Public housing moves toward rich, poor together

With its rooftop pool and health club, the Metropolitan is one of the most sought after addresses in Bethesda, Md. Two-bedroom apartments rent for up to $2,000 per month, and at least one couple rents a separate apartment for their children and nanny. But, interspersed throughout the high rise are apartments that rent for as little as $288 per month.

For the families on public assistance in these apartments, the concept of a nanny is as remote as season tickets to the opera.

This blending of incomes at the Metropolitan, which is owned by a public housing authority, is symbolic of some of the biggest changes sweeping public housing in 30 years. Those changes range from a historic shift to mixed-income housing to a measure allowing public-housing tenants to have pets. Many have been under way for some time, but they will continue to accelerate, due to a housing reform bill quietly passed by Congress last fall.

"In the 21st century, the processes we used 50 years ago may not work the way they were intended - the bill provides incentives so we can manage it better," says Harold Lucas, an assistant secretary at the Department of Housing and Urban Development (HUD).

Income mixing is likely to prove the most far-reaching aspect of the bill, experts say. In the past, federal law mandated that preference for housing go to the poorest of the poor - households making 30 percent or less of median income. But under the new law, public-housing authorities will be permitted to "skip" over families. So someone with a higher income could get into public housing sooner than someone with a lower income.

"This bill has the potential to dramatically change who is served by housing-assistance dollars," says Linda Couch of the National Low Income Housing Coalition in Washington. Experts estimate up to 80 percent of the nation's 3,400 public housing authorities could be affected.

The change to mixed-income housing began a few years ago, and was sparked by a desire to move away from the giant high-rises of the 1970s and give public-housing recipients safer, cleaner places to live.

"When you have people leaving for work with their lunch boxes or attach cases, it provides a role model," says Hilly Gross, a spokesman for the New York City Housing Authority, which mandates that 1 of every 2 new renters have a job.

For example, under the "Hope VI" program, which replaces dilapidated housing, all new public housing must include income mixing and low-rise, garden-type apartments. "If you research from the old days, we were always on the wrong side of the tracks - too dense, too tall, always harboring the poorest of the poor, and we generally had a hard time sustaining how the public housing program should run," says Mr. Lucas. Now, he says, the new units will house the moderately poor and the working poor, as well as welfare recipients.

This prospect concerns some advocates for the poor. They argue that the bottom rung is getting squeezed out. "This could be destabilizing for poor people and their quality of life," argues David Jones, the president of the Community Service Society (CSS) of New York.

In fact, the St. Paul, Minn., Public Housing Agency has rejected the concept of mixed-income housing for the 20,000 people it serves. Helping those who need it most "is a reflection of the core values of this inner city," says John Gutzmann, executive director.

Other public-housing officials, however, believe mixing incomes has a lot of benefits, including in nonhousing areas such as schools, libraries, and hospitals. "My wife is a school teacher, and I can tell you that with mixed-income housing you have no schools with a high concentration of low-income children, you don't have pockets of poverty," says Roy Appletree, assistant executive director of the Montgomery County Housing Opportunities Commission in Maryland.

To avoid dislocating people, the new law provides 50,000 new vouchers for families eligible for subsidized housing. And the shift in residents won't happen overnight, because the vacancy rate in public housing is relatively low. Ms. Couch says it will take five years to evaluate the effects of the change.

For many public-housing authorities, there will be a much faster impact as a result of another new change, which encourages the housing authorities to become more entrepreneurial.

IN the past, any non-rent income a public housing authority earned had to be returned to HUD, discouraging managers from seeking out commercial tenants. Under the new law, the housing authority will get to keep the money.

One of the strongest advocates of the change is Richard Leco, executive director of the Central Falls Housing Authority in Rhode Island. "We're trying to get our residents to be self-sufficient, so we should be self-sufficient as well," he argues. Mr. Leco, for example, leases the rooftops of his public housing units to cell phone companies. He uses the income to pay employees working in nonprofit reading programs and computer labs.

One of his most recent efforts is training tenants as interns at his organization, in hopes they can get jobs as temps at other housing authorities. In the future, he envisions renting out space for a doughnut kiosk or hair salon. "I have a 10-story building with awnings, I could sell advertising space," he says.

The entrepreneurial spirit is also spreading to the giant New York authority, which houses more than 600,000 people. The city is negotiating with satellite television companies to rent out roof space in a deal that could earn $350,000 to $360,000 per year. In addition, Mr. Gross says the commercial possibilities open up training opportunities. "If a vending machine company ... wants to put machines in our buildings, they have to agree to train our tenants."

That speaks to a major concern of community activists: "Will the money go back to the tenants living there?" asks Mr. Jones of CSS. "Will they get the benefits?"