Two measures passed by the House could lead to a large-scale reduction in the supply of public housing at a time when prospective tenants are now waiting years or even decades in some cities to obtain an apartment, critics of the proposals said this week.
The House, in passing the 1986 housing authorization bill, voted two weeks ago for an amendment introduced by Rep. Jack Kemp (R-N.Y.) to place the nation's 3.1 million public housing units on sale for 25 percent of their market value and approved another sponsored by Rep. Steve Bartlett (R-Tex.) that would halt nearly all construction of new public housing.
Meanwhile, Sen. Phil Gramm (R-Tex.) said he may introduce an amendment to the Senate housing bill after the July 4 congressional recess that would authorize public housing sales. "I would like to get the government out of the housing business," Gramm said in an interview. "If you provide housing for poor people and make it possible for them to own it," there would be less need for public housing.
Critics of the legislation, however, predicted the opposite will happen.
The combination of the two House amendments would be "a disaster," resulting in a "continuing diminution of the public housing stock," said Barry Zigas, president of the National Low-Income Housing Coalition. He said his organization favors homeownership for the poor, "but it is not fair to cannibalize the existing stock" of housing for those who cannot afford to buy homes.
In the debate over low-income ownership, Kemp said the Congressional Research Service has reported 25 percent of current public housing occupants could afford to buy their units under conditions prescribed by his amendment. If all purchased the apartments and houses they live in, "property worth roughly $14 billion would be immediately transferred to low-income tenants . . . . There would be an enormous benefit to the poor . . . . "
The Kemp measure would require local housing authorities, which own and manage public housing, to sell units for 25 percent of their market value and provide loans with interest at 70 percent of market rates.
The research service figures showed several levels of affordability depending on how much tenants could afford to spend on mortgages, utilities, taxes and other expenses of ownership, said Morton J. Schussheim, CRS senior specialist in housing, who did the study for Kemp. The 25 percent cited by the congressman apparently referred to the group of non-elderly public housing tenants with annual incomes of about $9,400 who are willing to spend 30 percent of their funds on housing, he said. Tenants with lower incomes would have to spend a larger percentage of their income.
The study was based on tenant income data from 1984, the latest figures available, and did not not take into account family size and the stability of tenants' income, Schussheim said. "HUD has tried homeownership for low-income families in the past and hasn't shown tremendous success . . . The numbers of units sold are only in the hundreds," he said.
Despite this record, the Reagan administration has said for years it wants to pass on "the American dream" of homeownership to the country's low-income citizens, and Congress seems increasingly willing to help with the idea.
Opponents said the dream quickly would turn into a nightmare for many low-income buyers, who would be unable to support the cost of homeownership over the years, and for cities and communities, which would run out of facilities for people too poor to buy.
The best units would be sold to the tenants with the highest incomes, and would not be replaced, Zigas and others said. The legislation places no restriction on resales after five years, so low-income owners could sell to higher-income buyers, thus moving the housing permanently out of the reach of poor families, critics said.
Nearly four million people now live in the 3.1 million units of public housing in the United States, with at least that many more on the waiting lists, according to the National Association of Housing and Redevelopment Officials. A house or apartment sold from the housing supply is lost for future use because little public housing is being built these days, said Richard Y. Nelson Jr., the association's legislative counsel.
Recent figures on waiting lists are not available from HUD or private organizations, but many housing authority directors report the number of families on the lists has risen dramatically in the last five years, said Gordon Cavanaugh, counsel for the Council of Large Public Housing Authorities, whose 43 member agencies each operate 1,250 or more units.
"Many have stopped taking applications because the lists are so long," Cavanaugh said. The waiting time in various cities ranges from four or five years to a lifetime for elderly applicants in New York City and other metropolitan areas, he said.
Among the critics of the Kemp amendment are officials at the Department of Housing and Urban Development who believe it does not go far enough. The proposal is "pretty restrictive" and would not allow enough public housing occupants to buy their houses or apartments, said Kennth Beirne, HUD deputy assistant secretary for policy development and research. A requirement that tenant management corporations must purchase units on behalf of tenants "more or less would limit sales to sizeable multifamily projects," he said.
Under a HUD demonstration program launched a year ago and designed to show whether selling public housing units to tenants is feasible, prices have been pegged to a tenant's ability to pay rather than to a specific formula, said Beirne. Nineteen homes have been sold so far, including 10 transactions this week in St. Mary's County, with more scheduled within the next two months, he said.
With the demonstration scheduled to last two more years, several congressmen and low-income housing organizations said legislation should not be passed until results from this program are available.
Bartlett's amendment, which would transfer funds Congress appropriated for construction of 4,500 new public housing units in fiscal 1986 to the HUD "modernization" program for rehabilitating rundown housing, also drew criticism from low-income housing advocates.
The amendment also would prohibit spending for new public housing in fiscal 1987, which begins Oct. 1, and in subsequent years, with a few exceptions. Public housing authorities which can show 90 percent of their units meet HUD housing quality standards and thus do not need modernization funds would be eligible to receive money to build new public housing.