New York Times, July 25, 2008: Opinion: To Fight Poverty, Tear Down HUD

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WITH the nation embroiled in a housing crisis, one would expect the Department of Housing and Urban Development to be playing a central role. But HUD is a marginal player. Although its Federal Housing Administration division has agreed to underwrite new mortgages, it is merely following the leadership of the Federal Reserve and the Treasury Department.

This is no accident. HUD۪s sidelined role is a product of its anachronistic approach to both housing and cities. It might be best to simply close the agency and create a new cabinet-level commitment to urban development.

In 1965, when HUD was created, its mission was to spur growth in and around cities. The agency provided mortgage assistance to veterans and first-time homeowners, it built housing for the urban poor, and the Federal Housing Administration spurred suburban expansion by recruiting developers and home buyers to a relatively new, untested market.

Since its inception, HUD has had a fairly straightforward recipe: develop good relations with mayors and local real estate leaders, then award grants and underwrite loans that affirm local development priorities. The longtime mayor of Chicago, Richard J. Daley, was often credited for creating the “city that works,” but it was the support of HUD and the housing administration that helped him eradicate slums, build public housing and create the vast array of working-class neighborhoods that are now Chicago۪s signature.

But in the last four decades the urban landscape has changed from discrete, independent cities to vast, interdependent regions where people and goods move freely. Between Los Angeles and Orange County, Milwaukee and Chicago, Boston and Philadelphia, cities have no choice but to collaborate on decisions over land use and economic development. In taxation and zoning, regional agencies like the Port Authority of New York and New Jersey and the Southern California Regional Rail Authority are as powerful as big-city mayors. And for the first time in our nation۪s history, poverty is rising faster in suburbs than in urban cores. In this new era, HUD۪s each-city-is-a-separate-whole approach is not only too inflexible and short-sighted, it also hinders effective regional growth.

To see why, consider HUD۪s most prominent urban development program: Housing Opportunities for People Everywhere (VI). Introduced with much fanfare in 1993, HOPE helped municipal governments demolish dilapidated public housing projects and revitalize their inner cities. To receive program money, mayors agreed to move families from the projects to low-poverty neighborhoods and build mixed-income housing where the projects once stood.

Clinton administration officials were quick to credit HOPE for reducing inner-city poverty. Big city mayors loved it because it gave them license to raze unsightly projects and gentrify their downtowns. Attractive parks and revamped schools entirely new communities, in essence brought thousands of middle-class families back to the central city.

But a closer look reveals a more complicated story.

In large cities like Atlanta, Baltimore and Chicago, the program reshuffled project residents to outlying neighborhoods and struggling inner-ring suburbs whose mayors lack the experience and resources to help the incoming poor and stem rising crime and gang activity. More than 80 percent of the families who left Chicago۪s demolished projects moved into equally poor, racially segregated neighborhoods.

Lawsuits have appeared every few years since the inception of the HOPE program, alleging that HUD used these funds to resegregate the poor, a violation of civil rights statutes.

A 1998 report from the Government Accountability Office also concluded that HUD oversight was lacking, and HOPE VI was giving greater weight to the interests of real estate developers. This raised widespread concern since private developers are less likely to build affordable housing or maintain usable public spaces.

And the construction of mixed-income housing on HOPE sites has lagged, leading to concerns that HUD policies have reduced the low-income housing stock.

How could a program aimed at curbing inequality and helping the poor end up creating new pockets of poverty? The answer lies partly in HUD۪s myopic focus on gentrifying urban cores. The agency ignored studies showing that former project residents would have difficulty finding rental housing in outlying neighborhoods and did not provide assistance for inner-ring suburbs with high rates of foreclosures. HUD resisted calls to slow down housing demolition and to move the poor to areas of high job growth.

By making no effort to ascertain needs and resources on a regional scale, HUD has ended up eliminating poverty in one place while creating distressed, low-income communities in others. If HUD had developed a broader vision, one that tied together inner city and suburb, it could have created policies to help both areas adjust to the modern urban landscape.

In correcting HUD۪s missteps, we must first separate “housing policy” from “urban development.” Today, housing policy is dictated by private markets, so why not give the Commerce and Treasury Departments oversight of a single authority that administers Federal Housing Administration financing needed to keep homes affordable for the majority of Americans and all of HUD۪s other housing programs?

Then, the development needs of our nation۪s regions wide areas like the Northeast corridor or Southern California could be considered anew. Block grants could provide incentives for municipal and county governments to collaborate. Regionalism must be embraced, even if it tests local officials who fear losing their traditional sources of government financing.

Promoting coherent regional development will also entail linking urban policy concerns like community development and social services with work like rehabbing roads and building railways. With gas prices driving Americans to public transportation, this is a fitting moment to think holistically.

But adding a few more buses won۪t do the trick. Americans live too spread out, and economic activity is no longer limited to downtowns. Community-based initiatives from vocational programs to rezoning efforts to designing effective transportation corridors and recreational space are sorely needed but will be effective only if they tie into a broader vision that anticipates growth on a large scale.

Even our most persistent problems of inequality will require new strategies. A federal agency devoted to regional planning could help the Health and Human Services Department reconfigure anti-poverty programs to aid suburban communities that have so far gone unnoticed but are desperately in need. It could motivate the Labor Department to develop training programs and support the transportation needs of workers.

We need an agency that can work outside old boundaries and design a regional approach to revitalizing cities and suburbs. Dismantling HUD would be a great place to start.

Sudhir Venkatesh, a professor of sociology at Columbia, is the author of “Gang Leader for a Day: A Rogue Sociologist Takes to the Streets.”

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