The Future of Public Housing (Hsiu Jui Chang, William Cunningham, Jui Kai Li)

On July 29th, the Subcommittee on Housing and Community Opportunity held a hearing on Academic Perspectives on the Future of Public Housing. Testifying were Dr. Thomas D. Boston, Professor, School of Economics, Georgia Institute of Technology, Orlando Cabrera, Chief Executive Officer, National Community Renaissance and Nixon Peabody, Dr. James Fraser, Associate Professor, Department of Human and Organizational Development, Vanderbilt University, Dr. Edward Goetz, Director, Center for Urban and Regional Affairs, University of Minnesota, Dr. Laura Harris, Assistant Professor, School of Urban Affairs and Public Policy, University of Memphis, Mr. David R. Jones, President and Chief Executive Officer, Community Service Society of New York, Dr. Mark Joseph, Assistant Professor, Mandel School of Applied Social Sciences, Case Western Reserve University, and Dr. Susan Popkin, Director, Program on Neighborhoods and Youth Development, The Urban Institute.

In the opening statement, several representatives expressed their views on public housing. The chairwoman maintained that there are problems with public housing such as neglecting the needs of existing public housing residents and underfunding. Rep. Lynch noted the shortage of staff required to maintain the quality of public housing. One congressman said flexibility in public housing programs is important. Most of the testimony concerned the HOPE VI program. The testimony is summarized below and copies of the written statements are available at; http://www.house.gov/apps/list/hearing/financialsvcs_dem/hchr_072909.shtml.

Highlights from Testimony:

One recurring problem identified had to do with the screening process. People receiving public housing are selected by private sector agents who may unfairly restrict applicants’ access to public housing services by the imposition of irrelevant credit requirements. Industry representatives responded that credit guidelines served to protect investors’ interests. Social responsible investors might counter by pointing out that credit guidelines imposed on subprime mortgage borrowers were also supposed to protect investors’ interests. They did not do so leaving some to question their relevance and fairness.

In general, fully evaluating the benefit of a public investment by simply looking at returns to a narrow group of people is inappropriate. One of the suggested program improvements involved making sure that HOPE VI program participants did not experience increased isolation as a result of participating in the program. In the table below, we show the interaction between isolation and improved housing. Thus, the most likely program outcome is a decline in quality of life for program participants.

		Housing
Isolation		No Change	Slightly Better	Much Better
	No Change	Flat	Quality of Life improves	Quality of Life improves
	Slightly Worse	Quality of Life declines	Quality of Life declines	Quality of Life improves
	Much Worse	Quality of Life declines	Quality of Life declines	Quality of Life declines