"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.