Freedom Of Choice

The Reagan Administration came into office determined to cut back sharply on the $30 billion the Government was then spending on low-income housing. As the keystone of this effort, the Administration in 1983 introduced federal housing-subsidy vouchers that allow low-income families to rent housing wherever they can find it, at whatever price they can negotiate; the Government then subsidizes a portion of the cost based on a "fair market" price. The traditional federal subsidy program requires tenants to pay no more than 30% of their income in rent, and only for housing that matches a "reasonable" rent set by Washington.

The voucher system is what enabled Angela Henderson, 26, her husband Chris and two children to move last April from an apartment complex in Bloomington, Minn., to a duplex in Brooklyn Park, a Minneapolis suburb of ranch-style houses. The family is thrilled with the extra space and privacy. "You're not having all those people above and underneath you and across from you," says Henderson. "I can go and do the wash when I want to instead of waiting. It's more like a home." In Bloomington the Hendersons paid $435 a month for their apartment. In Brooklyn Park the rent on the duplex is $460 a month, but they pay only $323. Vouchers cover the remainder. Although the Hendersons pay just under 30% of their income in rent, many voucher tenants are willing -- and permitted -- to pay more.

One impetus for the voucher program was a study by the Rand Corp. that reached just the conclusion that free-market advocates wanted to hear: rental units in many cities are plentiful but too expensive for lower-income people. Though liberal critics derided the idea as just another way to cut services to the poor, the Administration is now well along on a five-year, $200 million pilot program to test vouchers in 20 communities. To date 15,000 leases have been subsidized by vouchers; eventually the Government plans to subsidize 140,000 rental units.

Vouchers are supposed to help tenants pay for the best housing they can afford. At the same time, so the theory goes, the system gives landlords an incentive through higher rents to improve substandard housing to livable levels, increasing the housing available to poor families.

, In cities with high vacancy rates, low-income tenants like the freedom that vouchers provide, even at a higher price. Says Apolonio Flores of the San Antonio Housing Authority: "Some of our people are saying that they always wanted their kids to go to a nicer school, to live closer to their parents." But the rental markets in some cities are so tight that vouchers are meaningless. New York City, for example, has 200,000 applicants waiting for public housing. When vouchers were offered to low-income families there, 62% were returned unused: even with federal assistance, the families still could not find decent, affordable places to live. "The voucher system would make sense if there were housing," says Democratic Congressman Thomas Downey of Long Island, an outspoken critic of the program. "But there is just not enough. It doesn't in any way address the problem."