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When HUD Can Help

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When HUD Can Help

Federal intervention can overcome dysfunction in public housing, but only if such assistance is limited and results-based. October 18, 2017
Politics and law

From urban renewal to “ghettos in the sky,” the story of federal involvement in U.S. public housing is not a happy one. That’s all the more reason to note a rare success.

After more than three decades in receivership under the Department of Housing and Urban Development, the East St. Louis Housing Authority resumed local control on September 21. One of the most crime-ridden, dysfunctional municipalities in the United States, East St. Louis is a cautionary tale of public housing’s failures—but also, in this instance at least, an example of the benefits of a limited, time-bound federal intervention.

By the time HUD regulators brought ESLHA under direct control in 1985, making it the second local housing authority to fall into receivership, conditions for the city’s public-housing residents had become hellish. Citing his paper’s editorial from that year, Kevin McDermott of the St. Louis Post-Dispatch recalls “collapsing ceilings and sewage backing up into sinks . . . holes in the floor and rats in the walls.” Tenant complaints went unaddressed as housing commissioners and the mayor waged political feuds. Corruption siphoned off funds earmarked for maintenance in the 2,000-unit system, contributing to a budget deficit of over $14 million. Like all U.S. public-housing authorities, the East St. Louis system was federally chartered and funded, giving HUD the prerogative to assume control. But as bad as things had gotten, the feds didn’t rush in. “Federal officials spent months building their legal case for the unprecedented receivership,” McDermott notes, adding that a HUD spokesperson made it clear to locals that their presence would be temporary.

Though it took HUD three decades to make good on that promise, the results are impressive. HUD secretary Ben Carson, who has criticized his department for many of its past practices, praised the handling of the East St. Louis receivership. The key to success was HUD’s adoption, over 30 years, of standards for restructuring housing authorities. The department created the Public Housing Management Assessment Program in 1991 to document the physical, financial, and managerial health of local systems each year, setting fixed criteria for triggering receivership. HUD focused especially on corruption, which is a simpler target for federal intervention than poverty-related problems, and established an office to ensure dedicated management of each open receivership case. Under HUD oversight, housing authorities can opt to rehabilitate their deteriorating properties, or demolish them and acquire new ones, as long as each unit eventually meets standards for safety and health.

A 2003 report by the General Accounting Office tracked all 15 housing authorities that had fallen into receivership, finding that each one, under HUD stewardship, had “improved the physical condition of their units through extensive rehabilitation and modernization efforts.” Cases that have terminated since the GAO study, such as East St. Louis, Kansas City, and New Orleans, confirm that HUD has successfully managed these public-housing systems into stability—and devolved authority to local officials once its job is done.

Though noting the turnaround in East St. Louis, Carson expresses ambivalence about federal intervention into local authorities. “In the past,” he said, “the federal government rides in on a white horse and says ‘build this’ or ‘do that.’” The history of HUD is replete with examples of the agency’s overreach and destructive meddling, and Carson is right to stress that HUD should override local authorities only in extreme cases—and work closely only with reputable, corruption-free local officials when it does. Still, it’s encouraging that HUD has been willing to take responsibility for the worst cases, and its limited and results-based intervention—the opposite of open-ended federal involvement—has proved successful.

Photo by David Wilson/Flickr

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