Affordable Housing Institute : US

More than twenty years ago, at a housing conference I co-chaired where I was describing a then-nifty innovation in affordable housing finance, someone tossed up the doubting-Thomas question, “Why get in now?  Why not wait until things are clearer?”

 

I’m not ready to take a position on the matter

 

“Because,” I extemporaneously shot back without thinking, ” every HUD program goes through six stages — conceptualization, enactment, chaos, codification, scandal and shutdown.” 

 

The audience broke out in laughter.

 

“Chaos, codification, scandal and … what?”

Yet I was dead serious [Pretty rare! — Ed.], and it’s still true today. 

 

“Look, the beard shows I’m serious!”

 

Let’s look at the six phases of program evolution.

 

1.         Conceptualization.  Every housing program is responsive; it addresses a critical unmet need.  There are many reasons to create housing programs, and they are more or less continuously present across the full income and tenure spectrum.

 

Yet a particular need catches political fire by galvanizing public consciousness.  Sometimes it’s a breakout social phenomenon — like the US’s 1967 urban riots.  Sometimes it’s a tragic story — like the Triangle Factory Fire.  Sometimes it’s a political wakeup call — like the Kelo decision.  Sometimes it’s a crusading media expose, documenting deplorable conditions or barbaric exploitation.  Whatever the source, the topic is on everybody’s lips, and the question is, what are the politicians going to do about it?

 

I’m getting a picture of how the program might work

 

Program conceptualization is about building a shared vision of a solution.  As such, it is unstructured, mainly verbal, and interactive.  The written part is always very short, comprising policy briefs, talking points, and legislative outlines — all the lovely outputs of think tanks, trade associations, advocacy groups, and even pro-bono commenters. 

 

Conceptualization ends with a legislative proposal, introduced by a member (in the US) or minister (in the UK).

 

Useful principle: When you’re conceptualizing a program, design it by outputs (results you desire) and inputs (eligible properties or customers).  Don’t get into the mechanics of how the machine should do what it does; describe the customer interface only.

 

2.         Enactment.  Programs combine the government factory’s two products, laws and money.  Since affordable housing always costs money, a ‘program’ in our terminology represents a specific set of financial incentives (the four kinds of money, or a type of subsidy).  The formulation begins with a legislative proposal, and ends with a statute enacted into law (in the US, with Presidential approval or a veto override, in England with a Royal Assent).

 

Since they are words, statutes have to be drafted by an arm of government, and introduced by an elected member.  In the US, with both an executive and a legislative branch, legislation can come from either place, and bottom-up legislation is common.  In the UK, where the executive is fused with the legislature (the Prime — that is, first — Minister), legislation almost always emanates from the applicable ministry, and is often floated via a green paper or formal comment document. 

 

Either way, the process of creating precise words is fraught with imprecision.  Affordable housing program design is hard, and generalists — which is ultimately what we want from members of Congress and their staffs — often unintentionally mess up the specific details. That’s why people like me volunteer so frequently to serve as pro-bono advisors; we want to help government do things better.

 

Look, I’ve got experience in this field!

 

The challenge of getting enactment right is also why pilot programs are so popular and important — they let policymakers test out concepts in a highly unstructured way, and learn from reality before they commit procedures into the rigidity of statute.

 

Timing too is unpredictable — these things never happen quite in the order, or on the schedule, one expects.  Enactment itself is always a surprise.

 

Useful principle: Never make hard-dollar commitments based on an expected future enactment; wait until the ink is dry.

 

3.         Chaos.  Whether a program springs full-blown from a minister’s design, or rolls out via a pilot program or interval, its first contact with reality is always an unpleasant shock.

 

“No battle plan ever survives contact with the enemy.”

– German Field Marshal Helmuth von Moltke

 

Including the Schlieffen Plan

 

Simulations and studies are fine things, certainly better than just writing down a single individual’s first guess, but because ecosystems are complex, inevitably the program designers overlook something, and because markets move faster than governments — much faster — the environment a program enters is always different from the environment the policymakers envisioned when they designed it. 

 

Often the best way in is via a pilot program.  As more formally explored in a graduate-school thesis by Oliver Feltin-Traeger, posted on AHI’s Web site:

 

 

I’m happy we’re piloting this program

 

Either way a program appears — in the rude shock of unexpected enactment or through a structured pilot — its introduction is always chaotic.

 

KAOS is my middle name — check my lapel!

 

Meanwhile, even the best, most heralded, most widely anticipated programs have to attract initial participants, and that’s much harder than it looks, for it takes the adventurous to be the first down any chute.

 

It’s fun in that moment between commitment and impact!

 

In the pilot phase, control shifts from the legislators to the administrators, and the administrators were inevitably in a panic to show tangible progress and actual results — groundbreakings, ribbon-cuttings, handing-out-of-keys, happy-new-families-served. 

 

It felt like it took centuries to get to this point!

 

The administrators are therefore in as much haste as they can ever manage to attain, and they are fixated on results.  The bureaucratic kudzu has barely been planted and has not grown.  Further, since a pilot is supposed to experiment, program participants who bring sensible proposals likely get them accepted — because that’s part of learning.  The first cases form the universe around which the rules are written.

 

Useful principle: the best time to enter a program is in the chaotic phase.  First movers always get to shape the environment; their experiences are always presumed to stand for the many who aren’t moving forward.

 

That’s the point I was making to my seminar questioner — get in early, it’s the best time even if it’s chaotic. 

 

But there are other lessons on the program’s mature and declining phases:

 

[Continued tomorrow in Part 2.]

 

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