Public Housing’s Hidden Costs to Cities
Most policy experts agree that big public housing projects are noxious environments for their tenants. What’s less well understood is how noxious such projects are for the cities that surround them. Housing projects radiate dysfunction and social problems outward, damaging local businesses and neighborhood property values. They hurt cities by inhibiting or even preventing these rundown areas from coming back to life by attracting higher-income homesteaders and new business investment. Making matters worse, for decades cities have zoned whole areas to be public housing forever, shutting out in perpetuity the constant recycling of property that helps dynamic cities generate new wealth and opportunity for rich and poor alike.
Public housing spawns neighborhood social problems because it concentrates together welfare-dependent, single-parent families, whose fatherless children disproportionately turn out to be school dropouts, drug users, non-workers, and criminals. These are not the families public housing originally aimed to serve. But as the American economy boomed after World War II, the lower-middle-class working families for whom the projects had been built discovered that they could afford privately built homes in America’s burgeoning suburbs, and by the 1960s, they had completely abandoned public housing. Left behind were the poorest, most disorganized, non-working families, almost all of them headed by single women. Public housing then became a key component of the vast welfare-support network that gave young women their own income and apartment if they gave birth to illegitimate kids. As the fatherless children of these women grew up and went astray, many projects became lawless places, with gunfire a nightly occurrence and murder commonplace.
The crime and disorder didn’t stay within the confines of the blighted projects, as residents in neighborhoods dominated by public housing know only too well. “When you have single parents, you have lots of unsupervised teenagers and lots of drugs and gangs,” observes Laurena Torres, an Italian-Hispanic East Harlem real-estate agent and property owner, whose rental brownstones look out on the Robert Wagner Homes, a spine of projects looming over First Avenue. “It affects your everyday life—you have to avoid the projects just to get to the cleaners, the laundry, or the grocery,” she says. “None of us goes into them, or crosses through them—even at 1 in the afternoon—as a short cut.”
Fear of those who live in housing projects can drive neighbors who can afford it to move—another drain on urban vitality, since these are often the striving, upwardly mobile people who make neighborhoods flourish.
The destruction of failed housing projects, however, remains a relatively rare event. And this fact points to a second, more subtle, way that public housing harms cities. Unlike privately owned buildings, public housing becomes property permanently fixed in a particular, low-value use, even as cities change and renew around it. Many projects have loomed over their neighborhoods for decades now. All the while, cities never discover what new, imaginative uses the free market might invent for these frozen areas.
In New York City, the sheer quantity of property locked into service as public housing works as a significant drag on the city’s economy. In East Harlem, where no fewer than 13 huge housing projects stand (“the world’s greatest concentration of public housing,” city officials once boasted), almost no part of the neighborhood escapes their intimidating, prosperity-squelching presence. “We’re surrounded on all sides by them—they’re an eyesore, and there’s an awful lot of run-off, whether crime or drugs,” says one prominent property manager, whose firm owns 1,300 units in some 60 buildings in the area. “If we had even half the number of projects,” he laments, “we’d be the next East Village, with our proximity to midtown and the Number 6 subway train going right through the neighborhood.”
But East Harlem isn’t the only place in New York with an excess of public housing. Gotham has vastly more public housing units than any other city in the nation—nearly 200,000 of the national total of 1 million or so. (Chicago is a distant second, with 38,000 units.) Public housing occupies an astounding 2,500 acres of real estate in New York, the equivalent of 156 World Trade Center sites: a city within the city.
This profusion of public housing also reduces the space available for private housing—a real problem in a city where private housing, especially in the middle-income price range, is in perennially short supply. One New York neighborhood facing this problem is the Brooklyn Navy Yard area, home of a former shipbuilding operation that’s now an industrial park, with 3,500 employees working for dozens of small businesses. Many more firms will probably join these companies once a planned new movie studio opens in the neighborhood. Yet there’s virtually no housing available in the vicinity for the industrial park’s middle-income workers, because two big public housing projects use up much of the area’s space and discourage residential development in the rest. Says Richard Drucker of the Brooklyn Navy Yard Development Corporation, the nonprofit that runs the yard under lease from the city, “There’s a great demand for middle-income housing in the area. If you could build it, it would sell.” And if such housing replaced the projects? Replies Mr. Drucker: “Brooklyn would be better off.”
Nevertheless, the challenge of freeing the Brooklyn Navy Yard and other urban neighborhoods across the nation from public housing is daunting. The belief that “public housing ye shall always have with you” is sacrosanct among housing advocates and officials. Like public housing’s originators more than a half-century ago, they are convinced that the private housing market will always exclude the poor, making public housing permanently essential.
It is this assumption that drives the Department of Housing and Urban Development’s ongoing multi-billion-dollar Hope VI reform initiative—the latest in an endless series of HUD efforts to remedy the endless failures of its earlier housing programs. Hope VI has demolished 70,000 aging public housing units nationwide (including Chicago’s notorious Robert Taylor Homes), only to replace many of them with new units of a different design, in the belief that this time HUD will get the formula right.
As has been the fantasy of public housing officials from the beginning, HUD bureaucrats believe that the right kind of public housing can cure the ills of the “severely distressed.” In this oft-disappointed belief, Hope VI is replacing many of the alienating high-rises that it is tearing down with more comfy town houses, and it seeks to get higher-income families to move into the new units along with the poor, thinking that the more successful families will set a good example for the less successful. “Hope VI will strike a balance and create stable communities,” explains HUD deputy assistant secretary Milan Ozdinec. “It has the very low income side by side with the family earning 60% of median,” he says. “That’s where connections are made, examples are set, and social capital built.”
But this is mere wishful thinking. Why assume that the poor and dysfunctional will learn from the more successful? Isn’t it just as likely that the children of the dysfunctional will set a bad and potentially damaging example for the children of the successful? Moreover, it is far from certain that many Hope VI projects will be able to attract a mix of households in the first place. Why would those with the means to live elsewhere choose to move, say, into new Hope VI public housing going up in the badlands of Chicago’s South Side?
These considerations do not seem to matter to housing officials. Mr. Ozdinec happily—even proudly—concedes that many public housing sites could support higher-end uses. In Houston, he observes, land values around the demolished Allen Parkway Village “went up so fast, we had to scramble to put together enough land to build something else”—that is, public housing instead of higher-value private development. In San Francisco, the North Beach Hope VI project borders the famed Fisherman’s Wharf. “If something else had been built there,” says Mr. Ozdinec, “it would have been a tremendous economic boon for the city of San Francisco.” Under a Republican administration, such cavalier dismissal of urban prosperity, even by a career HUD official, is dispiriting.
It would be a boon to cities if they could get kid of these misbegotten places. By incubating social pathology, and by keeping so much property permanently off the property-tax rolls, public housing has sapped urban vitality. Though affordable housing activists deny it with their last breath, the gentrification that public housing inhibits is a good thing for cities, the urban poor included. It provides the housing that growing, high-paying businesses need if they are to attract the highly skilled workers who are their lifeblood—and whose high wages provide economic opportunity for so many other workers at all income levels. It is this economic dynamism that creates the opportunity city, in which there is a job for everyone, and no one has to depend on government for his income or his housing.
How then might we dismantle the public housing system, without hurting its most fragile residents? Any attempt to do so would have to be gradual, especially in a place like New York, where subsidized housing is such a large part of the residential real-estate system. Some housing projects would have to remain as de facto poorhouses for the most dysfunctional. But by placing time limits on new tenants entering public housing—as the city of Charlotte, North Carolina, has done—it would be feasible to reduce the overall number of subsidized housing units steadily. Some current tenants (the least dysfunctional) could be offered housing vouchers that they could use in the private housing market in exchange for vacating public housing. The voucher would come with a time limit, too, to discourage dependency. As the number of tenants fell, it would then become possible to sell some public housing buildings to private buyers, bringing more property back onto the tax rolls.
This does not mean that government would have no role to play in the creation of affordable housing. A conservative housing policy would work to dismantle the myriad government-made obstacles to the creation of housing by the private market—such barriers to building as rent control, irrational zoning regulations, expensive permit requirements, and overly demanding building codes. With such obstacles out of the way, newly dynamic urban economies could then be free to create private housing for all income groups, as they did decades ago, in the days when Boston three-deckers, Chicago two-flats, Brooklyn brownstones, and Oakland bungalows housed so many millions of struggling working families on their way toward the middle class. Cities would be better places for it—at all income levels.