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March 1997
Volume 15, Number 3

HUD Goes Berserk
Thomas DiLorenzo

The welfare state keeps being reinvented under new labels. In 1993, the Clinton administration renewed the Bush program (dreamed up by then HUD secretary Jack Kemp) called "Moving to Opportunity" (MTO). It gave welfare recipients housing vouchers worth as much as $1,677 per month for rental housing in middle-class neighborhoods.

The Clinton administration liked Kemp's idea because housing vouchers--and all government vouchers for that matter--are a means of implementing market socialism. People who get a voucher are getting other people's property (tax dollars) which they use to finance a government-supervised shopping spree, in this case, for housing. This is not free-market competition but legalized theft.

Such phony "housing choice" is the opposite of what classical liberals call "negative freedom"--the freedom to live one's life as one pleases as long as one respects the equal rights of others. It is this kind of freedom that the framers had in mind. But socialists believe in so-called "positive freedom"--the "freedom" to live at someone else's expense, to buy housing, food, and other items with other people's hard-earned money. This is the kind of "freedom" that government vouchers can buy. No wonder the Clintons like them so much.

Baltimore, Maryland, was one of the first cities chosen by Clinton's HUD secretary for the expanded MTO program. But thousands of middle-class citizens were outraged when they learned that their tax dollars would be spent to provide welfare bums with better housing than they could afford themselves in their own neighborhoods. They were also less than delighted to learn that some of their new neighbors would be coming from government housing projects where the violent criminal rate is about ten times the national average.

The citizen protest was so loud that Senator Barbara Mukulski, who is as far to the left as any member of Congress, successfully killed funding for the program. But the government housing bureaucracy wasn't about to give up. HUD conspired with the Maryland ACLU, which filed a lawsuit against HUD claiming that the housing agency had discriminated against blacks since Baltimore's government housing projects were predominately black (as is much of the private housing stock of the inner city).

A liberal judge joined the conspiracy by forcing Baltimore county to accept the MTO residents. To discourage the county from appealing the judges decision, HUD threatened to build numerous government housing projects in the county if its chief executive did not capitulate.

To quell the citizen dissatisfaction with this gun-under-the-table "agreement," HUD promised it would carefully screen all applicants and counsel them on how to be responsible tenants. MTO employs hundreds of bureaucratic counselors, advocates, assistants, administrators, directors, supervisors, inspectors, and "program coordinators."

We are beginning to understand what HUD means by "careful screening." Baltimore television reporter Patricia Ryback recently revealed to her audience how an MTO landlord got stuck with paying for $9,000 worth of damage to her property inflicted by one of HUD's responsible tenants, who ruined the hardwood floors, pushed out windows, broke the water heater, plumbing, and electrical system, and caused some of the ceilings to fall in.

HUD's response to the landlords request that it pay for the damage was to tell her that she must pay for the damage or else HUD will not send her the rental payments she is owed. HUD has effectively staked a claim to the landlords bank account on behalf of the tenant.

HUD has been destroying neighborhoods, housing, and lives for three decades. It all began in the 1960s when the agency literally bulldozed hundreds of healthy, viable communities and replaced them with ugly, crime-ridden housing projects. Over the years it has abolished far more housing units than it has built.

Today these projects--many of them urban high rises--are being literally blown up by HUD, whose bureaucrats now espouse the unbelievably flaky notion that allowing welfare bums to live in government-built townhouses, rather than highrises, will help raise them out of poverty and make them responsible citizens. (Although the highrises were themselves originally a "reform," being allegedly easier to police than lowrises.)

In Baltimore and in many other cities there are thousands of houses and apartments that are vacant because government has made it virtually impossible for a free market in low-income housing to exist. Bulldozing HUD would be a positive first step toward creating one.


Thomas DiLorenzo teaches Economics at Loyola College in Baltimore and is an adjunct scholar with the Mises Institute


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