Evening star., 1944-01-30
Taxes and Rent Subsidies

a>Ioxes and Kent Subsidies
To those who look on large-scale
public housing development for the
lowest income group in terms of
retaining entire communities
rather than the effect on individual
FAMILIES, there may be nothing con-
trajectory in the fact that only sixty
out of 1000 families on the relief
rolls OF the Board of Public Welfare
are tenants of this housing in Wash
ington.
Such figures, as they see it, merely
constitute additional evidence of the
need for more public housing. Sew
enty per cent of the families on
public relief are Negroes, the chief
victims of a housing shortage which
has accentuated the overcrowding
OF substandard dwellings. Families
I, eligible for public housing (their
eligibility being determined by
-income) sometimes prefer to remain.
where they are, rather than move.
and there has been deliberate policy
by the authorities against combining
new low-cost housing to relief clients
alone, on the theory that to do so
would create "poorhouse" districts.
But the argument has been that
failure of private enterprise to pro-
vide decent housing for the lowest
income groups has forced the Gov
ernment into the housing business
When it is revealed that only a small
proportion of Government-built
housing is occupied by the lowest
income group, that argument
appears to lose some of its force
and invites criticism to the effect
that tenants of Government hous-
ing are to some extent handpicked.
thus giving to Government manage
ment an advantage which lessons
the value of public housing as a real
demonstration of what can be done.
The policies involved no doubt
will be carefully examined in the
course Of the current hearings on
the housing problem, and in this
connection there should be special
consideration of the tax exemp-
ton factor. The Federal Housing
Authority now grants housing sub
sides to the National Capital Hous-
: ing Authority, the purpose of which
is to make up the difference between
tenants ability to pay and the
economic rent" charged for his
housing. This subsidy, now amount
ing to about $204, 800 annually, is by
law required to be matched by
local contribution of 20 per cent.
The local contribution takes the
form of exempting the housing
property from local taxes, and the
value of this exemption now
amounts to about $S6 6,OOO-a AZ per
cent, rather than 20 per cent, con-
tribution. The total subsidy, includ-
ing the tax exemption, amounts to
$29O,0o0. Yet, only about 80 per cent
of the tenants occupying these prop
critics require subsidized rents, a
proportion which has decreased with
war prosperity.
Thus, the tax exemption is exces-
sive in relation to the subsidy, and
the subsidy is excessive in relation
to the number of tenants who need
e 1t, and the local Housing Authority
wishes to use the excess to speed up
the liquidation of its housing loans.
But the increase in amount of tax
Z exempt property in Washington is
already serious problem and If tax
exemption is being granted on the
theory of subsidizing rents-when
the majority of the rents are paid
by tenants whose earnings eliminate
need for the subsidy-then some
thing is obviously wrong with the
theory.
The manifest danger of steadily
adding to the already large area of
tax exempt real estate in Washing
ton is another reason why privately
built low-cost housing, paying taxes,
should be encouraged by every avail
able means. Such encouragement
is made less difficult by the attitude
of John Ihlder, executive officer of
the NCHA, who is anxious to be
shown that the desirable objective
of public low-cost housing can be as
readily attained by private enter