Community Capitalism: How Housing Advocates, the Private Sector, and Government Forged New Low-Income Housing Policy, 1968–1996

Journal of Policy History

Volumn 18, Issue 2, 2006, Pages 167-204

  Erickson, David J ^a  

^a NONE

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EID: 34347231117     PISSN: 08980306     EISSN: 15284190     Source Type: Journal    
DOI: 10.1353/jph.2006.0003     Document Type: Article

References (139)

1. Katherine O. Reagan and John M. Quigley, “Federal Policy and the Rise of Nonprofit Housing Providers,” Journal of Housing Research 11, no. 2 (2000): 305.
2. Measured in 1993 dollars, the median monthly gross rents paid by poor households living in unsubsidized housing jumped from #x0024;366 in 1974 to #x0024;408 in 1993. Meanwhile, the number of low-cost apartments had dwindled, many of them lost to the urban-renewal bulldozer, condominium conversion, and gentrification. Between 1973 and 1983, the number of unsubsidized low-rent apartments (#x0024;300 a month in 1993 dollars) fell from 5.1 million to 3.6 million; by 1993, the number had fallen to 2.9 million. At the same time, the number of families in poverty increased significantly. Peter Dreier, “The New Politics of Housing: How to Rebuild the Constituency for a Progressive Federal Housing Policy,” Journal of the American Planning Association 63, no. 1 (Winter 1997): 34.
3. U.S. General Accounting Office. 1997. Tax Credits: Opportunities to Improve Oversight of the Low-Income Housing Program. GAO/GGD/RCED-97-55, Washington, D.C. 1999, 5.
4. Charles J. Orlebeke, “The Evolution of Low-Income Housing Policy, 1949 to 1999,” Housing Policy Debate (2000): 11, 2, 495.
5. Ira Katznelson, “Was the Great Society a Lost Opportunity?” in The Rise and Fall of the New Deal Order, 1930-1980, ed. Steve Fraser and Gary Gerstle (Princeton, 1989).
6. Katznelson, for example, argues that the pro-welfare-state Democratic party lost ground in the 1970s because Keynesian fiscal policy exacerbated the stagflation of that time and urban political machines withered, losing their ability to incorporate white ethnics into the party, while the white South defected (204). Thomas Byrne Edsall with Mary Edsall, Chain Reaction: The Impact of Race, Rights, and Taxes on American Politics (New York, 1991), 4.
7. For the Edsalls, the labor-dominated Democratic party reached a political high point with the Civil Rights Act of 1964, but the increased focus on minority rights pushed them too far to the left, while the Republicans moved to the political center. However, Arnold Hirsch in Making the Second Ghetto: Race and Housing in Chicago, 1940-1960 (Chicago, 1998) and
8. Thomas Sugrue in The Origins of the Urban Crisis: Race and Inequality In Postwar Detroit (Princeton, 1996) argue convincingly that the divisions in the liberal ranks were already apparent before the civil rights movement. There are many books that make the claim that the welfare state has withered since the 1970s, including
9. Edward and Kim McQuiad Berkowitz, Creating the Welfare State: The Political Economy of Twentieth-Century Reform, 2nd ed. (New York, 1988)
10. Daniel Levine, Poverty and Society: The Growth of the American Welfare State in International Comparison (New Brunswick, N.J. 1988)
11. Michael Katz, In the Shadow of the Poorhouse: A Social History of Welfare in America (New York, 1986)
12. James T. Patterson, America's Struggle Against Poverty, 1900-1985 (Cambridge, Mass. 1986), and
13. Walter I. Trattner, From Poor Law to Welfare State: A History of Social Welfare in America, 4th ed. (New York, 1989).
14. Critics shrank the welfare state in favor of allowing markets to have a greater sway in distributing goods, according to Michael Katz in The Price of Citizenship (New York, 2002) and
15. Neil Gilbert in Transformation of the Welfare State: The Silent Surrender of Public Responsibility (New York, 2002).
16. To Katz, this development starkly contrasts British sociologist T. H. Marshall's classic 1950 characterization of the welfare state as “the subordination of market price to social justice.” Katz writes, “While the tension between capitalism and equality remains as powerful as ever, today it is social justice that is subordinate to market price” (1).
17. Jason DeParle, “Slamming the Door,” New York Times Magazine, 20 October 1996, 52
18. and the Washington Post, “Saving HUD: One Department's Risky Strategy for Radical Change,” 6 February 1995, A4.
19. Low-Income Housing Tax Credit: Hearing Before the Subcommittee on Select Revenue Measures of the Committee on Ways and Means, House of Representatives, 101 Cong. 23 May 1989 (Washington, D.C. 1989), 6.
20. The federal budget numbers also challenge the standard story. Direct expenditure spending did dip in the 1980s (see the second chart in the text) and some programs– especially for the poor–have been eliminated or scaled back since the Great Society. But overall tax expenditures and direct expenditures continued to grow throughout the 1980s, albeit at a slower rate than the preceding twenty years. (See Christopher Howard, The Hidden Welfare State: Tax Expenditures and Social Policy in the United States [Princeton, 1997], 35.)
21. Lester M. Salamon, ed. The Tools of Government: A Guide to the New Governance (New York, 2002)
22. Steven Rathgeb Smith and Michael Lipsky, Nonprofits for Hire: The Welfare State in the Age of Contracting (Cambridge, Mass. 1993)
23. Jacob Hacker, The Divided Welfare State: The Battle over Public and Private Social Benefits in the United States (New York, 2002)
24. Jennifer Klein, For All These Rights: Business, Labor, and the Shaping of America's Public-Private Welfare State (Princeton, 2003)
25. Christopher Howard, The Hidden Welfare State
26. Julian Zelizer, Taxing America: Wilbur D. Mills, Congress, and the State, 1945-1975 (New York, 1998).
27. Walter W. Powell, “Neither Market nor Hierarchy: Network Forms of Organization,” Research in Organizational Behavior 12:295–336, 303.
28. Zelizer, Taxing America, 8.
29. A Decent Home: The Report of the President's Committee on Urban Housing, Edgar F. Kaiser, chair (Washington, D.C. 1969), 1.
30. A Decent Home: The Report of the President's Committee on Urban Housing 3.
31. J. Orelebeke, “The Evolution of Low-Income Housing Policy, 1949-1999,” 495.
32. The Evolution of Low-Income Housing Policy, 1949-1999 5.
33. The Evolution of Low-Income Housing Policy, 1949-1999
34. The Evolution of Low-Income Housing Policy, 1949-1999 2.
35. The Evolution of Low-Income Housing Policy, 1949-1999 22-23.
36. It assumed an annual GDP growth rate of 5.5 percent with a 4 percent unemployment rate. The analysts admitted that the models did not hold if there were problems of inflation. In fact, the ten-year period from 1969 to 1979 had an average level of unemployment rate of 6 percent and an average annual inflation of 7 percent. Calculated from information from the U.S. Bureau of Labor Statistics Web site: http:// www.bls.gov/cps/prev_yrs.htm# content (visited 3/25/03). John J. McCusker, “What Was the Inflation Rate Then?” Economic History Services, 2001, URL : http://www.eh.net/hmit/inflation/ (visited 3/25/03).
37. Economic growth was sluggish, too. From 1970 to 1976, the growth rate for real GDP was 2.3 percent, picking up by the end of the decade with a growth rate of 4.7 percent up to 1979. Louis Johnston and Samuel H. Williamson, “The Annual Real and Nominal GDP for the United States, 1789-Present,” Economic History Services, April 2002, URL: http://www.eh.net/hmit/gdp/ (visited 3/25/03).
38. Orelebeke, “The Evolution of Low-Income Housing Policy, 1949-1999,” 496.
39. Oscar Newman, Defensible Space: Crime Prevention Through Urban Design (New York, 1973).
40. Roger Biles, “Public Housing and the Postwar Urban Renaissance, 1949-1973,” in From Tenements to the Taylor Homes: In Search of an Urban Housing Policy in Twentieth- Century America, ed. John F. Bauman, Roger Biles, and Kristin M. Szylvian (University Park: The Pennsylvania State University Press), 152.
41. Rachel G. Bratt, “Public Housing: The Controversy and Contribution,” in Critical Perspectives on Housing, ed. Rachel G. Bratt, Chester Hartman, and Ann Meyerson (Philadelphia, 1986), 335-61.
42. See also Alex von Hoffman, “Why They Built Pruitt-Igoe,” in From Tenements to the Taylor Homes, ed. Bauman, Biles, and Szylvian, and
43. Henderson, “Tarred with the Exceptional Image,” American Studies 36 (Spring 1996): 31-52.
44. For a review of the problems in federal housing programs in the early 1970s, see John McCaughry, “The Troubled Dream: The Life and Times of Section 235 of the National Housing Act,” Loyolya University Law Journal 6 (Winter 1975): 1-45.
45. HUD's first secretary, Dr. Robert C. Weaver, who was president of the National Committee Against Discrimination in Housing, agreed with the idea of decentralizing resources and decision making to the state and local level provided there were safeguards against abuses. “No one can, I think, categorically say it is going to work. But heavens, if you have bad administration, even with a great degree of Federal supervision, you can have some pretty bad results, as we have seen.” U.S. Congress, House. Housing and Community Development Legislation–1973. Hearings Before the Subcommittee on Housing of the Committee on Banking and Currency, House of Representatives, 93d Cong. 1st sess. part 1 (Washington, D.C. 1973), 455.
46. When an apartment was built, it was often not worth having, according to Lindsay, because the city had to meet certain federal construction guidelines while constrained on building costs. “We in New York City, as you well know, over the years have cut corners, had inferior designs on all kinds of things to get in under cost limitations.” U.S. Congress, House. Housing and Community Development Legislation–1973, 481.
47. Housing and Community Development Legislation–1973 1199 and 1201.
48. Housing and Community Development Legislation–1973 1723.
49. The Report of the President's Commission on Housing, William F. McKenna, chair (Washington, D.C. 1982).
50. McKenna Report, xvii.
51. McKenna Report xviii.
52. GAO, Reports and Testimony: April 1990 (Washington, D.C. 1991), 17.
53. (Citing “Resolving the Savings and Loan Crisis: Billions More and Additional Reforms Needed,” by Charles A. Bowsher, comptroller general of the United States, before the Senate Committee on Banking, Housing and Urban Affairs. GAO/T-AFMD-90-15, 6 April 1990.)
54. McKenna Report, xvi.
55. McKenna Report 17.
56. McKenna Report 223.
57. McKenna Report 107.
58. McKenna Report 171.
59. Steve Blakely, “House Panel OKs #x0024;17.7 Billion Housing Plan,” Congressional Quarterly, 2 May 1987, 843. This often-cited drop in appropriations could be misleading. Actual outlays did not drop as dramatically because of appropriations from prior years.
60. A Decent Place to Live: The Report of the National Housing Task Force, chaired by James Rouse and David O. Maxwell (Washington D.C. 1988), ii.
61. Also important in the Task Force's evaluation was a series of twenty draft reports prepared by scholars and practitioners under the direction of Professors Langley C. Keyes and Denise DiPasquale of the Massachusetts Institute of Technology. Each of the papers was examined and several authors appeared as speakers before the task force. That collection of papers was published as Building Foundations: Housing and Federal Policy, ed. Denise DiPasquale and Langley C. Keyes (Philadelphia, 1990).
62. Maxwell/Rouse Report, 10.
63. Maxwell/Rouse Report 11.
64. Maxwell/Rouse Report 19.
65. Maxwell/Rouse Report 24.
66. Maxwell/Rouse Report 28.
67. Maxwell/Rouse Report 19.
68. Michael A. Stegman, “The Fall and Rise of Public Housing,” Regulation 25, no. 2 (2002): 68.
69. Julie Rovner, Macon Morehouse, and Phil Kuntz, “Bush's Social Policy: Big Ideas, Little Money,” Congressional Quarterly, 10 December 1988, 3459.
70. Senator Kit Bond (R-Mo.), Congressional Record Senate–S8198.
71. Even though my research of the Senate debates over tax incentives for housing seemed to reveal a tremendous amount of ignorance in how tax expenditure worked, there were clearly congressional members who knew exactly what they were (see Christopher Howard, The Hidden Welfare State).
72. Skip Kaltenheuser, “Housing's Moment on Capitol Hill,” Mortgage Banking, March 1990, 29.
73. Jill Zuckman, “PROVISIONS: Housing Authorizations,” Congressional Quarterly, 8 December 1990, 4091.
74. Congressional Record Senate–S13253.
75. Senator Robert Kasten (R-Wis.), in Congressional Record Senate–S13253 S15942.
76. Senator Connie Mack (R-Fla.), in Congressional Record Senate–S13253 S8881.
77. Senator Charles Grassley (R-Ia.), Senate Hearings for the National Affordable Housing Act (Senate–27 June 1990), Congressional Record Senate–S8851.
78. Senator Rudy Boschwitz (R-Minn.), Congressional Record Senate–S8852.
79. Jack Kemp–Senate Hearing: Hope: Homeownership And Opportunity For People Everywhere (Senate–November 17, 1989) Congressional Record Senate–S15943.
80. Hearing: Hope: Homeownership And Opportunity For People Everywhere S15944.
81. Senator Christopher Dodd (D-Conn.), Congressional Record Senate–S13253.
82. Senator Paul Sarbanes (D-Md.), Congressional Record Senate–S13254.
83. Joe Davidson, “House Clears Bill That Would Result in Big Boost in U.S. Housing Support,” Wall Street Journal, 26 October 1990, A16.
84. Skip Kaltenheuser, “Housing's Moment on Capitol Hill,” Mortgage Banking, March 1990, 29.
85. Interview with Barry Zigas, 12 August 2005. On TRA 86, see Cathie Martin, Shifting the Burden: The Struggle over Growth and Corporate Taxation (Chicago, 1991)
86. Shifting the Burden: The Struggle over Growth and Corporate Taxation
87. Iver Peterson, “Prospects Rise for Housing Legislation: Federal Measure Seeks to Help Home Buyers,” New York Times, 11 June 1989, R1.
88. New York Times, editorial, “Best Vehicle for Affordable Housing,” 18 November 1989, A26.
89. Richard Cravatts, Wall Street Journal, 18 January 1989, A16.
90. Low-Income Housing Tax Credit: Hearing Before the Subcommittee on Select Revenue Measures of the Committee on Ways and Means, House of Representatives, 101 Cong. 23 May 1989 (Washington, D.C. 1989).
91. Low-Income Housing Tax Credit: Hearing Before the Subcommittee on Select Revenue Measures of the Committee on Ways and Means, House of Representatives 6.
92. Low-Income Housing Tax Credit: Hearing Before the Subcommittee on Select Revenue Measures of the Committee on Ways and Means, House of Representatives 177.
93. Low-Income Housing Tax Credit: Hearing Before the Subcommittee on Select Revenue Measures of the Committee on Ways and Means, House of Representatives 235.
94. Julian A. McQuiston, “Tax Credits Fuel Growth of Affordable Housing,” Journal of Housing and Community Development 53, no. 6 (November-December 1996): 19.
95. Mitchell Pacelle, “An Expected Bush Veto of Tax Bill Poses Threat to Building Low-Income Rentals,” Wall Street Journal, 19 October 1992, C17.
96. Jean L. Cummings and Denise DiPasquale, “The Low-Income Housing Tax Credit: An Analysis of the First Ten Years,” Housing Policy Debate 10, no. 2 (1999): 294.
97. Paul Grogan, “Points of Urban Light,” Washington Post, 19 July 1992, C3.
98. Shelterforce 14 (January-February 1992): 12.
99. Chester Hartman, “Feeding the Sparrows by Feeding the Horses” Shelterforce 12, 14.
100. Paul S. Grogan and Benson F. Roberts, “Good Policy, Good Politics,” Shelterforce 13.
101. Shelterforce
102. Shelterforce
103. Shelterforce, 14, 15.
104. Patrick Clancy, “Tax Incentives and Federal Housing Programs: Proposed Principles for the 1990s,” MIT Housing Policy Project (Cambridge, Mass.: MIT Center for Real Estate Development, 1988), 9.
105. Extension of Remarks, Thursday, 3 January 1991, 102d Cong. 1st sess. 137 Congressional Record E 58, 137, no. 1.
106. Extension of Remarks, Friday, 1 November 1991, 102d Cong. 1st sess. 137 Congressional Record E 3640.
107. Nick Ravo, “Tax-Credit Program on Borrowed Time,” 24 November 1991, New York Times, R3.
108. New York Times
109. Senate, Wednesday, 22 July 1992, 102d Cong. 2d sess. 138 Congressional Record S 10070, 138, no. 104.
110. Los Angeles Times, editorial, “Housing Credit Extension Is a Must–And Riots Tell Us Why,” 2 June 1992.
111. A. R. Shashaty, “Archer VB. Clinton: The Rematch.” Affordable Housing Finance 5 (May-June 1997): 4.
112. Cited in Steven Rathgeb Smith, Nonprofits and Government: Collaboration and Conflict, ed. Elizabeth T. Boris and C. Eugene Steuerle (Washington, D.C. 1999), 202-3.
113. McQuiston, “Tax Credits Fuel Growth of Affordable Housing,” 14–19.
114. “New Republican Caucus Formed to Promote Affordable Housing,” National Real Estate Investor 38, no. 13 (December 1996): 74.
115. National Real Estate Investor
116. Jaret Seiberg, “Bankers Join in Bid to Rescue Low-Income Housing Credits: Series 1,” American Banker 160, no. 243 (19 December 1995): 1.
117. American Banker
118. Seiberg, 1–“The San Francisco-based Giant Announced a #x0024;100 Million Tax Credit Investment in Early December, Raising Its Total Investment to #x0024;316 Million.”
119. 1–“The San Francisco-based Giant Announced a #x0024;100 Million Tax Credit Investment in Early December
120. David Rogers and Bruce Ingersoll, “Two GOP Insurgents for House Seats in the South Cash in on Their Ties to Patrons in Washington,” Wall Street Journal, 1 November 1996, A14.
121. Barry G. Jacobs, “Archer Abandons Plan to Sunset LIHTC,” National Real Estate Investor 39, no. 8 (August 1997): 30.
122. McQuiston, “Tax Credits Fuel Growth of Affordable Housing,” 19.
123. Upendra Mishra, “Using Tax-Exempt Bonds to Finance Affordable Housing,” National Real Estate Investor 39, no. 6 (June 1997): 64.
124. Coming of Age: Trends and Achievements of Community-Based Development Organizations, 4th National Community Development Census (Washington, D.C. 1999), 5.
125. Coming of Age: Trends and Achievements of Community-Based Development Organizations 11.
126. Coming of Age: Trends and Achievements of Community-Based Development Organizations 16.
127. Edward Goetz, “Local Government Support for Nonprofit Housing: A Survey of U.S. Cities,” Urban Affairs Quarterly 27, no. 4 (1992): 420-35.
128. Ian Donald Terner and Thomas B. Cook, “New Directions for Federal Housing Policy: The Role of the States,” Building Foundations: Housing and Federal Policy, ed. DiPasquale and Keyes, 115.
129. Avis C. Vidal, “Can Community Development Re-invent Itself?” Journal of the American Planning Association 63, no. 4 (Autumn 1997): 429-38.
130. David Bauman, “Budget–Accounting for the Deficit,” National Journal, 14 June 2004, 3.
131. Jonathan Weisman, “Bush Plans Sharp Cuts in HUD Community Efforts,” the Washington Post, 14 January 2005, section A01.
132. The coalition included the U.S. Conference of Mayors, the National League of Cities, the National Association of Counties, the Association of Housing and Redevelopment Officials, the National Community Development Association, and the Local Initiatives Support Corporation. U.S. Newswire, 8 February 2005, “Mayors, County Officials, and Business Leaders Denounce Elimination of Community Development Block Grant (CDBG)” (WASHINGTON, 8 February 2005 (U.S. Newswire via COMTEX) http://www.comtexnews.com (visited 11 February 2005).
133. Robert D. Putnam, Bowling Alone: The Collapse and Revival of American Community [New York, 2000].
134. U.S. Department of Housing and Urban Development, “HUD: Back in Business. Fiscal Year 2001 Budget Summary,” Washington, D.C.
135. cited in Rachel G. Bratt, Housing for Very Low-Income Households: The Record of President Clinton, 1993-2000, Joint Center for Housing Studies, Harvard University, October 2002.
136. Cummings and DiPasquale, “The Low-Income Housing Tax Credit,” 272.
137. Harold Wilensky, Rich Democracies: Political Economy, Public Policy, and Performance (Berkeley and Los Angeles, 2002), 608.
138. David M. Kennedy, Freedom from Fear: The American People in Depression and War, 1929-1945 (New York, 1999), 469.
139. David Harvey, The Conditions of Post Modernity: An Inquiry into the Origins of Cultural Change (Malden, Mass. 2000), 39.