House Approves Major Reform of Federal Housing

The House approved landmark legislation Thursday to overhaul Depression-era laws governing federal housing programs for the poor by shifting a large measure of authority from Washington to local communities.

The bill, approved, 315 to 107, would replace an array of federal housing programs with two lump-sum block grants to the 3,400 local housing agencies across the country. Ninety-one Democrats voted for the bill.

Sponsors of the measure said that it would significantly improve the quality of life in public housing across the country by removing incentives for residents to avoid work, increasing economic diversity and enabling the government to demolish the worst projects.

“It is huge victory for our nation’s communities--a huge victory for the work ethic,” Rep. Rick A. Lazio (R-N.Y.), chairman of the House Banking and Financial Services subcommittee on housing and community opportunity, said in an interview after the vote. “It will begin the transformation of the poorest communities in this nation from communities of despair to communities of work and hope.”

Clinton administration officials gave the GOP initiative mixed reviews. They hailed the broad structure of the legislation, which builds on earlier administration efforts to change federal housing programs, and expressed support for provisions that would tear down dilapidated projects and replace them with mixed-income housing and would issue subsidized vouchers that poor families could use to rent private-sector housing.

But they denounced provisions that they said would be likely to increase rents for poor residents of public housing and free local housing officials from requirements that they give priority to the poorest applicants when filling the scarce subsidized housing units.

“The House bill would make permanent the sweeping public housing reforms launched two years ago by the Clinton administration but at the expense of the very poor,” said Henry G. Cisneros, secretary of Housing and Urban Development. “Some provisions could drive poor children and families out of their homes by sharply raising their rents.”

A similar measure, which is less objectionable to the administration, passed the Senate in January. The differences between the two bills must be reconciled before a bill is sent to Clinton. Cisneros said Thursday that he would work with both chambers to try to create a final bill that the president would sign.

The sharpest dispute in House debate over the bill was over the GOP plan to repeal a current law that prevents housing authorities from charging residents more than 30% of their income. Republicans argued that the provision discourages residents from taking jobs because they know that their rents will increase sharply if they do.

If link between income and rent is repealed, Republicans said, local officials could set rent structures that would encourage public housing residents to take more financial responsibility for their futures.

“We’re saying that work ethic is important,” argued Lazio, the measure’s chief architect. “The [law] is a job killer.”

But Democrats argued that this provision could increase monthly rental payments for hundreds of thousands of poor people living in subsidized housing and price many of them out of their homes.

“This bill will put poor families in jeopardy of losing their housing because they will be unable to pay higher rents,” said Rep. Maxine Waters (D-Los Angeles). “For many families, this will mean choosing between shelter and food or clothing or medicine.”

The House rejected a Democratic effort to retain the provision on a 222-196 vote.

Republicans prevailed in their argument with Democrats over another provision in the bill, which would abolish regulations that now require housing authorities to give preference to the homeless and the poorest applicants. The GOP measure would give local officials the authority to set their own criteria for selecting residents--although they would still be required to choose from among those whose earnings are below 80% of the local median income.

Rep. Christopher Shays (R-Conn.) stressed that the current system has turned public housing into ghettos of hopelessness, where children grow up without knowing adults who go to work every day to support their families.

Democrats argued that the neediest Americans could go without shelter if local housing officials were given this authority.

Richard Nelson, executive director of the National Assn. of Housing and Redevelopment Officials, said that the flexibility to set rent levels and policies for choosing residents are essential tools for turning housing projects into better neighborhoods.

Despite their disagreements over some of the specifics, the legislation signals that House Republicans and the Clinton administration have reached a broad consensus on how to reform the housing laws that govern how the Housing and Urban Development Department spends its $30-billion yearly budget and serves the 3 million Americans who depend on its programs.

In fact, many of the provisions in the measure were first adopted in the sweeping changes to federal housing policy included in a fiscal 1996 spending bill, which reflected the priorities of the administration. Those measures would expire at the end of the year but the GOP housing bill would make them permanent.

One of these provisions would give local officials the authority to demolish or dispose of the most blighted housing projects if they believe that maintaining them is no longer practical.