Yves here. Trump’s success in creating the appearance that he will break a lot of china means there’s a lot of alarm about high profile threatened changes, from ones that have some odds of happening (the appointment of Pete Hegseth as Defense Secretary) to one that are much less probable (a purchase or annexation of Greenland, a peace deal for Ukraine with Russia). All the furor has resulted in a lot of important Trump plans getting less attention than they warrant. One, as the piece below explains, is housing policy.
Here, Trump seems likely to preserve a lot of the status quo….not surprisingly, the worst elements from an income-inequality perspective.
By Fran Quigley, who directs the Health and Human Rights Clinic at Indiana University McKinney School of Law. Originally published at Common Dreams
Donald Trump has nominated former Texas state representative Scott Turner as his secretary of Housing and Urban Development, the $70 billion federal agency that administers rental assistance and public housing programs, enforces fair housing laws, and provides community development grants to local communities.
Other Trump cabinet nominees, like potential Health and Human Services Secretary Robert F. Kennedy Jr., have attracted attention for the ways they may shift the traditional priorities of the agencies they would lead. Turner has flown under the radar.
Perhaps that is because dramatic changes to HUD would need congressional approval, which was denied when Trump tried to slash the department during his first administration. Or maybe it is because, in many respects, Turner does not seem inclined to significantly alter U.S. housing policies.
That is not a good thing.
A Trump-Turner housing agenda appears destined to continue the worst aspects of our nation’s approach to affordable housing: a relentless diversion to the already-wealthy of resources supposedly designated for the housing needs of the poor.
This reverse Robin Hood approach to U.S. housing began in the 1970’s, when the Nixon administration and Congress began switching our affordable housing investment away from public housing to subsidizing for-profit landlords. Now, we fund wealthy landlords, often corporate landlords, via direct payments such as the Housing Choice Voucher program and Project-Based Section 8 program, in return for the for-profit landlords temporarily housing low-income tenants. 558F Low-Income Housing Tax Credits are designed to provide a tax shelter for wealthy investors.
This profit-soaked combination costs taxpayers six times more each year than public housing does. But public housing is far more efficient, for the simple reason that it bypasses private profits. Public housing is also hugely successful in providing high-quality, low-cost housing when there is adequate investment in maintenance and upkeep.
That is why other nations, who have far less homelessness, evictions, and housing-insecure people than we do, prioritize public housing. They divert little if any government support to for-profit landlords. And it is why U.S. for-profit landlords have been pushing for generations to block U.S. public housing from the funds it needs to ensure safety and keep up maintenance. The resulting deterioration of U.S. public housing undercuts competition for private landlords and creates a narrative justifying the delivery of housing dollars to the private sector.
A Subsidy for Gentrification
But those privatized programs are deeply flawed. The Low-Income Housing Tax Credit often leads to rents higher than poor families can afford. The program known as LIHTC has been characterized by housing researchers as “a better-than-nothing gimmick that helps the poor by rewarding the rich.” Even that characterization is too generous for some legislators, who call LIHTC “legalized theft of government assets.”
Similarly, project-based Section 8 housing directs government dollars to for-profit landlords as payment for low-income tenants’ rent. But, like LIHTC, the program allows those landlords to convert their buildings to market-rate rentals after they use the government subsidies to pay off their debt on the properties. By contrast, public housing provides affordable housing in perpetuity.
There is even less lasting impact coming from the largest low-income housing program in the country, Housing Choice Vouchers. We provide a full $30 billion per year in voucher payments to landlords, often large corporate landlords, but those landlords can end their involvement at the end of each tenant’s lease, leaving the low-income renter without housing. It is another low-risk high-yield arrangement for the wealthy and raw deal for the poor: little wonder that theProject 2025 blueprint drafted by Trump supporters champions vouchers even as it slams other HUD programs.
As for likely HUD Secretary Turner, he is most associated with yet another housing giveaway to the rich. During Trump’s first administration, Turner served as executive director of the White House Opportunity and Revitalization Council, which focused on promoting opportunity zones, a program created by Trump’s 2017 Tax Cuts and Jobs Act.
The program rewards the wealthy’s investment in economically distressed areas—opportunity zones—with huge tax breaks. But investigations by ProPublica and Congress show that the definition of what areas count as opportunity zones is far too broad, and the guidelines for who benefits from the investments are far too loose. As a result, money invested in expensive hotels, high-rent apartment buildings, and even luxury condominiums as a superyacht marina escapes taxation. Politically connected billionaires lobby for the land where they develop to be designated an opportunity zone, then rake in the benefits.
The Brookings Institution says opportunity zones operate as a subsidy for gentrification. “The direct tax benefits of opportunity zones will flow overwhelmingly to wealthy investors,” the Center on Budget and Policy Priorities says. “But the tax break might not do much to help low-income communities, and it could even harm some current residents of such communities.” < So, despite the relative quiet around Scott Turner’s nomination, we know some important things about him. We know that he champions opportunity zones as an addition to the already abundant tax benefits the U.S. showers on landlords and real estate investors. And we know that he is a fierce critic of anti-poverty programs, as he has made multiple public statements about government assistance being harmful and even disastrous.
But we also know that the likely next HUD secretary is concerned about that alleged harm only when assistance is provided to the poor. The wealthy can count on Trump and Turner to keep the pipeline of government housing money wide open and flowing their way.
This is the System and has been so for some time and I see no way it can change as long as money runs the political system. Conservatives argue that we need to eliminate programs that benefit the poor in order to motivate them to find a way to make money (legally or illegally) or, if intrusive laws can be wound down, provide new creative living opportunities for the poor like sharing housing space in intentional communities or whatever. The point they make is that solutions to problems when those solutions emerge from bottom to top rather than, as in government programs which I have seen directly lead inevitably to corruption as sure as night follows day (at least in the US, Europe and other developed countries the social situation is very different).
Social democracy is just not going to re-emerge because society has fragmented even more than it was a few generations back and thus collective desire to help others has, naturally, decreased. Our only possible future that is not a complete dystopia is a libertarian and emergent feudal system that would result, i.e., birds of a feather would come together in mutual aid. If society had common values that valued compassion, honesty, virtue, above the god of money then the social-democratic program might work. But we are not there, and we aren’t going to make it work as many programs to help the homeless have not worked very well because they have not been holistic and, as in CA in particular, have just led to more corruption.
Even if you can argue that helping the poor would benefit the country as a whole, good luck convincing both the public (who aren’t considered anyways, and the elites to make efforts to actually be compassionate towards the poor. I admit that, currently, the housing policies are cruel and not just corrupt.
Thanks for the report. I had an uncle who was a bit of a tycoon. He started out with a small factory making furniture but eventually switched to real estate–no doubt realizing that’s where the real money is.
As I’ve said, we used to have low income housing projects even in this small city but they seem to have disappeared in favor of the above. Even the new warehouses and factories that the county courts seem to almost be an excuse for the housing boom that is our real economic driver. Public/private is now the Republican business mantra.
This entire piece annoys me. I’m a housing attorney at a legal aid organization, and deal with all of this on a regular basis. Here are some observations from my experience on the ground working in (pre Katrina) New Orleans, Manhattan, Worcester, MA, Washington DC, Binghamton, NY and Ithaca, NY.
(1) Public housing mostly sucks. It almost always turns into a place where poor people are abandoned. If the New York CIty Housing Authority were a private landlord, they would be in jail. There ar good reasons why large scale public housing projects are out of fashion.
(2) Section 8 vouchers are on the right track. Let people choose where they live instead of sending them all to the same hell hole projects. Unfortunately, outside of a few states, landlord can turn section 8 vouchers down. This is an easy process to stop – make it illegal to do so. The other problem is the section 8 vouchers have too small of a cap on rent for most markets (see esp. Ithaca, NY), I doubt raising those caps would do much good on its own though.
You want housing solutions that work? Here’s my opinion on whay would work:
(1) Low rent municipal housing open to all. That’s right, municipalities can create quality housing (run it through a separate corporate entity), keep the rent low and rent to all comers first come first serve. No means testing. Elon Musk wants to live there, more power to him because that’s the point. Instead of creating poverty ghettos, make it attractive for all comers through the upper middle class to the working poor, to the destitute with a section 8 voucher. Yes it is going to fill up, so build more. Yes private landords are going to complain because it will undercut their needlessly high rents. Family blog them; that’s the whole point.
(2) Institute a vacancy tax on unrented units. In Ithaca we have a few newer buildings that are charging $2K for a studio apartment. There is a high vacacy rate for those things because nobody in their right mind would pay that. However, enough of them do rent to justify keeping the prices too high and it allows other landlords to keep their prices high. Put a tax on those vacant untis and you will see the rent prices come down. And if a private landlord wants to leave the market? Family blog them! The municipal housing corporation can buy out or foreclose on the building and turn it into more low income housing for all.
There is your solution, and there is absolutely no political will to carry it out. But please, no one wants a return to the public housing of the past, especially the people who would have to live there.