University of Virginia Economist Edgar Olsen to Call for an Overhaul of Public Housing in Congressional Testimony on Feb. 15

February 10, 2006 — Even before hundreds of thousands of people were made homeless by Hurricane Katrina, it was clear that the U.S. public housing program was not up to the task of serving our poorest families.

That is what Edgar Olsen, a professor of economics at the University of Virginia and a nationally recognized expert on low-income housing programs, plans to say in congressional testimony scheduled for next Wednesday. He will be calling for an end to U.S. public housing as we know it.

Olsen favors a radically different approach that would provide more choice to families currently covered by the program, an approach that could serve hundreds of thousands of additional families at no additional cost.

“The evidence indicates that it costs much less to provide equally good housing with housing vouchers than with public housing projects,” Olsen writes in his prepared statement. “Therefore, shifting the budget for public housing to housing vouchers would allow us to serve all of the families served by public housing equally well … and serve hundreds of thousands of additional families. Alternatively, it would allow us to serve current recipients better without spending more money.”

The federal Quality Housing and Work Responsibility Act of 1998 (QHWRA) “made a small step in the right direction but doesn’t go far enough,” Olsen believes. He proposes “a much more significant initiative that would gradually lead to the elimination of the public housing program in its current form.”

Currently, the federal government provides subsidies directly to local public housing agencies to operate and modernize their existing projects and build new projects. Olsen’s proposal would shift that support to the low-income families who need help paying the rent. By offering housing vouchers to current public housing tenants, the government would free these families to move to housing, neighborhoods and locations that they prefer to their public housing units. Allowing housing agencies to sell their worst projects and charge market rents for their vacated units would pay for the vouchers. The proposal would force housing agencies to compete for the business of their tenants. With the passage of time, local public housing agencies would administer fewer projects and more housing vouchers. No new public housing projects would be built.

Since Olsen’s proposal represents a dramatic departure from business as usual for housing authorities, it likely would face opposition, at least initially, from some who administer the public housing program. However, those motivated by a desire to help the poorest people improve their housing might eventually number among its most enthusiastic supporters once they see its impact.

Olsen has been invited to present his views before the House Committee on Government Reform’s Subcommittee on Federalism and the Census. The hearing is titled “Living in America: Is Our Public Housing System Up to the Challenges of the 21st Century?” Olsen will provide committee members with copies of his written testimony and give a five-minute oral presentation on Wednesday, Feb. 15, at 2 p.m. in room 2247 of the Rayburn House Office Building in Washington, D.C.

Olsen is one of the nation’s leading experts on low-income housing policy. He has spent more than 35 years studying the performance of low-income housing programs, including public housing and housing vouchers. He has been a consultant to the U.S. Department of Housing and Urban Development during both Republican and Democratic administrations, and he was consulted by the federal Government Accountability Office (GAO) on its study comparing the cost-effectiveness of tenant-based vouchers and the major active construction programs, including public housing’s HOPE VI initiative. He has testified before congressional committees on low-income housing policy on three previous occasions.