Tuesday, September 20, 2005

Private Markets, FEMA and HUD?


With the catastrophe in New Orleans, the Bush Administration has proposed a program which will help poor (former) residents of New Orleans become homeowners on what is presently federal land. But in the short-term, thousands will be herded into temporary housing - trailer parks constructed under the auspices of FEMA, meant (in a paraphrase of an official who was describing the planned parks) to be comfortable enough to live in but not comfortable enough such that people will want to stay.

NPR, a few days ago, aired a program (sorry, I'm not sure which one) which described life in a similar trailer park in Florida. Some of the residents spoke of the difficulty in finding alternative housing. One didn't want to move to a new apartment that wouldn't take her dog. Another couple, despite having employment and having lived rent-free for a year, claimed that they had been unable to raise money for a security deposit and first month's rent. The description of the park made it seem like it fit the description above - not a place anybody would truly want to stay over the long term. But hundreds of people had lived in the park for a full year, with no apparent intention of going anywhere.

This raises some "free market" questions. Since the Bush Administration occasionally pretends that there are free market solutions to just about any problem, and that the market can resolve most issues better than government, why are they so distrustful of the free market when it comes to housing? There are millions of rental units available in the United States, and it may well turn out to be cheaper to negotiate rental contracts with their owners than to build (and ultimately throw away) thousands upon thousands of new "rent free" housing units in temporary trailer parks. And even if it's not, Bush is writing a blank check for post-Katrina clean-up, so why not give private landlords a boost?

Beyond that, there's our nation's public and subsidized housing. If the free markets are the best solution, and home ownership helps lift people out of poverty, why aren't home ownership programs being implemented through HUD? Instead we have what amounts to more permanent versions of the FEMA trailer parks - housing units that, even if well-built, is often permitted to deteriorate to the point where the are comfortable enough to live in but not somewhere you would want to stay over the longer term. (And yet, as with the "temporary" Florida trailer park, people stay for the longer term anyway.)

So how about shifting HUD's focus from rental units to condo units? Give anybody with a job, no matter how mediocre, a subsidy toward the purchase of a condo unit as opposed to a rent subsidy. Convert many public housing projects into condos, put condo boards in charge of them, and have them contract with private companies for maintenance services. Rather than subsidizing section 8 rental housing, subsidize section 8 condo housing. Let the working poor become homeowners. Create a community with a stake in their property, rather than one which falls victim to slumlords and to neighbors who see no downside to trashing the place.

Granted, such a program probably wouldn't work for all people, and there would probably be some catastrophic failures along the way. (I am reminded of an effort in England, some decades ago, to move people out of crumbling houses into newly (but poorly) constructed row houses, with the net effect being the realization that by the time they finished the initial transition the first set of "replacement" houses would, themselves, have to be replaced.) But the status quo is not particularly impressive, so isn't it worth taking a look at a possible market solution? (Or are we only interested in "market solutions" which follow the model of "trickle down economics".)

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