New NO housing plan's basis sets it up to fail

As if we needed another example of how both the Pres. Barack Obama Administration nationally and the Mayor Mitch Landrieu in New Orleans fall prey to ideology over how the world really works, here comes an “Assessment of Fair Housing” document that puts wishful thinking ahead of the realities of human behavior.

A few months ago the U.S. Department of Housing and Urban Affairs promulgated a final rule under the Fair Housing Act alleging to address the propensity of its Housing Choice Voucher Program – better known as Section 8 – recipients clustering. Most properties participating in the program appear in lower-income, higher-crime areas, and as racial minorities disproportionately comprise recipients (about 25 percent Hispanic and 45 percent black nationally), this tends to concentrate minority participants in those areas given typically lower incomes of minority households. The rule seeks to desegregate racial concentrations by having jurisdictions compile data and make policy to steer minorities involved towards other, typically higher-rent neighborhoods.

As 98 percent of New Orleans program users are racial minorities, concentration particularly occurs. Unlike many local governments who fought the promulgation because it essentially creates an unfunded mandate of record-keeping, the city opened it with welcome arms, becoming the country’s first jurisdiction to cough up the plan required to continue gathering federal dollars to fund the program. It banks change on using new flexibility to increase ceilings on reimbursements to landlords, considering to require builders who utilize the Low Income Housing Tax Credit to guarantee below-market rates for a longer period of time than the law’s minimum (an option left up to jurisdictions, as well as the proportion of low-income residents required), and on creating of a housing registry that could identify units deemed substandard and declared ineligible for program participation.

But the very lack of logic underlying the plan’s formation will doom it to underperforming, based upon the conflating of race and poverty. Certainly, housing policy that reduces clients’ exposure to the vices of “bad” neighborhoods improves their quality of life and likely increases their odds of escaping poverty. Yet there is nothing sinister or prejudicial about such concentrations, because the same value set that often puts people into poverty usually predominates in the neighborhoods with housing at pricing points that make it attainable for Section 8 recipients.

The great myth propagated by liberals of Obama’s and Landrieu’s ilk is that for most able-bodied people “poverty” (which in comparative perspective actually means the American poor live better than about four-fifths of the world’s entire population, with many amenities unavailable to the wealthy even a half-century ago) is something unavoidable, not a product of their own behavior and choices. In reality, most poverty comes precisely because of inferior life choices stemming from a set of values that puts present gratification ahead of future considerations.

Unfortunately, the unwillingness to delay gratification – spending for a cell phone, engaging in sexual intercourse indiscriminately outside of marriage, failing to complete schooling, etc. in order to satisfy various immediate cravings – also serves as a root cause of criminal behavior. Instead of saving money they steal; instead of putting the work in to complete schooling they drop out and hustle drugs; instead of patient application of effort to get ahead they cut corners to try to quicken the process, etc. So it’s no accident that in neighborhoods disproportionately criminal from following that value set these places become so undesirable in which to live that housing values and costs plunge, making these most affordable to those not criminal but whose value sets attenuate their earning potential in different ways.

And because minorities disproportionately make up the poor by having these value sets, the segregation in use of vouchers does not occur in any significant way because of race, but because of values and behaviors associated with race. Therefore, any public policy solution designed to address racial disparities on the assumption that does not understand this truism will fail.

New Orleans’ plan does not reflect this reality; rather, it seeks as a solution the export of individuals of this value set to other neighborhoods where the value set is less prominent, if at all exists. By jacking up reimbursements, this increases the chance (even as some of the voucher holders do not share in the inferior value set of their present environment and want to get out) that those with the inferior set of values will come to a neighborhood populated by those with overwhelmingly future rather than present orientations. The same goes for builder/owners if asked to increase the proportion of low-income units and/or for a longer period of time in order to obtain the tax credit.

Landlords recognize this, and do not want to import individuals with orientations that will cause them trouble, both in property management and in ire raised by neighbors. They wish to avoid the scenario where they import too many with inferior values that then drives out other residents, which then sends rental and property values into freefall. Rather than take that chance, they’ll opt out of participation, subverting the goals of both greater racial dispersion in voucher households and increased provision of units for Section 8 purposes.

Like it or not, that’s the way the world works, a fact strenuously avoided in the thinking of Democrats Obama and Landrieu. This plan will not alter concentration by race of voucher households in any significant way; indeed, it applied clumsily will reduce the stock set aside for Section 8 clients. In the end, it will hinder Landrieu’s stated goal of increasing affordable housing and do nothing to make New Orleans, as one of his functionaries said was wished, a model in this policy area for the rest of the country.