Four years on, the 1996 Welfare Reform Act has brought encouraging results that even most of its early supporters could scarcely have hoped for: welfare rolls cut in half and former welfare mothers moving into the workforce with the seeds of a new work ethic and fresh optimism about the future. Yet one thing threatens, if not to derail welfare reform, at least to slow its progress and blunt its full beneficial impact: the nation's vast public housing system, sheltering exactly the same people whom welfare reform targets—unwed mothers, whose fatherless families have proved incubators of social pathology. Though welfare reform is pushing many public housing residents into the workforce, public housing's perverse incentive structure will probably impel many of them to settle permanently for a first, low-wage job instead of embracing upward mobility wholeheartedly. And though scattering these families, as some housing reformers have urged, surely can't by itself change their values, it's also true that concentrating them in permanently subsidized communities, where illegitimacy remains the unquestioned norm and work isn't seen as leading anywhere, can only make it harder for them to succeed.

That's why what's happening in Charlotte, North Carolina, is so important. With little fanfare, Charlotte's public housing authority is providing a blueprint for transforming the nature of public housing or even, over the long term, phasing it out. The key to Charlotte's new approach is time limits. This simple idea promises to make public housing more like the new welfare system—short-term aid, provided on the assumption of the recipient's serious effort to improve her situation. "What we're saying over and over again to our residents," explains Charlotte Housing Authority chief executive officer Harrison Shannon Jr., "is 'in, up, and out.'" Charlotte, in other words—along with a tiny handful of the nation's 3,200 public housing authorities—is thus seeking to make public housing policy reinforce welfare reform's message of self-reliance, rather than weaken it.

A time limit for public housing, extending welfare reform's ethic of personal responsibility, represents an historic break with the fundamental misconception that inspired the construction of public housing from the start. Public housing grew out of the idea that the private housing market could never provide decent and sanitary housing for those of modest means. In this conception—
articulated by Catherine Bauer in her influential 1936 Modern Housing and embraced by President Franklin D. Roosevelt in the National Housing Act of 1937—public housing authorities were to run apartment buildings as permanent public utilities, with publicly financed construction keeping rents low.

It's hard to exaggerate how mistaken this idea was, even when Bauer and other advocates first formulated it. From the end of the Civil War up until 1937, private builders had erected a dizzying variety of housing for the striving poor as they improved their condition over time (see "We Don't Need Subsidized Housing," Winter 1997). Chicago witnessed the construction of 211,000 decent, inexpensive two-family homes during those years—21 percent of the city's total residences. Private builders fabricated no fewer than 300,000 affordable, livable row houses in Philadelphia during the five decades prior to 1930. To be sure, a temporary shortage of privately built housing after World War II meant that many blue-collar families briefly benefited from public housing. But dynamic postwar economic growth left Bauer's argument in tatters: two-income working families flocked to the economical, privately built subdivisions of the suburbs. Today, an astounding two-thirds of American households aren't renters at all—they own their own homes. It's hard to find evidence that the nation ever needed its public housing system.

As those working-class families headed for the suburbs in the fifties, public housing began its transformation into latter-day poorhouses. Federal legislation authored by the late Massachusetts Republican senator Edward Brooke accelerated and intensified the change. The 1968 Brooke Amendment, seeking to protect low-income earners from local housing authority rent hikes, mandated that public housing households pay no more than one-third of their income in rent—but it also required them to pay no less than that third. This law should claim a prize for unintended consequences. It drove from public housing the remaining working families, whose rents suddenly shot up now that they had to pay a third of their incomes to the housing authority. They could now do better in the private housing market. At the same time, the Brooke Amendment opened the door wide to single mothers on public assistance; they'd pay very little.

If always unnecessary, public housing now became truly pernicious. It became a crucial part of the welfare-support network that abetted young women in having illegitimate children. It told young women that if they had a baby out of wedlock, they could leave home and set up their own apartments on the public dime. In a 1989 HUD survey, the most frequent reason single mothers gave for moving into public housing was "to establish own housing." Public housing's complicity in fostering single-parent families is so troubling because of what we now know about illegitimacy. Having a child out of wedlock often sentences the mother to poverty: 68 percent of single-parent families are poor, and single parents head 90 percent of black families in poverty. Worse, the children in those families suffer dismayingly high levels of social pathology, from school dropout to criminality (see "The Real Welfare Problem Is Illegitimacy," Winter 1998).

Today, 40 percent of all low-income single-parent families—26 percent of all poor families in the country—reside in 507,000 of the nation's 1.3 million public housing apartments and more than 1 million of the 2.7 units of other publicly subsidized housing (mostly paid for with federal Section-8 housing vouchers). Single mothers and their kids occupy 39 percent of all public housing apartments, the biggest demographic group in the system. Only the elderly, occupying 32 percent, come close. And since the elderly usually live together in buildings set aside just for them, low-income single-parent families dominate many housing projects.

Public housing is where the long-term welfare recipients wound up and stayed. In Charlotte's large projects, 40 percent of households have stayed five years or more; 20 percent have stayed ten years or more. Some dependent families have lived in Charlotte's system for three generations. It's little different elsewhere. The average stay of tenants in public housing nationally is 80 months; in New York, 99 months—just over eight years. And because 9 percent of tenants leave every year, those averages mask a sizable core of households that stay even longer.

Charlotte's time limits propose to change all this radically. The city's public housing authority currently enrolls more than 500 of its 1,800 non-elderly households in its "Transitional Family" program, an innovative initiative launched in the late 1980s that combines voluntary time limits with counseling, education, and financial management to encourage public housing residents to become self-sufficient. To get residents to agree to the time limits and take other real steps toward self-improvement, Charlotte offers a powerful incentive: newer, more desirable housing. The authority can get away with its system of incentives and disincentives because, as HUD rules have traditionally demanded, it still guarantees low-income residents public housing—but in its typically run-down, disorderly high-rise projects, not in its nicest buildings. Any large-scale public housing authority in the country could easily follow Charlotte's lead in navigating creatively around HUD requirements.

A resident who wants to move up from the shabby, conventional projects into the much nicer, relatively new Victoria Square and Claremont complexes must accept a voluntary five-year limit on her tenure in public housing and must already have shown her seriousness about self-improvement by starting to work on her high school equivalency certificate or signing up for community college or job training courses. To remain in the nicer housing or to hope to move on to something better, she must meet regularly with a social worker, who makes sure she's working toward obtaining both employment and an education. If she isn't, the program sends her back to the less desirable traditional housing.

An interesting innovation: but Charlotte's experiment gets even more creative than this. To push residents even closer toward self-sufficiency, Charlotte takes advantage of HUD's multibillion-dollar public housing rebuilding project, Hope VI, in ways that the federal agency "absolutely never intended," as one candid HUD official admits, but that nevertheless are not forbidden.

The federal program, on its own terms, is decidedly unpromising. It frees up money to raze older, dilapidated public housing projects—usually forbidding high-rises—and to replace them with townhouses mixed in among single-family homes and middle-income apartments. Hope VI makes the erroneous assumption, which has typified the thinking of public housing advocates since the days of Catherine Bauer, that one's housing environment determines one's behavior. If only poor, dysfunctional families could live next door to striving, middle-income families, this assumption runs, the good example would rub off and inspire the poor to self-improvement. But this formulation gets things backward: it is far more likely that disordered families will drive good families to despair through their antisocial behavior than that good families will improve the behavior of the disordered. Good neighborhoods take root and blossom through the efforts of striving, upwardly mobile families who've sought to distinguish themselves, economically and spiritually, from those who don't share their upstanding values. Hope VI simply ignores this crucial insight.

Yet Charlotte has turned this dubious federal program to its own responsibility-building ends by using brand-new Hope VI apartments to reward residents who've taken big strides toward self-sufficiency. When Charlotte, using Hope VI funds, demolished its notorious Earle Village project just east of the city's downtown, it told long-time residents of the project that they would have no special entitlement to enter First Ward Place, the pleasant townhouse complex that was to replace Earle. Instead, to enter these new townhouses, not only would a resident have to have agreed to the five-year time limit, but she'd also have to have finished high school, shown that she'd held a job continuously for at least the past year, and agreed to work with a social worker to budget her funds with an eye to moving up and out. Again, failure to continue moving forward means a quick return to traditional public housing.

Charlotte rewards the most successful strivers with the best housing of all. The housing authority runs four air-conditioned apartment complexes in some of the city's choicest, most crime-free residential neighborhoods, in the vicinity of good schools—complexes built just with city funds and thus free from HUD regulations, including the Brooke Amendment's one-third-of-income rent rule. To qualify for these buildings, a participant must not only accept the five-year limit, have her high school diploma, and be working, but she must also agree to pay a flat-rate rent that will not go down even if she loses her job. In other words, she must give up the Brooke Amendment's safety net. If her income rises, the authority increases her rent but puts the extra money she's now paying into an escrowed savings account. When the participant "graduates," she can use the money to help pay rent in the private market or put a down payment on a house. Those who fail to graduate by the time their five years are up, though, go back to dreary traditional public housing.

Charlotte's innovative program has produced some striking successes that show how time-limiting public housing can strengthen welfare reform's message of self-sufficiency. Consider Greta Greer, who entered Charlotte's public housing system as a young welfare mother in 1993. In 1996, welfare reform pushed her into the workforce, where she landed a low-paying job as a day-care assistant. But public housing kept her horizons low. Why try to move up? After all, she had her apartment, and if she made more money, her rent would increase. She'd only get to keep 66 cents out of every additional dollar. So why bother?

Greer's example confirms an old social-science axiom about semi-dependency, familiar from the Seattle and Denver income maintenance experiments of the 1970s: permanent subsidies are demoralizing and limit the long-term earnings of low-income workers. The Seattle and Denver studies on the effect of a negative income tax found that every dollar of subsidy given to low-income workers reduced their earnings from work by 80 cents, compared with workers without the subsidy.

Charlotte's time-limit program replaced Greer's diminished expectations with an invigorating sense of possibility. Agreeing to time limits in 1998, she moved into a better apartment. With the program's help, she learned how to check her credit rating and started to clear up bad debts. The program also encouraged her to get computer training and helped her prepare a résumé. She managed to get a better job as a receptionist in a collection agency, making $10 per hour. Newly,  confident, Greer began to interview in 1999 with several banks; First Union, one of Charlotte's largest employers, hired her. Greer now makes $13 per hour as an IRA specialist in the bank's investment department, has started a 401K plan, and is set to move her family out of public housing for their own home in a few months, three years before her five-year limit is up.

Greer's seemingly successful exit from Charlotte's public housing is far from unique. More than 400 residents have used the Transitional Families program to move out over the last five years; 125 have bought their first houses thanks to the program. Would these residents eventually have left Charlotte public housing under the impetus of welfare reform alone, without the additional push from the time-limit program? Perhaps: but it is more likely, as Greer's early semi-dependency shows, that even in a welfare-reform environment, an unreformed public housing system will keep people from being all they can be.

Charlotte officials candidly acknowledge the need to separate families by attitude and achievement. "We don't want people who are trying to improve themselves to have neighbors from hell," says housing authority head Harrison Shannon. Charlotte's Transitional Families program supervisor, Janet Lynch, notes that rather than drawing inspiration from hardworking neighbors, the non-working often try to undermine them. Cynthia Jackson, a public housing graduate, confirms it. "People were saying to me all the time, ‘What are you doing? You'll never make it,’" she recalls. Lynch finds most inspirational those transitional families just starting the process of moving up—women who, still surrounded by the welfare culture, have made a commitment to change. "They form tight cliques for protection," Lynch observes. "They start off as 15 strangers in a room and form a real bond; they swap babysitting, trade clothes, and form friendships I think will last." It's a heartening process to watch: the formerly dependent becoming a community of self-help and upward mobility.

Doubtless, Charlotte could do more. The authority could, for example, forthrightly address the deepest problem of many program participants—having kids out of wedlock. Authority social worker Alicia Carr, for one, contends that many residents "aren't ready for marriage; they need to learn how to become independent and self-sufficient, first." But neither Carr nor the housing authority in general seems willing to ask whether these young women are ready for motherhood. Still, if one must choose between single mothers stuck in public housing and single mothers taking care of themselves and their families on their own, the choice is clear—all the more so if Charlotte's program helps discourage a new generation of single mothers by raising the aspirations of Greta Greer's children and the kids like them.

In Delaware, the state public housing authority has just taken Charlotte's principle to its logical—if radical—conclusion: it has just adopted a mandatory three-year time limit for all of its non-elderly residents. Granted, Delaware's agency is tiny: it provides only 1,200 units of public housing, sprinkled mostly across the rural chicken-processing belt of Sussex and Kent Counties. But Delaware may foreshadow the future: Charlotte, a big urban housing authority, is considering adopting mandatory time limits too. As Harrison Shannon stresses, in refreshingly non-bureaucratic language, he doesn't want public housing to be a "safe harbor" for those who "lack a work ethic."

HUD regulations don't allow most housing authorities even to consider mandatory time limits. But Delaware and Charlotte are numbered among 32 housing authorities—1 percent of the national total—included in an HUD demonstration program called Moving to Work. HUD adopted the program under pressure from the 1996 Republican Congress, some of whose members were calling for the agency's outright abolition. Moving to Work regulations don't mention mandatory time limits specifically, but they don't prevent authorities from imposing them.

Delaware's program is tough stuff. Its mandatory time limit is shorter than Charlotte's voluntary one: just three years. Delaware helps residents find jobs and forces them to save money to start building a post-public housing nest egg, as Charlotte does. But any missteps—not showing up for work, failing to keep kids in school, even being late with the rent—lead to strikes against the resident. These expansively defined strikes represent failures to stay on the path of bourgeois social values that Delaware seeks to encourage. As in the national pasttime, three strikes and you're out: the resident must either leave public housing or pay a higher, unsubsidized market rent to stay. There's no "traditional" public housing to fall back on.

Because Delaware's program departs so decisively from past practices, it has angered some residents, who condemn it as unfair and punitive. But for others, the strict rules and firm guidance, as with welfare reform, help inculcate greater personal responsibility and a more vigorous work ethic. Linda Stephenson, who heads the tenant association in her housing authority complex, sees the new rules as eminently reasonable. "If I went to stay with my brother, he is going to want to know, 'What are you doing to better your situation? What are you going to do so you don't need my help?'" she notes. "That's how I see Moving to Work."

Critics of Delaware's initiative worry about what will happen to tenants after the three-year time limit expires. How will they afford market-level rents on the minimum wage? But the critics assume that the condition of the poor is static: that they will always be more or less dependent, incapable of taking charge of their own fates. After three years of training and support, critics assume, these public housing residents will still command only the minimum wage from employers. At least at present—with such a bustling national economy, and with welfare and housing reforms that aim to change the worldview of the poor and make them independent-minded—that assumption is suspect. Still, it is only prudent to acknowledge that, under such a no-nonsense regime, some residents ultimately will have to move back in with their parents or even seek a place in public shelters.

Over time, mandatory time limits could shrink the public housing system and ultimately end it as we know it. Delaware's time-limited tenants, for example, have the option, after their three years have expired, of remaining in their buildings and paying market-level rents. In the future, as apartments filled up with working families paying market rents, Delaware could sell off the now economically viable buildings to private buyers. Only a small core of emergency, time-limited housing would then remain. With housing time limits and welfare reform firmly in place, young women would be less tempted to become single mothers in the expectation of living on their own at public expense.

The value to cities of getting rid of public housing would be inestimable. Public housing projects haven't just incubated social pathology; they've also represented land held off the property tax rolls and reserved in perpetuity for a specific, low-value use. Freezing cities in this way is a sure way to sap their vitality: just look at how Harlem's thick concentration of public housing has kept the area from participating fully in the revitalization of Manhattan's Upper West Side. Putting public housing land back into circulation would help fuel economic growth.

Public housing has been a giant dead end. Charlotte and Delaware are showing the nation how it might extricate itself from a harmful system and set its demoralized inhabitants firmly on the road to the mainstream.


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