The long arc of federal housing policy reveals an unexpected political cycle of Republican innovation and Democratic appropriation. Government-sponsored public housing construction, an ambitious program forged during the New Deal, aimed to provide decent housing for low-income Americans. The plan faced conservative and Republican opposition necessitating compromises that diminished the scale of the program, yet expansion of the supply of low-income housing through publicly financed construction dominated policy for decades. Republicans, who argued against the prospect of socialized housing, eventually proposed rental vouchers (originally called housing allowances) as a policy alternative. The competitive electoral environment of the latter half of the twentieth century ensured rental vouchers would continue as a lynchpin for partisanship.
At first most Democrats derided rental vouchers; they appeared as half-measures compared to expanding the supply of affordable housing. Over time, however, Democrats came to acquiesce in the implementation of the Republican policy and by the mid-1990s they were promoting it. For their part, the Republicans eventually won the voucher program they had long championed. However, as Democrats embraced vouchers, many Republicans reversed course and opposed what was once their own reform.
The political journey of housing vouchers reveals a five-stage partisan policy cycle that reflects how an entrenched part of the Republican agenda turned into a component of the Democratic program (figure 1). This article will focus on the only complete revolution of this cycle: from the origins of large-scale low-income federal housing support in the 1930s to the Democratic embrace of rental housing vouchers in the mid-1990s. The key political events related to low-income housing that advanced the stages within the partisan policy cycle include (1) the passage of the US Housing Act in 1937 and the Housing Act of 1949; (2) significant Republican resistance to the Democratic subsidized housing policy; (3) the Republican promotion of rental assistance alternatives from 1965 through 1974; (4) the determination of the Reagan administration to pursue a housing strategy centered around vouchers in 1981; and (5) the rethinking of the Democratic message by the Democratic Leadership Council and the Republican capture of both Houses of Congress in November 1994 (figure 2).
FIGURE 1. Partisan policy cycle.
FIGURE 2. Key events in the housing partisan policy cycle.
The partisan policy cycle reflects the logic of the competitive electoral system in the United States. Bipartisanship is elusive because there are few paths for a minority party to regain majority status when promoting consensus. I propose a “partisanship” framework of policy change for issues scrutinized by the public. Disagreement may reap electoral rewards for a political party situated in the minority. Emotive labels such as socialism and big government are easy to employ, especially by Republicans, because of the complexity of modern social policy in the United States.
In the case of housing reform, politicians often stress the power of market mechanisms and private-sector actors, because those concepts have appeal to a greater range of actors than calls for increasing the role of government. In a policy area as controversial as housing, Republicans and Democrats have incentives to differentiate themselves and to disparage policies advocated by their opponents through the use of cutting labels. The conservative critique tarring government-sponsored housing policy as socialistic usually resonates far more with policy makers than the antimarket housing narrative sometimes articulated by reformers. The debate about policy may or may not rely on accurate evidence. At times politicians seem to operate on instinct and received wisdom; in other words, they construct their own policy truths only, at best, tangentially related to evidence. An example of this phenomenon is how they reuse familiar terms. Politicians applied the label rental vouchers and rent certificates to a variety of proposals; therefore, neither term has a universal definition.
The partisanship framework is useful as a conceptual framework for long-standing debates such as national health insurance and low-income cash assistance. Richard Nixon proposed a version of an employer-based mandate as an avenue toward national health insurance to counter Democratic calls for a single-payer system. Clinton adopted the essence of the Nixon proposal—the employer mandate—to arrive at universal coverage. In response to Clinton's plan, mainstream Republicans advocated an individual mandate to achieve the goal, but their support turned to opposition when Obama proposed a plan built on the individual mandate. Similarly Nixon hoped to reform welfare by replacing Aid to Families with Dependent Children with an alternative guaranteed income program. Republicans dropped the proposal when Carter offered his support in the late 1970s. Republicans coalesced around Reagan's California workfare model, a version of which was enacted in 1988 and supported by many Democrats. Republicans changed course; they proposed the termination of Aid to Families with Dependent Children as an entitlement and enacted Temporary Assistance to Needy Families in 1996 that Clinton signed after two vetoes.
Electoral calculations are the most important motivation for political parties to shift policy positions. Although both Democrats and Republicans have long praised market mechanisms in social policy (e.g., Schultze Reference Schultze1977) the complexity and nuances of actual policy allow for policy makers to view programs through various ideological lenses. The hope to harvest electoral dividends and meet the demands of immediate governing determines the trajectory of policy far more than conventional theories allow. Parties jettison long-standing positions when the politics of the moment warrants such a course.
Interest groups are key players in housing policy; however, they hold only limited sway because, when their inclinations are not aligned with those of policy makers, they are ignored. By framing their preferences in ideological terms that may resonate in the political milieu, interest groups bolster their chances for a favorable outcome.Footnote 1 The National Association of Real Estate Boards (NAREB), which later reconstituted itself as the National Association of Realtors (NAR), began arguing in the 1930s that low-income public housing construction was socialistic. They viewed government competition as unfair. Conversely, they supported rental assistance that, originally, was opposed by housing advocates, although all groups realigned themselves into voucher advocates as the fears held by many liberals about the program proved unfounded (von Hoffman Reference von Hoffman1996).
No study of rental vouchers attempts to construct a theoretical explanation by focusing on the evolution of the policy over time from a political perspective. Previous studies tend to analyze the nuances of policy change involving the politics of the moment (e.g., Hays Reference Hays1995; Olsen and Moffitt Reference Olsen and Moffitt2003; Olsen and Ludwig Reference Olsen, Ludwig, Bailey and Danziger2013; Orlebeke Reference Orlebeke2000; Struyk and Bendick Reference Struyk and Bendick1981; von Hoffmann Reference von Hoffman1996, Reference von Hoffman2012). After situating how the partisanship framework engages the literature on policy making and partisan change, I trace the political evolution of housing vouchers through the lens of the partisan policy cycle.
Previous Explanations
The political trajectory of rental vouchers challenges conventional theories of policy making such as “policy cycles,” “multiple streams,” and “punctuated equilibrium” by underscoring the importance of partisan reversals in policy positioning. The policy cycles model suggests that programs are undergoing evaluation and revision in a cyclical pattern. Evaluators determine the fate of programs based on performance and how much support interests and constituents evince. For instance, the popularity of public housing waned while that of urban renewal waxed during the course of the 1950s and 1960s as a result of cycles of evaluation (Jones Reference Jones1977). My model differs from the conventional understanding of policy cycles by adding a partisan lens and, to some extent, deemphasizing the role of programmatic evaluation.
The multiple streams framework suggests windows of opportunity open at rare times when a proposal is available for the purpose of tackling a “problem” when the “politics” of the moment allow the three streams to converge to effect policy change. Actors select their preferred solutions out of a metaphorical garbage can. Classic examples of multiple streams theory include airline and trucking deregulation and health maintenance organizations. The model makes the assumption that the policy process unfolds in stages with actors monitoring policy performance. Suboptimal outcomes make reform possible (Kingdon Reference Kingdon2010). My theory underscores the importance of what Kingdon calls the political stream. Partisan politics allow certain policy solutions to come to the fore and problems associated with particular programs to receive attention from elected officials, policy makers, and the broader public.
Punctuated equilibrium posits exogenous shocks, such as economic calamity, war, and other societal dislocations, serve as catalysts for policy change. The dislocations caused by the trauma foster an environment allowing actors to reshape policy. Examples include the decline of nuclear power after the Three Mile Island incident and federal regulation of the financial sector with the onset of the Great Depression (Baumgartner and Jones Reference Baumgartner and Jones1993). While exogenous shocks can trigger shifts in partisan dynamics, in my model partisan considerations not associated with external events also effect policy change.
Another model of policy making attractive to social welfare scholars is path dependence, which suggests that events occurring one moment in time are subsequently reinforced and make deviation from an established path increasingly difficult. A classic example of path dependence is the QWERTY keyboard developed to help typists on old manual typewriters. The system persists despite the rationale for QWERTY vanishing. Social welfare scholars have suggested path dependence is useful for understanding the variations among national health insurance schemes of developed nations are often attributed to path-dependent processes (Pierson Reference Pierson2000).
Path dependence does not assume the rationality of the policy-making process; rather, decisions made at a particular moment become magnified over time. Arguments, and not just institutions, assume a path-dependent quality. Many politicians have invoked a narrative that market mechanisms are superior to government planning. They apply labels such as vouchers and rent certificates to a variety of policy mechanisms in order to influence how actors view programs and reform proposals.
I suggest that all existing theories of the policy process are incomplete by failing to give enough attention to short-term electoral dynamics and ideas. In the United States, it is the Congress and presidents who have fundamentally changed housing policy at a federal level, so their preferences and rhetoric need to be taken into account. It is instrumental to incorporate the partisanship framework in theories of the policy process for contested issues. The rationality models and institutional path-dependent theories do not provide sufficient analytic leverage in order to understand how the politics of a policy such as rental vouchers has unfolded over time.
The partisanship framework also provides an alternative perspective to conventional understandings of how political parties reverse policy positions. Rational choice theorist Riker (Reference Riker1986) posited “heresthetics” as an explanatory device. His intuition is that partisan change is best explained in the game theory tradition where “losers” will seek to change policy positions in order to crack coalitions of the governing party. Tactics aimed to rend asunder majority coalitions in order to implement policies that are closer to the minority's preferences are another facet of “heresthetics.” Karol (Reference Karol2009) argues that political parties change in order to attract new constituencies, meet new demands of groups already part of the political party's coalition, and improve the party's standing with the public. Gilmour (Reference Gilmour1995) proposed a spatial model with politically permissible zones of agreement and disagreement in order to comprehend why political parties are often unsuccessful in forging compromises.
A number of scholars in recent years have recognized the centrality of ideas in politics although there is little agreement about how to incorporate them within a theoretical framework (Beland and Wadden Reference Beland and Wadden2008; Lieberman Reference Lieberman2002; Smith et al. Reference Smith, Shapiro, Skowronek and Galvin2006). The approach I am advocating, placing partisanship at the center of an explanation of policy evolution, is a perspective about how ideas influence policy making. Most politicians want to conform to the intuition, or idea, that they are not establishing a quasisocialistic program but rather harnessing the forces of markets and entrepreneurship. However, almost any viable policy option in housing involves aspects of the market and government and may be viewed through either lens. Politicians tend to define a proposal as market friendly or socialistic based on their political needs in the moment. They also reuse familiar labels for similar reasons: to make a proposal more palatable.
Democrats Propose Welfare State Program
At the height of the Great Depression both the administrations of Herbert Hoover and Franklin Roosevelt hoped to spur low-income housing construction by providing loans and grants to private-sector actors and local governments. Much of the existing housing stock was inadequate and policy makers hoped to replace slums with decent housing for working families. Between 1932 and 1934 Hoover's Reconstruction Finance Corporation, FDR's Housing Division of the Public Works Administration (PWA), and the Federal Emergency Housing Corporation all, in turn, failed in that mission. In 1934 the PWA began supervising construction directly; however, the comptroller-general of the United States, supported by the US attorney general, handed down a series of decisions declaring the activities of the PWA unconstitutional, essentially compelling Congress to act (Radford Reference Radford1996).
In Senate hearings before the Committee on Education and Labor in 1935 a housing advocate, Catherine Bauer, insisted the “real problem . . . is not so much the existing slums as it is the incapacity of private enterprise to meet the great need for new housing in the near future” (US Congress 1935). This was a radical notion that even surprised prohousing legislators. Her influence reshaped the views of Senator Robert Wagner (D-NY), who became the leading congressional advocate for comprehensive legislation for a public program to induce private builders to construct low-income housing. The culmination of New Deal efforts to promote low-income housing construction with federal funds was the US Housing Act of 1937 (Radford Reference Radford1996; von Hoffman Reference von Hoffman2012).
Republicans Denounce
A leading conservative, Senator Arthur Vandenberg (R-MI), opposed the US Housing Act on grounds of fiscal prudence. He played a game of chicken with Wagner on the Senate floor in the summer of 1936 in a futile effort to force the New York liberal to answer the query: “to what extent are the resources in the [housing] bill going to meet the sum total of the problem?” (Congressional Record 1936; hereafter CR). Vandenberg envisioned the legislation would provide a foothold for an eventual budgetary leviathan and many Republicans agreed, with only five Republicans in the Senate favoring the housing legislation (ibid.). In the key vote in the House the following year, 72 out of 73 Republicans voted to kill the bill in a recommit motion (CR 1937a). More than two-thirds of Democrats in both chambers voted for the legislation negating the Republican votes (CR 1936, 1937a).
While Republicans were unable to stop the bill, conservatives within the Democratic Party allied themselves with Republicans in efforts to contain costs. Senator Harry Byrd (D-VA) sponsored an amendment stipulating the cost of construction per unit be capped to the average cost for a modest dwelling nationwide. Critics pointed out that in urban areas, such as New York City, labor and transportation costs for materials were high and only subpar housing could be constructed with funding at the national average. The Byrd Amendment was enacted by a single vote, 40-39, behind unified Republican and some southern Democratic support (CR 1937b). One New Dealer, Senator Sherman Minton (D-IN), who noted Republicans often complained about the Democratic “steam roller,” suggested an opposing “elephant steam roller” operated to sabotage the effectiveness of the housing legislation (ibid.). In the House-Senate Conference agreement, cities with a population of more than 500,000 were allowed to have somewhat higher construction costs. Nonetheless, advocates of public housing anticipated that if construction costs for low-income housing exceeded that of Federal Housing Administration housing there would be a significant public backlash. They implored local authorities to reduce costs by skimping on unnecessary amenities and to keep expenditures on aesthetics to an absolute minimum (Hunt Reference Hunt2005).
Federal involvement in housing was still anathema to many conservatives in the 1940s; however, Senator Robert A. Taft (R-OH)—known as “Mr. Republican”—became supportive of a limited federal role in housing, even at the risk of drawing the enmity of various real estate interests (Taft Reference Taft1946). Taft expressed concern about the acute postwar shortage of housing and the slums located in his native city of Cincinnati (Patterson Reference Patterson1972: 319). In a speech to the Chamber of Commerce in Cincinnati, Taft said, “Housing is a more difficult problem than education, health, or medical care. Yet, in many ways, it is most important. Every family must have shelter of some kind” (Taft Reference Taft1946). To that end, Taft chaired a special Senate Subcommittee on Housing and Urban Redevelopment and eventually helped fashion a bill, the Taft-Ellender-Wagner Act, which passed the Senate in 1946, but died in the House (Davies Reference Davies1964).
Taft continued his efforts to develop a Republican housing policy. A strategy paper from 1948 prepared by his staff stated, “The Republican Party needs a housing program of its own; a program which neither borrows from nor imitates the New Deal; which is in consonance with the traditional American way of life, and the traditions and tenets of the Republican Party; and which will work” (Taft Reference Taft1948). Senator Joseph McCarthy (R-WI), who began his political career as a critic of public housing, became something of an expert. In a letter to the House of Representatives chair of the Joint Committee on Housing, Ralph Gamble (R-NY), McCarthy claimed that he had “visited practically every major city in the country and covered approximately 30,000 miles” and suggested that “rental housing should be encouraged” (McCarthy Reference McCarthy1948). This was a break from nearly 30 years of Republican rhetoric that emphasized homeownership (Radford Reference Radford1996). However, no distinct Republican housing program would yet emerge.
The Republican-controlled Congress enacted a modest bill, the National Housing Act of 1948, which President Harry Truman pilloried as insufficient (Patterson Reference Patterson1972). Truman's surprise victory and the Democratic recapture of Congress in the 1948 elections set the stage for the enactment of more ambitious legislation. The Housing Act of 1949 was the successor statute to the 1937 US Housing Act and focused on enhancing the public project-based housing program with a goal of providing “a decent home and a suitable living environment for every American family.” In the congressional debates a number of southern Democrats joined with Republican critics. In the House, 69-year-old Edward Cox (D-GA) charged the bill was “socialistic” and would create an “omnivorous bureaucracy” while 83-year-old Adolph Sabath (D-IL) called the Republican-southern Democratic alliance “unholy.” Cox and Sabath's argument descended into fisticuffs (Congressional Quarterly Almanac 1949: 282; hereafter CQ). After failing to include amendments curtailing the reach of the Housing Act, 24 of 35 Republicans in the Senate, nonetheless, joined the Democratic majority in voting for passage, probably a tribute to the influence of Taft in the chamber. In the House, 133 of the 164 Republicans in the House voted against the legislation in the motion to recommit (CQ Almanac 1949). The politics of housing, overall, exhibited a high level of partisanship during the 1930s and 1940s, an era in which the major political parties are often seen as ideological muddles lacking cohesion.
Republicans Counter with an Alternative “Market-Based” Proposal
The Democratic vision of public housing fell short of expectations. The reasons behind the disappointments are multifaceted. The emphasis on economy handicapped building programs. Fiscally minded congressional conservatives insisted that families whose income exceeded poverty levels be evicted from federal housing, thus providing a work disincentive and concentrating the poorest in public housing (von Hoffman Reference von Hoffman1996). Congress never budgeted the funds necessary to meet demand. These disappointments provided Republicans the opportunity to develop policy alternatives beyond simply critiquing housing programs as imprudent and socialistic.
The only significant alternative to public housing discussed from the 1930s through the 1950s was rent certificates, a precursor to vouchers. Rent certificate proposals called for subsidizing tenants to live in existing housing owned by for-profit firms. The virtue of rent certificates, according to advocates, was they would allow the federal government to limit the need for low-income housing construction, alleviate housing shortages, and promote private enterprise. Rarely was the concept fleshed out beyond a statement of general principles.
Starting in 1936, witnesses at congressional hearings, usually connected with real estate interests, promoted rent certificates. In 1943, the NAREB stated in a memo, “[rental] assistance should be administered through local welfare boards in the form of rent certificates adjusted to the needs and requirements of the family . . . this is the straightforward American way of handling the problem” (President's Advisory Committee 1953: Exhibit 21). The Producers’ Council of the NAREB published the only detailed early plan for a rent certificate program in 1944. The proposal envisioned needy families renting a privately owned unit approved by a local housing board. The families would receive a subsidy scaled to income. There was no requirement that compelled an owner to accept a tenant and, likewise, the low-income recipients could choose where to rent. In current parlance, this proposal is tenant based because the family may select any existing unit that meets the program's standards for housing and may move at the end of lease. In a project-based rent certificate proposal a government agency chooses the units to offer families on a take it or leave it basis (ibid.).
A Senate subcommittee in 1948, chaired by Taft, and a Presidential Advisory Committee on Government Policies and Programs convened under President Dwight D. Eisenhower in 1953 evaluated rent certificate alternatives. Advocates in 1948 argued rent certificates were analogous to the grocery stamp program providing food for low-income Americans. The 1953 committee considered two rent certificate proposals. One was a temporary program in which municipalities and local charities would endorse notes to pay a portion or all of the rent for low-income beneficiaries in private residences. The second included a component where the government provided direct loans to builders for low-income housing construction with relief agencies providing rent certificates calculated as the difference of normal rental value and the amount the tenant could contribute (ibid.).
No member of Congress from the 1930s to 1950s championed rent certificates. On the contrary, all who spoke were critical. The Taft committee pointed out that housing was far more expensive than food and rejected the grocery stamp analogy. The committee expressed concerns that rent certificates would lead to an increase in relief rolls, be more expensive than the public housing program, fail to increase the housing supply, and fail to provide incentives to redevelop slums. They believed that private enterprise would find participating in a large-scale program with a heavy regulatory burden intolerable. The 1953 study reiterated all these points (Orlebeke Reference Orlebeke2000; President's Advisory Committee 1953: Exhibit 21; Struyk and Bendick Reference Struyk and Bendick1981). Private-sector housing interests kept the rent certificate concept afloat for decades; however, they could not convince Congress, including its conservative members, of the utility of rent certificates.
Housing strategies to help renters appeared on the agenda again during the 1960s. Rent supplemental programs interested the Democratic Kennedy and Johnson administrations, which still were working within the public housing framework. In 1961 Congress enacted the Section 221d(3) Below Market Interest Rate program that aimed to reduce rents for low-income individuals by granting government-sponsored mortgages in most cases at a 3 percent interest rate. The 221d(3) program did not succeed in reducing rents as anticipated. Opposition emerged since the program was directed to the “rich poor” with incomes higher than the public housing population (Hays Reference Hays1995).
In 1965 the Johnson administration proposed a rent supplement program, also known as a rent subsidy program (Section 101), targeted to help the same “rich poor” constituency and promote racial integration. The proposal set rents at 20 percent of tenant's income with the government subsidizing the difference between the income and rental price. The Department of Housing and Urban Development (HUD) contracted with owners of otherwise unsubsidized new and existing housing to provide units that met the minimum standards (Olsen and Ludwig Reference Olsen, Ludwig, Bailey and Danziger2013). The program was controversial and enacted only after Congress made substantial changes including limiting recipients to those who qualified for public housing at rents of 25 percent of tenant income (Calhoun Reference Calhoun1980). Republicans under the leadership of Representative William Widnall (R-NJ) countered with a proposal for leased housing (Section 23). The Republican proposal dispensed with racial integration as a goal and would exclusively provide rental assistance for existing housing. The program called for taking “full advantage of vacancies or potential vacancies in the private market” in order to “[provide] a supplementary form of low-rent housing” (Housing and Urban Development Act 1965). The project-based proposal gave tenants no role in selection of units in contrast with the 1944 proposal from the Producers’ Council (Friedman and Krier Reference Friedman and Krier1968; US Congress 1965a).
After decades of congressional antipathy, a running dispute occurred in 1965 about whether the rent supplement or leased housing proposal was actually a rent certificate program in both House and Senate subcommittee hearings (US Congress 1965b, 1965c). Widnall's enthusiasm for rent certificates gave him the upper hand in winning this debate over nomenclature and, thus, what proposal seemed to represent genuine reform. He introduced the Republican version of the Housing and Redevelopment Act of 1965 that stated in the first line the purpose of the legislation is “to provide a rent certificate program for low income housing in private accommodations . . .” (US Congress 1965a). Frustrations with public housing programs appeared to lead to a reappraisal of a long-criticized alternative. Rent certificates gained legitimacy as a policy option because they had entered the housing policy lexicon as the alternative to the status quo.
The leased housing program (Section 23) was uncontroversial, a contrast to the rent supplement program, probably because it was a Republican rather than a Johnson administration plan. There were two variations of Section 23. In one version, a public housing authority selects and contracts leases with property owners and then sublets the units to tenants. The family offered the unit must accept the unit in order to receive a subsidy. In a variant, tenants were given choice in selecting units to lease. The first program was project based, because the family offered the unit had to accept the unit in order to receive assistance, and the revised program was tenant based, because the tenant could find a unit to rent (called “finders keepers”) that met minimum standards (Mayo et al. Reference Mayo, Mansfield, Warner and Zwetchkenbaum1980; Olsen and Ludwig Reference Olsen, Ludwig, Bailey and Danziger2013).
The leased housing program was small. Its significance is that it was an early initial foray in moving policy delivery away from its moorings in public housing toward rental assistance by using the existing privately owned housing stock. Marie McGuire, the Commissioner of Public Housing in Houston, stated in 1966 the leased housing program was “so radically different from conventional public housing” that it could hardly “be called by that name” because it utilized existing housing, rather than new construction (Friedman and Krier Reference Friedman and Krier1968).
The Johnson administration again attempted to reshape low-income housing with the passage of the Housing Act of 1968. In a vain effort to make a program helping those above the lowest income brackets more popular, Section 236 provided for a housing subsidy that went to the owner or private developer who were required to use it to offer below-market rents for the low-income tenants. Private-sector interests lobbied heavily to secure a privileged position in Section 236 housing that was spun as harnessing the power of private entrepreneurship. Section 235 of the Housing Act of 1968 added a construction program with the intent to allow families with modest means to eventually purchase their own dwellings (Hays Reference Hays1995).
The flawed design of Johnson's housing programs, particularly the 235 program, provided opportunities for malfeasance (Olsen and Ludwig Reference Olsen, Ludwig, Bailey and Danziger2013). A series of scandals involving kickbacks between the HUD staff and private realtors undermined the administration's efforts (Hays Reference Hays1995). For instance, in 1971 and 1972, 48 HUD employees and private realtors were imprisoned for defrauding the government, accepting bribes, and submitting false claims (Lilley and Clark Reference Lilley and Clark1972).
Large-scale projects such as Cabrini Green in Chicago and Pruitt-Igoe in St. Louis became notorious. Members of Congress were cognizant of public dismay with public housing construction, yet Democrats defended the status quo. According to Senator Philip A. Hart (D-MI), “the [housing] programs are not inherently defective even though they have become a magnet for corruption and speculation.” Senator William Proxmire's (D-WI) chief of staff, William A. McLean, declared that the Senator “has the uneasy feeling that as bad as the situation is, no one has a plan to improve it” (ibid.).
A Republican outside of Washington was pivotal in refashioning housing assistance. Malcolm Endicott Peabody, whose brother served as Governor of Massachusetts, harbored reservations concerning public housing. As civil rights coordinator, he led a bipartisan working group from 1963 to 1965 consisting of state representatives (including Michael Dukakis) and members of the private sector to review options for subsidized housing. The committee recommended a rental assistance program that commenced the following year. The program was similar to the Section 23 “Finders Keepers” tenant-based version of leased housing, although there is no evidence of direct cross-pollination between the federal government and Massachusetts. An aim of the committee was to promote social and economic heterogeneity by encouraging beneficiaries to seek their own units to rent and for the housing authority to contract with private owners for housing while strictly limiting how many units in a building could be subsidized (Commonwealth of Massachusetts 1965: 41–49).
Peabody hoped to go even further than the Massachusetts rental assistance program in harnessing market mechanisms. He promoted housing allowances that were gaining favor in economic circles. The major innovation in these proposals was that recipients of an allowance might rent a unit for below the payment standard and keep the extra cash to use for purchasing other goods. Recipients of an allowance could also use additional financial resources of their own to rent a unit costing more than the payment standard. Therefore, a key feature distinguishing housing allowances from most rent certificate programs was that the subsidy would not be reduced dollar for dollar if the family found a unit that rented below the payment standard and families could rent units costing more than the payment standard.
Allowances also came to the attention of the President's Committee on Urban Housing commissioned by Johnson. The committee was mainly interested in stimulating construction and blocked the desire of the committee's Chief of Staff, Howard Moskoff, to include a proposal for rent supplements (von Hoffmann Reference von Hoffman2012). However, as a gesture of goodwill to Moskoff, the final report recommended an experimental housing allowance program of tenant-based assistance that would “provide purchasing power directly to the consumer” to allow for making “his own choices in the market place, a freedom which tends to enhance personal dignity” (President's Committee 1968: 71; von Hoffman Reference von Hoffman2012). An experiment stemming from the recommendation commenced in Wilmington, Delaware, and Kansas City, Missouri, in 1970 (HUD 2013 [1978]). However, the energy necessary to promote allowances was not going to come from Democrats.
Peabody lost the primary for the Republican nomination for the US House of Representatives from the 3rd district of Massachusetts in 1968. After that election the Nixon administration tapped Peabody to serve as Deputy Assistant Secretary of Equal Opportunity of HUD (Malcolm Endicott Peabody, pers. comm., April 25, 2009). Firmly committed to the allowance/voucher principle, Peabody suggested Republicans embrace market ideology in both housing and education, and potentially across the larger spectrum of social policy. He called the strategy “Funding the People” whereby the government would achieve social policy goals by channeling funds to individuals who would have limited autonomy on how to spend the allowance/voucher. According to Peabody, vouchers would catalyze a process of “stimulating individual initiative, self-reliance, and responsibility [that] are crucial to any program designed to improve the quality of life” (Peabody Reference Peabody1970: 61).
Peabody had the opportunity to see one slice of his proposal, housing allowances, become law through backdoor channels. Senator Edward Brooke, an African American Republican senator from Massachusetts, was a natural ally for Peabody. Vested in housing issues, Brooke proved receptive to entreaties from his staff member on the Senate Banking Committee, Timothy D. Naegele, who agreed with Peabody about allowances. The lengthy hearings concerning the 1970 Housing and Urban Development Act featured only two cursory mentions of housing allowances (US Congress 1970: 798, 1039). Nonetheless, Brooke surreptitiously inserted an experimental housing allowance program as Section 504 of the HUD bill. According to Naegele the experimental housing allowance recommendation from the Johnson Committee on Urban Housing played no role in the course of these events (Naegele, pers. comm., October 15, 2014). Peabody recalled that George Romney, Nixon's HUD Secretary, expressed astonishment to find the demonstration voucher program in the final legislation (Peabody, pers. comm., April 25, 2009).
The demonstration, the Experimental Housing Allowance Program (EHAP), involved a number of organizations that tested several versions of allowances (including one that had an avenue toward homeownership and another that subsidized tenants directly) making it the largest social experiment in American history. If a recipient of a subsidy rented a housing unit for less than the payment standard, the recipient could spend the extra cash on other goods with no reduction in the subsidy. If a recipient spent more than the allotted payment standard the recipient had to make up the difference and had less to spend on other goods. The experiment used several different formulas to calculate the amount of the subsidy (HUD 2013 [1978]; Olsen and Moffitt Reference Olsen and Moffitt2003).
At this juncture, the Nixon administration viewed Section 504 as an unwelcome intrusion inconsistent with the president's program. Kenneth Cole, the deputy to John Ehrlichman, Nixon's chief domestic policy adviser, raised concerns about Section 504 in a memorandum stamped September 28, 1970. He viewed housing allowances as another facet of the congressional effort toward the complete “socialization of housing” (Nixon Presidential Materials Staff 1970). Yet this stance was not unanimous among Republican appointees. Donald Rumsfeld, the Economic Opportunity Office Chairman, favored demonstrations for housing allowances (Kotz Reference Kotz1970: A1). Despite White House misgivings, Nixon signed the Housing and Urban Development Act on December 31, 1970 that included the Section 504 EHAP demonstration program (Struyk and Bendick Reference Struyk and Bendick1981).
Republicans Work to Implement Alternative Proposal
The politics surrounding housing policy moved quicker than the EHAP demonstration. After acceding to congressional budgets with generous funding for housing construction in his first term, Nixon was ready to shake up low-income housing policy after his reelection. Nixon had no intention to preside over an administration that merely curtailed the New Deal and Great Society at the margins. He aimed to become a conservative domestic innovator—a self-styled American Disraeli—as indicated by his Family Assistance Plan (FAP) and promotion of health maintenance organizations (Black Reference Black2007).
Late in his first term, the Nixon brass thought that housing was the policy area in which to channel innovative energies after the demise of FAP. The open question was what sort of new proposals to offer. Cole recommended to Ehrlichman in a memo that Nixon, “regardless of budgetary circumstances, be in the position of proposing an alternative” or “solution” concerning housing. Housing allowances, a near panacea for Cole's dilemma, eluded the White House adviser's scrutiny as late as December 1972. Cole thought an urban revenue-sharing proposal the only viable alternative to Democratic building programs (Nixon Presidential Materials Staff 1972).
It is unclear who within the White House first realized the utility of housing allowances for the Nixon housing program; however, once offered for consideration, they soon became settled administration policy. While one cannot rerun history according to alternative scenarios, it is likely that housing allowances fared better in the long term because they were not part of the Johnson program. If a housing allowance program associated with Democrats had come into existence the concept would have lost its luster and would be an unlikely candidate for either Nixon or later Reagan to make the pillar of a Republican housing policy.
Romney never held sway in the Nixon administration. The HUD Secretary thought a Republican housing program should revolve around urban revenue sharing and homeownership (Romney Reference Romney1970, Reference Romney1972a). Nixon announced as early as 1970 in a meeting with close advisers that he was replacing Romney with Donald Rumsfeld as Secretary of HUD, an event that never transpired (Confidential Memo 1970). Romney attempted to resign in August 1972 although he was rebuffed until after the election. In his resignation letter Romney asked permission to leave immediately because Nixon “was no longer interested in my counsel and advice before making policy and operating decisions directly affecting the Department I head” (Romney Reference Romney1972b). The Nixon administration forced the outgoing Romney to announce a moratorium on all new subsidized housing building programs on January 8, 1973 with a promise for a thorough reassessment of strategies to cope with urban poverty (Hays Reference Hays1995). The White House ignored Romney's advice given ten days before the announcement that such a moratorium “would be a serious mistake” (Romney Reference Romney1972c). A conservative, James Lynn, loyal to the Nixon housing program, replaced Romney.
An early version of the report “Housing for the Seventies” served as the basis, according to Nixon in a State of the Union Message, to make housing one of his “highest domestic priorities” so that innovative “new policies that will provide aid to genuinely needy families and eliminate waste” (HUD 1974; Nixon Reference Nixon1973a). There was only meager information available about the utility of rental assistance programs using existing housing. “Housing for the Seventies,” cited the favorable evidence available although it did not explicitly recommend a housing allowance program (Hays Reference Hays1995; Orlebeke Reference Orlebeke2000; von Hoffman Reference von Hoffman2012).
Six months after the announcement of the moratorium, Nixon, in a special message delivered to Congress, announced the preliminary results of the HUD study. The president explained that housing policy “requires[s] a different approach” that does not keep the poor “warehoused” together in federal enclaves. Nixon suggested, “instead of treating the root cause of the problem—the inability to pay for housing—the Government has been attacking the symptom” by spending money on increasing housing supply. In the Nixon plan, “the Federal Government would provide qualified recipients with an appropriate housing payment and would then let them choose their own homes on the private market. The payment would be carefully scaled to make up the difference between what a family could afford on its own for housing and the cost of safe and sanitary housing in that geographic area.” Nixon believed, “This plan would give the poor the freedom and responsibility to make their own choices about housing—and it would eventually get the Federal Government out of the housing business.” He concluded by claiming that direct cash assistance would “be the most equitable, least expensive approach to achieving our goal of a decent home for all Americans” (Nixon Reference Nixon1973b). Widnall (R-NJ), the champion of Section 23 leased housing, applauded Nixon's proposal and referred to the concept as “appealing” (CR 1973a).
Nixon thus committed his administration to the advocacy of housing allowances as a major second-term domestic initiative. In doing so, he glossed over caveats expressed by policy experts. For instance, Peabody and others in HUD warned that housing allowances would prove problematic in tight rental markets such as New York City. Tenant-based assistance programs were few and of recent provenance. EHAP was still in the planning stages so the Nixon administration had limited evidence to cite, mainly from state-run programs and the Section 23 leased housing program (Solomon and Fenton Reference Solomon and Fenton1974).
Any prior Democratic support for housing allowances disappeared when Nixon touted their promise while pushing a moratorium on conventional housing programs. After Nixon gave his September 19, 1973 speech, majority leader Tip O'Neill (D-MA) delivered a riposte, accusing Nixon of residing in an “ivory tower.” O'Neill opined, “[T]he low- and moderate-income people of this Nation do not need a lesson in housing theory—or a lot of things that might work. What they need is housing.” The housing allowance program is an “experimental program” that merely could “nibble at [the] problem.” O'Neill suggested that Nixon would not speedily implement the trial program. The majority leader summarized the Democratic response with a sneer: Nixon's “kind of housing program is not enough to repair a leaky roof” (CR 1973b).
Democrats in the Senate concurred. According to Proxmire, “[I]f housing allowances are provided to any sizable proportion of the poor . . . their effect will be to increase housing costs, swell the budget, and add to the inflationary pressures . . . they are a formula for disaster . . . [and would] provide the worst of all worlds” (United Press International 1973). Proxmire also told Secretary Lynn during Senate hearings that the Library of Congress indicated “that the housing allowance program will probably cost four to five times as much as the present programs” (US Congress 1973a: 17–18).Footnote 2 Senator Joe Biden (D-DE) refused to believe that Republicans would stand by a program that gave cash payments to the poor, mentioning how hostility to a guaranteed income for families doomed the Nixon welfare proposal. Biden needled Lynn on the point:
If you had trouble last year, or two years ago talking about cash payments with regard to welfare recipients, how the heck do you think that in 1976 another election year you are going to have—oh, how about George Romney as your candidate? My God! I just can't imagine him talking about direct cash to anybody; really and truly. I think there is a serious political consideration here (ibid.: 39).
The antagonistic Democratic position toward allowances continued to be expressed until the late 1980s. Representative Edward P. Boland (D-MA), the HUD-Independent Agencies subcommittee chairman, never wavered in his disdain. As early as 1972, a Romney assistant related the challenge of securing an appointment with Boland because the chairman “strongly displayed a distaste for discussing” allowances (Romney Reference Romney1972c). Some of the foremost housing experts of the 1970s concurred with the Democrats, scornful of Nixon's proposal. Chester Hartman (Reference Hartman1975: 153–58) referred to allowances as “the grand delusion” and suggested shortages of modestly priced dwellings, racial discrimination, and dishonest landlords (who would claim substandard apartments met code requirements) would combine to undermine the market incentives.
The Nixon administration requested Congress to allow for more extensive tests of cash assistance programs in order to provide Congress a final report in late 1974 or early 1975. According to Lynn, “it is true we do currently have authority for an experimental housing allowance program . . . [however], we need the elimination of certain restrictions in the current experimental program and Section 23 leasing program which is used in the experiment” (US Congress 1973a: 11). NAR and the National Association of Real Estate Brokers (an association of minority realtors), which both had long promoted the concept of rent certificates, supported the administration's allowance proposal while also asking for the Housing Moratorium to be lifted (ibid.: 343–44). By contrast, advocates of low-income groups disparaged housing allowances believing they would hurt the targeted population (US Congress 1973a, 1973b).
The Democratic Congress took the lead in designing the Housing and Community Development Act of 1974 after the Watergate scandal engulfed the Nixon administration. They mainly ignored the Nixon proposal by funding at $40 million a small housing allowance experiment as part of Section 8. Instead, they were now willing to endorse a proposal calling for rent certificates seemingly because housing strategies designated by that terminology were no longer the desired Republican housing program. Congress shifted $1 billion to a new program, Section 8 Existing Housing, which was a direct successor to the tenant-based “finders keepers” version of the Section 23 program of leased housing. Local housing authorities provided rent certificates to families in order to find units. The family had the ability to choose to leave the housing unit at the end of each lease without giving up the subsidy, although if they rented a cheaper unit than the payment standard the subsidy would be reduced dollar for dollar (Housing and Community Development Act 1974). Against the wishes of the administration, Congress also enacted as part of Section 8a project-based New Construction and Substantial Rehabilitation program with up-front subsidies to developers and periodic payments on behalf of tenants (Olsen and Ludwig Reference Olsen, Ludwig, Bailey and Danziger2013).
Republican Senators John Tower (TX), Bill Brock (TN), and Robert Packwood (OR) objected to the Section 8 Existing Housing Program and argued that Democrats had appropriated the administration's proposal, “and amended it to such a degree that the concepts . . . have all but been destroyed.” They viewed Section 8 with its rent certificates and new housing construction components as a “hybrid that contains many of the inequities and pitfalls of our existing programs” (CQ Weekly 1974). Nonetheless, the final legislation, despite stated Republican misgivings, passed both Houses by lopsided margins (377-21 in the House and 84-0 in the Senate) and the new president, Gerald Ford, signed the Housing and Community Development Act of 1974 on August 22. Ford stated, “It is with great pleasure” that he was signing a law that “marks a complete and welcome reversal in the way that America tried to solve the problems of our urban communities” (Ford Reference Ford1974).
There are numerous views about how a given policy fits within an ideological paradigm. In the fluid environment of electoral politics an administration's conceptualization of policy will be at odds with the convictions of some partisan allies. One such example was the position of a Republican State Senator from Florida (at a time when elected Republicans were still a rarity in the south), David McClain, who thought that allowances were a betrayal of Republican principles. He wrote to Ford accusing him of a “blatant attempt at social maneuvering” and the “hand-out” was antithetical to “individual initiative and private enterprise.” McClain threatened not to support the president in his 1976 reelection bid because of the issue. The Ford administration wrote back explaining the philosophy, thanking McClain for his comments, and brushing off his critique (Hullin Reference Hullin1975).The administration was fully committed to perpetuating the second-term Nixon housing policy.
Democrat Jimmy Carter defeated Ford in 1976 and the new administration displayed little enthusiasm for housing allowances. Donna Shalala, Carter's HUD Assistant Secretary for Policy Development and Research, delivered remarks offering a preliminary assessment of EHAP. She emphasized that only half of eligible recipients applied for assistance in the demonstration cities despite an aggressive publicity campaign. She stated “housing allowance programs do almost nothing to increase the supply of decent, safe, and sanitary housing,” which was an acute problem in tight rental markets (Shalala Reference Shalala1978). Her conclusions also reflected the predisposition of Boland who asserted allowances were far more expensive than constructing new housing (e.g., US Congress 1976: 136).
The antipathy of the Carter administration for allowances did not diminish—it may, rather, have enhanced—enthusiasm for the concept from the new Republican administration of Ronald Reagan. The 1980–81 presidential transition was one of the most efficient on record with substantive policy goals linked with clear directions in how to proceed with implementation (Brauer Reference Brauer1986). The incoming administration emphasized concision in proposals. Revamping the tax code—with dramatically lower marginal rates—was the central priority for Reagan's domestic vision (Prasad Reference Prasad2012). The simplicity in messaging, including streamlining nomenclature, carried over to second-order agenda items as well. The term housing allowance was dropped in favor of voucher consistent with proposals in other policy areas, such as education.
Internal documents indicate that the Reagan administration settled on a housing policy revolving around rental vouchers before the president took his inaugural oath. A transition report underscored the point that vouchers were a viable Republican alternative and indicated, “a housing allowance program (a payment voucher system), has undergone an experiment by HUD and an assessment is available” (Harper, n.d.).Once in office, Reagan signed an executive order on June 16, 1981 appointing a housing commission (Reagan Reference Reagan1981). The commission, as expected, recommended transforming Section 8 into a program that primarily promoted the market vision of housing policy. Its report argued that tenant-based assistance was superior to new housing construction. A secondary recommendation was that vouchers were preferable to rent certificates because vouchers mimicked the mechanisms of the market better than rent certificates (McKenna et al. Reference McKenna and Hills1982: 17–30). Buttressing the administration's case was evidence from social scientists that vouchers had no adverse effects on the prices in the rental market (Barnett Reference Barnett1979).
Samuel Pierce was appointed as HUD secretary. He championed rental vouchers; indeed, he defended his competence and integrity from critics in the press by emphasizing his profile as a leading advocate for vouchers. For instance, when the Wall Street Journal published a particularly harsh depiction of the secretary, HUD staffers defended Pierce as fiercely “proud of his work toward switching department housing assistance largely into a rent voucher system” (Meese, n.d.).
In 1983 the Reagan administration requested that Congress create 50,000 new vouchers as part of Section 8 housing with Congress reluctantly agreeing to a demonstration project—the Freestanding Housing Voucher Demonstration Project—of 15,000 vouchers (Smith Reference Smith1983). Large-scale studies indicate that vouchers were significantly more cost-efficient than new construction programs, contrary to Boland's long-standing beliefs (Abt Associates 1981). The evidence presented in these studies was politically useful for the Reagan administration. In 1983, Congress complied with the president's request and followed the recommendation of the housing commission to terminate the Section 8 New Construction program. According to a Washington Post article, Democrats were attempting to “devise a politically attractive housing policy after struggling for years with an older set of programs” (Kurtz Reference Kurtz1983). Conventional public housing could not compete with rental assistance. Democrats shifted toward advocacy for the Section 8 Existing Housing program, which provided rent certificates, in existence since 1974.
Vouchers and rent certificates, overwhelmingly tenant based, eclipsed project-based assistance (Orlebeke Reference Orlebeke2000). Table 1 details the total of net new tenant- and project-based housing commitments for renters between 1980 and 2000. Fiscal Year 1980 was the last where net new project-based starts (about 130,000) were higher than net new tenant-based commitments (about 58,000). The number of net new project-based starts dropped precipitously. In Fiscal Year 1982 there were only about 18,000 net new project-based starts compared to 38,000 net new tenant-based starts and this trend continued.
TABLE 1. Net new tenant-based (vouchers and rental certificates) and project-based commitments for renters, FY 1980–2000
Source: House Ways and Means Committee (2000: 947, table 15–29). The tenant-based numbers (vouchers and rental certificates) are somewhat inflated because smaller programs (loan management and set-aside and the Moderate Rehabilitation Programs) are included in the totals. The numbers from 1991 to 2000 are not adjusted because of unavailable data. The 2000 data is approximate (the Ways and Means Committee halted publication of The Green Book after 2000).
The triumph of tenant-based housing strategy did not mean a new era of bipartisanship emerged regarding housing policy. Democrats and Republicans disagreed about what sort of rental assistance was optimal. Democrats regrouped to defend the Section 8 Existing Housing Program (rent certificates), and Republicans hoped to transform housing assistance into a voucher program. The vouchers were generally the difference between a locally determined “payment standard and 30% of the recipient's income, regardless of the rent of the unit” and allowed residents to choose a greater range of housing units in a metropolitan area than the rent certificate program allowed (Abt Associates 1990: 1, 8).
Democrats charged that the Reagan voucher proposal “is not that different from part of the current Section 8 program, but to the extent that it is different it would make it harder, rather than easier, for low-income people to rent decent housing . . . since people would choose to go into horrible housing” (Crenshaw Reference Crenshaw1983). There probably was real concern in some quarters about whether low-income Americans were able to make a good selection for their own living conditions, suggesting a broad philosophical disagreement about the merit of choice. However, partisan considerations provided Democrats an incentive to disagree with Republicans as well. Another news account from 1987 is suggestive. Democrats seized on a HUD study that found that low-income families paid more for housing almost half the time when they used vouchers than those who used rent certificates. Democrats abandoned the critique that individuals would select subpar housing and, instead, argued that those who used vouchers were able to secure housing only at a less affordable price (Mariano Reference Mariano1987).
Table 2 specifies the number of new rent certificate and rental voucher commitments between 1975 and 2000. Between 1975 and 1983, rent certificates were the established means by which Congress delivered rental assistance. In Fiscal Year 1984, Congress first committed to vouchers as part of new Section 8 housing assistance (15,000) while maintaining the dominance of rent certificates (56,000). For the rest of the 1980s, the number of new vouchers surpassed the units of new rent certificates. During the early 1990s, Congress enacted similar numbers of new rent certificates and rental vouchers. The Republican capture of Congress ended the era of increasing new units for vouchers or rent certificates as new starts were frozen.
TABLE 2. Units of new voucher and new rental certificates enacted, FY 1975–2000
Source: HUD (2000: table 1). Only Section 8 vouchers are included in this data. Vouchers from the EHAP experiment are not included thus somewhat deflating the total number of units obtained through vouchers. In FY 1994 Congress combined certificates and vouchers in a single appropriation. The numbers were not disaggregated. The Quality Housing and Work Responsibility Act of 1998 collapsed the rental certificate into vouchers as the Housing Choice Voucher program.
The inherited poor reputation of housing programs gave an opening for Reagan to assign blame to Democrats for past failures in antipoverty policy. Most famously, in his 1988 State of the Union Address Reagan stated, “My friends, some years ago, the Federal Government declared war on poverty, and poverty won” (quoted in Olsen and Ludwig Reference Olsen, Ludwig, Bailey and Danziger2013). Low-income housing policy, as an adjunct to the broader range of antipoverty policy, invites partisan rancor. Political rhetoric indicated that a vast gulf separates the major political parties. An opportunity was available for Republicans to claim credit for reforming what was perceived to be a broken system. Democrats, however, resisted Republican policy ideas because they suspected the motives of the Reagan administration. Many, including Boland, believed the Reagan administration's actual intent was to dismantle low-income housing assistance and, therefore, vouchers were a nefarious innovation. A bipartisan approach was incongruent with the existing polarized environment surrounding low-income policy among Republican and Democratic elites.
The Reagan administration and Congress had an ongoing tussle about the merit of vouchers. In 1984, the administration proposed Congress create an additional 91,000 rental vouchers. The incredulous Boland observed the “request is far and away beyond what the administration can actually utilize in fiscal 1985.” HUD had not yet allocated the 15,000 vouchers from 1983 leading Boland to say, “[T]here ought to be a further test of that demonstration project” (Rothman Reference Rothman1984a). The chairman of the House Banking Committee, Representative Henry B. Gonzalez (D-TX), was blunter at expressing skepticism: “I believe the voucher proposal is fatally flawed” and the Reagan administration should issue more “realistic” proposals (Davis and Smith Reference Davis and Smith1983). Nonetheless, Congress agreed on a compromise to fund 38,500 new vouchers (Rothman Reference Rothman1984b). A series of recorded floor, committee, and subcommittee votes confirmed that, overall, Republicans remained firm supporters and most Democrats foes until near the end of the Reagan administration (e.g., US Congress 1987).
In 1985, Congressman Toby Roth (R-WI) proposed making the Freestanding Housing Voucher demonstration project permanent, and Democratic resistance appeared to make Republicans more adamant on the matter (Blakely Reference Blakely1985). In 1986, the Reagan administration requested further augmenting the number of vouchers by 50,000 (CQ 1986). Speaking for the Republicans, Representative Marge Roukema (R-NJ) said, “If you want to break ground, let's break new ground by recognizing the value of vouchers” (CR 1987). On the Democratic side, Gonzales said, a Republican amendment “puts all housing assistance into vouchers. In my district [vouchers] certainly don't work” (Blakely Reference Blakely1987). The impasse was broken in a compromise piece of legislation, the Housing and Community Development Act of 1987. Partisan sniping about vouchers abated and House Democrats were willing to begin casting votes in favor of vouchers. One Democratic effort by Representative Bruce Morrison (D-CT) to transfer voucher monies over to rent certificates was defeated by a wide bipartisan majority (Kuntz Reference Kuntz1988). The partisan controversy over vouchers and rent certificates probably diminished because both programs were now in operation and only differed modestly. Other important factors included a new frontier of partisan controversy in urban policy emerged when Congressman Jack Kemp (R-NY), who had presidential ambitions, became a proponent of enterprise zones and a centrist organization within the Democratic Party, the Democratic Leadership Council (DLC), soon began to exert influence.
Pierce concluded his tenure as HUD secretary celebrating the fact that the Reagan administration had doubled the number of recipients—2.2 million by 1989—who received support from Section 8 housing assistance (Ellickson Reference Ellickson1990). The fastest-growing part of Section 8 was the voucher program. Between 1985 and 1989, voucher funding increased from $1.6 billion to $3 billion (Office of Management and Budget 1989).
Housing policy remained visible during the George H. W. Bush administration, because Kemp served as HUD Secretary, although the president considered the veteran Republican Congressman a “blowhard” (Kolb Reference Kolb1994: 204; Charles Kolb, pers. comm., October 9, 2009). In a pattern reminiscent of the Reagan presidency, the elder Bush administration considered vouchers a key element of any low-income housing policy. The Republican-friendly Heritage Foundation proposed devoting HUD's entire assistance budget to vouchers. According to Heritage's John Scanlon, “[Vouchers] give people the opportunity to climb out of the poverty trap” (Zuckman Reference Zuckman1990). HUD Deputy Secretary Alfred A. DelliBovi characterized Republican and Democratic housing agendas in starkly contrasting terms: “The Reagan and Bush administrations want to give people the voucher to choose where to live and to reject the building where there's no heat in the winter and where the elevator is not consistently repaired. The slumlord lobby wants these people to be prisoners in their buildings. That is the essential difference between the conservative Republican approach and the liberal Democrat slumlord” (ibid.).
The Reagan and Bush administrations marked an era of unwavering Republican support for rental vouchers. The number of new vouchers increased rapidly, making the once tiny program a mainspring of low-income housing assistance, while Democrats preferred rent certificates through the 1980s. A large-scale study published in 1990 suggested there was little difference in the efficiency and efficacy between rental certificates and vouchers (Leger and Kennedy Reference Leger and Kennedy1990). Although both the voucher and rent certificate programs were substantial, voucher is the more familiar term and was retained for the merged hybrid program of “Housing Choice Vouchers” after 1998. Most significantly, Democrats had moved closer to the Republican housing position by largely abandoning their advocacy of conventional public housing, and some Democrats toward the end of the Reagan administration appeared to become more comfortable with vouchers and no longer offered ironclad resistance. Republicans had expanded their housing agenda to include high-profile housing initiatives such as enterprise zones that suggested Republicans now had the momentum to continue pushing forward with a fertile agenda to remake housing policy.
Democrats Adopt Republican Proposal
Within a very short time frame the Democratic Party adopted rental vouchers as its preferred housing program. Instead of claiming victory, the Republican Party leapt away from its long-standing advocacy of housing vouchers. A set of centrists or “New Democrats,” whose membership included Governor Bill Clinton (D-AR), began to work to reshape the Democratic Party's policy agenda. The New Democrats organized themselves as the DLC and touted the efficacy of market mechanisms in social welfare. In May 1991, they delivered a “Cleveland Proclamation,” which included the following statement:
We should refocus the fight for social justice on the economic and cultural fronts, especially on innovative approaches that empower poor and minority citizens to make the choices and control the resources necessary to liberate themselves from poverty and dependence. We should accelerate experiments with tenant ownership and management and expand choices for the poor through social service vouchers. (Cleveland Proclamation 1991)
Clinton's subsequent election to the presidency set in motion an unexpected recalibration of the politics of rental vouchers. Democrats wanted to be seen as promarket and were not interested in differentiating themselves from Republicans on the nuances of market mechanisms in housing. Where the DLC distinguished itself from Republicans was the willingness of New Democrats to embrace greater total spending on housing assistance than the Republicans.
The Congress that met in the first two years of Clinton's presidency (the 103rd) shunted housing issues aside because health care and budgetary issues consumed almost all political attention. A number of liberal Democrats such as Charlie Rangel (D-NY) adjusted their tactics in accordance with the predominance of New Democrats in the administration. Speaking about enterprise zones, vouchers, and Republican housing policy from the 1980s, he said, “I rejected the whole concept under Reagan. But people came to me and said ‘How can it hurt?’ So I just said ‘what the hell’” (Lemann Reference Lemann1994, section 6, 27). The frustrated House Banking Chairman, Henry Gonzales, a defender of New Deal housing policy, complained in a letter to Clinton HUD Secretary Henry Cisneros that he “was treated a lot more considerately by Jack Kemp,” although he had shepherded through Congress legislation renewing existing vouchers with a moderate increase of funding for the program (Katz Reference Katz1993). As late as the summer of 1994, Republican Nick Smith (MI) introduced an unenacted amendment to a housing bill that increased funding for rental vouchers by nearly $180 million but cut assistance for housing overall (CQ 1994). Smith's amendment followed the long-standing Republican strategy as a minority party to shift housing assistance toward vouchers. In November the Republicans captured control of both chambers in Congress for the first time in 40 years, thus fundamentally reshaping the political landscape. One component of this new order was that Republicans jettisoned support for vouchers.
What triggered the sweeping Democratic change in attitude toward vouchers was primarily not theory—although liberal housing experts had warmed toward vouchers—but rather the political reality they faced after the 1994 midterm election. No longer were Republicans interested in revamping housing but instead as a governing party mainly interested in reducing domestic spending. There were no further impassioned pleas from Republicans about enacting vouchers.
Concurrently, Clinton jettisoned support for all inherited Democratic housing programs; indeed, Vice President Al Gore apparently considered advising Clinton to go along with Republican demands to abolish HUD. The HUD Secretary, Henry Cisneros, waged an intensive campaign to save HUD by crafting a blueprint suggesting that all federal housing assistance be converted into rental vouchers, which was precisely the proposal proffered by the conservative Heritage Foundation just five years earlier. The Clinton administration understood the appeal of the Cisneros plan. Operating from a position of weakness, the Clinton administration determined that any housing program was better than none. While never explicitly stated, the most persuasive argument to make would be to offer the Republicans more of what Republicans had always said they wanted. The Cisneros plan became the administration's low-income housing program for 1995 (DeParle Reference DeParle1996).
Cisneros appeared before the newly renamed Subcommittee on Housing and Community Opportunity of the US House Banking Committee where he offered a full-throated defense of vouchers (US Congress 1995). The new Republican rhetoric embraced skepticism. The Republican chair of the subcommittee, Rick Lazio (R-NY), told Cisneros “Now you know as well as I do that the effectiveness of vouchers depends on the supply of affordable units, that is meaningless if you don't have units you can move to. . . . But in moving toward vouchers, aren't you telling the community that one-size-fits all?” When Lazio pushed Cisneros about the utility of vouchers for a tight rental market like New York City, the HUD Secretary tried to wave the critique away by stating, “New York is unique . . . we will have to do some things differently in New York” (ibid).
Lazio reiterated the new Republican ambivalence on vouchers a number of times. “I'm not less committed to vouchers” than Democrats, he opined. However, he quickly added, “I think [vouchers] are a good idea for situations in certain areas. . . I am more cautious than the Administration is.” Senator Christopher “Kit” Bond (R-MO) expressed a similar attitude by stating, “It's not to say that vouchers wouldn't work. But I'd like to test them in [different kinds of] communities first” (Stansfield Reference Stansfield1995). Bond managed to ignore two decades’ worth of studies on the effectiveness of vouchers. While Bond's home state of Missouri had a significant number of recipients receiving housing assistance and Lazio's Suffolk County district in New York is one of the wealthiest in the nation, the two united on a position concerning vouchers that had become the new Republican orthodoxy. The partisan flip on housing policy occurred without the actors acknowledging the irony. Most members readily followed their party leadership in making the rapid transition. Only a few iconoclasts, such as Representative Jim Leach (R-IA) and Patrick Kennedy (D-RI), failed to comply: Leach remained favorable and Kennedy expressed criticism about vouchers after the 1994 elections (US Congress 1995).
Now that the rental vouchers had become the Democratic Party's agenda, the partisan policy cycle had completed a full rotation. The Republicans were unable to terminate HUD in 1995 and housing politics have continued to operate in a cyclical nature. By the late 1990s the Republican Party converged on another “market-based” low-income housing policy, homeownership, as a response to the Democratic rental voucher program. The George W. Bush administration attempted to reduce voucher funding in order to promote government support for low-income mortgages.
Conclusion
The political journey of rental vouchers demonstrates a cycle where Republicans proposed a policy that eventually flourished and became connected with their Democratic political opponents. In the first stage of the cycle, Democrats pushed through a public housing program. In the second stage, Republicans (and some conservative southern Democrats) opposed the federal housing program and later adopted a strategy of limited acquiescence. A viable Republican alternative housing policy of rent certificates and, then, rental vouchers blossomed during the 1970s representing the third stage of the cycle. In the fourth stage of the cycle Republicans attempted to implement a permanent voucher program in the face of Democratic resistance. The Republican Party succeeded during the Reagan administration. The election of 1994 was a political earthquake that reshaped the politics of housing. Democrats adopted the Republican policy of housing vouchers completing the cycle. Republicans shifted from the promotion of rental vouchers to low-income homeownership, renewing the partisan policy cycle with a second revolution with Democrats now advocating existing rental vouchers as a better housing policy for low-income Americans.
Rental voucher policy is a case in which the rationality and path-dependent models have fallen short in providing explanatory leverage. The models that emphasize rationality suggest that program assessment and review based on standards of evidence should drive policy change. Path dependence suggests that a program traveling down a certain path will become further entrenched. The politics surrounding housing policy is not consistent with either type of model. Instead, existing programs and proposed reforms are jettisoned when partisan dynamics shift. A revised model of policy making that underscores the importance of electoral dynamics, a partisan model, is necessary in order to conceptualize the political trajectory of policy.
The partisan contestation over housing policy between the 1930s and 1990s involves versions of just a few major ideas: Should housing policy be project based or tenant based, what constituencies should be served, and should the eventual outcome involve homeownership? Although short-term partisan dynamics are the most critical variable in determining outcomes—rather than expertise, analytic studies, and actual outcomes of pilot programs—policy results are better than might be expected. While never adequate to meet demand, large numbers of underprivileged Americans received some form of necessary housing assistance during these years. It can plausibly be argued that at times efficiency triumphed because of partisanship. Nonetheless, the political process has only provided the crudest structure for evaluating housing policy. Across the ideological spectrum all serious observers believe outcomes are often suboptimal.
Vouchers are not typically a first-order policy program that consumes the attention of most politicians and voters. Nonetheless, the primacy of elections and short-term partisan needs have dictated the trajectory of housing voucher politics. The pursuit of power in the United States has privileged partisan politics even in policy areas, such as housing, that are not typically central to winning elections. Most politicians are ready to remold policy preferences according to short-term political dynamics. Heated rhetoric unleashes the partisan policy cycle. Instead of arriving at consensus, the parties move past each other, literally flipping positions. The case of rental housing vouchers is a piece in the puzzle of understanding the making of public policy under conditions of intense partisan rivalry.
