Economics Professor To Urge Congress To Overhaul Approach To Public
28, 2001-- As the United States begins to direct
more money toward national defense and domestic security, funding
for lower-priority issues, such as public housing, will hold steady
-- at best -- in the upcoming federal budget.
how can the Department of Housing and Urban Development (HUD) use
its limited resources to help the growing number of poor American
families find affordable housing?
Thursday, Nov. 29, Edgar O. Olsen, professor of economics at the
University of Virginia, will testify before the U.S. Senates
Committee on Banking, Housing and Urban Affairs, suggesting an overhaul
of the way in which HUD helps impoverished families keep a roof
over their heads. He believes his approach -- switching entirely
to housing vouchers -- would also stretch taxpayers dollars.
believes that the answer to low-income housing is not in subsidizing
builders and apartment managers, but in shifting HUDs entire
budget for low-income housing into housing vouchers that go directly
to eligible families so they can seek housing on the open market.
on the effects of housing programs
shows that we can serve
current recipients equally well (that is, provide them with equally
good housing for the same rent) and serve many additional families
without any increase in the budget by shifting resources from project-based
to tenant based assistance," Olsen writes.
cites five major studies, conducted in different markets and at
different times, which unanimously found that housing certificates
and vouchers provided equally desirable housing at a much lower
total cost than any of the HUD programs designed to spur the construction
of new public housing. Shifting the structure of funding would significantly
expand the reach of public resources, Olsen said.
the smallest estimates of the excess costs of project-based assistance
imply that shifting 10 families from project-based to tenant-based
assistance would enable us to serve two additional families. Since
HUD provides project-based assistance to more than 3 million families,
a total shift would enable us to serve at least 600,000 additional
families with no additional budget."
suggests restructuring HUD programs to expand poor families
access to affordable housing:
money currently spent on operating and modernization subsidies
for public housing projects should be used to provide tenant-based,
portable vouchers to public housing tenants;
with the owners of private subsidized projects should not be
renewed. Tenants should be given modest grants for moving expenses.
of new public or private projects should not be subsidized.
people who develop and operate subsidized housing projects will
oppose these reforms," Olsen said. "However, they will
give taxpayers who want to help low-income families more for their
money. Without spending more money, taxpayers can increase the number
of families served while maintaining support for current recipients."
has focused in his academic career on the economics of subsidized
housing what works and what doesnt. Over the past 30
years, he has conducted numerous studies of public housing for state
and federal agencies, under Republican and Democratic administrations,
and reviewed a large number of other studies.
was an analyst on the Housing Policy Review Task Force that led
to the Section 8 Certificate Program during the Nixon Administration
and evaluated the Experimental Housing Allowance Program for the
Department of Housing and Urban Development during the Carter Administration.
More recently, he has studied low-income housing programs for the
National Bureau of Economic Research and served as a consultant
to the General Accounting Office on the cost-effectiveness of tenant-based
vouchers and major construction programs, such as the Low Income
Housing Tax Credit.
Charlotte Crystal, (434) 924-6858