Friday, August 26, 2011

A New Civil Right: The Right to Raise Hell in Section 8 Rental Housing in Formerly Nice Neighborhoods: Another Failed Government Housing Policy

"Section 8 rental subsidies have long been one of the most controversial federal social programs. The Department of Housing and Urban Development (HUD) under the Obama administration is making a troubled program worse.

In the 1990s, the feds were embarrassed by skyrocketing crime rates in public housing—up to 10 times the national average, according to HUD studies and many newspaper reports. The government's response was to hand out vouchers to residents of the projects, dispersing them to safer and more upscale locales.

Section 8's budget soared to $19 billion this year from $7 billion in 1994. HUD now picks up the rent for more than two million households nationwide; tenants pay 30% of their income toward rent and utilities while the feds pay the rest.

But the dispersal of public housing residents to quieter neighborhoods has failed to weed out the criminal element that made life miserable for most residents of the projects. "Homicide was simply moved to a new location, not eliminated," concluded University of Louisville criminologist Geetha Suresh in a 2009 article in Homicide Studies. In Louisville, Memphis, and other cities, violent crime skyrocketed in neighborhoods where Section 8 recipients resettled.

Dubuque, Iowa, is struggling with an influx of Section 8 recipients from Chicago housing projects. Section 8 concentrations account for 11 of 13 local violent crime hot spots. Though Section 8 residents account for only 5% of the local population, more than 20% of arrestees resided at Section 8 addresses. Dubuque's city government responded by trimming the size of the local Section 8 program. HUD retaliated by launching a "civil rights compliance review" of the program.

HUD seems far more enthusiastic about cracking down on localities than on troublesome Section 8 recipients who make life miserable for the rest of the community. And because Section 8 recipients in some areas are mostly black or Latino, almost any enforcement effort can be denounced as discriminatory.

Remarkably, HUD seems bent on creating a new civil right—the right to raise hell in subsidized housing in nice neighborhoods. Earlier this year, the agency decreed that Section 8 tenants who are evicted because of domestic violence incidents may sue for discrimination under the Fair Housing Act because women are "the overwhelming majority of domestic violence victims." In essence, this gives troublesome tenants a federal trump card to play against landlords who seek to preserve the peace and protect other renters."

~James Bovard writing in the WSJ 

MP: In hindsight, we now know that the political obsession with homeownership created a housing bubble, mortgage meltdown, and financial crisis, which destroyed many formerly good, stable neighborhoods.  We now have another example of failed government policy intended to create affordable housing, this time for renters, with government-subsidized Section 8 rental housing.  

With one set of public policies, the political obsession with homeownership turned good renters into bad homeowners and created a housing, mortgage and financial crisis, and with another set of policies to create affordable rental housing, the political elite turned bad renters in bad neighborhoods into bad renters in formerly good neighborhoods, and helped destroy even more neighborhoods in America. 

In hindsight, isn't it obvious that we would be better off today if the federal government had never intervened in the residential housing market, the mortgage market, or the rental market?  Then add in the distortions and inefficiencies of local rent control laws in NYC and elsewhere, and you have a strong case that government intervention in housing over the last 50 years has done significant damage to the housing market and economy.  I think it would be almost impossible to argue that government housing policies have created net benefits for America over the last half-century, and very easy to make the case that government policy has made our housing markets and neighborhoods much worse off.

19 Comments:

At 8/26/2011 8:19 PM, Blogger Paul said...

Obviously, the answer is to raise Warren buffet's taxes.

 
At 8/26/2011 8:26 PM, Blogger Hydra said...

Nice tirade.

 
At 8/26/2011 9:39 PM, Blogger bix1951 said...

no landlord should ever rent to section 8 tenants
it is a big mistake
and will be regretted
Only greed induces landlords to do this because they have bad units that are hard to rent to mainstream people

 
At 8/26/2011 10:29 PM, Blogger juandos said...

Maybe hydra could use some section 8 folks at his place...

What do you think hydra, one of those 'necessary social programs' you might be willing to partake in?

 
At 8/26/2011 11:11 PM, Blogger Don Culo said...

"MP: In hindsight, we now know that the political obsession with homeownerhip created a housing bubble, mortgage meltdown, and financial crisis, which destroyed many formerly good, stable neighborhoods. We now have another example of failed government policy intended to create affordable housing, this time for renters, with government-subsidized Section 8 rental housing."


I'm glad we are no longer blaming the innocent victims.... financial institutions such as investment banks and hedge funds, who were not subject to the same regulations as commercial banks for the housing/financial crisis.

The investment banks were victims of shady section 8 ghetto people forcing wall street to give them home loans which would not be repayed.

 
At 8/26/2011 11:43 PM, Blogger juandos said...

"I'm glad we are no longer blaming the innocent victims.... financial institutions such as investment banks and hedge funds, who were not subject to the same regulations as commercial banks for the housing/financial crisis"...

Sarcasm?

If so you might want to watch this: PJTV: The Government Caused the Financial Crisis, Not Greed

 
At 8/27/2011 5:26 AM, Blogger Larry G said...

just looking locally.... the foreclosures are not on section 8 housing nor even in "poor" neighborhoods...

the foreclosures are in recently-built upscale subdivisions....

want to see something interesting that I've noticed in CP posts:

put the phrase "Raising Hell in Subsidized Housing"

and see what kind of websites you get....

reads like a Who's Who of right-leaning blogs, eh?

 
At 8/27/2011 9:46 AM, Blogger Methinks said...

Not to mention, when public housing was built, more units were torn down to build them than units built. So, the number of housing units decreased with the proliferation of public housing.


The investment banks were victims of shady section 8 ghetto people forcing wall street to give them home loans which would not be repayed


The investment banks were guilty of following the incentives set up for them by government. Incentives that do not exist in nature and can only be concocted by an entity with the power and the willingness to rob hundreds of millions of people at gunpoint to subsidize the its cronies. I notice you mentioned nothing about the people defrauding the system by lying on their applications. I guess non-bankers can't be guilty of greed and other vices in your well rounded and fully thought through opinion? The frauds were bailed out at my expense too.

 
At 8/27/2011 9:55 AM, Blogger juandos said...

"reads like a Who's Who of right-leaning blogs, eh?"...

Yeah you're right Larry G, don't to befuddle the realities by the facts now do we?

 
At 8/27/2011 11:24 AM, Blogger Larry G said...

I call it the "herd".

:-)

 
At 8/27/2011 12:27 PM, Blogger Ron H. said...

"just looking locally.... the foreclosures are not on section 8 housing nor even in "poor" neighborhoods...

the foreclosures are in recently-built upscale subdivisions....
"

It would appear that you are referring to single family housing here, so I'm really curious: how can you tell when a single family dwelling is rented to a section 8 tenant?

You do understand the difference between public housing and section 8 rental agreements, right?

 
At 8/27/2011 12:42 PM, Blogger Larry G said...

foreclosures are rented guy.. have you noticed?

 
At 8/27/2011 1:30 PM, Blogger juandos said...

" how can you tell when a single family dwelling is rented to a section 8 tenant?"...

Eight kids by eight different guys?...:-)

 
At 8/27/2011 1:53 PM, Blogger Ron H. said...

"foreclosures are rented guy.. have you noticed?"

I'll take a chance here, that this is meant as a response to my previous comment. It's hard to tell, as it has no particular meaning, and doesn't even close to answering my question.

You will have to do better, Lar, explain how you can tell when a single family residence is occupied by a section 8 tenant.

Do you fail to understand section 8, rental, foreclosure, or all of the above?

 
At 8/27/2011 2:08 PM, Blogger Ron H. said...

juandos

"Eight kids by eight different guys?...:-)"

Is that why it's called section 8? Eight x eight. That makes sense.

That's undoubtedly a good indicator, but I doubt that Leftist Larry has that information available to him as he performs a casual survey of foreclosures that he calls "Just looking locally", so it's not clear how he reaches the conclusion he does.

I've asked him for clarification, but he has so far only responded with a meaningless sentence fragment. I'm sure he's working on something better, as we speak.

 
At 8/27/2011 4:37 PM, Blogger Larry G said...

actually around here the redneck paranoia is that 3 or 4 hispanic families will rent a 4-bedroom home.. outbidding the Section 8 folks?

and yes.. foreclosures.. and older homes.. that were never particularly palatial even in their hey days..

and yes.. the solution seems to be to herd them back to projects with 8 foot chain link topped by concertina...

in our area - where the section 8 housing is - if you get caught with a unauthorized person or felon or wanted individual living with you - you will lose your housing....

out you go...

 
At 8/27/2011 6:28 PM, Blogger AIG said...

A lot of landlords refuse to rent to section 8, for good reasons. Perhaps the gov can force some landlords to rent to section 8? Otherwise, why would anyone put themselves in that situation?

As for gov. intervention in housing market, you'd be surprised at the utter stupidity of some people, even "educated" people. There is this absolute moron who sits next to me at work, engineering and MBA degree and all, and yet he is still absolutely oblivious to justify his buying a house with STUDENT LOANS, by saying "well the government wants me to buy a house, because it helps the economy"

How do you argue with stupidity of that magnitude? We have ingrained in the heads of the American public the notion that buying houses is a "benefit to the public", therefore gov. policies to increase home ownership help everyone. Facts be damned.

 
At 8/27/2011 11:32 PM, Blogger W.E. Heasley said...

“….you have a strong case that government intervention in housing over the last 50 years has done significant damage to the housing market and economy“. - Mark Perry

Slightly edited:

….you have a strong case that government intervention [politicos through the mechanism of government] in housing over the last 50 years has done significant damage to the housing market and economy.

 
At 8/28/2011 1:12 AM, Blogger Ron H. said...

"A lot of landlords refuse to rent to section 8, for good reasons. Perhaps the gov can force some landlords to rent to section 8? Otherwise, why would anyone put themselves in that situation?"

I don't know why anyone would want to rent to section 8 these days, either. Years ago I rented to section 8, and at the time, the incentives were better. One of the attractions was the just-like-clockwork payment of 75% of the rent on the 1st of the month by the agency administering the program. Frequent inspections by the agency and requirements that tenants perform to certain standards or lose their eligibility helped also. Each year was a new annual contract if I wished to continue with the program, with a suggested rent increase between of 4-8%. The icing on the cake was that the county, in my area, guaranteed against all damage. Submit your receipts, for repairs after the tenant had moved out, and the county paid.

I stopped offering section 8 when the county stopped offering to pay for damages, apparently in a cost cutting move.

I don't know anyone who now rents to section 8, and I often read in the local news that section 8 tenants sometimes wait more than a year to find eligible housing. go figure. Can you say unintended consequence?

 

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