New Study on Low-Income Housing Subsidies

By Chris Edwards of Cato.

"A new study at Downsizing Government looks at low-income housing aid. Howard Husock of the Manhattan Institute examines the history of federal aid and discusses problems with current policies, particularly rental subsidies and public housing.

One problem is that housing aid is costly to taxpayers. The federal government spent $30 billion on rental subsidies (Section 8 vouchers) and almost $6 billion on public housing in 2016.

Another problem is that housing aid and related rules are costly to urban communities. Howard argues that federal interventions undermine neighborhoods, encourage dependency, and create disincentives for long-term maintenance and improvements in housing.

In urban politics, there are frequent calls for “affordable housing.” But Howard says that it is a myth that markets cannot provide decent housing for people at all income levels. He discusses the vast private housing investment in the decades prior to the 1930s, which was a time of rapid growth in America’s big cities.

The problem today is that government rules and regulations inflate housing costs, which is the topic of an upcoming study by Cato’s housing expert, Vanessa Calder.

What should Ben Carson do? The new Secretary of Housing and Urban Development should heed Howard’s advice and work to cut federal subsidies. Carson should also follow through on his conviction that HUD imposes too many “social engineering” rules on local governments.

Vanessa provides further policy guidance for Carson here, and she discusses an example of the sort of top-down HUD mandate that should be on the chopping block here.

Howard’s vast scholarship on housing policy is here.

More information on HUD is here. I would particularly recommend HUD Scandals. My god, Ronald Reagan’s HUD was appalling."