The Paradox of Public Housing
By Timothy Noah

(FORTUNE Magazine) – Congress passed an important bill in October regarding publicly subsidized housing for the poor. You'll remember this, of course, from the banner headlines, heated debates on radio call-in shows, and round-the-clock discussions on MSNBC.

Just kidding.

This bill was all but ignored both inside and outside Washington, largely because the whole subject of federal housing subsidies tends to confuse and exasperate even the most hardened policy jocks. But bear with me, because public housing encompasses a tragic--and fascinating--conundrum that deserves a lot more attention than it gets.

The new law illustrates just why public-housing policy is so frustrating. Briefly, its aim is to help families with somewhat higher incomes find public housing; it will do so by eliminating federal preferences that make it easier for the poorest of the poor to get public or subsidized housing. Now it will be a bit harder for such folks to get this housing and commensurately easier for people who are less financially desperate. This is good because these somewhat-better-off families can help create what housing experts call "stable" or, more euphemistically, "mixed income" communities. Communities with concentrated poverty, like Chicago's notorious Cabrini Green and Robert Taylor Homes, are "unstable," i.e., rife with violence, drug abuse, and a general sense of hopelessness.

Herein lies the maddening paradox of housing policy. With most public policies it's possible to conjure up some notion of an idealized outcome. The "perfect" welfare policy would sustain unemployed people for a brief period and then shift them into well-paying, satisfying jobs. The "perfect" antidrug policy would wipe out drug addiction. The "perfect" education policy would make America's schoolchildren really, really smart. But nobody has even a theoretical model for what the "perfect" public-housing policy would be. You'd think it would be a policy in which the government provided housing for a spell to those in need and then, once they got back on their feet, eased them into unsubsidized housing. This is known in housing circles as "up and out." But if the government succeeded too well at moving public-housing tenants up and out, the result would be frightfully unstable communities because the pillars-of-the-community families--the ones likeliest to get jobs and keep after the landlord about the suspicious-looking commerce in the courtyard after dusk--wouldn't hang around long enough to have much influence on their surroundings. As a recently published study by Lance Freeman of the University of Delaware puts it, "Unlike welfare reform...where reducing dependency is the paramount goal, reducing dependency in public housing represents only one of several often conflicting goals."

The conflict between up-and-out and stable communities is precisely why covering HUD for the Wall Street Journal during the Bush administration frequently gave me a throbbing headache. Go, stay: One didn't know what to root for. If this country were suddenly able to give public-housing subsidies to everyone who needed them, it would pose a real dilemma: Should we encourage the tenants to view their new addresses as temporary or permanent?

As it happens, the U.S. isn't even close to fully guaranteed housing. According to HUD, about 5% of the population pays more than half its income for housing or lives in housing of very poor quality. That's 12.5 million people whom federal housing policy is meant to serve--nearly three times as many people as the 4.3 million who get housing assistance now. For several years during the 1990s there was no increase in funding for public or publicly subsidized housing. Now the new law will create 50,000 housing vouchers aimed at assisting welfare families' transition to work. That's still a small commitment, given the 12.5 million whose housing the U.S. government views as unacceptable. The smallness does clarify, however, that the real question is not how to make federal housing policy work for everyone; rather, it's how to make life tolerable for the lottery winners who manage to get federally subsidized housing in the first place.

The answer is to make these places more stable and more heterogeneous. As for how to make life tolerable for the great mass of needy people who don't get any housing assistance, there's no point agonizing over whether the federal government is getting that right or wrong, because the blunt truth is that it isn't doing anything at all.

--Timothy Noah

TIMOTHY NOAH writes about politics for Slate and George.