The Welfare Efficiency of Moving Families into Public Housing in Little Rock, Arkansas

Abstract

The federally assisted public housing program was launched with the enactment of the United States Housing Act of 1937. This depression era legislation was refurbished with the passage of the United States Housing Act of 1949. Public housing, as a welfare conveyor, is a straightforward attempt to reduce the number of people residing in substandard housing. In order to accomplish this notable objective, this program provides for rent subsidies, an increase in the housing stock, and supposedly prevents a deterioration of nonsubsidized household welfare. The evolution of contemporary public housing has occurred over four decades of piecemeal legislation. Some might view this in-kind transfer program as being simply a graveyard of good intentions. Others may consider this welfare mechanism as an example of Morton Grodzin's marble cake federalism. From a Grodzin perspective, various governmental bodies decline to truly accept the responsibility for the low-income target population of the public housing program. This analysis will provide an estimate of the cash outlay that would be necessary to make families moving into Little Rock public housing during the 1979 fiscal year equally well off.1 These households could then contract for housing service in the private sector.2 The discussion includes a determination of how efficiently federal expenditures are transformed into an increase in tenant welfare. Net-tenant-benefit equity impliations are also considered. Approximately 74% of the families are black and about 88% of the family heads are female. The mean age of the heads of households was 44 years. In addition, the mean family size was 2.52 persons, and the mean gross annual family income immediately prior to moving into Little Rock public housing was around $3,357.00. Family income includes all welfare payments (i.e., old age assistance and aid to families with dependent children). It should be mentioned that all of the tenant families moving into low-rent housing had family income levels that were sufficiently low for the 25% maximum project rental limitations to be invoked.3