated Heath Center
fiscal costs ofinac- tion mandate that we help those Programs.
whoare caught now in the downward cycles of Fifth,opportunities to work.Theextraseries of
homelessness. While exiting homelessness must barriers that lack of a home base presents to
bethe focus for the individual homeless person or homeless job-seekers can best be overcome by
family, if immediate placement in housing is not locally created job centers that provide a home
possible, a humane society will, inthe meantime, base, combining laundry,storage and showerfa-
provide a number of baseline guar antees: cilities with the “home” address andphone that
First, immediate placement insafeand ap- aresonecessarytofindwork.Informaldaylabor
propriate shelter, with a minimum of bureaucratic markets, notorious exploiters of homeless people,
trappings, followed as quickly as possible by need to be regulated.
placement in permanent housing, with services, if Sixth, respect for the civil rights of homeless
people. As a class, homeless people endure however, may be seen as be- ingcost-
abridgmentoftheircivilrightsthatwouldbeun- effective,perhapsnotinactualfinancial savings but
thinkable for most other groups:barrierstotheir certainly inthe decrease in human suffering and the
children's education, dispersal from downtown increase in quality of life for us all.
areas, and resistance to their right to vote, receive In addition to potential cost savings, another
medical care or receive local entitlements. In key to the adoption and success of prevention
particular, laws prohibiting “publicsleeping” or programs—whichnecessarilymuchbeaimedat a
“public camping” should be removed in any much broader population—is to present them as
locality that cannot demonstrate an available place universalprograms. Ofcourse, level ofbene-
inadecent and appropriate shelterfor every fitswillvarybyincome.Butthegreatdifference inthe
homeless person seeking one. way people generally perceive Social Security (and
Added together and including the crucial other non-meanstested programs) as an earned
component of low-cost housing, the kinds of right, but“welfare” (and other means-
strategies to ameliorate, facilitate exit from and testedprograms) as a charity, speaks eloquently to
prevent homelessness sketched here create a the need to move toward non-means-tested
comprehensive “continuum” that also delin- programs generally.
eatesbasicelementsofaRighttoHousing.Along with
the principles of coordination, prevention, stability
and outreach that have been stressed, such a THE ROLE OF THE FEDERAL GOVERNMENT
holistic approach should exhibit the following
characteristics: The past decade has seen important changes in
homeless initiatives. Among those have been the
• easy entrance and minimal screening at entry increases in total funding and adoption of the
levels; Continuum ofCare approach bythe federal
• encouraging empowerment and a sense of ef- government. More recently, the increased focus on
ficacy in clients;15 housing as a long-term solution, thecom- mitment
• effective aftercare—services that have helped a to end “chronic homelessness,” and the
family or individual exitor stave offhome- revitalization ofthe Interagency Council on
lessness mustbe available for some time after Homelessness offer at least the possibility of
thecrisis inorder to avoid relapse into crisis. progress. These initiatives must continue and
expand,and the commitment mustbe extended to all
Programs to ameliorate and exit homelessness homeless people as well as backed up and
for small groupsofpeople have been more readily implemented with the allocation of substantial
funded (comparatively speaking) than newfunds. Even more important, housing and other
preventionprograms, mainlybecausetheirprice tags anti-poverty programs must not be cut but rather
are smaller—or appear to be. Providing ashelter bolstered so that theyprevent poor people from
meal and acotintuitively seems less expensive than becoming homeless.
subsidizing precariously housed people in Moreover, the size of the problem, the limits on
permanenthousing, but available evidence local resources, and localities' fears that theywill
suggestsotherwise.ANewYorkCitystudy become a magnet for low-income peo- pleall point
ofsupportive housing forhomeless people with to the importance of a substantial federal role in
severe mental illness found that reduced use of funding. Further,the kind of coordination,
acute care services nearly offset the cost of the centralization andlinking of services advocated
housing.(Culhane,MetrauxandHadley2002). The here can only be imposedby the highest level of
National Law Center on Homelessness & Poverty government. The success of the Continuum of Care
estimated that incarceration inajail costs almost approach in leveraging local dollars and inducing
twice as much as a bed in a shelter (NLCHP previously reluctant individual programs to adopt a
1998:1, citing U.S. Department of Justice 1995:10). communitywide approach is powerful evidence of
To the extent that prevention requires the persuasiveness of federal funding guidelines in
additionalresources, such as construction of new encouraging necessary regional thinking.
housing, costs will obviously be higher.These too, One of the great problems in mounting
meaningful initiatives to deal with homelessness advocates nowfear that the growing deficit—
has been the diffusion of responsibility referred to resulting from tax refundsand military expenditures
above. Localities know that there is no necessary —will trump claims for social justice. Legal
connection between whereaper- son becomes entitlements provide much stronger (though not
homeless andwhere heor she receives necessarily permanent) protection amidst the
help,orbetween whereahomeless person receives vicissitudes ofbudgets andpoliticians.
help andwhere heor she resumes life as a One of the clearest and most powerful ways to
contributing taxpayer. Only the national place housing above partisanship would be for the
government isabletotruly realize the cost efficiency federal government to declare housing a right, as
of preventing homelessness inthe long run. Only have numerous governmental bodies across the
the federal government isableto avoid the diffusion world (NLCHP 2004b; Foscarinis 2000; see also
of responsibility, by declaring homelessness a Chapter 8). Step by torturous step, federal policy
national problem requiring a nationally funded and has recognized how crucial housing stability is—to
administered—but locally directed—attack. disabled veterans to bat- teredwomen to substance
Finally, the federal government bears a good abuserstothose with mental illnesses and so forth.
deal of responsibility for the explosion of Viewed through a housing rights lens—and defined
homelessness. It not only failed to control the and conceptualized as such—this kind of
private market forces that were destroying low-cost incremental prioritizing of groups can also be seen
housing, it (and local governments) abetted them as movement toward recognition of a Right to
while largely withdrawing its commitments to Housing. Simply declaring a Right to Housing or a
publicand other low-income housing, a national goal of universal access is insufficient, of course: It
mentalhealth system and a real safety net. must be backed up by action and adequate funding.
Within overall federal resources and strategies, According to the most recent reliable estimates,
local governments, nonprofit groupsand other some 2.5 to 3.5 million peopleare now homeless in
private entities have significant tasks. The first is to the United States during the course
implement federal programs locally, since, despite ofeachyear(Burt2001:49-50);atagiven point intime,
the similarities in roots ofhomelessness across the some 840,000 are homeless (according to figures
nation, local conditions are different in important obtained in a 1996 survey— Burt 2001:50-51).
particulars. Only those familiar with each local While emergency shelter and especially transitional
situation (including, of course, local homeless and permanent housing programs forhomeless
people) can steerresources efficiently.The second people grew dramati- callyduringthe 1990s,in
taskistodevelop and carry out local policies that do 1996,totalcapacitywas not quite 608,000 beds (Burt
not exclude, but rather promote and include, 2001:243-244). Simply reacting to each new case
needed housing and services, and leverage will not close this gap.
additional local resources to supplement federal Three out of ten American households nowhave
aid. But while doing so, local governments and housing affordability problems (see Chapter 2); of
otherinter- ested parties must be engaged in the that number, 14.3 million are severely cost-
third task: constantly lobbying national burdened, paying over 50 percent of income for
policymakers for whatever changes are necessary, housing (Joint Centerfor Housing Studies 2003:25).
as discovered in practice at the local level, and for We can continue to have people falling inand out
the truly significant funding that will be necessary ofhomelessness, some of them recovering and
to adequately fight homelessness andhouse the na- going on to lead mainstream lives, others
tion. While homelessness is largely created by suckedinto a whirlpool that drags them and others,
national policies, it isatthe locallevel that it is most including their children, down. Orwe can decide a
sharply felt. civilized nation ensures that every resident is
In the late 1990s, theClinton Administration adequately housed.
hailed the new federal budget surplus, arguing As a strategy for ending and preventing
thatit would allow a progressive national agenda in homelessness, declaring a Right to Housing makes
regard to both homelessness and housing to emerge programmatic sense; itmay make economic sense
(NLIHC 1999b). Sincethattime,the political and as well. Prevention isvery likely a cost-effective
fiscal landscape has shifted dramatically, and strategy, given the costs of ameliorating and exiting
homelessness once it has already occurred—to say do much more unless and until itmakes alliances
nothing of the costs of the alternatives of crisis with other segments of the population on issues of
response and incarceration—and it additionally housing, employment, public assistance and social
promises to return money to the various levels of services. A Right to Housing suggests itself as one
government through the re-establishment of inde- of the most important struggles for homeless
pendent, self-sufficient taxpayers. But further, activists and advocates at this time. Prevention
declaring a Right to Housing has the strength of all isthe key to ending homelessness, and housing
universal programs: It's inthe interests of the vast isthe key to prevention.
majority of Americans. Affordable housing has
become an issue forworking- and middle-class
peopleaswell as those living in poverty. NOTES
As a nation, we need to reconsider how we
think of housing: Is itarightor a privilege? As Acknowledgment: Maria Foscarinis is grateful for
withpubliceducation,theargumentforhousing as a the assistance of Meagan Leatherbury.
1. Some disaffiliation theorists tied their more in-
guaranteed right is that it is goodforboth the
dividualisticandpsychological explanations ofhome-
individual and the society as a whole. As with lessness to structural frameworks; see, for example, Bahr
public education, we can guarantee everyone a (1973). For a recent argument that the Disaffiliation
decent standard without preventing those who want School as a whole was actually structuralist in
a superior standard from obtaining it for orientation, see Main (1998).
themselves. 2. This policy was criticized by advocates, and a
Finally, a declaration of a Right to Housing new initiative was announced to provide housing
assistance to people who were previously homeless or
andits fulfillment would avoid one of the most
receiving housing assistance. See U.S. Department of
unfortunate effects of muchhomelessness legis- Housing and Urban Development, Jackson and Chertoff
lation: As “specialinterest”legislation, itcreates a Announce Comprehensive Transitional Housing
backlash from those who feel they too have a just Assistance program for Katrina Evacuees. Sept. 23, 2005.
claim on resources (as in local fights between 3. For a fine debunking of the relatedproposition
homeless and precariously housed people over that “welfare magnets” attract poor people in general, see
Hanson and Hartman (1994).
priorities for subsidized and public housing).
4. The change was made in 2000, following the
Despite much talk inthe last fewyearsabout a untimely death of Rep. Bruce Vento, an original co-
“hardening” of public opinion concerning homeless sponsor and author of the legislation and major Con-
people, the review of public opinion polls by Link gressional champion of aid for homeless people.
andhiscolleagues indicates that “most Americans 5. The Homeless Eligibility Clarification Act
would be willing to pay more in taxes to help (HECA), enacted in 1986, consisted of other small parts
homeless people, and that an even of the original advocacy agenda. These were aimed at
removing barriers to homeless persons' receipt of
higherpercentage favor increased government
“mainstream” benefits—though they did not remove
spending on the problem Moreover, most members barriers intheapplication process. HECA also included a
of the public believe the federal government “prerelease” program that was intended to keep poor
shoulddo things like build more affordable housing people leaving institutions from becoming homeless upon
forpoorpeopleand give rent exit. Federal reports had already sounded the note that “it
subsidiestopeoplewhoneedthem”(1995:551). But, ismore cost-effective and certainly less disruptive to
assist people before they become homeless, than to serve
as they also argue, such attitudes are not firm:
their needs after they become homeless” (GAO 1990:11,
Political leaders can manipulate them in anumber cited in NLCHP 1995:5)
of directions. It istherefore necessary to mount a 6. As indicated by its name, the CoC approach
political coalition with enough clout to convince envisions a “continuum” of programs, beginning with
politicians that social approaches to homelessness outreach and shelter, then moving to “transitional”
and a RighttoHousing are popular stances. housing (defined to be includeatwo-year time limit), and
Homeless activism was, on one level, quite then to permanent housing. Advocates and providersare
increasingly promoting a “housing first” approach that
successful in the 1980s, altering public opinion and
seeks to place people as quickly as possible into
successfully pressing the case for a social, rather permanent housing.
than police, response to homelessness. But it is 7. These numbers are not nationally representative,
unlikely the movement against homelessness can however, because the study looked specifically at the
most developed continuums (Burt et al. 2002). Bureau of Justice Programs.

8. An additional $6.5 million reallocated HOME Bernstein, Jared, and John Schmitt. 1998. Making work
funds are being targeted toward this effort and $13.5 pay. Washington, DC: Economic Policy Institute.
million in Departmentof VeteransAffairsandDepart- ment ———. 2000. The impact of the minimum wage.
of Labor funds for an employment initiative for homeless Washington DC: Economic Policy Institute.
veterans. Bernstein, Nancy, and Irene Basloe Saraf. 2003. New
9. In the Cities and Counties: Nation's 200th 10- rental production and the National Housing Trust
YearPlanningPartnershipLaunchedinReno,Nevada, Fund campaign. Journal of Affordable Housing and
Interagency Council on Homelessness website, updated Community Development Law,Vol. 12, No. 4, Sum-
September 28, 2005. mer.
10. In 2003, a survey of large cities found that 30 Better Homes Fund. 1999. Homeless children: America's
percent of requests for emergency shelter went unmet new outcasts. Newton, MA: The Fund.
(U.S. Conference of Mayors 2003a). BeyondShelter. 2003. Housing First 101, inWorkshop
11. ICP notes that one inthree unemployedhomeless Notebook, November 3-4.
parents interviewed in metropolitan New York shelters BostonGlobe.1984.(February1).FromMarkJ.Green and
cited lack of appropriate and affordable child careasthe GailMacColl, Reagan'sreignoferror. 1987. New
reason for their current unemployment (ICP 1998a:57- York: Pantheon Books.
58). Bratt, Rachel G. 1986. Public housing: The controversy
12. As there is an argument to be made for a Right to and contribution. In Critical Perspectives on Housing,
Housing, so isthere for a policy offull employment, with Rachel G. Bratt, Chester Hartman and Ann Meyerson,
the government as employer of last resort. (See eds. Philadelphia, PA: Temple University Press.
Harrington 1984; Ginsburg 1983; Levison 1980.) Burt, Martha R. 2001. What will ittaketoend
13. Inthe longrun,theUnitedStatesneedstomove homelessness? Washington DC: Urban Institute,
toward the kind of integrated family policies found in October 1.
many European countries, which include family al- Burt, Martha R., Dave Pollack, Abby Sosland, Kelly S.
lowances to help cover the costs of child-rearing, quality Mikelson, Elizabeth Drapa, Kristy Greenwalt and
state-run child care centers, family planning services, and Patrick T. Sharkey. 2002. Evaluation of continuums
maternity andhealthbenefits. Such asystem effectively of care for homeless people: Final report.
strengthens family units to prevent crises rather than Burt, Martha R., Laudan Y. Aron, Edgar Lee and Jesse
responding to crises when vulnerable families begin to Valente. 2001. Helping America's homeless.
break apart. Washington, DC: Urban Institute.
14. This, however, raises a difficult problem: Should Center on Budget and Policy Priorities. 2003. Poverty
housing be contingent on accepting services? Though one increases and median income declines for second
is tempted in some situations to agree, respect for all consecutive year. www.cbpp.org/9-26-03pov.htm
people's righttodetermine such matters for themselves Chicago Coalition for Homeless. 2000. Families hardest
and the practicalfact that requirements of any kind tend to hit: The effects of welfare reform on homeless
reduce program use suggest offering, but not requiring, families. Chicago: The Coalition.
service use. Culhane,Dennis P.2002.New strategiesand collaborations
15. This means putting into practice the 1992 target homelessness. Housing Facts and Findings,
amendment to the McKinney Act, which requires the Vol. 4, No. 5.
involvement of homeless people “to the maximum extent Culhane, Dennis P., Stephen Metreaux and Trevor
practicable.” Homeless peopleshould help design, Hadley. 2002. Public service reductions associated
oversee andrun programs as well as eachindividual or with placement of homeless persons with severe
family exercising as much initiative as feasible. mental illness in supportive housing. Housing Policy
Debate, Vol. 13, No. 1.
Ellwood, DavidT. 1988. Poor support.New Yo rk: Basic.
Fosburg, Linda B., Gretchen Locke, Laura Peck and
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Rachel G. Bratt
16 Community Development Corporations: Challenges

in Supporting a Right to Housing
COMMUNITY DEVELOPMENT cor- creation. CDCs are formed by residents, small

porations (CDCs) are important producers of
business owners, congregations and other local
housing for low-income households. They are
joinedbypublic housing authorities and a number of stakeholders to revitalize low- and moderate-
other nonprofits as well as private for- profit
incomecommunities.CDCstypically produce
developers, which have also contributed to
theoverall stock ofhousing affordabletothis group. affordable housing and create jobs for community
But CDCs have a number of unique attributes
residents. Jobs are often created through smallor
making them particularly attractive as owners and
managers of this housing. At the same time, the micro business lending or commercialdevelopment
work of CDCs, and their position inthe local
projects. Some CDCs also provideavariety of social
political economy, is hardly simple or
straightforward,asthey constantly encounter major servicestotheir target area (National Congress for
challenges. In view of the many assets of CDCs
Community Economic Development 2005).
and the constraints theyface, thischapter examines
the potential of CDCs to play amajor role in a Thus, the various activities undertaken by CDCs
Right to Housing initiative. are intended to contributetothe broader goal of
The first section provides an overview of CDCs improving the physical and social environment of a
—their history and production records. Thechapter target neighborhood—often referred to as
then assesses thestrengthsandlim- itations of CDCs neighborhood revitalization, community building
and explores how they could position themselves to or, most frequently, community development. As
assume major responsibilities in promoting a nonprofit organizations, CDCs areexempt from
RighttoHousing. The focus here
paying taxes under Section 501(c)(3) of the
isontheorganizational/programmatic, contextual
InternalRevenue Code, anddonations to these
and structural attributes of CDCs and the groups qualify as tax deductions for the donor.
challenges CDCs are currently facing and would be There isalong history of nonprofit involvement
likely to face insuch a new initiative. The final with housing. Preceding the formation of CDCs
section presents comments about CDCs and their inthe 1960s, there wereatleast three types of
overall potential to play asignificant role in organizations. These included the efforts of the
implementing a Right to Housing. early 20th century reformers and philanthropists
who promoted model tenements; the nonprofits
inthe federal Section 202 program for the elderly
HISTORY AND PRODUCTIVITY OF CDCS and the nonprofits that were involved in
implementing the Section 221(d)(3) and 236
Community development corporations are
programs inthe late 1960s and 1970s (Bratt 1989).
nonprofit organizations that are characterized by But while all these groups were focused on housing
production for low- or
their community-based leadership and their work
primarily in housing production andpos- sibly job
Community Development Corporations 341
moderate-income households, it was not until the still exist, madesignificant progress in identifying
late 1960s that the nonprofit housing agenda and packaging the technical and financial resources
became explicitly identified with a broader set of needed to do nonprofit housing development. Even
goalsthat revolved around the economicand in that era, however, these early efforts revealed the
physicalredevelopment of severely deteriorated challenges that persist today: “They aresaddledwith
urban areas. goalsand objectives that are far beyond their
Partly in response to urban unrest and integral resources to achieve” (quoted in Keyes 1971, 169).
to theWar on Poverty,the 1966 Special Impact In addition to localprograms that werestim-
Amendment to the EconomicOpportunity Act and ulated, at least in part, by federal funding, most
Title VII of theCommunityServices Act of 1974 CDCs emerged in response to the serious problems
provided substantial resources to support the that were beginning to bearticulated,such as
fledgling CDCs. According to journalists Neil redlining, arson, inadequate housing conditions and
Peirce and Carol Steinbach: urban renewal (see, for example, Berndt 1977;
Zdenek 1987; Keating, Rasey and Krumholz 1990;
The modern CDC movement was launched on the
February dayin 1966 when Senator Robert F. Vidal 1992). The first major assessment of CDC
Kennedy toured the dilapidated streets of Bed- activities and the factors contributing to their
Stuy [Bedford-Stuyvesant, a poor, predominantly success was presented in a study of a group of
African-American section of Brooklyn, NY] and neighborhood development organizations
planted the seeds for what would become (synonymous with CDCs)1 that had received
thefederalinvolvementinCDCs.Kennedy funding through the federal NeighborhoodSelf-
wasdespondentoverurbanriots,justbegunwith Watts HelpDevelopmentProgram, launched in 1980
in 1965. The idea emerged: rather than federal aid (Mayer 1984). Andin 1992, Avis Vidal produced a
alone, rather than simply opening the
seminal study on urban CDCs, whichpresented
doorstopoliticalparticipation of the poor, it was
acomprehensive profile of the origins, size and
time to create new economic bases in troubled
communities. (1987, 20) activities of these organizations.2
Since the mid-1970s, CDCs have gained in-
But whilethe idea mayhave been newly con- creasing recognition for their contributions to the
ceptualized from a political standpoint, in reality, low-income housing and community development
the approach was already being pioneered by the agendas. With about 3,600 such organizations
Ford Foundation through its Gray Areas program, across the country, and more than 550,000 units of
whichprovidedfunding directly to local community housing produced or rehabilitated, CDCs are often
groupsand served as a prototype for theWar on viewed as key engines for community renewal
Poverty'scommunity action program. Between (National Congress for Community Economic
1966 and 1980, over $500 million in federaldollars Development 1999).3 While the majority of CDCs
was provided to CDCs through the programs (52 percent) operate in urban areas, 26 percent
enacted in 1966 and 1974 (National Center for serve rural areas; the remainder servesamixtureof
Economic Alternatives 1981, 25; see also Abt urban andru- ral locales (National Congress for
Associates 1973). Community Economic Development 1999). (See
This early group of CDCs was focused more on “Box” by Robert Wiener on Rural Housing
economic development and social service de- Nonprofits.) In 1990, nonprofits produced
liverythanonhousing.Nevertheless,inaddition to approximately 17.2 percent of the total number
creating jobs, providing human services and offederally assisted housing units (Walker et al.
supporting small businesses, several thousand units 1995, 22).
ofhousing were builtorrehabilitated (National CDC-owned housing is an important com-
Center for Economic Alternatives 1981). At about ponent of the socialhousing sectorintheUnited
the same time, another group of community-based States, whichStone estimates to comprise a little
organizations—housing development corporations more than 4 million units (see Chapter 11). While
(HDCs)—were being supported by the Office of we know that CDCs have produced or rehabilitated
Economic Opportunity and the Model Cities over a half million units, we do not know exactly
program. HDCs, which were the forerunners of how many of those units continue to be inthe social
many of the community-based housing groups that sector, as opposed to owner- occupied units that do
342 Rachel G. Bratt
not include caps on equity appreciation, for acute, a significant amount of research has been
example. devoted to understanding the obstacles that CDCs
In addition to production by CDCs, there are face in becoming larger producers. It has often
many other nonprofit producersofhousing, been noted, for example, that for a CDC to produce
including 84 regional nonprofit housing orga- low-income housing, it must engage in
nizations. These groups, which do not confine their “patchworkfinancing,”theassembling of numerous
work to small geographicareas as do most CDCs, types ofloans, grants and tax credits (Clay 1990;
have developed, financed or preserved over Stegman 1991; Hebertetal. 1993; Walker 1993).
400,000unitsof“affordable”rentalhousing and This isacomplex, costly and timeconsuming
220,000 single-family homes (The Housing process, andis far less efficient than asi ngl e-sour
Partnership Network 2005). ce d eep sub s idy progr am.
In a large-scale Right to Housing initiative, the Other researchers have investigated the per-
number of CDC-produced units inthe social formance of the developments owned and managed
housing sector as well as other public and nonprofit by nonprofit organizations. The first major study
socially owned housing would grow dramatically, on this topic concluded that while CDCs are
probably over a period of several decades. managing to do a reasonably good job in terms of
day-to-day activities, there are a number of danger
signs that should be heeded, and additional
STRENGTHS AND LIMITATIONS OF CDCs supportandresources for CDCs are needed, which
would allow them to continue to provide high-
The question ofhow CDCs could contribute to a quality housing services (Bratt et al. 1994). In a
Right to Housing involves an understanding of subsequent study, another team of investigators
their various attributes, most of whichhave both examined some exemplary nonprofit-sponsored
positive and negative aspects. These are orga- developments, both homeownership and rental, and
nizedinto three categories, encompassing orga- found that overall, they were performing well. Con-
nizational/programmatic, contextual and structural cerning the rental developments, and similar to the
facets of CDC operations. findings by Bratt et al. (1994), researchers found
that developments typically had inadequate reserve
Organizational/Programmatic Issues funds, making them vulnerableto increases in
expenses or decreases in revenues (Rohe, Quercia
Organizational/programmatic issues include a and Levy 2001).
number of aspects of CDC operations—their role In addition to encountering difficult develop-
as housing producers, their ability to make inroads ment and management challenges, CDCs generally
on the larger community development agenda, and face complex staffing issues. Salaries are typically
their ability to represent community interests. low, hours are long and the obstacles to completing
tasks can be significant. It is not uncommon, for
Housing Producers. There are at least two ways of example, for staff members at all levels to
assessing the record of CDCs as housing producers. experience “burnout”—exhaustion after several
Looking at the cup half-empty, weob- serve that the years that results in a resignation. This presents
production record of CDCs and other contributors serious problems for CDCs as they struggle to
to the social housing stock pales against the develop a competent, stable work force.
needforhousing that isafford- abletolow-income In light of this type of work environment, which
households. But thisshould not diminish the is almost a “given” in the CDC world, a number
importance of the work of CDCs. To the extent that ofresearchers have questionedhow the capacity of
thecupis half-full, we need to remind ourselves that CDCs can be increased so they can better deal with
withpublic housing authorities producing very few the constraints that they face. A major
units of new housing, nonprofit organizations in philanthropic initiative has involved a number of
general and CDCs in particular, are major players foundations, financial services corporations, and
in whatever housing is being produced for those the Department of Housing and Urban
with the lowest incomes. Development (HUD) in an effort aimed at
Since the housing needs of these groups are so accelerating the growth, scale and impact of CDCs
in 23 cities across the country. Known as the building housing. Thegrowing appreciation for the
National Community Development Initiative, over work of CDCs has been reflected in a number of
$253 million was provided over a ten-year period legislative initiatives. For example, CDCs were
to the Local Initiatives Support given prominent roles in disposing of federally
CorporationandtheEnterpriseFoundation(see n. 7), owned properties that were previously owned by
which, in turn, funneled funds to the CDCs. 4 A failed savings and loan associations and
study of the program reported substantial overall commercial banks; they have key responsibilities
gains between 1991 and 2001 in terms of increased inthe HOME; Low Income Housing Tax
capacity of the CDCs to undertake CreditandEmpowermentZones/Enterprise and
communitydevelopment projects, especially Renewal Communities programs; and they are
housing production. The researchers also prominent in boththeCommunityDevelop- ment
highlighted the role of collaborations and networks Financial Institutions program (including the New
in assisting and supporting CDC activities and Markets Tax Credit program) andin initiatives to
noted that investments inCDCs helped to increase preserve federally subsidized, privately owned
the reputation of this sector and enabled them to housing for low-income tenants.
launch moresophisticatedinitia- tives in order to How can we assess the overall production
attack neighborhood problems (Walker and record of CDCs and their potential to increase
Weinheimer 1998; Walker 2002; Walker, capacity so that they could play a significant role in
Gustafson and Snow 2002). promoting a Right to Housing agenda? Based on
Further research on CDC partnerships and the challenges involved in “growing” CDCs, and
howsupportsystemscanbe set up to assist CDCs the millions of dollars expended in trying to
comes from another multiyear study.Withfund- ing achieve this goal, CDCs would not be likely to
for 17 partnerships coming from the Ford emerge as the only producers of housing forlow-
Foundation, investigatorsstudied thestrengths, income households. Even if one were to envision a
weaknesses and future prospects for these part- significantly enhanced system to support the work
nerships. The key issues explored were whether of CDCs, including organizational operating
and how CDC capacity to undertake additional supportanddeep construction subsidies as well as
activities was increased through the partnership long-term subsidies to reduce monthly housing
and, ultimately, whether there were positive costs, it is most likely that CDCs would evolve as
impacts on the economic and social conditions of only one of the keyhousing providers. They would
the low-income neighborhoods. The researchers be accompanied by the regional nonprofits and
point out that it is difficult to assess capacity with other nonprofit organizations with, for example,
precision. For example, creation of more CDCs nonspatial orientations (such as unions, other trade
maybe one criterion but, in some citiesagoal of the associations,
partnership maybe to reduce the (too) large number or groups who target their services to particular
of CDCs. Similarly, if one tries to use production sub-groups of the population, such as single
numbers, it is difficult to know the extent to which mothers) in addition to a revitalized public housing
they can be attributed to the activities of the sector. Thus, while CDCs would likely emerge as
partnership in strengthening CDC capacity (Nye important players, and their production records
and Glickman 1995; 1998). The researchers posited would likely increase substantially, we should not
that “capacity” isamultidimensional term, con- assume that they would be able to carry out the
sisting of resource, organizational, networking and extensive amount of work involved,
programmatic and political elements (Glickman unassistedbyotherkeyproviders. Moreover, any
and Servon 1999a). And while they recognized the such expectation would be unwise, since it would
difficulties of ascribing causality to the not fully utilizethecapabilities of otherimportant
partnerships, they concluded that partnerships do contributorstothe socialhousing sector.
indeed make a difference in CDCs' quest to build
capacity (Glickman and Servon 1999b). Programs beyond Housing. As noted above, in
Despite thecontinued obstacles CDCs face in addition to housing, CDCs are also committed to
terms of enhancing productivity,there is recog- producing wider-scale community benefits.
nition that they areabletoaccomplish the job of Because CDCs often adoptacomprehensive ap-
344 Rachel G. Bratt
proach to communitydevelopment andwork at a and political consciousness-raising; and homeown-

local level, they are thought to be inagood position ership (Bratt and Keyes 1997).
to coordinate effective communityimprovement As CDCs have gone beyond producing “housing
efforts (Blakely 1989). Whether a given group's alone” (no small achievement in itself), theyhave
community development agenda involves crime emerged as leaders in providing—
watch programs, preschool and youth programs, orinmanycaseshelpingtocoordinate— housing plus
meals-on-wheels for the elderly and infirm, park services. A robust Right to Housing initiative
and open space beautification, employment would involve a full array of programs connected
counseling, job training, commercial to housing that would enablethe members of each
redevelopment, small business assistance or some household to maximize their own capabilities and
combination of those elements, most CDCs are productivity. To the extent that CDCs have been
involved with a range of activi- among the pioneers in this realm, they would be
tiesbeyondhousing(Vidal 1992). The particular well positioned to further develop and facilitate
mixofinitiatives thataCDCselects dependson its housing plus services programs.
mission, the community's needs, the CDC's staff
capacity, and the availability of funds and other Representatives of Community Interests. Among
types of assistance (Leiterman and Stillman 1993; the various positive qualities of CDCs is their
Vidal 1997). One of the keywaysthat CDCs decide supposed connections to their local communities:
on which activities to pursue is through their They are alleged to be good representatives of
organizing efforts, which will be addressed later in community interests. Thisviewis based, in part, on
this chapter. the origins of many CDCs—a large number grew
Since at least the early 1990s, researchers and directly out of local protest and advocacy
analysts have been producing numerous case movements and more than one-half of the members
studies and vignettes highlighting the many ways in of CDC boards are generally drawn from the local
which CDCs have contributed to community community (Vidal 1992). HerbertJ.Rubin
improvements (e.g., Vidal 1992; Leiter- man providesanumber ofpowerful examples of the ways
andStillman 1993; Sullivan 1993; Robinson 1996; in which communitybased development
Bratt and Keyes 1997; Grogan andProscio 2000; organizations (which include CDCs) work to
Von Hoffman 2003).5 Briggs and Mueller note that empower the poor and to respond to community
theirs was “perhaps the first-ever attempt to concerns (1993, 106). He adds that the actions of
analyze rigorously collected data on a wide r ange these organizations open up the decision-making
of effects of CDC practices on the lives and process by showing that it isthe right of community
attitudes of neighborhood residents” (1997, 1). members, rather than the business community, to
Among their many findings was that twoof the set a neighborhood development agenda. The
three organizations studied “had measurable effects success of community-based development
on the social fabric of their neighborhoods” and organizations, organizations that are open to the
that inall cases, “CDC housing is a ‘move up,' poor and responsive to the community, to “sit at the
especially for the most disadvantagedresidents. table” focuses the attention of the broader society
Whetherinterms of housing conditions, social- to the importance of social equity when doing
service programming, feelings of safety,and/or community development (1993, 119).
other conditions in the neighborhood, residents The perception that CDCs are indeed linked
recognize improvements even as they expect more” closely to community interests was under-
(Briggs and Mueller 1997, 7-8). scoredbyresearchersattheUrban Institute who found
While housing isthe foundation of most CDC compelling evidence of communityleadership and
activity andis usually viewed as partof a wider- strong alliances bothinsideand outside their
scale community development agenda, many CDCs neighborhoods (Walker 2002, 35). These attributes
also, explicitly or implicitly, strive to promote are part of what is viewed as unique about CDCs—
resident “self-sufficiency.”6 Such activities include their ability to understand the needsof their local
personal responsibilitybuilding; skill-building for community and to create programs that explicitly
work; service delivery; economic development; respond to those needs.
communitybuilding through organizing, advocacy It is also clear, however, that the community is
not a monolithic entity (Heskin 1991; Bratt 1996). coordinated social services. Since their creation,
Any given “community” is likely comprised of CDCs have always been viewed as key vehicles
tenants and homeowners of varying income levels, forimproving these types of conditions and, overall,
resident as well as absentee landlords, small promoting community development.
businesses and larger commercial outlets. And After several decades of CDC activities as well
there is no reason to assume that all these various as other types of federal and local community
groups—“the community”— will agree on all development initiatives, it is clear that there are still
issues. many locales that continue to be plaguedbythe most
Despite the complexities of trying to understand seemingly intractable problems (see Rusk 1999).
and represent the “community,” there is a At the same time, however, many locales have
widespread v iew that community-based orga- been experiencing an urban renaissance, where
nizations “are particularly effective at delivering once neglected and severely deteriorated
services because of their relationshipsand standing neighborhoods are now “turning around” (Grogan
in the community” (HUD 1996, 22). In a full-scale and Proscio 2000; Von Hoffman 2003).
Right to Housing initiative, CDCs— because of Whether aCDC is attempting to counter market
their close connections to their communities, trendsand to promote housing and economic
however diverse and complex they may be—would development, or whether it is operating in a
be expected to play a key role in bridging the gap gentrifying area and attempting to safeguard
between resident needs and desires and the housing existing residents against displacement, it iscer-
production system. But there isanopen question tain to be facing significant challenges. On the one
about theextentto which CDCs would be able to hand, it must struggletodo development in areas
mediate the various community interests and to that have been abandoned by the private sector and
produce housing and services that are optimally that are often plagued by high crime rates, with the
aligned with the community's agenda, as discussed possibility of theft of building materialsor
below. Howeverimperfectly CDCs would (anddo) vandalism of structures inthemidst of rehabilitation
play this role, it is not clear what types of organiza- or construction. And once the buildings
tions would be better positioned to carry out this arecompleted,adverse neighborhood
critical function. factorsmakethe task of management that much
more difficult (Bratt et al. 1994). On the other
Contextual Issues hand, some CDCs are now operating in areas that
have begun to show a resurgence of economic
Contextual issues arise outside the control of activity, private market investment and interest by
CDCs, but they all have a significant impact on anewwave of urban settlers, or gen- trifiers. Such
CDC productivity. The larger environment in groups are challenged by a lack of affordable land
which CDCs operate includes local economic and and buildings, all of which makes their work as
market trends and the efforts of the national housing developers nearly impossible(Rohe, Bratt,
nonprofit intermediaries as well as city, state and andBiswas 2003). This points to one of the ironies
national policies and funding priorities. In of community development:
reflecting on how CDCs could play a significant
role inaRight to Housing initiative, it is important The more CDCs succeed in renovating and re-
to consider which of the contextual issues would selling or renting dilapidated and derelict prop-
continue to present obstacles and which would erties, the more they contribute to community
essentially disappear as other public priorities revitalization. This revitalization, in turn, leads to
became realigned. higher house prices and fewer vacant properties;
thus, CDCs are priced out of the market. (Rohe,
Local Economic and Market Trends. CDCs typ- Bratt, and Biswas 2003, 31)
ically emerge in areas with some combination of
significant poverty, deteriorated housing, weak or In addition, some CDCs are finding it in-
nonexistent financialinvestment by the private creasingly difficult to persuade higher-income
sector, limited orpoor-qualitypublic amenities such residents, particularly homeowners, to permit the
as parksand open space, andinadequate or poorly construction or rehabilitation of additional housing
346 Rachel G. Bratt
targetedforlow-income people (Goetz and Sidney rural locations.

1994). In essence, we are seeing NIMBY (not in In recent years, the roleofintermediaries has
my back yard) attitudes in the neighborhoods, not grownsignificantly due, in part, to thesubstan- tial
just in affluent suburbs (Rohe, Bratt, and Biswas investments that these organizations have received
2003, 69). from major funding efforts such as the National
It is impossibletopredict the extent to which Community Development Initiative. In fact,
market factors would still present obstacles to Walker (2002) has noted that:
CDCs inthe context of a broad-based Right to
The number one accomplishment of the com-
Housing initiative. While such a new program
munity development leadership system inthe 1990s
might mean that the role of the market would be
was thecreation or strengthening of strong
significantly dampened, we cannot predict whether intermediary institutions—the collaborations,
CDCs would still encounter the problems partnerships, coalitions and alliances, and other
associatedwith strong andweak markets as well as bodies that help engage leaders from multiple
NIMBY-ism. For the present, it is sufficient to note sectors as contributors to community development.
that inanyRighttoHousing effort, attention would (48)
need to be paid to the types of market conditions
There isaprevailing view that CDCs are better
that would likely prevail and to work to ensurethat
able to deliver services with the assistance of
they areacknowledged as possible factors
intermediaries than without them. Specifically,
intheability of CDCs and other
intermediaries andlocal collaborations facilitate
socialhousingproviderstodothe work that they are
multi-yearfunding for CDCoperations, and they
committed to doing. And of course, beyond
tend to increase the level of investment; they
recognizing these factors, mechanisms to overcome
establishperformance standardsand monitor CDC
adverse market conditions would need to be
progress; and they shiftadminis- trative burdens for
devised.
grant-making and management awayfrom
thegrantor to the intermediary (Walker 2002, 40).
National Nonprofit Intermediaries. CDCs have However, there is also some question about
enjoyed substantial support from state and local theextenttowhichintermediaries interfere with the
government, nonprofit and philanthropic initiatives agendas of CDCs. Von Hoffman (2001) says that
(Bratt 1989; Goetz 1993; Committee for Economic they do not, while other researchers have pointed
Development 1995; Yin 1998) as well as from the out that the position played by intermediaries in the
three national nonprofit intermediaries—the CDC support system carries some inherent conflict.
LocalInitiativesSup- port Corporation (LISC), the
Enterprise Foundation and the Neighborhood The main issue . . . is when and how the inter-
Reinvestment Corporation.7 A fourth intermediary, mediaries andfundersshould intervene inCDC
the Cen- terfor Community Change, was createdin affairs. CDCs believe they are autonomous or-
1967, years beforetheother groups, andisunique in ganizations that serve locally defined needs and as
its overriding concern with advocacy and in serving such should not be dictated to by intermediaries
as a linkbetween activist CDCs and technical and funders. Yet intermediaries and funders have
their own interests to consider, and it is reasonable
assistance andin its commitment to grassroots
for them to set conditions for re- ceiptof their
empowerment (Rubin 2000).
funding. Thechallenge, then, is for intermediaries
The national intermediaries play an important andfunderstofind a balance between allowing
role in influencing and supporting the work of CDCs autonomy to fulfill their missions as they
CDCs. Both LISC and the Enterprise Foundation see fit andimposing conditions forsupport
raise funds primarily through private corporate ........................[And morespecifically,] how can
andfoundation donations, while the Neighborhood intermediaries and funders create standards for
Reinvestment Corporation receives annual performance along with sanctions for noncom-
Congressional appropriations. These three pliance, without appearing too heavy-handed and
organizations disseminate funds to local chapters overwhelming the CDCs' own agendas? When,
how, and to what extent should intermediaries
that in turn provide funds directly to affiliate
andfunders intervene inCDCaffairs? (Rohe, Bratt,
organizations working inurban neighborhoods or and Biswas 2003, 35, 65)
According to Rubin: theextenttowhich the funderwould participate in

determining the agenda of the housing provider and
Developmental activists fear that in accepting help how the nonprofits or public agencies would be
they will end up having to comply with the held accountable for that funding.
ideologies put forth by the intermediaries or the
foundations [They] appreciate the difference
between an intermediary or foundation mandating Public Policies and Funding. Much of the litera-
that the community-based development tureonCDCs acknowledges thechallenges they face
organization do it their way, and the constructive inachanging policy environment (Stoecker 1997;
interaction that can occur between knowledgeable Vidal 1997; Bratt et al. 1998; Rohe 1998). As
foundation orintermediary officials and federal dollars available for community de-
community activists . . . . Still in many other cases, velopment activities declined during the 1980s and
developmental activists expressed intensely
1990s, the number of nonprofit organizations
negative feelings that support organizations simply
don't understand what community development is
undertaking these kindsofinitiatives grew, partly in
about. These activists fear that by pushing for an effort to fill the void (Goetz 1993; National
bricks-and-mortar projects, LISC distracts Congress for Community Economic Development
attention from the more radical social change 1999). At the same time, reductions in federal
needed to repair a capitalist economy. (2000,112- funding have meant that a large number of
113) organizations arechasing afterfewer available
resources, making it increasingly difficult for
Despite these strong wordsof caution, Rubin
groups to cover their basic operating costs as well
concludes that intermediaries and foundations
as to launch development deals
generally work well and constructively with the
(Rohe,BrattandBiswas2003;seeboxonp.360).
staff members of community-based development
The extent to which housing in general has been
organizations. Characterizing their disagreements
receiving less and less federal assistance is
as “family arguments,” he contends that
documented in the Introduction to this book. For
participants recognize their shared agenda, that
the purposes of this chapter, it should be noted that,
frank discussions do occur and that “while money
unlike the 1970s and early 1980s, when both
speaks loudly, [it] does not drown out other
nonprofit and for-profit producers of housing could
conversations” (2000, 132).
look to a single source ofdeep subsidy inthe
If there were a full-scale Right to Housing
Section 8 New Construction and
initiative, it is quite possible that there would be
SubstantialRehabilitation Program, thistypeof
little need for the intermediaries, in their current
funding isnolonger available. Since the Reagan
form. To the extent that federal funds would
years, CDCs and other nonprofits have had to piece
beavailabletononprofits and otherhousing
togetherdealsusing a complex and multilayered
producers, the key role of the intermediaries in
assortment of public and private funding.
raising and disseminating funds would not be
By themid-1990s, thecontextin which CDCs
needed. Presumably, adequate federal funding
operate began to be characterized as the devolution
would be available, and an allocation mechanism
of policy-making down to state and local levels
would be developed. But one of the strengths of the
(Galster 1996; Ammann and Salsich 1997). But
national intermediaries is their
this devolution has not come with nearly as deep
roleasprovidersoftechnicalassistanceandvehi- cles
pockets as inthe pre-1980s federal housing subsidy
for sharing and communicating “best practices.”
era. Funding decisions at the local level are far
This set offunctions would quite possibly still be
from static, and resources are generally scarce. And
needed.
either a city's decision to emphasize one type of
Whether or not intermediaries continued to
housing over another (such as homeownership
serve as conduits forfunds inaneraof a Rightto
rather than rental) or its own economic constraints
Housing, it is likely that many of the questions
can have dramatic implications for the viability of
thathavesurfacedabouttheirrolewouldpresent
CDCs (Rohe, Bratt and Biswas 2003). Any
similar challenges for the new funding entity
reduction inad- ministrative, predevelopment
(presumably the federal government). Specifically,
anddevelopment funds, as well as ongoing
there likely would be ongoing questions about
348 Rachel G. Bratt
subsidies that enable the housing to continue to be income constituents? To what extent dothe tasks
provided to low- income households, results in an involved with development and management (like
extremely difficult environment in which groups acquiring the necessary permits, assembling
are forced to operate. However, it has been argued financing and collecting rents) conflict with the
that CDCs are in a good position to organize them- needs of low- income communities and their
selves into a powerful constituency to demand that residents? Is it really possible to be working with
federal low-income housing policies must be the powerful interests of a community while
responsive to the needs of the nonprofit sector staying true to the needs of those who live at the
(Koschinsky 1998). Moreconcretely, we have margins? To what extent do CDCs deal with the
already seen how the efforts of the national symptoms ofpoverty as opposed to the root causes?
tradeand advocacy organization for CDCs—the And, if they only address the former, is that
National Congress for Community Economic sufficient?
Development—have resulted in increased visibility AsmalladvocacyorganizationbasedinCam-
for CDCs and new designated roles for CDCs in bridge, Massachusetts, sponsoredone of theear-
major federal initiatives. liest critiques of community housing development
A Rig h t to Housi ng i n i t i ati ve w ould a corporations. Citing poor qualityhousing, highrents
ddress this key problem of resource availability. It and a small overall impact, the report underscored
is tantalizing to contemplate how CDCs would re- that:
spond in a system in which funding for competent
[T]he most serious conflict of interest between the
producers was guaranteed and not subject to either
community housing sponsor and the com-
large fluctuations or sudden termination. The munity ...comeswhen thesponsor assumes the role
infusion of substantial funds through theNational of landlord Inthe community housing
CommunityDevelopment Initiative provides development process, the rights and needsof the
evidence of theextentto which CDCcapacity tenants come last, only after all other parties in-
andproductivitywould increase if funding for volved in the development have been satisfied.
CDCactivities were widely available and if a larger (The Housing and CommunityResearch Groups
number of promising groups could avail 1973, 39, 41)
themselves of financial and technical assistance. Researchers at the Urban Institute, in presenting
an evaluation of three early CDCs, observed:
Structural Issues
A development institution such asaCDC is in-
Beyond the inadequacy ofresources availableto evitably placed in a situation where it must per-
carry out their broad and sweeping missions, there form simultaneously a dual role, since it is not
self-sufficient. On one hand, the CDC's planning,
are a number of deeper weaknesses inthe CDC
programming, and program allocations must relate
approach as pointed out by a small group of to the needsandinterests ofits community
analysts. These weaknesses bring to question constituents. On the other hand, the CDC's
whether CDCs should, in fact, exist at all, given the resource mobilization activity must relate to
position they are attempting to play within our development support institutions. If the contrast
capitalist political economy. Closely connected to between the view of those providing funds and the
these issues isthe question ofwhether CDCs community's is sharp, the CDC may not be able to
arestructurally abletocarry out organizing and generate sufficient funds to become self-sufficient
advocacy work. even if most programs are devoted to generating
revenue. (Garn, Tevisand Snead 1976, 131)
Capital versus Community. Over the past several Berndt (1977) continued this overall analysis by
decades, a number of critics have identified pointing out the problems inherent inthe operations
conflicts between the ways in which CDCs operate of CDCs, including their inability to deal with the
and their socially oriented objectives. To what structural causes ofpoverty. Nearly a decade later,
extent can CDCs, organizations whose names Schuman's (1986) reflections on self-help housing
include the word “corporation” and that are forced had important implications for CDCs. Specifically,
to work closely with financial institutions and city he noted that such programs reduce “pressure on
governments, really bead- vocates for their low- government to maintain its legitimacy by
alleviating the failures of the private market with within the constraints set by the funders. They try
socialprograms” (467). Schuman also offered this to be community oriented while their purse strings
note: are held by outsiders. They are pressured by
capital to produce exchange values inthe form of
The precarious financial picture of self-help capitalist business spaces and rental housing. They
housing has led more than one community group are pressured by communities to produce use value
to enter joint venture agreements with private inthe form of services, home ownership, and green
investors through the sale of equity shares. spaces. This ismorethan a “double bottom line”
[This]demonstratesthepressurestocon- form to the (Bratt et al. 1994). It isthe internationalization of
private market for housing. Although no the capital-community contradiction andit leads to
neighborhood group can be faulted for seeking trouble. (1997, 6)
critical financial assistance, there is at least an
Others disagree. For example, Leiterman and
element ofironyinthe attempt to solve housing
problems by reinforcing the taxshelter and
Stillman reportthat among the32organizations
investment mechanisms that main- tainahousing intheirsurvey,therewasagenerallypositivefeel- ing
system based on profit rather than need. (1986, that housing was a good basis for enabling tenants
469-470) to exercise control over their environments. One
tenant living in a building owned by a CDC
Schuman concludedhis analysis by acknowl- observed that:
edging that whileself-help maybe “a dangerous
diversion, shunting attention from thestruc- tural This CDC is the only landlord I know that gets
personal. The CDC looks at what the tenants go
aspects of the housing problem into a bottomless
through and what they want. TheCDC has helped
pitof small-scaleself-exploitation...in the absence of
realize the whole picture—legal issues,
a mass movement for decent housing as a public management, tenant responsibilities, and so on. At
responsibility, the self-help sector can be a valuable meetings, we discuss howweasacommunity will
starting point (471). come together. (1993, 30-31)
In recent years, Stoecker (1 997) has, perhaps,
Another team of researchers points out that
done the most work exploring the built-in con-
other types of neighborhood associations are more
tradictions between the work of CDCs and their
likely to be dominated by residents with higher
position within our capitalist system. His argument
incomes than are CDCs and that CDCs have played
posits that the fundamental conflict between capital
important roles in assisting low- income residents
and community introduces a virtually
when neighborhood associations have become
insurmountableobstacletoCDC success.
dominated by conservative property owners (Goetz
Community's tendency is to preserve neighbor- and Sidney 1994). Political scientist Tony
hood space as a use value for theservice of com- Robinson further contends that rather than
munity members, while capital's tendency is to becoming a pawnof capital, CDCs can “be very
convert neighborhood space in to exchange values successful at altering the political balance of
that can be speculated on for a profit. This sets up development politics inthe city,atchanging
an antagonistic relationship. Capital's conversion
thecalculus of capitalinvestors, and at enhancing
of neighborhood spaceinto exchange
the social and psychological fabric of a
valuesdrivesuprents,destroysgreenspace,elim-
inates neighborhood-based commerce, and dis- neighborhood” (1996, 1648). And he adds that
rupts neighboring patterns. Capitalis less willing to “increasingly professional CDCs incorporated in
invest in neighborhood redevelopment that relationships with government and private
maintainsneighborhoodspacesasusevaluesbe- developers, have become more, not less, powerful,
cause that would prevent speculation and limit as outside forces have become co-dependent on the
profit accumulation. Either through destructive political and economic resources that CDCs can
investmentordisinvestmentcommunity suffers. ‘bring to the table”' (1996, 1660). Rather than
(Stoecker 1997, 5) being marginal players, Robinson suggests that
And, further, Stoecker continues: CDCs may actually becontributing to
systemicchange (1996, 1667).
CDCs manage capital like capitalists, but do not Rubin offers this sweeping assessment of the
invest it for a profit. They manage projects but role that community-based development orga-
350 Rachel G. Bratt
nizations play in a capitalist economy: Whilesupportive of the work of CDCs,Rubin

acknowledges the inherent tensions in their
[They]tie together a social mission with capitalist
realities. . . . [They] providethe hopetocom- bat the
operations, andhe presents a scenario of how a
self-reinforcing cynicism that has led to the CDC could temporarily lose touch with its
abandonment of many neighborhoods. They community:
followapragmaticideologyofahumane capitalism Organizations might begin with an ideological
for social change that community members, as fervor, pushing for empowerment and community
wellas politicians ofboth conservative and liberal participation. As external funds dry up and the
leanings, can accept Community-based only money available is that for efficiently
development organizations are not about leading building affordable housing, the mission does
an in-the-streets revolution, but they are about change, or else the organizations simply die, as
increasing social equity and demonstrating that a many have. But as some semblance of economic
market economy still can have a heart. By stability returns, the recognition occurs that
reshaping the underlying symbolsof acap- italist building homes is not enough, that services are
society to serve a social need, [they] end up required,asisamore holisticapproach to renewal,
renewing hope in neighborhoods of despair. (2000, and once again developmental ac-
273, 274) tivistsattempttobuild,toserve,andtoempower.
(2000, 66)
If there were a Right to Housing initiative, the
built-in contradictions between capital and Other analystshavealso pointed tothe potential
community would be lessened. With a well- for CDCs to overemphasize technical concerns and
fundedprogram, the needsof communities and the “nuts and bolts” of housing development, and
individuals would be able to function more in- they voice a skepticism that the scale of CDC
dependently from traditional sources of capital. activity could ever provide more than the
This, then, would further weaken the conflict, and proverbial “drop in a bucket” (Mol- lenkopf 1983;
CDCs would be in a good position to more Traynor 1993; Fisher 1994).
unequivocally serve the needsof their constituents. Expanding this analysis, Stoecker (1997) has
Even inthe present era, whiletensions may surface, argued that organizing should becarried out by
CDCs appear to be doing a good job of mediating other neighborhood-based organizations, since
thetwo worldsand,much more often than not, CDCs are not able to mediate the contradictions
keeping true to their missions to serve low-income ofworking withinacapitalist development model,
people and communities. while also serving as advocates to low- income
Organizing and Advocacy. Although many CDCs communities. He has recommended that CDCs
arose from an organizing and advocacy agenda, as adopt a community-controlledplan- ning process
their work became increasingly focused on the and thattheybecomehigh-capacity and multi-
technical aspects of development, many groups local.Inacritique to Stoecker'sargu- ment, I argued
began to lose sight of their mission to organize and that thetraditional CDCmodel, which attempts to
advocate for community needs. This conflict was combine both development and organizing
identified early inthe growth of CDCs, as agendas, is still viable and mer-
theywereevolving into important itssupport(Bratt1997).However, Lenz cautions that
playersonthecommunitydevelopment landscape. whileorganizing ofpoor communities may not
betheexclusive job of neighborhooddevelopment
Just to exist, they [CDCs] have to engage invir-
organizations, development-oriented groups should
tually nonstop fund raising. Then they face the
administrative nightmare of conceiving and car- subordinate their plans to the organizing agenda.
rying out complex development projects with Citing the experience of a Chicago CDC, he
multiple partners. Each negotiation maypresent continues:
obstacles; foot-dragging by any one partner can
As important as the actual housing units isthe fact
imperil a larger project. Another factor: closer
that a whole new group of neighborhood leaders
association with the private sector andlocalgov-
has been educated on housing and the potential of
ernment may discourage advocacy. Few organi-
community organizing. The hope and promise of
zations are anxious to alienate new-foundfund- ing
this approach to neighborhood development is that
partners. (Peirce andSteinbach 1987, 32, 34)
by building the capacities and power of low-
income people, they will be in a position to productive capacity. By the mid-to late 1990s,
demand even more far-reaching economic and however, acknowledging that CDCs were losing
political changes inthe future. (1988, 30) touchwith their local communities, NPI promoted
Rubin recorded a similar sentiment inanin- an organizing/advocacyinitiative targeted to the
terview with the head of a community-based city's CDCs and provided fund- ingto help CDCs
development organization: reconnect with their neighborhoods. In response,
Slavic Village Development developed anew
We think of ourselves as catalysts..........Over the organizing arm and was successful in a highly
years we've done over six hundred units ofhous- visible effort to keep a neigh- borhoodhospitalfrom
ing. And there...are [probably] at least fifty closing (Rohe, Bratt and Biswas 2003).
families in this community that could use it for At about the same time, membersof the Mas-
everyone we've served ........But the fact of the sachusetts Association of CommunityDevelopment
matter is, it is a drop in a bucket. So if that
Corporations, thetradeorganization representing the
dropdoesn't...ignite activism andignite a sense
among people about what can be done when state's CDCs, decided
people work collectively and struggle forwhat is to renew their emphasis on organizing inorder to
needed, then we've done little. (2000, 139) re-energizetheir development work.CDC leaders
reached thisconclusion from experience: some had
According to one team of researchers, orga-
celebrated the completion of new housing
nizing emerged as a constant theme among those developments only to find themselves faced with
interviewed, and one CDC executive director problems of crime and drug dealing inthat
commented: “Organizing is like breathing—it is neighborhood;others had sufferedwhen a political
part of everything we do” (Leiterman and Stillman change resulted in the withdrawal of support for a
1993, 30). Further, they reported that among the project. (Massachusetts Association of
thirty-two CDCs they studied, most areactive CommunityDevelopment Corporations 2003)
advocates on behalf of their communities. Most In Massachusetts, the sense that organizing and
commonly, CDCs advocate for housing funds, development could not only co-exist but could also
increased police protection, supermarket be mutually reinforcing was partially based on the
development, day care and other social services. In work of some of the state's most noteworthy CDCs.
setting strategy, organizations are less likely to Lowell's Coalition for a Better Acre (CBA), for
takeanadversarialrole(likesitting- in in front of City example, has been credited forits development of
Hall), and more likely to negotiate, work the over 360 units ofhousing,
bureaucratic channels, and develop allies and aswellascreatingaprogramtotrain low-income
constituents among targeted supporters (Leiterman Latina and Cambodian women to be home day care
and Stillman 1993, 34). providersandhelping to establish thecity's first
Sara Stoutland, inamajorreview ofresearch on Spanish-language cable television station.
CDCs, concluded that some CDCs “have become According to one commentator:
important advocates at city hall for their
neighborhoods, andit is not difficult to argue on CBA has won these victories through basic
principle that support for the organizations should community organizing techniques—knocking on
doors; meeting one-to-one to develop rela-
continue for this reason alone” (1999, 233).
tionships; building coalitions with churches and
Nevertheless, she also pointed out that “it is other allies; training resident leaders; holding ac-
difficult to measure or assess the importance of countability sessions with public officials; and,
thisadvocacy,especially when thereareother sources when necessary,through direct action. CBA has
of neighborhood leadership in many of the places been successful because it sees its mission not just
where the organizations operate” (1999, 233). as building buildings,but as building power.
It is not easy for groups to merge the two (Winkelman 1998, 4)
agendas—organizing and development work. For But CBA has also faced obstacles from the city
example, in Cleveland, Neighborhood Progress, andfrom other stakeholders. Its success appears to
Inc., a group representing the area's 50 largest be due, in part, to its “relative power and its ability
corporations and major foundations, originally was to find ways to get what it wants whilethecity gets
interestedin assisting CDCs to increase their somethingtoo Intheend, it isCBA'sabilty to
352 Rachel G. Bratt
mobilize residents—whoare also voters—that has It is neither simple nor easy to effectively
allowedittomaintaincity funding and influence city combine organizing with development. Involving
practices” (Winkelman 1998, 4, 5). residents and providing real opportunities for them
It appearsthat, beyond these concrete examples, to define an organization's agenda, as well as
many CDCs incorporate advocacy and organizing allowing them to make realdecisions, can be labor-
into their work. Based on a sample of 1,057 CDCs, intensive, time-consuming and filled with conflict
two-thirds reported that theywere and maybe beyond the reach of any local initiative.
involvedincommunity organizing(Walker etal. Yet, it is also clear that the two types of activities
1995). More recently, in another national study of can be undertaken together and that the outcomes,
163 CDCs in23cities, researchers found that 80 in terms of organizational strength, resident
percent of thegroups indicated theywere involved empowerment and concrete development projects,
with activities that included “neighborhood can readily justify what are inherently difficult
planning, community organizing and advocacy tasks to carry out simultaneously.
work, community safety, neighborhood cleanup, Even the most skeptical analysts, such as Randy
and other programs that require active participation Stoecker, appear to have reached asimilar
of residents and businesses” (Walker 2002, 13). conclusion. In a recent contribution to the debate
Further, many CDCs are actively striving to about thecompatibility (orlack thereof ) between
strengthen their organizing capabilities. CDCs development and organizing, Stoecker concluded
inthis samplealso reported that the area in which that “aCDCcanaccomplish community organizing
they had made the second- most progress was in when it is structured to manage the potential
developing community linkages and community contradictions involved” (2003, 509). And further,
organizing; the area in which the most gains were “It is possible for CDCs to use traditional
reported was in building development capacity confrontational power tactics in their organizing
(Walker 2002, 36). And nearly one-fourth of the activities” and that there are a number ofinitiatives
groups sur- veyedindicated that community underway that areexplor- ing ways to manage
organizing was one of their priority areas for theorganizing-development dialectic (2003, 510).
organizationalim- provement (Walker 2002, 38). My sense is that the debate is moot. One so-
Compoundingthecomplexity of mergingor- lution is not appropriate to all organizations. While
ganizing and development isthe fact that many of some groupsmaybeabletomerge thetwo agendas,
the problems CDCs encounter originate outside the others may not be. While some groups should be
local community. As Lenz notes: working at a larger geographic scale, others should
stay locally focused. We have not yet developed an
Until these trends and policy decisions can be appropriate set of measures to assess which groups
affected, community development will be limitedin
are best suited for which types of approaches. But
what it can accomplish.The best that can be hoped
the argument should be put to rest. Organizing is
for at present is that well-organized, activist
neighborhood development organizations can important.Develop- ment is important. Andit is
contribute to the political process needed to important that both be accomplished in the current
address these extra-neighborhood issues. (1988,30) environment as well as partof a Right to Housing
initiative. It is less important, however, which
One of the waysthat CDCs have contributed to typeof organization does what. Since so many
the political process and have advanced progressive CDCs believe that their work involves combining
agendas is by joining advocacy coalitions— the two, it makes little sense to undermine this
groupsof nonprofits as well as other advocates who mission by overemphasizing the structural
are committed to a similar set of goals (Goetz weaknesses of a merged agenda. To produce the
1996; Rubin 2000). Despite the apparent successes, needed units of housing, both now andinthe future,
there is still a group of organizers and critics who we will need all kinds of competent organizations,
“fear that CDC efforts deflate and divert social and hopefully,they will be well connectedwith
movements” and that “for poor and working people community needs and visions.
CDC activity has a place, but only if it is par tof a
larger political activist strategy” (Fisher 1994,
190). OVERALL ASSESSMENT OF CDCS AND
THEIR ROLE IN A RIGHT TO HOUSING shouldn't when there are reasons for cautious
optimism” (Schwartz 1994, 1).
Indicators of CDC success have traditionally been Focusing on the specific contributions of CDCs,
“bricks-and-mortar” measures—number of housing a team ofresearchers concluded: Most of the doubts
units generated, jobs created, square footage of about CDCs are either dispelled or partly dispelled.
business or commercial space made available, The CDCs experienced vigorous growth and
development dollars leveraged and the like. change Parochialism characterized some CDCs but
However,asdiscussedinthischapter,CDCs usually was counteredbythe development of extensive
go beyond physical development to includethe networks Thead- dition of service delivery and
delivery of social services, community organizing housing development functions, whichprovided
and other activities related to the somewhat evidence of the narrowing tendencies that
amorphous concept of community development. concerned many observers, coexistedwith vigorous
Thus, the full array of changes for which CDCs policy advocacy in many cases (Clavel, Pitt and
maybe responsibleand which they are attempting to Yin 1997, 451).
achieve are difficult to measure and, as a In one of the most recent assessment of CDC
consequence, maybeoverlookedbyre- searchers as activities, which focused on the experiences of 163
indicators of success (Temkin and Rohe 1998). CDCs in 23 cities:
It is not surprising that various observersof- fer
quite different overall summations of CDC Field researchers found widespread agreement
effectiveness. Rohe (1998) has noted that claims of among community development practition-
success are often made with little or no supporting ers...that some CDC investments have produced
evidence and that even examples of successful improvement in community quality that have been
CDCs fail to provide convincing evidence of the recognized by the market and thus capitalized in
superiority of CDCs over other community higher real estate values [Furthermore], CDC
development initiatives. In addition, Stoecker directors, intermediary staff, city officials,
bankers, foundation staff, local academics, and
(1997) cites numerous analysts who are unable to
others...identified, neighborhoods with upswings
show that CDC activities are effective enough to
in housing markets thought to be due, in some
reverse neighborhood decline or that the large part, to
development for which they take responsibility CDCredevelopmentefforts.Inabouttwo-thirds of
would not have happened without their cities, practitioners credited CDCs with successful
involvement. And, writing from a conser vative p e neighborhood turnaround in at least one
r s p ective, Husock a r gues th at CDCs are bad for neighborhood. (Walker 2002, 9; original
cities because they “keep the poor frozen in emphasis)
poverty and cities forever frozen as warehouses for Even more convincing evidence comes from an
the eternally poor”; that they are nothing more than econometric analysis of five neighborhoods.
a decentralized HUD and that they are prone to Researchers found that in two of the neighbor-
corruption (2001, 68, 73). hoods:
Probably the most scathing attack of CDCs [E]conometrictrend analysis produced solid ev-
appearedinaNew York Times Magazine article by idence that the increases [in property values] re-
Nicholas Lemann. Arguing that community sulted from CDC activities and the supporting
development is a myth, he sees CDCs and other investments made by private and public agencies
neighborhood-focused efforts as major The conclusion: “Policy” interventions of the sort
disappointments. Instead, he suggests that urban represented by CDCs' community development
policy should focus on people-oriented programs— investments can produce real results that are
human service initiatives and efforts to provide scientifically measurable. (Walker 2002, 7)
inner-city residents opportunities to move to Aside from the various evaluations of CDC
nonpoverty areas (Lemann 1994). One of the performance, a number ofpractitionersandre-
numerous rebuttals ques- tionedwhetherwe must searchers have begun to explore why some or-
“really give up on poor communities in order to ganizations are having difficulty and, in some
help poor people?” And, in answer, “We cannot cases, are being forced to close their operations.
simply write off poor communities, and we One of thefirst reports to identify this problem
354 Rachel G. Bratt
focused on the situation inChicago as of 1995 and develop housing and other community services.
noted that: While they would still encounter some of the same
problems that they currently face, a well-funded
Three high-profile CDCs...terminated their
national program, supplemented by supportive and
development activities and essentially [went] out
ofbusiness...leaving behind atroubledportfo- lio of technically competent local and national intermedi-
low-income residential projects that they had aries, would go a long way toward our ability to
developed and managed over the years. In significantly increase housing production.
addition, several other CDCs were going through In the meantime, as part of an overall com-
unsettling leadership changes. (Futures Committee mitment to provide increasedfunding forhousing,
on Community Development in Chicago 1997, 3) the public sector should make sure that its
investments strengthen CDCs and other nonprofits.
And,sincethen,oneofthelargestandmostpres- tigious
In particular, these groups continue to need a
CDCs inthe country, East SideCommunity
steady source of income to cover operating
Investments in Indianapolis, has also closed its
expenses. And they also need asim- pler subsidy
doors (Reingold and Johnson 2003).
mechanism that would allow them to package deals
What arethe causes of CDC failures? According
and develop projects much moreefficiently than
to TonyProscio, who recorded the proceedings of a
thecurrent system that requires the use of
LISC-sponsored conference on six
multiplesubsidies andfunding sources.
CDCsthathadfailedorencounteredseriousdif-
A number of existing progr ams, such as the
ficulties, noneofthegroupswasabletoidentifya single
Community Development Block Grant Program,
“trigger” factor—something that altered the
Community Development Financial Institutions,
situation from that of a problem to a fullscalecrisis.
including theNew MarketsTaxCredit Program, and
“Serious crises, the kind that jeopardize an
HOME, are good conduits for funding CDCs. But
organization's survival, are cumulative affairs in
bringing back a deep,single subsidy such as the
which individual problems—no one of which is
Section8New Construction and Substantial
fatal—gradually gain mass and mo-
Rehabilitation Program would be a top priority.
mentumuntiltheavailableforcesforremedyare too
Another possible source of funding would come
little, too late” (Proscio 1998, 5).
through anew National Housing Trust Fund, which
This problem was further exploredbyRohe, Bratt
would provide a dedicated source of revenue aimed
andBiswas, who similarly concluded that “It isoften
at producing, rehabilitating and preserving 150,000
not possibletoidentify asingle “fatal” problem.
units per year within the span of a decade (The
Instead ...various factors—which are
National Housing Trust Fund Campaign 2005).
invariablyboth contextual and organizational—
Another proposal would target resources di-
interact, resulting inaserious challenge to orga-
rectly to CDCs and create a pool of technical
nizational viability” (2003, 57). Whilethis team of
assistance and capacity-building funds to assist
researchers acknowledges that not all CDCs should
CDCs. The CommunityEconomic Development
besaved (such as wherethere isorganiza- tional
Expertise Enhancement Act (H.R. 2683) would
incompetence or market forces that create adverse
authorize, over athree-yearperiod, $225 million to
conditions for CDCs), their recommendations are
provide technical assistance and capacitybuilding
aimed at providing guidance to CDCs and their
funds for community-basedde- velopment
support communities to make surethat as few
corporations, helping to leverage private
CDCs as possible face organizational extinction.
dollarstocreate affordable housing andjobs in
The reason weneed to be concerned about CDC
disinvested communities (National Congress for
survival is simple: As one of the key pro-
CommunityEconomic Development 2004).
ducersofhousing affordabletolow-income residents,
Alternatively, the federal government could
it iscritical that CDCs besupported and helped to
bring back an old initiative, the Neighborhood Self-
thrive. If and when a Right to Housing initiative is
Help Development program,8 which provided
created, its smooth and efficient implementation
categoricalfunding for neighborhooddevelopment
will depend on theexistence of an experienced and
organizations. Finally, all developments aimed at
competent infrastructure. CDCs are well positioned
low-income households should be permanently
to assume a majorrole in a wide-scale effort to
affordable to this group; subsidies need to be
provided over the long term to make sure these and local governments” (NeighborWorks 2003, 3). The
restrictions stay in place. NeighborWorks network, whichwascreatedand
The mechanisms needed to support CDCs and supportedbytheNeighborhood Reinvestment Corporation,
consists of more than 240 local nonprofit organizations
other producers of social housing are well whose goal is to create affordable housing and to promote
understood. We are not confronted by a lack of community revitalization (NeighborWorks 2005). In
knowledge about how to solve our housing FY2004, nearly $152 million in NeighborWorks
problems; the limiting factor is our collective revolving loan fund and capitalinvestments leveraged
political will. morethan $2 billion in other direct investments in
neighborhoods served by affiliate organizations
(NeighborWorks 2004). The Enterprise Foundation was
NOTES created in 1982 with the assistance of real estate
developer James Rouse. Since then, the organization has
secured and made close to $6 billion in investments and
1. Another term used synonymously with CDCs in
contributions. Through their network of more than 2,500
this chapter is “community-based development or-
organizations, more than 175,000 homes affordable to
ganization.”
low-income families have been built or rehabilitated (The
2. A small portion of the literature reviewed in this
Enterprise Foundation 2004). The Local Initiatives
chapter was first presented in Rohe, Bratt, and Biswas
Support Corporation (LISC) was created in 1980 and is
(2003).
committed to working with CDCs to rebuild
3. The National Congress for Community Eco-
communities. Technical assistance and financial support
nomic Development tracks the growth of CDCs and
are provided to local programs operating in 38 cities as
presents an image of uninterrupted growth, from some
well as to 37 statewide rural programs. LISC raises
200 groups in the mid-1970s to about 1,500 to 2,000
money from private investors, lenders and donors (over
groups in 1988 to 3,600 groups in 1999 (National
$6 billion) which, inturn, leverages additionalpublic- and
Congress for Community Economic Development 1989,
private-sector funds. Since its inception, the organization
1999). However, anecdotal evidence, as well as recent
has provided assistance to 2,400 CDCs, which have built
research, reveals that CDCs not only are created, but they
or rehabilitated 158,000 affordable homes and created
also go out of business (Rohe, Bratt, and Biswas 2003).
over 22 million square feet of commercial, community
4. In 2001, funders committed to another ten- year
and educational space (LISC 2005).
investment; NCDI was incorporated asanon- profit with
8. The Neighborhood Self-Help Development
anew name: Living Cities: The National Community
program provided $15 million in direct federal grants
Development Initiative.
targeted to neighborhooddevelopment organizations.
5. Sinceabout1990,agrowingmovement,known as
There were two rounds of funding, in 1979 and 1980; it
Comprehensive Community Initiatives (CCIs), has
was abolished as a freestanding program in 1981 and
incorporated and expanded upon the communitybuilding
became an eligible activity under the Community
mission of CDCs. Funded by a number of foundations,
Development Block Grant program.
CCIs generally have one or more CDCs as central actors
in broad-based, community development initiatives
(Eisen 1992; Connell et al. 1995;
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Robert Wiener
Old and New Challenges Facing Rural Housing

Nonprofits
NONPROFIT ORGANIZATIONS areas, vast rural parts of the country are

have played a major role in shelter provision either unserved by any nonprofit developer
in rural areas for decades. In the 1930s, or are greatly underserved. Typically,
theAmerican Friends Service Committee at- existing rural nonprofits and local
tempted to promote self-help housing for the governments lack the expertise and skills
depression-era poor in Appalachia. In the to apply forhousing assistance and to im-
1960s, the Institute for Community Eco- plement housing development. Outside
nomics developed the community land trust training and technical support are hard to
model to house southern black farmers. To come by. Capacity needs include gen-
day, rural housing nonprofits across the eration of administrative funds, develop-
country build, repair and acquire housing for ment of professional management skills
the elderly, large families, farmworkers and and acquisition of technicalproficiencyin
other special-needs populations. One study developing and operating projects as well
found that almost 900 local groups were in- as using the new information technologies.
volved in some aspect of rural housing as- Lack of Credit and Capital—Historically, ru-
sistance (Housing Assistance Council 1995). ral communities have been characterized
Another found nearly 1,400 community de- by endemic shortages of funds for resi-
velopment corporations (CDCs) providing dential lending and investment (Strauss
assistance to rural communities, 81 percent of 1999). Creation in 1949 of a housing com-
them (1,134) involved in some aspect of ponent intheU.S. Departmentof Agriculture
housing (RuralLISC 2002). As of 1999, CDCs (USDA), the Farmers Home Admin-
had produced 115,000 units in rural areas, 21 istration (now renamed the Rural Housing
percent of all CDC-produced units nationwide Service [RHS]), with direct lending
(Steinbach 1999). Over one-half of the rural authority, was based on a recognition of
units (53 percent) were for homeownership, these shortages. Rural communities often
compared with 22 percent of the urban units. lack conventional lenders, such as banks
Despite recent growth in the number of and savings and loans, and rural “redlin-
housing nonprofits serving rural communities, ing”isafact of life. In addition, secondary
including urban and suburban CDCs that have mortgage lenders entered rural markets
expanded their geographic reach, housing much later than they entered urban areas
improvement in many rural areas is still beset (Wilson and Carr 1999). Unlike large
by the traditional limitations and obstacles that cities, local governments in rural areas
have always confounded assistance efforts.
These limitations and obstacles include:
Lack of Organizational Capacity—Although
some of theoldest and most sophisticated
CDCs originated and still operate in rural
359
ges acing sing Nonpr
are unable to generate sufficient tax rev- communities; in fact, they pre-date the
enues to finance projects and are greatly emergence of most comparable urban and
dependent on nonentitlement funds from suburban CDCs. Some of these organizations
highly competitive federal and state fund- formed to meet the opportunities for self-help
ing pools. housing development in poor rural and
Lack of Buildable Sites and Infrastructure— farmworker communities made possible,
While the common perception is that rural beginning inthe 1960s, by the federal Office
areas are blessed with huge tracts of ofEconomicOpportunity and then by the
inexpensive land ripe for development, in USDA. Later, they and newer organizations
practice, housing production for low- expanded into other areas ofru- ral housing
income households is more constrained provision, funded by the USDA, Department
than in many cities. Constraints include the of Housing and Urban Development (HUD),
total absence or limited capacity of sewer and state and local housing agencies. On
and water facilities; lack of other supports, theotherhand, vast areas ofru- ral California
such as transportation routes, health and have faced the same limitations and obstacles
educational facilities, and employment to housing improvement as in other states
opportunities; growth controls to protect because of lack of local capacity and the
agricultural land, coastal zones and other inability of the established organizations to
environmentally sensitive areas; and the extend their reach.
existence of large public holdings. However, recent expansion of urban and
Lack of Local Political Will and Support— suburban nonprofit developers into rural
Finally, rural housing nonprofits operate in communities in search of new development
some of the most politically conservative opportunities has created a new dynamic.
areas of the country, where resistance to Untilthe1990s,ruralhousingdevelopershad
most forms of government intervention is worked in environments that were considered
powerful.Government-assisted housing more collegial than competitive. Many had
development suffers from the images that operated mostly unchallenged in service areas
rural citizens have of inner- city slums. defined by relatively large county and multi-
Opposition often takes the form of countyregions, unliketheareas served by urban
restrictive zoning, permit denials and groups, whichwereoften limited to smaller
NIMBY (not in my back yard) reactions neighborhood, city or metropolitan regions.
that are, at least in part, driven by strong For themostpart,theareasservedby CDCs—
racial and ethnicstereotypes about the rural and urban—are self-selected and bound
prospective occupants of low-income only by organizational charters and, in some
housing. cases, funder restrictions. In
general,organizationsarenotguaranteed the
exclusive right to develop in a specified area,
ANEW PRO BLEM FACING RURAL but most have held to informal understandings
NONPROFITS: THE CALIFORNIA STORY that respect each organization's territorial
boundaries.
In rural parts of the country that are experi- Rural nonprofits, as well as many of their
encing population growth and urbanization urban counterparts, now fear that this pattern
pressures from expanding cities and suburbs, a of reciprocity and mutuality is in jeopardy.
new problem is emerging—competition from Research on California's nonprofit housing
urban and suburban CDCs. California isagood sector, including its rural housing developers,
case example and perhaps a harbinger of what revealed a pervasive sense that competition
is to come in other states. On the one hand, it had increased in recent years and would
is characterized by a core group of established continue to increase in future years (Wiener
and highly sophisticated development 1997).1 Increased competition was identified
organizations that have their roots in rural as resulting from huge growth in the number
of nonprofits and relative decreases in federal, Regional Housing Nonprofits—Large non-
state and local spending for housing. profits from urban areas that have out-
Competition today is astruggle by too many growntheir original service areas because
nonprofits—as well as for-profits—for too of limited funding and sites, high devel-
few financial resources, which in turn opment costs, growth controls and other
threatens to undermine traditional ways of factors are now seeking development and
doing business. management opportunities inthenew
In the California study, a majority of or- growth centers.
ganizations reported that the number ofde- Multipurpose Social Service Agencies—
velopers operating within their service areas Urban-based service providers desiring to
had grown in recent years. Indeed, starting in meet the shelter needs of their clients have
the early 1980s, California saw unparalleled formed housing development arms and,
growth in the nonprofit housing sector. This like regional housing nonprofits, are
can be attributed to several factors. Federal, expanding into the new growth centers.
state and local programs of the mid-1980s to Community-Based Housing Development Or-
early 1990s encouraged existing nonprofits to ganizations (CHDOs)—New nonprofits
expand and encouraged start-up organi- formed by local governments, existing
zationstoenterthefield, includinganewgen- nonprofit developers, citizens' groupsand
eration of community-based developers.2 others are competing in funding programs
Growthwas also stimulatedbymajorprivate that favor local development and
foundations and lending consortia, which ownership of housing.
created intermediary lending programs, and by For-Profit-Controlled (“Captive”) Nonpro-
individuallendersoffering moreattractive fits—New nonprofits have been formed or
financing products in order to meet federal have been sponsored by profit-motivated
Community Reinvestment Act obligations. entities to gain access to government pro-
The emergence of a strong technical support grams and local entitlements (such as
system inthe late 1970s and early 1980s (such property tax exemptions) that provide a
as the Local Initiatives Support Corporation, preference for or are restricted to properties
Enterprise Foundation and Rural Community developed and owned by nonprofit
Assistance Corporation) and the development organizations.
of nonprofit trade organizations helped to train
and nourish new housing
professionalsandincrease nonprofit capacity.
FUTURE PROSPECTS
The new financing programs and institu-
tional supports have had the unanticipated The vagaries offederal, state andlocal spend-
effect of weakening the strong position that ing for housing, which is currently in great
rural nonprofits have held in some localities jeopardy throughout the country, together
withinthe programmaticspecialties that they withthegrowthinthenonprofithousingsec- tor
had dominated for years. At the same time, that occurredwhen conditions weremore
migration of great numbers of people into the favorable, portendhard times for some orga-
interior andruralregions of the state during the nizations. Even with infusions of new funding,
1980s and 1990s, beyond the urban fringe of such as Californiaexperiencedwithpas- sage of
the expensive and congested coastal cities, has Proposition 46 in 2002,3 it is quite likely that
created new pressures and opportunities for the day of reckoning will only be delayed and
housing development for low-income that thecurrent number of nonprofits will
households. decline inthe future, with only the strongest
COMPETITORS OF RURAL NONPROFITS and most opportunistic surviving.
To survive in this highly competitive era of
Four new types of competitors are now chal- limited resources, many nonprofits are making
lenging the primacy of rural nonprofits:
operational changes in development activities,
ges acing sing Nonpr
staffing patterns, target populations and community-based, nonprofit development. These

service areas in order to best respond to the include the federal Low Income Housing Tax Credit
new competitive challenges. In the California and the various programs of the McKinney
study, a significant number of urban Homeless Assistance Act of 1987 and the National
Affordable Housing Act of 1990, including the
nonprofits reported that competition figured in
HOMEprogram, Housing Opportunities for People
strategic decisions to expand service area Everywhere (HOPE), Housing Opportunities for
boundaries and develop housing in new People with AIDS (HOPWA) and Title VI
jurisdictions. The majority of expansions were Preservation (see Chapter 7).
into a new county or multicounty area—in 3. In November 2002, California voters ap-
some cases a jurisdictional leap far from their proved $2.1 billion in bonds to fund a variety of
main business address. Some expansions were existing and new state housing programs, including
into small towns and unincorporated areas programs limited to orproviding preferences for
served by existing groups. These trends are nonprofit-developed housing.
most troubling to the older, limited-purpose
rural housing developers who are highly
dependent on vulnerable housing programs REFERENCES
and fear challenges to their traditional turf
Housing Assistance Council. 1995. Filling the gaps:
from “servicearea creep” by urban-based
Astudy of capacity needs in rural nonprofit
competitors.
housing development. Washington, DC: The
Thus, thechallenge incoming years willbe Council.
twofold: to increase the development capac- Rural LISC. 2002. Directory of rural community
ityin rural and remote rural communities that developers, 2002 Edition. Washington, DC.
are currently unserved or underserved Steinbach, Carol. 1999. Coming of age. Washing-
andtominimizeand mitigate the worst man- ton, DC: National Congress for Community
ifestations of competition that threaten the Economic Development.
viability of the establishedruralhousing sector, Strauss, Leslie. 1999. Creditand capital needs for
whichisuniquely committed to theshel- ter affordable rural housing. In Housing in rural
America, eds. Joe Belden and Robert Wiener.
needs of small cities and rural locales. This
Thousand Oaks, CA: Sage Publications.
becomes especially critical at times of funding Wiener, Robert. 1997. Too muchdemand,toolit- tle
scarcity and as we move inexorably toward a money! Competition in California's nonprofit
“devolved” federal housing system dependent housing sector. Sacramento: California Coalition
on state and local administration (see Chapter for Rural Housing Project.
17). Healthy competition can stimulate greater Wilson, Harold L., and James H. Carr. 1999. Impact
efficiencies and community responsiveness. of federal interventions on private mortgage
But a mad scramble for shrinking funding credit in rural areas. In Housing in rural
resources, without respect for traditional America, eds. Joe Belden and Robert Wiener.
communityloyalties and services missions, can Thousand Oaks, CA: Sage Publications.
have the opposite effect and undermine the
future health andin- tegrity of the nonprofit
housing industry.
NOTES
1. The research, funded by the Aspen Institute,

investigated the impacts of growth and competition
on seventy-four California nonprofit producers of
rural and urban housing that was affordable to low-
income households.
2. Whileoverall federal andstategovernment
outlays for housing declined during the 1980s and
1990s (see Introduction and Chapter 5), new
programs emerged during this time that encouraged
John Emmeus Davis
17 Between Devolution and the Deep Blue Sea: What's

a City or State to Do?
DEVOLUTION IS A political storm, cuts. The irony here, especially for governors who
many years in the making, which has finally ar- have championeddevolution, isthat many members
rivedin full force.Atthecenter of thisturbulence is a of Congress have come to believe the overblown
dubious idea that is simplicity itself. It costs the rhetoricabout saving 25 cents on the dollar. That's a
federal government far moretooperate most lot of “fat” for committee chairs to capture for their
domestic programs, so theargument goes, than it pet projects—or for the tax reduction crowd to
would cost the less bureaucratically burdened remove from the budget altogether. Even when
governments of the nation'scities or states to ad- housing dollars remain in the budget, there
minister the same programs. For every federal isseldom any guarantee that a greaterproportion of
dollar spent on subsidizedhousing, community them will reach thestreets.
development or social welfare, anywhere from a Bureaucracydoesnotdisappear simply by chopping
dime to a quar ter is needlessly “wasted” because it into smaller pieces. Devolution's proponents may
Washington is running the show instead of officials or may not becorrect intheir gloomy assessment of
who are closer to the problems and closer to the federal inefficiency, but they are certainly wrong in
people these programs are meant to serve. To their rosy predictions of the efficiencies to be
eliminate such waste, say devolution's devotees, gained—and the savings to be had—from turning
responsibilityfor most domestic over dozens of programs to 50 states and to
programsshouldbeturned over—“devolved”— to a hundreds of cities. 2
lower level of government. Give states and cities Less targeting and less oversight by federal
most of the money previously controlled by the agencies. The whole point of devolution isto “get
Feds, grant them the flexibility to “reinvent” these the Feds off the backs” of cities and states so that a
programs and they will find creative, efficient and thousand innovations and efficiencies can bloom.
effective waystodomore with less. Bureaucracy The record of earlier attempts to give cities and
will be steadily shrunk. Money will be better spent. states moresway overfederally funded programs
People will be better served.1 forhousing and communitydevelopment shows,
Lurking behind all the talk of devolving au- however, that devolution has usually resultedin
thority and reinventing government, however, fewerdollars being directed tothe poor (and to the
aresinister spectersthat are deeply disturbing to neighborhoods in which they live); fewer dollars
those whostruggle day-by-day to provide housing going to any tenure of housing other than market-
for lower-income people and to improve conditions priced homeownership and fewer dollars benefiting
in lower-income communities. persons of color.3 “Ifitain'tafederaldollar,” as one
Less money for housing and community de- inner-cityresident commented long ago when
velopment. Promises of flexibility,efficiency and reflecting on the Model Cities program, “you can
democracy resulting from devolution have fre- hang itup
quently been used to deflect criticism of proposed
cuts inthe federal budget and to insulate
Congressfromthe backlash engenderedbythose
Between Devolution and the Deep Blue Sea: What's a City or State to Do? 365
as far as minorities are concerned” (Browning, Unlike their federal counterparts, they have not had
Marshall and Tabb 1984, 207). True then; true the political luxury of simply turning awayfrom the
now. deepening poverty of their citizens, the
More political clout by private real estate inter- deteriorating housing of their neighborhoods, and
ests and suburban constituencies. “By practically the widening gulf between household incomes and
any measure,” notes Etzioni (1995), “thetypical housing costs. Nearly inundatedbya sea of need,
state government isevenless responsive to its cit- most cities and states have tried to do something to
izens than Washington.” Most state legislatures, on house their lower- income citizens. Some of what
the other hand, are quite responsive when it comes they have done has been hastily conceived and
to protecting the interests of real estate developers, deeply flawed. None ofwhat they have done has
landlords, bankersandlandowners, especially when come close to replacing the billions of housing
a maverick municipality goes “too far” dollars that have been steadily withdrawn by the
inchallenging the boundaries ofhousing reform. 4 federal government. Nevertheless, hereand there,
A few examples: When tenants in Philadelphia cities and states have made a difference.
succeeded in getting their city council to adopt an Attempting to do “some”
18-month moratorium on the conversion of rental thingforhousing,theyhaveoccasionally found their
housing to condominiums in 1979, developers, way, by accident or design, toward doing the
landlords and realtors hustled off to the “right” thing.
Pennsylvania legislature and got the moratorium Whatthey are doing—and,moretothe point, what
eradicated by a state law preempting local they should do—is the subject of the present
condominium ordinances.5 When the voters of chapter. Devolution is not a passing disturbance but
Burlington, Vermont approved an antispeculation a climatic change inthe political environment, one
tax on rentalhousing in 1986, the state legislature likely to be with us forquite a while. 8 Thereare
blocked its enactment by refusing to allow dangers inthisshiftofdollars, powers and
Burlington to amend its municipal charter to levy responsibilities. There are limits in the ability (and
such a “confiscatory” tax. In 1995, the California will) of cities and states to cope with these
state legislature imposed vacancy decontrol changes.9 Yet there are also opportunities that
(beginning in 1999) on every city with rent control, should not be ignored,offering room to maneuver
preempting the power of local governments to and reason to hope that some of the innovations
decide for themselves the circumstances under being tried by nonfederal units of government may
which price-controlledrentalscould returntothemar- nudge the entiresystem ina positive direction,
ket (Keating 1998). Also in 1995, a state-wide moving a little closer toward making a Right to
referendum in Massachusetts eliminated rent Housing a reality. Cities and states have been
control in Boston and two other cities that had pioneers inthe past. They may play a similar role
enacted municipal rent control (Keating 2003, 25). inthe future.
It is no accident that the real estate industry (among
otherbusiness interests) has usually preferred PROGRESSIVE STRATEGIES FOR CITIES
regulations and dollars to flow from state AND STATES
government rather than from either the federal or
municipal government.6 Cities and states that are serious about doing the
Although this picture may seem devoid of “right” thing for housing can choose from amenuof
portents or possibilities for housing strategies of st rategies, arrayed among four goals: redistributing
amore progressive bent, the future is not totally the benefits of growth;expanding the supply of
bleak.Norwas the past. After all,thecurrent nonspeculative housing; preserving the lower-cost
enthusiasm for turning overfederalprograms to housing that presently exists; and enabling
lower levels of government is the continuation of a residential mobility, both social and geographic. I
long-term trend in the case of subsidized housing attempt to show what should be done by selecting
and community development.7 Public officials at concrete examples of what cities and states are
the state and municipal levels have been forced to already doing.
live with creeping devolution for many years.
366 John Emmeus Davis
The good news is that there are so many guarantees of a livable wage for all who find work,
examples from which to choose. Cities and states would make almost anyhousing policy
have displayed a remarkable degree of innovation moreeffective. Nevertheless, for reasons of focus
over the last few decades in attempting to address and space, I have chosen to omit “supplementing
the housing needs of their populations.10 The bad income” from mylist of goals and strategies.
news is that so few of these innovations have been Noris“producingmorehousing”tobefound on my
adopted widely enough or funded fully enough to list of progressive goals and practical strategies.
allow a complete assessment of their replicability The construction of new housing is treated here as
andworth. There are interventions aplenty for each a means to an end, not as an end in itself. Cities and
of the strategies that follow, but they generally states should prioritize the preservation of the
indicate what might be done to realize a particular lower-cost housing they already have before
strategy. None is proposed as a legislative or diverting scarce resources to the construction of
programmatic ideal that should be uncritically new housing. They should promote production as
embraced. They are “works in progress.” Some are one tool (among many) for pursuing the goals of
“failures in progress”—goodideas that were expanding nonspeculative housing or enabling
legislatively compromised from the beginning or residential mobility. Creating new units may also
poorly implemented later on; or good programs that be justified as one tool (among many) for
were initially effective but eventually terminated rebuilding or revitalizing a distressedlocale.
when a more conservative regime took office. Production is not exactly missing from these
Nevertheless, containedwithin each isakernel policyprescriptions, but it is treated as incidental to
ofinspiration for answering the question of “what's goalsand strategies with a prio r c l a i moverpu blic
a city or state to do?” resour ces.
One final note: Dividing multiple strategies
Progressive Housing Strategies for Cities and States among four different goals is an expository device
Goals Strategies that tends to obscure the many overlaps that can—
Redistributing the Tapping into development and should—occur across these descriptive divides.
benefits of growth Reinvesting deposits The most effective interventions tend to advance
Taxing transfers
Expanding Prioritizing project funding
more than one housing goal atatime, to utilize more
nonspeculative Subsidizing nonprofit than one housing strategy and to blur the line
housing between what Rusk (1999) has deemed the “inside
operations
game” and the “outside game”—that is, measures
Delegating assets and powers
Sanctioning affordability controls
that are targetedinternally toward a
Preserving lower-cost Protecting against loss of units
particularneighbor- hood,city or townversus
housing Protecting against evictions measures that aretar- getedregionally,across
Protecting against rising costs numerous jurisdictional boundaries. In practice,
Enabling residential Removing barriers there is(or should be) an interdependence among
mobility Penetrating enclaves these interventions as well as an intersection of the
Promoting choice
“inside game” and the “outside game.” These
interventions are partof the same comprehensive
Two caveats about what is missing from my list
policy, eachpro- viding an essentialpiece of an
ofrecommended strategies:Except for some
interlocking puzzle. None should be pursued in
mention of rental assistance, there is no discussion
isolation.
of governmentalprograms for supplementing the
income ofpoverty-levelhouseholds. The
Redistributing the Benefits of Growth
meagerness of such supplements inthe past and
theshrinkage of such supplements inthe present
Davidoff (1978:69) once suggested that the best
impose major constraints on the ability of any city
way to determine whether a planner is engaged in
or state to house its most impoverished citizens or
meaningful, moral and effective work isto ask,
to redevelop its most dilapidated neighborhoods. A
“Are you a redistributionalist?...Are you for
generous and just incomes policy, combined with
maintaining the distribution of goods, services,
opportunities and processes as they are, ordo you economic and environmental burdens on residents,
favor a redistribution so that those whonowhave the neighborsand municipalbudgets that are usually ill-
least will receive considerably more and thus the prepared to shoulder them.
gap will be reduced?” If the planner's work is not To realign this imbalance, many cities, some
aimed at redistribution, he argued, hisorher efforts states and a few regions have enacted avariety of
will be counterproductive at best, amoral at worst. measures to ensure that the fruits of
Krumholz (1996) reached asimilar conclusion growtharemoreequitablysharedwhileprevent- ing
inarguing forwhat has come to be called “equity the costs of growth (or decline) from falling
planning.” The goal that heandhis planning staff disproportionately upon those with the least ability
embraced in Cleveland during the 1970s was “more to pay.These are not necessarily “progressive”
choices for those who have few.” regimes. Even the most pro-growth, pro-
Imbued with a similar impulse toward re- businessgovernmentcan,onoccasion,finditself
distribution, the present chapter assumes that a forced by political reality or economic necessity
paramount concern for a planner, policymaker or into taking a redistributionist stance. What is
community activist whose work is focused on important, therefore, is not where the sponsors of a
housing must always be, Who gets what? Will the measure happen to beonthe political spectrum, but
investment ofpublic resources or theexercise of whether the outcome of that measure redistributes
public powers aimed at providing housing or resources, rights orpower from groups who have a
improving neighborhoods help those who have lot to groups who have less.
theleastorthosewhohavethemost?Willoppor- Nearly every state or municipalinitiative dis-
tunities and conditions for persons of different cussedinthischapter serves this redistributionist
classes, races, abilities and ethnicities be made end.Thereare some, however,that depend on
moreequal—orless? The formeristhe prizeon which growth; they are possible and effective only in the
the eyes of the progressive planner or the equity presence of growth, especially a strong and
planner must always be fixed. expanding real estate market. By tapping into
Redistribution as the aim of public policy is put profits (and taxes) generated by residential and
to its stiffest test by the issue of growth, especially commercial development, by reinvesting assets
at themunicipallevel.Asteady increase in capital deposited in banks and by taxing transfers of
investment, real estate values and population— realproperty,cities and states can mobilizenew
what Logan and Molotch (1987, 32) once called the resources forhousing lower-income peopleand
“unrelenting search...for more and more”—is revitalizing lower-income neighborhoods.
eagerly sought by political elites in nearly every
city, even in those where a more progressive Tapping into Development. For-profit real estate
agenda has come to the fore.11 What distinguishes development is an attempt to reap an economic
progressive planners from their more conservative reward from property values created by others.
colleagues is not a disregard for growth but a There is, of course, a stream of income that directly
commitment to redistributing its benefits and results from the developer's own creation of a
burdens. When applied to housing and useful structure which others are willing to lease
communitydevelopment, progressives proceed orpurchase. But the most significant re-
from a recognition that real estate development has turnonadeveloper's investmenttypicallycomes from
traditionally allowed property owners to internalize tapping into the “web of externalities” (Qadeer
—to claim for themselves—not only 1981, 172) that dumps value onto his orher site
theappreciation that they personally create through simply because it isuniquely and opportunistically
their own dollars and efforts but appreciation that is there. What else is implied, after all, by the popular
socially createdbypublic investment intheneigh- saying that only three things truly matter in real
borhood, by private investment in adjoining estate: “location, location and location”?
parcels, orbygrowthinthecity (or region) as a One of the most common waysthat cities and
whole. Conversely, the owners and develop- counties have found to force residential developers
ersofreal estate areallowed to externalize many of into sharing some of this locationallargess is by
the costs of their projects, imposing social, inclusionary zoning. The developer is required to
sell or to rent at an “affordable” price Linked downtown-neighborhood development

aspecifiedpercentage of anyhousing units produced policies mandating exactions for housing have been
through new construction or substantial adopted in San Francisco (1981), Santa Monica
rehabilitation. In New Jersey, where this type of (1981), Boston (1983), Jersey City (1985),
zoning has been a mainstay of municipal and state Berkeley (1986 and 1993), Cambridge (1988) and
housing policy since 1983, the “normal” Sacramento (1989). San Diego adopted a hefty
inclusionary set-aside is 20 percent, divided equally linkage fee in 1990 to capitalize the city's housing
between units madeaffordable for households trust fund but then reduced it by one-half in 1996.
earning between 50 and 80 percent of a locality's Seattle has had a voluntary linkage program since
median income and units made affordable 1989, allowing commercial developers to purchase
forhouseholdsearning under 50 percent of median extra floor-area ratio for their projects if they
(Calavita, Grimes and Mallach 1997; Mallach provide affordable housing, child care or other
1994).12 Outside of New Jersey, this mandated set- amenities (Avault and Lewis 2000). Many other
aside has varied greatly. In California, for example, cities, including Miami, Denver, Hartford, New
where 107 cities and York, Chicago, Portland (OR) and Washington,
countieshavesomeformofinclusionaryzoning, the DC, negotiate agreements on a case-by-case basis,
percentage of below-market units required ranges linking commercialdevelopment to the
from as littleas4percent in San Clemente to as high development of lower-cost housing.
as 35 percent in Davis (NPH/CCRH 2003). There What maybethe most effective and lucrative
is also considerable variation in New Jersey, strategy for tapping into development, however, is
California and elsewhere inthe requirements for one that has rarely been implemented in the United
how “affordable” the prices of inclusionary homes States: regional revenue sharing. Every city in a
must be, how long such affordability must last and region contributes to a regional pool a percentage
how large a project must be before being subject to of the growth in its property tax base resulting from
inclusionary zoning. Behind these variations, new commercial, industrial
however, the redistributionist logic is essentially andresidentialdevelopment. These pooled revenues
the same: The sellers of buildable land, the are then redistributed among the region's cities.
developers of market-rate housing and the High-growth, high- tax-capacity municipalities
buyers(orrenters) of market-rate units become net contrib- utorstothis pool. Low-growth,
aremadetobear most of the cost ofproviding low-tax-capacity municipalities become net
housing at a below-market price, “sharing the beneficiaries. Where the percentage of the tax
wealth” withhouseholds less affluent than increment captured by this regional pool is
themselves. significant, fiscal disparities among a region's cities
Linkage is infused with a similar logic. For- can be gradually reduced,along with the deadly
mally defined as “the mandatory municipalreg- competition forgrowth.The region surrounding
ulation of unsubsidizedlarge commercialdevel- Minnesota's Twin Cities (Minneapolis and St. Paul)
opment in order to obtain housing exactions as a has had a mand atory tax b ase sh a ring sy stem i n
condition of development approval” (Keating 1989, place since 1971, where each city in the metropoli-
211), linkage is really nothing morethan a means of tan region contributes 40 percent of the growth
redistributing wealth from the down- ofits commercial and industrial tax base into a
towntotheneighborhoods.13 The developersof regional pool (Orfield 1997, 87). Dayton, Ohio and
commercialreal estate are required either to con- 26 out of 30 ofits surrounding townships and
struct (or rehabilitate) off-site housing themselves municipalities adopted a voluntary plan in 1991 for
or to pay fees in-lieu-of-production into a h ous i sharing 13 percent of the growth in both their
ng t r ust f un d ,ad m i n i ste re dby t h emu- property taxes and payroll taxes (Rusk 1999, 201-
nicipality. All of the housing produced through 221). The impact on existing fiscal disparities has
such exactions is priced to be affordable—and, in been small in both of these cases. There is,
many cases, to remain affordable—for persons nevertheless, the potential in such multi-
earning below 80 percent or 50 percent of median jurisdictionalrevenue sharingfor tapping into
income. suburban development, not only to invest in
declining communities that needitthe most, but to these struggles yielded negotiated settlements with
fundlower-cost housing in thriving communities offending financial institutions, making millions of
that often resist itthe most. dollars available for mortgages, home improvement
loans and small business loans in neighborhoods
Reinvesting Deposits. Since the 1930s, most federal that were previously overlooked. Even without
and state laws regulating commercialbanks and formal settlements, theCRA has been generally
savings andloan associations that are in the effective in increasing the level of mortgage
business of providing credit to the public have lending to people and places underserved in the
contained a provision asserting that these regulated past (Squires 2003, 12; Apgar and Duda 2003).
institutions should serve the “convenience and Municipal officials, including those in Boston,
needsof their communities” (FFIEC 1992, 3). Cleveland and Milwaukee, have occasionally
There was an assumed reciprocity here: entered the fray on thesideof community activists,
Government gave the financial institution a charter wielding the “stick” of the CRA. State officials,
to do business, insurance for its deposits and access including those in Connecticut and Pennsylvania,
to discounted capital; members of the public gave have sometimes personally negotiated CRA
the institution their savings; and, in return for these agreements (Taylor and Silver 2003) . Most cities
privileges and trust, the institution helped to meet and states, however, have been more inclined to
the credit needs of the entirearea from whichit drew use the “carrot” of their own deposits to nudge
its deposits. lenders toward community reinvestment.
Atleastthatwasthewayitwassupposedtowork. In Implemented through either administrative policy
reality, the practice of many banks was to restrict or legislative action, these “linked deposit”
access to credit forpeopleof color andfor residents measures reward financial institutions that exhibit
of certain low-income neighborhoods. arecord offairlending and a commitment to meeting
The federal Community Reinvestment Act the credit needs of lower-income neighborhoods.
(CRA) of 1977 was aimed at changing that, as were By 1994, at least
various antiredlining, fair lending and mortgage adozencitiesand14stateswererequiringthede-
disclosure laws enacted by many state positories ofpublic funds to have a “good com-
legislatures.14 TheCRAandits state-level cousins munityreinvestmentrecord” (Squires 1 994, 82) . In
reaffirmed the principle of reciprocity, declaring most cases, this has meant granting “good”
that a financial institution could not receive institutions favored status in competing to receive
privileges from government and collect deposits and manage public deposits. Chicago has
from the public without meeting an “affirmative gonefurther.Bymunicipalordinance,theCityis
obligation” to help meet local credit needs, even in prohibited from doing business with predatory
low-income communities. Equally significant, lenders or their affiliated banks.
theCRA handed community activists, local officials
and the pressanew means of monitoring the lending Taxing Transfers. Finally, a redistributionist
policies and practices of these regulated strategy can be pursued by taxing away some of the
institutions, along with a means of pressuring them short-term gains that make the speculative buying
into doing better. These nonfederal actors have and selling of residential real estate so lucrative for
frequently proved moreeffective in uncovering some and so damaging for others. Such a strategy
CRAviola- tions than the federal regulators. In can serve either a preservationist or a
Atlanta and Detroit, for example, it was the press redistributionist end. If successful in discouraging
that blew the whistle on discriminatory lending speculation, it can relieve pressureon the existing
practices (Dedman 1988, 1989;Everett stock of lower-cost housing. If unsuccessful as a
1992).InChicago, Pittsburgh, Milwaukee, deterrent to speculation (often because it was never
Cleveland, Cincinnati, intended as such), taxing transfers can at least
Dallas,DenverandWashington,DC,itwascom- capture a portion of the
munity activists whotook the leadinexpos- ing and speculativevaluewhenpropertieschangehands, using
confronting local lenders who failed to meet their those revenues to subsidize housing for low- and
CRA obligations (Squires 1994, 76-83). Many of moderate-income people.
Although no city or state has gone very farin controls that are lost too soon. 18 Many CRA
actually trying to stop speculation, once dubbed by settlements and linked deposit programs create
Hite (1979, 49) “the great American game,” a few mortgage pools for homebuyers of modest means
have enacted taxes that either slow ittoaless but provide few benefits for poorer populations
destructive pace or share its gains more broadly. orfor alternative forms of tenure. Many housing
Washington, DCand the state of Vermont provide trust funds, including some that are funded by real
two examples. The former adopted a Real Property estate transfer taxes, do little to limitthespeculative
Transfer Tax in 1978, aimed at the “flipping” of buying and selling of the housing they assist—
residential rental properties; the latter adopted a inadvertently contributing totheveryproblemof
Land Gains Tax in 1973, aimed at the speculative unaffordable housing that they are trying to
turnover of larger parcels of unimproved land. Both address.
make use of graduated taxes pegged to the period Redistributing the benefits of growth, there-
that a pro p e r t yis h e ld b et w een p u rc h ase an fore,isonlyoneofseveralgoalsthatacity or state
dre-sa l e. The shorter the holding period, the should pursue when setting out to “do something”
higher the tax on the property's appreciated value. to house lower-income populations. It should not
Similar antispeculation taxes have been considered be pursued by itself. Strategies of redistribution
but not adopted by state legislatures in California, must be combined with strategies associated with
Hawaii,Maryland, Massachusetts, Montana, other progressive goals, especially the goal of
Oregon, Virginia and Washington.15 expanding the supply of residential units that are
By contrast, the Dade County, Florida Doc- permanently removed from the speculative market.
umentary Surcharge Program, created in 1983, was
never intended to impede speculation but merely to Expanding Nonspeculative Housing
raise revenues forlower-cost housing. By tapping
into theappreciated value ofreal estate transfers Nonspeculative housing goes by many names,
other than those of single-family homes, Dade including “decommodified housing,” “perpetually
County captures millions of dollars per year for its affordable housing,” “social housing” and “social
housing trust fund.16 This approach to funding ownership” (see Chapter 11). Such housing can be
affordable housing went state-wide in 1992, when owned and operated by public housing authorities,
the state of Florida raised its own real estate by private, nonprofit organizations orbythe
transfer tax and directed these new revenues toward residents themselves, as in the case oflimited-
the creation of affordable housing. 17 Real estate equityhousing cooperatives, limited-equity
transferfees collectedbyMaine, New Jersey and condominiums, community land trusts and single-
several other states are usedinsimilarways, with family houses with resale restrictions incorporated
considerable variation inthetypes ofhousing into a deed, mortgage orlease. Regardless of
targeted and the mix of populations served. owner,all nonspeculative housing is operated
Although each of these strategies generates without a profit andis transferred without a
significant resources for subsidizing lower-cost speculative gain. Residents are given security of
housing, it must beadmitted that the amount of tenure. They are also given an opportunity, in some
redistributionthattypicallyresultsfromtapping into cases, to realize limited appreciation when reselling
development, reinvesting deposits or taxing the homes that are theirs. Owners may not rent or
transfers is relatively small.Asimplemented to date, sell, however, to whomever they want orfor
none of these strategies goes very far in closing the whatever the market will bear. The property is
gap between those with wealth and those without. permanently removed from the market, priced to
Moretothe point, none of these strategies remain relatively affordable forlower-income
necessarily results inthe kind ofhousing that is most households, one transfer after another.
needed and most affordable, unless they Of late, the fastest-growing segment of non-
areexplicitly designedwith this speculative housing has been the private, non-
inmind.Manyinclusionary zoning andlinkage market housing produced or sponsored by private,
programs, for example, create housing with eli- nonprofit organizations with the direct assistance of
gibility thresholdsthat aresettoohigh or affordability cities and states. It is here, in seeding and
sustaining new models of nonmarket tenure, often all nonprofits believe that the housing they produce
accompanied by new modes of nonprofit should be permanently removed from the market—
production and new methodsof nonbank finance, especially when that housing is owner-occupied.
that cities and states have been especially Nonprofit housing and nonspeculative housing are
innovative during the last few decades. It is here, in not alwaysthe same.
adopting and refining what I have previously called On the other hand, as Bratt has pointed out
a “third sector” housing policy (Davis 1994, 2000), (1989, 199), when it comes to maintaining the
that cities and states are most likely to show affordability of the housing they produce, “the
initiative and innovation in the years ahead.19 commitment of most community-based housing
That is not to say that public housing authorities developers is more similar to the long-range
orresidents themselves cannot besignificant players commitment of public housing authorities and
inexpanding thestock of nonspeculative housing. contrasts with the relatively short-livedinvolve-
Most of the strategies for meeting this goal can be ment of private, for-profit developers of subsi-
tailored to support publicly owned housing dizedhousing.” To theextenttheir commitment to
orresident-controlledhousing, with or without the long-term affordability is real, private nonprofits
involvement of a nonprofit developer. A number of have been—and will probably continue to be—the
housing authorities have, in fact, begun to play a principal vehicles through which cities and states
more active role in recent years both in developing attempt to expand the supply of nonspeculative
new housing andin revitalizing housing they housing.
already own (cf. Vale 1997, 2002; CHAPA 2001). Cities and states that embrace this goal
On the other hand, present political realities commonly use one or more of four different
suggest that public-private partnerships with strategies.20 They prioritize funding for the
nonprofit organizations are probably the path of construction or rehabilitation of units that are
least resistance for nonspeculative housing. Inatime owned and operated as nonspeculative housing;
of privatization, when anything governmental they supporttheoperations of the nonprofit or-
seems suspect andwhen public housing in ganizations that produce suchhousing; theydel-
particular is often in disrepute, cities and states egate assets andpowers, previously the purview of
findit easier to venture into uncharted territory with the public sector, to private, nonprofit orga-
anonprofit partner at their side. In a time nizations; and they provide legal sanction for
ofretrenchment, when Washington'scom- mitment permanent affordability.
to declining urban and rural areas is itself in
decline, elected officials in cities, counties and Prioritizing Project Funding. An explicit policy of
states find themselves looking for new models and governmental support for nonspeculative housing
new partners to help them rebuild distressed means, first and foremost, that a city or a state's
communities. A growing number of these resources for housing are directed predominantly
publicofficials have concluded,along with Barton toward forms ofprivate (orpublic) nonmarket
(1996, 111), that “social ownership is virtually the ownership that preserve public subsidies and
only way to keep housing viable perpetuate affordability. These housing resources
inneighborhoodsundergoing drastic disinvestment include pass-through funding from various federal
and abandonment by the private sector; programs, the allocation ofLow Income Housing
moreover,socialhousingorganizationstypically Tax Credits and the distribution of various state
strengthen the organizational skills of the residents, and municipal revenues.21 Under a nonspeculative
promoting community self-help and mutual aid as housing policy, priority in awarding such public
well as advocacyfor amoreequitable distribution of funds—whether for the construction of nonmarket
municipal resources.” housing, the acquisition and rehabilitation of units
Not all nonprofits behave this way. Many do previously owned and operated as market housing
little to strengthen the organizational skills of or the acquisition and rehabili-
people residing in the units that they develop or the tationofunitspreviouslyowned and operated as
neighborhoods which they serve. Even more subsidized housing—goes to projects for which
problematic for a progressive housing policy, not there is a guarantee that any subsidized units will
remain affordable for a targeted class oflow-or term restrictions on rents and re-sales has a lower
moderate-income residents. value. Theownersof such“encumbered”
How long affordability must last varies greatly propertypay lower property taxes than owners who
from one locality to another. Ideally, can rent orresell their properties forwhatever
nonspeculative housing is removed permanently themarket will bear.23
from the market; it is perpetually affordable. Some
cities and states have, in fact, been quite explicit Subsidizing Nonprofit Operations. It isnoac- cident
about pursuing this elusive ideal. Burlington, that the most stable, sophisticated and
Vermont has made a commitment to “perpetual accomplished nonprofit housing networks are
affordability” the cornerstone ofits housing policy foundinthose cities and states that have historically
since 1984. Connecticut's “foreverhousing been the most generous in providing operational
policy,”institutedin the late 1980s but dismantled support for community development corporations,
by a later administration, declared that “state- mutual housing associations, community land trusts
assistedhousing should be permanently removed and other nonprofit producers of below-market
from the speculative market” and proceeded to housing. Chicago, Cleveland, Minneapolis, St.
prioritize funding for limited-equity housing coop- Paul, Seattle, Boston, Burlington and Portland,
eratives, community land trusts, mutual housing Oregon, for example, are cities in which nonprofit
associations and other nonmarket models designed developers have come to play a major role—
to preserve “the long-term affordability of housing indeed, the starring role—in producing, preserving
generated by public funds.”22 Affordability and operating such housing. Municipal support for
requirements lasting anywhere from 40 years to the bricks-and-mortar residential development, in each
“useful life” of the assisted property can also be of these cities, is regularly supplementedby direct
found in selected housing programs of the City of municipal support for thecoreoperations of the
Boston and the Boston Redevelopment Authority nonprofits being asked to undertakesuch
(Collins and White 1994); inthe housing trust funds development.
of Ann Arbor, Cambridge, Berkeley, San A par ticularly promising innovation inthe area
Francisco, San Diego, Los Angeles and of operating support has been the recent growth of
Washington, DC; andinthe housing trust funds of local “partnerships” and “col- laboratives” for
Ohio, Oregon, Rhode Island and Ve rmont (Brooks community development (Nye and Glickman
1994, 2002). The state of California began 2000). These are city-wide intermediaries, using
providing $1 million to $2 million grants to fundscontributedbymu- nicipal agencies,
localhousing trust funds in 2003, requiring a dollar- community foundations and private corporations,
for-dollar match from local sources and requiring that provide a reliable, predictable stream of
all of these funds to be used for the construction of operating grants, training opportunities and
rental housing with affordabilityrestrictions technical assistance for nonprofit producers of
lastingamin- imum of 55 years. affordable housing. Examples of such partnerships
Housing projects with continuing affordabil- can be found in Boston, Cleveland, Detroit, Los
ityaresometimesgivenapublicboostinanother way as Angeles, New Orleans, Philadelphia, Washington,
well. A number of cities and states offer private, DC, and Portland, Oregon.
nonmarket housing either short-term orlong-term Although state agencies have tended to be far
reductions in property taxes. Most common are more reluctant than their municipal counterparts to
temporary abatements for a limited number of provide dollars for the ongoing operations of
years or for a specified component of a project's nonprofit developers, there are notable exceptions.
total assessment (such as not collecting taxes on the Massachusetts, New Hampshire, New York, North
incremental value created by rehabilitating a Carolina, Oregon and Ve rmont, for example, are
dilapidated residential building). Less common, but states with a long history of making “capacity
more significant, arethe permanent abatements grants” availabletothe nonprofit producers of state-
providedinNew Jersey,Vermont, Oregon and a assisted affordable housing.24
handful of other states, where local assessors It should be emphasized again that nonprofit
recognize that privately owned housing with long- housing is not necessarily nonspeculative housing.
Indeed, there are cities with extensive nonprofit atabelow-marketprice,anyhousingunitsslated for

housing development networks, like Cleveland and conversion or anyinclusionary units offered for
Pittsburgh, where lasting affordabilityis barely a sale. As a quid pro quo, the nonprofit purchaser is
partof the policy agenda. Subsidizing the expected to guarantee the affordability of these
operations of nonprofit producers is a strategy for units for low-income tenants or low-income
meeting the goal of expanding nonspeculative homebuyers for a lengthy period of time.
housing only where nonprofits are committed to Even more common isthe practice of making
creating—andwherecities and states insist on nonprofits, limited-equity housing cooperatives or
creating—housing that isaffordable to low- and tenant associations the preferredrecipients of
moderate-income households both initially and surplus public property or foreclosed private
continually. property seized by a city for nonpayment of taxes.25
New Yo rk City's Tenant Interim Lease Program
Delegating Assets and Powers. Accompanying (TIL) and its Community Management Program
theshiftofresponsibilities from higher to lower (CMP), established in 1978, are among the oldest
levels of government, there has been a parallel and largest of these municipalprograms for
trend over the past 25 years of transferring in- transferring tax-foreclosed propertyinto
creased responsibilities, powers and assets from the nonspeculative ownership.Under these programs,
public sector to nonprofit organizations (cf. Smith the tenants of tax-foreclosed buildings receive
and Lipsky 1993). Such atrend may eventually hold training in the organization and management of
as manydangers forlow-income peo- pleandlow- cooperative housing, funding for repairs and
income communities as devolution, but it has also rehabilitation, and, eventually, clear title to their
offered a number of unexpected opportunities for building (Chen 2003; Leavitt and Saegert 1990;
nonprofits to expand thesup- ply of nonspeculative White and Saegert 1997). By 2003, according to
housing. New York City's Department of Housing
It has become common practice, forinstance, for Preservation and Development, 795 buildings,
cities and states to give nonprofit organizations containing 16,692 units, hadbeen converted
responsibility for administering revolving loan through TIL and CMP into tenant-owned, low-
funds, capitalizedwithpublic funds. Acting as the income, limited-equity housing cooperatives. 26
municipality's (or the state's) agent, the nonprofit The most extraordinary delegation ofpublic
loans andre-loans these fundstolow- income power, however, occurred in Boston in 1988. The
homeowners, mom-and-pop landlords or small Boston RedevelopmentAuthority conveyed to the
businesses within a targeted area. Although it is Dudley Street Neighborhood Initiative (DSNI) the
rare for these revolving loan programs to impose power of eminent domain over 30 acres of inner-
lasting restrictions on the affordability of assisted city land (Medoff and Sklar
projects, nonprofits with a comm i tment to nons p 1994).Whilethissovereignpowerofthestatehas often
ecu l at ive h ous i ng h ave often used been delegated to hospitals, universities and
theselendingprograms(andfeesgen- erated by them) utilities, it had neverbefore been granted to a
to subsidize their own operations, to expand their community-based nonprofit for the purpose
social base and to stabi- lizemarket-rate housing ofredeveloping its own neighborhood. All of the
proximate to the social housing they own and real estate obtained by DSNI, through eminent
operate. domain or otherwise, is conveyed to a community
Another delegation of municipal power has land trust, ensuring long-term community control
been granted to nonprofit developers in several over the land and lasting affordability foranybelow-
cities that have either enacted ordinances con- markethousingdevelopedonthat land.
trolling theconversion ofrentalproperty to con-
dominiums or mandated the set-aside of “in- Sanctioning Affordability Controls. Despite the
clusionary” units innewly constructedprojects. variation that exists in property law from one state
Required by ordinance or enforced as a policy of to another, two common law principles apply
the agency administering theordinance, non- nearly everywhere. They are knownas the “rule
profitshavebeengiventhefirstrighttopurchase, against perpetuities” and the “rule against
unreasonable restraint on alienation.” These rules maintaining and improving its condition as a source
presume that privately owned real estate, including of safeand decent shelter, should exert a prior claim
housing, isamarketablecom- modity that should be over public resources. Whatever housing is most
freely transferred at the highest price a willing affordable,moreover,servingpeoplewiththeleast
buyer will pay to a willing seller. Courts tend to ability to obtain and retain decent housing on their
frownonany contractual restraints that last too long own, should command the most attention from
and interfere “unreasonably” with this market public officials.29
transaction. Progressive preservation is focused, therefore,
Nonspeculative housing, in seeking to place not only on maintaining the physical stock oflower-
perpetualrestraints on rents andresales, iscon- trary cost housing but also on enhancing the residential
to the spirit of these rules. Proponents have security of the lower-income people who occupy
prevailed, however, when abletodemonstrate that that housing. Residents need protection against the
such restraints are “reasonable,” especially loss of units. They need protection against unjust
insofarastheyserveanecessaryandworthypub- lic eviction. They need protection against housing
purpose. To buttress theargument that price- costs that rise beyond their ability to
restricted housing does indeed serve a public pay.Acomprehensive—and progressive—
purpose, several states have given statutorysanc- preservationist policy requires all three.
tion either to affordability controls in general or to
specific models of housing that incorporate Protecting Against the Loss of Units. The existing
affordability controls into their definition. The inventory of lower-cost housing in most cities and
“affordable housing covenants” allowedbystate law states includes: (1) publicly subsidized rental
in Maine, the “housing subsidy covenants” housing, either publicly ownedby a housing
allowedinVermontand the “affordable housing authority or privately ow nedbya for-profit or
restrictions”allowedinMassachusettsareexam- ples nonprofit corporation; (2) unsubsidized, privately
of thefirst.27 Cooperative housing statutes enacted ownedrentalhousing; and (3) unsubsidized, owner-
by Minnesota, Massachusetts, Califor- niaand occupied housing.
Vermont are examples of the second.28
Subsidized Rental Housing. Federal rules that once
Preserving Lower-Cost Housing governed the operation of 1.3 million units of
public housing are relaxing. Federal contracts that
A preservationist policy with a progressive bent is once protected the affordability of 1.9 million units
one that discourages the removal of lowcost ofprivately owned, publicly subsidized housing are
housing and the displacement oflow- income expiring. The condition of both types of assisted
people. Although exceptions to this rule may housing is deteriorating. Much of this stock of
occasionally be justified, these exceptions should affordable housing is at risk of being lost (see
be narrowly defined and strictly regulated. Any Chapter 7textand box). Making matters even
persons displaced should be fully compensated. worse, affordability controls on the first 23,000
Under most circumstances, what Hartman (1984) units of more than a million built since 1986, using
once called the “right to stay put” should take Low Income Housing Tax Credits, started expiring
precedence over the “rightto displace.” in 2002, with another 180,000 units set to follow
It is lower-cost housing that isthe principal during the next ten years (Bodaken 2002, 6).
concern of progressive preservation. Priority in
theapplication ofpublic powersand the investment Unsubsidized Rental Housing. “Public attention,”
ofpublic dollars isgiven to preventing the loss of as Apgar (1991, 206) noted long ago, “tendstofocus
housing units that rent or sell for prices that are on maintaining thecurrent stock of subsidized
relatively affordable for persons of modest means. housing, but curbing the loss of privately owned,
This is not to belittle various historic or aesthetic unsubsidized units is also essential.” Between 1974
aspects of the existing stock, which may also be and 1993, in particular, this housing sector lost
worth saving, even at public expense. Preserving nearly three million units (JCHS 1995, 31).30
the affordability of that housing, however, while Another 1.7 million units were lost between 1993
and 2002 (JCHS 2003, 20). Most likely to be lost prevent the loss—and upgrade the condition—of
have been rental units affordable to very-low- all three categories of lower-cost housing. Such a
income households, losses that are seldom offset by policy should embody twoother principles as well:
new construction. Even in cities where the long-term affordability and resident empowerment.
production of new rental housing has been robust, A premium should be placed on methods of saving
there maybe little benefit for lower-income tenants, and improving lower-cost housing that maintain
since the “new multi-unit family apartments being units, retain subsidies and sustainaffordabilityfor as
builtaresubstantially moreexpensive on average long as possible. A premium should also be placed
than the ones being lost” (JCHS 2003, 20). on methods that give residents a personal stake in
that housing, whether a stake in ownership, a stake
Unsubsidized Owner-Occupied Housing. Nearly in control or merely a stake in longevity— that is,
one-half of all very-low-income households some assurance of remaining in homes that they
intheUnitedStates owntheir homes. Over one-half have come to regard as “theirs.”
of these very-low-income homeowners pay Cities and states that commit themselves to
morethan 30 percent of their income for the fixed preventing the loss of lower-cost housing, while
costs of their housing—a third pay more than 50 incorporating the principles of longterm
percent (JCHS 2000, 36)—leaving little for affordability and resident empowerment,
maintenance or replacement.31 Among all intervene in four basic ways: (1) they use their
homeowners, there has been a dramatic jumpin the regulatory powers to prevent the deterioration,
number of households spending more than one-half demolition or conversion of lower-cost units; (2)
their incomes on housing, a financial burden they provide public funding to transfer into
described by HUD as “severe.” About 7.3 million nonspeculative ownership many marketrate units at
homeowners reported severe cost burdens in 2001, risk of being lost; (3) they provide public funding
up from 5.8 million in 1997, the “first time on to stabilizesubsidized units already under
record that homeowners have outnumbered renters nonspeculative ownership; and (4) they ensure that
with severe affordability problems” (JCHS 2003, whenever units are lost, any persons displaced will
26). For these homeowners, especially those inthe be provided with the means to relocate, securely
bottom two income quintiles where 84 percent of and satisfactorily.
the severely cost-burdenedhouseholdsaretobe Preserving housing through regulation has a
found,there is no margin of safety. Any unexpected rich pedigree, stretching back to the earliest
expense or disruption in income can dislodge the municipal efforts to set minimum requirements for
precarious hold they have on their homes. ventilation, sanitation and safety in tenement
More precarious still isthe security of those housing. By theend of the 20th century,over 3,000
low-income households who own manufactured municipalities wereusing health and building codes
housing—popularly known as “mobile homes.” to regulate the construction and maintenance of
Outside of metropolitan areas, mobile homes make housing; most states had enacted plumbing,
up a significant portion of the lower-cost housing electrical, boiler or elevator codes; and over 15 had
stock. They are often in poorrepair. Even when the enacted state-wide building codes (Nenno 1997,
housing isadequate, the “park” in which the 10-11). Several other states have acted
housing is located often is not. Decrepit water and aggressively, in recent years, to remove lead,
sewer systems, dangerous electrical service, asbestos and other dangerous materials from
nonexistent open space, and unpaved, unplowed residential structures. Such minimum requirements
and unmaintained roads create conditions in many for the health, safety and habitability of housing
mobile home parks that are barely adequate. help to prevent the loss of residential units from
Adequate or not, many parks are at risk of being shoddy construction, deferred maintenance,
sold and shut down, leaving the owners of homes condemnation or fire— if they are vigorously
that turn out to be less mobile than advertised to enforced andifthe costs of compliance are not
abandon ship or to search for another space in simply heaped onto the shoulders of the present
another park, frequently in vain. occupants, rendering their housing unaffordable. 32
A comprehensive policy of preser vation should Going far beyond code enforcement, some
cities and states have sought to preserve their courttoorder a building that has become a hazard to
existing stock of lower-cost housing by using the its occupants and neighbors to be placed under the
regulatory powers at their disposal to im- pedethe control of a court-ordered receiver. Rents from the
demolition or conversion ofhousing. Demolition of building andloans from thecity (securedbya lien on
rental housing—or its conversion to a the property)arethen used to bring the building into
nonresidential use—is made more difficult when a compliance withlocal health andsafety codes
city requires developers who wish to remove rental (Listokin 1985;Morrissy
units to replace those units on a unit-for-unit basis, 1987).Typically,theownerregainscontrolupon
either by constructing replacement units repayment of the costs incurred by the receiver in
orbymaking an in-lieu-of-production payment into managing andrepairing the building. Michael Stone
a housing trust fund.33 Housing preservation ( 1993, 246-247), however, has urged cities to
ordinances, with or without a replacement viewreceivership as “a transitional step” toward
obligation, have been pioneeredbyHartford,Atlanta, social ownership,onethat “enables the housing to be
Los Angeles, San Francisco, Seattle and physically salvaged before it is too late, while
Burlington. New YorkCityhas closely regulated the working simultaneously to effect transfer of title to
demolitionor conversion of single-room- more responsible owners, including residents,
occupancybuildings andisalso one ofseveral cities community-based organizations, nonprofits, and
that use rentcontrol to regulate demolitions. public agencies.”
Portland, Oregon has a preservation ordinance Most of these regulatory measures maybe used
preventing the loss of any housing subsidized by not only to prevent the loss of units but also to
the municipality. The affordability of such housing complement preservation efforts aimed at
mustbe maintained for aminimum of 60 years. transferring units into the hands of more re-
Looming as a greater threat than demolition in sponsible owners.34 With or without this regulatory
manyparts of the countryhas been the large- scale shove, transferring at-risk housing into the hands of
conversion of lower-cost rental units to individuals and organizations oriented toward
condominium ownership. To prevent the loss of nonspeculative ownership has become the focus of
these units, a number of cities (and a few states) many state andlocalprograms aimed at preserving
have enacted strict controls over condo affordable housing. These programs have been
conversions. Most condoconversion ordinances targeted to both subsidized and unsubsidized
require the owners of rental housing to notify housing, especially projects with
tenants inadvance of the planned conversion of checkeredhistories andirresponsibleown- ers.
their units, a notice period that may stretchinto Putting troubled projects under the control of either
severalyears.Evictionsandrentincreasesduring their residents or a private, nonprofit organization
thisnoticeperiodaretightlyregulatedtoprevent the has proven to be an effective way of securing the
premature displacement of the current occupants. affordability of these projects, while improving
Many ordinances give tenants not only security of their livability and prospects for survival.35
tenure during the notice period, but the first right to Programs to prevent the loss of owner-
purchase converted units once the notice periodhas occupied housing tend to focus either on protecting
elapsed. Conversion ordinances in Washington, DC low-income homeowners against rising costs
and Burlington, Vermont go beyond these (discussed below) or preventing the physical
individual rights. Upon being notified of their deterioration of their units through grants orlow-
landlord's intent to converttheir building into interest loans forrehabilitation.36 Saving such
condominiums, tenants are given a collective right housing by transferring it to nonspeculative
to purchase the building before its conversion and ownership has rarely been tried—withfour laudable
are offered assistance by the municipality in exceptions.
making this buy-out a reality. First, some municipalprograms that provide
Another regulatory tactic occasionally used by grants or loans for the rehabilitation of owner-
municipal governments to prevent the loss of occupied housing contain antispeculation pro-
lower-cost housing is “receivership.”Under a revisions. The homeowner is required to return the
ceivership action, municipal officials petition a public subsidy (with interest) upon resale if the
house is not sold to another low-income example, have enacted state laws requiring lengthy
homebuyer.Alternatively, a nonprofit organization notification and giving current mobile home
is given an option to purchase the house at a bel owners the first right to purchase their parks if they
ow-market price, one that reflects the continued are put upfor sale. In Ve rmont, the State Housing
presence of the public subsidy. Authority established a special-purpose nonprofit
Second, several municipalities have attempted in 1990 to acquiremobile home parksonbehalf of
to replicate thenow-defunct Home Equity Living current residents and to manage these parks until
Plan (HELP) of Buffalo, New York. In these they can be turned over to resident-controlled co-
programs, the equity contained in the houses of operatives. Similarly, New York's Mobile Home
elderly homeowners is “unlocked” to payfor Cooperative Fund Program, started in 1988,
maintenance orimprovements, preventing both the provides low-interest loans to acquire land,
deterioration of the housing and the displacement complete infrastructure improvements and cover
ofits occupants. The drawback, in Buffaloand the costs of converting parks to cooperative
elsewhere, isthat once the houses are vacated they ownership.
are resold, usually for a price beyond the reach of Quick though cities and states have sometimes
anotherlow-income homebuyer (inorder to been to use their own powers and resources to
replenish theHELP account). For each elderly preserve unsubsidizedhousing, rental and owner-
homeownerhelpedintheshort run, a lower-cost occupied, only a few have accepted responsibility
home is lost inthe long run. Only in Madison, for saving at-risk projects that are publicly owned
Wisconsin has an attempt been made to add an or publicly subsidized— housing that isalready
antispeculative twist. The Madison Area outsideof thespeculative market. Many municipal
Community Land Trust, with the City's support, officials have, in fact, regarded thethreatenedloss of
has explored the feasibility of an equity conversion subsidizedhousing as a welcome relieffrom rent-
program that would provide an annuity and life regulatedprop- erties they would prefer to tax at a
estate for elderly homeowners, but transfer their higher rate, from older projects they would prefer
houses into the price-restricted domain of the to bulldoze, and from low-income people they
community land trust upon theelders'death would prefer to move somewhere else. Many other
ordeparture(Davis, McKenzie and Carminati 1993). officials bemoan the possible loss of these units,
To date, however, this program has not been but treat this threat as a problem belonging to
implemented. someone else: the tenants, the private owners, the
Another approach to converting owner- public housing authority or the federal government.
occupied housing into nonspeculative ownership is This has not been true everywhere. A number of
under development in Massachusetts. The towns of cities and states have considered the preservation of
Bedford and Hingham are considering adoption of subsidized housing to beahighprior- ity. State
an Equity Conversion & Homeownership agencies and municipal governments in Vermont
Opportunity (ECHO) program, employing a model and Massachusetts, for example, played majorroles
proposed by Michael Stone. This program would insupporting twoof thefirst tenant-led buy-outs of
use public funds to provide both an upfront grant privately owned, publicly subsidized housing
and a multiyear annuity to lower-income projects inthe nation: Northgate Apartments in
homeowners, allowing them to make necessary Burlington, Vermont and Clarendon Hill Homes in
repairsand to meet their ongoing housing costs. In Somerville, Massachusetts (see Chapter 7).
exchange for this publicsubsidy, homeowners Ownership of these projects was transferredfrom
would acceptanaf- fordability covenant, restricting absentee investors to partnerships controlled by the
the resale price of their homes and ensuring their project's residents. Similar transfers to nonprofit
futureafford- abilityforhomebuyersearning below ownership have occurred with municipal support in
80 percent of area median.37 Providence and Chicago. In Colorado, the City of
Finally,anumber of state programs facilitate and Denver and the Colorado Housing Finance Agency
subsidize the transfer of owner-occupied mobile played leading roles in transferring ten multiunit
home parks into nonspeculative ownership. Florida, rental projects from the Resolution Trust
New Jersey, New Hampshire and Ve rmont, for Corporation to nonprofit, nonspeculative
ownership (Atlas and Shoshkes 1997). In where income-eligible tenants maybe removed
California, the state has appropriated funds to from their units only for damaging a unit,
preserve subsidized projects and has supported threatening the peaceorsafety of other tenants,
their transfer to nonspeculative ownership by conducting illegal activities, failing to pay rent
exempting from state taxes 50 percent of thegain orrefusing to allow the landlord reasonable access
on thesaleof subsidized housing if it issold to a to do repairs (see Chapter 9and Hartman
nonprofit organization, a public entit y or a limited- andRobinson 2003). Some cities and states have
equity cooperative. extended this protection to tenants residing in
Anyprogram forpreserving lower-cost housing privately owned rental housing that is not publicly
must make provision not only for preventing the assisted. New Jersey, New Hampshire, New York
loss of units but also forrelocating people when and California are a few of the states with “just
units are lost. Even whenacitydoes every- cause” statutes. Similarprotections against “unjust”
thinginitspowertopreservetheexistingstockof lower- evictions have been enactedbya number of cities,
cost housing, hundreds of units may still be lost to including Seattle, Berkeley, Santa
dilapidation, condemnation, abandonment, Monica,Oakland, San Jose, NewYork andWash-
demolition or conversion; hundreds of households ington, DC.40
may still be displaced. Where the removal of Tenants may also be forced out of housing not
housing is directly attributable to the action because a landlord has evicted them but because a
(orinaction) of the property'sowner, the cost utility company has shut off their gas, water or
ofrelocating andrehousing persons displaced from electricity. This is sometimes the fault
this housing should be borne neither by the persons ofalandlord,whohasstoppedpayingutilitybills to
displaced nor by society at large. These costs milk a property prior to abandonment or to empty a
should be “internalized” within the project's building prior to demolition or conversion. It is
budget, paid by the property's owner. sometimes the tenant's fault. Either way, it is vital
Many cities and states, accordingly, build into to a strategy protecting security of tenure that
their condemnation, conversion or antidemolition utility companies not be allowed to terminate
laws a provision requiring property own- service without providing affected tenants with
erstopayfor their tenants' costs of moving to prior notice anddue process. In cases where
another unit, plus any differential between the rent threatened shutoffs are the result of the landlord's
they paid before the move and the rent they must negligence, tenants should also have the right to
payfor thenew unit.38 This rent subsidy istypically pay for the utilities themselves and to deduct that
requiredfor a period of three to five years. Owners sum from their rents.41 Finally, in cases where
may also be allowed to meet these costs indirectly utility shut-offs may result in immediate harm to
by paying “impact fees” into a municipally the occupants—loss of heat inthe dead of winter,
administered housing trust fund. Better, of course, for instance—utility companies should be
to save the housing in thefirst place, but when that temporarily barred from shutting off utilities at all,
proves impossible, displacees should receive regardless ofwho is at fault. Pennsylvania,
adequate assistance in relocating to housing at least Massachusetts and Washington, DCareafew of the
as affordableasthe units they are being forced to places where one or more of these protections
leave.39 against utility shutoffs have been enacted.
Tenants may also be forced out simply because
Protecting against Eviction. Protecting against the their units have become so dilapidated that they can
loss of units and theeviction of occupants are no longerremainthere. To pre-
sometimes combinedinthe same measure, as in the ventsuch“evictionbydilapidation”tenantshave been
case of a condo conversion ordinance that stabilizes given the right to ensurethe repair of substandard
rents and inhibits evictions in units slated for units under so-called“repair and deduct” laws. If
conversion. Protecting against eviction can take their landlord refuses to correct unsafe or
other forms as well. Most federally unsanitary conditions after being no-
assistedrentalhousing, for example, isgov- erned by tifiedofthesedefects,tenantsmayhiretheirown
“just-cause” or “good cause” eviction statutes, contractorstocorrect the defects anddeduct the cost
of these repairs from rent payments. Some cities 2003, 19). Nonfederal interventions to prevent
take “repair and deduct” much further. In cases predatorylending have been gathering momen-
where tenants cannot afford the out-ofpocket tumsince 1999,whenNorthCarolinapassedthe
expense ofdoing the necessary repairs, a municipal nation's first antipredatory lending law. Within
agency pays to correct the building's defects and thenexttwo years, sixteen other states had
then puts a lien on the repaired property to ensure adoptedlawsof their own, some weak and some
that thecityis eventually repaid.42 strong, for restricting predatory lending. Several
Although security of tenure is typically higher cities haddone the same, including Atlanta,
for homeowners than for tenants, homeown- ersare Chicago, Dayton, Oakland, Philadelphia and
not immune from displacement.43 The most Washington, DC.
common way they lose their homes, especially While such measures provide residents of
during downturns inthe economy, is by mortgage owner-occupied housing with far more protection
foreclosure. This isoften the result of a low-income against eviction than is usually afforded the
homeownerlosing a job or experiencing some other residents of rental housing, they adjust only slightly
financial disruption, forcing the homeownerinto the imbalance of power between the struggling
default.44 The 2001 recession and the weak homeowner and the foreclosing lender. Cities and
recovery that followed, for example, sent mortgage states have, in fact, been reluctant to interfere with
delinquency rates soaring and pushed foreclosures a lender's right to repossess properties with
toward record levels. By theend of 2002, between mortgages in arrears. One of the few exceptions is
400,000 and 450,000 homeowners were in the Pennsylvania's Homeowners' Emergency Mortgage
process offore- closure (JCHS 2003, 18). Most Assistance Program (HEMAP), enacted in 1983
state laws require financial institutions to provide a after an intense grassroots campaign by a coalition
lengthy redemption periodbeforeseizingowner- of unions, churches and community organizations.
occupied property, thus granting the homeowner an HEMAP provides up to 24 months of mortgage
opportunity to curethe default and retain pos- payments forhomeownersthreatened with the loss
session. Many state laws also give homeowners of their homes.What this laudable program does
considerable protection against the loss of their not do, however, but should, is to require a quid pro
“homestead” inthe face of bankruptcy or adverse quo for such public assistance. For example,
legal claims.45 assisted homeowners could grant a public or
A number of states—and a few cities—have nonprofit organization an option to purchase their
responded to the rising threat to homeowner property at a below-market price whenever a
security that is posed by predatory lending. Equity homeowner decides to vacate. Adding this
can be stripped andhomes forced into foreclosure requirement would turn a simple program for
through subprime loans charging exorbitant front- preventing the displacement of financially strapped
end fees, back-end penalties and interest rates mortgagors into a dual-goal strategy of preserving
much higher than the borrower's income can lower-cost housing for present homeowners while
support, and through abusive practices like inflated expanding nonspeculative housing for future
appraisals, financed single-premium credit homeowners (cf. Stone 1993, 238-239).
insurance and repeated refinancing with no benefit
to the homeowner (Hurd and Kest 2003). Not all Protecting against Rising Costs. “Affordability
subprime lending can be characterized as remains America's most widespread housing
“predatory,” but it is this segment of the mortgage challenge,” a problem that has “worsened over the
market where the highest rates ofdefaultand the past 25 years” (JCHS 2003, 25). Between 1975 and
worst abuses of borrowers are found. Low-income 2002, the inflation-adjusted incomes of households
communities are especially vulnerable. Between inthe bottom two quintiles remained nearly flat,
1993 and 2001, the subprime share of home pur- while rents and home prices outpaced generalprice
chase loans in low-income, predominantly minority inflation. Rising costs are leaving millions of
communities shot up from 2.4 percent to 13.4 lower-income people with precarious housing,
percent; the subprime share of refinances inadequate housing or no housing.
soaredfrom 6.8 percent to 27.5 percent (JCHS One of the most effective methods for pro-
tecting tenants against rising costs over the long less energy-efficient dwellings. Recognizing this
run, as suggested above, has been to transfer problem, whilecoping with a decline
property currently owned by private landlords into infederalfundingforresidentialweatherization,
the hands of public-sector or thirdsector anumber of cities and states have usedrevenues
organizations committed to operating such housing oftheirown,discretionaryfundsfromotherfed- eral
on a price-restricted basis in perpetuity. Permanent sources or exactions from regulated utilities to
affordability can be made a realit yfor owner- subsidize energy efficiency improvements in
occupied housing, as well, through resale controls residentialbuildings.48 A fewhave gone further. The
appended to deeds or groundleases (cf . stateofWisconsinandseveralcities, including San
DavisandDemetrowitz 2003). Anumber of cities Francisco, Sacramento, Minneapolis and
and states have, in fact, dedicated majorresources Burlington, have used energy conservation codes
to developing such astock of nonspeculative and time-of-sale ordinances to mandate greater
housing. energy efficiency in rental housing.
Many other cities have attempted to protect
tenants against arbitrary and inflationary rent Enabling Residential Mobility
increases, not by expanding the domain of
nonspeculative housing, but by regulating the The “righttostayput”shouldbecombinedwith the
operation of market housing.46 Approximately 200 “right to move.” It is not enoughforpersons of
U.S. cities and counties have used some form of modest means to have security of tenure in
rent control over the past 25 years, including those accommodations that match their current resources
inNew Jersey, Alaska, California, Connecticut, and needs. They should also have the ability to
Maryland, Massachusetts, New York and Virginia secure other housing when their circumstances
(Gilderbloom and Appelbaum 1988, 27; Keating change and to secure better housing when their
1998). Nearly all municipalities with rent control, circumstances improve. A complement to
moreover, not only regulate rents but protect preservationist strategies protecting residents
tenants against arbitrary evictions. against the pressure to move are mobility strategies
The most serious affordability threat facing removing barriers, penetrating
many low-income homeowners is rising property enclavesandpromotingchoiceforresidentswho desire
taxes, especially in neighborhoods where to move.
gentrification has caused a precipitous increase in
property values. While such an increase may be Removing Barriers. Fair housing is not only the
welcomed by homeowners who plan someday soon first mobility strategy but also thesine qua non for
to sell and relocate, it can be calamitous for those every mobility strategy. Although federal
who have no intention (or means) of moving prohibitions against discriminatorypractices in the
andwhofindit increasingly difficult to pay the rising renting, selling or financing of housing play the
cost of staying. To ease this tax burden, many leading role nationally in removing barriers to
states have adopted some sort of “circuit breaker” entry, all but a handful of states—and
law, limiting (or rebating) property taxes that dozensofcities—haveadoptedfairhousinglaws of
certain classes of homeowners must pay—for their own.49 The protected classes coveredby these
example, homeowners who are poor, elderly or state and municipal laws tend to duplicate federal
disabled. Only a few of these states—Iowa, definitions forbidding discrimination on the
Maryland,Vermont, New Yo rk andPennsylvania basisofrace, color, religion, national origin, age,
being prime examples— have offered similarrelief sex, familial status or disability. Many states and
to renters whoare low- income, elderly or cities go further than the federal government,
disabled.47 however, broadening the pool of“protected classes”
Finally, it is worth noting that a major com- to prohibit discrimination on account of marital
ponent ofrising residential costs, forhomeowners status, sexual orientation, or past or present service
and renters alike, is energy. The cost of heat in the armed forces.
andpowercanputenormouspressureonhouse- holds
oflimited means, especiallythose who live inolder, Chicago'sfairhousingordinancelists“sourcesof
income” among its protections. Massachusetts return of those deposits, with interest, if tenants
extends fair housing protections to persons re- depart without damaging apartments.
ceiving rental housing subsidies like Section 8. Massachusetts has a similarlaw. Connecticut
Some municipalities have gone beyond federal briefly operated, inthemid-1980s, a revolv ing loan
fair housing laws in anotherway as well.To prevent fund that providedlow-interest loans for security
racial discrimination and to promote integration, deposits to homeless households seeking
theyhave attempted to regulate the practices ofkey emergencyhousing. Several other states and cities
sectors of the housing industry, especially the have done the same, offering grants or loans to the
brokers and agents in private real estate firms. homeless to cover rental and utilitydeposits that
According to Keating (1994, 201), these would otherwise bar the door to permanent
regulations take three typical forms. The first is housing.
regulation of“for sale” signs to prevent
blockbusting orpanicselling inareas undergoing Penetrating Enclaves. A second mobility strat-
racial transition. The secondis regulation ofrealtor egyis “fair share”: opening up areas from which
solicitations, prohibiting brokers subsidizedhousing,rentalhousingorlower-cost
fromcontactingpotentialhomesellers who have housing of any kind has been excluded; and
placed their names on a do-not-call list main- making every locality participate more equally in
tainedbythemunicipal government. The third meeting a regional responsibility for providing
requires realty firms who wish to do business with such housing.
the city to register with thecity and to pledge their Nowhere has fair share been taken more se-
cooperation with municipal policies promoting fair riously than inNew Jersey, where two decisions of
housing. the state's Supreme Court and an act of the
In the case ofpopulations with special needs, legislature have promoted the doctrine that every
anumber of states have combined “negative” municipalityhas an affirmative obligation to
sanctions prohibiting discrimination with “af- provide low-and moderate-income housing. In its
firmative” incentives promoting the development Mount Laurel decision of 1975, theNew Jersey
of barrier-free housing. California's Special User Supreme Court declared that everymunicipality
Housing Rehabilitation Program, for example, must eliminate illegal barriers to low-income
provides low-interest deferred payment loans for housing and must “by its land use regulations,
the acquisition and rehabilitation of group homes make realistically possible an appropriate variety
and apartments forpersons withdisabilities. and choice ofhousing.” What theCourt soon
Connecticut has provided grants andlow-interest realized, however, was that removing exclusionary
loans to create congregate housing for the frail barriers might make low-income housing
elderly. Florida subsidizes rents incongregate living “possible” but does not make it probable. Low-
facilities forlow- income adults whoareelderly, income housing will actually becreatedincom-
disabled orblind. Similar state-funded programs, munities that have historically contained little (or
targeted specifically to persons with special needs, none) only if those communities are obligated to
have been developed by Maine, Maryland, provide such housing.
Massachusetts, Michigan, New York, Ohio, In 1983, in “Mount Laurel II,” the Court en-
Oregon and Rhode Island.50 dorsed a strategy of “mandatory set-asides” to
A few cities and states have attempted to re- ensurethisobligation would be met. TheCourt
move anotherbarrier that frequently faces low- encouraged municipalities to require the devel-
income persons whotry to move from one opersof market-rate housing to makeaspecified
apartment to another—or who try, if homeless, to percentage of their units available at an affordable
gain access to any housing at all. This class-based price (rent or sale) for low- and moderateincome
impediment is exorbitant security deposits, households. Complementing this explicit
demanded eitherbylandlordsorby utilities. endorsement of inclusionary zoning was the Court's
Burlington, for example, enacted an ordinance in creation ofwhat became known as the “builder's
1985 limiting the size of security deposits to the remedy.” If a municipality failed to meet its fair
equivalent of one month's rent and requiring the share obligation, “any builder with a reasonable
site denied approval by the municipality—and who 40Bin 1969, a statute that quickly became known
was willing to provide lower-income housing in his as “Anti-snob Zoning.” Chapter 40B gave a state-
development— would be awarded his approvals by wide Housing Appeals Committee the power to
the courts, over whatever objections the town override localzoning boards in cases where
might raise” (Mallach 1988, 12). communities with little subsidized housing reject
In 1985, the New Jersey legislature created a an application from a developer to construct such
state agency,the Council on Affordable Housing housing. Developers may pursue this remedy inany
(COAH), to standardize and oversee the inclu- town where less than 10 percent of the year-
sionary practices emerging out of Mount Laurel roundhousing stock ismadeup of units subsidized
Iand II.51 It also funded aNeighborhoodPreser- for low- and moderate-
vation Balanced Housing Program through a realty incomehouseholdsorwherelessthan 1 1/2 percent of
transfer tax to assist local governments in meeting the town's buildable land is already developed for
their fair shareobligations. By September 2004, subsidized housing. Nearly 30,000 housing units
COAH was able to report that 66,600 inmorethan 200 communities have been builtusing
“affordableunits”hadresultedfromthesecourt- the provisions of Chapter 40B (Heudorfer 2003). 54
orderedpolicies and state-fundedprograms, in- RhodeIsland's Chapter 45-53, enacted in 1991, and
cluding 34,900 units newly built or under con- Connecticut's Section 8-30g, enacted in 1989, are
struction, 13,800 units rehabilitated, 9,100 units similar instructureandproceduretothe
with “realistic zoning in place” and 8,800 units Massachusetts law, although appeals in
provided through“regional contribution agree- Connecticut are made to a court rather than to a
ments” (COAH 2005).52 special state-wide housing committee (Meck,
A number of other states have made quiet Retzlaff andSchwab 2003, 141-158).
progress in opening up suburbia to low- and Oregon has been the nation's leader in at-
moderate-income housing. Some have used their tempting to use state-wide land use planning and
housing trust fundsor other state andfederal growth management laws to promote fair share.
monies to promote the production of such housing Since 1973, State Planning Goal 10 has required
where it was never available before. 53 Some have every city and county to adopt comprehensive
used their powers to remove regulatory plans that “encourage the availability of adequate
barrierserectedbylocaljurisdictions. Others have numbers of housing units at price ranges andrent
used land use planning laws to require a mix of levels which are commensurate with the financial
housing types, tenures and costs. capabilities of Oregon households.”Despite
A few examples: Florida's State Apar tment numerous attempts by local governments to
Incentive Loan Program, initiated in 1988, provides circumvent or challenge this requirement,
low-interest loans to developers who build rental Oregon'scourts have not only upheld Planning Goal
housing for very-low-income persons in “a mixed- 10, but interpreted it to mean that local
income setting.” The state of Washington requires governments have an affirmative duty to facilitate
all cities with more than 20,000 residents to adopt production of the kinds ofhousing that lower-
ordinances allowing the development of accessory income people can afford (Toulan 1994; Abbott
rental units in existing single-family homes 2002).
(Nelson 2003, 5). Minnesota's Livable Oregon is not alone. Florida and Washington,
Communities program, createdin 1995, provides likeOregon, requiremunicipalities to adopt
grants andloans to “first tier” suburbs surrounding affordable housing plans. Connecticut's Fair
the Twin Cities as incentives to increase the Housing Compact Pilot, enacted in 1988, en-
production of lower-cost housing and to eliminate courages municipalities to enter into “regional
regula- torybarrierstosuchhousing(Meck, Retzlaff compacts,” setting fair sharegoals by consensus.
and Schwab 2003, 88). California established a procedure for setting fair
Massachusetts, Rhode Island and Connecticut share housing goalsthroughregional councils of
have attempted to accomplish similarresults by government in 1980 and has required a “housing
regulatory measures similar to New Jersey's element” in all municipal plans since 1989.
“builder's remedy.” Massachusetts adopted Chapter Vermont has required all municipalities to plan for
low- and moderate-income housing since 1988.55 suspicion (or outright hostility) of long-time
At themunicipallevel, fair share housing has residents toward
usually been pursued through voluntary compacts newcomerswithlowerincomesanddarkerskins tend
negotiated among multiple jurisdictions or to keep the doorsof many suburbs firmly shut. 56 In
throughregionalhousing plans promulgated by a recognition of the harsh reality that penetrating
regionalplanning commission or a council of enclaves isgoing to take more than subsidizing
governments (COG). The nation's first fair share demand through the provision of tenant-based
plan, the Dayton Plan, was formulated by the rental assistance, some cities and states have begun
Miami Valley [Ohio] Regional Planning using their powers and resources to subsidize
Commission in 1970. Other fair share plans include supply, promoting choice by stimulating the
those developed by the Denver Regional COG, the production of below-market housing inareas
Metropolitan Washington COG, the Metropolitan outside of central city neighborhoods.
Council for the seven-county region surrounding
Minneapolis-St. Paul,and the Portland Metro Promoting Choice. The final mobility strategy can
Council for the three counties surrounding be called “fair choice.” While this might be
Portland, Oregon (Listokin 1976; Abbott 2002; regarded as merely a minor variation on the pre-
Meck, Retzlaff and Schwab 2003). These plans set vious strategy, promoting choice goes beyond
numerical targets for allocating subsidized housing, “opening up the 'burbs.” If mobilityistobe real for
low-cost housing or new housing of anykind persons at every level of income, there must not
among all themunicipalities of aspecifiedregion. only be enoughbelow-market housing but also
Rarely, however, have these allocations been enough diversity ofhousing tenure, type and locale
backed by incentives sufficient to reward a willing to accommodate thevariety of needs that people
municipality for meeting its fair share bring with them when they go looking for a place
responsibility orbypenalties sufficient to force a to live.
reluctant municipality into accepting its Promoting multiple models of housing as a
responsibility. matter of public policy has been rare, especially
Some state and local programs, by contrast, when the intended beneficiaries are households
have attempted to promote residential mobility, not with very low incomes. As a moral judgment, the
by producing lower-cost housing in places where poor are commonly believed not to deserve, at
little has existed, but by putting into the hands of public expense, anything much better than
low-income households the financial resources that modestflats in large rental complexes. As a prac-
will enable them to move wher- ticaljudgment, the poor are widely believed not to
evertheywanttogo.SanDiego,forexample,created a possess the financial orpersonalwherewithal to
relocation fundin 20 0 1 , providing money for manage, much less own, the housing that is
security deposits, loan closings and moving costs in “theirs.” As a political expedient, the poor are
order to help low-income minority families relocate systematically excluded from areas where their
to neighborhoods with lower concentrations of very presence is believed to threaten thevalue of
poverty. At least five states (California, adjoining properties. The customary result, despite
Connecticut, Maryland, Massachusetts and New some experimentation hereand there with scattered-
York), one city (Seattle) and one county site projects, shared living arrangements, tenant
(Montgomery County, Maryland) have operated management and suburban development of below-
programs providing tenant-based rental assistance market housing, has been a cookie-cutter approach
for low-income households, using nonfederal to subsidized housing offering neither a choice of
funds. accommodation nor achance to move.
Many of these subsidized tenants soon discover, Catherine Bauer was one of the first housing
however, that their new-found ability to payfor a advocates to warnagainst this anti-mobility
market-rate apartment does not guarantee access to mindset. As early as 1957, while lamenting the
many suburban enclaves. Pervasive restrictions on “drearydeadlock” ofpublic housing, she argued
the construction of multifamily rental housing, the that“what is primarily needed, not only forlow-
unavailability of public transportation and the income slum dwellers and minority groups but for
the great mass of middle-income families inall their istruly wheretheyprefer to be.
infinite variety of taste and need, is more choice in When multiple models of housing are devel-
location, dwelling type, and neighborhood opedwithinthe same locale, thetransition from one
character” (Bauer 1985, 284). A number of cities to another is made less difficult than before. People
have heededher advice. They have attempted to of modest means are provided not only with a
diversify their stock of low- and moderate-income choice of housing but also with a chance to move.
housing, creating an integrated system oflower-cost When multiple models are developed within the
market housing and nonmarket housing offering same region—penetrating, in particular, suburban
more diversity and more mobility than is typically enclaves that have long been hostile to any
available to persons of modest means. In market diversity in housing tenure, typeorprice—peopleof
housing, they have enacted zoning changes modest means are provided not only with a chance
supporting the production of smaller houses to move but with a choice ofplace. 57 These are
(through relaxed “floor-size minimums”) and oppor tunities too rarely provided by either public
thecreation of accessorydwelling units (Nelson policy or the private market.
2003). In public housing, theyhave supported lower
densities, scattered sites, townhouse designs and
tenant management. In third-sectorhousing, they CONCLUSIONS
have supported a multitude of housing tenures and
types, including multiple forms of private, Recent interventions by cities and states to address
nonmarket homeownership like cooperatives, the housing needsoflower-income populations have
limited-equity condominiums and community land been plentiful, innovative and frequently
trusts. In partnership with neighboring towns, they progressive, lending credence to the notion that
have shared information, expertise andrevenues to devolution may allow more room for maneuver
promote regional solutions that disperse, rather than is commonly feared.Indeed, with so much
than concentrate, the supply of housing that is good having happened at these lower levels of
affordable to low- and moderateincome households government during the last two decades, itmaybe
(Rusk 1999; Orfield 1997). fair to askwhetherweshould stop worrying about
Another sort of residential mobility— another devolution and focus, instead, on seizing those
sortof choice—is made possible in some cities by opportunities that devolution presents for
the creation of multiple forms of housing in redistributing the benefits of growth, expanding
neighborhoods with a preponderance of low- nonspeculative housing, preserving lower-cost
income renters. Although most municipal programs housing and enabling residential mobility.
promoting inner- city homeownership are focused I would answer that worry—even fear—
on drawing middle-income homebuyers into inner- remains a reasonable response to devolution. Yes,
city neighborhoods, raising reasonable fears among there are things that cities and states can dotomake
presentresidentsofgentrificationandtheirown housing more abundant, affordable, decent and
displacement (Varady and Raffel 1995; Lutton secure. But the dangers are real. Devolution is
1997), such programs need not be aimed exclu- resulting in less money for lower-income housing,
sivelyatattractingaffluentnewcomers.Theycan also less targeting for lower- income peopleandlower-
be designed to help a neighborhood's own sons and income communities, and more political clout for
daughters to stay put (or to return). Many low- interests inimical to both. These dangers have been
income neighborhoods lack any di- magnified, moreover, by changes occurring over
versityinthetypeor tenure of their housing stock, the past two decades that weaken theability of
giving present residents little choice but to leave cities and states to respond creatively and
the neighborhood, should they have the means and effectively to whatever opportunities devolution
desire to improve their housing situations (cf. maypresent.
Davis 1991, 165). A comprehensive mobility
• Economic restructuring, accompanied by
strategy should not only help low-income
corporate downsizing and the accelerated flight
peopleto“move to the‘burbs”' but help those who
of jobs to suburbs, Sunbeltand Third World, has
seek better housing to “stay in the‘hood',”ifthat
left many urban centers bereftof jobs and made surpluses ofthe 1990s have been replaced by
growth more elusive for municipalities that soaring deficits, many states have not only been
mightotherwise considerre- distributing the cutting deeply into their own bureaucracies but
benefits of growth. have begun cutting services and benefits for
• Concentration and centralization in the banking their owncitizens.
industry has made local activism around
community reinvestment more difficult than in These changing conditions makecoping with the
days when there were more banksand smaller dangers and demands of devolution more difficult
banks controlled closer to home. CRAactivism than everbefore. Might anything make it easier?
has been undermined, as well, by the growing Probably not. Yet there are things that can be done
proportion of mortgages and other financial to improve the odds that cities and states will
services being handled by institutions not actively pursue those opportunities that still exist
subject to theCom- munity Reinvestment Act.58 and will actually succeed,onoccasion, inmaking
• The stagnation (or decline) in annual earnings housing more abundant, affordable, decent and
for every income groupwith exception of the secure for those who need itthe most.
top quintile has made households just above the The most important thing to do is forhousing
povertyline more precarious—and harder to advocates insideand outside ofgovernment to
house (see Chapter 1). devote more attention not only to the kindsof
• The de-funding of General Relief programs at muscular interventions described in this chap-
the state and county level, combined with terbut also to the connective tissue among them.
“welfare reform” at the federal level, have This is partially a matter of tying together multiple
punchedholesinasafetynetthatalreadypro- vided strategies—and multiple constituencies— into a
only bare-bones protection forhouse- holds single, comprehensive policy. But connecting one
below the poverty line. housing strategy to another does not go far enough.
• The restructuring of federal housing assistance, Housing itselfmust be linked to issues, interests and
including the deregulation ofpublic housing constituencies outside its immediate domain. There
authorities, the substitution of tenant- are many possibilities here, though three hold
basedsubsidiesforproject-basedsub- sidies, the special promise for helping housing to weather the
replacement oflong-termsubsidy contracts by storm ofdevo- lution.
those with annual extensions and the production First, the connection between housing devel-
of a million tax-credit units with affordability opment and community development should be
controls ofshort duration, have all made a strengthened, not abandoned. Housing has long
dwindling supply of subsidized housing less been a bellwether of neighborhood wellbeing or,
secure. conversely, of neighborhood decline.
• The reallocation of federal spending toward Manypublicandprivate interventions aimed at
national security afterSeptember 11, 2001, the stabilizing or revitalizing residential neighborhoods
massive cost ofinvading, occupying and have focused, accordingly, on improving the local
rebuilding Afghanistan and Iraq,and massive housing stock. Combining the two has made for
cutbacks in federal taxes (including a ten-year good projects—and for good politics—at both the
phase-outoftheestatetax) have darkened the state andlocallevel.Of late, however, the centrality
prospects forfunding any new programs for ofhousing to community development has come
housing and community development while under attack.60 Thiscrescendoof criticism is a useful
threatening the funding of programs that al- reminder that jobs, schools, safety and services
ready exist. play as large a role in determining a neighborhood's
• The consolidation and downsizing of state fate as does the condition and affordability of its
agencies charged with the administration of housing. But it runs the risk ofpushing the
housing and community development programs pendulum too far theotherway, where housing
has made many states less ableand agile in isremovedfromthemixofstrategiesforrebuild- ing
handling new responsibilities devolved from community and where nonprofits are badgered or
above.59 Furthermore, as the budgetary bribed into retreating from tasks that theydo well in
pursuit ofmore elusive (anddu- bious) objectives to force local lenders into complying with the
likeseeding fragile economic enterprises inthe CRA.66 Dozens of cities have low-income housing
rocky soilsofthe inner city.61 If nonhousing aspects advocacy organizations. Over thirty states have
of community development have been slightedinthe statewide affordable housing coalitions. Across the
past, thesolution lies not in ignoring housing, but in country,over 2,000 community-based nonprofits
enhancing the links between housing and services, struggle daily to provide housing that low- and
housing and transportation, housing and jobs, moderate-income people can afford. Not all of
housing and schools, and the like.62 These issues— them combine organizing with development; not all
and their scattered constituencies—must be joined of them join willingly with residents, activists and
togetherifeitherhousing or community development other nonprofits to pressure the public sectorinto
istohave much hope ofadequate funding from state continuing its support for below-market housing.
and municipal governments in the years ahead.63 But manydo. Nonprofit housers, in a number of
Second, connections between the preservation locales, have become a significant politicalforce
of lower-cost housing and the preservation with capacity,credibility and clout.67
ofhistorical, natural and culturalresources should be What cities and states did right for housing
strengthened. Those whofight for the stewardship during the recent past happened, in large measure,
of residential affordability often share many of the because organizations and coalitions like these
same values, supporters, funders—and enemies— organized and mobilized city by city and state by
as those whofight for the stewardship ofhistoric state to make it happen. The current wave of
structures, open spaces, forests, farmlands, devolution will demand more of the same. If safe,
wetlands and other natural resources. Admittedly, decent, affordable housing forlow- and moderate-
there are issues of development, class and race that income people istoremainapri- ority of cities and
often divide these groups. At the state and local states that have been innovators inthe past, if it is to
level, however, housing, conservation and become a priority of cities and states likely to
preservation organizations are discovering inherit even more responsibilities from the federal
newways ofworking together for common ends, government in the future, theofficials who lead
combining their clout for mutual gain.64 The fight those cities and states must be pushed in that
against sprawl, in particular, is beginning to pro- direction. There is much they can do. There is little
duce some surprising alliances, with considerable they will do without an organized, mobilized
potential for advancing the cause oflow- and constituency peering intheir windowsandpounding
moderate-income housing.65 on their doors.
Finally,the connection between housing and
organizing should be strengthened—not inthe
spiritof embracing something new, but ofreviv- ing NOTES
something old, getting the housing movement
“back to its roots” (see Chapter 10). It is true that 1. For a sampleof the kindsof extravagant claims
that have been made for “devolving” money, missions
many cities and states have been pioneers in and authority to the states—and, to a much lesser extent,
supporting lower-cost housing, most recently in to cities—see Gold (1996), Weaver (1996), Cara- ley
response to Washington's unilateral withdrawal. It (1996), Engler (1997) and Norquist (1996).
is also true, however, that few of them plunged into 2. Quigley and Rubinfeld (1996, 300) discover “no
the deep blue sea without a vigorous push. As systematic evidence suggesting a better management
Goetz (1996, 177) has noted, cities and states were capacity by local government.” Downs (1997) suggests
that Congress “isshifting a lot ofpower to the wrong
“prodded into that response by a community-based
levels.” Caraley (1996, 8) concludes that “there is no
housing movement that has combined long- evidence to support a proposition that all state governors,
standing neighborhood concerns about legislatures and bureaucracies aremoreef- ficient and
disinvestment and gentrification with the interests dedicated than the organs of the federal government.”
of tenant organizations, community-based social Etzioni (1995) puts it more bluntly: “If the large-scale
service agencies, and affordable housing transfer of monies and missions from Washington to 50
developers.” Many cities and states have state capitols isthe way to curb government, then copy
machines areaway to cut paperwork.”
community reinvestment associations, established
3. The Community Development Block Grant and Washington shatteredwhatever consensus mayhave
Program is a perfect example. Given the flexibility to once existedfordevolving federal responsibilities for law
design their own programs, cities and states have tended enforcement, airline security and public health. The
to spread housing and community development monies centralizing tendencies of national security have a way of
more widely, instead of concentrating CDBG funds in trumping the decentralist proclivities of devolution.
areas most in need; they have tended to shift funds from 9. It is well to remember that, despite the fulsome
affordable housing to economic development and public rhetoric about “returning” responsibilities to lower levels
facilities; and they have favored homebuyer assistance of government, many cities and states never enacted—
over tenant assistance (Goetz 1995; Hayes 1995, 211- and never would have enacted—many of the programs
215, 242-243; Davis, Wasserman and Staudinger 2000). that Congress isnow commending into their care. Left to
4. Partof the solicitude shown by state legislatures their own devices, many cities and states use their
to developers, landlords, bankersand otherwellheeled financialresources andregulatorypow- erstomake housing
private interests is no doubt engendered by many less plentiful, less affordable, less desirable and less
legislators' personal ties to these interests. In far too many available to nonelderly households of limited means.
state legislatures, conflicts of interest are both rampant Relaxing federal oversight for these cities and states is a
and undisclosed (see Center for Public Integrity 1999). recipe not for innovation but for the diversion of
5. Pennsylvania is not the only state to preempt resources away from neighborhoods, tenures and people
local regulation of condo conversions. During the late most in need.
1970s and early 1980s, preemption was used to re- 10. Idonotmeantosuggestthateverypublicinter-
scindmunicipalmoratoriums inNewJerseyandMary- land, vention reviewed in this chapter was instituted in the last
to terminate local condo conversion ordinances in 25 years or instigated in direct response to devolution.
Massachusetts and Maryland, and to prevent the passage Manywere, but some—like building codes and fair
of such ordinances inWisconsinand Virginia. A state housing protections—have a much longer pedi-
preemption bill failed in California only because of gree.Devolutionhasprovidednotonlyanoccasionfor
strong opposition from tenants andlocal governments innovation, but an impetus to revive and strengthen
(Lauber 1984, 292-293). earlier interventions.
6. As Yeoman ( 1 997, 2 1) has pointed out, the real 11. This is not to say that every municipal regime is
estate industry is hardly alone inenlisting sympathetic equally and unequivocally pro-growth. There are many,
state legislatures to curtail the regulatory impulses of in fact, that are quite ambivalent about further
citiesandcounties.Businessgroupsof manykinds “are growth,especiallyintheirown populations.Evenwhen
going to state legislators, with whom they have more pursued under theguise of“sustainable development” or
pull, and asking them to pre-empt local ordinances.” A “smart growth,” however, few regimes have been able to
significant exception to the business sector's preference avoid entirely the competition with neighbor-
for state-levellawis land use control.The private real ingmunicipalitiesfortheir“rightful”shareof a region's
estate industry has historically opposed state-level economic activity and investment.
planning and zoning, preferring to deal with local or- 12. Theorigins ofinclusionary zoning inNew Jersey
dinances and local officials. are rooted in two decisions of the New Jersey Supreme
7. Even inthe case of many categorical programs Court: Southern Burlington County NAACP
like public housing, urban renewal and Model Cities, etal.v.TownshipofMountLaurel, 67NJ151 (1975) and
municipal (and state) governments were granted an Southern Burlington County NAACP et al. v. Township
extraordinary degree of discretion and control over these of Mount Laurel, 92 NJ 158 (1983). They have come to
federally fundedprograms. It isarguable, in fact, that be known more simply as “Mt. Laurel I” and “Mt. Laurel
many of thefailingsusuallyattributed tothesepro- grams II.”
were due not to a centralized structureoffederal 13. Madison, Wisconsin considered a “reverse-
controlbuttoadecentralized (“devolved”)structureof local linkage” policy in the early 1990s that would have
control—a heresy seldom heard above the rising extracted fees from new commercial development outside
drumbeat for turning over most federal monies and of the downtown to support the development of lower-
missions to lower levels of government. cost housing in central city neighborhoods. This
8. As Donahue (1997) has observed, the wisdom of mandatory measure was voted down by the city council.
transferring power away from Washington and toward 14. The first states to enact their own CRA laws
lowerlevelsof government (especially toward the states) regulating state-chartered financial institutions were
enjoys “something as close to consensus” as ever occurs Iowa, Massachusetts, Missouri, New York, Ohio,
in American politics. Eisinger (1998, 316) has made a Washington and West Virginia (National Center for
similar point. On the other hand, while there continues to Policy Alternatives 1988, 15-78). Access to insurance can
be widespread support for devolution in the case of beasmuch of a problem as access to credit in low- income
housing, community development and social services, the areas containing large numbers of minority residents
September 11, 2001 terrorist attacks onNew Yo rk City (Squires 1995, 1997; Luquetta and Goldberg 2001).
Illinois, Minnesota, Missouri, Wisconsin, California and Burlington waives 50 percent ofrequiredimpact fees
Massachusetts require geographic disclosure of insurance forprojects serving persons below 75 percent of median
policies. In 1988, Massachusetts became thefirst state to income—if such affordability is made permanent.
impose reinvestment requirements for residential 21. State support for the nonmarket housing
insurance that are comparable to CRA requirements for developedbynonprofit organizations can be provided not
residential lending. only directly inthe formof grants orloans but also
15. This list of states is found in Stone (1993:248). indirectly inthe form of tax credits or tax exemptions.
Antispeculation efforts have been focused more narrowly Florida's “community contribution tax incentive
in Montgomery County,Maryland andBur- lington, program,”for example, provides tax credits forprivate
Vermont. They have slowed the speculative conversion corporations that donate resources to community
of rental housing to condominiums by assessing an development projects sponsored by nonprofits. The
“impact fee” against thesales price of each converted “affordable housing tax credit” enacted in Illinois in 2001
unit. These fees are depositedinto a housing trust fund to allows corporations and individuals a 50-cent credit
be usedlater to create lower-cost housing. toward their state income tax for every dollar in cash,
16. Monroe County, Florida has funded low- income land or property donated for the creation of affordable
housing not with a tax on the transfer of properties but housing. Connecticut and California operate their own
with a tax on theturnover of short-term occupants. A “bed low-income housing tax credit programs, funded with
tax,” collected from hotels and motels intheFloridaKeys, state dollars. California also exempts from taxation one-
is usedbytheMonroe County Land Authority to purchase half of the capital gain on certain low-income housing
lands either for conservation orfor the development projects if sold to a nonprofit corporation, a public entity
ofbelow-market housing. or a limited-equity cooperative. Important here as well is
17. Thirty percent of the units subsidized through the states' use of the federal Low Income Housing Tax
Florida's collection of real estate transfer taxes serve Credit. Although most states have invested the bulk of
households earning less than 50 percent of the area their tax credit allocation in projects produced by for-
median income (AMI); 30 percent serve households profit developers, Oregon and Vermont are two states
earning 50 to 80 percent of AMI; and forty percent serve that have targeted most of their credits to projects
households earning 80 to 120 percent of AMI. sponsored by nonprofit corporations.
18. For example, the inclusionary zoning ordinance 22. Both quotes appear in a widely distributed
adopted by Montgomery County, Maryland in 1975 is brochure published by Connecticut's Department of
often cited as a model by proponents of inclusionary Housing, circa 1987, describing the state's Forever
zoning. This ordinance has a fatal flaw, however: Housing programs.
affordability requirements lasting only 10 years for 23. These permanent reductions in property taxes are
homeownership units and 20 years for rental units. More quite different from the PILOT (payment in lieu of taxes)
than 11,000 units of housing made initially agreements established in earlier years for public housing
affordabletohouseholdsearning under 65 percent of AMI and Section 202 elderly housing. Tax assessors are
have been produced through Montgomery's inclusionary slowly coming to accept, often because they have been
zoning ordinance; by 2003, only 3,800 of these forced to dosoby a state court ruling, that privately owned
inclusionary units remained affordable (Axel-Lute 2003, housing with a legally recorded, long-term restriction on
9). rents andresales has a taxable market value that is less
19. More detailed discussions of the rationale for than a comparable property with no such encumbrance.
increased municipal and state support of “third sector Two examples where a state court has considered this
housing” can be found in Davis (1994, 2000), Davis and question are inNew Jersey, Prowitz v. Ridgefield Park
Demetrowitz (2003), and Barton (1996). Village, 584 A.2d 782 (1991); 568 A.2d 114 (1989); in
20. Another typeof support for nonspeculative Oregon, Bayridge Assoc. Ltd. Partnership v. Department
housing is less common but still noteworthy: the granting of Revenue, 321 Oregon Reports 21 (1995).
of regulatory preferences or exemptions. Projects that 24. Massachusetts began subsidizing the operations
combine initial affordability with lasting affordability of approximately 30 CDCs in 1976 through its
have been granted zoning bonuses for density, height or Community Enterprise Economic Development Program.
coverage. For example, some of the projects developed This program was defunded in 2003. New York has
by BRIDGE, a nonprofit housing developer in San annually subsidized the operations of more than 100
Francisco, have been allowed higher densities in areas Neighborhood Preservation Companies and about 40
where such “up-zoning” would never have been granted Rural Preservation Companies since 1978. The North
to a for-profit developer (Wheeler 1990:217). Projects Carolina Community Development Initiative provides
withlasting affordability have also been exempted from operational funding for “mature” CDCs, using a mix of
impact fees or transfer taxes. Vermont, for example, public and private monies. New Hampshire provides
exempts housing that is permanently affordable from the operating support for a network of twelve nonprofit
payment of real estate transfer taxes. The City of housing developersvia its Housing Futures Fund,
capitalized through a one-time tax credit for banks addition of new subsidized housing for poverty-level
investing in the Fund. “Capacity grants” for Vermont's renters offset the removal of unsubsidized, low-cost
nonprofit housing delivery system are provided by the rentals only in the Midwest. In the rest of the country, the
Vermont Housing and Conservation Board. number of low-cost rentals subtracted from the affordable
25. Although a nonprofit preference for disposing of housing inventory exceeded the number of
surplus public propertyistypicallyhandled through subsidizedrentalsthat wereaddedby36percent—anet
administrative rules, itmay also be enshrined in law. For decrease of 902,000 affordable units (JCHS 1995, 31).
example, Chapter 440 was incorporated into Oregon's 31. According to Retsinas (1999), lower-income
statutes in 1989 (ORS 440.2812). This law declares that homeowners tend to live in older homes with more
“it will further the public interest to put unused state- physical problems than do higher-income homeowners.
owned real property at the disposal of nonprofit housing They repair their homes less often and spend less when
providers and housing authorities to address the housing performing repairs. Nearly 2 million lower-income
needsoflow-income individuals and families.” State households live in homes in such poor repair that their
agencies are given authority to “sell, convey, or lease” homes may pose health and safety hazards. (See also
such unused property for the purpose of providing “low- JCHS 2003.)
income housing options,” including emergency housing, 32. Code enforcement is seldom sufficient, however,
transitional housing and “permanent low-income housing in preventing the loss of units from fire when the culprit
units.” is arson. Stone (1993:247) suggests that, in cases of
26. Other notable municipal programs for trans- arson, code enforcement and criminal investigation be
ferring tax-foreclosedpropertyinto the handsof non- combined with municipal laws requiring insurance
profitsandcooperativesareCleveland's LandBankand the proceeds to be used to rebuild fire-damagedhousing (for
Washington, DC Homestead Program. Often, the biggest current residents), with the municipality as additionalloss
hurdle faced by local governments in dealing with tax- payee.Healso suggests that landlords be required “to pay
delinquent properties are state laws that create a displaced tenants' relocation expenses and housing costs
cumbersome foreclosure process and a lengthy in excess of their pre-fire rents for a period of at least one
redemption period.Anumber of states have amended their year.”
laws in recent years, however, to make it easier and faster 33. A serious loopholeexists in many of these ordi-
for cities to foreclose on tax-delinquent properties. nances. They allowlandlords to avoid housing preser-
Florida's amendment is worth special note; there, vation requirements by slowly emptying their buildings
legislation was enacted that permits community and holding them vacant. To plug this loophole, Hartford
development corporations to purchase tax liens from the enacted an Anti-blight Ordinance that fines landlords for
county in which a tax-delinquent property is located and eachhousing unitthat remains emptyfor over
prevents the former owner from making claims at a later 60daysandthatalsopresentsafire hazard, attracts illegal
date (Fannie Mae Foundation 2001). activity or becomes dilapidated. San Diego, Seattle,
27. Vermont's statute authorizing “housing subsidy Cincinnati and Burlington have enacted similar
covenants” (27 V.S.A. 610) was enacted in ordinances, imposing stiff fines on landlords who leave
1989. Maine's statute authorizing “affordable housing residentialbuildings vacant forlong periods of time
covenants” (33-AM.R.S.A.121)and theMassachusetts without any movement toward improving, renting or
statute authorizing “affordable housing restrictions” selling them.
(Chapter 184, Section 26) were both enacted in 1991. 34. Although usually targeted to the preservation of
28. These cooperative housing statutes—found at unsubsidized rental housing, regulatory measures like
M.G.L. 157B (Massachusetts), 14 V.S.A. 1598 antidemolition and anticonversion ordinances can also
(Vermont), Section 2002.273.11, Subdivision 8 of the serve as powerful deterrents to the loss of publicly
Minnesota Statutes, and Section 33007.5 of the California subsidized, privately owned rental housing. For instance,
Health and Safety Code—make special provision an overlooked aspect of the often-told story of
forlimited-equity cooperatives, sanctioning the use of savingNorthgateApartments,anexpiring-use Section
perpetual restrictions on the transfer of member shares 221(d)(3) project in Burlington, Vermont, isthe
inorder to preserve theaffordability of housing for low- enactment of a condo conversion ordinance in 1987, two
and moderate-income households. years prior to the date when the project's affordability
29. I am not saying that preserving affordability and controls were set to expire. This ordinance moderated
preserving historically significant features are always Northgate's market value and made its owners more
incompatible, nor that the latter must necessarily be willing to sell to a consortium of third-sector and public-
sacrificed to the former. I am asserting that preserving sector organizations acting under the direction of
affordability should have a prior claim over public Northgate's tenants.
resources. 35. Mention should be made here of a common
30. Between 1974 and 1993, an especially dark pe- preservation strategy employed by city and state
riodinthe federalretreat from subsidizedhousing, the governments: granting or loaning money to private,
profit-orientedlandlords for the rehabilitation of their bills.Tenantsmayassumetheseutilitypaymentsthem- selves

rental property. Although such rental rehab programs can and deduct them from their rent. Landlords may have gas,
be effective in preserving the physical structures, most of electric or water service terminated, moreover, only after
them do little (or nothing) to preserve affordability, submitting a sworn, notarized statement to the utility
preserve subsidies or enhance tenant security. certifying that the units are vacant or that tenants have
Rentalrehabprograms can bemademoreeffective and fair, consented to the shut-off.
however, by targeting eligibility, preventing dis- 42. Cities typically use liens that are repaid upon
placement, maintaining affordability and giving non- sale of the property. Zarembka (1990, 134), however, has
profits, a public housing authority or residents themselves recommended using tax liens that must be repaid within
the first right to purchase assisted properties. one year of the city's repair of the property. At theend of
36. Rehabilitation programs for low-income this period,themunicipalitywould have the
homeowners are probably the most common and most righttoacquirethe propertybyeminent domain if the
popular municipalhousing programs. Less com- landlord has refused to reimburse thecityforits work.
monarehomeownerrehabprogramsthatareoperated by a 43. There is one class of homeowners whose
state agency. Maine provides a good example, however. security is just as precarious as tenants: the owner-
Maine's housing finance agency contracts directly with occupants of mobile homes. Because they lease spaces
community action agencies to close and monitor for their manufactured housing, these homeowners are as
approximately 1,200 home improvement loans each year, vulnerable as any tenant to rising rents and arbitrary
targeted to low-income homeowners. evictions. (It is arguable that these homeowners are more
37. Unpublished description of the ECHO Program vulnerable than the typical tenant, since most mobile
drafted by Michael E. Stone on May 27, 2002. homes are not “mobile” at all, fixed as they are to a
38. The model for most state and municipal laws permanent foundation. Even when they can be moved,
governing the relocation of tenants isthe federal Uniform their owners often find that no other park will accept a
Relocation Assistance and Real Property Acquisition used mobile home into its midst.) Nearly every state with
Policies Act of 1970 (URA). Federal agencies are a substantial number of mobile home parks has laws
required by the URA to pay moving expenses and to governing their rental practices and evictions. The
assist in paying for replacement housing for strongest protections aretobe found in Florida and
homeownersor tenants who lose their homes because of California. See Barr (1997, 1998). Florida law allows
actions initiated ordollarsadministeredbya federal agency courts to overturn rent increases that are “unreasonable.”
(see Hartman 1998). Similar laws at the state or California law allows municipalities to enact rent control
municipal level require relocation assistance for persons ordinances for mobile home park spaces and,asof 1997,
displaced by state agencies, by municipal agencies or, in about 100 jurisdictions haddone so. In both states,
some cases, by private parties, even those who are not residents of mobile homes can be evicted only for “just
using public funds. cause.” In Maryland, park owners who decide to sell their
39. Hartman, Keating and LeGates (1982, 42) acreage for more lucrative development must give mobile
pointed out long ago a problem with preservation home owners in their parks a minimum of 12 months
ordinances that contain only relocation assistance: “If the beforeeviction and must produce a relocation plan
only barrier to demolition is dollar penalties and (Hartman and Robinson 2003, 489).
relocation assistance payments, developers will probably 44. It is not only financial institutions that force
absorb these as a cost of business and will continue to homeowners into default. Some 20 million homes—
demolish lower-rent housing because alternative uses are nearly one-fifth of the nation's total stock of owner-
so profitable.” occupied housing—are governed by homeowner
40. A prohibition against a particular type of unjust associations. As Hartman and Robinson have pointed out
eviction, known as a “retaliatory eviction,” has been (2003, 482), many of these associations have the “power
enacted by some cities and states that otherwise do little (used frequently and often capriciously or vindictively) to
to interfere with the landlord's right to evict. Under such evict homeowners via the foreclosure process, often
a measure, tenants may not be removed from their units without due process.”
as a punishment for complaining to a public agency about 45. Less common nationally, but a serious problem
health or safety v iolations in their building; for deducting in some locales, have been various schemes for wresting
money from their rent to pay utility bills that the landlord title away from unsuspecting homeowners, including land
should have paid; or for joining a tenants' organization. contract sales, sale-lease option plans and lien sale
Massachusetts, for example, has never enacted “just contracts. A number of cities and states have been moved
cause” eviction, but its laws against retaliatory eviction to enact fraud prevention measures when such scams
are quite strict. have come to light (see, for example, PRRAC 1992).
41. Under Pennsylvania's Utility Services Tenants' 46. These strategies need not be mutually exclusive.
Rights Act, for example, tenants must be notified if their Santa Monica's housing policy in the 1980s, for example,
landlord is seriously delinquent in paying utility combined rent control with public support for social
housing (Capek and Gilderbloom 1992, 261). In suburban boundary, even when inclusionary units have
Berkeley, on the other hand, Barton (1998, 108) been sited in suburbia (cf. Wish and Eisdorfer 1997;
contendsthat it was “only with the demise ofrent control” Boger 1997).
that progressive and moderate city officials began to 53. Five state-supported housing trust funds that
support a social housing agenda in earnest. have promoted housing on a regional basis are
47. An innovative variation on this theme, describedinMeck, Retzlaff andSchwab 2003, 107-140.
combining tax relief with rent stabilization, isthe 54. Massachusetts may also be the only state to have
Community Stability Small Homeowners Tax Credit, linked all discretionary state funding for com-
introduced in the New York legislature in January 2003. munitydevelopment to a municipality's willingness to
Owners of 1-3-unit buildings would receive a real estate allow housing development in general—and the de-
tax abatement equal to 50 percent of the difference velopment of housing for low- and moderate-income
between the rent they are currently being paid and the families in particular. Executive Order 215, issued by
“fair market rent,” determined by the state, for each Governor Edward King in 1982, instructed all state
apartment. Owners of 4-5-unit buildings would receive a agencies to withhold grants for economic development,
60 percent abatement. (See infrastructure improvements and otherprojects from
http://www.fifthave.org/cstc/cstc.html). “cities or towns which have been determined to be
48. State housing finance agencies, in particular, unreasonably restrictive of new housing growth.” This
have a chance to play a critical role in promoting energy executive order has seldom been invoked or enforced by
efficiency in the housing they finance, whether that the state, however, since the administration of Governor
housing isnewly constructed or newly purchased, owner- Michael Dukakis, who left office in
occupied or renter-occupied. Although HFAs have done 1990.
much to expand the supply of low-cost housing (cf. 55. Good intentions and good planning notwith-
Terner and Cook 1990), few have made energy efficiency standing, it must also besaid that none of these states, not
a high priority. Sachs and Hunt (1992) tell the story of even Oregon, has committed the financial resources that
one that has. are necessary to turn fair share pronouncements into fair
49. State and municipal fair housing laws, similar in share production. The limitations ofland use planning as a
structure to federal law, first appeared in the 1960s. means ofpromoting fair share housing are illustrated in
California was thefirst state to enact a fair housing law the case of Minnesota,
ofits own. Oberlin, Ohio, was thefirst municipality discussedbyGoetz,ChappleandLuckermann (2001).
(Keating1994,197). 56. My focus here is primarily on economic inte-
50. State programs providing financial assistance for gration: state and municipal efforts to open up affluent
specialhousing needsare describedinChapterSix of the suburbs to persons of limited means, whatever their race.
1990 Compendium of State Housing Initiatives, published It should be noted, however, that a number of public
by the Council of State Community Affairs Agencies programs for “penetrating enclaves” have been focused
(Thompson and Sidor 1 99 1). Unfortunately, this primarily on racial integration. State agencies inOhio,
excellent state-by-state synopsis has never been updated. Wisconsin and Washington, for example, have long
51. New Jersey'sFair Housing Act of 1985 also en- offered below-market mortgages to firsttime, moderate-
couraged municipalities to submit to the Council de- income homebuyers who are willing to make a “pro-
tailedplans forhow theyintended to comply voluntarily integrative move” into an area where
with the Mount Laurel doctrine. Any municipality with a minorityhomeownersarecurrently underrepresented
plan approved by the Council is protected from Mount (Keating 1994, 202-206; Orfield 1996, 326-327).
Laurel II lawsuits and shielded from the builders remedy. 57. Cooperatives, community land trusts and other
By September 2004, according to the Council, 286 of the models of private, nonmarket homeownership have
state's 566 municipalities were participating in this proven to be particularly effective in “opening the
planning and compliance process (COAH 2005). ‘burbs” to classes and races who have long been
52. Although New Jersey's Fair Housing Act of excluded. Resistant planning commissions and suspicious
1985 was aimed at opening up suburban enclaves to all neighbors often findit easier to accept below-market
income and racial groups, the Act's original intent was housing when it is to be occupied by “responsible”
undermined by a legislative provision allowing “regional homeowners and overseen by a “responsible” nonprofit.
contribution agreements.” This provision More importantly, when mutual aid and social supports
allowsamunicipalityto“buyout” uptoone-halfofits are incorporated into the very fabric of the housing that is
fairshareobligationbypayinganothermunicipalityto build theirs, lower-income households moving into
below-market housing within its boundaries. As a result, inhospitable suburban settings can findit easier to weather
many of New Jersey's inclusionary units have been built the chilly reception that too often awaits them. The
in urban—not suburban—neighborhoods. Another “social capital” engendered by social housing can help to
disappointment has been the low number of black and ensure that “moving to opportunity” is a realized dream,
Latino households that have actually crossed the urban- not an empty promise. For evaluations of theHUD-
sponsored social experiment known as Moving to the problem ofhigh classroom turnover, a damaging form
Opportunity, see Goering and Feins2003; Goetz 2003. of educational instability that is largely a function of
58. In 1984, there were 3,418 savings and loan residential instability. See Hartman and Franke (2003).
associations (S&L) and 14,496 commercial banks in the 63. Such connections should be a two-way street. As
United States; by 2000, there were 1,590 S&Ls and 8,315 Cushing Dolbeare (2000, 15) has pointed out: “Ask
banks (Colton 2003, 194-197). CRA requirements for almost all educators, employment counselors, or health
smaller banks (those with assets below $250 million) care or social service providers whether they can succeed
were weakened by the 1999 Gramm-Leach-Bliley in their own missions if their clients are homeless ordo
Financial Modernization Act. Banksof all sizes, not have stable housing. The answer is that decent
moreover, have been losing business to institutions like housing is a major requirement for their success. But we
private mortgage companies that are not covered by the do not hear their voices raised in housing advocacy. That
CRA. is left primarily to ‘housers'.” But “housing is too
59. In a number of states, the housing finance important to be left to housers,” she continues, “we need
agency or some other public (or quasi-public) “super- to encourage everyone who recognizes the importance of
agency” has been given control over the allocation of a decent home and suitable living environment to say so.”
nearly all grant money for housing (federal and state), all 64. One of the oldest and most successful of these
below-market financing for single-family and mul- state-wide coalitions, combining advocates for housing
tifamily housing, all Low Income Housing Tax Credits with advocates for conservation, farmland preservation
and the preparation of all housing statistics, assessments and historic preservation, isthe one created in Vermont in
andplans. Whatever efficiencies are presumably gained 1987 to secure state funding for a housing and
by placing so many resources and responsibilities under a conservation trust fund (Libby and Bradley 2000; Axel-
single organizational umbrella, there are also losses of Lute 1999; Harmon 1992). A similar mixing of interests
creativity, flexibility and accountability that cannot be and agendas led to the passage of the Massachusetts
denied. These super-agencies often combine the worst Community Preservation Act in 2000, a measure that
elements of both a risk-averse private bank and a change- uses a 3 percent surcharge on local property taxes and
averse public bureaucracy. matching grants from the state for open space, historic
60. From the right, there has been a long-standing preservation and “community housing.” Across the
animosity toward place-oriented programs, perceived as country, conservation groups affiliated with the Land
discouraging the mobility of people and the movement of Trust Alliance, the Trust for Public Land and the Nature
capital. From the left, there has been mounting criticism Conservancy have displayed a growing willingness to
ofwhat is believed to betoo narrow a focus on affordable discuss common agendas with housing and community
housing by CDCs and other community-based development groups. Likewise, affiliates of the National
development organizations that are said to have become Trust for Historic Preservation, once inthe vanguard of
so devoted to providing housing that they no longer have many efforts to gentrify inner-city neighborhoods, have
time for organizing residents of theneighborhoods in begun to display anew sensitivity to preventing
which theywork (cf. Stoecker 1995). From the center, displacement and preserving affordability.
there is a belief that economic development should 65. One of the most surprising alliances to have
become the primary focus of efforts to revitalize emerged from the fight against sprawl isthe consortium
impoverished locales. The key to neighborhood of the Bank of America, the California Resources
revitalization, according to this viewpoint, lies less in Agency, the Greenbelt Alliance and the Low Income
rehabilitating the built environment than in resuscitating Housing Fund that produced the 1995 report Beyond
the local economy, creating jobs within the Sprawl (Bank of America et al, 1995). Forging and
neighborhood. A competing position contends that sustaining such alliances can be a tricky business,
human development should hold center stage (cf. Sidor however, as Axel-Lute (1999) has noted in her review of
1995, 1996). attempts to fuse affordable housing and “smart growth”
61. Nicholas Lemann (1994) made precisely this agendas in Vermont, New Jersey, Rhode Island and
argument in his criticism of the Clinton Administration's Maryland. Other attempts to forge multi-issue, multi-
Empowerment Zone/Enterprise Community Program. He jurisdictional coalitions around growth management, tax
feared that scarce resources would be diverted from sharing and affordable housing can be found in Arigoni
housing-related activities that have been the cornerstone (2001), Rose and Silas (2001), the Smart Growth
of success for many CDCs and directed, instead, toward Network (2001), Harmon (1998), Rusk (1999) and
activities like ghetto-based job creation that have a Orfield (1997).
relatively dismal record. It is also frequently forgotten 66. TheCRA movement has been especially aware of
that housing development is itself a powerful economic both the need for organizing and the wisdom of linking
engine, providing jobs and multipliers that greatly benefit grassroots advocacy with community-based development.
a local economy (cf. Davis and Knodell 1999). Bradford and Cincotta (1992, 269), for example, noted
62. One exampleof the housing/schools linkage is that twoof the keys to reinvestment are “a strong local
base of community organizing complemented by Barton,StephenE.1996.Socialhousingversushousing

activities that build the capacity of local communities to allowances: Choosing between two forms ofhousing
engage in development activities themselves.” Similarly, subsidy at the local level. APA Journal 62:108119.
Taylor and Silver (2003) speak to the “essential role of 1998. The success and failure of strong rent control
activism” in community reinvestment. in the city of Berkeley, 1978 to 1995. In Rent
67. An argument for the growing political sophis- control: Regulation and therentalhousing mar-
tication, interconnectedness and clout of nonprofit, ket,eds. W. Dennis Keating, Michael Tertz and An-
community-based developers can be found in Clavel, Pitt drejs Skaburskis, 88-109.NewBrunswick,NJ:Rut-
and Yin (1997). By contrast, Krumholz (1997) has noted gers University Center for Urban Policy Research.
the criticism by local activists in Cleveland that nonprofit Bauer, Catherine. 1985. The dreary deadlock ofpublic
developers there have become less political over time as housing. In Federal housing policy and programs:
they have become more dependent upon city and state Pastand present,ed.J.Paul Mitchell, 277-285. New
funding, a charge that Stoecker (1995) has leveled against Brunswick, NJ: Rutgers University Centerfor Urban
the entire “CDC model of urban development.” PolicyResearch.
Bodaken, Michael. 2002. The increasing shortage of
affordable rentalhousing in America: Action items
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Rachel G. Bratt
18 Housing and Economic Security
THE GOAL OF social policies should be chapter,andindeed this entire book,argues that
to promote individual, family and communitywell- housing policies must beexplicitly focused on a
being. However, housing and other socialpolicies, more fundamentalissue: the well-being ofindi-
whileoften appearing to be benevolently motivated viduals,familiesandcommunities.Further,they must
are, instead, generally aimed at promoting political also been seen as integrally connected to a l a r ger
agendas and the economic objectives ofprivate soci a lpo lic y agend a. 1 Such an agend a should
businesses (Marcuse 1986). In addition, housing involve the creation of anew social con-
policyisoften seen as apart from, rather than tractbetweenindividualsandgovernmenttoen-
integral to, larger social welfare concerns, such as compassaseries ofrights andresponsibilities to
economic security. Writing with a European whichbothwould adhere. Key to this discussion
perspective, but one that also has validity for the isour view that among the rights that should be
United States, Kemeny has noted: guaranteedbygovernment to all individuals isa
Right to Housing.
Ultimately, the problem comes down to the way in A b etter und e r standing of t h e w ay s i n
which housing has been defined as a residual area whic h housing can be seen as part of a larger social
divorced from the central policy-making area of agenda is particularly important inthe present
social security. Once the far-reaching ramifications political context. During the 1990s, under the
of housing for the whole of social Clinton Administration, housing began to be
structureareunderstood, it becomes possibleto viewed as an explicit vehicle to promote “self-
appreciate how crucial housing policy is to the sufficiency.”2 And,atthestartofthe 21st century, the
viability of a welfare state. (1986, 275-276) bipartisan Millennial Housing Commission began
its report with the following:
Housing analysts and policymakers have often
focused on the detailsandprocesses of specific Decent, affordable, and accessible housing fosters
programs, such as thechanges inthe relative severity self-sufficiency, brings stability to families and
of different aspects of housing problems (like new vitality to distressed communities, and
housing quality, overcrowding and affordability); supports overall economic growth. Very partic-
ularly, it improves life outcomes for children. In
and the relative costs and benefits of various
the process, it reduces a host ofcostly social and
housing strategies. Further, questions of
economic problems that place enormous strains on
implementing housing programs often revolve the nation's education, public health, social
around where housing should be built, who should service, law enforcement, criminal justice, and
own and manage it, what types of subsidies welfare systems. (2002:10)
areneeded, howlong the housing will
beavailabletolow-income householdsandwho Thus, we have clearly begun the largerdiscus-
should be eligible to live in it. sion about how housing could and should be
While such issues are obviously critical, this

400 Rachel G. Bratt
aimed at promoting economic security, a critical outcomes forpeople, rather than serving as a
component of individual and family wellbeing. disincentive. The logic of this position is far more
Thischapter examines howhousing policies can compelling, believable and consistent with psycho-
promote “self-sufficiency” in a larger context—as logical viewsonthe importance of work to personal
partof astream ofinitiatives aimed at promoting self-actualization than the notion that the provision
economic security.Infact, the goal of promoting of housing encourages complacency and laziness.
“economic security,” rather than “self-sufficiency,” At the heartof economic securityisadequate
would go a long way to advancing the level of income. Income maybe derivedfrom wages, in-
dialogue since, as discussed below,nobody herited wealth, interest on investments, contri-
insocietyistruly “self-sufficient” nor should they butions from family members, property ownership
be. or from income supports provided by the
As background to this discussion, it is important government. (A variety of noncash benefits can
to question whether the provision of housing also be provided in the form of health care,
enhances or thwarts the ability of households to education, food or even housing.) Public assistance
attain economic security. Advocates argue that initiatives directly boost income or enhance assets
without adequate housing workers have a difficult so that households can better afford housing and
or impossible time finding and sustaining other necessities. However, for manyhouseholds,
employment andparents are stretched to the limit the road to economic security is more complex than
intrying to care for themselves and their children. “simply” finding andkeeping a job or
Often, families cannot stay togetherwithout a supplementing income withpublic assistance.
secure, stable home3 In addition, attaining decent Obviously, for some people, holding a steady jobis
housing that isaffordable in relation to the beyond their physical or mental capacity. In
household's income is essentialinorder to have addition, substance abuse or other family problems
sufficient money available to cover the other or illness can significantly impede one's ability to
necessities of life (see Chapter 2). For example, a maintain employment.
study that tracked a group of children whose For those who have the capacity to work,
families received housing assistance at some point achieving economic security also depends on
between 1968 and 1982 concluded that public personal attributes and skills, such as the mo-
housing may have positive effects on a child's long- tivation to work and ability to perform inthe
term selfsufficiency (Newman and Harkness workplace. Initiatives that focus on providing
2002).4 assistance in this area are often called “self-
However, a second view holds that if housing is sufficiency” programs.
guaranteed, the motivation to seek em- Two additional key factors contributing to one's
ploymentandtoworktowardeconomicsecurity will ability to work are the availability of decent-paying
be undermined. Why work if housing, the single jobs as well as accessibility to both jobs and
largest expenditurethat a household must cover, educational programs that prepare children, teens
isgiven, rather than something that must, with and adults to assume roles inthe workforce. There
effort, be secured and maintained? In answer to are also numerous jobtraining programs and other
these questions, the weight of existing empirical types of initiatives that are aimed at job creation
evidence indicates that if people are provided such as economic incentives aimed at the private
housing, there are not negative impacts on the sector and the direct provision of public sector jobs.
motivation levels of workers, or would-be Finally, when wages and other income supports
workers.5 Further, given the evidence to the do not provide enough cash to assist
contrary—that housing is a critical element for householdsachieve economic security,thereare a
families who are striving to achieve economic host of direct benefit programs that provide
security and that it is essential in both promoting additional assistance. These benefits maybe in the
family well-being and in providing a springboard formof subsidizedhousing or they may assist with
from which other career and income-enhancing other critical needs(food stampsand Med- icaid)and
initiatives can be launched—this chapter embraces thereby free up available cashincome to pay for
the view that providing housing results in positive housing as well as other necessities.
Housing and Economic Security 401
Thischapterisaimed at broadening thecon- economic security fall way shortof the

versation in which housing policy analysts fre- markandthat,indeed,aRighttoHousingwould
quently engage. It attempts to place housing in dramatically advance that agenda.
thecontextofhow economic securityfor the entire
population can be achieved, and it explores the role
that housing can play in fulfilling that mission. INCOME ENHANCEMENTS
Since adequate income isthe essential ingredient of
economic security and, indeed,the Wages comprise about three-fourths of total family
mostdirectmeanstothatend,thechapterbegins with an income (Bernstein et al. 2000, 34) and therefore are
overview of the ways in which income the most critical source offunds to cover living
enhancement initiatives contribute to economic expenses, including the costs of housing for most
security. If individuals and families had sufficient households. For some segments of the population,
income to cover housing and other costs, less direct however, wages alone have not been sufficient to
approaches to achieving economic security would provide decent lev- elsofliving and economic
be unnecessary. However, as discussed in Chapter security. This has always been true, but the
8, a right to income is almost certainly less situation has worsened over the past two decades.
achievable than a Right to Housing. And, even if As discussed in Chapter 1, since the late 1970s,
incomes for all were adequate to cover the costs of average wages have fallen, after controlling for
housing and other necessities, wealso know that the inflation, and wage inequality has increased. In
housing market is far from perfect and that order to supplement wages for households unable
discrimination, for example, would still create to work or whose earnings are inadequate to cover
obstacles forlarge numbers ofhouseholds, and that the necessities of life, a variety of strategies aimed
speculative profits could swallow up much of the at providing income support and benefits have been
income withlittle housing improvement. The created.Inthis context, “income enhancements”
chapter then examines three key approaches that include three major sets of initiatives that have the
connect housing with otherbroad socialpolicy most impact on families with children: the federal
concerns and together relate to thegoal of economic income tax system, federal and state minimum
security.Itfocuses on the connections between wage laws/living wage programs and welfare
housing and: payments. This section does not examine Social
Security, since those benefits are aimed primarily
• Welfare reform—How is the welfare reform
at retired workers, and unemployment
agenda, specifically the “work first” require-
compensation, since that is available only to
ment, making it easier or more difficult for
formerly employed workers whose employers
households to afford housing and other ne-
contribute to that program.
cessities oflife?
• “Self-sufficiency” programs—How are housing- Federal Income Tax System
based “self-sufficiency” programs being
utilized as a vehicletopromote economic se- Thefederalincometaxsystemisapotentialvehi- cle
curity? for enhancing economic security.Through a
• Programs aimed at increasing access to educa- trulyprogressive tax system, families at the highest
tional and job opportunities—How does access income levels would always pay the highest
to these opportunities create a higher likelihood percent ofincome in taxes, and those at the lowest
of an individual attaining a good paying job? endwould always pay the lowest percent or no tax
Thechapter concludes with a series ofrec- at all. In addition, a negative income tax could
ommendations concerning howhousing can be used provide direct cash payments to households,
to better promote economic security. The final thereby enabling them to attain incomes that would
section also explores how a Right to Housing be life-supporting.
would fit into a new social contract between Our current tax system does have progressive
individuals and government. The central argu- elements. The Earned Income Tax Credit (EITC)
mentisthatcurrentstrategiesthatallegedlypro- mote provides a means to supplement income for low-
402 Rachel G. Bratt
and moderate-income working households. In higher-income households end up paying a lower

2003, the federalEITC provided a maximum of percentage of their income in taxes than some
$4,204 for a married couple with two or more households with very lowincomes.
children and with incomes of no more than $34,692 Indeed,therearealwaysanumber of very-high-
(Berube 2004). Morethan 19 million families income households who pay no taxes at all, despite
andindividualsclaimthe tax credit, andit lifts about a federally mandated alternative minimum tax.6
4.8 million people in working families above the The tax system has also fostered everwidening
poverty level, more than other means-tested income disparities between the wealthiest and
initiatives (Johnson, Llobr- eraand Zahradnik poorest citizens. Between 1977 and 1999, the after-
2003). In addition, seventeen states plus the District tax income received by the top 1 percent of U.S.
of Columbia offer their own income tax credits, households rose from 7.3percenttoabout12.9percent
modeled on the federal program and ranging —ahigherper- centage than inany otheryear
from4to43per- cent of the federal EITC (Llobrera examined by theCongressionalBudget Office.
and Zahrad- nik 2004). While this is an important Moreover,the after-tax income of the richest 1
measure, it does not fully provide economic percent equaled the total after-tax income of the
security to all poor and working poor households, bottom 38 percent. This translates into 2.7 million
based on a realistic measure of “self-sufficiency,” Americans
as noted below. withthelargestincomesreceivingasmuchafter- tax
A secondkeyprogressive aspect of the feder al income as the 100 million Americans with the
tax system isthe different marginal tax brackets, lowest incomes (Shapiroand Greenstein 1999, 2-3;
based on income. The higher one's income, the see also Krugman 2002.)
higher the overall percentage of income that is The major way that the tax system relates to
generally paid.Furthermore, a variety ofdeduc- housing is through homeowners' deductions. These
tions are phased out for higher-income taxpayers. deductions enable middle- and upperincome
Overall, the highest income quintile (top 20 percent families to enjoy significant savings. As notedinthe
of the population) both earns more than one-half of Editors' Introduction, in 2004, about $84 billion
total nationalincome (Shapiro and Greenstein 1999, was saved bytaxpayers (which means lost revenues
2) as well as paysmorethan one-half (about 59 to theU.S.Treasury) due to the deductibility of
percent) offederal taxes (Lav and Greenstein 1999, mortgage interest and property tax payments from
8-9). homeowners' incomes. The majority of these
Despite the progressive aspects of the tax code, benefits went to households in the top two-fifths of
the system is most kind to extremely high-income the income distribution. Other tax benefits
taxpayers. For example, capital gains (based on connected to housing, which also accrue
profits from thesaleof stocks, bondsand other disproportionately to higher-income households,
assets, which not surprisingly are predominantly amounted to an additional $36 billion in lost
held by high-income households) are taxed at a revenues (Dolbeare, Saraf and Crowley 2004; see
muchlowerrate than income from salaries, interest, also Chapter 5).
dividendsand selfemployment. The capital gains What aretheshort-term possibilities that the tax
tax rate is20 percent, about one-half the top system will become more progressive and thereby
marginal tax rate for very-high-income households provide greater economic security to the lowest-
(39 .5 percent), andisslated to go downto18percent income households? Poor to nonexistent.
in 2006. In addition, a variety of tax deductions and UnderPresident George W. Bush's tax cut,
tax credits enable higher-income taxpayers to enactedwithinsix monthsafterhistaking office and
shelter portions of their income. Also, wage in effect through 2011, the top 20 percent of the
earners' taxes are deductedfrom their paychecks, income distribution was expected to receive some
whereas affluent business owners often 70.6 percent of the benefits, while it was
areabletohideportionsoftheirincome,thereby anticipated that the bottom 80 percent would
reducing their tax liability. As a result of mea- receive 29 percent (Shapiro, Greenstein and Sly
suressuchasthese,themoreprogressivefeatures of the 2001, 1). More recent estimates of the impacts of
Internal Revenue Code are undermined, and some these tax cuts have been even more troubling: In
2005 the wealthiest 0.2 percent of the population— sufficient to cover the costs of renting either a one-
households with incomes of more than $1 million or two-bedroom unitatan affordable level
per year—enjoyed a tax cut averaging over (NationalLow Income Housing Coalition 2004).
$100,000. Moreover, tax cut measures slated to There is an obvious policy disconnect here. On
take place will result in another $20,000 per year in the one hand, we have a minimum wage. But the
tax savings for this group. Overall, 54 percent of incomederivedfromsucha wage is com-
the new tax cuts will go to those earning more than pletelyunrelatedtoanalreadyunrealisticallylow
$1 million peryear and 97 percent of the tax cuts poverty level, and to HUD's own assessment of
will go to the 3.7 percent of the population earning what it costs to rent a decent housing unit. The
over $200,000 (Greenstein, Friedman and Shapiro minimum wage does littletopromote economic
2005). security.Itneither lifts a household with asingle
In summary, the federal income tax system has minimum wage earner above the poverty level, nor
not significantly altered the ability of low- income does it provide enough income to support a f amily.
households to achieve economic security. While In contrast to the inadequacy of the poverty
the tax code has some progressive elements and level, “market basket” approaches providemuch
even attempts to modestly redistribute income to moreaccurate methodstodetermine how much
low-income wage-earners through the EITC, income is needed to cover basic expenditures.
overall, it does not provide enough preferential Michael Stone (1993, 75, Appendix A) provides an
treatment to low-income households. overview of such efforts, which are based on actual
living costs and expert opinion. In addition, Stone's
Federal and State Minimum Wage Laws/Living concept of “shelter poverty” is actually an income-
Wage Programs adequacy standard based on such a market basket
approach (see Chapter 2).
As of 2005, the federal minimum wage was $5.15 Building on the “market basket”idea, a “Self-
per hour, set in 1997. Prior to the 2000 election, Sufficiency Standard” has been calculated for
there wasconsiderable debateaboutraising the thirty-four states plus the District of Columbia
minimum wage; however, no such increase was (Wider Opportunities for Women 2003).
enacted.7 After accounting forinflation, the value of Acknowledging that costs vary even within states,
theminimum wage in 2004 was 26 percent less than “self sufficiency” standardsare developed for
in 1979 (Economic Policy Institute 2005). A full- various locales. For example, inWilmington,
time wage earner working 40 hours per week, 52 Delaware, a four-person household of two working
weeks per year, would earn $10,712. This is $8,638 adults and two children would need nearly $44,000
less than the federally establishedpovertylevelfor a peryear, which translates into an hourly wage of
family offour, whichwas $19,350 in 2005. Even if a $10.36 for each adultworker(Pearceand Brooks
family were able to reach the poverty-level 2003).
threshold with wage income, it still would not have In further recognition of the inadequacy of the
achieved economic security. Indeed, the poverty minimum wage, some 117 city and county
level, while a useful and consistent benchmark, has governments have mandated that a “living wage”
little relationship to what it actually costs a family be paid by all private business that benefit from
to live in decent housing, eat adequate food, buy public money (such as through service contracts,
appropriate clothes, pay for health insurance and grants, loans, bond financing tax abatements or
meet themyriad other expenses households face.8 other economic development subsidies—[ACORN
Data on wages and housing costs demonstrate 2004]). At the very least, such a wage should boost
how much more than the federal minimum wage a wage earner trying to support a four-person
households need to earn in order to afford rental household above the poverty level (Albelda and
units, using the U.S. Department of Housing and Tilly 1997, 153). Based on the four-person poverty
Urban Development's (HUD) “Fair Market Rent” level of $19,350, a worker would need to earn
(FMR)9 levels, while paying no more than 30 about $9.25 perhour,or about 80 percent more than
percent of income for rent. In no locale in the the 2005 federal minimum wage. Even with this
United States isthe federal minimum wage large an increase, in no state would a $9.25 per
404 Rachel G. Bratt
hour wage earner be able to afford a two-bedroom that thetrendbegan to reverse almost immediately.
FMR unit. West Virginia comes the closest, with a Between 1995 and 1998, contractions inthe food
worker earning $9.31 per hour able to afford a two- stamp program and cash assistance for poor
bedroom FMR unit. Other relatively affordable families with children resulted in a reduction in the
states, where a wage of under $10 per hour number of children served, with an overall
translates into a worker able to afford a 2-bedroom reduction inthe effectiveness of the safety net at
FMR are: North Dakota, Arkansas, Mississippi and reducing child poverty (Porter and Primus 1999).
Alabama (National Low Income Housing Coalition Although welfare payments provide a
2004). straightforward and potentially efficient mech-
Given Congressional reluctance to boost the anism for promoting economic security, the record
minimum wage, particularly to levelsthat would of thistypeof support, as well as ourhis- torical
result in a truly livable income, it seems reasonable aversion to providing “too much” government
to surmise that initiatives to enhance economic assistance to the needy, suggests that this is not a
security through this mechanism are likely to fall viablesolution. Indeed,asdiscussed below, “welfare
way short of the mark. And while living wage reform”has meant that farfewer households are
campaigns appear to be successful in boosting receiving direct income transfers, and
wages in scores of locales, they still only cover a morestringent requirements are being placed on
small percentage of the country. eligibility than ever before. The “bottom line” is
that poverty has been increasing. The U.S. Census
Welfare Payments reported that the number of poor people stood at 37
million in 2004, an increase of 4.1 million since
The U.S. government has always had a mixed 2001. Moreover, the overall poverty rate rose from
attitude, at best, toward providing direct cash 11.7 percent in 2001 to 12.7 percent in 2004. And
supplements to the poor. As Katz (1989) has the severity of poverty (the average amount by
pointed out, “theundeserving poor” areviewed with which the incomes of those who are poor fall below
a combination of contempt and pity, and public the poverty line) matched the highest on record,
policies aimed at assisting them are never generous dating back to 1975 (Center on Budget andPol- icy
enough to fully cover the costs needed to maintain Priorities 2005).
a decent standard of living. It is telling that welfare IMPLICATIONS OF WELFARE REFORM FOR
payments are not even pegged to bring a household HOUSING AND ECONOMIC SECURITY
above the official, woefully inadequate poverty
line. Although there isconsiderablevariation in The welfare debate of the 1990s, which resulted in
Temporary Assistance for Needy Families (TANF) passage of the Personal Responsibility and Work
payments from state to state, no state provides Opportunity Reconciliation Act of 1996, assumed,
sufficient benefits to lift a household out of in part, that there was a better way to provide
poverty.10 Further, inthetypical state, “the pur- public assistance that would enable poor
chasing power of the maximum welfare benefit households to move out of poverty. Much of the
(adjustedforinflation) fell by half between 1970 and criticism lodged against welfare revolved around
1997” (Sweeney et al. 2000, 31). the perception of a permanent welfare population
The extent to which all government transfer and the seeming inability of these households to
programs lift people out of poverty presents a move up the economic ladder.11 Indeed, it has often
mixed picture. In 1995, nearly one-half of the 57.6 been argued that the old welfare system's rules
million people who would have been poor without undermined the ability of recipients to become
government benefits were moved out of poverty independent.12
with the assistance of these programs (Primus Thenewlawwas aimed at ending “the de-
1996). While this was the highest percentage pendence of needy parents on government benefits
ofpeople who weremoved out of poverty with the by promoting job preparedness, work, and
aid of government assistance for any year since marriage” (quoted in Loprest 1999, 1). Specifically,
1980, more than one-half of the poor were not the 1996 act eliminated the 61-year old guarantee,
boosted above the poverty level.Therearealso signs through theold Aid to Families with Dependent
Children (AFDC) program, that all children between the two has been problematic. 14 Newman
meeting federal eligibility standards could receive and Schnare have been inthe vanguard of
assistance. Thenew system, TANF, mandates states articulating the importance of viewing the two
to impose limitations on the length of time that systems as part of a whole, rather than as two
recipients may receive benefits. Most households separate bundles of services. They argue that “If
can rely on public assistance for two consecutive providing adequate housing to all inneed is the
years and a total of five years over a lifetime. goal, the combined system is unfair, ineffective,
Recipients are generally expected to work at least andinefficient. Iffostering economic independence
30 hours perweek. If a household does not comply is the goal, the system isevenmore deeply flawed”
with this requirement, benefits are progressively (1992, 7). Theyfurtherpoint out that the amount of
cut. Further, under the 1996 law most parents are money earmarkedforhous- ing through welfare
only able to count 10 hours of participation in job does not come with the requirement that housing
skillstraining, education related to employment and meet quality standards, and welfare shelter grants
attendance in secondary school or participation typically fall far short of the cost of decent housing;
inaGeneralEquivalency Diploma (GED) program nearly one-third of welfare recipients live in
as part of the work requirement (Economic Success substandard conditions. Also, housing assistance
Clearinghouse 2005). has typically reached only a small fraction of those
Without belaboring the validity of the ar- who qualify for such assistance, but those who do
guments behind the 1996 welfare reform act, this receive such subsidies are generally adequately
section explores the connections between welfare housed (Newman and Schnare 1992, 6-7). Pines
reform, housing and economic security. After a has astutely observed that:
review of the connections (and lack of connections)
between the housing and welfare systems, the Although there is ample documentation of the
following questions are addressed: What doearly interlocking nature of the problems of poor
evaluations tell us about the likelihood that welfare families...the disparate systems operating service
programs often exacerbate the problems by
reform will promote economic security and enable
dealing with each “symptom” as an unrelated part
families to cover their costs, including the cost
of the whole. Rather than working to build a
ofhousing? To what extent will any shortfalls strong viable family unit, this fragmented
impact the assistedhousing stock? approach seems to pull fragile families farther
apart Families do not care whether help comes
Housing and Welfare—the Connections [from one program or another]. Theydocare ifthey
are funneledfrom one intake office to another, and
Both the housing and welfare systems are large and if they have to undergo multiple eligibility
determinations. . . . The nation can no longer
complex.13 The housing system includes dozens of
afford “stand alone” social service systems. They
programs funded by HUD (see HUD 1999). In
are inefficient andfarfrom user friendly. We must
addition, a host of other public and private pursue a more rational,
initiatives have a direct bearing on housing coherentfamilyinvestmentsystemcharacterized by
affordable to low-income households. The welfare integrated service delivery at the local level.
system is equally complex. A 1995 U.S. General (1991:112)
Accounting Office report noted that Congress had
created about 80 separate programs providing cash ThegreatmajorityofthosewhoreceiveHUD
and noncash assistance to low-income individuals housing assistance and those who receive welfare
and families. “These myriad welfare programs— benefit dosofrom only one typeof aid, not both.
each with its own rules and requirements—are Nationwide, only about 25 percent of families
difficult for families in need to access and receiving welfare payments through TANF also
cumbersome for program administratorstooperate” receive federal housing assistance (Khadduri,
(GAO 1995, 2). Shroder and Steffen 2003).
In view of the difficulties involved in coor- One of the problems in coordinating the
dinating and rationalizing each of the discrete housing and welfare systems is that eachhas a
systems, it is hardly surprising that coordination somewhatdifferentmission.Inthecaseofhous- ing,
406 Rachel G. Bratt
the overall concern is that the developments and welfare systems provide opportunities for
function smoothly and that theyprovide anop- enhanced coordination (1991, 9). However, despite
timum living environment for residents. Welfare the rhetoric suggesting logicallinks between the
officials are typically less involved with the housing and welfare systems, thetwo continue to
housing per se and moreconcernedwith the function virtually autonomously.
individual well-being of clients (see, for example,
Council ofState Community Development Termination of Welfare Benefits and Employment
Agencies and the American Public Welfare As-
sociation 1991, 6-7). A key question about welfare reform is, Will
The conflict between the housing andwelfare households whose benefits terminate beableto find
systems first surfaced in the 1930s when the jobs that will enable them to cover their costs
financing formula for public housing required ofliving, including paying rent? The an-
tenants to payrent based on a percentage of income. swerappearstobemixed.Butonbalancewelfare
As a result, Newman and Schnare note: reform iscreating vast problems forwelfareand
formerwelfare recipients who are facing complete
[M]any of the poorest households, including those loss ofpayments due to time limits or sanctions due
on welfare, were excluded from public housing to noncompliance with the work requirement. The
Itisunfortunate that this first formal connection Centerfor Community Change (1999b) went so far
between the housing andwelfare systems was as to call the law “an unmitigated disaster in its
contentious. It isalso disturbing that the earliest impact on poorpeople.”
frustrations that each system voiced with the other Concerning the much-touted positive outcomes
are essentially the same today as they were then.
ofwelfare reform, thenumber ofhouseholds on
(1992, 14-15)15
welfare has gone down dramatically, and many
former recipients have found jobs.
During the 1950s, the federal government went
Some2millionhouseholds receivedwelfarecash
so far as to explicitly prohibit public housing
assistance in 2003 compared with about5mil- lion
authorities from hiring staffto provide social or
inearly 1994 (Lazere 2000, 1; U.S. Department of
community services. In something ofa turn-around,
Health and Human Services 2003). President
during the 1960s, official administrative guidelines
George W. Bush's former Health and Human
andlegislative initiatives encouraged public
Services secretary Tommy Thompson heralded this
housing managers to include social and economic
decline by noting that “Americans are
goals for tenants, although funds were not
demonstrating that they want to beself- sufficient
appropriated for such activities (Newman and
and economically independent for the benefit of
Schnare 1992, 15-16). Newman andSchnare(1992,
themselves and their children” (U.S. Department of
18-20) furtherpointoutthat the history ofwelfare
Health and Human Services 2003).
initiatives includes an emphasis on the importance
More negatively, however,atleast 20 percent of
ofhousing, particularly for families with young
the “families that have left welfare have
children. And, in 1969 theold Department of
boomeranged back, and rolls started climbing again
Health, Education andWelfare (HEW—predecessor
[in 2001] in 30 states Morethan half of those who
to the Department ofHealth and Human Services)
return to welfare . . . originally left
noted that decent housing was a route to
withajob.Theysooneithergotlaidoff,losttheir jobs
independence and was essential to enable poor
for other reasons, orfound they could not earn
people to move toward“self-support,self-
enough to stay afloat” (Loprest 2002, 1). Moreover,
care,andabetterquality
as the economy cooledintheearly yearsof the 21st
oflife”(citedinNewmanandSchnare1992:20).
century,the percentage ofpeople who left welfare
The Council of State Community Development
withjobs(orfound them shortly thereafter) was
Agencies and the American PublicWelfare
significantly lower than the corresponding
Association (the latter is now known as the
percentage inthe late 1990s, dropping 8 percentage
American Public Human Services Association)
points, from50to42per- cent. Not surprisingly,then,
have underscored the ways in which the housing
a higherpercentage ofpeople who left welfare in
2002 compared with 1999 had returned to welfare additional stresses on management.
(Loprest 2003a). Moreover,those jobsthat Second, for owners of Section 8 housing, there
formerrecipients have been able to secure are likely is less concern about losses in revenues, since
to paylow wages (Loprest 2003a). Also federal subsidies increase to offset reduced rental
problematic isthat these jobs often do notcome with income (Sard 2003). In that case, however, “If
employment- related benefits, such as paid HUD payments to the project-based owners rise
vacation, sick leave and health insurance (Parrott substantially due to declining tenant incomes as
1998, 17, 18). families hit time limits, HUD mayhave to reduce
As one might expect, the loss of welfare, un- spending on other housing programs to remain
certain employment, lowwages andweakben- efits within budgetary limits” (Sard and Daskal 1998).
translate into a high degree of economic instability Little concrete evidence is available about the
and human suffering, including inadequate income actual impacts of welfare reform on subsidized
to coverrent or mortgage costs, utilities, food and housing. As of the late 1990s, theU.S. General
medical care.16 But researchers have found that Accounting Office concluded that the “impact of
those who leave welfare with housing assistance welfare reform on the revenue, employment status
are generally better off than those who do nothave of tenants, and roles of selected housing agencies is
this help (Loprest 2002; Zedlewski 2002; Sard uncertain” (1998b, 27). In a study of developments
2003). financed by the Massachusetts Housing Finance
In summary,the results ofwelfare reformap- Agency (now known as MassHousing), site
pear problematic from all but a public relations or managers were
budgetary perspective.17 Welfare reform set out to
reduce welfare rolls and to reduce the gov- asked a series of questions about how they
ernment'sexpenditures forwelfare payments. It has anticipated welfare reform would impact their
achieved this. But it has not furthered the goal of properties. About one-third predicted that the
providing poorfamilies with a decent standard quality of lifeatthe developments would bead-
ofliving andwith sufficient income to pay for rent. versely impacted and that a variety of management
If anything, itappearsthat economic instability has problems would increase, including more cases
increased for the poorest membersof the ofrent arrearages (Massachusetts Housing Finance
population. Agency 1999, 27). Although difficult to quantify, if
welfarecreates morestress forhousing managers,
Welfare Reform and the Assisted Housing Stock the quality of maintenance will likely suffer.
The post-welfare reform era providesagood
Experiences with welfare reform emphatically opportunity for the housing and welfare systems to
underscore justhowinterconnected the housing and develop more collaborative relationships.
welfare systems are. First, concerning public Emphasizing the need andimportance of such
housing, if the incomes of a substantial number of cooperation, Sard and Waller (2002) provide a
these residents are reduceddue to loss of welfare series of suggestions for how housing assistance
income, and if equivalent income is not and welfare payments can be better coordinated to
derivedfrom wages, the revenues collected by optimize outcomes for families.
public housing authorities, which are based on a The U.S. General Accounting Office study cited
percentage of income, will be reduced. To make above also urged HUD to pay closer attention to
matters worse, “public housing authorities do not issues of coordination. While acknowledging that
generally receive any additionalfederal subsidy “HUD has provided guidance on welfare reform,”
during a year in which they experience a net the report noted that HUD had “not ensured that all
decrease in revenue, and recent experience sug- of the field offices
geststhatthereisnoguaranteethattheirsubsidy will andpublichousingagenciesreceivedand understood
increase the following year to compensate theguidance.” TheGAOcalled on HUD to “develop
forreducedrevenue” (Sard 2003, 112-113). In that a comprehensive strategy” and to direct its field
case, public housing authorities are forced to offices to work closely with federal, state
operate with fewer funds, thereby creating andlocalwelfare reformefforts (U.S. General
408 Rachel G. Bratt
Accounting Office 1998b, 58, 60). concerns should beconsidered andfac- toredinto a
Despite the lack of data on the impacts of definition: Acquisition of new skills and abilities
welfare reform on the assisted housing stock, at the could enable the person to function without
very least the issue serves to highlight the assistance inthe future; there can be positive
importance of seeing the two systems as part of an movement toward self-sufficiency,as opposed to
overall mechanism for promoting greater economic total independence andit is important to recognize
securityforresidents. So far, however, such that for some individuals and householdsself-
coordination seems still to beatthe level of sufficiency may not haveaneco- nomic meaning at
opportunity, rather than action. And this lack of a all. Instead, itmay connote a greater capacit yfor an
consi stent set ofpo lic i es oriented at op t i m izing indiv idual with serious mental, emotional or
the economic security of those in need will likely physical limitations to cope with life's challenges.
create adverse impacts on this population. In addition, challenges presentedbytheglobal
economy (such as domestic job losses,
deindustrialization) as well as social constraints
HOUSING-BASED “SELF-SUFFICIENCY” (like discrimination) make it more difficult for
PROGRAMS unskilled and uneducated workers to find
employment that provides sustainable wages.
Historically, housing programs have promoted Elaborating on the complexities of defining self-
production and subsidization ofhousing affordable sufficiency, Bratt and Keyes reported that anumb e
to low- and moderate-income households. r o fresp ond ents (who w e r e h ead sof nonprofit
Measures of success typically includenumbersof housing organizations that were implementing
units produced orrehabilitated and accessibility of some formof aself-sufficiencyprogram)
those units to households with serious housing articulated:
needs. But, increasingly,the housing agenda is
evolving to include a more expansive set of goals. [S]erious objections to the term “selfsufficiency,”
Now, as noted at the outset of thischapter, it is not even while they referred [the researchers] to
enoughforhousing programs to provide decent, noteworthy efforts or while they, themselves,
affordable housing—which,of course, is no small readily described their programs as focused on
feat in itself. Housing must also promote a promoting the concept. “Selfsufficiency” invokes
criticism for anumber of reasons, some of which
household's ability to achieve economic
can betraced to strong, possibly conflicting
independence, or to become “self-sufficient.” 18 But cultural strands in our society—an infatuation with
what is “self-sufficiency,” andwhyistheterm individual independence embedded within
problematic? What have we learned from prior widespread support for collaboration and a
self-sufficiencyprograms, and to what extent do strengthening of community.
current initiatives appear to be promoting economic On one level, manypeople interviewedraised
security? serious questions about the usefulness of the term
“self-sufficiency” because it evokes an image
Multiple Meanings of “Self-Sufficiency” of“ruggedindividualism,”whichisnomore orless
applicable to low-income people than it istothe
“Self-sufficiency” is a frequently used phrase that rest ofsociety. “Self-sufficiency” implies that
people who participate in such programs will, at
defies precise definition. For purposes of this
some point, no longer need any outside supports
chapter, self-sufficiency refers to individuals and and instead willbe totally able care for themselves.
households who are managing their lives without In contrast, almost no one inour society is truly
any direct subsidy.Using thisstrict and simple self-sufficient. Virtually all citizens receive some
definition, a self-sufficient household would not be form of “special assistance,” whetherbecause
receiving income assistance, housing subsidies or oflow incomes (means-tested) or, mostly, through
other direct supports. one ofour manyentitlement programs that are
However,asdiscussed more fully in Bratt and available either to anyone, regardless ofincome, or
Keyes (1997), various studies and reports on self- to certain groups, such as veterans, theelderly,
homeowners, etc.19
sufficiencyhave argued thatavariety of additional
Thus,thegoalthatthe poor should somehow 1999, 6). In addition, according to Sard, fewer than
become “self-sufficient”is contrary to the wayin one-half of all public housing authorities offer
which almost all U.S. citizens actually live. Yet, at theFSS program to residents and, among those that
the same time, interviewees acknowledged that do, the number ofparticipants is restricted.This
societyis increasinglyarticulating a strongdesire
results in less than 5 percent of families with
forpoorpeopletobe less dependent on public
resources. This was expressed most explicitly in
children living in public housing or utilizing a
the 1996 welfare reform legislation, which, for housing choice voucher involved with FSS (Sard
thefirst time, placed a lifetime cap on the receipt of 2001), despite the fact that all such households are
public assistance. eligible to participate.
On a secondlevel,severalpeople interviewed Based on a series of studies that have inves-
indicated that they were uncomfortable with the tigated the experiences of participants in local and
phrase “self-sufficiency” because it can suggest federal programs, some clear policy implications
that until you achieve “self-sufficiency,” you are emerge.21 First, it is impossible to devise a “one
somehow insufficient, clearly a negative conno-
size fits all” initiative; participants' assets and
tation.
deficits (including physical and mental limitations
Athird critique isthat whether or not someone
becomes “self-sufficient” maybe less a matter of and the particular family's situation) must all be
their own commitment and actions, and more a taken into account when creating a self-sufficiency
result of the contextual challenges that often program. As a result, programs must be tailor-made
standinthe way of gaining some measure of to meet the diverse needsof the population being
economic independence. . . . Although individuals served. And they must offer a variety of servicesasa
may be working hard to overcome economic whole package, rather than as a series of separate
dependency, external pressures, such as low-wage initiatives, eachwithits ownsetofrules and
jobs or high housing costs, constantly present requirements (Rohe and Stegman 1991; Pines
challenges and roadblocks. (1997, 9)
1991;Brattand Keyes 1997). Inorder to achieve
thistypeofprogram coordination, individuals are
Despite the problematic nature of the term, needed who have significant authority to
“self-sufficiency” has become a popular phrase, bringdiverseagenciestogethertodiscusshowto
denoting a greater, if not complete, level of eco- streamline procedures andprovideafull complement
nomic independence from public subsidy. of services. This needstooccurboth at the national
Since the 1960s, various local programs have level, in better coordinating the housing and
provided social services to public housing residents welfare systems, as well as at the local level, where
(Newman and Schnare 1992), although the major programs get implemented.
housing-based self-sufficiency programs began Second, whatever theobjectives are forhelp- ing
inthemid-1980s. These programs have generally an individual or family to enhance their economic
been aimed at providing incentives to create a security, it is important to recognize that long time
sense of responsibility among participants in terms frames are important; quick fixes are highly
of expectations placed on them and countering unlikely and goals must be set that can be achieved
traditional criticisms of welfare programs, “one step atatime” (Shlay and Holupka 1992; Rohe
particularly the disincentive to work due to a loss 1995; Bratt and Keyes
ofincome andbenefits. The largestandbest- 1997).However,thestepsarenotnecessarilylin- ear;
knownself-sufficiencyprogram was created by the for many households, there are invariably many
federal government in 1990. The “Family Self moves forward andbackward,andjobloss
Sufficiency program”20 (FSS) directs localities to orafamilyillnesscanplungethefamilybackinto an
provide a high level of social services as well as to insecure economic situation (Sweeney et al. 2000).
coordinate these services. While this program “can Third, programs aimed at promoting economic
succeed in leveraging the provision of services only security should be infusedwith a respect for clients.
if there issufficient funding from other Programmatic approaches that promote
sourcestosupportthose services” (Shlay 1993, 486), responsibility and a sense of choice among
no additional funds are provided for the actual programparticipantscanbeasimportantasthe actual
services (Center on Budget and Policy Priorities services being offered (Bratt and Keyes 1997).
410 Rachel G. Bratt
Fourth, motivating peopletoparticipate ina self- Summarizing the extent of income and race
sufficiency program can be a challenge, at least in segregation, Downs has noted that “Poorblacksand
part because many people have given up on Hispanics remain far more concentrated in inner-
themselves, lacking the self-confidence and self- city and other high-poverty neighborhoods than do
esteem to undertake education andjob training poor non-Hispanic whites” (1994, 73). Until 1990,
programs (Rohe and Stegman 1991; Bryson and thetrendhad not been encouraging, as the
Youmans 1991). The use of escrow accounts concentration of poor blacks in high- poverty and
(accounts that enable house- holdstosavethe portion distressed neighborhoods steadily increased
of their rent that would becharged under HUD's (Kasarda 1993, 283; see also Chapter 3). While
standard guidelines for increasing rent recent research points to a reversal of this trend in
contributions when incomes rise) may be an virtually all neighborhoods except for older, inner-
important attraction for recruiting participants to ring suburbs (Jargowsky 2003), the change may not
such programs (Rohe and Kleit 1999). be permanent. In fact, some of the gains may
Fifth,andinsharp contrast to theFSS program, already have been lost due to the downturn inthe
programs aimed at promoting economic security economy during the early years ofthe 21st century.
should be well funded, and housing subsidies Moreover:
should be a critical component of the supports
[T]he long-run picture is far from sanguine...........
provided. Financial resources are needed to payfor If the inner-ring suburbs provideanyindication,
at least three distinct components of aself- then the underlying development pattern that leads
sufficiencyprogram: theservices themselves, to greater neighborhood stratification was still at
coordinating theservices, and paying personnel to work inthe 1990s, andis likely to have continued
do case management and referrals. Housing in the considerably weaker economic climate of
subsidies are a critical, if not [2000-2003]. If so, greater concentration of
thefirst,“service”neededinself-sufficiencypro- poverty and more geographically stratified
grams (Bratt and Keyes 1997). In addition, a metropolitan areas could exacerbate social
problems inahost of areas . . . . [W]e should not
housing subsidy maybe needed even after a
ignore the warning signs that our society is still
household has begun to make progress toward self-
vulnerable to increasing concentration of poverty.
sufficiency (Shlay 1993). (Jargowsky 2003,13)
Housing-based self-sufficiency initiatives
certainly holdpromise forpromotingeconomic One of the ways that planners and policymakers
security. However, since only about one-third of all have attempted to reduce concentrations ofpoor and
eligible households actually receive rental housing nonwhite households has been through a
assistance (Millennial Housing Commission 2002, strategyknown as mixed-income housing. Whilethe
14), thereby making them candidates for FSS public housing program, when it was created in
programs, combined with the relatively small 1937, was not structured to be occupied exclusively
scaleof these programs, makes them marginal at by very-low-income people, by the 1960s and
best. 1970s, income mixing began to disappear as
demographic shifts transformed amajority of public
housing developments into low-income enclaves,
HOUSING AND ACCESS TO OPPORTUNITIES in most of which nonwhite residents were the
majority. This trend was exacerbated through
Beyond the effects ofhousing itself, where people legislation enacted in 1981 that directed local
live, interms of neighborhood setting and locational housing authorities to target Section 8 and public
advantage, mayhave an impact on access to both housing units to households withincomes below 50
educational opportunities and employment and percent ofarea median income.
social networks. For example, Wilson's The Truly As public housing was becoming home to
Disadvantaged (1987) argues persuasively that moreand more very-low-income, nonwhite
isolation ofpoor and nonwhite populations creates households, buildings continued to age, police
its ownsetof problems, placing barriers inthe path protection ofthe developments often slackened
of those struggling to move out ofpoverty. andquality ofmanagement frequently declined. The
net result was that the image ofpublic housing demographic data reveal that, during the decades
worsened, often being referred to as government- following World War II, millions of households
supported slum housing. It is littlesurprise that with the financial means to leave their urban homes
concentrated poverty was seen as the cause exercised their option to do so. Those with few or
ofadverse social conditions, and the notion that no choices remained in the cities (Goldsmith and
subsidizedhousing should include a mix ofincomes Blakely 1992; Downs 1994).
became a widely accepted doctrine. Thereareanumber of reasons why low- income
And so, by the 1970s, several state housing fi- people and people of colorhave been
nance agencies, notably those in Massachusetts and unabletofollow the more affluent and nonminority
New York, explicitly required multifamily populations to the suburbs. As manufacturing jobs
developments receiving their financing to rent at have left the cities, the lack of education among
least 20 percent of theunits to low-income tenants. many inner-city residents has prevented them from
Aportionofthe funding to achieve this goal came competing forbetter- paying jobs that often are
through the federal Mortgage Revenue Bond located outside the cities. In addition,
Program, which gives local governments and state discrimination on the partof employers, as well as
housingfinance agencies the authority to sell tax- by the real estate, banking and insurance sectors,
exempt bonds, the proceeds of which can be loaned has limited the ability of nonwhite households to
to developers who commit to set aside at least 20 move to suburban locales. Furthermore, large-lot
percent of theunits for households at or below 80 zoning requirements in many suburban
percent of area median income.22 communities effectively bar the production of
Twoother major federal programs that explicitly small, low-
encourage mixed-income housing are the Low costhomes;manysuburbantowns'zoningordi- nances
Income Housing Tax Credit (LIHTC) and prohibit the development of multifamily housing
theHOPE VI program.23 Enacted in 1986, the and mobile homes, which, inturn, prevents access
LIHTC provides attractive tax credit opportunities to these locales by lower-income groups. In
to private investors in developments with set-asides addition, all of these factors are either fueled or
for households earning at or below 50 or 60 percent exacerbated by NIMBY (not in mybackyard)
of area median income.24 The HOPE VI program, attitudes of existing suburban residents.
created in 1992 to produce physical and social Also important isthe fact that the majority
rejuvenation ofdis- tressed public housing, has as a ofhousing developments built with public subsidies
key objective a mixed-income approach. are located in central cities, as opposed to the
Whilemixed-income housing has continued to suburbs or outside metropolitan statistical areas
gainpopularity andis often accepted as apillar ofa (McGough 1997). This is primarily due to the
soundhousing policy, there are manyquestions structure of the public housing program, which
about the extent to which income mixing, gives local governmental bodies discretion
asopposedtootheraspectsofthehousing(such as concerning whether or not to create a local public
location, quality of construction, amenities and housing authority (the entity responsible for the
management) isthecriticalingredient (two production of public housing), as well as to
thoughtful critiques of mixed-income housing are community opposition to siting subsidized housing
Schwartz and Tajbakhsh 1997, and Smith 2002). developments in suburban locations, noted above.
While there is continued interest incre- Although the criteria for locating publicand other
atinghousingincities(aswellasinthesuburbs) that types of subsidized housing changedinthe 1970s,
includes residents with amixofincomes, there with attempts to direct the location of new projects
isalsoastrong sentiment that low-income outside ar-
households will have greater opportunities if they easofminorityconcentration(Vernarelli1986),
areabletoleave the cities, following the trend oftheir ambiguities inthe way these criteria werear-
higher-income counterparts. ticulated and reductions in federal funding for
Although many people love what thecity offers newconstructionoverthepasttwodecadeshave meant
—in terms ofjobs, recreational and cul- that theoverall pattern of racial segregation in the
turalfacilities and educational opportunities— subsidized housing stock still prevails.
412 Rachel G. Bratt
Finally, although housing choice vouchers can neighborhoods with lower concentrations of
be used in suburban locales, the relative scarcity poverty. The first, knownasthe Gautreaux program,
ofrental units in these areas makes it difficult, if not was carried out inthe metropolitan Chicago area. 25
impossible, forrecipients to find suitable Results reveal thatamovetothe suburbs
housingoutside the cities. While vouchers are much improvedyouths' education prospects, although
less likely to concentrate welfare families in high- gains wereneitherimmediate nor easy, and
poverty areas than istrue of ei- therpublic housing significant additionalhousing and counseling
or Section 8 projects, they do not appear to assist services were required (Rosenbaum 1995, 263-
welfare families escape from high 264). To summarize:
concentrationsofpoverty (Khadduri, Shroder and
Positive changes were also reported for small
Steffen 2003, 36).
samples of children who had been living in less
Theoutcomehasbeenanincreasingtrendto- ward
segregated neighborhoods. Although they had
two societies, divided along racial and class lines initially experienced declines in school perfor-
that are, for the mostpart, separate and unequal. mance, inthe long run (7 to 10 years) such children
Harrington's The Other America, written were less likely to drop out of school
in1962,wasoneofthefirst,andcertainlyamong the andweremore likely to takecollege-track classes
most powerful, portrayals of our bifurcated society than their peers in a comparison group who moved
—a trend that worsened throughout the second half to city neighborhoods, which were both poorer and
of the 20th century. Although the problem ofhow to more racially segregated than the suburban
measuretheeffects of neighborhoods on individuals locations. After graduating from high school, the
Gautreaux children were also more likely than
and families is complex
their citypeers to attend a4-year college or become
andunresolved(Galster2003, 909), itisstillrele- vant employed full-time. (Orr et al. 2003, v)
to question what we know about neighborhood
effects: To what extent are poorinner-city However,there were significant limitations
households whoareabletomovetononpoor locales inherent inthe Gautreaux research because of the
able to attain economic security through improved nonexperimental natureof the study,specifically:
educational and employment opportunities?
The causallinkbetween thenewresidentialloca-
tions and the improvement was not certain: The
Educational Opportunities
observeddifferencesmightreflectdifferencesbe-
tween the kindsofpeople whomoved to thesub-
Theeducationalperformance ofpoor, predominantly urbs through Gautreaux and those who moved
nonwhite students is farfrom adequate (Downs within the city rather than reflecting the effects of
1994; Rusk 1998; Orfield et al. 2004). The reasons the different residential locations. (Orr et al. 2003,
are subject to debate andrevolve v)
aroundwhetherpoor educational outcomes among
The Gautreaux program was followed by a
this group are due to the quality of the schools or to
federaldemonstrationprogram,knownasMov- ingto
the concentration of an impoverished population
Opportunity (MTO), whichincorporated an
inthose schools.
experimental design, thereby providing a better
One view is that “if blacks were able to obtain
mechanism for understanding whether moves from
housing throughout the metropolitan area onthe
high- to low-poverty areas can result in positive
samebasisaswhites, the problemofracial segregation
changes. Initiatedin 1992, MTO was aimed at
in schools would largely disappear” (Kain 1992,
“assist(ing) very low-income families with children
452). And, further, the continuing discrimination in
who reside in public housing to move out of areas
housing and the resulting segregated
ofhigh concentrations of persons living in poverty
neighborhoods may be important factors
areas to areas withlow concentrations of such
contributing to our educational problems (Turner
persons.”26 An evaluation of the MTO program
1998).
provided some important insights into the
Anumber of initiatives have been aimed at
benefitsto familieswho had moved to low-poverty
assisting low-income, predominantly nonwhite
areas. Specifically, families reported substantial
households move out ofinner-citylocations and into
improvements in housing and neighborhood business district (Goldsmith and Blakely 1992,
conditions and en- hancedfeelings of safety. 27 132).
However,concerning one of the major goalsof the Although Kain (1992) and other researchers
program—to improve educational performance— (for asummaryof studies, see IhlanfeldtandSjo-
no “convincing evidence” of theeffects of the quist 1998) conclude that the spatial-mismatch
program were found (Orr et al. 2003, xv).28 hypothesis is sound, there is considerable con-
Since all such dispersal programs are likely to troversy about the extent to which a lack ofphys-
remain quite small inthe years ahead, due to ical access to jobs isthe cause of high unem-
limitedhousing supply insuburban locales, dis- ployment among poor inner-city, particularly
crimination among realtorsandrental agents, and nonwhite, residents.
NIMBY attitudes on the part of current residents, it Taking a somewhat different view,that social
is extremely unlikely that significant numbers of isolation isthe most compelling issue, Wilson
inner-city poor households could participate insuch explains the problem as follows:
an initiative (Yinger
1998;VaradyandWalker2003).Moreover,many Unlike poor urban whites or even inner-city blacks
of earlier years, the residents of highly
inner-city households with that option would
concentrated poverty neighborhoods inthe in-
stronglyprefer to remainintheirownneighbor-
nercitytodaynot onlyinfrequentlyinteractwith those
hoodsunderimproved conditions. The problem individuals or families who have had a stable work
remains ofhow to provide improved educational history andhave hadlittle involvement with welfare
opportunities for city dwellers. Charter schools, or public assistance, they also seldom have
school voucher programs and general efforts to sustained contact withfriendsorrel- atives
improve inner-city school systems are some of the inthemore stable areas of thecity orin thesuburbs
approaches being pursued.29 Wholesale moves to Thenetresult isthat the degree of social isolation—
thesuburbs, even assuming the best results,do not defined in this context as the lack of contact or of
present a viable approach for most people. sustained interaction with individuals and
institutions that represent mainstream society—
inthese highly concentrated poverty areas has
Employment and Social Networks become far greater than we had previously
assumed . . . . Inner-city social isolation makes it
Wherelow-incomehousingislocatedandwhere much more difficult for those who are looking for
poorpeople live likely hasagreatdeal to do with the jobs to be tiedinto the job network. (1987, 60)
ease or difficulty that manypotentialworkers
haveinlocatingemployment.Sinceatleast1968, with Following Wilson's analysis, Goldsmith and
publication of the report by the National Advisory Blakely present a compelling picture of how ghetto
Commission on Civil Disorders (the Kerner residents are deprived of a host of social contacts
Commission), the physical separation between jobs which, for many other job seekers, often result in
and where workers live has been widely finding employment. They conclude that “ghetto
acknowledged. The “spatial-mismatch hypothesis,” residence is, indeed, an inhibitor to job access “
which has been attributed to John Kain, argues that (1992, 136).
jobs withlow educational requirements are Both Gautreaux and MTO, by relocating
disappearing with the decline of traditional households to low-poverty areas, attempt to
manufacturing industries, especially in the city, and provide better physical access to jobs as well as to
that central-city minority residentshave increase opportunities to network with neighbors
beenparticularlydependentonthese declining concerning employment opportunities. In the
industries forwork.Atthe same time, cityresidents Gautreaux program, whether it was thechange in
lack access to suburban jobs, since they often do physicalproximity orinthe social environment,
not have access to private orpublic transportation. those who moved to the suburbs were more likely
And since minority workers are often unskilled, to find employment than their counterparts who
they are poorly matched with the high-skill jobs in remained in the city (Rosenbaum 1995, 239). Less
the service and high-tech industries, which are positively, however,more recent research did not
generally closer to their homes, often in the central find any convincing evidence that employment and
414 Rachel G. Bratt
earnings or household income, food security and homeowners' deduction (see Chapter 5). All
self-sufficiency were positively impacted by the additionalrevenues gainedfrom elimination or
MTO program (Orr et al. 2003, xv). reduction inthe homeowners' deduction should
Despite the limited encouraging results of be earmarked for housing affordable to low-
Gautreaux and MTO, vouchers are a key element income households.
of a comprehensive housing policy, not theonly 2. Expand the Earned Income Tax Credit, and
such strategy.Whether one believes that encourage all states to adopt their ownsuch
employment opportunities are constrained due to a programs.
lack of available jobs in inner-city areas or because 3. Adoptaneconomic security standard that
of weak social networks and role models, makessense,inplaceofanunrealisticpoverty
unemployment among inner-citypoorpopulations is level.A“marketbasket”approachwouldpro- vide
unacceptably high. Despite themixed results, a clearer basis for determining theminimum
programs that assist families to move out of high- amount of money a household needs
poverty areas may continue to provide attractive toachieveeconomicsecurityandthenumber of
opportunities for some families. However, they will households falling below this level.
not, inthe foreseeable future, be 4. Encourage state and local governments to adopt
abletoaccommodate thenumber ofpeople who living wage policies for all employees of firms
might be eligible or interested in participating. The that that do business with that lo- caleor that
challenge still remains ofhow to promote better receive subsidies or otherkindsof special
employment and educational opportunities for all consideration from thegovernmental entity.
low-income people, and the question ofwhat role 5. Raise the minimum wage, and make certain
housing should playinsuch efforts remains thatitisindexedtoinflationratherthanbeing
unresolved. dependentonrenewedCongressionalaction. The
real value of the minimum wage should never
fall. The minimum wage should be set in
RECOMMENDATIONS relation to the cost of housing (HUD's
FairMarketRent) and representative of atrue
Housing security and economic security are closely povertylevel,such as the “marketbasket” ap-
intertwined and must bethe basis for anew social proach noted above.
agenda. The cost of housing, as the single largest 6. Create a comprehensive employment program
expenditure most households must cover, is a offering good jobs that pay a living wage. These
constant worry to families that can threaten their could include a range of public sectorjobs,
economic well-being. The following including public works improvements and social
recommendations are presented at two levels. The service delivery.
first provides concrete guidelines for how current
policies, such as the ones discussed throughout this Welfare
chapter, could be improved in order to enhance 7. Provide welfare payments to qualifying
economic security.The second outlines a new social households that enable them to support a
contract between government and individuals that decentlevelofliving. Such payments should, at
would encompass a series of rights and thevery least, lift families out of poverty, using
responsibilities for both. A Right to Housing would realistic definitions andbenchmarks, as noted
be a centerpiece of this new contract. above.
8. Create a welfare system that better inte-

Changes in Current Programs
gratesthe“workfirst”ideologyofthepresent
system with training and education programs.
Income
The importance of using thetwo strategies
1. Create a truly progressive income tax system by together is outlined by the U.S. General
eliminating preferential tax treatment for the Accounting Office (1999).
wealthy and reducing or eliminating the 9. Count all participation intraining and education
programs as work to satisfy the work escrow accounts should be incorporated.

requirement under the 1996 welfare reform act;
Access to Opportunities
suchinvolvement should protect the in-
dividualfrom loss ofwelfare benefits for not 16. Continue to assess “Moving to Opportunity”
working within the prescribed time limits. and other initiatives aimed at enabling families
10. Adopt a comprehensive set of “safety net” to move to locales with greater educational and
programsthatsupportfamiliesandchildren. In employment opportunities. In view of the
comparison with western Europe, for example, overall needs, the ability of this strategy to
the United States is far behind in offering become thecenterpiece ofan antipoverty effort
quality programs that enable poor families to is unlikely.
maintain decent standardsofliv- ing. Albelda
and Tilly (1997), for example, offer a rich set
ofproposalsthat would comprise a true “safety HOUSINGASTHEBASIS OFANEW SOCIAL
net,” including financial support forfull-time CONTRACT30
child care, expansion of unemployment
insurance and temporary disabilityinsurance Adoption of the above measures would go a long
andprovision of education and training for all. way toward promoting economic security. Another
11. Coordinate the welfareandhousing systems so bolder, bigger approach would involve creation of
that, at minimum, housing and welfare anew social contract between government and
agencies work together to create welfare re- individuals. Thiscon- tractwould include a series
form guidelines that do not conflict with those ofrights andresponsibilities that eachpartywould
of various housing programs. Several key becommitted to fulfill.
provisions are noted above; for a complete set This chapter, and this entire book, argues that
of these proposals, see Sard and Waller (2002). housing must beviewed as central to individual
12. Do not label welfare reform a success until the andfamily well-being. Until everyone is guaranteed
impacts on formerrecipients are well un- a decent, affordable place to call home, moves
derstood, intermsoftheiroverallwell-being and toward economic security will be piecemeal and
economic security. incomplete. Incorporating a Right to Housing into a
new social contract would mean that, for the first
Housing-Based “Self-Sufficiency” Programs
time, individuals and families would be guaranteed
13. Continuetounderscorethatthereisnosuch thing a stable environment in which to carry out the tasks
as “self-sufficiency”; the goal is better ofdaily living—child-rearing, pursuing and
statedasoneofeconomicsecurity.Everyone maintainingjobs, andparticipating in
needs(andreceives) a certain amount of as- education/training programs. In exchange,
sistance and support from thegovernment. Poor individuals would be expected to meet core
people may need more of certain types of such responsibilities, including working to maximize
assistance than others, although they often their family's wellbeing and optimizing their own
receive the least aid. productivity.
14. Viewhousing as a baseline ingredient in
enabling households to move toward greater The sense ofreciprocity underlying this contract
economic security. Rather than a “work first” isembracedinthe “communitarian” philoso-
ideology, we should promote a “housing first” phy.According to Etzioni, who has been central to
campaign. One of thefirst critical steps this movement:
inafamily'sefforts to promote itswell-
At the heart of the communitarian understanding
beinginvolvesstabilizingitshousing situation.
of socialjustice isthe idea ofreciprocity:each
15. Develop “self-sufficiency”/economic security member of thecommunity owes something to all
programs that are of high quality, are well the rest, and the community owes something to
funded and that assume long time frames. each ofits members. Justice requires responsible
They should also involve participants as active individuals in a responsive community. (1995, 19)
change agents, and mechanisms such as
416 Rachel G. Bratt
There is some precedent for explicitly artic- Instead of an across-the-board work/service

ulating the expectation that recipients of gov- requirement, the program being proposed here
ernment assistance also provide something in would involve caseworkers assisting individuals to
return. In the 1996 welfare reform legislation, for develop acourse of action that would both provide
example, there was a realization on the part family supports as well as an assessment about
oflawmakers that some kind of social contract was howproductivity and contributions to society could
needed so that the government and its citizens be maximized.This plan would embrace guarantees
would each have a clear set ofrights and while engendering a sense of responsibility. But
responsibilities. However, this legislation created doing the two simultaneously is, admittedly, not
an arbitrary, “one size fits all” set of government easy,andwe have little information abouthow
expectations for welfare recipients. At the same anoutside entity, such as a governmental or
time, it did not incorporate sufficiently substantial nonprofit organization, can stimulate the internal
supports, or guarantees, for those in need. Even for motivation necessary for an individual to commit to
households that still receive welfare benefits, the education, training
income provided does not come close to meeting orotherinitiativesthatcouldpromoteeconomic
family needs, and again, no singlestrategy or security. Indeed, isthis something that can be
uniformtime limits can be expected to work for mandated by a federal program, which is es-
everyone. Finally, and in direct contradiction to sentially what the Welfare Reform Act of 1996
what is being proposed here, the 1996 law also aimed to do? How can we develop a program
allows only ten hoursof education or training thatstimulatesmotivationwithoutcreatingper- verse
programs to count as part threats and sanctions about possible loss of
ofthe30hoursperweekworkrequirement.And benefits, housing orfood? Andhow can service to
specifically concerning public housing (but not one's family, such as child-rearing or care for an
other types of subsidized housing), the Quality elderly household member be factored into the
Housing and Work Responsibility Act of 1998 work/service requirement? These and many other
includedaprovisionthatrequireseachadultres- ident critical and difficult questions would need to be
to performcommunity service or participate in an addressed. For the present, however, the following
economic “self-sufficiency” program for at least key elements should be considered in the program
eight hours per month. being proposed.
Despite these work/service requirements, up to First, a comprehensive family support system
now, the government's expectations forwhat would be developed that would operate as atrue
individuals will contribute as partof their re- and meaningful safety net. It would respect clients,
sponsibilities have been insufficient andincom- andit would provide needed ser-
plete. Government should not be content with an vices.Andparticipationinthissupportprogram could
individual simply finding a job, any job; and a be viewed as the initial way that a household could
specific minimum hourly work or community meet the responsibilities expectedin exchange for
service requirement maybe far too little(or too housing assistance. The rationale for treating
much) for agiven person. An editorialinthe Boston participation inafamily support program as a
Globe eloquently summed up the essence of this responsibility is based on the assumption thatif
argument: such an initiative can help indi- vidualstodevelop
their own capacities, society at large will benefit.
Since welfare reform was signedin 1996, the fed- After receiving these high- quality
eral government's mandatetothe poorhas been andcomprehensive supports for aperiod of time, the
simple: Get a job It's meager advice. Jobs do hope isthat people would want to move toward
keep families afloat, but the battle against poverty
realizing their personal development goals.
needsabetter script. The president could
Second, and integral to the new systemoffam-
say ...gotocollege...look for jobs with career
paths...and brave the road to self-sufficiency, but ily supports, individuals would be assisted to assess
know, whether you fail or succeed, that the United and maximize their skills and productivity.
States government will not let your children go Programs would be devised that would build on the
hungry or unprotected. (2004) assets and capabilities of eachindividual, with the
long-term goal of greatly enhancing economic participation insocial and economic life. Ifpeople
security and, ultimately, enabling the household to were guaranteed decent places to live, with the
function comfortably without federal housing worry of deprivation and humiliation removed,
subsidies. much human potential could be unleashed.
The third aspect of the program maybethe most Some individuals may need to work on literacy
controversial. It is proposed that all households or substance abuse issues. Othersmay need to
who receive government-sponsored or -supported develop andhone parenting skills. And, as family
housing participate inthe family support program, life is stabilized, education and jobtraining
including those who take the programs would be provided. A revitalized social
homeowners'deduction. All recipients ofhousing service and public works program could be partof
subsidies should betreated more or less the same. this initiative as well.Asbridges and other parts of
For example, if low-income public hous- our infrastructure continue to age, workers would
ingrecipientsandhousingchoicevoucherhold- be enlisted to assist in suchprojects. In addition,
ersareexpected to participate in family support and more one-on-one assistance is needed in a variety
skills assessment programs, so too should higher- of sectors, from schoolstohospitalstothe kind of
income recipients. This recommendation caseworkpro- posed here. These jobs may be
recognizes that, while it would be most desirable temporary, or they may turn into permanent
for the homeowners' deduction to be eliminated (as positions. The keypoint isthat the stability housing
noted above), this may be a long while incoming. provides would go a long way toward enabling
Incorporating higher-income families inthe individu- alstofulfill their responsibilities to their
programs outlined here would achieve at least four families and to work toward realizing their
goals. First, it would provide real supports potential as productive members of society.
andservicestoallfamilies,regardlessofincome, The program outlined here would require three
thereby acknowledging that family assistance and major kinds of funding. Thefirst would go to the
careerdevelopment guidance are necessary more direct support of anewhousing production and
broadly, not just for the poor. 31 Second, such a far- rehabilitation program as well asagreatly expanded
reaching program would be nonstigmatizing for the housing choice voucher program.32 While it is
poorer participants. Third, it would make explicit beyond the scope of this chapter to delve into the
how many people do, in fact, receive some specific types of hous-
formofhousing subsidy in the formof the ingthatwouldbecreated,mystrongrecommen- dation
homeowners' deduction. And, fourth, for those would be for an expanded commitment to various
homeowners who do not want to participate inthe forms of socialhousing—housing ownedbythe
dual programs, the homeowners' deduction would public and nonprofit sectors—as well as to
be forfeited, thereby whittling increasing homeownership opportunities
away,andperhapscontributing to the elimination (withpermanentnonspeculative resale re-
altogether of a regressive subsidy that strictions).Attheveryleast,inorderforhousing to
disproportionately benefits the wealthy. promote feelings of self-worth and empowerment,
This proposalis premised on the notion that it is likely thatanewhousing program would
development of human capital should beatthe embrace ownership forms and management
heartofwhat government expects ofits citizens. This arrangements that would enable residents to
is quite different from the work and com- maximize control over their living environments.
munityservicerequirementscontainedinrecent The second funding stream would go to the
legislation mentioned earlier, which are essentially family support initiative outlined above. Enough
punitive. The first set of responsibilities that well-trained and competent caseworkers would
everyone must accept isthe responsibilityfor one's need to be hired to make sure that case loadsare
self and his or her family's physical needsand low and to ensure that each participant receives the
safety. At the most basic level, housing and other needed attention. Clearly, the task of caseworkers
family supports would be provided, and recipients to assess not only immediate needs but also the
would be expected to demonstrate responsibility potential of family members to reach their
for moving toward greater productivity and capacityinterms ofproductivity would present
418 Rachel G. Bratt
huge challenges and a high level of skill. One of well as the co-editors of this book for their careful
the secondary goals of the program might also be to reading of earlier drafts of this chapter and for their many
help develop caseworker expertise among those helpful comments.
1. The view that housing should be seen as part of a
who, themselves, have participated in (or still are
larger socialpolicy agenda has been embracedbya number
actively participating in) the family support of analysts. (See, for example, Bratt and Keyes 1998;
program. Newman andSchnare 1993; Roheand Kleit 1997, 1999;
Finally, funding would be needed to support the Sard 2003; Shlay 1993, 1995.)
public works and community service jobs 2. In charting a new course for HUD's programs,
thatwould be created. These kindsofjobs would not the department's sweeping 1994 proposals, known as the
only enable workers to develop skills and expertise, “Reinvention Blueprint,” argued that many past HUD
initiatives ran counter to the goal of promoting “self-
but they would also provide needed servicestothe
sufficiency.” “Low- and moderate-income families
larger community. should have greater power to make decisions about their
For those who believe that instead we would be lives, and government should support their quest for self-
inviting a lazy and complacent society, I sug- sufficiency [underline in original]. Public and assisted
gestthatweembarkonanewsocialexperiment. housing rules that have locked families into substandard
Thisnewinitiative would besignificantly bigger and housing have impeded their ability to move to self-
more far-reaching than any other such ini- sufficiency [Thus, one of HUD's key goals is to m]ake
affordable housing serve as a starting point for families
tiativestodate,33anditwouldallowusto explore
working toward stability and self-sufficiency by
different ways of providing basic human needs. emphasizing work, education and security” (HUD 1994,
Also, key to thisexperiment wouldbe anoppor- 1, 4).
tunity to evaluate how thenewrights could be 3. Based onastudy of 21 nonprofit housing or-
balanced with individual responsibilities. ganizations' approaches to “self-sufficiency,” Bratt and
The costs of implementing a Right to Housing Keyes (1997) “underscored the importance ofhousing
would not be low. Butthe benefits, hopefully, are being secured first, before people could pay serious
attention to non-housing issues.” They further note that:
apparent inview of the evidence presented
“Housing is at the core offamily stability” (77, n. 3). See
throughout this chapter and the entire book. Sard and Lubell (2000a, 6-7) for additional support for
Whilethis bookwas conceptualizedlong before the this view. The National Coalition for the Homeless has
September 11 terrorist attacks, we acknowledge stated that “A recent longitudinal study ofpoor and
that the recommendations presented here may seem homeless families inNew York City found that regardless
even less plausible, with significant resources beingof socialdisorders, 80% of formerly homeless families
spent on the fightagainstterror- ism,homeland who received subsidized housing stayed stably housed,
i.e. lived in their own
security and military incursions.
residencefortheprevious12months.Incontrast,only 18% of
It is farfrom certain when our country will em- the families who did not receive subsidized housing were
braceafullandrobustdomesticagenda.Perhaps thestableattheend of the study. As this study and others
hurricane-stimulated crises along the Gulf Coast demonstrate, affordable housing is a key component to
will prove to beanimportant wake-up call about the resolving family homelessness” (1999, 4).
depth and seriousness of the problems facing poor 4. For additional documentation on the extent and
citizens, particularly poor citizens of color. At theways in which living in assistedhousing produces positive
impacts, or no negative impacts, see Currie and Yelowitz
same time, the costs of dealing with the rebuilding
2000; Meyersetal. 1993, cited in Currie, 1995; Center for
of New Orleans and its surroundings may reduce Community Change 1999a; Newman and Harkness,
the already depleted fundsavailable2000; 2002; Williams et al. 1997; Li et al. 1997. These
fordomesticspending. But when our country is studies are summarizedin Bratt 2003.
finally andfully prepared to confront the range of 5. Newman (1999) has examined aseries ofstud- ies
problems our residents face, we hope these ideas pertaining to the question ofwhetherhousing isan
incentive or disincentive to achieving a high level of
will help chart that course.
economic security. She has statedthat “most observers
take itasself-evident that being homeless increases the
difficulty ofpursuing education orjob training, or getting
NOTES and keeping a job” (3-4). Shealso notes that there may be
some modest positive effects among residents in assisted
Acknowledgments: I am indebted to Barbara Sard as housing, such as greater labor force participation or
educational attainment; and that findings indicating that familyoffourissimplytheoriginalpovertyline,$3,100 (set in

“welfare recipients whoalso receive housing assistance 1963), adjustedforinflation and changes inconsumer
have lower employment rates than those who do not prices (Albelda and Tilly 1997, 20-21). Poverty levels for
receive assistance” maybe due to “administrative families of different sizes are set in a similar manner. At
decisions, such as preference rules forhousing programs least since the early 1990s, the mechanism for
that gave priority to the most disadvantaged—not the determining the poverty level has been viewed as
resultof the disincentive effect ofhousing assistance, per inadequate. In 1999, the Census Bureau analyzed the
se” (8, 10). effects of specific experimental poverty measures, but no
Inaddition,astudyofCaliforniaresidentslivingin changes have been adopted. (See U.S. General Ac-
Section 8 housing provides support for the view that the counting Office 1997 and Porter 1999).
provision ofhousing does not negatively impact 9. The HUD-established Fair Market Rent isthe
motivation to work. According to the author, “a well- amount of moneyrequired to cover the rental costs for
designedhousing program can help welfare recipients physically standard 1-, 2-, 3- and 4-bedroom housing
form a greater attachment to the labor market” (Ong units. HUD calculates these rents for each metropolitan
1998, 791). area inthe country; they are adjusted annually to
Sard and Lubell (2000a) cite a study by Manpower keeppace withinflation. However, in many market areas,
Development Research Corporation ofwelfare reform in FMRsare below the real costs of attaining a decent unit of
Minnesota that found that “most of the gains in housing. Section 8 subsidies (now known as housing
employment and earnings attributable to the state's choice vouchers) are based on the difference between
welfare reform initiative were concentrated among res- what a household can pay, contributing 30 percent of
idents ofpublicor subsidizedhousing. In otherwords, their income for rent, and the Fair Market Rent in that
welfare reform was found to have a larger effect on em- locale.
ploymentandearningsamongfamiliesreceivinghous- ing 10. This is based on figures provided by the U.S.
subsidies than among otherfamilies inthe study.” They Department of Health and Human Services (2002) on
further note that “Preliminary findings from studies in TANF benefits provided to three-person families in 2003.
Atlanta, Georgia and Columbus, Ohio, indicate the same The poverty level for this size family in 2003 was
may be true ofdifferent initiatives undertaken in those $15,260.
cities” (3). See also Freeman (1998) andReingold (1997). 11. A report by the U.S. General Accounting Office
These studies are summarizedin Bratt (2003). (Congress changed the name of this office to the
In contrast to the above findings, Miller and Riccio Government Accountability Office inJuly 2004) sum-
(2002) cite two unpublished studies and note that marized a series of studies concerned with the length of
“housing subsidies tend to reduce employment among time recipients stay on welfare and concluded that
single mothers” (13). “relatively few families are long-term welfare recipients”
6. According to a 1998 report by the InternalRev- (1993, 41). Nevertheless, the image oflong-term welfare
enue Service, based on 1994 tax returns, 1,137 taxpayers dependency as the norm helped to fuel welfare reform.
who earned more than $200,000 paid no taxes (Online 12. For example, the U.S. General Accounting Of-
Athens 1998). In California, in 2000, 784 individuals ficereportedthat“Asearningsrise,familieswhoreceive
with incomes of $200,000 or more paid no income tax AFDC, food stamps, and housing subsidies may initially
(Smith 2003). Concerning taxation of corporations, the have reduced total incomes, making them financially
U.S. General Accounting Office reported that from 1996 worse off than if theyhad not worked When heads of
through 2000, a majority of all corporations reported families earned at the rate of $10 an hour and worked as
paying no taxes. And, in 2000, about 94 percent of U.S.- many as 80 hours a month, there was still only a small
controlled corporations and 89 percent offoreign- gain in income from employment
controlled corporationsreported less than 5 percent in tax comparedwithnotworkingandreceivingAFDC,food
liability (2004, 6,7). stamps, and housing subsidies” (1993, 31).
7. Theminimum wage is not indexed to inflation; 13. This section is revised from Bratt and Keyes
increases must be approved by Congress. In 2005, sixteen 1997, Appendix B, 101-104.
states and theDistrictof Columbiahad minimum wages 14. Nevertheless, Newman and Schnare point out
higher than the federal minimum of $5.15 per hour, with that “the principlethat housing assistance should bea
Alaska, Oregon, and Washington leading at $7.15, $7.25 vehicle for independence is not new to either the wel-
and $7.35 per hour, respectively (U.S. Department of faresystem or the housing system. As early as the 1920s,
Labor 2005). the welfare system recognized that adequate housing was
8. The federalpovertylinewassetinthe1960sand was one of the most important needs for mothers and their
based on a minimum adequate diet for different types of children.” And one of the tenets guiding the first
families, multiplied by three. The multiplier is based on nationalhousing act in 1937 was that “subsidized housing
the assumption that food constitutes one- third of a should be a vehicle for human development” (1992, 8).
household's budget. The poverty line for a 15. For example, housing managers are generally
420 Rachel G. Bratt
forced to takestepstoevict a household if the lease has velopment, community-building and, most recently,
been violated for cause. However, welfare caseworkers comprehensive community initiatives all include a central
counter that if the family is forced to leave their role for housing. However, an examination of the
subsidized unit, they would have no place else to go. connections between housing and these types of
16. Data on the negative impacts ofwelfare reform programs is beyond the scope of this chapter.
can be found in a number of studies of post-welfare 19. The perspective that even those who profess to
experiences. Morethan one-half of the respondents in have “made itontheirown”areinsteadthe recipients of
asur vey conducted by the Urban Institute repor ted that someformoffederallargesseiscapturedinananecdote
often or sometimes food did not last until the end of the involving Vernon Jordan, former Executive Director of
month, and they did not have money for more; 46 percent the Urban League. During an in-flight conversation
reported atime during the previous year when they were between Jordan and a successful white businessman the
unable to pay rent, mortgage or utility bills. Nine percent following transpired:
indicated they had to move in with others because they
were unable to pay their bills (Loprest 2001, 5). A “Afterhisfirst martini the businessman observed
Children's Defense Fund and National Coalition for the that black people had to pull themselves upby their
Homeless study noted that “Manyfamilies leaving own bootstraps. After thethird martini the
welfare reportstruggling to get food,shelter,or needed businessman acknowledged that he wenttoan elite
medical care; many aresuffering even more hardshipsthan Eastern private college on theGIbill, started his
before” (Sherman et al. 1998, 2). The Institute for business with a loan from theU.S. Small Business
Women's Policy Research has reported that the “threat of Administration, and purchased his Scarsdale home
eviction can be a particularly serious problem for welfare with an FHA loan. As Jordan concluded, ‘So much
recipients who lose benefits” and that, in the aftermath of for lifting yourself up by your own bootstraps.'”
welfare reform, there has been an increase inthe number (quoted in Squires 1994, 9)
of homeless people seeking shelter. Many researchers
attributed these changes to the new policies (Nichols and 20. The Family Self-Sufficiency program was au-
Gault 1999). Further, researchers at the Center on Budget thorized in Section 504 of the National Affordable
and Policy Priorities, using Census data, reported that Housing Act of 1990 andhas been required since 1993.
“the average disposable income of a significant The program is aimed at promoting the development of
percentage of the poorest single-mother families was local strategies to coordinate federal housing assistance
lower in 1997 than in 1995. Of particular concern, with public and private resources to enable low-income
progress in reducing the depth and severity of child families work toward economic independence and “self-
poverty ...haltedbetween 1995 and 1997 despite sufficiency.” Participants include current housing choice
continuedimprovement inthe economy.Thenumber of voucher holders, as well as public housing residents, and
poor children declined only slightly during this pe- are expected to carry out their self-sufficiency programs
riod,and children who remainedpoorbecame poorer, on within five years.
average. Among many low-income single-mother 21. Thematerialpresentedisdrawnfromtwotypes of
families with significant earnings gains, the gains were sources: (1) studies of the major “self-sufficiency”
offset entirely by losses in means-tested benefits, leaving programs, including Project Self-Sufficiency, Operation
the families no better off economically” (Primus et al. Bootstrap,FamilySelf-SufficiencyProgram,Fam- ily
1999, xv). Investment Centers, Mixed-Income New Commu-
17. Lazere notes that “As caseloads have fallen, so nityStrategyDemonstration, Family Support Centers and
has spending on cash assistance. Federal and state ex- the Gateway Program (for a complete description of these
penditures for cash assistance benefits in fiscal year 1999 programs, see Bratt and Keyes 1997; Bogdon 1999) and
totaled $12.4 billion, or $10.6 billion less than in (2) observations based on field vis- itstotwenty-
fiscalyear 1994 (2000, 1). For a discussion of the excess onenonprofithousingorganizationsthat were
fundsthat weremadeavailable to states due to thesavings implementing some form of “self-sufficiency”
in welfare payments, see U.S. General Accounting Office program,aspresentedinBrattand Keyes 1997. Bogdon has
(1998a). Despite the view that there have been significant noted a variety of methodological problems with the
reductions inthe amount the federal government is paying studies of thethree majorprograms (thefirst three noted
in welfare payments, other data reveal that these savings above), whichledher to observe that “The most
maybe illusory. Loprest (2003b) reports an increase in fundamental conclusion is that the potential role of
other forms of government assistance, such as food housing assistance inthe long-term process of attaining
stamps and adult Medicaid payments. self-sufficiency still needs to be addressed” (1999, 169).
18. In addition to housing becoming intertwined 22. The federalgovernmentfirstauthorized the use of
with the “self-sufficiency” agenda, since at least the tax-exempt housing bonds in 1968 through amend-
1960s, housing has also played an important role in mentstoSection 103ofthe InternalRevenueCode.The Tax
neighborhood revitalization efforts. Community de- Reform Act of 1986 added various requirements
associatedwith the issuance of these mortgage revenue school reform is not a panacea. Instead, he argues that
bonds (which could be used to support homeownership deeply entrenchedpoverty andfamily and community
for qualified first-time homebuyers as well as for environments and values are most critical (January16,
multifamily rental housing) and capped each state's 2000). Nevertheless, there are numerous examples of
bonding authority and instituted more stringent targeting good schoolsmaking significant impacts in poor com-
standardstolow-income households(National Low Income munities (see, for example, Schorr 1997, 232-297).
Housing Coalition 1986). 30. Versions of this proposal also appear in Bratt
23. HOPE VI is a component of theHomeOwn- 2002 and Bratt 2003.
ership for People Everywhere legislation, enacted by 31. The suggestion that a comprehensive set of
Congress in 1990, theCranston-Gonzalez National Af- family supports be offered broadly has been made by
fordable Housing Act. TheHOPE program was aimed at anumb e r o f soci a lpo lic y analysts. S ee, f o r example,
empowering low-income families to achieve self- AlbeldaandTilly1997, Chapter9; Skocpol2000, Chapter
sufficiency and to have a stake intheir communities by 5; andSchorr 1997. Also, there isample precedence for
promotingresidentmanagementaswellasotherforms universal family support programs in many European
ofhomeownership.HOPE VI, whichwas added to the countries.
legislation two years later, does not involve homeown- 32. Theother twoeditorsof this bookdo not agree that
ership. the number of rental vouchers should beexpanded. They
24. Tax credit developments aimed at households at argue that all federal subsidies should go toward
orbelow 50 percent of area median income must set socialhousing. However,my viewisthat, at least in the
asideatleast 20 percent of theunits for thisgroup. De- short term, it is necessary to create as many opportunities
velopments aimed at households at 60 percent or less of to promote affordability as possibleand that in many
area median income must reserve at least 40 percent of markets, vouchers make sense.
their units for this group. 33. There have been two other significant ex-
25. The Gautreaux program was created as a result periments exploring various approaches to providing
of a lawsuit filed by tenants of public housing in Chicago housing. The first, the Experimental Housing Allowance
against the Chicago Housing Authority and HUD. Program, was initiated in the 1970s. As the production-
Gautreaux attempted to remedy the segregation in public based housing programs (public housing andbelow-
housing developments by providing opportunities market interest rate programs of the 1960s) began losing
forpublic housing residents to leave and to relocate in support, a series of experiments were launched to test
predominantly white areas—either in other areas of theeffectiveness of subsidies linked to individual
Chicago or in the suburbs. While there were about 1,700 households rather than to specific housing units. These
eligible households, only about one- demonstration programs are collectively referred to as the
fifthusedtheirSection8certificateandmoved(Varady and Experimental Housing Allowance Program (EHAP).
Walker 2003). (See, for example, Bradbury and Downs 1981; Hartman
26. P.L. 105-550 42 U.S.C. 3672 Sec. 146. 1983). The second major experiment was the Moving to
27. The homes and neighborhoods of people who Opportunity demonstration, discussed earlier.
moved to low-poverty areas were substantially more
desirable than those where control group members lived
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About the Contributors
EMILY PARADISE ACHTENBERG Council of the Federal Reserve Bank and

(ejpa@aol .com) isahousing policy theCitizens' Housing andPlanning Association in
anddevelopment consultant and urban planner who Boston. She received a Ph.D. from the Mas-
specializes in the preservation of federally-assisted sachusetts Institute of Technology's Department of
housing. She has assisted community-based Urban Studies and Planning.
nonprofit and government organizations
inacquiring and preserving more than 3,500 units DAVIDB. BRYSON was a housing attorney at the
threatened with expiring use restrictions and National Housing Law Project for 27 years, during
subsidy contracts, and she is actively involved in which he also twice served as its acting director.
the development of federal, state and local Through his litigation, training, writings
preservation policies andprograms. She isthe andlegislative and administrative advocacy, he
author of Stemming the Tide: A Handbook on influenced almost every progressive development
Preserving Subsidized Multifamily Housing (2002) in affordable housing law. He was author or co-
and has written about strategies to promote social author of Welfare and Housing—How Can the
housing ownership, production and finance. She Housing Assistance Programs Help Welfare
was an original member of the PlannersNetwork Recipients? (2002), HUD Housing Programs:
Steering Committee andiscurrently a Board Tenants' Rights (intwoeditions, 1981 and 1994)
member of Citizens Housing and Planning and Public Housing in Peril (1990). His efforts
Association in Boston. She received an MCP from established numerous rights forresidents under the
the Massachusetts Institute of Technology. federal low-income housing programs. He also
litigated or participated in landmark housing cases,
RACHEL G. BRATT ([email protected]) is including Wright v. City of Roanoke (1987), the
professor and chair of the Department of Urban Supreme Court's decision recognizing that public
andEnvironmentalPolicy andPlanning at Tufts housing residents could enforce their statutory
University and a Fellow at the Harvard Joint righttolimitedrents, and Geneva Towers Tenants
Center for Housing Studies. She is a co-editor of Organization v. Federated Mortgage Investors, a
Critical Perspectives on Housing (TempleUni- case establishing the due process rights of
versityPress, 1986) and the author of Rebuilding a federally-subsidized residents in the rent increase
Low-Income Housing Policy (TempleUniversity process. David died in 1999.
Press, 1989). She is also the author or co-author of
dozens of professional and research reports, HELENE CLARK ([email protected]) is
articles and book chapters. In addition to her an environmental psychologist and director of
academic work, she was a professional planner ActKnowledge, a research organization that
intheCity of Worcester, Massachusetts, andhas studies and assists social change ef-
served as a board or advisory committee mem- forts.Throughprogramevaluation,community
berforanumberofpublic,privateand nonprofit
organizations, including the Consumer Advisory
428 About the Contributors
development and public policy research, she brings PETER DREIER ([email protected]) is E. P. Clapp
social science research into partnership with Distinguished Professor of Politics and director of
program providers and policymakers. Dr. Clark's the Urban & Environmental Policy Program at
work in the field of housing policy has been Occidental College in Los Angeles. He is co-
concerned with understanding and supporting author of Place Matters: Metropolitics for the 21st
efforts to move housing out of the private market Century (2005, 2nd edition), The Next Los
into tenant or social ownership. Currently, she Angeles: The Struggle For a Livable City (2005)
works with nonprofit organizations to and Regions that Work: How Cities and Suburbs
developplanning andresearch tools for social Can Grow Together (2000) as well as co-editor of
change initiatives. Up Against the Sprawl: Public Policy in the Mak-
ing of Southern California (2004). He writes reg-
JOHN EMMEUSDAVIS is a partner and cofounder ularly for the Los Angeles Times, The Nation and
of Burlington Associates in Community American Prospect.From 1984 to 1992, heserved
Development, LLC (www. burlingtonasso as the chief housing policy adviser to Boston
ciates.com), a national consulting cooperative MayorRay Flynn and as the director ofhousing for
specializing inthe designofpublic programs and the Boston Redevelopment Authority.
private modelsthat supportthe development of
permanently affordable housing and the revi- MARIA FOSCARINIS ([email protected]) is
talization of lower-income neighborhoods. He founder and executive director of theNational Law
previously worked for the City of Burlington, Ve Center on Homelessness & Poverty, a nonprofit
rmont, and at the Institute for Community organization established in 1989 as the legal armof
Economics. He has taught at New Hampshire the nationwideefforttoendhome- lessness. She has
College, the University of Ve rmont and Mas- advocated nationally for solutions to homelessness
sachusetts Institute of Technology.His publications since 1985 and was a primary architect of the
include The Community Land Trust Handbook Stewart B. McKinney Homeless Assistance Act.
(1982), Contested Ground: Collective Action and She has litigated to secure the rights of homeless
the Urban Neighborhood(1991), The Affordable persons and has also written for scholarly and
City: Toward a Third Sector Housing Policy general audience publications. She isagraduate of
(1994), Bridging the Organizational Divide: The Columbia Law School and also holdsaMAin
Making of a Nonprofit Merger (2002), and Per- philosophy.
manently Affordable Homeownership: Does the
Community Land Trust Deliver on Its Promises? CHESTER HARTMAN ([email protected]) is
(2004). He holdsanMS and Ph.D. from Cornell. the director ofresearch at the Poverty & Race Re-
search Action Council in Washington, DC—an
NANCY A. DENTON ([email protected]) is organization for whichheserved as executive di-
associate professor of sociology and the associate rector and president from its founding in 1990
director of the CenterforSocial andDemo- graphic through 2003. Prior to that, he was a Fellow at the
Analysis at the State University of New York at Institute for Policy Studies and founder and chair
Albany. She received her MA and Ph.D. in of the Planners Network, a national organization of
demography from the University of Pennsylvania progressive urban planners. He has served on the
and an MA in sociology from Fordham faculty of Harvard, Yale, Cornell, Columbia, UC-
University.Her majorresearchinterests are race and Berkeley and the University of North Carolina-
residential segregation, and she isthe author of Chapel Hill and is an adjunct professor ofsociology
numerous articles on the topic. She is co-author of at George Washington University. Among his
American Apartheid: Segregation and the Making recent booksare City for Sale: The Transformation
of the Underclass (1993), winner of the 1995 of San Francisco (2002), Between Eminence and
American Sociological Association Distinguished Notoriety: Four Decades of Radical Urban
Publication Award and the 1994 Otis Dudley Planning (2002) and Poverty and Race in
Duncan award from the Sociology ofPopulation America: The Emerging Agendas (2006).
section of theAmerican Sociological Association.
About the Contributors 429
W. DENNIS KEATING books on housing and the elderly, including

([email protected] .edu) isaprofessor and Housing the Aged: Design Directives and Policy
associatedeanwithLevin College of Urban Affairs, Considerations (1987); Housing Frail Elders:
Cleveland State University, where he also chairs International Policies, Perspectives and Prospects
the Department of Urban Studies. His numerous (1995) and Linking Housing and Services for
publications are in housing, housing law, Older Adults: Obstacles, Options and
neighborhood revitalization and urban policy. His Opportunities (2004). He isa founding member of
co-edited special issue of the Journal of Urban theNational Home Modification Action Coalition
Affairs on “New Perspectives in Community andhas been awarded Guggenheim and Fulbright
Development” was publishedin 2004. Hiscurrent Fellowships. Before moving to USC in 1979, he
researchprojects include a national study was the director of an Area Agency on
ofintentionally diverse suburban communities and Aging/Home Care Corporation in Massachusetts
studies of the First Suburbs Consortium of greater that provided a range of services to keep older
Cleveland. persons out of institutional settings and allow them
to age in place. He holdsundergraduate, master's,
PETER MARCUSE ([email protected]) isa andPh.D. degrees from Harvard University.
professor of urban planning at Columbia Uni-
versity. He is a co-editor of Globalizing Cities: A ROB ROSENTHAL ([email protected]) is
New Spatial Order? (1999) an d Of States and a professor of sociology and director of the
Cities: The Partitioning of Urban Space (2002). Service-Learning Center at Wesleyan University.
He was majorityleader of Waterbury,Connecti- He writes frequently on homelessness, isthe author
cut's Board of Aldermen; a member ofits City of Homeless in Paradise (TempleUniversity Press
Planning Commission; laterpresident of the Los 1994) and was a founding member of the Santa
Angeles Planning Commission; and more recently, Barbara Homeless Coalition. He is working on a
a member of Community Board 9 in Manhattan book (with Dick Flacks) on how music is used in
and co-chair ofits Housing Committee. Prior to social movements andisthe author of the historical
joining the Columbia faculty in 1978, he was on rock opera, “Seattle 1919.” He received his Ph.D.
the faculty of UCLA and for 20 years was from the University of California, Santa Barbara.
inaprivate lawpractice inWaterbury, Connecticut.
He spent two years in Germany, both West and SUSAN SAEGERT ([email protected]) isthe
East, and has taught in Australia and South Africa. director of the Center for Human Environments
and a professor of environmental psychology at the
CHRISTY M. NISHITA ([email protected]) CUNY Graduate Center, where she was also the
completed her Ph.D. in gerontology from the first director of the Center for the Study of Women
University of Southern California in 2004 and and Society. She holds a Ph.D. in social
iscurrently a post-doctoralresearch associate at psychology from the University of Michigan. She
USC's Andrus Gerontology Center. She was a is a co-editor of Social Capital in Poor
recipient of a National Institute on Aging pre- Communities (2001) and coauthor of From
doctoral traineeship to conduct research on the role Abandonment to Hope: Community Households in
of supportive housing and home modification in Harlem (1990) and the Annual Review of
long-termcareandhas publishedjournal articles, Environmental Psychology, 1990.
book chaptersandpolicyreports on the topic. Shehasservedaspresidentof the division forEn-
vironmental and Population Psychology of the
JON PYNOOS ([email protected]) is the UPS American Psychological Association, co-chair of
Foundation Professor of Gerontology, Policy, the Environmental Design Research Association
Planning and Development at the Andrus and on theeditorialboardsof Environment and
Gerontology Center of the University of Southern Behavior and the Journal of Environmental
California, where he also directs its National Psychology.
Resource Center on Supportive Housing and Home
Modifications. He has written and edited five MICHAEL E. STONE (Michael.Stone@umb .edu)
430 About the Contributors
isaprofessor of communityplanning and public Albelda, 1997), Work Under Capitalism (with
policy at University of Massachusetts, Boston. For Charles Tilly, 1998) and Stories Employers Tell:
more than 30 years, he has been involved in Race, Skill, and Hiring in America (with Philip
teaching, research, policy analysis, program Moss, 2001).
development, technical assistance and advocacy on
housing, poverty and living standards, and ROBERT WIENER ([email protected]) has
participatory planning. Among his numerous been the executive director of the Califor-
research reports, articles and books is Shelter niaCoalitionforRural Housingsince 1981. As
Poverty: New Ideas on Housing Affordability oneoftheoldeststatelow-incomehousingcoali- tions
(Temple University Press, 1993). During 2002 to inthe country,CCRH has played amajor
2003, he was an AtlanticFellowin Public Policy, roleinfederal andstatehousingpolicyandpro- gram
based at the Centre for Urban and Community efforts in ruralhousing, farm laborhousing, housing
Research, Goldsmiths College, University of preservation and other areas of
London. housingprovision.Hehasbeenonthefacultyof the
Universityof California, Davis, Community and
MICHAEL SWACK ([email protected]) isthe Regional Development Program. In 1999, he co-
founder and dean of the School of Community edited (withJoe Belden) HousinginRural America
Economic Development at Southern New (1998) andiscurrently working on a book on
Hampshire University. He was the founding affordable housing practice in California. He holds
chairman and current board member of theNew a doctorate inurban and regional planning from
Hampshire CommunityLoan fund.Hereceived his UCLA.
doctorate from ColumbiaUniversity andhis
master's degree from Harvard University. LARRY LAMAR YATES ([email protected]),
currentlyanorganizerfortheVirginiaOrganiz-
CHRIS TILLY ([email protected]), University ingProject intheShenandoahValleyofVirginia,
Professor of Regional Economic and Social served as thefield directorfor the National Low
Developmentatthe UniversityofMassachusetts at Income Housing Coalition andwas the Grassroots
Lowell,specializes in labor, income distribution Organizing Mentor at the Center for Health,
andlocal economic development. His books Environment and Justice. He was also the founding
include Half a Job: Bad and Good PartTime Jobs executive director of theVirginia Housing
in a Changing Labor Market (Temple University Coalition and provided critical early supporttothe
Press, 1996), Glass Ceilings and Bottomless Pits: foundersof theNational Alliance for HUD Tenants
Women's Work, Women's Poverty (with Randy (URL: www.user.shentel.net/ llyates).
Index
Aaron, Henry, 123 American Friends Ser v ice Committee Barton, Stephen E., 391n46, 371 Bauer,
AARP. See American Association of (AFSC), 221, 360 Catherine, 113, 129, 142, 143,
Retired Persons abandonment, 8 Abrams, American Homeownership and 158n7, 384 Becker, Julie, 193 Bedford,
Charles, 66 Abramson, Alan J., 64 Economic Opportunity Act of 2000, 285 Massachusetts, 377 Berkeley, California,
Achtenberg, Emily Paradise, 2, 427 American Housing Sur vey, 58n8, 59n13, 368, 372, 379,
ACORN, 119, 220, 22, 224, 226, 234 Action 280 391n46 Berndt, Harry Edward, 349
Coordinating Committee to American Indians, 66, 230. See also Bishop, Catherine, 193 Biswas, Protip, 354
End Segregation inthe Suburbs Native Americans Black Panther Party, 214, 218, 219,
(ACCESS) (Arlington County, Virginia), American Public Human Services 220, 230, 233 Black Radical Congress,
219 Association, 406 235 Blacks, 23, 27, 32, 54, 55, 61, 63, 66,
Administration on Aging, 289 AFDC/TANF, American Public Welfare Association, 406 67,
129n1, 131n11, 420n12 affordabilit y Americans Disabled for Attendant 68, 69, 70, 74, 77, 78n8, 131n20, 280,
covenant, 377 Affordable Housing Act Programs Today (ADAPT), 230 290, 298, 300, 301, 302, 309, 311, 392n52,
(1990), 152 Affordable Housing Anders, Gideon, 193 410; non-Hispanic, 95. See also African
Preservation Ann Arbor, Michigan, 372 Anti-Blight Americans Blakely, Edward J., 414
Initiative, 232 Ordinance (Har tford, Blanchette, Katherine, 288 blockbusting, 66,
Affordable Housing Program (AHP), 269, Connecticut), 390n33 77, 381 Bluestone, Barry, 29 Bogdon, Amy
270 Apartment Incentive Loan Program S., 421n21 Boggs, Carl, 220 Bonds, Andrea,
Afg hanistan, 14 (Florida), 382 193 Boston, Massachusetts, 63, 67, 68, 70,
African Americans, 28, 33, 62, 64, 65, Apgar, William C., 375 223, 227, 250, 306, 312n2, 365, 368, 369,
70, 77, 217, 281. See also Blacks Appalachia, 360 372, 373, 374
Agriculture, U.S. Department of Arizona, 24, 130n7 Boston Globe, 417 Boston HUD Tenants
(USDA), 106, 111, 113, 119, 131n13, Arkansas, 130n7, 404 Alliance, 214 Boston Medical Center, 3
150, 171, 174, 360 Arlington County, Virginia, 219 Boston Redevelopment Authorit y, 372,
AIDS (Acquired Immune Deficiency Arme y, Dick, 126 374 Bradford, Calv in, 393n66 Branch,
Syndrome), 227, 292 Asian/Pacific Islanders, 59n13 Taylor, 213
Akron, Ohio, 229 Alabama, 130n7, 215, 404 Asians, 29, 32, 54, 55, 62, 63, 65, 67,
Alaska, 130n5, 380, 420n7 Albelda, Randy, 70, 73, 78n2, 95, 280, 301
415 Aspen Institute, 363n1
Albuquerque, New Mexico, 230 Alexandria, Association of Community Organizations for
Virginia, 230 Reform Now. See ACORN
Allen, Steven, 30 Almost Home (New York Association of Reinvestment Consor tia for
City), Housing (ARCH), 273
187n5 Astor, Vincent, 158n6
Alzheimer's Disease, 283, 289 Amalgamated AT&T, 30
Clothing Workers, 251 America's Atlanta Constitution, 224
Community Bankers, 126 American Atlanta, Georgia, 63, 65, 66, 68, 70,
Apartheid, 234 American Association of 292, 321, 322, 369, 376, 380, 419n5
Retired Atlantic City, New Jersey, 320
Persons (AARP), 224, 283, 289, 290 Atlas, John, 185
American Association ofSer v ice Aububon Society, 253 AuCoin, Les, 124
Coordinators, 287 Austin, Texas, 292 Axel-Lute, Miriam,
American Bankers Association, 126 393n65
American Baptist Churches, General
Board of, 179 Baltimore, Maryland, 65, 132n24,
American Dream, 84, 97, 123, 126, 132n28, 219 Bank of America, 393n65 Bankers
231 Trust, 187n5 banks, 67, 86, 87, 88, 89, 91,
American Federation of Labor 96, 118,
Congress of Industrial 152, 262, 268, 270, 273, 285, 360, 365,
O rganizations, 224, 232 367, 369, 385, 389n24 Barr, Joseph, 122
432 Index
Bratt, Rachel G., 257n6, 342, 354, 371, 372, 378, 380, 381, 413, 421n25, 422n25 274, 275, 276, 277, 343
408, 419n3, 427 Brehm, Bob, 222, 235 Chicago Affordable Housing and Communit y Economic Development
Brennan, Sylvia M., 193 BRID GE (San Community Jobs Campaign, 223 Chicago Expertise Enhancement Act (H.R. 2683),
Francisco), 389n20 Briggs, Xavier de Souza, Housing Authority, 421n25 Chicago Rehab 355
344 Bringing America Home Act (HR Network, 222, 223 child care, 14, 27, 33, 46 Communit y Enterprise Economic
2897), 14, 233, 319 Brookings Institution, Children's Defense Fund, 420n16 China, 32 Development Program, 389n24 communit y
121, 123 Brooklyn, New York, 341 Brown Chinese, 66, 78n2 Chittenden Bank facilities, 2
Berets, 218, 219, 230 Bryson, David B., 427 (Vermont), 273 Cincinnati, Ohio, 369, Communit yfor Creative Non-Violence
Buffalo, New Yo rk, 377 Builder, 126 390n33 Cincotta, Gail, 393n66 (CCNV), 183, 189n22
building codes, 288, 376, 388n10 Burlington Cisneros, Henry, 116, 125, 132n23, 154 Communit y Investment Program,
Community Land Trust, Citizens for a Sound Economy (CSE), 269
257n11 126 community land trusts, 213, 229, 230, 240,
Burlington, Vermont, 365, 372, 376, 378, Citizens' Commission on Civil Rights, 69 252, 253-54, 360, 370, 372, 374, 384,
381, 388n15, 389n20, 390n33, 390n34 City Council District 7 Housing Taskforce 392n57
Bush Administration (George H.W.), (New York City), 232 Communit y Management Progr am (CMP)
99, 144 Bush Administration (George City Limits, 235 (New York City), 373
W.), 95, City-Wide Tenants Council (New York Communit y Preservation Corpor ation (New
99, 128, 139, 155, 169, 231, 319 Bush, City), 216 York City), 276
George H.W., 90, 116, 124, 127, Civil Rights Act (1866), 203 Civil Rights Communit y Reinvestment Act (CRA)
129 Act (1964), 145 (1977), 66, 67, 68, 76, 95, 148, 167, 220,
Bush, George W., 154, 155, 188n12, Civil Rights Act (1968), Title VIII, 146 Civil 224, 225, 268, 269, 270, 273,
225, 324, 403 Business Week, 232 Rights Movement, 12, 64, 115, 145, 177, 275, 276, 362, 369, 370, 385, 387,
217, 218 388n14, 392n58, 393n66
Cable News Network (CNN), 126 Civil War, 132n28, 237; and Reconstruction, Community Services Act of 1974,
California, 24, 130n5, 130n7, 172, 197, 219 341
220, 273, 274, 290, 321, 361, 365, 368, Clarendon Hill Homes (Somer ville, Communit y Stabilit y Small Homeowners
370, 372, 374, 378, 379, 380, 381, 383, Massachusetts), 378 Tax Credit, 391n47
388n14, 389n21, 390n27, 391n43, 392n49, Clark, Heléne, 427 Communit y-Based Housing Development
419n5, 420n6 Califor nia Community Cleveland, Ohio, 63, 65, 218, 351, 369, 372, Organizations (CHDOs), 362
Reinvestment 373, 393n67 Competitive Institute, 98 Comprehensive
Corporation, 269 Cleveland Land Bank, 389n26 Clinton Community
Califor nia Resources Agency, 393n65 Administration, 95, 118, 127, 132n23, 150, Initiatives, 307
Cambodians, 231, 352 Cambridge, 154, 155, 319, 322, 334, 393n61, 399 Concord Coalition, 125 condominiums, 94,
Massachusetts, 349, 368, Clinton, William J., 116, 127, 153, 223 250, 365, 370, 373, 376, 378, 384, 388n15;
372 Campen, Jim, 68 Canada, 125, 179, clothing, 1, 2 and conversion, 182, 229, 390n34
305, 306 capital gains, 106, 107, 184, Coalition for a Better Acre (CBA) (Lowell, Congregate Housing Services program
188n19; Massachusetts), 352 (CHSP), 286
and taxes, 110, 130n8 capital g rants, 100, Coalition for Low-Income Community Congress, 1, 4, 5, 28, 34, 62, 69, 87, 90, 99,
165, 189n25, 242, Development, 226 105, 112, 113, 114, 115, 116, 118, 119,
243, 247, 249, 255, 265, 267, 277 Car ale Coastal Enterprises (Wiscasset, Maine), 270 120, 122, 123, 124, 125, 126, 128, 129,
y, Demetrios, 387n2 Caribbean, 29 Carson, code enforcement, 390n32 Cogswell, 130n5, 130n8, 131n19, 131n20, 140, 142,
Rachel, 213 Car ter Administr ation, 149 Stephen J.H., 68 Cold War, 115 Cole, Alber 143, 144, 145, 146, 148, 150, 154, 164,
Carter, James E., 148, 154 Cato Institute, t, 152 Collaborative Initiative to End 166, 171, 172, 173, 174, 175, 180, 181,
126 CDFI Data Project, 272 CDFI Fund, 272 Chronic Homelessness, 324 Colorado, 195, 198, 200,201, 203, 204, 206, 209,
Cedar-Riverside (Minneapolis), 130n7, 378 228, 230, 237, 265, 266, 267, 269, 288,
223 Color ado Housing Finance Agency, 378 319, 322, 324, 325, 327, 329, 346, 364,
Census, U.S. Bureau of, 6, 25, 31, 78n2, Columbia Universit y, 216 Columbus 387n2, 388n9, 405, 415, 420n7, 420n11
420n8 County, Ohio, 321 Columbus, Ohio, 419n5 Congressional Black Caucus, 155
Census, U.S., 404; 1990, 72; 2000, 77n1 Commerce, U.S. Depar tment of, 117, 320 Congressional Budget Office (CB O),
Center for Communit y Change Commission on Affordable Housing and 125, 131n11, 133n35, 164, 165, 402
(CCC), 224, 226, 228, 231, 232, 246, 346, Health Facilities Needs for Seniors inthe Connecticut, 230, 369, 372, 380, 381,
406 21st Century. See Seniors Commission 382, 383
Center for Home Ow nership, 232 Center for Communist Party, 215 Communities Connecticut Depar tment of Housing,
Third World Organizing, Organized for Public 389n22
213 Ser vice (COPS), 223, 226 Communit y Consolidated Health Center Progr am, 332
Center on Budget and Policy Priorities, 16, Action Agencies, 218 Communit y Consolidated Plan, 229, 234 Constitution,
420n16 Development Block U.S., 195, 201, 202, 203,
Centers for Disease Control and Prevention, Gr ant Program (CDBG), 5, 37n3, 115, 205; Bill ofRights of, 1, 14, 178
3 117, 119, 147, 207, 219, 226, 265, 284, 286, Consumer Price Index (CPI), 93 Continuum
Charleston (Missouri) Housing Authority, 319, 355, 356n8 community development of Care (CoC), 321, 323,
174 corpor ations (CDCs), 5, 13, 69, 76, 120, 324, 333, 336
Charlotte, North Carolina, 63 Chase 221, 222, 223, 224, 225, 226, 228, 231, 233, Convention on the Elimination of All Forms
Community Development 235, 248, 250, 257n6, 269, 305, 306, 307, of Racial Discrimination (1965), 187n8
Corporation, 269 308, 312, 340-59, 360, 361, 372, 389n24, Conyers, John, 233
Chevy Chase, Maryland, 133n30 Chicago, 390n26, 393n61 Communit y Development Coolidge, Calvin, 132n28, 151 cooperatives,
Illinois, 2, 63, 65, 68, 72, 73, 131n17, 153, Financial 113, 263, 267, 274, 275, 289, 305, 306, 308,
218, 220, 221, 222, 223, 227, 321, 368, 369, Institutions (CDFIs), 270, 272, 273, 373, 374, 378, 384, 392n57; and limited-
Index 433
equity, 213, 224, 229, 240,246, 250-53, 254, 403, 415 76, 118, 130n1, 196, 203, 219,225,236
255, 257, 265, 266, 305, 306, 312, 370, 372, East Side Community Investments Fair Housing Act (1985) (New Jersey),
373, 374, 378, 389n21, 390n28 (Indianapolis, Indiana), 354 392n51, 392n52
Cortes, Ernesto, 223 education,1,2,4,5,7,8,15,27,28,29, Fair Housing Act Amendments (1988),
Council of State Communit y 32,33,34,35,71,178,179,181,185, 75,182,284,292
Development Agencies, 406 Council on 187n4,205,232,244,307,310,322, Fair Housing Compact Pilot (Connecticut),
Affordable Housing 325,331,332,335,361,393n62,399, 383
(COAH) (New Jersey), 382 courts, 193- 400,401,405,410,412-13,415,416, fair housing, 146, 174, 225, 228, 231,
212, 217, 374, 383, 389n23 417, 418, 419n5; andschools, 61, 71, 234,236,241,327,381,388n10, 392n49
crime,3,7,61,71,75,132n21,177, 75,241,324,332,386,422n29 fair market rent (FMR), 46, 403, 404, 415,
178, 187n3, 194, 199, 201, 202, 207, Education and Secondary School Act, 420n9
208,303,310,344,345,352,399 188n12 fair share, 382, 383, 392n55,
Cubans, 77n2 Cunningham, Lynn, 193 Education Goals Panel, 188n12 Faircloth, Lauch, 116
Current Population Survey, 35n1 Eisenhower Administration, 151 Family Investment Center, 421n21 Family
Eisinger, Peter, 388n8 Self Sufficiency Program (FSS),
Dade County, Florida, 321, 370 Dallas, elder cottage housing oppor tunities units 409,421n20,421n21
Texas, 63, 204, 227, 369 (ECHO), 290 Family Support Centers, 421n21
Daniel, Michael M., 193 Davidoff, Paul, 366 elderly, 13, 39, 46, 52, 56, 58n6, 75, 83, Fannie Mae Home Keeper, 285
Davis, California, 368 Davis, John Emmeus, 119,149,157,163,172,247,279-95, 305, Fannie Mae, 83, 85, 86, 89, 91, 93, 95, 96,
428 Davis-Bacon Act, 142 Dayton Plan, 383 310, 344, 360, 377, 380, 381, 389n23, 98, 99, 100n2, 101n9, 101n15, 126,
Dayton, Ohio, 368, 380 Dedman, Bill, 68 409, 417 129n1, 132n28, 144, 149, 189n21, 262,
Defense, U.S. Department of, 106, 107, Emergency Fleet Corporation, 141 263, 264, 269, 273, 275, 304
117,129n1,130n4,244 Emergency Home Finance Act of 1970, Farley, Reynolds, 78n5
Delaware, 130n7 86 Far m Labor Contr acting Act, 199 Far m
Dellums, Ronald, 2, 154, 227 Democratic Emergency Low Income Housing Security Agency, 215 Far mers Home
Admi nistrations, 12 Preservation Act (ELIHPA), 169n2, 173, Administration (FmHA), 112, 117, 171, 198,
Democratic Party, 115, 140, 236; and 174 200, 201, 202, 209n2, 360
Democr atic Leadership Council, 125 Emergency Task Force on Food and Shelter Far mers Home Administration, Section 515,
Denmark, 291 for the Homeless, 322 eminent domain, 145, 174, 175, 257n6
Denton, Nancy A., 65, 72, 178, 225, 194, 217, 241, 242, 246, 256, 374, 391n42 Federal Deposit Insurance Corporation
234, 428 employment, 1, 5, 7, 20, 21, 25, 35, 48, 177, (FDIC), 90, 91, 129n1, 132n28
Denver, Colorado, 368, 369 178, 179, 186, 264, 297, 311, 325, 328, 330, Federal Emergency Management Agency
Denver Regional Council of 335, 336, 344, 400, 410, 415, 416; and living (FEMA), 181, 318, 322
Governments, 383 wage, 230, 232,233,366,401,403,404,415 Federal Home Loan Bank system (FHLB),
DeParle, Jason, 10, 116 Empower ment Zone/Enterprise Community 83, 85, 86, 88, 89, 90, 93, 100n2, 101n15,
Depository Institutions Deregulation and Program, 154, 343, 393n61 117, 129n1, 141, 144, 269, 270, 276
Monetary Control Act (DIDMCA), 88 England, 3, 27, 306. See also United Federal Home Loan Mortgage Corporation
Detroit, Michigan, 63, 65, 70, 369, 373 Kingdom (FHLMC). See Freddie Mac
Disaffiliation Theory, 317, 318, 335 ENPHRONT,231,233 Federal Housing Administration (FHA), 10,
discrimination, 8, 10, 55, 61-81, 118, Enterprise and Renewal Communities, 343 14, 66, 68, 71, 78n7, 83, 85, 86, 89, 96,
157,177,194,199,202,217,225, 236, 245, Enterprise Foundation, 120, 222, 224, 117, 129n1, 132n22, 132n28, 133n30,
300, 412 displacement, 43, 145, 166, 168, 271,275,343,346,356n7,362 141, 144, 148, 151, 156, 189n21, 198,
172, Environment and Development, Conference 200, 201, 208, 217, 246, 247, 257n6, 266,
173, 207, 224, 227, 242, 245, 246, on (1992), 188n8 285, 421n19; and Section 202, 149,
303,317,318,320,326,345,374, 376, 377, environment, 9, 30, 110, 157, 179, 235 158n11, 181, 247, 248, 257n6, 265, 279,
378, 379, 380, 384, 390n32, 390n35, Episcopal City Mission, Massachusetts 282, 284, 287, 288, 340, 389n23; and
393n64 Episcopal Diocese, 179 Section 221, 252; and Section 221(d)(3),
Dissimilarity Index of Segregation, 63, Equit y Conversion and Homeownership 163, 165, 247, 257n6, 279, 340; and
64, 78n2, 78n3 Oppor tunity (ECHO), 377 Section 223(e) homeow nership program,
District of Columbia, 131n17, 273, Etzioni, Amatai, 365, 387n2, 416 118, 151; and Section 235 homeow
402, 403, 420n7 Europe, 22, 23, 28, 29, 42, 248, 251, nership program, 115, 118, 146, 151; and
District of Columbia Rent Act, 151 292,415,422n31 Section 236 rental program, 118, 146,
Dolbeare, Cushing, 123, 393n63 Evans, Gary W., 308 151, 163, 165, 247, 252, 257n6, 340; and
Dole, Robert, 116, 127 Everywhere and Now Public Housing Section 608, 151
Donahue, John D., 388n8 Residents Organizing Nationally Together. Federal Housing Enterprises Financial
Douglas Commission. See National See ENPHRONT Safety and Soundness Act of 1992, 95
Commission on Urban Problems evictions,14,38,43,157,182,183,184, Federal National Mortgage Association
Douglas, Paul, 76 194,195,198,200,201,202,207, (FNMA). See Fannie Mae
Downs, Anthony, 123, 387n2 208,209n3,221,242,249,292,322, Federal Reser ve System, 97, 99, 101n15,
Dreier, Peter, 150, 185, 428 326,330,331,366,374,376,378, 379, 380, 129n1, 149
Driesler, Stephen, 126 391n40, 391n43, 4240n16 Federal Savings and Loan Insur ance
Dudley Street Neig hborhood Initiative Executive Order 11063, 145 Experimental Corporation (FSLIC), 89, 90
(DSNI), 223, 374 Housing Allowance Feldman, Roberta, 312 FEMA. See Federal
Dukakis, Michael, 392n54 Program, 146, 422n33 expiring use Emergency
restrictions, 13 Management Agency
Earned Income Tax Credit (EITC), Filipinos, 78n2
107,114,128,129n1,181,328,402, Fair Housing Act (1968), 17, 66, 67, 69, 75, Financial Institutions Reform, Recovery and
434 Index
Enforcement Act (FIRREA) of 1989, 90, Habitat for Humanity, 231 197, 200, 202, 208, 224,
269, 270, 276 First Houses (New York City), Habitat II conference, 154, 188n8 Haiti, 29 231,232,237,240,242,243,244, 249, 255,
158n6 Fischer, Mary J., 70 Fitts, Austin, Hamilton, Susan, 68 Hancock, Karen E., 280, 285, 298, 299, 300, 304-
133n30 58n5 06,309,311,342,344,348,360, 375, 380, 384,
Fleet Bank, 96 Florida, 154, 305, 377, 381, Harlem (New Yo rk City), 215, 221 390n31, 418, 421n22, 421n23,
383, 388n17, 389n21, 391n43 Harrington, Michael, 412 Homestead Act (1862), 132n28, 181
Folbre, Nancy, 34 food, 2, 38, 46, 281, 323, Harrison, Bennett, 29 Hartford, Connecticut, Homestead Program (Washington,
328, 332, 400, 368, 376, DC), 389n29
403, 407, 414, 417, 4240n8, 420n12, 390n33 Hartman, Chester, 2, 61, 75, 374, Hoover, Herbert, 132n28, 141, 144
420n16; and food stamps, 1, 16, 111, 116, 391n39, 428 Harvard University, 131n11, Hoovervilles, 227
130n5, 132n21, 148, 163, 177, 180, 181, 155, 268 Hawaii, 130n7, 370 HOPE VI program, 12, 152, 153, 155,
185, 188n8, 188n9, 188n10, 328, 329, Hayden, Dolores, 4 Hays, R. Allen, 158 245,246,411,421n23
401, 404 Head Star t, 233 health, 1, 3, 5, 7, 15, 23, 38, HousingAct(1968), 86, 145, 151, 156,
Forbes, 125 43, 46, 71, 110, 177, 178, 179, 180, 181, 180,181;(1937),114,142;(1949),
Forbes, Steve, 126, 127 Ford Foundation, 185, 187n5, 230, 232, 233, 241, 280, 282, I, 57,114,139,144,145,146,147,
271, 341, 343 283, 285, 287, 289, 292, 308, 310, 319, 320, 217,326;(1959),158n11;(1968), 115;
Ford, Gerald R., 148 323, 325, 326, 327, 329, 331, 332, 334, 336, (1974), 180;(1990), 180, 247; (1998), 327
Ft. Lauderdale, Florida, 63 For tune 500 361, 376, 388n8, 390n31, 391n40, 399, 400, Housing and Community Development Act
companies, 98, 120 Foscarinis, Maria, 428 403, 407, 422n27; and long-term care, 291, (1974), 147; (1992), 287
foster care, 181, 182, 188n16 293; and medical care, 281; and mental Housing and Home Finance Agency
France, 22, 34 health, 4 (HHFA), 131n19, 131n20, 152
Franklin County, Ohio, 321 Freddie Mac, Health and Human Services, U.S. Depar Housing and Urban Development, U.S.
86, 89, 91, 93, 95, 96, 98, tment of (HHS), 3, 130n5, 181, 287, 324, Department of (HUD), 5, 6, 7,
99, 100n5, 101n9, 101n15, 126, 189n21, 325, 406 II, 12, 14, 16, 46, 58n2, 67, 69, 76,
262, 263, 275 Health, Education, and Welfare, U.S. 86,95,105,106,110,111,112,113,
Frey, William H., 78n5 Friedman, Alice T., Department of (HEW), 3, 406 Healthy 115,116,117-19,120,128,130n1, 130n11,
312 People 2010, 181 Heritage Foundation, 126 131n20, 131n21, 132n23,
Fuchs, Fred, 193 Hill, Joe, 213 150,152,154,155,156,157,164,
Hill, Sidney, 214, 215, 216, 223, 228, 229, 165,166,167,171,174,175,183,
Galster, George, 71, 72 237 187n5,198,199,201,219,221,221,
Gar n-St German Act of 1982, 88 Gateway Hingham, Massachusetts, 377 Hispanics, 61, 223,227,229,231,246,248,250, 257n6,
Program, 421n21 Gautreaux program, 76, 62, 63, 66, 67, 68, 70, 78n2, 154, 280, 281, 284, 285, 287, 291, 299, 320,
413, 414, 290, 300, 302, 410. See also Latinos 322,323,324,343,353,361,375, 405, 406,
421n25, 422n28 Hite, James C., 370 407, 408, 410, 419n2, 421n25
gender, 31, 33, 51, 254. See also women Home and Communit y-Based Ser v ices Housing Appeals Committee, 383 Housing
General Accounting Office, U.S. (HCBS), 288 Assistance Council, 131n12,
(GAO), 118, 120, 164, 165, 175, 199, home equity borrowing, 71, 96 Home Equit 173
232, 322, 405, 407, 408, 420n6, 420n11, y Conversion Mor tgage (HECM), 285 Housing Authority Resource Center, 232
420n12 Home EquityLiving Plan (HELP), 377 Housing Authority, U.S., 215 housing codes,
gentrification, 153, 237, 245, 320, 345, HOME Investment Par tnership program, 11, 5, 6, 15, 182, 183, 196, 198, 199, 207
346, 380, 384, 387 George, Henry, 253, 263, 265 Housing Development Action Grant
254 Georgia, 130n7, 292, 321 Gibbons, Sam, Home Mortgage Disclosure Act (HMDA), (HoDAG), 149
125 Gingrich, Newt, 116 Ginnie Mae, 15, (1975), 66, 67, 95, 148, 234 Housing Discrimination Study, 67 Housing
86, 89, 91, 93, 101n9, Home Owners' Loan Corporation (HOLC), Finance Agency
101n15, 266 66, 77, 141, 144 (Massachusetts), 407
Gitlin, Laura N., 289 Gittell, Marilyn, 306 HOME, 119, 257n6, 336, 343, 355, 363n2 Housing Futures Fund, 389n24 housing, in-
Giuliani, Rudolph, 183 globalization, 20, 28, Homeland Securit y, U.S. Department of, fill, 5
29, 31, 32, 82 Goals 2000: Educate America 318 Housing Justice Campaign (NLIHC), 230,
Act, 181 Goetz, Edward G., 387 Golant, Homeless Elig ibilit y Clarification Act 235
Stephen, 288, 289 Goldman Sachs, 187n5 (HECA), 335 homelessness, 2, 4, 5, 6, 7, Housing Justice Day, 230
Goldsmith, William W., 414 Gonzalez, 13, 15, 34, 35, 43, 57, 58, 106, 117, 119, Housing Now! March (1989), 227, 228, 233
Henry B., 2, 217 150, 151, 154, 155, 157, 178, 183, 185, Housing Oppor tunities for People
Gore, Albert, 127, 154 Gould, George, 193 187n4, 188n10, 188n18, 189n22, 206, Everywhere (HOPE), 363n2 Housing
Government National Mortgage Association 226, 227, 228, 229, 230, 231, 232, 237, Oppor tunities for People with AIDS
(GNMA). See Ginnie Mae 245, 281, 296, 297, 301, 305, 309, 310, (HOPWA), 363n2 Housing Preservation and
government sponsored enterprises (GSEs), 316-49, 381, 382, 393n63, 419n3, 420n16 Development, New York City
86, 92, 93, 98, 99 Homeow ners' Emergency Mor tgage Department of, 373
Gramm-Leach-Blile y Financial Assistance Program (HEMAP), 380 Housing Quality Standards, 183
Moder nization Act, 392n58 granny flats, Homeow nership Opportunities for People Housing Security Plan for Older
290 Gray, Jesse, 221 Everywhere (HOPE), 152 Americans, 291, 293 housing trust funds,
Great Depression, 8, 10, 21, 38, 83, 84, 88, Homeow nership Opportunities for Women 14, 168, 266, 276,
113, 132n28, 142, 143, 150, 158, 188n10, (HOW), 305 homeownership, 2, 4, 6, 9, 10, 282, 368, 370, 376, 378, 388n15, 392n53
214, 215, 216, 233, 251, 360 11, 15, 27,28,39,40,43,50,51,52,53,56, Houston, Texas, 63, 65, 66,72, 73,
Great Society, 235 59n10, 61, 71, 82, 83, 84, 89, 93, 94, 246
Greenbelt Alliance, 393n65 95,96,99,100,106,107,113,121, Howard University, 224 Howell, David, 29
Grimm, K., 301 Grow, James, 193 122,124,127,128,132n28,140, Hunt, Allan S., 392n48 hurricanes, 14; and
Guatemala, 29 Gulf Coast, 14 Gulf War, 182 141,144,149,152,154,155,156, 185, 195, Hurricane Katrina,
Index 435
318,419 419n5, 422n27 League of Women Voters, 185

Husock, Howard, 353 hypersegregation, 65- John II, Pope, 179 Legal Aid, 218
66 Johnson, Andrew, 132n28 Legal Ser vices, 226
Johnson, Lyndon B., 115, 122, 157, 219 Legal Ser vices Homelessness Task
Iceland, John, 78n6 Joint Center for Housing Studies, 6, 7, Force, 186
Ickes, Harold, 142 8,15,131n11,155 LeGates, Richard, 391n39 Lehman Brothers,
Idaho, 130n7, 174 Joint Committee on Taxation, 130n6, 187n5 Leiterman, Mindy, 350 Lemann,
Illinois, 230, 328, 388n14, 389n21 130n9, 184 Nicholas, 354, 393n61 Lenz, Thomas J.,
immigrants, 5, 33, 35, 64, 65, 72, 77n2, Jordan, Vernon, 187n5, 421n19 JP-Morgan 351, 352 Levin, Julie, 193 Lewis Mumford
95,132n28,230,231,234,297,302, 312n2 Chase, 269 Center for
income inequality, 9, 10, 13, 20, 25, 27, Justice, U.S. Department of, 130n1 Compar ative Urban and Regional
28,30,34,35,40,58,82,90,91,93, 94, 95, Research, 64
129 Kain, John, 413, 414 Link, Bruce, 188n10, 316, 335 Linneman,
Independent Progressive Political Kaiser, Henry J., 146 Peter D., 43 Livable Communities Program
Movement, 234 Kansas, 130n7 (Minnesota), 382 Liv ing Cities: The
India, 29 Kansas City, Missouri, 199 National
Indiana, 226 Kasarda, John D., 304, 311 Communit y Development Initiative,
Indianapolis, Indiana, 354 Indians, 78n2 Katz, Michael B., 404 356n4
Individuals with Disabilities Act, 233 Kearns, Ade, 43 Local Initiatives Support Corpor ation
Industrial Areas Foundation, 220 Institute Keating, W. Dennis, 381, 391n39, 429 (LISC), 120, 224, 232, 270, 271, 343,
for Community Economics Kelley, Tom, 193 346, 347, 354, 356n7, 362
(ICE), 224, 229, 230, 360 Kemeny, Jim, 399 Logan, John R., 367
Institute for Policy Studies (IPS), 2, 184, Kemp,Jack,152,153,226,227,228 Kempson, Long Beach, California, 63
186, 227 Elaine, 43 Loprest, Pamela, 421n17
Institute for Women's Policy Research, Kennedy Administration, 145 Los Angeles, California, 63, 65, 68, 70, 72,
420n16 Kennedy, John F., 21, 123, 131n20, 73, 78n6, 227, 229, 252, 320, 372, 373,
insurance, 67, 68, 76, 92, 100n4, 202, 208, 145,157 376
234, 236, 263, 280, 388n14, 390n32; Kennedy, Robert F., 341 Louisiana, 130n7, 230
private mortgage insurance (PMI), 264 Kensington Welfare Rights Union, 227, Low Income Housing Fund, 393n65 Low
Inter agency Council on Homelessness, 232 Income Housing Infor mation
321,324,325,333 Kent State, 220 Serv ice (LIHIS), 226, 227
Intercommunal Surv ival Collective, Kentucky, 130n7, 167 Low Income Housing Preser vation and
222 Resident Homeownership Act
Internal Revenue Service (IRS), 120, Kerner Commission, 115, 413 Kerry,John, (LIHPRHA), 175, 227
132n25, 132n27, 248, 251, 340, 402, 189n21 Low Income Housing Tax Credit
420n6, 421n22 Keyes, Langley C., 408, 419n3 King, (LIHTC), 11, 34, 106, 113, 119-20,
International Convention on the Elimination Edward, 392n54 131n15,131n17,132n25,132n26, 133n33,
of All Forms of Discrimination Against King, Mar tin Luther III, 232, 233 King, 150, 204, 224, 248, 263,
Women (1979), 187n8 Martin Luther Jr., 147, 214, 218, 267,268,271,273,343,363n2,372, 375,
International Convention on the 219, 220 389n21, 392n59, 411
Rights of the Child (1989), 187n8 Knecht, Barbara, 309 Korea, 22, 29 Kozol, Low Income Investment Fund,
International Covenant on Economic, Jonathan, 4 Krumholz, Norman, 367, 393n67 274
Social and Cultural Rights (1966), Ku Klux Klan, 216, 236 Lowell, Massachusetts, 352 Lubell, Jeff,
187n8 419n5
International Labor Organization labor market, 13, 21 labor movement, 235 Lukehart, John, 77
Recommendation No. 115 on Workers Labor Party, 234
Housing, 187n8 Labor Statistics, U.S. Bureau of (BLS), 23, MacDonald, Heather, 94 Madison Area
Iowa, 126, 130n7, 163, 167, 380, 46, 189n24 Community Land
388n14 Labor, U.S. Department of, 117, 325, Trust, 377
Iraq, 14 336 LaGuardia, Florello, 143 Land Trust Madison, James, 132n28 Madison,
Irvine, Jim, 127 Alliance, 393n64 land trusts, 263, 265, 266, Wisconsin, 377, 388n13 Mahes, Gangaram,
267, 187n3
Jackson, Alphonso, 11 275 landlords, 100n1, 118, 131n21, Maine, 130n7, 370, 374, 390n27,
Jackson, Jesse Jr., 179 132n28, 147, 148, 151, 180, 194, 196, 390n36
Jackson, Kenneth T., 76 198, 199, 200, 201, 202, 204, 206, 207, Malaysia, 29
Jackson State, 220 215, 221, 241, 243, 250, 251, 282, 305, Malcolm X, 220, 233
Japan, 22, 28, 29 306, 326, 331, 345, 349, 350, 365, 373, Maldonado, Jaime C., 301 Maly, Michael,
Japanese, 78n2 378, 380, 381, 387n4, 390n32, 390n33, 77 Manila, Philippines, 187n1 Manpower
Japanese-Americans, 32 390n35, 391n40, 391n41, 391n42 Development Research
Jarrett, Robyn, 298 Latinos, 23, 31, 32, 33, 34, 54, 55, 65, 95, Corporation, 419n5
Jefferson, Thomas, 132n28, 144 217, 219, 230, 301, 352, 392n52. See also Marable, Manning, 218
Jersey City, New Jersey, 368 Hispanics March for Our Lives: Stop the War at
jobs,2,20,29,33,38,61,71,75,96, Lazard Freres, 187n5 Lazere, Ed, 421n17 Home, 232
97, 128, 187n5, 297, 303, 305, 307, lead poisoning, 3, 15, 177, 194, 376; Marcuse, Peter, 2, 185, 429 Maricopa
310,317,318,326,332,340,341, and paint, 198 County, Arizona, 321 Mark to Market, 166-
353,355,385,386,393n61,401, Leadership Conference on Civil 67 Marriott Senior Living Services,
405,407,409,410,411,412-14,417, 418, Rights, 232 288
436 Index
Martinez, Mel, 154, 231 Community of Colored People (NAACP), 217, 225
Maryland, 130n7, 132n24, 370, 380, Strategy Demonstration, 421n21 Mobile National Association of Homebuilders
383,387n5,391n43,393n65 Home Cooperative Fund (NAHB), 126
Maslow, Abraham H., 15 Mason, Jennifer, Program (New York State), 377 mobile National Association of Housing and
298 Massachusetts, 183, 221, 227, 257n8, homes, 95, 101n14, 270, 304, Redevelopment Officials, 119, 215 National
257n10,321,352,365,370,373, 374, 377, 375,377,391n43,412 Association of Housing
378, 379, 380, 381, 382, Moch, Annie, 308 Cooperatives, 230 National Association
383,387n5,388n14,389n24, 390n27, Model Cities program, 5, 117, 219, of Real Estate
391n40, 392n54, 41 1 341,364,388n7 Boards, 114, 144
Massachusetts Association of Molotch, Harvey L., 367 National Association of Realtors
Community Development Monroe County, Florida, 388n16 Montana, (NAR), 114, 123, 124, 126, 127
Corporations, 352 Massachusetts 130n7, 370 National Association of Social Workers, 179
Communit y and Montgomery County, Maryland, 321, National Coalition for the Homeless (NCH),
Banking Council, 68 Massachusetts 383, 388n15, 389n18 119, 224, 228, 232, 233, 419n3, 420n16
Communit y Morgan, Barbara A., 285 Morningside National Commission on Urban Problems
Preservation Act, 393n64 Massachusetts Heights, Incorporated (Douglas Commission), 146
Housing Partnership, (New York City), 216 National Community Development Initiative
257n8 Mortgage Assignment Program, 209 (NCDI), 343, 346, 348, 356n4
Massachusetts Trustees of Mor tgage Bankers Association (MBA), National Community Reinvestment
Reservations, 253 97, 126 Coalition, 119, 224
Massey, Douglas, 65, 72, 178, 225, 234 mortgage bankers, 88 Mortgage Banking, National Congress for Community
MassHousing, 407 126 mortgage companies, 276, 277, 285, Economic Development (NCCED), 5,
McCullough, Jack, 193 392n58 119, 222, 348, 355n3
McKinney Act, 150, 187n4, 322, 323, mortgage revenue bonds (MRBs), 94, National Cooperative Bank, 252
324,325,329,331,336,363n2;and Shelter 101n10, 122, 131n14, 266, 267, 411, National Council ofLa Raza, 224
Plus Care, 323 421n22 National Council of State Housing Agencies,
McKinney Education of Homeless mortgage-backed securities (MBSs), 131n14
Children and Youthprogram, 324 86, 88, 89, 91, 92, 99, 101n5, 101n9, National Education Goals Panel, 188n12
McKinney Health Care for the 101n15, 262, 263, 275 mortgages, 10, 53, National Fair Housing Alliance, 236
Homeless Program, 332 54, 66, 68, 76, 77, National Homeless Civil Rights Organizing
McLean, Virginia, 133n30 85, 86, 87, 88, 89, 90, 92, 94, 100n1, 107, Project, 228
McLure, Charles E. Jr., 133n32 Meadows, 110, 121, 150, 242, 261, 262-65; and National Housing Agency (NHA),
James, 30 collateralized obligations (CMOs), 91; 114
Medicaid, 111, 116, 178, 181, 182, 284, default on, 43, 96, 166, 200, 201, 242, 248, National Housing Conference, 115,
285,286,287,288,291,325,328, 262;and foreclosure, 43, 59n10, 82, 83, 84, 215
329,401,421n17 92, 96, 97, 98, 131n21, 157, 166, 174, 182, National Housing Goal, 1, 14, 57, 61, 69,
Medicare, 181, 284, 287, 328, 329 184, 194, 200, 201, 202, 208, 209, 242, 247, 139, 158n1, 180, 184, 200, 201, 206, 237
Megbolugbe, Isaac F., 43, 285 Memphis, 250, 256, 379, 390n26, 391n44; and National Housing Institute, 128, 185,
Tennessee, 7, 63 Merrill Lynch, 187n5 predatory lending, 155, 369, 379; and 221
Methunion Manor ( Boston, prepayment, 163-65, 171; and redlining, 66, National Housing Law Project, 186, 189n23,
Massachusetts), 250 68, 77, 118, 144,148, 158n9, 182, 237, 341, 222, 245
Metropolitan Washington Council of 342, 369;and reverse, 284-86, 290, 293, 305; National Housing Policy Initiative, 226
Government, 383 and subprime lending, 101n12, 379 Mount National Housing Trust Fund, 128, 155, 156,
Mexican Americans, 236 Laurel, 195, 205, 206 Moving to 189n21, 229, 232, 233, 327, 355
Mexicans, 35, 66, 77n2, 217 Opportunity (MTO), 76, National Industrial Recovery Act of 1933,
Mexico, 29 118, 132n24, 392n57, 413, 414, 416, 142
Miami Valley (Ohio) Regional 422n27, 422n33 National Journal, 126
Planning Commission, 383 Mueller, Elizabeth J., 344 municipal National Law Center on Homelessness and
Miami, Florida, 63, 65, 66, 72, 73, 321, 368 services, 2, 203, 205, 207, Poverty, 333
Microsoft, 9 226 National League of Cities, 224
Midwest, 215 Muskegon City, Michigan, 214, 221 mutual National Low Income Housing Coalition
mig rant farmworkers, 6; and housing, housing associations (MHA), (NLIHC), 6, 119, 123, 128,156, 186,
155 157, 229, 240, 246, 248-49, 250, 254, 189n21, 223, 224,226, 227, 228, 229, 230,
Mikulski, Barbara, 132n24 military family 257n4, 305, 372 231, 232, 235
housing progr am, 181 Millennial Housing Mutual Mortgage Insurance Fund, 156 National Organizers Alliance, 213,
Commission, 4, mutual savings banks, 84, 85 235, 238n2
12,129,155,399 National Partners in Homeownership,
Miller, Cynthia, 419n5 Nader, Ralph, 127 National Advisory 305
Milwaukee, Wisconsin, 65, 369 Commission on National People's Action, 148, 220, 222,
Minneapolis, Minnesota, 223, 368, Civil Disorders. See Kerner Commission 224, 234
372,381,383 National Affordable Housing Act (1990), National Preservation Working Group,
Minnesota, 130n7, 321, 374, 382, 228, 229, 363n2, 421n20 National Alliance 227
388n14, 392n55 of HUD Tenants (NAHT), 213, 214, 227, National Rural Housing Coalition, 223
Minnesota Housing Finance Agency 229, 231, 233, 234, 237 National Survey of Homeless Assistance
(MHFA), 286 National Alliance to End Homelessness Providers and Clients, 323
Mississippi, 130n7, 203, 404 Missouri, (NAEH), 187n5, 319 National Task Force on Rural Housing
130n7, 174, 388n14 Mixed-Income New National Association for the Advancement Preservation, 173
Index 437
National Tenants Organization 230, 251, 321, 373, 379, 380, 383, Coalition, 230
(NTO), 213, 214, 218, 220, 221, 222, 388n14, 389n24, 391n47, 411 Permanently Affordable Resident and
225, 226, 233, 234 New York Times, 105, 116, 125, 232 New Community Controlled (PARCC). See
National Tenants Union (NTU), 220, York Urban Coalition, 218, 235 Newark, PARRC housing
221 New Jersey, 63, 65, 66 Newman, Sandra J., Perot, Ross, 125 Personal Responsibility and
National Trust for Historic 405, 406, 419n5, 420n14 Work
Preservation, 393n64 NIMBY, 236, 327, 346, 361, 412, 413 Opportuni ty Reconciliation Act of 1996,
National Unemployed Councils, 213, Nishita, Christy M., 429 405
214, 215, 233 Nixon Administration, 149 Philadelphia Corpor ation on Aging, 286
Native Americans, 31, 32, 34, 59n13, 61, 95, Nixon, Richard M., 115, 146, 147, 151, 152, Philadelphia, Pennsylvania, 63, 65, 72, 73,
119, 155, 240, 253, 301.See also 154; and 1973 housing moratorium, 118, 201, 227, 230, 232, 365, 373, 380 Pima
American Indians 147, 152 non-Hispanic whites, 61, 62, 63, County, Arizona, 292 Pines, Marion, 405
naturally occurring retirement communities 70, 95 nonmetropolitan areas, 5 Pittsburgh, Pennsylvania, 312n2, 369,
(NORCs), 289. See also elderly Norfolk, Virg inia, 63 373 Planners Network, 224 Platt,
Nature Conservancy, 393n64 NatWest Bank, North American Free Trade Agreement Anthony, 218 Pleter, Saul, 130n4 police
269 (NAFTA), 29 power, 241 Poor People's Economic Human
Nebraska, 130n7 Neighborhood Assistance North Carolina Community Development Rig hts Campaign, 232 Poor Peoples'
Corporation of America (NACA), 96 Initiative, 389n24 March, 219 Population Summit (1994),
Neighborhood Preser vation B alanced North Carolina, 116, 130n7, 373, 379 188n8 Portland, Oregon, 368, 372, 373, 376,
Housing Program, 382 NorthDakota, 24, 130n5, 130n7, 404 383
Neighborhood Preser vation Northgate Apartments (Burlington, Portland (Oregon) Metro Council, 383 Post,
Companies, 389n24 Neighborhood Vermont), 378, 390n34 NotInMyBack Ya Langdon, 143, 216 Potochney, Pete, 130n4
Progress, Inc., 351 Neighborhood rd (NIMBY). See powell, john, 77
Reinvestment NIMBY President's Commission on Civ il
Corporation(NRC), 248, 249, 271, Nyden, Philip, 77 Disturbances, 145 President's
346, 356n7 Commission on Housing,
Neighborhood Self-Help Development O. Henry, 187n3 140, 149
Program, 341, 355, 356n8 Oakland, California, 63, 229, 379, 380 President's Committee on Urban
Neighborhood Works, 271 neighborhoods, 4, Oberlin, Ohio, 392n49 Housing (Kaiser Committee), 146
5, 9, 10, 14, 61, 62, Office of Economic Oppor tunity, U.S. President's Conference on Home
63, 65, 66, 68, 69, 70, 71, 72, 73, 74, 75, (OEO), 117, 341, 361 Building and Homeow nership, 141
77, 78n8, 95, 118, 119, 125, 148, 149, Office of Management and Budget, U.S. prisons, 23, 32, 188n17 Prog ressive
153, 157, 172, 183, 194, 202, 203, 204, (OMB), 130n6, 130n9, 149, 164 Challenge, 234, 235 Progressive Era, 113
207, 213, 215, 216, 220, 226, 236, 241, Office of Rental Housing Preservation, 173 Prog ressive Policy Institute, 125 Projects for
251, 263, 269, 271, 279, 280, 290, 304, Office of Thrift Supervision (OTS), 90 Ohio, Assistance in Transition from Homelessness
306, 310, 320, 340, 343, 346, 349, 353, 144, 167, 372, 388n14, 392n56 Ohio State (PATH), 323, 329 proper t y tax. See taxes,
354, 365, 366, 367, 368, 369, 383, 386, Depar tment of Aging, 286 Oklahoma, propert y Proscio, Tony, 354 Providence,
392n52, 410, 412, 413, 421n18 130n7 Rhode Island, 378 Public Housing Residents
NeighborWorks, 232, 356n7 Ness, Hallie, Older Americans Act of 1965, 284 Oliver, National
193 Melvin, 71 Organizing Campaign, 231 public
Netherlands, 34 Oper ation Bootstrap, 421n21 Oper ation housing, 8, 12, 75, 76, 83, 105,
NewDeal, 142, 144, 149, 156, 157, Homestead (Seattle, 106, 111, 113, 114, 115, 116, 117, 118,
214, 215, 216, 220, 223, 232, 235, 237 Washington), 228 130n5, 132n24, 133n31, 142, 143, 144,
New England, 254 Oregon, 24, 124, 130n7, 174, 288, 289, 370, 145, 146, 148, 152, 153, 155, 158n4,
New Hampshire Communit y Development 372, 373, 383, 389n21, 389n23, 389n25, 158n9, 163, 165, 181, 182, 187n5,
Finance Authority (CDFA), 268 392n55, 420n7 188n14, 195, 198, 199, 202, 203, 204,
New Hampshire, 126, 373, 377, 379, 389n24 Organization of the Petroleum Exporting 207, 208, 209, 215, 221, 225, 226, 229,
New Jersey Citizen Action, 269 New Jersey Countries (OPEC), 28 231, 237, 240,
Fair Housing Act, 206 New Jersey Supreme Orton, Katie, 193 overcrowding, 1, 6, 15, 40, 242, 244-47, 249, 250, 253, 257n5, 265,
Court, 382 157, 177, 184, 188n10, 279, 281, 293, 282, 287, 292, 298, 299, 301, 303, 305,
NewJersey, 124, 195, 206, 221,226, 321, 312n2, 399 306, 307, 308, 310, 312, 325, 326, 327,
368, 370, 372, 377, 379, 380, 382, 383, overhousing, 40, 41, 281 Owens, Major, 230 331, 335, 342, 370,
387n5, 388n12, 389n23, 392n51, 393n65 371, 378, 384, 385, 388n7, 389n23,
New Markets Tax Credit program, 343, Pacific Islanders, 61 Packwood, Rober t, 390n35, 400, 406, 407, 409, 411, 412,
355 125, 126, 127 paired testing, 68, 76, 146 413, 417, 419n2, 421n20, 422n25,
New Mexico, 130n7 Panel Study of Income Dynamics, 25 422n33; andSection 8, 12, 105, 115, 116,
New Orleans, Louisiana, 63, 65, 66, PARRC housing, 230, 242 Pearce, Diana, 34 120, 147, 148, 149, 152, 154, 155, 165-
373, 419 Pechman, Joseph, 123 Peirce, Melusina Fay, 68, 169, 169n5, 169n7, 175, 181, 182,
New Republic, 116 251 Peirce, Neil, 341 Penn South Progr am 185, 187n5, 201, 204, 247, 257n6, 268,
New York City Partnership, 235 for Seniors 279, 304, 305, 319, 323, 324, 326, 327,
NewYorkCity, 2, 4, 5, 6, 12, 15, 63, 65, (PSPS), 289 Pennsylvania, 167, 201, 209, 328, 348, 355, 381, 407, 411, 419n5,
66, 72, 73, 78n6, 131n17, 143, 158n6, 365, 369, 420n9, 422n25
183, 187n1, 187n5, 214, 215, 216, 217, 379, 380, 387n5, 391n41 Pennsylvania Public Works Administration (PWA),
221, 232, 237, 250, 251, 252, 276, 289, Housing Coalition, 142, 143 Puerto Ricans, 24, 32, 77n2, 218
305, 310, 320, 321, 332, 333, 368, 373, Resident Education and Action Project, Purchase, New York, 105 Pynoos, Jon, 429
379, 388n8, 419n3 229
New York State, 114, 130n7, 131n17, 226, Pennsylvania Low Income Housing Quality Housing and Work Responsibility
438 Index
Act of 1998, 14, 158n1, 188n11, 245, Rosen, Kenneth, 7 sing le room occupancy (SRO) buildings,
305, 416 Rosenthal, Rob, 429 263, 275, 281, 309, 317, 323,324,331,376
Quigley, John M., 387n2 Rossi, Peter H., 304 single-parent families, 10
Roukema, Marge, 124 skid rows, 317
race, 7, 12, 13, 15, 16, 20, 21, 27, 31, 39, 51, Rouse, James, 120, 356n7 Slavic Village Development
54, 61, 76, 77, 146, 148, 155, 158n10, Route 2 Co-op (Los Angeles, California), (Cleveland, Ohio), 352
177, 182, 194, 254, 296, 297, 298, 361, 252 Small Business Administr ation (SBA), 117,
386, Rubin, Herbert J., 344, 347, 350 148, 188n15, 421n19
racial segregation, 300, 301, 304, 410, Rubinfeld, Daniel L., 387n2 Smith, Fred, 98
412 racism, 68, 74, 144, 185, 214, 216, Rudman, Warren, 125 Snyder, Mitch, 183, 228
217, rural areas, 143, 269, 281, 286, 289, 341, Social Development Summit (1994), 188n8
219, 224, 225, 233, 236, 237 346, 360-63, 371; and housing, social housing, 100, 140, 157, 169
Rasmussen, David W., 285 Reagan 155,253,254 social ownership, 168, 240-60
Administration, 88, 90, 116, Rural Communit y Assistance Corporation, Social Security, 23, 28, 57, 114, 181,
118, 133n32, 149, 151, 158n12, 322, 348 362 305,329,331,333
Reagan, Ronald W., 123, 124, 140, 149, Rural Housing Services (RHS), 112, 171, Social Security Disability Insur ance (SSDI),
220, 232, 322, 324 173, 174, 175, 209n2, 360 325, 328, 329
realtors, 67, 68, 60, 77, 118, 123, 124, Rural Preser vation Companies, 389n24 Socially Responsible Banking (SRB)
243, 365, 381, 413 receivership, 198, Rusk, David, 366 Fund, 273
199, 207, 256, 376 Redfoot, Donald, 285, Sojourners, 232
288 Sachs, Beth, 392n48 Soldiers and Sailors Relief Act of 1940,
Sacramento, California, 368, 381 Saegert, 182
redlining. See mortgages, redlining Reform Susan, 429 Somerville, Massachusetts, 378
Party, 125 regional revenue sharing, 368 safetynet, 140, 180, 303, 304, 317, 326, South Africa, 146
rehabilitation, 5, 11, 112, 119, 148, 154, 328,385,404,415,417 South Bronx, 307
165, 169n1, 174, 189n21, 203, 246, 252, San Antonio, Texas, 154, 217, 223, 226 South Carolina, 130n7
265, 267, 327, 346, 368, 371, San Clemente, California, 368 South Dakota, 24
372, 373, 382, 390n35, 390n36, 418 San Diego, California, 368, 372, 383, South Shore Bank of Chicago, 272
Reich, Robert, 125, 127 Reinvestment Fund 390n33, Souther n Christian Leadership
(Philadelphia, San Francisco, California, 63, 321, 322, 368, Conference (SCLC), 218, 221
Pennsylvania), 270 372, 376, 381, 389n20 Southern Empowerment Project,
rent control, 8, 151, 182, 221, 365, 376, San Jose, California, 63, 379 213
380, 391n43, 391n46 rent strike, 215, 221 Sanders, Bernie, 189n21 Special Impact Amendment to th e
rent withholding, 196, 198, 215 rental Santa Monica, California, 221, 368, 379, Economic Opportunity Act, 341
housing, 2, 14, 68, 75, 113, 391n46 Special User Housing Rehabilitation
131n15, 247-48, 375 renter households, Sard, Barbara, 193, 408, 409, 419n5 savings Program, 381 Springfield, Illinois, 230 St.
6, 50, 51, 52, 53, 54, and loan associations (S&Ls), Louis, Missouri, 3, 63, 65, 66 St. Paul,
55, 59n14, 61, 67, 83, 185, 279-81, 84, 85, 86, 88, 89, 90, 95, 99m129n1, Minnesota, 368, 372, 383 Stark, Forney, 124
300 rent-to-income ratio, 6 184, 262, 343, 360, 369, 392n58 State Commission Against
Republican Administr ations, 12 Scarsdale, New York, 421n19 Discrimination (SCAD) (New York), 217
Republican Party, 116, 140 Resolution Trust Schnare, Ann B., 96, 405, 406, 420n14 state housing finance agencies, 89, 113,
Corporation, 378 restrictive covenants, 203 schools. See education 120, 166, 266, 267
Retsinas, Nicholas P., 390n31 Schuman, Tony, 349 State Planning Goal 10, 383
Revenue Act of 1964, 123 Seattle, Washington, 228, 229, 368, State Universit y of New York, Albany,
Rhode Island, 130n7, 306, 321, 372, 383, 372, 376, 379, 383, 390n33 72
393n65 Seattle Displacement Coalition, 229 steering, 68
Riccio, James A., 419n5 Second Vatican Council, 178 Stegman, Michael, 267 Steinbach, Carol,
Riverside (California), 63 Section 8. See public housing, Section 8 341 Steinmetz, Erika, 78n6
Rober t T. Stafford Disaster Relief and Securities and Exchange Commission (SEC), Stillman, Joseph, 350 Stockman, David, 149
Emergency Assistance Act (PL 93-288), 98 Stockton, California, 230, 231 Stoecker,
188n15 security of tenure, 1 Randy, 223, 349, 351, 353, 393n67
Robert Wood Johnson Foundation, Suppor segregation, residential, 33, 194 Seiders, Stone, MichaelE., 2, 6, 62, 67, 82, 178,
tive Ser v ices in Senior Housing David F., 126, 127 Self-Help Credit Union 183,184,185,189,213,227,281, 341, 376,
Demonstration, 287 (Durham, 377, 390n32, 403, 430
Robinson, Tony, 350 North Carolina), 270, 272 self- Stoutland, Sara, 351
Rock Island, Illinois, 229 sufficiency, 344, 356n6, 399, 400, suburbs,33,64,69,70,71,72,73,74,
Rohatyn, Felix, 187n5 401, 402, 408-10, 414, 415-16, 84,110,112,124,132n28,216,220, 290,
Rohe, William M., 354 419n2,421n18,421n21,421n23; and 304, 305, 310, 312n2, 320, 346,
Roisman, Florence Wagman, 2, 185, standard, 403 361, 369, 382, 384, 385, 392n52, 411,
193,209 Senior Citizens Housing Act of 1962, 412, 413, 414; and sprawl, 110, 128, 157,
Romney, George, 115 171 158, 386, 393n65
Roosevelt Administration (Franklin D.), 141, Seniors Commission, 282, 287, 288 Shapiro, Sunbelt, 33
158n9 Thomas, 71 Sunrise Senior Living, 288 Supplemental
Roosevelt, Franklin D., 1, 14, 38, 132n28, Sharecroppers Union, 215 Securit y Income (SSI),
142, 157, 188n10, 215, Shelter Plus Care, 323 181, 288, 320, 325, 328, 329 supportive
236 Shinn, Marybeth, 326 housing, 282, 323, 327,
Rose, Stephen, 24 Silver, Josh, 393n66 329, 330, 333
Index 439
Supreme Court, U.S., 66, 198, 201, 71, 87, 90, 91, 95, 113, 147, 157, 235, Washington Mutual Bank, 269 Washington
203, 205, 209 325, 336 Post, 116, 125 Washington State Housing
Surrey, Stanley, 123 Survey of Consumer Uniform Relocation Assistance and Real Justice
Finances (SCF), Property Acquisition Policies Act of Campaign, 230
35n1 1970(URA), 195, 391n38 unions, 28, 30, Washington State, 370, 382, 383,
Survey of Income and Program 113, 115, 140, 142, 388n14, 392n56, 420n7 Washington, DC,
Participation, 35n2 144,146,217,223,232,235,251, 343 63, 65, 66, 163, 183,
Surveys of Consumer Finances, 97 Swack, United Communit y to Save Our Homes, 217 189n22,200,228,320,321,368, 369, 370,
Michael, 430 United for Peace and Justice, 232 372, 373, 376, 379, 380, 388n8
Sweden, 22, 34, 291 United Housing Foundation, Watertown, Massachusetts,
217 246
Taft, Robert, 144 United Kingdom, 58n3. See also Britain, Watts (Los Angeles, California),
Tahoma Indian Center, 230 England 341 wealth,4,9,27,28,35n2,71,90,140,
Taiwan, 22, 29 United Nations, 154, 188n8 237,241,243,250,254,255,298, 301, 305,
Tax Reform Act of 1986, 421n22 tax system, United States Housing Corpor ation, 141 368, 370, 400
2, 9, 243 taxes,30,34,68,119,157,158,241, Universal Declar ation on Human Rights
276, 369, 389n23, 401; and expenditures, (1948), 187n8 Weaver, Robert, 131n20
105, 106, 107; and homeowner deduction, Urban Institute, 121, 180, 246, 324, 345, Weber, Eleanor, 304
106, 108, 120,163,182,184,186,189n21, 349, 420n16 Weinberg, Daniel H., 78n6
208,230,299,402,415,417;and property 9, Urban League, 421n19 Weiss, Marc, 158n8
11, 54, 77, 92, 100n4, urban renewal, 5, 115, 117, 131n19, Weld, William, 183
106,107,109,114,123,124,130n6, 130n9, 144, 145, 341, 388n7 welfare, 8, 20, 23, 33, 35, 64, 105, 132n21,
184, 189n20, 241, 243, 251, Urbana, Illinois, 292 157, 185, 205, 206, 219,
362, 368, 369, 372, 380, 393n64 Utah, 130n7 227,236,245,297,299,301,305,
Taylor, John, 393n66 Tegeler, Philip, 193 Utilit ySer v ices Tenants' Rights Act 306,307,310,311,317,320,321, 325, 328,
Temporary Assistance for Needy (Pennsylvania), 391n41 330, 333, 399, 401, 404-
Families(TANF), 107, 321, 328, 404, 08,410,412,415,416,419n5, 420n11,
405, 406, 420n10. See also welfare Vance, Cyrus, 187n5 VanderGoot, Matthew 420n14, 420n15, 421n17; reform of, 7,
Tenant Interim Lease Program (TIL) (New R., 64 130n5, 385. See also Tempor ary
York City), 373 Vento, Bruce, 335 Vermont Housing and Assistance for Needy Families
tenant management corporations, 153 Conservation Wells, Nancy M., 308
Tenants' and Workers' Suppor t Committee Board (VHCB), 266, 389n24 Vermont West Germany, 34
(Alexandria, Virg inia), 230, 232 State Housing Authority, West Hollywood, 221
Tenenbaum, Richard, 193 377 West Virginia, 320, 388n14, 404
Tennessee Valle y Authority (TVA), 143 Vermont, 130n7, 292, 370, 372, 373, 374, Westchester County (New York),
tent cities, 227 377, 378, 380, 383, 389n20, 389n21, 105
Texas, 24, 90, 125, 130n5, 230, 292 390n27, 390n28, 393n64, 393n65 White House Office for Women's
Thailand, 29 VeteransAdministration (VA), 83, 85, Initiatives and Outreach, 305 Whitehead,
Thais, 78n2 86,117,129n1,133n28,202 Donald, 232, 233 Widrow, Woody, 221
Third Parties '96, 234 Veterans Affairs, U.S. Depar tment of Wiener, Robert, 341, 430 Wilen, William P.,
Thompson, Tommy, 407 (VA), 182, 209n5, 325, 336 193 Williams, Ed, 231, 233 Wilmington,
Tilly, Chris, 415, 430 Vidal, Avis, 341 Delaware, 403 Wilson, William Julius, 410,
Time magazine, 126 Vietnam, 28 Vietnamese, 78n2 414 Wisconsin, 130n7, 381, 387n5,
Ting, Kwok-fai, 304, 311 Virginia Beach, Virginia, 63 388n14, 392n56
Tobin, Mitchell S., 64 Virginia, 130n7, 163, 208, 219, 370, women,7,12,21,23,24,27,28,32,34,
Torre, Susana, 311 380, 387n5 39,52,55,56,75,119,177,179,215, 225,
transportation, 9, 29, 71, 75, 110, 158, 186, visitability, 292 230, 234, 252, 279, 280, 281,
202, 287, 289, 292, 310, 311, VISTA, 227 287,290,296-315,306,352.Seealso gender
328,330,332,361,384,386,413; and public, Von Hoffman, Alexander, 347 Voting Rights Women's Housing and Development
304 Act of 1965, 145 Voting Rights of Homeless Corporation, 306, 307
Transpor tation, U.S. Depar tment of, 117 Citizens Women's Summit (1995), 188n8 Wood,
Traub, James, 422n29 Act of 1997, 187n7 Edith, 113
Treasury, U.S. Department of, 87, 90, vouchers,8,11,111,115,119,123, Workers Cooperative Colony (Bronx, New
92, 93, 98, 99, 106, 123, 126, 149, 152, 149, 152, 164, 165, 167, 168, 174, 175, York City), 251
204, 268, 272, 276 187n5, 209n6, 279, 288, 291, World Conference on Human Rights,
Truman Administration, 157 307,409,412,414,417,418, 421n20, 188n8
Trust for Public Land, 393n64 Tsongas, 422n32. See also public housing, Section World Trade Organization (WTO),
Paul, 125 8 29
Turner, Margery, 180 WorldWarI, 139, 141, 216
Twentieth Century Fund, 123, 133n30 Twin Wagner, Robert, 114, 143 Wahl, Hans- World WarII, 4, 10, 38, 82, 83, 84, 114, 121,
Cities, Minnesota, 230, 368, 382 Two Cents Werner, 289 122, 132n28, 133n28, 143, 157,
for Housing, 228 Wall Street Journal, 23, 33 Waller, Mary, 182,216,217,252,411
408
U.S. Catholic Bishops, 178 Wallis, Jim, 232, 233 YankelovichPartners, 126
U.S. Conference of Mayors, 119, 321 War on Poverty, 117, 341 warranty of Yates, Larry Lamar, 430 Yeoman, Barry,
underemployment, 23 unemployment, 23, habitability, 182, 195, 196, 197, 198, 200, 387n6
24, 25, 28, 32, 38, 208 Yinger, John, 76
440 Index
Young Lords Organization,

218
Zarembka, Arlene, 391n42 zoning, 8, 69,

202, 205, 206, 241,
289,290,305,310,311,327, 388n6; and
bonuses, 389n20; inclusionary, 368, 370,
373, 382, 388n12, 389n18; and restrictive,
361; and snob, 69, 383; and up-zoning,
389n20

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A Right to

RACHEL G. BRATT MICHAEL E.

Rachel G. Bratt, Michael E. Stone and

TEMPLE UNIVERSITY PRESS

Copyright © 2006 by Temple University, except Chapters 2,4, 11 Copyright

Library ofCongress Cataloging-in-Publication Data

1 Why a Right to Housing Is Needed and Makes Sense: Editors' Introduction 1

Segregation and Discrimination in Housing 61

Pernicious Problems of Housing Finance 82

Federally-Assisted Housing in Conflict: Privatization or Preservation? Emily

Privatizing Rural Rental Housing 171

The Case for a Right to Housing 177

11 Social Ownership 240

12 Social Financing 261

Opening Doors: What a Right to Housing Means for Women

Responses to Homelessness: Past Policies, Future Directions, and a

16 Community Development Corporations: Challenges in Supporting a Right to Housing 340

Housing and Economic Security

About the Contributors 427

DAVID BRADY BRYSON (1941-1999) was a brilliant legal advocate and a

CUSHING N. DOLBEARE ( 1926-2005), the founder and long-time director of

Rachel G. Bratt, Michael E. Stone and Chester

Why a Right to Housing Is Needed and Makes

IT IS UNCONSCIONABLE that inthe 21st true democracy impossible.

three-fourths of a century of government Congress as H.R. 1122 (A Bill to Provide an Af-

mentalhealth; better- Congressionally-appointed bi-partisan Millennial

from HUD. exemplified by the hundreds of thousands of

hallways. A housing unit is termed “moderately “affordable housing” ap-

five major metropolitan areas analyzed in a Center on Achtenberg,EmilyP.2002.Stemmingthetide: A handbook

sity Press. ingneeds. Plusupdateonworstcasehousingneedsin

1 The Economic Environment of Housing: Income

HOUSING AFFORDABILITY depends those of color have persisted.

help to explain why wage

Figure 1.1 shows one set of consequences for growth.

All of the evidence so far spells out the results of

1997). implementation of otherregulations, ranging from

Type, 1999 as likely to be employed as white males, and black

seen as competitors or undeserving beneficiaries of andbottomlesspits:Women'swork,women'spoverty.

Economics 112(1):291-303. trial Relations 37(4):419-439.

ity. New York: Oxford University Press. http://factfinder.census.gov

2 Housing Affordabilit y: One-Third of a Nation

Housing, by contrast, is highly inhomogeneous. an income of at least $38,000 to beabletoafford to

in comparison with the poor households in 2001, compared with 84

Shelter Poor Paying 25+% ------Paying 30+%

FIGURE 2.1. Affordability Trends in Number of Households, 1970-2001.

temporary peak of a after which it again

— Shelter Poor Paying 25+% - - -Paying 30+%

FIGURE 2.2. Affordability Trends in Percent of Households, 1970-2001.

1970—and larger households (containing three or

1-2 Person HH Shelter Poor 1-2 Person HH Paying 30+%

Renter HH Shelter Poor --------Renter HH Paying 30+%

Household Size (# of persons)

FIGURE 2.5. Renter Affordability by Household Size, Percent of Households, 2001.

elderly and/or a person of color. The rates of number of shelter-poor renterhouseholds

Household Size (# of persons)

FIGURE 2.6. Homeowner Affordability by Household Size, Percent of Households, 2001.

3 Segregation and Discrimination in Housing

downeventothecurrent group's neighborhoods near the downtown of a

Thusfar, we havebeenusingthe index ofdissim-