I’ve already explained why the Department of Housing and Urban Development should be eliminated, but a superb column in the Wall Street Journal by my old friend Jim Bovard has my blood boiling.
After reading Jim’s piece, I no longer want to merely abolish HUD. I want to bulldoze the building, cover the ground with six feet of broken glass and rusty nails, and then add a foot of salt to make sure nothing can possibly spring forth again.
In the 1990s, the feds were embarrassed by skyrocketing crime rates in public housing—up to 10 times the national average, according to HUD studies and many newspaper reports. The government’s response was to hand out vouchers to residents…, dispersing them to safer and more upscale locales. Section 8’s budget soared to $19 billion this year from $7 billion in 1994. HUD now picks up the rent for more than two million households nationwide; tenants pay 30% of their income toward rent and utilities while the feds pay the rest. Section 8 recipients receive monthly rental subsidies of up to $2,851 in the Stamford-Norwalk, Conn., area, $2,764 in Honolulu and $2,582 in Columbia, Md. But the dispersal of public housing residents to quieter neighborhoods has failed to weed out the criminal element that made life miserable for most residents of the projects. “Homicide was simply moved to a new location, not eliminated,” concluded University of Louisville criminologist Geetha Suresh in a 2009 article in Homicide Studies. In Louisville, Memphis, and other cities, violent crime skyrocketed in neighborhoods where Section 8 recipients resettled. After a four-year investigation, the Indianapolis Housing Authority (IHA) in 2006 linked 80% of criminal homicides in Marion County, Ind., to individuals fraudulently obtaining federal assistance “in either the public housing program or the Section 8 program administered by the agency.”
In other words, the federal government decided that it wasn’t doing enough damage by being a slumlord. It then decided to directly subsidize rents (often at scandalously high levels), often for the benefit of criminals.
Not surprisingly, proponents of big government are playing the race card, claiming that opposition to rental subsidies is a form of discrimination since a disproportionate share of recipients are minorities. Yet this controversy actually pits law-abiding people, regardless of color, against social-engineering bureaucrats.
…middle-class blacks are the program’s least inhibited critics. Sheldon Carter of Antelope Valley, Calif., testified at a recent public hearing on local Section 8 controversies: “This is not a racial issue. It is a color issue. The color is green and it’s my dollars.” Shirlee Bolds told Iowa’s Dubuque Telegraph Herald in 2009: “I moved away from the city to get away from all this crap. Dubuque’s getting rough. I think it’s turning into a little Chicago, like they’re bringing the street rep here.” Remarkably, HUD seems bent on creating a new civil right—the right to raise hell in subsidized housing in nice neighborhoods.
The bureaucracy’s perverse definition of civil rights is not a recent development, as illustrated by this previous post critiquing HUD’s bean-counting mentality.
The moral of the story, though, is that the federal government has no business being involved in housing. Jim’s closing sentences are a pretty good summary of this outrageous situation.
The Obama administration is now launching a pilot program giving local housing authorities wide discretion to pay higher rent subsidies to allow Section 8 beneficiaries to move into even more affluent zip codes. Hasn’t this program helped wreck enough neighborhoods?
Heck, let’s also add arsenic, lead, and strychnine to the glass, nails, and salt. Maybe some radioactive material as well. No sense taking any chances.
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And no one can find ANY place to cut government spending! No gov’t programs that should be eliminated. Only Ron Paul had the spine to name anything. If insanity is repeating the same actions over and over and expecting different results, could we maybe rent all the copies of “Old Yeller” and make all the gov’t minions keep watching it…until the dog doesn’t die?
The willful ignorance of stupidity knows no bounds.
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vouchers for days out
Do you have a Facebook Fan Page I could subscribe to?
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HUD is run by idiots who pander to the banks.
I’m not talking about fraud & cronyism, like Charlie Rangel’s personal use of two low-income units, I’m talking about the way the low-income housing industry is set up and stupid decisions from the people who control it.
Years ago the federal government tried constructing and managing low-income apartment complexes, but things didn’t go well. Then the states developed projects. It was also an expensive failed experiment.
In the 1960s or 1970s Congress enacted laws to encourage private firms to develop low-income housing. Recently HUD has offered rent assistance and loan guarantees to encourage private managers to construct or operate low-income housing. Projects constructed after 1986 can also qualify for tax credits.
Private managers solicit funds from investors. They obtain a government guaranteed loan from a lender and they buy or construct low-income apartment complexes. The lenders receive interest, the low-income tenants have a residence and the apartment managers receive a regular income. Investors are allowed to receive a return, but seldom get it.
Questions:
1. Why do some of the current HUD projects still have 10% or 11% interest rates on their mortgages?
2. How does HUD expect managers to provide decent housing when their massive paperwork tries to micro-manage and the downward pressure on assistance payments keeps everything tight?
3. Why should investors ever put any money in to these projects when they are fourth or fifth in line? The mortgage lenders and tenants receive the most benefit. The manager is probably next and HUD often demands part of the reserves or sales proceeds if the property is sold. Investors usually receive little if anything from a property sale.
The costs, to the Government, are huge. Sometimes HUD subsidizes the mortgage interest, they usually guarantee the mortgages, they pay rent assistance and they add tremendous overhead. Meanwhile current investors receive tax credits.
HUD would save billions if they would encourage the owners and mortgage holders to refinance at current interest rates. HUD could save billions in rehab expenses if they would encourage the managers to use “best practices” that have worked in a few of the projects. They could do this by allowing the managers to earn a higher return, if certain benchmarks are achieved. Finally, investors should be allowed to have earnings on their investment, other than tax credits.
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Pretty d@mned frustrating.
I’m almost certain that my previous apartment (The V at City Vista) on 5th St. NW in DC had a few subsidized units. This is a luxury apartment building that was just opened in November 2009. My fiance and I had to move out because we couldn’t afford the $2200/month rent, and we both work full time.
Some of those Section 8 rent amounts are astounding. $36K per annum, just in housing benefits? Really?! Yet, still probably counted as among the Americans that “live in poverty”. Legal plunder…
[…] Another Compelling Reason to Shut Down the Department of Housing and Urban Development (via International Liberty) Posted on August 19, 2011 by genomega1 Section 8 recipients receive monthly rental subsidies of up to $2,851 in the Stamford-Norwalk, Conn., area, $2,764 in Honolulu and $2,582 in Columbia, Md. But the dispersal of public housing residents to quieter neighborhoods has failed to weed out the criminal element that made life miserable for most residents of the projects. I've already explained why the Department of Housing and Urban Development should be eliminated, but a superb column in the Wall Street Journal by my old friend Jim Bovard has my blood boiling. After reading Jim's piece, I no longer want to merely abolish HUD. I want to bulldoze the building, cover the ground with six feet of broken glass and rusty nails, and then add a foot of salt to make sure nothing can possibly spring forth again. In the 199 … Read More […]