Senate Can Salvage Rent-Supplements Plan

Ten Republican senators last week declared that Congress should "provide adequate funds for promising new urban programs," especially the model cities and rent-supplement ones. This joint statement is an encouraging sign because the Senate Appropriations Committee will act on these programs soon, and only a decisive Senate victory can offset the massive House cutbacks in the direly needed proposals. The Administration is sure to secure some model city appropriations, but its rent-supplement plan will be difficult to salvage. The House has voted against supplements by a decisive 62 votes, and it will require an impressive Senate reversal to win back any of the $40 million program in the House-Senate Conference.

The rent supplements plan barely won its first authorization in 1966 after severe cutbacks. It authorizes the Government to contract non-profit and co-operative local housing sponsors to pay the difference between 25 per cent of a poor person's income and his rent in standard housing. The sponsors then reserve part of their housing space for the subsidized tenants, and the Government pays the necessary subsidies on that space for periods of up to 40 years.

Republican opponents have characterized the supplements as a "socialistic giveaway." They argue that it is wrong to tax one person to pay another's rent. Also the program will undoubtedly foster racial and economic integration and this implication has contributed greatly to the opposition; it is probably why the 1966 act included a rider granting local officials veto power over supplement projects.

Opponents argue that the supplements program is too costly because of its 40-years contract authority. A $5 million contract authorization, for example, really amounts to $5 million for 40 years, or a total of $200 million. The actual Government expenditure, however, would be less because its payments cease when the tenant can pay the full rent with 25 per cnt of his income.

The same Republican opponents who criticize this program's costs are the ones who staunchly support the funding of Senator Percy's plan to provide below-market interest-rate loans to low-moderate income families purchasing homes. In other words, they argue that rent supplements are too costly, but that Percy's plan--their own Republican proposal--is not. Regardless of the merits of the Percy proposal, the use of it as a substitute for rent supplements is outrageous. Supplements aid the very poor, while the Percy bill would help only those people who could show enough income stability to maintain payments on their homes.

The rent supplements plan does not purport to be a panacea for the ghetto. Its concept, however, is vastly superior to that of public housing, which has not been able to accommodate most of the nation's poor and often makes matters worse. In some cases of urban renewal, poor people are evicted without sufficient provision being made for their relocation at rents they can pay. In other cases, the new public housing structures themselves deteriorate into slums. Because all tenants of a public housing project have low incomes, the project has basically the same atmosphere as an urban ghetto; almost all occupants are usually members of racial and ethnic minorities.

The Supplements plan, by placing subsidized tenants in standard housing with non-subsidized higher-income families, gives the lower-income occupant an incentive to increase his income. In public housing, however, a tenant has to give up his dwelling when his income exceeds the eligibility level. When the supplement tenant's income rises above the local eligibility limits, he no longer receives the supplement but may remain in the project and pay the full rent. And the fact that private enterprise sponsors the supplements projects is an advantage. Then, private groups, rather than the government, pay for construction and administration.

It will probably take a 15 or 20-vote Senat evictory if the rent-supplements measure is to get any appropriation through a House-Senate conference. Instead of responding to the ghetto riots with dreams of massive new urban projects, Democratic leaders should push frantically for this relatively small experimental program.