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The urban housing crisis.

The fact that there are no easy solutions to the housing problems in our nation's largest cities was graphically demonstrated at a recent housing conference sponsored by Fannie Mae. At its 1993 Annual Housing Conference, the focus was on Housing Policies for Distressed Urban Neighborhoods, and speaker after speaker painted a picture of a housing problem that is beyond the scope of any one program or agency or government to fix.

The diversity of views offered as to the root cause of the problem was stunning. There were mayors, academics, housing policy experts, business people, journalists, public housing officials and nonprofit group leaders. The message that emerged was that the miserable housing conditions faced by poor, inner-city residents in this country are inseparable from the larger social and economic problems that are pulling at the seams of modern American civilization. And just as those larger problems have defied solutions for decades, so too has the problem with housing poor Americans in the inner cities.

Nevertheless, the conference gathered some policy experts and practitioners together in a final discussion panel to try and talk openly and candidly about potential solutions and the proper role for government to play.

Preceding the final panel discussion, Victor Palmieri, president of a successful workout firm, The Palmieri Company, summarized the message he took away from the day-long conference to start the discussion off. "What I heard was that the failure of our housing programs is evidenced by the data" showing rising concentrations of urban poor in America. Palmieri was referring to research findings presented to the conference by John D. Kasarda of the University of North Carolina at Chapel Hill. Kasarda's study showed that "almost one in five residents of large cities lives in poverty, a number that grew by almost 2 million to a total of 9.4 million from 1970 to 1990.

But Palmieri asked the panelists whether it is really a failure of housing programs, or "is it failure at a deeper level--failure in society. We are asking our housing programs to make up for a social deficit." In weighing this question, he said we ought to "think about the drug economy and what it means to youth making rational choices between |potential income from drug enterprises~ versus the minimum wage."

Palmieri, who was one of the key members of the Kerner Commission 25 years ago that chronicled the extent of racial division in America, added that the problems in inner-city, low-income housing are also tied to severe crime. He said, "We ought to think about the complete breakdown of our criminal justice system." And just to keep the discussion light, he added, "If you think things are bad now, wait and see what happens. There now exists a global system that spits out great wealth on one end and great poverty on the other."

This broader economic theme of the current failure of our free-enterprise system to create new jobs to pair up with classes seeking to rise the social ladder in this country, was echoed many times in the discussion. Tony Downs, of the Brookings Institution, who along with Palmieri helped to pen the final report of the Kerner Commission, wrote a book about the Kerner Commission findings called Opening Up the Suburbs. Downs says it's the concentration of the urban poor in huge high-rise dense living arrangements that is partially the root of the problem. Downs, a panelist, told conference attendees: "Until we do something about deconcentrating the 10 million who live in areas of extreme poverty" we are not going to be able to make much headway in solving the housing problem for these people.

Downs added that in America, "23 percent of children under the age of six are living in poor conditions."

Another panelist, Robert Woodson, of the National Center for Neighborhood Enterprise, said that "as long as we have people living with disincentives for them to function as independent people, and as long as the people managing the housing projects get more money for the number of vacant units they have, then there's no proprietary interests in solving the problems." Woodson added that as long as the poorest of the poor are taken care of by the government in so many ways as long as they remain in poverty--by programs such as Legal Aid, government subsidized housing, Medicaid and food stamps--he said they feel no incentive to leave that condition. He pointed out as positive alternatives, housing projects where people who lived in the units were put in control of security and maintenance and began to feel a real stake in their neighborhoods.

Baltimore Mayor Kurt Schmoke, a panelist, said the inner-city problems "are not just a policy problem but an attitude problem at the federal level." He said that in this country "far too many people view cities as massive shelters for the poor versus massive places of opportunity." He added, "A lot of my colleagues are going to think this is heresy, but if you asked me today if I had the choice of getting a massive amount of new money from the feds or regulatory relief over the next four years, I'd take the regulatory relief." By the regulatory relief the mayor explained he was referring to being free from all the red tape that comes with getting federal money under certain programs. He said, "We are not allowed to move money around and target it more carefully" to areas of need within a given city.

Schmoke cited an example of what he meant by the strings tied to getting housing money from the federal government. He said Baltimore got "a lot of money from the federal government to renovate high-rise buildings and we said to them, 'How about if we put the money into neighborhoods and renovate vacant housing and tear down old buildings that are doing nothing but breeding antisocial behavior?' We got a 'no' from the feds. We also had banks who wouldn't lend to help renovate properties and restore neighborhoods. But we had a little chat in City Hall with the bankers and they got religion." Schmoke says that getting "the attitude changes" down at those local lending offices made a difference in unleashing some needed funding.

Another panelist, Vincent Lane, an official with the Chicago Housing Authority, said this: "We have two housing systems in this country." We've got the public housing system for the very poor and then we have the private-sector housing system for modest-to-high-income people. Lane said, "I think that was a mistake. There is a proliferation of these public housing authorities that take care of nothing but poor people." Lane observed that "public housing used to work 40 years ago" when people would start off life with little money and then work their way up the social ladder and create better lives for their families.

Now, he says, "The attitudes of our Congress and legislators is that they think we are housing people who are lazy and shiftless." Lane observed that people in Congress are creatures of their constituents and they are bound to spend money in ways the voters think it's well spent. "We've got to convince |for example~ the farmer that the money is being well spent."

Chester Hartman, of the Poverty and Race Research Action Council, another panelist, said: "The basic issue is there is an enormous gap between what housing costs and what people make in this country. It's a multi-multi-million-dollar gap."

But Mayor Schmoke says that the urgency of the domestic housing crisis has to be put higher on the government agenda. "We need to define this as a matter of national security--the enemy within."

The issue of security in housing projects in urban areas came up and Schmoke said that the issue of crime has soared to the top of the agenda in his city. "We are stuck with two national policies that are so disastrous: national policy on handguns and the war on drugs." Schmoke said, "I think our national drug policy is creating more problems than it's solving."

Lane said in Chicago public housing, all visitors have to sign in at security desks. He said he spends $62 million yearly on security.

Mayor Schmoke summed up the discussion saying, "There is a love/hate relationship between citizens and the cities. And the hate seems to be winning out. We have to have attitudes that value the cities amongst our officials in Washington."
COPYRIGHT 1993 Mortgage Bankers Association of America
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Author:Butler, Jeff
Publication:Mortgage Banking
Date:Aug 1, 1993
Words:1407
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