The voices of Urban Institute's researchers and staff
December 17, 2018

America’s public housing program faces an uncertain future

Housing assistance plays a crucial role in stabilizing so many elements of a family’s daily life, including employment, education, and health. But despite its important role, our nation’s public housing program faces an uncertain future. 

Most public housing in the US is at least 40 years old and needs major capital repairs like new windows, plumbing, roofs, and heating systems to keep it operational. Many years of funding cuts, poor management, and weak oversight from the US Department of Housing and Urban Development (HUD) have left many housing authorities to face the hard reality that they may not be able to keep their buildings open. HUD secretary Ben Carson stated in an op-ed in the Washington Post this past Sunday that “HUD’s budget cannot keep pace with the growing capital needs of public housing.”

The two-year budget deal Congress approved in March 2018 included an increase in funding for public housing and a doubling of the number of housing units eligible for the Rental Assistance Demonstration (RAD). RAD enables housing authorities to leverage property value and their HUD funds to access private-sector financing and additional public funds.

Although this was good news for authorities, HUD notified housing authority executives in November that the department is focusing on “repositioning” 105,000 public housing units by the end of the next fiscal year. This notice raises concerns about losing public housing units, which would worsen the affordable housing crisis.

About 4.7 million low-income renter households receive federal housing assistance, including public housing, housing choice vouchers, and project-based rental assistance. Public housing is the oldest of these programs. The federal government directly finances both the capital costs and operations, but local housing authorities own and operate the properties themselves. More than 3,000 housing authorities manage 1 million public housing rental units.

Although the voucher program is larger, public housing is the only program that provides permanently deeply subsidized homes (called “hard units”) for low-income families, the elderly, and people with disabilities, guaranteeing a supply of affordable housing even in expensive rental markets.

New York City’s housing authority is emblematic of problems

The New York City Housing Authority (NYCHA), the nation’s largest housing authority, is the most extreme example of how the public housing crisis is endangering the families who depend on public housing. The agency faces a $25 billion capital backlog and has a severe management crisis. This past winter, 80 percent of its 320,000 residents experienced at least 24 hours without working heat, and the agency admitted that lack of resources led it to cover up problems like leaking pipes and mold instead of repairing them.

Most alarming, children in NYCHA units were exposed to lead. Instead of protecting them from being poisoned, the agency appears to have disregarded the test results.

Since these problems came to light, NYCHA’s executive director has been forced out, and the agency is now under federal oversight, with state and local officials debating how to reverse the downward spiral.

But as bad as NYCHA’s situation is, many smaller housing authorities are also in dire straits, with no realistic options for government bailouts or private financing. The plight of the Cairo Housing Authority—which had to close its only two developments, forcing residents to relocate to other towns, has received national coverage, but other housing authorities may face similar dilemmas.

When public housing is so deteriorated that the costs of repairing or replacing the buildings has become excessive, federal law allows housing agencies to demolish the buildings and relocate the current tenants with “tenant protection vouchers.” Since it was implemented, the “demo/dispo” (demolition and disposition) rule has led to the loss of tens of thousands of hard units as the need for assistance continues to grow.

Demo/dispo is one of the tools HUD expects housing agencies to use to address the backlog of capital improvement needs. The department’s 2018 notice that provides application information for demo/dispo approval would weaken resident consultation requirements and would allow agencies to begin relocation and demo/dispo before receiving written HUD approval. The repositioning effort appears to reflect an effort to reduce the number of hard units that receive federal funding and to streamline the process in ways that increase risk for disadvantaged families.

The public housing crisis developed over many years and will not be solved overnight. RAD has been a means to access funds for housing preservation while protecting tenants, and Secretary Carson and others hope it will fix the funding gap.

But getting the financing and implementing the redevelopment takes time, and because it’s still new, we don’t know how well the program has worked so far. The short-term goal should be to stop the bleeding—targeted reinvestment to preserve units where they are most needed, protecting all tenants from losing their homes, and making sure housing authorities have enough HUD funding to use as leverage for effective RAD financing deals.

By no means should we give up on this critical source of affordable housing during a national housing affordability crisis and walk away from those who need it. More must be done to halt the public housing stock’s downward spiral and protect families living in deteriorating homes.

HUD Secretary Ben Carson and U.S. representative Mike Coffman tour one of the new complexes at the Village at Westerly Creek on July 30, 2018, in Aurora, Colorado. The Housing Authority of Aurora serves working families, single parents, disabled residents, seniors, people experiencing homelessness and veterans, and manages over 680 units of rental housing.

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