The Nation's Mayor
Can Julián Castro Stop HUD's Wrecking Balls?
July 31, 2014
Jul 31, 2014
8 Min read time
Can Julián Castro stop HUD's demolition of public housing?
Chicago's Cabrini–Green Homes, under demolition in the spring of 2011. Photo by Monica Reida.
In these days of bitter confirmation battles, Julián Castro’s experience must have been an occasion for celebration at the White House. On July 9 the former San Antonio mayor breezed through a Senate vote to become the new Secretary of HUD, the federal Department of Housing and Urban Development.
During his hearing in June, Castro was questioned extensively about mortgage finance, Fannie Mae, and the financial solvency of the Federal Housing Administration. These are likely to be at the top of his agenda as he begins his work at HUD.
Yet behind these high-profile issues lurks a national crisis of rental housing affordability that neither the senators grilling Castro nor recent HUD secretaries have been able to solve. The numbers speak for themselves. More than 30 percent of American renter households spend more than 50 percent of their incomes on housing, well above the recommended level. The federal government’s estimates suggest that 8.5 million Americans are in “worst case” housing conditions: either spending more than 50 percent of their incomes on housing or living in “severely inadequate” conditions. More than 20 million households are doubled up, with families sharing living space because they cannot afford their own.
Indeed, over the past twenty years, the federal government has not only been a weak hand in fixing the affordability problem but has exacerbated it by systematically disinvesting from the nation’s affordable housing stock. There are now hundreds of thousands fewer subsidized and affordable housing units than there were twenty years ago, and, adjusted for inflation, HUD’s public housing budget is currently lower than it was then. Since the early 1990s, very low-income renters have been displaced from their subsidized housing in city after city. Atlanta has demolished all of its original public housing, resulting in the displacement and relocation of thousands of residents. In Chicago, a plan to demolish more than 20,000 units is underway. Memphis, Seattle, Denver, Baltimore and San Antonio have also been aggressively pursuing demolition and redevelopment. Former low-cost housing communities in these and other cities have been torn down and remade for new commercial ventures and high-end residences.
As HUD secretary, Julián Castro will face a choice between tenants’ rights and private investment opportunities.
The result for the most disadvantaged Americans has been forced displacement, re-segregation, deteriorating living conditions, and the disruption of community life. There is little reason to believe Julián Castro can change this—or that doing so is his goal. After all, the assault on affordable housing has been a bipartisan affair. It began during the first Bush presidency, reached full flower in the Clinton years, and continued through Bush II. It has not abated under President Obama and his last HUD Secretary, Shaun Donovan. And Castro—like Henry Cisneros, a predecessor in San Antonio City Hall and at HUD, and to whom he is often compared—is a mayor, not an advocate for the poor. The difference is crucial.
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Public housing, what many know as “the projects,” has long been the centerpiece of the nation’s effort to provide affordable homes for very low–income families. At the program’s height, there were more than 1.3 million units of federally funded public housing. More than a quarter of a million units have been demolished in the past twenty-five years. Though initially designed for the working poor and operated with minimum income requirements, in the 1960s public housing became the option of last resort for the elderly, disabled, and the poorest.
Prior to 1993, HUD authorized demolition only in rare cases, although it did so more frequently as the 1980s wore on. Since 1993, however, demolition has become standard HUD policy, making the option of a last resort increasingly unattainable.
Because public housing is provided and administered by the federal government in concert with local authorities, responsibility for the downfall of public housing is widely distributed. At the tip of the spear are local authorities who disinvested from their stock. In a process that came to be known as de facto demolition, some housing authorities simply stopped maintaining properties they felt were too problematic. In Houston, Newark, and Washington, D.C., the local housing authorities chose to not spend HUD grant funds earmarked for property improvements. These and other housing agencies in Kansas City, Missouri, Chicago, El Paso, and Bridgeport have been sued by residents for neglecting the physical conditions of public housing. As conditions in these developments deteriorated, residents moved out. Housing authorities would purposely fail to re-rent the units, leading to high vacancy rates. In some cases, vacant units became gang territory, driving out more rent-paying residents, deepening the decline. At some point in the process, the local authority would appeal to HUD to allow either full or partial demolition, citing poor conditions as a rationale.
The centerpiece of the policy of displacement was HOPE VI. In 1993 the newly appointed Cisneros inherited HOPE VI, which had been passed by Congress in the previous year. Over the life of the program, HUD would make HOPE VI revitalization grants to 133 different jurisdictions large and small, totaling $6.3 billion. The program called for the improvement of public housing environments and reinvestment in both the social conditions of public housing and in the physical stock. But Cisneros’s implementation did not follow the recommendations of the National Commission on Severely Distressed Public Housing, which urged maintaining the existing stock to the greatest extent possible, or the design of Congress, which had based the HOPE VI legislation on the Commission’s report. Cisneros’s HOPE VI relied almost exclusively on demolition and resident relocation.
Most units were inhabited right up to the point of demolition. Displacement was followed by the engineered resettlement of tens of thousands of very low-income families. There has been no larger source of public sector displacement since the urban renewal and federal highway programs of the 1950s and ’60s. My own and others’ research suggests that most of these residents moved to other high-poverty and racially segregated neighborhoods. For instance, sociologist Deirdre Oakley has found that displaced families in Chicago tended to end up in other segregated neighborhoods of the city’s South and West Sides. The Urban Institute found similar patterns in its five-city study.
The displacement is not a result of failure to rebuild. Under HOPE VI large swaths of urban land that once contained low-cost housing have been repurposed for new residential developments in order to attract affluent investors and residents and revitalize commercial areas in central cities. In some cities, revitalization preceded the conversion of low-cost housing. In others, the demolition of public housing triggered real estate rebounds that have led to millions of dollars of private investment and large-scale gentrification. The physical transformation of most of these places has been remarkable. The Center City district of Philadelphia, Pittsburgh’s Manchester neighborhood, Capitol Hill in Washington, D.C., Near North in Chicago, and areas adjacent to downtown Charlotte, Atlanta, Denver, and elsewhere, have all experienced rebounds. The reduction in crime on site, improvement of property values on site and nearby, and return of private investment have produced tremendous fiscal benefits for cities, improved the climate for further private investment, and been used to leverage tourism dollars and generate housing opportunities for the affluent.
HOPE VI has been, in sum, a prototypical mayor’s program. Former HUD official Bruce Katz called it “one of the most successful urban regeneration initiatives in the past half century.” What it has not been is a good housing program for needy families. And Julián Castro’s record to date suggests this is not about to change.
When it comes down to a choice between public housing tenants’ right-to-place and the investment opportunities of the private sector, will Castro defend tenants? Not likely. Castro brings a particular perspective to HUD. As a mayor, he was occupied by fiscal pressures brought on by the recession and the challenges of providing services to constituents. Like others have before him, he put a premium on working collaboratively with business interests. Castro prides himself on having successfully drawn investment to San Antonio, particularly downtown. Though his supporters in San Antonio laud the attention he has given to low-income neighborhoods, on the housing front his approach has been right in line with recent HUD policy.
Castro counts Cisneros as a close friend, mentor, and role model. HUD’s redevelopment and displacement policies over the past twenty years have been essentially Cisneros’s policy. Pointing to benefits that have accrued to the neighborhoods once home to displaced low-income residents, Cisneros continues to take pride in his achievements. Castro won’t repudiate them lightly. Indeed, under Castro’s leadership, San Antonio was one of the first cities successfully to apply for HUD’s Choice Neighborhoods initiative, a slightly improved successor to HOPE VI that still underwrites the full-scale demolition of low-cost housing and displacement of residents. The $29.7 million grant anchors the city’s East Side redevelopment effort and will fund the demolition of a 249-unit public housing complex. An additional $60 million in public and private investment is slated for revitalization, but it is not yet clear whether original, long-term residents will have the chance to benefit from improvements.
It didn’t have to be this way. Demolition, displacement, and relocation to segregated, high-poverty neighborhoods could have been avoided. Revitalization for the benefit of poor and minority residents is possible. It involves phased redevelopment, which allows residents to live on site while partial redevelopment takes place. Residents then move to the new units while the rest of the site is completed. This minimizes the disruptions experienced by the families and facilitates their moves into the renovated homes. Both of these have been a particular failure of HUD policy over the past twenty years. A resident-friendly process also provides better guarantees of resettlement into revitalized communities and mixes rehabilitation and renovation with demolition that is absolutely necessary. Finally, it requires one-for-one replacement of lost units.
What few concessions have been made in these directions were imposed by Congress or the courts, not by HUD itself. However, with today’s immobile Congress, significant legislation is unlikely. So the opportunity is there for HUD and its new leader, but if Castro sees himself as America’s mayor, there is little possibility of real change.
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July 31, 2014
8 Min read time