When we talk about "public housing," we're usually referring to those big decaying boxy buildings surrounded by asphalt located in neighborhoods of color where middle and upper class white folks are afraid to drive, let alone tread.
But in fact, most of our housing could be called "public" -- that is, subsidized by the government -- including those million dollar McMansions in the ‘burbs. Like the people in the projects, these homeowners get financial help from Uncle Sam, in the form of the Home Mortgage Interest Deduction (HMID) and property tax deductions from their federal income taxes.
Public housing development is rooted in the New Deal recognition that the private market cannot meet the housing needs of the country, particularly the needs of working class and low-income people. During the 1930's, many of the unemployed became homeless, and slums arose within cities where people crowded into makeshift shelters and deteriorating buildings, living in unsafe and unsanitary conditions. The housing division of the Public Works Administration began its work in 1933; its goal was to build modern and high quality housing for the poor. Loss of jobs and the failure of the banking system caused high rates of foreclosure, driving homeowners as well as renters into the streets. To bring back affordable homeownership, beginning in 1934 the Federal Housing Administration (FHA) insured and subsidized mortgages, making housing a safe investment. Later the Home Mortgage Interest Deduction was instituted, which helped ease mortgage burdens even more. Many who enjoy housing security today owe it to government programs of the past.
But all of this good will and good work was deformed by the usual American malady: racism. When the public housing program changed to put operational decisions into the hands of local politicians, cities could decide where to locate the projects, which virtually guaranteed that they would be racially segregated. In terms of homeownership, the FHA endorsed "red-lining," the targeting of people in communities of color as "poor financial risks," and encouraged lending to white families buying in suburbs. Over its 30 year history, only 2% of its loans were made to families of color. As for the HMID, low and middle income homeowners who do not itemize on their tax return get no benefit, and for those who do itemize, the bigger the mortgage the bigger the subsidy -- those with the highest income and wealth levels get the most. We have a two tier color-coded public housing policy: disinvestment in low-income communities of color, and increasing subsidies for middle and upper income whites. No wonder racial wealth inequality has been growing (the new report from the Institute for Assets and Social Policy at Brandeis University shows that the wealth gap between whites and blacks quadrupled over a generation.)
In 2005, the American people spent $70 billion to subsidize disproportionately white middle and upper income homeowners through the HMID. They invested only $6.2 billion -- under 10% as much -- on "public housing." A new report from the national non-profit Right to the City, We Call These Projects Home: Solving the Housing Crisis from the Ground Up, raises the voices of the residents themselves, who attest to the success of public housing developments. They are the most stable and secure housing for low-income families, and the people living there have created a culture of support and cooperation (is that what's meant by the "culture of poverty!?"). They make the common sense argument that our nation needs to strengthen these communities through linking residents to jobs and services, rather than dismantling and dispersing them to the winds.
Simply by eliminating or capping the HMID, we could free up enough money to pay for all the improvements recommended by Right to the City to preserve, improve, and construct new public housing developments. It's always astounding that we don't challenge socialized programs for the rich, but have no problem cutting public spending for the poor. Let's listen to the residents, invest in public housing, and turn a raw deal into a new -- I mean a really new! -- deal.