Like most cities, Oklahoma City has some really nice areas, some areas which are okay, and some areas you'd just as soon avoid. Since the nature of any particular area is subject to change — and since the weather was less horrendous than usual — I spent part of this weekend cruising at low speeds through some of this town's more heinous areas, trying to get a feel for how they got that way and what can be done about it.

Conventional wisdom holds that there are two kinds of residents: those who want to live at point X, and those who have no choice but to live at point X. It can probably be assumed, in the absence of de jure segregation, that the latter condition is mostly a function of economics; I could theoretically choose to live in, say, a spiffy new subdivision on the edge of town, but I couldn't possibly pony up the price of entry. At every price point, there is someone who can afford it, and someone else who can't. I imagine it wouldn't be difficult to find somebody who couldn't afford to live in my neighborhood.

But if affordable housing is the catch, what's the solution? A group called the National Low Income Housing Coalition, based in (of course) Washington, DC, speculates that to be able to afford a "fair market" two-bedroom rental in Oklahoma, a person must earn $9.81 an hour, or just over $20,000 a year. By contemporary standards, this is fairly cheap; the national average is $15.21, and Massachusetts or California residents have to pull down over $20 an hour. The "fair market" rental is, of course, determined by the Federal government, and in Oklahoma City as of last summer, it was $561 a month. (By contrast, it was $1775 in San Francisco and $1419 in metro Boston.)

Still, a whole lot of people don't earn anywhere near $9.81 an hour. (Most of my life, I didn't.) Somebody making minimum wage isn't going to come close to being able to come up with $561 a month for rent. (My house payment is not much more than that, and I'm getting by, but only just.) Since it's a safe bet that the minimum wage isn't going to be raised to ten bucks anytime soon, the government's Housing Choice Vouchers, known familiarly as "Section 8", attempt to fill the gap, and local public-housing authorities administer the program, which has the effect, intentional or otherwise, of doubling the available bureaucracy without necessarily increasing the availability of housing, since landlords are under no obligation to accept Section 8 tenants and there is a belief among many, landlords included, that Section 8 residents are, for various reasons relating to property damage and other misdeeds, just about the least desirable.

Part of the problem, I suspect, is that the government's attempt to establish a "Fair Market" rent creates its own form of market distortion, and the fact that highly-desirable properties command far higher rents than the government considers "fair" would tend to support this premise. This suggests that government involvement in housing might actually be more trouble than it's worth, and Howard Husock of the American Enterprise Institute has said almost exactly that:

Neighborhoods are not random collections of structures and people. They are roughly organized on the basis of the income and education levels of residents. This does not mean, of course, that everyone in a given neighborhood or census tract has the same income, only that income levels are grouped within a fairly narrow range. But the housing ladder is also a social system in which families strive to improve their economic position — to climb the ladder to a higher rung, or, at the least, to maintain their home (and hope their neighbors do the same) so they do not fall. There is no city in the nation (perhaps the world) in which neighborhoods are not stratified along income lines.

This social system matters a great deal at the lower rungs of the housing ladder. In the pre-subsidized housing era, poorer neighborhoods, despite being derided as slums, were places where many small property owners occupied their own inexpensive homes and rented out apartments or rooms on the side. Even tenants rented rooms to boarders. Owners had an incentive to maintain their property (they often lived on the premises or nearby); tenants often assisted in repairs and maintenance in order to keep their rents down. Property owners hoped to realize the value of their investment and move up the ladder to a better neighborhood; tenants hoped to become property owners.

Public housing and "assisted" housing have turned this chain of social progress on its head. Newly-built public housing projects draw tenants away from private landlords by offering amenities which tenants could not otherwise afford. Surrounding neighborhoods decline, while public housing lacks the self-sustaining qualities of the private market because no one has an incentive to maintain it. Even when subsidized housing is privately owned, there have been problems: Initially, owners were told they could place their units built with subsidies on the open market after a fixed period of time. In recent years, Congress has been reluctant to allow this, and has instead allocated millions of dollars to private owners to induce them to keep their units as "affordable" public shelters. Similar bailouts are likely for a new generation of subsidized apartment buildings now being run by non-profit community development corporations — who will not be able to maintain both property standards and "affordability" absent subsidies.

Giving out vouchers allows the government to bypass the hard costs of building and maintaining apartment buildings publicly. But these vouchers can do great damage to the social fabric. They generally catapult people to a neighborhood better than what they could otherwise afford, thus sending a message at odds with the prevailing (if seldom stated) view that one should work one's way up the ladder. Even in poor neighborhoods, vouchers break the umbilical relationship between tenant and landlord. Property owners need not worry as much about the quality of their tenants because the rent will be paid by Washington (via the local housing authority). Conversely, tenants — who pay only 30 percent of the full rent — lack leverage in their dealings with landlords.

At first glance, this seems to be the rant of an uncompassionate conservative. But exactly what's wrong with it? Surely it has to be better to own a $30,000 house, however crummy, than to pay $400 a month in rent and own nothing. (And a quick search of Realtor.com shows that houses in the neighborhoods I visited often sell for that price or less; they're not by any means the spiffiest houses in town, but the fact that they're still standing after 50 or 60 years attests to some sort of stamina.) In retrospect, I probably would have been better off buying one of these little boxes years ago and then trading up as my situation improved, and certainly I'm not the only person who's ever been in this position.

"Aha!" come the voices. "I'm all right, Jack, keep your hands off my stack — you got yours, now you want to make damn sure nobody else gets theirs." Not so. In the first place, what I got isn't a lot, except in the most literal sense: a lot, approximately 10,000 square feet, with a house sitting in the middle of it. And if I deserve it, and I think I do, plenty of other people should deserve it as well. If killing housing subsidies will change the market enough to make it possible for them to be able to own their own homes, then let those subsidies be killed, and let no tears be shed at their burial.

The Vent

#377
16 February 2004

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