Howard Husock

In a collection of seven essays previously published in City Journal, Howard Husock, contributing editor of that publication and a faculty member at Harvard’s Kennedy School, breathes fresh life into the often stale debate over affordable housing in urban America. Husock reminds the reader of the potential of private developers to supply housing for the poor–and the peril of ignoring the market in designing affordable housing programs. Though these points may seem obvious, they are often tragically, even fatally, overlooked by housing advocates and policymakers.

Unfortunately, Husock’s essays exemplify the too-narrow view of cities taken by the Manhattan Institute’s suite of urban thinkers. He presents an odd combination of the dogmatic, yet primitive, promotion of market economics often found on the right and the strange focus on central cities in isolation from their surrounding suburbs often found on the left. Husock’s collection, like City Journal itself, falls into a rare category: writing that veers off the mark with alarming frequency, yet remains absolutely essential reading.

Husock’s central argument, and one that bears listening, is that our affordable housing production system has become focused on a network of government subsidies instead of asking more fundamental questions about why private developers do not build such housing. Husock portrays a triad of institutions–non-profit community development corporations (CDCs) which build housing, the federal Low Income Housing Tax Credit (LIHTC) which finances affordable rental housing, and the Section 8 program that provides the poor with rental vouchers–that “add up to a cleverly decentralized HUD, almost entirely financed through federal funding and provisions of the federal tax code, not through the assets and initiative of neighborhood residents.” This system often produces little housing, argues Husock, and hardly engages the local community, serving instead as a jobs program for a lucky few. Husock thoughtfully notes that “onerous regulations” also impede “privately supplied, very modest housing for the poor.”

In many cases, Husock is correct that the current production infrastructure yields only modest results. Furthermore, he does the industry a great service by bringing the regulatory issues to the fore–issues that the CDC-LIHTC-Section 8 crowd doesn’t focus on because, at least in some cities, removing such regulations would force them to compete with private developers and undermine their business model. For example, Husock discusses the construction of 2,700 bare-bones, single-room occupancy, shared-bathroom units in San Diego, made possible only after regulations were removed that prohibited this type of housing, which in the past was a common first step on the housing rung. Is such housing ideal over a long period of time? No. But in a city in which houses in rundown neighborhoods start at $250,000 and recent immigrants struggle to find anyplace to live, it is a practical, even essential, contribution.

But Husock’s sweeping accusations prove too much. By refusing to acknowledge the successful entrepreneurial community development non-profits, from Patterson Park CDC in Baltimore to BRIDGE Housing in San Francisco, Husock reveals himself, like most City Journal writers, as a shill for a set of ideological beliefs, unable to cast an objective eye on how those beliefs play out in real life.

For example, Husock goes to talk with a woman who moves out of a public housing project and into a Habitat for Humanity home in Chicago; he finds a proud new homeowner. Husock likes Habitat for Humanity, and I do too for similar reasons: they have a sense of moral values in their work, they require prospective homebuyers to earn a real stake in the house through significant labor and financial contributions, they find ways to build houses cheaply, and they muster significant participation from community members. I’m not sure, however, that their leadership would fully recognize the portrait of Habitat that plays out in the book. Quoting Habitat founder Millard Fuller’s statement that “We don’t believe in trying to go where we’re not wanted,” Husock crows, “it is not Habitat’s goal to force the rich to live with the poor.” Yet Habitat has many chapters in affluent suburbs because it recognizes that low-income families who work in those communities need modest housing.

In contrast, another woman who had a house financed by one of Husock’s enemies, and whom he does not appear to have interviewed, is cast as a hopeless deadbeat whose “husband was in prison” and “had previous credit problems.” Though the particular credit arrangement in the case is indeed suspect, one gets the sense that Husock believes people with spouses in prison and previous credit problems should not be on the path to homeownership. I guess that Husock’s tried-and-true social conservative “encouragement to marry the fathers of their children” didn’t work for this woman–as it does not in the many cases where those fathers are either imprisoned or cannot find decent paying work, situations that are well described in a recent article for the New Yorker by MacArthur and New America Foundation fellow Katherine Boo.

Husock’s ideological blinders are most evident in his critiques of the Community Reinvestment Act (CRA), the landmark 1977 federal legislation that requires banks to increase lending in poor neighborhoods in which they have a branch. He argues, with some credible examples, that the CRA has forced banks to make overly risky loans. What he does not mention is that banks, being sophisticated businesses, are working extremely hard to find lower-risk ways to fulfill CRA requirements–and succeeding. Established investment firms like Goldman Sachs and startups like Urban America are finding solid business opportunities in CRA neighborhoods, packaging them, and selling them to banks. These opportunities produce market or near-market return at market or near-market risk. Husock’s free-market ideology, of course, would argue that if such opportunities existed, businesses would have taken advantage of them without CRA. But before 1977, when Congress passed CRA, Goldman Sachs and others had plenty of opportunities to start these funds, and they didn’t. Government regulation in this case has pushed a wide range of people to think harder about how to deliver market projects successfully in poor neighborhoods. That’s a good thing.

Husock also fears that the CRA will “flash-freeze certain neighborhoods and set them aside for the poor”–though if he really believes that the rich shouldn’t live with the poor, you’d think he would leap at the idea. Indeed, his book thoroughly ignores the government actions taken by wealthy neighborhoods in both cities and suburbs to stop affordable housing from being built, like requiring all houses to be built on lots of an acre or more. These omnipresent regulations distort the housing market much more than the modest government subsidies that Husock attacks and are far more influential than the urban building codes and rules that Husock does such a good job of bringing to the reader’s attention. In short, these regulations are exactly the sort you would expect a true libertarian to attack.

Husock seems almost oblivious to the existence of a world outside of big cities. Of course, most Americans live in the suburbs, and with each Census more jobs move further and further out of the city–that includes jobs for secretaries, janitors, and public school teachers. Any solution to the affordable housing problem must recognize this reality. It’s usually the left that focuses intently on inner city neighborhoods in the guise of helping poor communities, even while fighting to keep “them” out of their communities–hence the term “limousine liberal.” It would be apt to characterize the myopic focus of Husock, and City Journal in general, on the inner city as limousine libertarianism.

Read America’s Trillion-Dollar Housing Mistake, and read City Journal, for the important critiques of bedrock principles that the left, and indeed pretty much everyone, takes for granted. But do so with about a pound of salt. Whether it’s coming from the left or the right, the only thing sure to fail in the complex world of affordable housing is a purely ideological approach.