#162 Summer 2010 — Public Housing Privatization

PETRA Perspectives: PolicyLink

As the merits and flaws of PETRA are being debated, PolicyLink offers its list of desired outcomes for poor people and economically distressed communities.

America has invested in building and supporting housing for lower income people and vulnerable populations for decades. This investment is a critical part of our nation’s safety net. But like other infrastructure deferrals, writ large in America, our investment in homes for those who need help needs renewed investment.

HUD’s rental assistance programs serve 4.6 million households. But many of these homes are at risk. Every year, the inventory of privately and publicly owned affordable rental units shrinks, sometimes due to physical deterioration, sometimes due to owners’ frustrations with HUD’s labyrinthine administrative procedures, and also due to redevelopment that reduces the overall number of homes. Additionally, many homes need rehabilitation and reinvestment, requiring about $30 billion in work, according to HUD.

The very people who should be benefiting from these programs — low-income people and people of color — find it hard to navigate the system. And instead of expanding their choices, participation in these programs often limits their options. Multiple, multiyear waiting lists lead to unfair and inequitable outcomes. And those who are lucky enough to receive housing vouchers good for use in opportunity-rich neighborhoods find that rental units there are few and landlords are less willing to accept the vouchers.

Fortunately, HUD has recognized that change is necessary. Under Secretary Donovan’s leadership, a plan has been proposed to overhaul HUD’s 13 different rental subsidy programs and combine them into one coherent program. The active dialogue prompted by the PETRA proposal is welcome and long overdue.

As Congress, the administration, advocates, community development practitioners, financiers, and others debate the merits and flaws of PETRA, we believe that the discussion should be focused on solutions that will achieve the following outcomes for poor people and economically distressed communities:

1. Make all neighborhoods stable, healthy, and livable. We must strategically align HUD investments for high-quality affordable homes with other infrastructure investments like high-quality schools that help people participate and prosper while also renewing and rebuilding distressed communities.

2. Link people to opportunities and supports spread across regions. Housing investments must be linked to other strategies that help people connect to opportunity such as recent efforts in many regions to employ land use policies that co-locate jobs, transportation, and affordable housing.

3. Enable all to live near regional opportunity. Housing investments must be used to open up opportunity-rich neighborhoods to low-income people and communities of color so that they can access good schools, job centers, public transportation, and more.

To forge a productive path forward — one that improves outcomes for poor people, promotes communities of opportunities, and lays a secure and sustainable foundation for the future of rental assistance, HUD must do the following:

1. Ensure strong one-for-one replacement, long-term affordability, and regional mobility provisions. The transformative reform that is possible with PETRA should ensure to the maximum extent possible no net loss of affordable units. Longer affordability terms (ideally into perpetuity) must be built into any major overhaul of rental assistance policy as is being proposed through PETRA. Finally, rental assistance reform must make “regional mobility” real for those who want to leave neighborhoods of concentrated poverty. That means finding new landlords, deep mobility counseling, and support to stay in the new place.

2. Establish principles to guide public-private partnerships and financing. One of the most polarizing aspects of the PETRA debate is the use of private dollars to finance the needed improvements and expansion of the public housing stock. This is a debate that cuts across many infrastructure policy arenas — and it won’t go away as needs across a range of infrastructure types mount. It’s time for the federal government to establish guiding principles and a framework to promote effective and equitable public-private partnerships around infrastructure development. There are ways to ensure public ownership of precious national assets while encouraging a modest return on investment for private investors.

3. Strategically tie reform to the administration’s broader agenda. The Obama administration is the first to look comprehensively at how federal policies and programs affect places. Many new programs in the 2010 and 2011 budgets, such as Promise Neighborhoods, Choice Neighborhoods, and the Sustainable Communities Initiative, are place-based. Aligning PETRA with these other new initiatives is essential to maximizing positive outcomes for low-income people and communities of color.

While there are many important concerns that need to be worked through, PETRA also offers a window of opportunity to put into practice a growing research consensus: that housing is a central linchpin to prosperity and that well-planned public housing can help ensure that all Americans participate and prosper.

We hope all of us — members of Congress, the administration, advocates, community developers alike — will choose to work together to craft a path forward. The future prospects of millions of low-income people and communities of color depend on it.


  • An orange tinted bridge over water in New Brunswick, New Jersey.

    A Battle for Wards in New Jersey’s Hub City

    October 17, 2010

    How an organization of residents crossing age, race, and socioeconomic lines took on an unyielding City Hall known for quelling grass-roots efforts and (almost) overtook the political party machinery.

  • A worker at Evergreen Cooperative Laundry, which recently secured new contracts for 3 million pounds of health care linens.

    Green Jobs with Roots

    October 17, 2010

    For the founders of Cleveland's Evergreen Coops, putting a handful of people to work at minimum wage isn't worth it. They are aiming at nothing less than a ground-up economic transformation -- one owned by the very people it's intended to help.

  • Taking Foreclosures to Task

    October 17, 2010

    All across the country, local governments, CDCs, community groups, and housing counselors are coming together to address the foreclosure crisis.