Public Nightmare: Section 8

Repost of (http://oasisoffreedom.org/articles/7/public-nightmare-section-8)

This is a subject I have first hand experience in that I can opine on with some level of expertise. I will write a series of these to illuminate why political liberalism (in the Nolan chart sense of the “political left”) fails.

Some background: Public Housing Authority is part of the Department of Housing and Urban Development (or HUD). Its mandates is to help the poor by subsidizing their rent via either housing them in the government housing (projects) or paying for vouchers to be used in rental properties owned by private investors. I bought a property in northwest (central northwest) of the city I live in, you know, where the railyard used to be? I learned a lot during my experience of 4 months of looking at 60+ properties personally (yes, going inside) and two months of rental arrangement with PHA voucher holder that I was given the lease contract from previous owner.

I will make the claim to the following. PHA and the mandate of good intentions created situation where quality of housing is poor, cost of housing is artificially higher, and the urban poor become dependent to the system. PHA creates situation where crony capitalism thrives at the expense of the poor (which mandate was designed to) and the tax payers.

The way that the PHA system for voucher is set up, the landlords have no incentive to improve the properties they own. PHA inspections are annual, and often the participating landlord and the local PHA case workers collude to make this process as smooth as possible for the landlord. The tenants, through the voucher program (or housing assistance program), can choose to live in any property that is registered with the government as a participating property. I bought a property that had disgustingly rapacious arrangement between the landlord, the dependent poor (who have become lazy due to disincentive from exiting the housing assistance program) and the government.

Here’s how that all works:
The company I bought the property from was supposed to, by law, maintain the property and enforce the lease to ensure the quality of the housing provided by the PHA program is sound. The tenant never paid her portion of the rent during the course of years that she float around this company’s properties. During that time, no properties have been kept to any sort of decent standard. Why is that? The participating landlord colludes (initially) with the tenant to work out a deal where tenant do not inform the PHA of repairs with implied threat that landlord will immediately pursue any late payments of the tenant portion of the rent.
The tenant gets a voucher worth some amount of money per month as prescribed in PHAguidelines of “market rent” and “median income.” This is so chock full of BS that it’s not even trying to hide the fact of its failure.

Let’s throw out some actual numbers to explain why PHA and HUD is a physical manifestation of failure.
For the property that on open market has rental cost of $550, this company was able to get $650 from the government, in fact, on the lease agreement I was privy to as part of sales hadPHA case worker’s correction on monthly lease amount that went from $680 to $650, saying that’s what the PHS schedule says. I brought this up to illustrate the point that PHA will always payout the maximum amount to the participating landlord. They don’t care about their mission, all they care about is that their budget be allocated to them instead of all the other departments in the sprawling government. The property I bought had serious foundation damage, the carpet was not replaced for dozens of years, and the front porch was dangerous with loose nails and boards (standing part of the front porch next to the front door). I think I still got a good deal, even after about $5000 I put into repairing the most damages. But the state of disrepair that this property was in, and others like it among the 60+ properties I personally looked at before buying this one just say volumes of failures of HUD and the paternalistic government that won’t let people lead their own lives.

PHA program was designed so that voucher amount will decrease as income goes up for the participating tenants. For the tenant that had occupied the property when I bought the property, she was suppose to be paying $80 out of $650 in monthly rental. This level of subsidy, ladies and gentlemen, will discourage anyone from improving their lot in life. If I say to you that you can live for free (because of crony capitalism and collusion with landlord) there is no way that the urban poor will try to escape their fortune. This great disincentive has created what HUD was mandated to prevent: urban decay. This part of the city that I bought the property in is a focus of many investment companies buying cheap slum properties and not improving them to a decent standard. HUD was created to combat redlining, the practice of neighborhoods and developers to draw zones that constitute “safe” property to make a mortgage loan out to (mainly white working class neighborhoods in 1960s) and where it is “not safe” to lend (mainly urban black and minority enclaves). By creating projects and FHA, proposition was to reduce the practice of redlining. They failed, in monolithic scale.

The flight of middle class to the suburbs is one example of magnitude of HUD’s failure, and in more personal experience, the urban blight of northwest of the city that I live in is an example of PHA program participating properties and creation of urban ghetto which Champagne Liberals who voted for people who created HUD’s massive bureaucracy will not themselves live in. The hypocrisy and short-sightedness of these Liberals who thought compassion had to be legislated ended up worsening the condition of the urban poor.

This is but one example of government creating a system of patronage and crony capitalism that ruins this nation from within. Financial success for many of these people are solely dependent on political clout and not market savvy. These do-gooders created a situation similar to what they were originally tasked to prevent. Lastly, HUD created a system of dependency and a large disincentive for poor to better their lot in life.