YOU ARE HERE: LAT HomeCollections

Housing and End of Subsidies

September 22, 1986

This is in response to the article (Sept. 14), "Elderly Facing Ouster as Rent Subsidies End," by Wendy Leopold and Larry Green.

Imagine that 20 years ago, your uncle gave you the down payment to build an apartment complex, arranged a private loan at a very reduced interest rate, and then sent you a monthly check to cover mortgage and operating costs. Since that time, your only responsibility has been to hold on to the property, and to enjoy the cash flow and tax benefits.

Now two decades later with the mortgage nearly paid off, you can convert the building to condominiums or double the rental income. Remembering the help of dear uncle, you undoubtedly would conclude that he was either very generous or very dotty.

Well, this has been Uncle Sam's way of producing affordable housing over the last 20 years. From the standpoint of private developers, this system has been very generous. From the standpoint of preserving low-cost housing, it has been very dotty.

The article by Leopold and Green described some of the results of these expensive and shortsighted government housing programs. In Chicago, as subsidized apartment units return to the market, 70-year-old women face eviction from their apartments and search for shelter at $283 per month in "less desirable neighborhoods."

In the public-private partnerships created to produce affordable housing, the federal government struck deals with private developers that would embarrass an undergraduate business major. Typically, in a partnership, a balance is reached between the interests of both parties. But by providing all of the funds for housing construction with no long-term requirements for the preservation of affordability, the Department of Housing and Urban Development took its public funds and transformed them into private windfall profits.

The real casualties of these housing programs are residents, like the elderly women in Chicago, who will be losing their homes. Some estimate that displacement from government housing will affect as many as 1 million people.

Ironically, during this period where nearly 3 million Americans are already homeless, government housing programs are expected to increase the number of people on the street. Steps must be taken to protect those who face eviction as subsidized housing returns to the market.



Richman is executive director of Community Corp., a nonprofit housing development corporation.

Los Angeles Times Articles