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“Nightline” Exposé on Public Housing Tells Incomplete Story

Wednesday’s ABC “Nightline” story on misspent funds and poor living conditions in public housing run by three local agencies didn’t adequately explain the causes of these problems  — or proposals that could help address them.

The abuses in Philadelphia, the main focus of the report, highlight a major blind spot in federal oversight of housing assistance:  an experimental program known as Moving to Work (MTW).  This misnamed program, which actually does little to support employment, exempts Philadelphia and 32 other agencies from many federal rules meant to ensure that taxpayer funds are spent as intended, making effective oversight by the federal Department of Housing and Urban Development (HUD) more difficult.

Some MTW agencies have used this flexibility responsibly.  But as the Center warned a year ago, overall these agencies provide housing assistance to many fewer families per dollar of federal funding than other agencies do.  That leaves tens of thousands of families on waiting lists, even though the money is available to assist them.

HUD needs additional tools to rectify bad housing conditions more expeditiously in MTW and non-MTW agencies alike.  The Transforming Rental Assistance proposal, which the President proposed in his 2011 budget and was introduced in the last Congress, would give it some of those tools, such as the ability to compel an agency to hire new management for a property and to allocate available capital funds to meet emergency needs.

Transforming Rental Assistance would also use market mechanisms to help ensure that publicly owned housing provides decent homes to the vulnerable families and individuals it serves:

  • It would allow housing agencies to borrow private funds to perform needed renovations.  Not only would this help agencies make up for years of federal underfunding, but private-sector lenders would provide another source of oversight to help prevent mismanagement.
  • It would give more choices to public housing tenants.  Under current rules, public housing residents lose their housing assistance if they move; in contrast, low-income people who have federal housing vouchers to rent housing in the private market can use their voucher to move to a new apartment.  Transforming Rental Assistance would allow people who have been in public housing for two years to move to a private apartment without losing housing assistance if a voucher is available.

Public housing performs a critical role, providing affordable homes to 2.3 million low-income Americans, large numbers of whom are elderly or have a disability.  HUD and Congress need to make sure it does so both effectively and efficiently, by making the necessary policy changes as well as providing additional oversight.