Public housing: the Ghost of Christmas Yet To Come
What does the future hold for public housing? Is the future as grim as Dickens’ Ghost of Christmas Yet To Come foretold:
“Before I draw nearer to that stone to which you point,” said Scrooge, “answer me one question. Are these the shadows of the things that Will be, or are they shadows of things that May be, only?”
On the Web site of my for-profit affordable housing consultancy, Recap Advisors, I’ve posted an exploration of this question in Web Update 55: Public housing: the Ghost of Christmas Yet To Come? The Web Update also includes an article of similar title just published in the Journal of Housing and Community Development, bimonthly publication of NAHRO (the National Association of Housing and Redevelopment Officers), which represents America’s roughly 13,000 public housing authorities.
Christmas Yet To Come? For public housing, the present circumstances are grim enough.
“Dear, HUD’s underfunded the operating subsidy again.”
Though often portrayed as ‘red in tooth and claw,’ evolution makes no moral judgments: a superior new species’ emergence is not inescapably a sentence of extinction for all its forebears. Today’s modern vascular plants live happily alongside ferns, unchanged in two hundred million years.
Digital photo taken last week, or 200,000,000 years ago? No difference!
In the multigenerational struggle of coexistence or no existence, should the new entrant displace earlier forms, an established species must migrate out of its previously comfortable biome to another one, less desirable and therefore less competitive.
And sometimes people were forced to move, for reasons much less evolutionary.
The same holds true in affordable housing. Older inferior forms compete with, adapt to, or give away to newer better models.
So it has been with public housing — the first species of government-assisted truly affordable housing, an inventory of over one million apartments that are in dire need of revitalization, not just of the physical property, but also of their ecosystemic environment.
“Maybe some day I can have my structural systems modernized.”
Over the last seven decades, public housing has seen enter its space waves of ever-more-evolved competitors:
- Pure private grant-funded non-profit housing (Section 202).
- Public-private appropriated-funding housing (Sections 221d3, 236, and 515)
- Public-private rent-assisted housing (Section 8 New Construction and Substantial Rehab)
- Portable housing assistance (vouchers)
- Public-private soft equity (LIHTC)
Each of these new species is:
- Newer construction, therefore easier to maintain.
- Closer-to-modern design, therefore more competitive.
- Programmed to produce positive NOI (Net Operating Income), and therefore capable of sustaining some level of financing.
- Privately owned, and therefore with a motivated non-government sponsor.
- Better underwritten, with a stronger awareness of cash flow, and therefore with more operating cushion.
- Accounted for on an individual property basis, and therefore better informed.
All of these attributes are better than the tools available today to public housing.
Faced with these new competitors, public housing has gradually become ‘the housing of last resort,’ where dwell ‘the poorest of the poor,’ though neither of these were among the program’s original objectives.
Over time, public housing migrated to a customer base that cannot afford even the operating costs.
Public housing was pushed into this corner by exclusion — each new wave of superior-quality production carved away a top slice of its eligible-resident universe, leaving public housing with income concentration.
“I wear in death the chain I forged in life.”
Although evolutionary pressures make no value judgment, they do have rules, and the law of economic gravity is catching up with the inventory. As so often happens, everything is breaking down all together:
My troubles come not in spies but in battalions.
– Napoleon Bonaparte
1. Many properties are physically unsustainable. The jargon is ‘cannibalized,’ for when an apartment falls below its reparability threshold, its portable amenities such as toilets and appliances are removed and used to keep other apartments occupiable. Such apartments are called ‘down units’ and after a while, many a housing authority simply ignores them when computing occupancy figures, because it is too depressing to count as vacant something no longer rentable.
2. Housing authorities are going broke. New York City, the largest and one of the best, is responding to funding pressure and the exhaustion of internal resources is forcing authorities to make long-overdue ‘reforms’ of rent structures, but even these are but patches, stopgaps not solutions.
The Federal government buys these in bulk.
3. Housing authorities lack financing tools. Absolutely fundamental to any rational asset management strategy for income-producing property is the ability to finance immediate capital requirements with long-term borrowing. Yet, despite a Congressional reform statute (QWHRA) some years back, most of the QHWRA financing liberalizations remain unimplemented.
Housing authorities are casting about for strategies — any strategies — that will enable them to improve, stabilize, or salvage their better apartments. Indeed, the comprehensive redevelopment accomplished in HOPE VI makes more programmatic sense when seen as a generation-skipping financial technological advance, leaping straight over the old appropriated programs to carry formerly public housing into the modern tax-credit-based era.
Such is the morbid future foretold by the Ghost.
Is there no hope?
Even though the ghost is mistakenly cited as Christmas Future, I’ve always admired Dickens’ precision phrasing — Yet To Come – for that truly signals the Ghost’s (and the author’s) narrative intent: namely, to point out what may be and prevent it from becoming what will be.
Not all species go extinct. For every dodo there is a coelacanth, and more inspirationally, a peregrine falcon.
Everyone thought I was long gone, but I showed ‘em!
I’m compatible with technological and urban habitat advances.
The public housing inventory is a huge resource currently being undernourished. Someone has to point out the consequences:
He sat very close to his father’s side upon his little stool. Bob held his withered little hand in his, as if he loved the child, and wished to keep him by his side, and dreaded that he might be taken from him.
“Spirit,” said Scrooge, with an interest he had never felt before, “tell me if Tiny Tim will live.”
“I see a vacant seat,” replied the Ghost, “in the poor chimney-corner, and a crutch without an owner, carefully preserved. If these shadows remain unaltered by the Future, the child will die.”
“No, no,” said Scrooge. “Oh, no, kind Spirit. Say he will be spared.”
“If these shadows remain unaltered by the Future, none other of my race,” returned the Ghost, “will find him here. What then? ‘If he be like to die, he had better do it, and decrease the surplus population.’”
“I was elected to cut waste, fraud, and abuse, and reduce the budget deficit.”
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