US housing policies in need of remodeling. All sides agree a solution demands public, private, and nonprofit input - but what is the best combination of the three?

A patchwork of ideas, many with proved track records, is beginning to come together to reshape the national housing agenda. The political right and the political left, mortgage bankers and social activists, academic policy specialists and low-income renters are all contributing to the dialogue. And the consensus is that housing should be a national priority.

The approaches to the problem vary, but most agree that no one method will be enough to solve this country's housing woes. Subsidies from the federal government must be increased, most housing experts say, but with a realistic eye to the federal deficit. Nonprofit organizations have become quite skilled at producing or rehabilitating housing, but not on a large scale. Private developers make use of local tax incentives and innovative zoning laws, but many admit housing for the very poor and homeless is best handled through the public sector.

As the number of homeless grows and the number of homeowners drops, the need for a new commitment to decent and affordable housing has become a political and economic concern. Many activists are determined to make housing an issue in the current presidential campaign. That's because they see the erosion of federal funding for new housing commitments - an 80 percent decline in the past decade - as a key factor contributing to the current housing crisis.

The National Housing Task Force's recent report, requested by Sens. Alan Cranston (D) of California and Alfonse D'Amato (R) of New York, was a clear call from the political mainstream to make housing a priority. The report recommends a 12-year program, with an initial commitment of $3.4 billion from the federal government, aimed at providing aid to the poorest Americans and at leveraging funds to increase home ownership among moderate and middle-income families.

``This is a tremendously serious situation we face, and not just another `condition,''' says James Rouse, chairman of the task force.

One of the cornerstones of the report is that the solutions will require greater flexibility. The effort cannot rest solely on federal spending but will require the participation of state and local governments, the nonprofit and for-profit sectors, and religious and community organizations. Federal dollars ``have got to go out in a way that adds and draws additional money'' for housing, Mr. Rouse says.

Indeed, a wave of innovative housing initiatives has grown as nonprofits, community organizations, the private sector, and state and local governments attempt to address the nation's housing problems. Many experts and politicians are convinced that progress can be made in tackling the nation's housing problems, if all these innovative solutions are put together. Some of the successful programs include:

A national nonprofit group that aids community-based development corporations, giving them grants for new or rehabilitated housing. The Local Initiatives Support Corporation has made more than 1,000 grants to 482 community development groups, which has resulted in 14,000 units of affordable housing over the past eight years. Last year the local support organization used the carrot of federal housing tax credits to enlist the support of major corporations in creating a $14.25 million equity investment pool. This, in turn, attracted an additional $45 million of private and public financing to produce another 1,000 units.

State initiatives and local initiatives. In Rhode Island, the state Housing and Mortgage Finance Corporation has put together a variety of programs funded by tax-exempt notes and bonds available to private investors. These include helping first-time home buyers obtain affordable mortgage financing and providing low-interest loans to public and nonprofit agencies for rehabilitating housing at affordable rents. The programs have become broader since dramatic changes in the housing market in the past six years have put housing out of the reach of many, says Nicolas Retsinas, executive director of the corporation.

A variety of community programs that include land trusts, tenant management, and cooperative housing (see associated story on mutual housing).

Local participation needed

The task force proposals envision the federal government as the pivotal force in meeting housing needs, and as the principal source of funding. But there is an emphasis on local action. The proposed $3 billion ``housing opportunity program'' would be designed to spur matching state and private money. Half of the funds would go to states to distribute, with the requirement that the state match the funds. The other $1.5 billion would be sent directly to local governments.

``To the extent that we revive the federal commitment, we want to leverage that into neighborhoods,'' says David Maxwell, chairman of Federal National Mortgage Association and vice-chairman of the task force.

Reaction to the task force has been generally optimistic.

``The good news is that the response of Senators Cranston and D'Amato was positive,'' says Paul Grogan, president of the Local Initiatives Support Corporation and a member of the task force. He notes that a draft bill is considered likely by July. ``The real test will be when it gets into the legislative process. I do think either a Republican or Democratic administration will have to respond to the growing housing problem.''

Andrew Mott, vice-president of the Center for Community Change, says the report is ``heading in the right direction, although the speed is extremely moderate in terms of the actual crisis.'' He is disappointed that the report does not fully recognize the value of involving tenants and low-income communities in solving housing problems through tenant-management or other cooperative arrangements.

Taking housing away from bureaucrats

A different task force, the Presidential Commission on Privatization, has proposed another course of action to address the housing problem. This group, although politically more conservative, agrees that there is ``very clearly a housing problem,'' says economist David Linowes, who chaired the group.

The commission advocates the increased use of housing vouchers, allowing the poor to compete in the private market for housing. It calls for the gradual withdrawal of the federal government from all building and managing of subsidized housing. It further recommends the abolition of local rent control laws, which it says have stymied private development of low-income housing. Low-income families living in decent subsidized housing should be encouraged to buy and manage that housing, it says.

``We need to take [this housing] out of the hands of bureaucrats,'' says Dr. Linowes.

Long-term solutions

There are other housing experts who believe that neither approach is radical enough to address housing needs. Progressives talk about examining the profit nature of housing. Chester Hartman of the Institute for Policy Studies, who took part in the National Task Force, would like to see more housing come into what he calls the ``social sector,'' meaning that it would not be a part of the free-market private sector.

Mr. Mott applauds the efforts of the groups that make up the patchwork of ideas. But he worries that they do not have the capacity to make a big dent in the problem.

``Hundreds of thousands of units are needed,'' Mott says. ``Some cities are not good at community-based organizing. Then there are rural areas, which are so spread out and isolated, it is hard to get aid.''

``We should not push simply for more short-term solutions,'' he says.

But Mr. Grogan of the Local Initiatives Support Corporation is one who believes that this patchwork of public, private, and nonprofit initiatives is just what is needed for a realistic and sustained housing program. These innovations are not just anecdotal examples of nice ideas but are significant solutions to the nation's housing problem.

Last of a three-part series. Other articles ran May 11 and 12.

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