Washington: Kemp's Opportunity

Jack Kemp's first phone call as secretary-designate of Housing and Urban Development was not to a powerful senator, a wealthy developer, a professional poverty worker, or any other of HUD's traditional supporters in Washington. Instead, Kemp called a person HUD was created to serve: a poor, single mother who lives in a public housing project.

Kemp's call wasn't a PR stunt. And he didn't telephone just any of the 3 million low-income Americans who receive assistance from HUD. He phoned Kimi Gray, a Northeast Washington woman who has accomplished what the nation's social planners have been unable to do—transform an inner-city ghetto into a model of economic development.

In 1982, Gray's community, the Kenilworth-Parkside public housing project, had the highest crime rate in the city. Rape and robberies were common in the hallways and on the grounds of the sprawling 464-unit complex. There was no heat or hot water and the buildings were falling apart. Some 80 percent of the residents were on welfare. The only sign of economic activity was money changing hands at what had become a notorious open-air drug market.

Under Gray's leadership, the tenants of Kenilworth-Parkside have turned the community into a decent place to live. They began by taking over the management of the complex from local public housing officials. They put former welfare mothers to work running a day-care center. They hired an out-of-work repairman to teach youngsters how to fix the screen doors in the project; the effort evolved into a small profit-making company. Since then, tenants have also formed a janitorial service, a food carryout, a grocery co-op, a construction crew, a moving business, and a beauty salon/barber shop. Thanks to this burst of capitalism, more than 130 Kenilworth-Parkside residents are off welfare. And after 1990, when the tenant management corporation takes over ownership from the federal government, the project's units will go on sale to residents for about $10,000 each.

Kenilworth-Parkside is one of 14 tenant-managed housing projects across the nation where committed groups of residents—working with housing authorities, foundations, and local businesses—have transformed blighted communities into models of inner-city development. Gray and the other tenant managers have succeeded because they have demanded more of their neighbors than housing officials and professional poverty workers would have. They have promoted individual responsibility and self-reliance. They have created jobs in tenant-owned companies by obtaining venture capital funds from private foundations.

Like these tenant managers, Kemp believes that traditional poverty programs suppress the very attributes that should be rewarded—self-reliance, individual initiative, and private enterprise. As HUD secretary, Kemp wants to foster self-reliance by selling off public housing to its residents at prices they can afford. He wants to spur individual initiative by helping other tenant groups emulate Gray. He wants to encourage private enterprise by giving tax breaks, regulatory relief, and other incentives to businesses who will create jobs in ghettos and by reinstating tax deductions, eliminated in the 1986 tax revision, for builders of low-income housing.

But when Kemp called Gray he wanted to talk about more than the principles they believe in. To succeed at HUD, he needs her help and the help of other tenant managers. Congress hasn't exactly been enthusiastic about Kemp's approach to inner-city development. For eight years his plans to sell public housing units to tenants and to establish "enterprise zones" have been stalled. Congress has sided with the poverty-program establishment—labor leaders, developers, and professional do-gooders who believe the only way to improve life for low-income Americans is for the federal government to spend more money. Kemp hopes that Gray and her colleagues will help him convince Congress that a different approach is needed.

One reason Kemp's initiatives have gone nowhere is that they were too closely identified with white, conservative Republicans. When this group spoke of applying private enterprise and self-reliance to the problems of the nation's inner cities, traditional supporters of the poor heard only a justification for cutting social programs. They viewed any Republican initiative with suspicion. An alliance with tenant managers can help dispel that suspicion.

Kemp first teamed up with tenant managers in 1987, when they lobbied for a Kemp-sponsored bill to give tenants nationwide the right to manage their own projects. The effort succeeded, although provisions to enable tenants to buy their units at affordable prices were watered down substantially.

This new alliance seems to be making further headway in the Democrat-controlled Congress. Rep. Charles Rangel (D–N.Y.), a liberal who represents Harlem, has reintroduced Kemp's enterprise zone bill. Rangel's sponsorship, and House Speaker Jim Wright's pledge of "sincere cooperation" on the measure, show that the Democrats are finally seeing the private-public partnership light that Kemp has so long championed.

Kemp must be careful to use this newfound clout wisely. Never overly concerned with the budget deficit, he, too, will be tempted to attack the nation's housing problems by spending more money.

Already the housing industry and social planners are demanding that the cuts made in HUD's budget during the Reagan years be rescinded. Since 1980, HUD's budget for subsidized housing has been slashed 77 percent, from $26.7 billion to $7.4 billion in 1989. The reductions reflect a change in priorities: instead of spending money to build new housing, HUD funds are going to repair the existing government-owned stock and to provide housing vouchers for the poor.

Some 155,000 households now use vouchers on the open rental market, giving them more choice about where to raise their families; money has been allocated so that approximately 47,000 more families can be served this year. Vouchers, which cover the difference between market rents and 30 percent of the recipients' income, cost the federal government about $4,800 a year per household, compared to $7,000 for newly built public housing. With the national vacancy rate for low-cost housing that meets HUD standards at nearly 8.7 percent—up from 5.1 percent in 1980—vouchers make even more sense.

But poverty-program lobbyists want the federal government to launch a major new construction program. (Historically, about one-third of all money spent on public housing projects has gone for construction contracts.) A federally funded task force chaired by developer James Rouse recently recommended a $3-billion building program. The National Coalition for the Homeless wants the government to spend $15 billion on new construction.

Instead of trying to win new dollars for the construction industry, Kemp should take a cue from tenant managers and look for innovative ways to involve citizens, nonprofit groups, and businesses who say they care about the poor and homeless. As many as 65,000 public housing units stand vacant because they have fallen into disrepair. These units could be donated to nonprofit organizations that agree to fix them up to house the needy.

Kemp could also use his bully pulpit to rally support for "urban barn raisings"—private, community efforts to build low-cost housing by getting businesses and nonprofit groups to donate materials and citizens to pitch in. The idea, conceived by Robert Woodson, founder of the National Center for Neighborhood Enterprise and long-time Kemp ally, would complement the efforts of such existing nonprofits as Habitat for Humanity. Kemp should show up to work at such a "barn-raising."

Finally, Kemp should use his influence to extend the principles behind tenant management to all public housing projects. Tenant management won't work everywhere: to succeed, it must originate with tenants themselves and be spearheaded by a strong individual who can see the effort through rough times. But even in those housing complexes where tenant management is not feasible, Kemp should still apply some of the lessons drawn from successful tenant-managed projects. He should require public housing officials to hire residents of public housing to do at least some of their own maintenance and construction work. After all, those who live in public housing have a greater stake in the results than workers who live across town. By using resident workers, the federal government can get higher-quality work at a lower cost and build tenants' job skills.

"We should place our trust where we place all our hopes, not in the hands of the bureaucrats, but in the hearts of the people who are seeking a better way of life," Kemp wrote former HUD Secretary Samuel Pierce last April. By depending on the very people the programs were designed to help, Kemp has an opportunity to change the way poverty programs work and to revitalize the nation's inner cities.

Rita McWilliams is a free-lance writer. Her article on tenant management, "Revolution in the Projects," appeared in the July 1988 issue of REASON. Richard E. Messick is a lawyer with the firm Patton, Boggs & Blow in Washington, D.C.