Subsidized housing doesn't work because it can't !
A scholar from Harvard's Kennedy School of Government contends that subsidized housing programs fail "because they are flawed at the core." Howard Husock charges that "devoting government resources to subsidized housing for the poor . . . is not just unnecessary but also counterproductive. It not only derails what the private market can do on its own, but, more significantly, it has profoundly destructive unintended consequences."
Writing in the Winter issue of City Journal, published by the Manhattan Institute, Husock argues that "housing subsidies undermine the efforts of those poor families who work and sacrifice to advance their lot in life -- and who have the right and the need to distinguish themselves, both physically and psychologically, from those who do not share their solid virtues."
Advocates of subsidized housing are convinced that "the private market cannot and will not provide adequate housing within the means of the poor," but it is their own misguided attempts at helping the less fortunate that are to blame. "Insisting unrealistically on standards beyond the financial means of the poor, they help create housing shortages, which they then seek to remedy through public subsidies," observes Husock. He notes that federal housing programs "have caused private owners and builders to bypass the low-income market. So stringent are the standards that, under current building codes and zoning laws, much of the distinctive lower-cost housing that shaped the architectural identity of America's cities . . . could not be built today."
Determined do-gooders are not dissuaded by their failures, of course, but the fact remains that subsidized housing has failed. "Four generations of attempts to provide subsidized housing built to higher standards than the poor could afford on their own in the private market have proved that this idea just doesn't work," says Husock. He argues that "providing the poor with better housing than they can afford also saddles them with higher maintenance costs than they can afford."
Cutting out the profit-seeking landlord doesn't necessarily make housing cheaper, either. Husock points out that "public authorities and nonprofit management firms are bureaucracies with their own over-head expenses; and, unlike private owners, they have no incentive to control costs. Nor have their employees any incentive to provide good service; and tenants, who are not full-fledged paying customers, have little leverage. Indeed, public housing authorities have demonstrated an ability rivaling any slumlord to disinvest in their properties."
Howard Husock reminds us that subsidized housing has indirect costs too. "Far from being more cost-effective than private housing," he observes, "subsidized housing is even more expensive than it first appears. Its cost includes the vast amount of property-tax revenue forgone when rental housing is held by public authorities or non-taxpaying nonprofit groups. By choosing to invest in housing, cities choose not to invest in other services, or not to leave money in the private economy to finance growth that would provide opportunity for poor and non-poor alike." Isn't it about time we ended this proven failure?