This is the last in a series of columns on the nation's low-income housing crisis.
As the ranks of the homeless grow and the nation's low-income housing crisis hits emergency proportions, Washington is sure to face rising demands for multibillion-dollar federal subsidies, the equivalent of a new Great Society in the '90s.
The political system cannot resist the pressures altogether. Billions of dollars for housing will flow. In fact, the first trickle has begun with emergency aid for the homeless clearing Congress this spring.
But will we repeat the housing errors of the '60s and '70s? Will we yet again, in the name of helping the poor, provide windfalls for speculators, financiers, developers and the construction industry? And in the process, will we touch only a fraction of the problem? That's the danger.
To replace the housing units that will lose their federal subsidies under programs expiring between now and the end of the century would cost $130 billion. Add to that the nation's new low-income housing needs and -- assuming the old ways of doing business continue -- the trillion-dollar price tag would make Caspar Weinberger's Pentagon look like Scrooge-on-the-Potomac. No one believes the political system will ever cough up subsidies of that magnitude.
Enter the nationwide upswelling of state, city and neighborhood-based housing programs, of churches, foundations, banks, corporations, insurance companies, of community-development corporations, socially conscious investors, even labor unions that have plunged into the vacuum of national housing policy in the '80s.
They form the nucleus of an alternative low-income housing supply system. Measure them by Washington's billions and they aren't great yet. Measure them in terms of innovation and capacity to produce and run housing at dramatically reduced cost, and with the community support and social stability that so often eludes federal projects, and you can envision a radically improved future for national housing.
How do they do it? By cutting construction costs. Enterprise Foundation founder James Rouse claims as much as 40 percent can be pared by eliminating architects and independent contractors, conserving usable fixtures in rehabilitation, going for prefab material and builders' salvaged goods in new housing. Labor costs sink by working through community-development corporations.
On the financing side, the megasavings come through an artful blend of below-market-rate loans, state subsidies, support of investors, federal community-development funds, and backing by such intermediaries as the Enterprise Foundation and the Local Initiatives Support Corp. Often, land or salvageable buildings are obtained dirt cheap through HUD or VA foreclosures or delinquent tax rolls.
The critical test is how to combine federal housing subsidy dollars with the pool of talent and new ideas bubbling up from the "alternative systems" invented in the '80s. Unless that's done, there will never be a critical impact on the nation's housing problem.
A promising first piece of the answer may be Boston Mayor Raymond Flynn's concept of a national partnership in housing. Washington would match, dollar for dollar, expenditures for low-income housing by local or state governments, banks, insurance companies or foundations. And there would be technical assistance to cities willing to set up housing partnerships.
But we may need an even tougher strategy: Put all new federal housing funds into a single pot, set up a representative national housing council, and then challenge states and cities and nonprofit foundations by asking: What are the very best results you can provide us? How well is the state using its own powerful tools, such as housing trust funds and public pension funds? Show us the broadest local participation you can get, from banks to corporations to unions. Prove how can we leverage federal moneys to the ultimate.
But the challenge could go still further: How can you encourage home ownership or alternatives that give residents a real stake in their neighborhood? What are you doing to strengthen community-development organizations, so they'll first be housing producers, and then manage it so that vandalism doesn't spoil what's built?
Bonuses could go to those who come up with the best answers. Many states might want to emulate Massachusetts' statewide housing council, set up by Gov. Michael Dukakis. Its membership includes bankers, builders, legislators, planners, housing advocates and city officials. Its task: to propose, then implement innovative housing.
Some of these new ideas will surely surface in the extensive hearings on a federal housing policy for the '90s, recently announced by Senate Housing Subcommittee Chairman Alan Cranston (D-Calif.). If we're lucky, other concepts will emerge in the presidential campaign.
A recreation of the Great Society is as infeasible as turning back the hands of time. But the time is ripe for a challenge strategy that builds first on the lessons of the '60s and '70s, but most particularly on the bright potential of today's city and state self-help efforts.