Wednesday, March 25, 2015

Something from a newsletter to help you understand yet more government crookedness

When you think of section 8 housing, you probably don't think of
rooftop pools and personal wine storage, but more and more apartment
complexes are getting into the business of accepting government
subsidies for housing. These days, a number of luxury complexes across
the country that offer everything from in-home manicure services to
theater/screening rooms are setting aside at least some of their units
for affordable housing[1]. The main reason is not that the complex
owners have hearts of gold for those in need, but rather that those
section 8 subsidies are an exchange for funds for building and
maintenance as well as, in some cases, permission to develop.

Section 8 started about three decades ago with the National Housing
Act (NHA). The act was intended to put housing projects out of
business and provide better housing options for individuals receiving
federal aid. The plan seemed like a good one because it largely
eliminated the need for government housing and maintenance of that
housing, but it has eroded over the years thanks, in large part, to
the open-ended nature of the program that enables recipients to remain
on government-funded housing indefinitely. Section 8 rents are based
on income, so once a recipient lands an apartment – particularly a
nice one – it disincentivizes any improvement in income because even a
small jump will quickly render the new rent unaffordable.

"What you're talking about is a kind of entrapment situation,"
explained Russell Dano, an Arlington, Virginia city planner. He added,
"There's a disincentive to do better in the world" with the caveat
that, in his opinion, people are not "as economically mobile as we
believe them to be." However, Heritage Foundation scholar Robert
Rector warned that the real issue is not whether or not section 8
housing has a place in these developments, but why the developments
include it[2]. "What you have is a corrupt log-rolling between these
big developers and the bureaucracy and they feed off each other," he
said, adding, "Washington and local governments run these very
unbalanced programs [that] give high benefit to a limited number
[while others] don't get anything."

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