Obama And Affordable Housing

by hilzoy

While I was away, the Boston Globe had a story on Obama and some Chicago affordable housing projects that sound pretty bad. If you read the article carefully, the actual story seems to come down to this:

First:

"As a state senator, the presumptive Democratic presidential nominee coauthored an Illinois law creating a new pool of tax credits for developers. As a US senator, he pressed for increased federal subsidies. And as a presidential candidate, he has campaigned on a promise to create an Affordable Housing Trust Fund that could give developers an estimated $500 million a year.

But a Globe review found that thousands of apartments across Chicago that had been built with local, state, and federal subsidies - including several hundred in Obama's former district - deteriorated so completely that they were no longer habitable."

Second, some of these failed projects were developed by Obama associates, supporters, and contributors. Third, some of them are in Obama's old State Senate district, and he doesn't seem to have done much about them.

I have no interest in defending Obama on the second and third points. I don't know much about them. Some blog coverage of this story is wrong: contrary to some summaries of this article, Obama did not "run" these projects, and Grove Parc, the development the Globe story focusses on, was redeveloped by a public-private partnership in 1990, while Obama was still in law school. After citing a description of this project, Rick Moran writes: " Obama pushed hard to finance these projects back in the 1990's." Projects with this legal structure, yes. This project, no.

The story here, to my mind, is not: Obama got support for the projects the article describes. It's: Valerie Jarrett, one of his close advisors, let this continue after her group took over management of the project in 2001. It's worth noting, though, that Jarrett and the company she now heads, Habitat, did not need Obama's help to get into this business: when the Chicago Housing Authority was put into receivership in 1987 (before Obama went to law school), they were appointed its receivers. When Jarrett met Obama, and for quite a while afterwards, he would have been the one needing her help, not the other way around. That in no way excuses her allowing this property to deteriorate, or Obama's not doing anything about it. I mention it only because when I read the blog coverage, a lot of people seemed to think that this story was about Obama getting contracts for his buddies. And I really don't think that's accurate. When a lot of the contracts mentioned in the story were given out, Obama was not in a position to do any such thing, nor were some of the buddies in question in need of his help.

But I do know a little about housing stuff, enough to find the idea that there's something suspect about supporting public/private partnerships for low-income housing development a little odd. To get a hint of what bugged me about the Globe story's presentation of this point, consider this quote:

"Under Mayor Richard M. Daley, who was elected in 1989, the city launched a massive plan to let private companies tear down the projects and build mixed-income communities on the same land.

The city also hired private companies to manage the remaining public housing. And it subsidized private companies to create and manage new affordable housing, some of which was used to accommodate tenants displaced from public housing.

Chicago's plans drew critics from the start. They asked why the government should pay developers to perform a basic public service - one successfully performed by governments in other cities. And they noted that privately managed projects had a history of deteriorating because guaranteed government rent subsidies left companies with little incentive to spend money on maintenance."

Chicago's public housing had been, for decades, a symbol of nightmarish dysfunction:

"Planned for 11,000 inhabitants, the Robert Taylor Homes housed up to a peak of 27,000 people. Six of the poorest US census areas with populations above three people were found there. Including children who are not of working age, at one point 95 percent of the housing development's 27,000 residents were unemployed and listed public assistance as their only income source, and 40 percent of the households were single-parent, female-headed households earning less than $5,000 per year. About 99.9 percent were African-American. The 28 drab, 16-story concrete high-rises, many blackened with the scars of arson fire, sat in a narrow two-block by 2.5-mile (300 m by 3 km) stretch of slum. The city's neglect was evident in littered streets, poorly enforced building codes, and scant commercial or civic amenities.

Police intelligence sources say that elevated number of homicides was the result of gang "turf wars," as gang members and drug dealers fought over control of given Chicago neighborhoods. Its landlord, the Chicago Housing Authority (CHA), has estimated that $45,000 in drug deals took place daily. Former residents of the Robert Taylor Homes have said that the drug dealers fought for control of the buildings. In one weekend, more than 300 separate shooting incidents were reported in the vicinity of the Robert Taylor Homes. Twenty-eight people were killed during the same weekend, with 26 of the 28 incidents believed to be gang-related."

I do not know much about the Chicago Housing Authority. For all I know, every single person who ever worked for it was as wise as Solon and a saint to boot, and all its problems were the result of disastrous coincidences that were utterly beyond its control. But given the actual history of government-run housing in Chicago, when I read the Globe article citing "critics" who "asked why the government should pay developers to perform a basic public service - one successfully performed by governments in other cities", I thought: who are these critics? And why isn't the answer to their question obvious? Namely: whatever works or doesn't work in other cities, letting the CHA manage public housing in Chicago seems like a really, really bad idea. Maybe it would be less bad now -- for all I know, the CHA might have improved a lot. But back in 1990 or so, the question "why not let the government run public housing in Chicago?" would have been like asking "why not let Michael Brown run FEMA?" right after Hurricane Katrina. Maybe Brownie was a great guy, but the appearances were certainly against him.

So if straight public housing was out, what were the alternatives to public-private partnerships?

One, I suppose, would have been to do nothing at all: leave Chicago's existing public housing intact, and don't build any more. This would have been a horrible solution: the existing projects were horrific, and something needed to be done about them. Moreover, the CHA was at the time under a court order to find housing for people in areas that were not mostly African-American, so there were legal problems with inaction. I will also assume that dynamiting the projects and leaving their tens of thousands of ex-residents to fend for themselves was not a serious option.

Another alternative would have been to rely entirely on Section 8 (or other) vouchers rather than building or redeveloping affordable housing units, whether publicly or privately managed. The voucher recipient pays some set percentage of his or her income; the government pays the rest; the people who hold the vouchers find their own housing. Chicago did, of course, use Section 8 vouchers, and I believe that most people involved in affordable housing issues at the time supported them, as part of a mix of solutions. The question isn't, should there be vouchers?, but: should there be anything else? Should we rely on vouchers for 100% of our low-income housing policy?

Again, I don't know enough about Chicago in particular to know how it would make sense to answer that question there. But there are various reasons why relying exclusively on vouchers doesn't always make sense. Namely:

(a) In some cities, the housing market is tight enough that even if you give people vouchers, they may not be able to find housing. (Think San Francisco.) Vouchers always work best where there is a decent supply of affordable housing to start with.

(b) Vouchers risk altering the pricing of affordable housing in ways that might not be desirable. If vouchers are too far below standard rents for affordable housing in a given market, people with vouchers will not be able to find housing that will accept them. The obvious way to avoid this is to set the amount that vouchers will pay somewhere around the median rent for the low end of the housing market. But if you do that, and if there are a sufficient number of vouchers, then you risk making that median into a sort of de facto floor on rents: everyone can get that amount, so no one will charge less. (This is, of course, only true where you have a considerable number of vouchers in circulation, but that would have been true had vouchers replaced public housing in Chicago.)

(c) If you want people to have access to low-income housing, then there's an advantage to building units, rather than relying entirely on vouchers. It's relatively easy to simply retire vouchers when someone turns one in, or dies, or whatever. And this isn't particularly visible, and thus would be less likely to provoke a political brouhaha. In this way, actual support for affordable housing could be cut stealthily, without people noticing -- in the same way in which turning a guaranteed benefit of X dollars per person into a block grant for the whole program makes it easier to cut support for that program stealthily and without political repercussions. If you lock in a housing unit, by contrast, this is much harder to do. So people who care about ensuring access to low-income housing have a reason to support having actual buildings as part of the mix, while people who support eliminating any government role in ensuring access to affordable housing have a reason to favor a purely voucher-based solution. (Note: I am not arguing that anyone who favors either policy must do it for these reasons; just that it's one reason for favoring one policy or the other.)

(d) Finally, the kinds of incentives you can offer to developers differ from the kinds of incentives you can offer to owners of rental properties. If you think, in general, that having a lot of different incentives in your policy arsenal is a good thing, since some work best in some circumstances and others work best in others, then it makes sense to have a multi-pronged approach. Likewise, if you worry about unanticipated consequences of one policy or another, it makes sense to try a mixed approach, on the grounds that if one program turns out to be a disaster, it won't affect your entire approach to affordable housing.

In the case of Chicago in particular, there's another wrinkle. As I noted above, the Chicago Housing Authority was under court order to move public housing out of exclusively black neighborhoods. You can read an account of some of the difficulties involved here. But it's not clear that the CHA could have complied with the court order without building new housing, or that the court would have accepted a purely voucher-based solution. (I don't know that the CHA couldn't have complied using vouchers alone, or that the court wouldn't have accepted a 100% voucher-based solution; just that the fact that the CHA, and later Habitat, which was its receiver, was operating under court order is relevant to what it might and might not have done.)

***

One more thing. Chicago's efforts to do something about its public housing nightmare are a very, very big deal, involving 25,000 units of housing, huge numbers of public housing residents, enormous sums of money, and vast tracts of land, some of it quite desirable. Any project of this magnitude is going to have a whole lot of moving parts, and it will operate under a lot of constraints: political, financial, and so on. Especially in a city with a reputation for, um, interesting approaches to public management, I would be astonished to find that absolutely everything had gone swimmingly. What I would really like to know, therefore, is: how many of the projects went bad? Whose projects were they? Is the number better or worse than one would expect? And why, exactly, didn't they work out?

Moreover, one way to look at the results is to notice that no solution to this problem looks particularly enticing. As I noted above, the government didn't do a good job of running public housing. If the cases cited in the Globe article are representative, public-private partnerships weren't all that great either, though they'd have to get a lot worse before they rivaled some of Chicago's old projects. But vouchers also have problems -- see this Atlantic article, which argues that when public housing residents are dispersed using Section 8 vouchers, crime often follows.

Before I'd be prepared to criticize someone for supporting public-private partnerships for affordable housing, I'd want to know what alternative the critic has in mind, and what reason there is for thinking that it would be better. It's not enough to say: gee, this didn't work so well, if nothing else works better.

***

I do not mean this post to be a defense of Obama. I think that with public-private partnerships, as with a lot of things, the devil is in the details. You need to design a program with some real oversight, to ensure that people don't just take the subsidies and let the buildings deteriorate. You also need to provide adequate subsidies for operating expenses: rumor has it that they are routinely low, since developing low-income housing is a lot more politically appealing than providing decent operating subsidies. And you need to get a lot of other details right as well. The Globe article does not provide enough information to let me figure out whether Obama's program was well-designed or not. (The fact that some projects funded by it went bad wouldn't show that the program wasn't well-designed, just that it wasn't good enough to prevent anything from going wrong, which few programs are. You'd need to know how many went bad, and how that stacked up to other alternatives. And the Globe article doesn't cite a single clear case of a project that went bad and was funded by the programs Obama passed, though it does cite one that went bad after he voted to give it a grant, as a member of a foundation board. With one possible exception (New Evergreen/Sedgwick, which got tax credits the same year that Obama's program passed, and therefore might have received them under his program, if that program was funded immediately), the examples are all of projects that went bad using "his approach", meaning public-private partnerships.)

Moreover, as I said at the outset, I haven't dealt at all with questions like: did he know that this was going on? If so, why didn't he do anything about it? If not, why not? Valerie Jarrett is one of his closest advisors: is the deterioration at Grove Parc representative of her firm's work? If so, what does that say about Obama? If not, why did she let this particular site go so bad? Those are, to my mind, completely fair criticisms, and I have neither the knowledge nor the desire to try to defend against them.

I do think, though, that criticizing someone for favoring public-private partnerships for affordable housing takes a lot more thought than the Globe reporters seem to have given it, and that making that criticism stick takes a lot more information than they provided. That was my only real point.

Comments

[trilobite]

Hilzoy, you did a great job of laying out that mess. I was in Chicago studying sociology in 1988-92, and the CHA was, quite literally, a textbook case in public management gone wrong. Monday-morning quarterbacking of the nteenth legislative attempt to navigate the rocky shoals of Gautreaux without running afoul of NIMBY Charybdes is presumptuous at best.

It sounds to me like Obama was one of many legislators over the years who threw more money down a rat hole in hopes that this time the developers would make it work.

[Brick Oven Bill]

It is not fair to fault Obama for this. We were loosely affiliated with a similar project on Navaho lands. Hundreds of beautiful new homes were turned over to the Nation and were quickly sold for scrap. Windows, sinks, toilets, lumber, everything.

Obama is guilty of being naïve, but not of corruption.

As an aside, the new Section 8 Chicago migration is destroying once good schools. Shootings of school children have tripled and the rate is still increasing. There were 30 dead students last year. I can attest to the emergence of drug gangs in my old Middle School. The authorities, of course, blame:

“There are just too many weapons here.”

[trilobite]

Bill, taking weapons away from drug-addled, testosterone-fueled, teenage gangsters is not be the whole solution, but do you seriously think it would be better if there were more guns in public schools?

Wait, why am I even asking, of course you do. Yes, we should definitely arm the other students too, so they can have shoot-outs in study hall. That'll learn 'em.

Anyway, yes, if you start a program of breaking up the gangs by redistributing poor families throughout the cities, you will to some extent spread out the shootings and other crimes that used to be concentrated in giant concrete slabs where only poor people lived. If you then slash social services budgets, and systematically destroy provably helpful programs like midnight basketball, you may merely metastisize the cancer. This is not because you had no chance to defeat the gangs in detail, it's because you went halfway and then stopped. To put it in terms that may be more familiar to you, when the enemy is engaging you widely but is diffused, additional boots on the ground will help quell violence and give time to evolve more peaceable social structures. Cutting and running will only ensure chaos.

Personally, I refuse to conclude that poor urban kids (unlike Iraqi fundamentalists) are a lost cause -- that's been too often proven false.

[Phil]

The authorities, of course, blame:

“There are just too many weapons here.”

Whereas you and I know the problem is really too many negroes, right, Bill? **wink, wink**

[The Baglady]

This is a great article. These kind of public assistance nightmares is one reason I'm wary of Obama's universal healthcare plan. What will happen if all doctors are government employees? Wouldn't the quality of healthcare also fall into the toilet?

[Turbulence]

What will happen if all doctors are government employees?

I don't think Obama's health care plan makes all doctors government employees. If you think it does, could you please provide a citation?

Wouldn't the quality of healthcare also fall into the toilet?

Even if what you said was true, I have trouble believing that the quality of care would fall much below that in the UK, where all doctors actually are government employees. That doesn't seem like such a bad outcome to me considering that the UK spends less per capita and has better healthcare outcomes, but perhaps you think that getting less for much more money is a good idea.

[Jesurgislac]

The Baglady: What will happen if all doctors are government employees? Wouldn't the quality of healthcare also fall into the toilet?

It's hard to see how anything could make healthcare in the US worse than it already is, Baglady, but FWIW, in the UK the majority of doctors are government employees - and quality of healthcare is so much higher than in the US you should hope that you get up to British levels of health care, which are, after all, nothing special in the developed world.

I wasn't aware that Obama had any plans to set up anything as effective as a national health service, however, so I suspect your assessment of it is as muddled as your assessment of the current quality of US health care.

[Phil]

What will happen if all soldiers are government employees? Wouldn't the quality of security also fall into the toilet?

[liberal japonicus]

Someone guide Bill over to the Heller thread, he'll be in much better company.

[Observer]

Hilzoy:

First, let me applaud you for debunking much of the right wing reaction to the original story. It’s not about corruption. It’s not about any failures in Obama’s management. And it’s not (mostly) about Rezko. So let’s set all of those things off to the side.

That said, I think the article raises three troubling questions.

First, what did Obama know about the squalor in which hundreds of his constituents were living, and what did he do on their behalf? You’re correct that we don’t yet know the full answer to that question. But that’s not a defense. We don’t know the full answer because, as the story notes, Obama and his staff declined to answer the question. (“The campaign did not respond to questions about whether Obama was aware of the problems with buildings in his district during his time as a state senator….”) What we do know is that he told another reporter that he was unaware of conditions in Tony Rezko’s developments, and that he would have distanced himself from him had he known. (“Other local politicians say they knew of the problems.”) Is that true of all the failed developments, not just Rezko’s? That’s a claim that would raise a lot of eyebrows. This stuff wasn’t any secret. If he did know, then there are certainly credible reasons why he might have chosen not to publicize those conditions or attack those responsible, but they need to be offered. So far, they haven’t been, and that’s regrettable.

The second question relates to his advisers. This isn’t Bill Ayers redux, a tendentious claim of guilt-by-association. There’s no adviser closer to the Obamas than Valerie Jarrett. He used to work for Allison Davis. Martin Nesbitt is his campaign treasurer. Rezko, as we all know, was a key fundraiser and a close friend. This is his inner circle. Their professional careers are tied to these policies. I think it’s ridiculous to suggest that Obama funneled them contracts out of friendship, or that there was other corruption here, at least not in the classic sense or legal definition of the term. But did his ties to these folks enhance his enthusiasm for these policies and dull his inclination to aggressively investigate the shortcomings or failures of privatization? Alternatively, was it his enthusiasm for public-private development that made him such an appealing figure to so many who were growing wealthy from the policy? And, given that Obama seems inclined to take at least some of these folks with him to Washington, how does their participation reflect on the advisers themselves? Those seem like legitimate questions. But Obama refused to comment on his advisers, and Jarrett wouldn’t talk about the developments that failed on her watch.

But you’ve already acknowledged those two questions. It’s the third point on which we really part ways. You suggest that, given the failures of large public developments generally and of the Robert Taylor Homes in particular, something needed to be done. I agree; so does the article, which labels them “American bywords for urban misery.” But I don’t think that the myriad shortcomings of the CHA made private development at public expense the only solution. Even corrupt, intransigent bureaucracies can be reformed, or barring that, replaced. But Obama, like most Chicago leaders, had evidently come to the conclusion that the very model of public housing was part of the problem; that, as Valerie Jarrett puts it in the article, "Government is just not as good at owning and managing as the private sector because the incentives are not there." (Actually, she even took that a step further: “I would argue that someone living in a poor neighborhood that isn't 100 percent public housing is by definition better off." That sounds, to me at least, less like policy than ideology. Someone in a well-managed public housing project (and they do exist in this country) is definitionally less well off than a resident of Grove Parc? What, exactly, would Jarrett trust the government to do, absent the incentive of profit?)

And now we arrive at the third question: If affordable housing was among Obama’s signature issues, and if public-private partnerships sometimes resulted in catastrophic failures, what did Obama do to address this fact? You seem to think that it’s up to the reporter to propose a better solution. I disagree. The question isn’t whether anyone else had a better idea. It’s not whether these outcomes were the result of specific pieces of legislation championed by Obama. The point is this. Some public-private partnerships, including some in Obama’s district and some built or managed by people very close to him, proved to be abject failures. They failed by any measure; they were as bad as the failed public housing they replaced. This was one of his signature policy issues. He continues to push it in his presidential campaign. And yet, we know it’s not a perfect policy. That’s alright. No policy is perfect. But it’s incumbent upon any leader to acknowledge and address the imperfections in the policies they advance. If these failures aren’t a result of the public-private model per se, but of some flaw in the authorizing legislation, what did Obama do over the past decade to close that loophole? What would he do in the future? I don’t expect him to offer panaceas. But that’s just it. Jarrett speaks of public-private partnership as if they are a panacea – as if, simply by paying people to manage housing, we can cure its problems. She won’t even talk about her failures, or take the trouble to explain what’s gone wrong. And neither will Obama. And that, at the end of the day, is why I find this article so disturbing. Obama has generally shown a willingness to face up to mistakes, to acknowledge ambiguities, or to outline the limits of the possibilities of change. But when it comes to affordable housing, he’s not doing that. Confronted with these questions, he issued a statement saying: “Throughout his career in public service, Barack Obama has advocated for the development of mixed-income housing and public-private partnerships to create affordable housing as an alternative to publicly subsidized, concentrated, low-income housing.” Well, yeah. And the question is, why doesn’t it always work? And what does he propose to make it work better?

It’s not that I’m willing to dismiss public-private partnerships. They clearly have produced some good outcomes. It’s that I’m inherently suspicious of anyone who champions them without acknowledging their shortcomings or seeking to address them. That, I find disturbing.

[OCSteve]

b.o.b. – Dude – you are not on my side and I have to formally disclaim you at this point (under the bus, etc). Good luck with those potatoes… The AK-47 won’t handle it as I will have a SAW and 40mm grenades… You need better connections…

Note to the secret service – this post is intended for entertainment purposes only.

[hilzoy]

Observer: thanks for a very thoughtful comment. I guess one difference between us concerns this point:

"But I don’t think that the myriad shortcomings of the CHA made private development at public expense the only solution. Even corrupt, intransigent bureaucracies can be reformed, or barring that, replaced. But Obama, like most Chicago leaders, had evidently come to the conclusion that the very model of public housing was part of the problem; that, as Valerie Jarrett puts it in the article, "Government is just not as good at owning and managing as the private sector because the incentives are not there.""

I didn't get, from the article, a sense that Obama thinks of this as a panacea. For that matter, a lot of the article was consistent with his just thinking it made most sense in Chicago. And while, as I said, I don't know enough about the CHA to say anything definite, I can certainly imagine a world, which might be this one, in which two things were true: (a) simply abolishing the CHA and starting over was politically impossible, especially if one happened to be not the mayor of Chicago but a State Senator, and (b) public-private partnerships were a lot more likely to work than anything run by the CHA.

He does propose an affordable housing trust fund. But it's not clear, from the article or from his web page, that he's committed to that being the sole vehicle for low-income housing development, or even the predominant one. (His affordable housing policy is not exactly awash in details, though it beats McCain's simply in virtue of existing.)

Moreover, I think that there are models of public-private partnerships that work pretty well. (Hope VI, as I understand it, is doing well in a lot of places, though still pretty challenging; and it was aimed at the absolute worst public housing had to offer.) As I said in the piece, I think a lot would depend on the details, and I wish there were more of them.

A lot would also depend on who Obama puts in as secretary of HUD. My understanding is that HUD was been a nightmare for decades, except for a brief happy period under Cisneros. I would imagine that having been the forgotten stepchild of cabinet agencies under a whole series of Republican Presidents, it would have more than its fair share of the sorts of employees who stick with demoralized agencies: a few who are just plain committed, and a lot who have no other alternatives. The Secretary of HUD will, I think, have his or her work cut out for him or her; and a lot will be riding on what s/he does.

[hilzoy]

If anyone wants to get wonky and read about Hope VI (otherwise known as "what the Clinton administration tried to do about the most totally dreadful projects", or "a great big enormous and ambitious attempt to change public housing policy in the US"), a good evaluation is here.

[DaveC]

Obama has as a claim to fame being a community organizer, then a state senator, but during those years he did jack squat, except trying not to be associated with the Chicago Combine.

And he failed at that. Compare the integrity of Peter Fitzgerald, who fought the Machine and pissed people off, no matter the consequences, to Obama who voted "Present" so many times.

How much better is the South Side doing since Obama started organizing and legislating, anyway? Seems to me not so much.

[Michael Cain]

The longer I work at my present job, trying to help state legislators make sense of all the different special-purpose public assistance programs -- health care, housing, nutrition, energy assistance -- the more often I find myself thinking that perhaps those who want to replace them all with a simple minimum guaranteed household income have a real point. I know it wouldn't fit all cases. The special needs of developmentally disabled individuals or people with long-term expensive medical conditions aren't well matched. But the simplicity sure is attractive on days when I'm having to cope with some indirect complication from the current mish-mash.

[now_what]

How much better is the South Side doing since Obama started organizing and legislating, anyway? Seems to me not so much.

In the years that he was a state legislator, crime in the city was cut by around 40% for the most serious crimes, which were most prevalent on the South Side.

What, in your opinion, demonstrates that the South Side has not gotten better?

[Observer]

Always a pleasure exchanging views with you, Hilzoy.

We're going to have to agree to disagree on the CHA. I remember seasoned vets explaining to me that Mayor Bloomberg's call for mayoral control of the schools was a pipe dream, and that their problems were entrenched beyond hope of reform. Conventional wisdom tends to regard the unprecedented as the impossible. Besides which, there's no evidence that Obama was settling for the feasible, or the least-worst option. He has consistently lauded this model of development as an ideal, as a model of a succesful and forward-thinking government program. You're certainly correct that Hope VI has done a lot of good, and that the devil here is in the details, which haven't been provided. But that's prospective. And I'm less interested in what Obama is now proposing at the federal level, in the heat of a campaign in which promises to aid the poor are inexpedient, at a time when details are rarely on offer and have little predictive value, than I am in his performance in the past.

But let's spend a moment on his proposals, anyway. Obama’s housing policy is, to say the least, opaque. He has said that he’ll use “a small percentage of the profits” from Fannie Mae and Freddie Mac to create an Affordable Housing Trust Fund that will place new units in mixed-income neighborhoods. Of course, neither company has posted a profit in some time – they’re both mostly focused on steering clear of bankruptcy amid mounting losses. The scope of the program is also a little unclear. A year ago, he said it would create as many as 112,000 new units. He later spoke about building up to 14,000 units each year – either a downward revision, or the original number spread over two terms. More recently, the campaign has shifted to the vaguer goal of thousands of new units.

But no matter how impractical the funding mechanism, or how broad or narrow its scope, it is the only proposal advanced by the campaign to increase the supply of affordable housing for those who cannot purchase homes of their own. Obama has also proposed restoring “cuts to public housing operating subsidies,” and ensuring “that all Department of Housing and Urban Development (HUD) programs are restored to their original purpose.” That’s all well and good. But there’s nothing in here about funding new projects. At best, this would restore public housing to the halcyon days before Bush took office – from catastrophically underfunded to dismally underfunded. And it’s clear that Obama has no intention of funding the creation of more public housing developments - I don't think it's accidental that this is his only proposal. He really hasn’t been ambiguous on this point. His experience has left him convinced that public housing doesn’t work.

But all of that is prospective, a discussion of what he’d do as president. What I’m really interested in is the retrospective view of where Obama has stood on this issue. In a 1997 interview with the Chicago Daily Law Bulletin, quoted in the story, he singled out his experience at Davis, Miner representing private clients building affordable housing, using the public-private partnership as the paradigmatic example of smart govenrment policy. And he’s spoken of his decision to join Davis, Miner and represent builders of affordable housing as a choice to forego a larger salary and “be part of the solution.” Then, in 2000, he introduced his bill putting in place a tax credit for donations to nonprofit affordable housing developers. In a debate with Alan Keyes in 2004, he said that “federal tax credits and incentives should be used to help community development corporations entice developers to build new housing,” as one report paraphrased his stand. And he cited affordable housing as one of the handful of issues that would be among his foci, shortly after his election.

In other words, for more than a decade, Barack Obama has stuck to a single idea: that the way to increase the supply of affordable housing is to provide government subsides to private developers. He continues to push this idea in his current campaign. He has advanced no other proposal for building or converting affordable housing. And that’s fine. As you’ve demonstrated at some length, there are no perfect solutions to this mess, and public-private partnerships are certainly no worse than the alternatives.

The problem is that, for hundreds (and later, as a US Senator, thousands) of his own constituents, these publicly-funded private ventures generated terrible outcomes. The developers and management companies pocketed their profits, and the housing fell apart. The government paid a lot of money and got very little in return. That’s a problem. But it doesn’t necessarily mean that the whole policy should be junked. There are any number of potential explanations and solutions. Perhaps the subsidies need to be larger. Perhaps they shouldn’t be available for the renovation of dilapidated housing that can’t readily be rendered habitable, or perhaps they should be increased in such situations. Perhaps developers shouldn’t be able to take their profits off the top; we might be better off if they could only pocket profits at the end of a period of satisfactory performance. Perhaps we should bar companies that have presided over dramatic failures from receiving further subsidies. Or perhaps the solution lies in some combination of these approaches, or somewhere else entirely.

Obama spent eight years in the Illinois State Senate, and four on Capitol Hill. He had to be aware that some public-private partnerships had gone disastrously wrong. And yet there’s no evidence that he ever protested to the companies responsible, despite his close personal relationships with many of the key players. He elevated some of those players to the inner circle of his campaign, but won’t talk about the failures over which they presided. He introduced legislation to expand public subsidies, but made no effort to address the shortcomings that were by then apparent. In both his campaign for the United State Senate and in his run for the Oval Office, he has continued to tout publicly subsidized private development as the sole means of expanding the supply of affordable housing, but he has never suggested any alterations to exisiting policies. I don’t expect him to single-handedly solve the affordable housing crisis. I don’t expect the policies he advances to be flawless or devoid of trade-offs, and I damn well don’t expect him to avoid making mistakes. But this is an issue that was central to his career, to his advancement through the ranks of state-level politics. It’s an issue that was of vital importance to his constituents. And what I’d like to see is some evidence – any shred, really – that as he became aware that some public-private partnerships run by his friends were creating housing as dismal as that which they’d replaced, he did anything at all about it. That he tried, however inneffectively, to fix the problem. I don’t think that’s too much to ask. And I find his refusal to discuss any of this more than mildly disturbing.

Let me be perfectly clear. I am an enthusiastic supporter of Barack Obama’s candidacy. He’s light-years ahead of John McCain on all of these issues. But that doesn’t mean he should be able to elude scrutiny. This is important. And I’d like to see that he understands as much.

[hilzoy]

Observer: I'm in complete agreement. I think he ought to be saying more, and that the story, which I think got sort of buried in the Globe piece, is about his not having raised more questions about this stuff with people he knew, and those people (esp. Jarrett)'s role in his campaign. Also, as you say, about his level of interest in affordable housing.

[trilobite]

Observer, good questions, but IMO you're expecting an unrealistic level of detail for a campaign policy statement. Candidates usually just give a broad-strokes description so that they have more flexibility when it comes to actually drafting and negotiating legislation. It's also not really their job to anticipate all possible objections to the proposal in advance, that's what the give-and-take of the legislative or regulatory process is for. Obama's statements are actually more substantial & detailed than most, which strikes me as respectful of the public, and as a good start to a conversation. Your questions are exactly the sort of thing that should be asked, but I don't think there's any shame in the website not including preemptive answers.

[hilzoy]

The Grove Parc tenants association responds to the Globe article.

[brewmn]

Without getting into the weeds on the level of observer, I find it interesting that Richie Daley hardly gets mentioned in all of this. Daley has a fetish for privatization (i.e., steering lucrative city business to companies owned by his cronies) that would embarrass the most free-market worshiping Republican. And nothing, absolutely nothing, gets done in Chicago or Cook County without Richie Daley's approval.

Which is a long-winded way of making the point that any attempts by Obama or any other do-gooder in Illinois politics to construct affordable housing in Chicago would have to be signed off on at some point by Da Mayor. So Obama may have been playing the hand he was dealt as best he could.

If, however, he failed and continues to fail to see the flaws endemic to this hybrid form of governance, then Observer's concerns are fully justified. But until Obama, and not the utterly corrupt Daley, is calling the shots, we have no real way of knowing.

[Gary Hussein Farber]

"This is a great article. These kind of public assistance nightmares is one reason I'm wary of Obama's universal healthcare plan. What will happen if all doctors are government employees?"

What would happen if all doctors were all eggplants? Both are equally proposed by Obama's plan, which is to say, not at all.

Heck, Obama hasn't even proposed universal coverage, let alone a single-payer plan, let alone making doctors government employees.

We call this "making stuff up out of whole cloth," you know, though some have harsher terms for it.

(Naturally, there's no cite, because there can't be.)

[The Baglady]

Well, what I said was really hypothetical and in response to the fact that more government intervention and agencies tend to make things more complicated and arguably worse for everyone (as shown in the article in relation to housing). Obama does talk often about a universal healthcare plan in his speeches, but how he would achieve that is muddled at best. On his website he proposes a cheaper insurance plan that would be affordable for everyone, but this probably would require a new government agency to administer. So that's why I said I am wary of his plan.

[gwangung]

Well, what I said was really hypothetical and in response to the fact that more government intervention and agencies tend to make things more complicated and arguably worse for everyone (as shown in the article in relation to housing). Obama does talk often about a universal healthcare plan in his speeches, but how he would achieve that is muddled at best. On his website he proposes a cheaper insurance plan that would be affordable for everyone, but this probably would require a new government agency to administer. So that's why I said I am wary of his plan.

Devil's in the details. And execution, as it always is.

Private sector is no panacea either. 75% of all new businesses fail. And I believe about half of all initiatives by existing businesses are not successes either.

[Phil]

Well, what I said was really hypothetical and in response to the fact that more government intervention and agencies tend to make things more complicated and arguably worse for everyone (as shown in the article in relation to housing).

I agree, we should go to completely free, unregulated markets. It proved to be a smashing success in the subprime mortgage industry.

[liberal japonicus]

Baglady,
I don't mean to pry, but with the handle and taking a look at your blog, you seem very concerned with financial independence/solvency and how that is achieved. Given that background, I wonder if you would agree that the approach to fixing the US health system should not be wait until we have a perfect proposal (which would also demand a seamless transfer) but, as Heinlein had his main character in Starship Troopers say (iirc), the important thing is not to do the perfect thing, but to do _something_. I don't live in the US, but my encounters with the health system in the US suggest to me that everyone but the Paris Hilton class is a major illness away from total financial ruin. I also think that one reason that a lot of countries seem to have a more stable political scene is that health care security acts as ballast. Here in Japan, we have a adequate system and I think it is one of the reasons people are so nonplussed about being in a recession for so long or why one doesn't have riots, even though the price of gas is $1.75 a liter (which I think is about 6.50 a gallon)

[Grove Parc Tenants Association]

GROVE PARC RESPONDS TO ARTICLE ON OBAMA HOUSING POLICY

Tenants call on all candidates to support Human Right to Housing

In recent days, leading news organizations around the country have reported on the housing policies of Senator Barack Obama, following a feature article published in the Boston Globe which highlighted the example of the Grove Parc Plaza Apartments, a subsidized housing complex in Chicago’s Woodlawn neighborhood that we call home.

The Globe Article, while rightly raising concerns about the failure of the private sector to adequately provide for the housing needs of the poor, unfortunately leaves out half of the story. Grove Parc is not just an example of the failures of past policies, but a beacon of hope for the way forward. Tenants have not only stopped foreclosure and the displacement of some 500 low income families, but also brought in new management committed to working with the tenants to rebuild affordable and quality housing for all residents. In so doing, we have highlighted two fundamental principles that both presidential candidates would do well to heed as they finalize their housing policy platforms,-- first, the full participation of tenants, who have the biggest stake in housing policy, and second, the guarantee of quality housing for all as a human right and social responsibility.

In the wake of massive housing cuts, privatization, and foreclosures that have left millions without a stable home – problems for which both major political parties must take responsibility - it is time for both candidates to tell the American people how they will ensure quality housing as a human right and reality for every American family. In short, the new administration must ensure a roof over the head of all American families.

Never has it been clearer that government has to play an active role in ensuring that America’s families have safe, decent housing. Millions of home-owners are facing foreclosure. Gas, food and utility prices are sky-rocketing. Thousands of units of public housing are being torn down from New Orleans to Miami to Chicago and close to 500,000 families - including many elderly and disabled - may soon be put out on the streets due to Congress under-funding HUD’s subsidized housing program by $2.8 billion this year. Homelessness and poverty will continue to rise until we treat housing as a human right rather than a source of profit for speculators and developers. In Chicago, for example, a recent study published in the Chicago Tribune shows that a minimum wage worker would have to work 97 hours a week, 52 weeks a year to afford a modest two-bedroom apartment. Low-income communities of color, in particular, are being ravaged by this crisis, which extends far beyond housing. Displacement weakens our communities and in so doing makes problems like youth violence and unstable schools even worse. The promise of “mixed-income” communities has been a smoke screen for a set of policies that have involved tearing down lots of housing and replacing very little of it. The people affected by these policies are never at the table when they are created.

While the Globe article raises important points about the problems in both public and subsidized housing, it fails to highlight the role played by massive budget cuts to HUD, which has created a lack of oversight over all HUD programs. These cuts have been carried forth by both parties, and their effects have been made even worse by rampant corruption in the last HUD administration, whose Bush-appointed National Secretary, Alphonso Jackson, recently stepped down amidst allegations of contract steering.

But there is another way forward. Our nation needs to guarantee the Human Right to Housing for all of its citizens, regardless of income and race, and to ensure that the people affected by policies are active participants in creating them. As a start we call on both candidates to commit to:

*Fully fund HUD

The 2008 HUD subsidized housing budget was under-funded by $2.8 billion dollars, threatening to triple the rents of 500,000 families overnight (40% of whom are the elderly and disabled) unless Congress acts fast.

*Support tenant empowerment and oversight

Grove Parc is turning around because as tenants we are taking control of our housing. We chose a new management company, stopped HUD from foreclosing on our complex, and have won awards around the country for our efforts. Grove Parc is proving that when the people who live in housing finally have a voice in how it is run another future for subsidized housing is possible.

*Declare a moratorium on demolition of public housing and foreclosures

Most of the public sees housing subsidies as hand-outs to the poor, not realizing that the vast majority of HUD subsidies go to first time home buyers. Ironically, now both groups are in the same boat, unsure of where to look for housing as banks are bailed out but homeowners are left hanging while the few safety nets that exist continue to be decimated by the current administration.

*Create a comprehensive plan to ensure the human right to housing for all

We hope that the both campaigns will see this as an opportunity to take a strong stand for Housing as a Human Right and to take a critical look at the failure of privatizing housing and the need for strong public oversight and tenant control. Some will undoubtedly use the stories of wasted money and failed housing in the Globe article as justification to further cut these programs. Cutting badly needed subsidies in any housing program, especially in economic times like we are in, is irresponsible, unethical and inefficient, creating many unforeseen costs to society. With better oversight and regulation, an expansion of all housing programs and tenant inclusion in policy-making, the Human Right to decent and safe housing can become a reality for all.

GROVE PARC TENANTS ASSOCIATION

“Housing is a Human Right – We won’t go without a fight!”

FOR MORE INFORMATION:

www.stopchicago.org

www.saveourhomes.org

www.economichumanrights.org

www.righttothecity.org

[Grove Parc Tenants Association]

GROVE PARC RESPONDS TO ARTICLE ON OBAMA HOUSING POLICY

Tenants call on all candidates to support Human Right to Housing

In recent days, leading news organizations around the country have reported on the housing policies of Senator Barack Obama, following a feature article published in the Boston Globe which highlighted the example of the Grove Parc Plaza Apartments, a subsidized housing complex in Chicago’s Woodlawn neighborhood that we call home.

The Globe Article, while rightly raising concerns about the failure of the private sector to adequately provide for the housing needs of the poor, unfortunately leaves out half of the story. Grove Parc is not just an example of the failures of past policies, but a beacon of hope for the way forward. Tenants have not only stopped foreclosure and the displacement of some 500 low income families, but also brought in new management committed to working with the tenants to rebuild affordable and quality housing for all residents. In so doing, we have highlighted two fundamental principles that both presidential candidates would do well to heed as they finalize their housing policy platforms,-- first, the full participation of tenants, who have the biggest stake in housing policy, and second, the guarantee of quality housing for all as a human right and social responsibility.

In the wake of massive housing cuts, privatization, and foreclosures that have left millions without a stable home – problems for which both major political parties must take responsibility - it is time for both candidates to tell the American people how they will ensure quality housing as a human right and reality for every American family. In short, the new administration must ensure a roof over the head of all American families.

Never has it been clearer that government has to play an active role in ensuring that America’s families have safe, decent housing. Millions of home-owners are facing foreclosure. Gas, food and utility prices are sky-rocketing. Thousands of units of public housing are being torn down from New Orleans to Miami to Chicago and close to 500,000 families - including many elderly and disabled - may soon be put out on the streets due to Congress under-funding HUD’s subsidized housing program by $2.8 billion this year. Homelessness and poverty will continue to rise until we treat housing as a human right rather than a source of profit for speculators and developers. In Chicago, for example, a recent study published in the Chicago Tribune shows that a minimum wage worker would have to work 97 hours a week, 52 weeks a year to afford a modest two-bedroom apartment. Low-income communities of color, in particular, are being ravaged by this crisis, which extends far beyond housing. Displacement weakens our communities and in so doing makes problems like youth violence and unstable schools even worse. The promise of “mixed-income” communities has been a smoke screen for a set of policies that have involved tearing down lots of housing and replacing very little of it. The people affected by these policies are never at the table when they are created.

While the Globe article raises important points about the problems in both public and subsidized housing, it fails to highlight the role played by massive budget cuts to HUD, which has created a lack of oversight over all HUD programs. These cuts have been carried forth by both parties, and their effects have been made even worse by rampant corruption in the last HUD administration, whose Bush-appointed National Secretary, Alphonso Jackson, recently stepped down amidst allegations of contract steering.

But there is another way forward. Our nation needs to guarantee the Human Right to Housing for all of its citizens, regardless of income and race, and to ensure that the people affected by policies are active participants in creating them. As a start we call on both candidates to commit to:

*Fully fund HUD

The 2008 HUD subsidized housing budget was under-funded by $2.8 billion dollars, threatening to triple the rents of 500,000 families overnight (40% of whom are the elderly and disabled) unless Congress acts fast.

*Support tenant empowerment and oversight

Grove Parc is turning around because as tenants we are taking control of our housing. We chose a new management company, stopped HUD from foreclosing on our complex, and have won awards around the country for our efforts. Grove Parc is proving that when the people who live in housing finally have a voice in how it is run another future for subsidized housing is possible.

*Declare a moratorium on demolition of public housing and foreclosures

Most of the public sees housing subsidies as hand-outs to the poor, not realizing that the vast majority of HUD subsidies go to first time home buyers. Ironically, now both groups are in the same boat, unsure of where to look for housing as banks are bailed out but homeowners are left hanging while the few safety nets that exist continue to be decimated by the current administration.

*Create a comprehensive plan to ensure the human right to housing for all

We hope that the both campaigns will see this as an opportunity to take a strong stand for Housing as a Human Right and to take a critical look at the failure of privatizing housing and the need for strong public oversight and tenant control. Some will undoubtedly use the stories of wasted money and failed housing in the Globe article as justification to further cut these programs. Cutting badly needed subsidies in any housing program, especially in economic times like we are in, is irresponsible, unethical and inefficient, creating many unforeseen costs to society. With better oversight and regulation, an expansion of all housing programs and tenant inclusion in policy-making, the Human Right to decent and safe housing can become a reality for all.

GROVE PARC TENANTS ASSOCIATION

“Housing is a Human Right – We won’t go without a fight!”

FOR MORE INFORMATION:

www.stopchicago.org

www.saveourhomes.org

www.economichumanrights.org

www.righttothecity.org