The willingness of Elon Musk and his Department of Government Efficiency to take on sacred cows is stunning Washington, as tenets long unquestioned suddenly fall like idols destroyed by Abraham.
The same creative destruction should be focused on a bad idea that has harmed cities and fostered dependency for nearly a century: public housing.
Instead of tinkering around its edges, Musk and his minions, as per their approach to the Agency for International Development, should look to phase out “the projects” altogether — by selling off the properties and buying out tenants.
It’s time for government to get out of the housing business — which it never should have been involved with in the first place and which it has proven incompetent to manage.
The first and best reason for exiting public housing is the condition of the projects themselves — and the ill effects on the supposed beneficiaries, the tenants.
The nation’s largest housing authority, that of New York City, faces a backlog of $80 billion in deferred maintenance, which translates to routine leaks, mold and elevator failures through the 326 “developments.”
The danger of falling bricks is so common that scaffolding remains up for years — providing cover for criminals.
The same story has been true across the country; more than 200,000 public-housing units have had to be demolished over the past 20 years because they proved uninhabitable.
Foolishly, New York state is choosing to use taxpayer dollars to repair the aged buildings, in which no sane private realtor would invest.
It’s even allowing tenant elections, in which Housing Authority employees can vote, to choose those same failed employees to do the repair work.
Here’s what should get Musk and DOGE’s attention: A great many of the public-housing sites are valuable real estate; their sale and development could spark a building boom of new housing, stores and offices.
The property values are eye-popping: The Baruch Houses on the Lower East Side is worth an estimated $111 billion.
The Ingersoll Houses on the booming Brooklyn waterfront would also command an enormous sum.
High-value public housing sites dot the country, in 3,000 cities and towns of every size. Their value should be unlocked.
The Department of Housing and Urban Development, which provides grants to those local authorities, can push them to sell their properties, by doing what Musk had already shown as a model: cutting off grant assistance and making even short-term aid contingent on starting the sell-off process.
That grant assistance, coupled with the substantial revenue from property sales, can instead be used to help relocate tenants — by paying them to move out, so as to free up the project sites.
It’s important to realize that public housing has actually been harmful to those tenants — trapping them in a cheap apartment while they miss out on the chance to be homeowners.
HUD rules actually lead to dependency. In New York, the average tenant has lived in the projects for 20 years. And the higher a tenant’s income, the higher the rent.
African Americans have been particularly victimized; thriving black neighborhoods, in which homeownership was common, were demolished to make way for projects in which only the government could be the owners.
Other forms of subsidized housing, such as Section 8 vouchers, have the same ill effects; the average tenant has lived in their unit for nine years.
What’s more, the system gives priority to those of the lowest income: single mothers with children, the largest non-elderly population group. This encourages long-term poverty.
And unlike cash welfare, subsidized housing comes with no time limits and no requirement to work.
The same is true for the most recent progressive housing boondoggle — developments financed through the Low-Income Housing Tax Credit.
Premised on the unproven idea that it’s important for those of high and low incomes to live together, LIHTC units are wildly costly — an incredible $708,000 per subsidized apartment in California, for instance.
As in public housing, tenants offered cheap rent tend to stay put in tax-credit projects — foregoing upward mobility.
When public housing began during the New Deal, its advocates believed it would replace private housing for the majority of the population. American free enterprise has shown the folly of that socialist approach.
But more than 9 million Americans remain mired in the poor conditions and dependency trap of subsidized housing — nearly half of them African-American.
It’s tempting to find new financial approaches to repairing public housing; that’s the path that New York, home to 10% of all the public housing in the country, has chosen.
But a facelift today is no guarantee of good conditions over the long term. Even the worst public housing, such as the now-demolished lakefront high-rises in Chicago, looked good when politicians cut the ribbons.
Private management, such as through HUD’s Rental Assistance Demonstration program, can help — but doesn’t rid the system of its lure to long-term dependency.
The fact of the matter is that government should not be in the real-estate business.
Now that imaginative ideas are actually in play in Washington, it’s time for public housing to go.
Howard Husock is a senior fellow in domestic policy at the American Enterprise Institute.
