Campaign Issues

By Jacob V. Lamar

It is a political problem with a painfully human face. Unlike the arcane theories of Star Wars or the complex calculations of the budget deficit, homelessness is no abstraction. The homeless confront urban dwellers every day: sleeping on sidewalks and park benches, begging pedestrians for loose change, huddling in doorways for shelter or meandering the streets muttering to themselves. In cities that have flourished during the Reagan years, there are more homeless today than at any time since the Great Depression.

On any given night, an estimated 735,000 people in the U.S. are homeless. As many as 2 million may be without shelter for one night or more during the year. A deplorable situation that began with deinstitutionalized mental patients' living in the streets has grown to include the working poor and whole families. Nearly a quarter of the homeless have jobs; more than a third are families with children. "The growing phenomenon of homeless children," says a report from the National Academy of Sciences, "is nothing short of a national disgrace."

If the condition of the homeless is appalling, solutions can seem hopelessly complex. Offering the medical treatment necessary for a derelict alcoholic is different from providing job training and education for a welfare mother, counseling for a teenage runaway or more income for a worker trying to secure an apartment. Yet no matter what their other difficulties, the homeless share a simple problem: they need a place to live. The best response to homelessness is to build more housing. This wealthy nation should start with a basic policy: no American should have to sleep on the street.

But the Reagan Administration has had no effective housing policy for most of its eight years in power. Samuel Pierce, the Secretary of Housing and Urban Development, is the only remaining member of Ronald Reagan's original Cabinet, yet he has been the Administration's invisible man. Federal support for subsidized housing has been slashed 77%, from $32.2 billion in 1981 to $7.5 billion this fiscal year. HUD authorized the construction of only 88,136 subsidized dwellings in 1987, compared with more than 224,000 in 1981.

Meanwhile, 2.5 million units of low-income housing have disappeared since 1980 through a brutal combination of market forces and government indifference. Tenements that housed the disadvantaged have been razed or renovated to make way for pricey apartments and high-rise office buildings. According to a 1986 congressional report, in the past decade the nation has lost half its single-room-occupancy hotels, long the housing of last resort for the poor. In New York City, tax-abatement policies of the early 1980s encouraged private developers to turn SRO buildings into luxury condominiums. The number of New York apartments renting for $300 a month or less dropped ; from 1.7 million in 1978 to 409,459 last year.

No matter who the next President is, the homeless crisis is likely to get worse. An additional 200,000 units of low-income housing could disappear over the next five years as loans expire from a tax-break program of the 1960s and '70s. The Federal Government had encouraged private developers to build low-income housing by offering to subsidize 40-year mortgages on the buildings. Now many owners are taking advantage of an option to pay off the mortgages after 20 years, freeing them to sell or rent the apartments at the prevailing market price. The result could be hundreds of thousands more people in shelters.

The Reagan Administration's approach to housing was another version of the supply-side experiment: instead of subsidizing low-cost construction, as Washington had done since the 1930s, the Reaganites decided to subsidize tenants. Give cash vouchers directly to the poor to help them pay their rent, went the theory, and the market would respond by supplying more housing. Vouchers have had some success in the Southwest, where prices are depressed and vacancy rates relatively high. But in much of the country, as housing prices have increased by 43% in the past eight years, voucher recipients have been unable to find apartments with affordable rents that also meet federal quality standards. In New York City, where rent control, high taxes and land prices discourage the construction of modestly priced housing, three out of four vouchers were returned to the Government last year after futile apartment searches by the recipients. Supply-side housing, like supply-side economics, has had drastic, unintended consequences.

The Administration finally admitted last year that homelessness was an "unprecedented crisis" when the President signed the McKinney Homeless Assistance Act, a compendium of programs covering everything from job training to food assistance. The act authorized the spending of $1 billion over two years, but attorneys for the homeless had to sue the Government to get the funds moving out of a clogged federal pipeline. The $500 million in first-year funds, haphazardly distributed in hundreds of U.S. cities, so far has done little tangible good. Last February, Reagan signed the Housing and Community Development Act, which provides assistance to 152,000 needy families and authorizes the renovation of 10,000 run-down public-housing units. Neither bill does anything to encourage the desperately needed construction of new low-cost housing.

On the campaign trail, Vice President George Bush's response to the housing crisis has been to ignore it. In answer to a question at the first presidential debate, Bush called for full funding of the McKinney Act and involvement of private benevolent organizations -- the "1,000 points of light" -- in communities that aid the homeless. Michael Dukakis has endorsed the recommendations of the National Housing Task Force and is committed to spending $3 billion of federal money to build homes, mostly for low-income people.

With the Federal Government straining under a $2.6 trillion debt, it is obviously unrealistic to expect that low-cost housing funds will be restored to pre-Reagan levels. But any serious program to stem homelessness is going to require money. The National Coalition for the Homeless estimates that it would cost $4 billion to build 280,000 additional units of housing over the next two years.

What Washington must do is make sure that available money is carefully targeted and intelligently spent. Local governments have already taken the lead in offering low-interest loans or tax-exempt bonds to finance housing construction. By providing loans to developers and easing building codes, San Diego has spurred the creation of five new SRO hotels, where tenants pay from $240 to $390 a month. In New York City last week, local officials joined with a community-development group to finance the construction of 1,000 apartments for low-income families; $25 million of the $80 million cost was raised from corporations, which can write off their contributions as a federal tax credit. An additional $25 million has been raised through the tax-credit program -- a little-noticed innovation tucked into the 1986 tax-reform bill -- for low- income housing in Los Angeles, Kansas City, San Francisco and about a dozen other cities.

There are other reasonable options the next President should consider, steps that transcend the rhetoric that either candidate has offered so far.

Rehabilitate old units. Though public housing is routinely condemned as a failure, there are 800,000 applicants on the waiting lists to get into it. Public-housing developments like St. Louis' Cochran Gardens and the Montgomery County, Md., program demonstrate that well-maintained, well-managed projects can be successes and not eyesores or breeding grounds for crime. Yet about 70,000 of the country's 1.3 million units are vacant: uninhabitable while awaiting repair or occupied by squatters. The Comprehensive Improvement Assistance Program, which provides funds for the maintenance and rehabilitation of public-housing projects, was cut from $2.5 billion in 1983 to $1.6 billion last year. Surely it is cheaper, as well as more humane, to renovate available apartments than to dump families into welfare hotels.

In private-housing stock, some of the most ambitious renovation is being performed -- again -- by community-development corporations, which obtain funds from local governments, financial institutions and religious organizations. In Chicago, Bethel New Life, a Lutheran Church group, has refurbished 321 homes, built a day-care center and saved a crumbling school building. Congressman Joseph Kennedy II of Massachusetts has proposed a bill that would provide $500 million to help nonprofit community groups purchase and rehabilitate low-income housing.

Use foreclosed housing. HUD owns 47,000 properties seized for mortgage defaults. Traditionally, these repossessed buildings have been sold at auction to the highest bidder. The Government ought to start seriously complying with 1987 housing legislation that calls for underused property to be turned over to the homeless, by donating or selling buildings at low prices to housing advocacy groups.

Create more community-based health clinics. The homeless crisis began when overcrowded mental hospitals started to release patients who were not considered dangerous to themselves or others. The number of mental patients in U.S. institutions dropped from a peak of 560,000 to 143,000 today, and an estimated 30% to 40% of the homeless are mentally impaired. The release program was intended to lead to more small facilities, where the poor could receive affordable outpatient care. Yet 70% of the $6 billion spent each year on state-run mental health programs still goes to institutions. A greater proportion must go to promoting neighborhood clinics and group homes. What is more, the operators of these clinics must reach out aggressively to get people off the streets, especially in cold weather. They must trek to the parks, bus depots and other places where the homeless congregate to persuade them of the need for health care.

Once more, Washington does not have to bear this burden by itself. The National Academy of Sciences report cites the Zacchaeus Medical Clinic in Washington as a superb example of an inner-city health center that has been funded exclusively by church and community groups and individual donors.

Raise the minimum wage. The best way to help the working homeless is to pay them better: the national minimum wage has stayed at $3.35 an hour since 1981, while the cost of living has risen by a third. Modest financial help is already coming from some states. California raised its minimum wage to $4.25 an hour in July. Other states provide more direct assistance: New Jersey has prevented 12,000 families from being evicted over the past four years by providing loans and grants to help pay rents and mortgages.

Clearly, alleviating homelessness is going to cost U.S. taxpayers money. It is up to the next President and to the American people to decide how high a priority housing of the dispossessed deserves. In considering the cost, the President should keep in mind that the $7.5 billion the Federal Government will spend for low-cost housing this year is meager compared with the nation's biggest housing subsidy: more than $30 billion in a mortgage-interest tax deduction goes to 58.5 million private homeowners, including the very wealthy.