Tuesday, May 2, 2017

Reinventing public housing: Once more with funding

by Ethan Handelman, National Housing Conference

I’m spending a portion of this week in Halifax, Nova Scotia, at the 49th National Congress on Housing and Homelessness convened  by the Canadian Housing and Renewal Association. Talking with housing colleagues from Canada, Australia and the United Kingdom reminds me clearly that we in the United States need to think seriously about reinventing how we own, finance and operate public housing. We also need to revisit our public funding commitment. Adjusting the balance of public and private responsibilities can help us find efficiencies, but no amount of tinkering can substitute for a sustained funding commitment.

Everywhere, publicly owned housing has its particular struggles. In the United Kingdom, production is falling behind demand even as the population is living longer. A recent change to send housing subsidy to tenants rather than directly to housing providers has, unsurprisingly, resulted in rent collection problems and potentially evictions. The nonprofits that own formerly state-owned housing (thanks to a massive transfer under Prime Minister Margaret Thatcher in the 1980s) continue to merge in pursuit of economies of scale. Underfunding of housing is a major election issue.

In Canada, the new government is planning a national housing strategy that will “support healthier families and build stronger communities and better housing for all.” This laudable national commitment is a much-needed correction to the federal cuts of housing funding in the 1990s, and tiptoeing back in the 2000s. Issues of high need among the poorest parallel quickly rising costs in major cities, especially Toronto, which is facing criticism from community members and a capital backlog. Social housing (owned and operated by a mix of government, nonprofit and cooperative entities) is a key component of solutions but also faces expiration of long-term subsidy agreements.

Australia has a much smaller social (that is, publicly owned) housing sector: less than four percent of the housing stock. It is owned by small agencies, most with little or no net assets on their balance sheets and limited by inconsistency in government funding. The federal government is struggling to measure results from use of housing funds by states. At the same time, the private rental sector is growing rapidly with few protections for renters.

Here in the United States, innovative public housing agencies are finding ways to renovate properties and improve services to residents, often by shifting financing out of the traditional public housing model (see the Montgomery County Housing Opportunities Commission and the San Diego Housing Commission for great examples). For many agencies, however, the public housing properties are the oldest in the country, and the local agencies who own and operate them have suffered decades of underfunding. Policy changes have shifted previously mixed-income public housing into concentrations of the neediest. The backlog of unfunded capital needs was $26 billion at last count.

The American success with public-private partnerships for affordable housing is a reminder that we have the technical capability to do the job well. The experiments abroad, however, are a reminder that there are many paths to affordable housing, each with trade-offs. Public control can bring accountability and mission focus. Private control can bring innovation and efficiency. Either can fail at the extremes, and neither does well by the residents or the real estate when funding is insufficient or inconsistent. It is surely time to revisit how we handle public housing in this country, but only if we match that spirit of innovation with a commitment to meeting the need. 

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