The problem at HUD - reform of Dept. of Housing and Urban Development

WASHINGTON, D.C.-There's nothing like the whiff of scandal to bring out the bloodhounds here in the capital, and revelations that former Reagan Administration officials like James Watt were paid hundreds of thousands of dollars for a few phone calls to HUD has the goodgovernment crowd off on another crusade. Democrats are busy blaming the former Secretary of Housing and Urban Development, Samuel Pierce; the press is treating it as but another example of Reagan-era sleaze; and Republicans, including current HUD Secretary Jack Kemp, don't seem to know how to play it.

"I don't think this is unique to the Reagan Administration," says David Bley, who was a HUD official under the Carter Administration. Current HUD Undersecretary Alfred A. DelliBovi adds: "The problem is not the party which happens to be running the program. The problem is the program." Truth be told, the problem is even more fundamental: the problem at HUD is HUD.

The way it works now, HUD supplies low-income housing by paying individual developers and builders to renovate existing substandard housing projects. The cost of these modernizations typically runs from $60,000 to $80,000 per unit-the price of a brand-new condominium in most parts of the country. Which projects are slated for renovation depends in large part on politicians' or former politicians' calling up HUD and asking that the nod be given to their constituencies, the pay-off coming in the form of campaign contributions from grateful developers. Congressmen do this all the time-it's not illegal-but what irks people here is that calls were also made by former officials of a supposedly free-market Administration. "Getting a high-priced consultant to make a few calls is in fact the norm in those situations where the Federal Government is shelling out money from Washington for projects," says Stuart Butler, director of domestic-policy studies for the Heritage Foundation. No surprise, then, that Congress has not made influence-peddling illegal.

The obvious solution is to attack influence peddling at all levels by instituting a voucher system, which tenants could use to find their own housing rather than having the government award contracts to developers with political contacts. As Representative John Hiler notes, "Vouchers have a minimum of abuse and give a maximum amount of choice to the consumer." The argument against them is that they're not all that useful in areas with tight housing markets. But tight housing markets themselves are largely due to restrictive zoning requirements and rent control, a fact recognized even by Governor Michael Dukakis, who is taking steps in Massachusetts to overturn local zoning restrictions to promote affordable housing. Nor is it any secret that the same people who oppose vouchers generally support rent control.

Under Mr. Pierce a significant portion of HUD funding was actually shifted toward vouchers, despite opposition from Capitol Hill. But it would have been futile to alienate everyone in Congress over the issue of "mod rehab," and so it appears that what be did was make a cynical but politically rational decision to leave this program alone. This by no means exonerates him for what happened, particularly if it's true that he himself pushed for projects for his own buddies. But it highlights the problem as a structural one: HUD is designed for influencepeddling. What all this suggests is that a good litmus test for those serious about reforming HUD would be where they stand on vouchers. To that end I took a little survey, and found, perhaps not surprisingly, that many of those crying the loudest (Representative Barney Frank, for example) do not support vouchers.

Here, for example, is how the members of the House Committee on Banking, Housing, and Urban Affairs line up on vouchers:

Chairman Henry B. Gonzalez (D., Tex.):

opposed.

Walter E. Fauntroy (D., D.C.): waffle.

Bruce F. Vento (D., Minn.): in favor.

Robert Garcia (D., N.Y.): waffle.

Charles E. Schumer (D., N.Y.): waffle.

Barney Frank (D., Mass.): waffle.

Richard H. Lehman (D., Calif.): opposed.

Bruce A. Morrison (D., Conn.): opposed.

Marcy Kaptur (D., Ohio): waffle.

Ben Erdreich (D., Ala.): waffle.

Thomas Carper (D., Del.): waffle.

Esteban E. Torres (D., Calif.): opposed.

Gerald D. Kleczka (D., Wis.): waffle.

Paul E. Kanjorski (D., Pa.): refused to answer.

Stephen L. Neal (D., N.C.): waffle.

Carroll Hubbard Jr. (D., Ky.): waffle.

Joseph P. Kennedy 11 (D., Mass.): waffle.

Floyd H. Flake (D., N.Y.): opposed.

Kweisi Mfume (D., Md.): opposed.

Nancy Pelosi (D., Calif.): opposed.

John J. LaFalce (D., N.Y.): waffle.

Elizabeth J. Patterson (D., S.C.): waffle.

David E. Price (D., N.C.): waffle.

Jim McDermott (D., Wash.): waffle.

Peter Hoagland (D., Neb.): in favor.

Richard E. Neal (D., Mass.): waffle.

Marge Roukema (R., N.J.): waffle.

Chalmers P. Wylie (R., Ohio): in favor.

Bill McCollum (R., Fla.): in favor.