Affordable Housing Institute : US

[Continued from the preceding Part 1, Part 2 and Part 3.]

 

In covering the history of public housing using MIT Professor Lawrence Vale’s comprehensive study, From the Puritans to the Projects, we’ve seen that public housing arose from a Christian-charitable impulse, was adopted by the late nineteenth-century’s enlightened progressives, and first found expression as a government activity in the Great Depression, when the slums themselves were seen as the problem, and government slum clearance the solution.

 

[For more on my views of public housing, see Public housing: the Ghost of Christmas Yet to Come (June, 2006), Public housing’s Gordian’s knot (December, 2006), and The essential housing authority (September, 2007).  Dozens of marvelous photographs are in the LaGuardia-Wagner archives.]

 

Though World War II interrupted this trend, it only suspended change, for the war’s successful conclusion unleashed two related forces that transformed America’s cities:

 

1.  The great migration (mainly of blacks) from the rural south to the industrial north.

2.  Returning GI’s and the baby boom.

 

Governor Thomas E. Dewey, Truman’s opponent in the election, at a 1948 groundbreaking for Al Smith Homes in New York

 

I’ve written elsewhere that slums arise inevitably when there is rapid urbanization in a strong economy, and precisely this occurred in postwar America.   Demand for housing was enormous, at every level and in every large city.  These demographic pressures, plus the pent-up consumer demand flooding back in to America, impelled Harry Truman’s Federal government to follow the lead set by his predecessor Roosevelt, and push the Federal government even further into housing.

 

Ribbon cutting, New York City, 1947

 

Truman (one of my favorite presidents, right up with Lincoln) believed in housing, and saw housing and civil rights as marching hand in hand, and took his surprise 1948 election as a mandate for change and to push the Federal government into housing.  The real estate lobbies – the National Association of Real Estate Boards and the National Association of Home Builders – were intensely opposed, insisting that public housing was “the cutting edge of the Communist Front,” “pure socialism,” and a step toward nationalization of all housing (!!).  An NAHB lobbying memo recommended:

 

“Accuse your housing authority of squandering funds, of being inefficient and failing to live up to promise.  Deride failure to clear slums and to house the poor.”  Page 238.

 

Remembering the Boston experience, where the good-government groups had used eminent domain to take large neighborhoods and transform them into public housing, the builders also sought to stop individual properties in their tracks:

 

“If you know about these steps – if you watch for them – if you take action when they are about to occur – you will have an excellent chance to stop socialized public housing projects in their inception….  Hit the public housing program in your city at each of these steps.”  Page 241.

 

Locals protesting potential new residents, New York, 1947

 

Feisty Truman was characteristically principled, furious, and direct.  As he said in the legislation fight:

 

“I do not recall ever having witnessed a more deliberate campaign of misrepresentation and distortion against legislation of such crucial importance to the public welfare.  These attempts to mislead and frighten the public and their representatives in Congress – these false claims designed too prejudice some groups of the people against others — these malicious and willful appeals to ignorance and selfishness – are examples of selfish propaganda at its worst.”  Page 241.

 

Truman’s 1949 housing act is one of the five landmark pieces of American housing legislation (the others are the 1937 NHA, the 1968 NHA, the 1986 Tax Reform Act, and 2008’s HERA).

 

Will HERA be judged a work of art decades hence?

 

For public housing, the 1949 act had three enduring consequences:

 

1. Made “decent, safe, and sanitary” housing a national goal.  Truman irrevocably committed the Federal government to the business of housing quality, and this touchstone phrase is always referenced in any new legislation.

 

2. Set off the second wave of public housing construction.  Between 1949 and 1954, the Federal government returned to public housing in force.  As Professor Vale accurately puts it:

 

In Boston, virtually all of the city’s family public housing constructed by the BHA was completed in two waves – between 1938-1942 and between 1949-1954.  A modest amount of public housing for the elderly was completed later on, but the heyday of public neighborhood construction ended in 1954.  Boston’s pattern is similar to the peaks of public housing construction nationwide, although much more was built in other cities after 1955.  Page 167.

 

Moving in to Jacob Riis Houses, 1948

 

Significant for us is that nearly all the legacy public housing we see today is at least fifty years old.  In that half-century, there have been several revolutions in apartments and affordable housing, yet the public housing inventory remains largely as it was built.

 

Just remember, 1954’s idea of housing was like 1954’s idea of a trendy kitchen!

 

3. Public-private partnership.  Truman’s FHA was much more active than Roosevelt’s, and with programs like Section 608, the Federal government created the first public-private partnerships with private builders.  While it would take until 1962 for public-private to reach long-term rental (with the first HUD Section 221d3 properties), the introduction of a better ecological form would mean that future resources would flow not into more public housing but into public-private.

 

Throughout the 1950’s, public housing was the preferred replacement property for slum clearance and slum redevelopment.  As I’ve posted elsewhere, led by Bob Moses in New York the reformers brought their bulldozers, leveling ‘Obsolete Neighborhoods’ (as they were labeled on Boston City Planning Board diagrams) to make way for ‘New Plans’.  As Vale writes, “Instead of an environment that ‘undoubtedly impairs the mental and physical health of its inhabitants’, the Planning Board proposed ‘an environment of good physical and mental health’ which ’should be less of a financial burden to the city.’”  (Page 275).

 

Despite the lonely efforts of people like Jane Jacobs, the reformers knew they were right:

 

I can match their smug with my smug!  Jane Jacobs, circa 1965

 

“To people who have lived there a long time, the West End may not seem ’substandard.’  But the preliminary studies made by the Housing Authority show that it is.”  Page 278.

 

Today we would hoot at such hubris – or would we?

 

In any case, back in 1955, few foresaw that public housing was sowing the seeds of its own doom, but one who did was New York public housing advocate Charles Abrams:

 

“The policy of restricting eligibility to fixed maximum income has given an institutional character to the projects.  The occupants are tagged as people who earn less than a specified income, so that a tenant feels more like the inmate of a poorhouse than a rent-payer….  A rise in income due to increased earnings, which should be a cause for joy, may result in the family’s eviction….  The policy of evicting those who do improve their status drives out the more exemplary tenants, leaving a less successful residuum.”  Page 265.

 

Intoxicated with slum improvement, the reformers were apparently oblivious to the public ghettos they were building to replace the private ghettos they had torn down:

 

Chester Hartman, academic (1964): “For those who do relocate to public housing, the grouping of the disadvantaged, the stigmatization of projects, and the feeling of resentment at limited choice serve to exacerbate existing social and personal problems.  Neither the objectively superior housing nor the subsidized rents sufficiently compensate for these disadvantages of status and sociability….  Social and economic realities make it almost inevitable that the projects will increasingly turn into islands of poverty, segregation, deprivation, and despair.”  Page 282.

 

In fact, they ‘tipped’ from white to black with breathtaking speed.  In 1964, for instance, Boston’s six large public housing properties were 80% white.  By 1970, they were 70% black, as blacks moved in and whites fled to the suburbs.

 

 

 

[Continued in Part 5.]

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[Continued from the previous Part 2 and Part 1.]

 

So far in our multi-part history of public housing using MIT Professor Lawrence Vale’s comprehensive study, From the Puritans to the Projects, we’ve covered the pre-urban era (the Puritans and their almshouses, poorhouses, and Houses of Industry), and the Progressive period that ended the nineteenth century and opened the twentieth. 

 

[For more on my views of public housing, see Public housing: the Ghost of Christmas Yet to Come (June, 2006), Public housing’s Gordian’s knot (December, 2006), and The essential housing authority (September, 2007).]

 

Arizona progressives, circa 1900

 

This was a time of American sunshine, yet both here and in England, prosperity produced what seemed a paradoxical blot: the slums.  Slums, as we’ve seen, arise from the rapid urbanization that accompanies economic growth and technological advance (for city infrastructure).  In general, communities react to slums in predictable stages. 

 

Ignore them and hope they’ll go away.  Sometimes you pay them to go away.  It doesn’t work.

Locate them out of sight and out of mind.  Hope they get better.  They usually don’t.

 

But as the economy grows and the city grows with it, the swarms overwhelm some neighborhoods – often the oldest, because they are the closest-in.  These buildings are old, overcrowded, unsanitary, and decrepit – because those conditions are economically rational in a slum:

 

Tenement yard, 1926

 

The private sector has a straightforward and economically rational solution to the problem of unsustainable renters, consisting of the following steps:

 

1. Compress rentable space each unsustainable renter occupies.  This has the effect of increasing the revenue per unit.

 

Tenement, 1880

 

2.  Reduce operating expenses to a bare minimum.  This results in an accelerating cycle:

 

Inadequate operating expenses.  The result is deferred maintenance and a decline in property physical condition.

Declining property condition.  With lower curb appeal, the property has difficulty attracting good tenants, so it takes marginal tenants (often those with no formal income or another reason to evade scrutiny).

 

Rear-yard tenement (almost certainly illegal), New York City, 1959

Rear-yard shacks are a staple of slums in the global south today.

 

Accepting marginal tenants leads to higher collection/ bad debt losses, higher maintenance, secondary problems (e.g. vandalism), and the loss of market tenants.

Loss of market tenants means lack of rentability except by those who have no other economic choice.

 

Thailand, 2005

  

3. Adverse-select location to find the ones with the lowest acquisitions/ operating costs and the tenancy residing in them has the fewest alternatives and the least economic imperative for (as an example) transportation and public services.

 

Camden, New Jersey, 1938

 

Slums were a-brewing in America, and then came the Great Depression, which swept in Franklin Roosevelt and the New Deal’s vast expansion of the Federal government’s role in just about everything, including affordable housing. 

 

Homes in Los Angeles, 1935

 

Led by Massachusetts and New York (two states that throughout American history have been in the vanguard of affordable housing developments), governments embarked on dramatic slum-clearance efforts.  The nation’s first public housing property was in Boston – Old Harbor Village, later renamed Mary Ellen McCormack Homes, and still in use.

 

April, 2008: Double shooting at Mary Ellen McCormack Homes

 

As the 1930s opened, slum clearance appeared a panacea – it would improve water and sanitation infrastructure …

 

Philadelphia, 1930’s: St. Albans Street, street Arabs with open drain

 

… replace overcrowded urban hovels with clean, modern apartments, improving neighborhoods and bringing precious construction jobs.  It would also improve the city’s budget economics:

 

In its 1933-34 report, the State Board justified the  need for slum clearance and new housing by analyzing “the cost to the community of maintaining a substandard area,” using the specific example of Census Tract M-3 in South Boston. 

 

I’ve often thought this exercise to be worth doing, even if I tend not to like the results.  Cities are economic organisms, and municipal government is a sub-organism within the city, and it’s legitimate analysis for a city to deduce which property uses make it money, which cost it money.  I suspect that office buildings make money for cities because they generate both real estate taxes and payroll taxes – plus jobs, which mayors like. 

 

 

Their method of analysis is instructive.  The board itemized land and building values, then compared the income from real estate and water taxes to the district’s share of direct public expenditures needed to support its schools, library, hospital, parks, infrastructure, police and fire stations, and relief roll.  It added to these the less significant pro-rated cost of thirty-five other city departments whose service to the district was more indirect. 

 

Residential property costs money – and I fear family apartments cost a lot of money – because you have to handle all of people’s byproducts, including children who need to be educated in those schools you build.  Even so, city economics has always seemed to me the best argument for formalizing informal communities.  At some point, the volume of humanity and their earning potential is such that the revenue you gain from building the infrastructure to legitimize (and hence to tax) them outweighs the costs you incur by providing them with services (versus the cost you incur by trying to exclude them from your city). 

 

The bottom line was this: Census Tract M-3 brought the city $27,000 in income, while absorbing $275,000 in city expenses, so this slum cost the city $248,000 a year. 

 

The very poor could pay only 10% of the costs of their municipal infrastructure; as we’ve seen elsewhere, municipal infrastructure’s hard costs are usually non-recoverable, and the Basic Model of infrastructure finance requires the very poor to pay only the minimal operating costs.  I’m intrigued that this ratio has persisted for nearly a hundred years.

 

Slum in downtown Los Angeles, 1930s

 

Even though they are provided few services, slums are expensive because of their externalities, as we saw with Guarapiranga.  Formalizing could be cost-effective – at least, that’s what the city concluded.

 

Retrofitted municipal drainage: Guarapiranga, Sao Paulo, Brazil

 

The board’s conclusion, following a logic that would have been utterly incomprehensible to the residents of the neighborhood, was that “Substandard areas of this character are indeed a luxury for the City to maintain.”  The entirety of tract M-3 was leveled in 1941 to make way for the eventual construction of the West Broadway public housing development.  Page 187.

 

West Broadway was unusually contentious as it involved the Federal government.  Six years earlier, the City of Boston had moved on its own, picking:

 

… an eleven-block area of South Boston adjacent to the abortive site of the [never-built] Columbia Gardens project.  At present, the [Federal Public Works Administration] administrator noted, the neighborhood “is occupied principally by old three-story, frame, two-family houses.”  The site had been strongly recommended to the PWA by a disparate variety of groups, including a citizens coordinating committee chaired by Dean William Emerson of MIT, the State Housing Board, the housing committee of the Boston City Planning Board, the Women’s Industrial Union, the Boston Council of Social Agencies, the Boston Housing Association, and the Little House (a welfare organization).  Page 173.

 

What could be more logical than that the government, about the sole economically viable entity, should move into the business of being everyone’s social landlord: building new public housing, locally owned and operated under the municipal government? 

 

Roosevelt’s New Deal included a medicine-cabinet full of nostrums for the body politic and economic, and what more logical place to start than with housing?

 

 

As codified in the 1937 National Housing Act, which built on the 1934 National Housing Act creating FHA, public housing was tied to slum clearance.  New construction must be accompanied by the –

 

“elimination by demolition, condemnation, and effective closing, or the compulsory repair and improvement of unsafe or unsanitary dwellings situated in the locality or metropolitan area, substantially equal in number to the number of newly constructed dwellings provided by the project.”  Page 184

 

From the beginning, public housing and slum clearance were a political pitched battle by progressives and big-government advocates against an unlikely alliance of slum incumbents.  The residents distrusted their government:

 

One man shouted: “They call it a slum district.  Well, it’s good enough for me and it has been good enough for you.  Why didn’t they find out what the people of the district thought before they decided to throw people out of their homes and out of small businesses they have taken years to build up?  They kept quiet about it until the last minute because they knew there would be a roar   of protest which would balk at the land grab … This move smacks of plain communism.”  Page 173.

 

Kitchen, Brooklyn tenement, 1948

 

As did the property owners.  As eloquently argued by the attorney for a small owner whose property was to be taken by eminent domain slum clearance:

 

“No doubt bad housing conditions are an evil, and so is an insufficiency of food and clothing.  All result from the ever present curse of poverty.  But it does not follow that it is the function of government to attempt to remedy these evils by the expenditure of public money raised from the people by taxation and by the taking of private property.  The doctrine is a dangerous one that everyone is entitled to be well fed, well clothed, and well housed, and if one by reason of misfortune, incompetence or sloth cannot achieve that end by his own efforts the public will pay the bill.  No permanent improvement of mankind can result from the attempt by government to remove the necessity of the struggle for existence.”  Page 216.

 

Adding to the objections was the belief that giving people cheap income-eligibility-restricted housing would discourage their work ethic:

 

“What will happen … when a privately employed worker, living in a subsidized housing project, is offered a raise in pay or a better job?  Will he joyfully accept the opportunity or reluctantly refuse it rather than move back to the ‘cold-water flat’?  How would the boy or girl, fresh from school, react to a chance for a job if by accepting it, the family would have to leave their home?  In other words, will public subsidized housing tend to ‘fix’ low wages, dull the worker’s initiative and ambition and encourage subterfuge?  Such eventualities are more than imaginary, for tenants at Old Harbor Village are reported to have faced such decisions, and to be still living in the project.”  Page 180.

 

Despite the neighbors’ protestations, the properties went ahead, and between 1935 and 1943 both Boston (which led) and the Federal government (right behind it) constructed larger number of new public housing apartments. 

 

Public housing production, City of Boston (top) and nationally (bottom)

Page 167 of From the Puritans to the Projects ­ – image supplied by the author

 

To provide positive incentives and eliminate perverse ones, the BHA established eligibility requirements:

 

·         Income.  May not exceed five times the rent (or six times the rent for a family with three or more minor dependents).  [Inference: Rent equals 17% to 20% of income.]

·         Previous housing.  The family must have been living under substandard conditions detrimental to health, safety, and morals for six months immediately before filing of the application.

·         Residency.  The family must have resided in the City of Boston for at least one year immediately before filing of the application.

·         Citizenship.  The head of the family must be a U. S. citizen.  Page 196.

 

As always happens when slums are cleared and replaced with better housing, the new apartments cost more to rent than the informal housing the residents left behind:

 

Boston Housing Authority (BHA) analysis shows that average pre-clearance rent was $15.88 per month, with post-clearance public housing $23 a month for a family of the same average size and income.  Page 200.

 

Moving in to public housing, East River Townhouses, New York, 1941

 

As a result, the tenancy changed.  The new public housing residents were better off than the average pre-clearance slum inhabitants:

 

In June, 1939, 152 families who had been ordered to vacate the Lenox Street site went on record as being unable to find alternative affordable accommodation.  Having paid monthly rents of twelve to sixteen dollars in the buildings about to be razed, they found that it would cost them 25% to 35% more to live elsewhere.  Moreover, many claimed, these alternatives were frequently less desirable than the accommodations that were about to be torn down. 

 

One exasperated local commentator, observing the impasse, concluded that “these so-called ’slum clearances’ as far as many people can see are … ‘a lot of hokum.’  The people the clearances are supposed to benefit get left out in the cold, as the rent is too high for them to meet.”  Page 209.

 

Family moving in to Sojourner Truth public housing, Detroit, 1942

 

Despite all these challenges, the New Deal swept all before it.  During the late 1930’s and into 1940 and 1941, city slums were demolished; waves of public housing were undertaken in all of America’s large cities, among them Boston, New York, Washington, Atlanta, St. Louis, Chicago, New Orleans, Los Angeles, San Francisco.

 

Remaking the map: public housing sites in East Harlem, New York

 

Then came Pearl Harbor, and public housing and housing policy stopped dead, not to resume until after World War II.

 

President Roosevelt signing the declaration of war against Japan

 

 

[Continued in Part 4.]