Adopt Elon Musk’s USAID Approach to Liberate Tenants from Public Housing Struggles

The readiness of Elon Musk and his Government Efficiency team to challenge long-held beliefs is surprising Washington, as principles that once seemed untouchable now crumble like idols shattered by Abraham.

This same principle of creative destruction needs to be applied to a misguided concept that has damaged cities and encouraged dependency for close to a century: public housing.

Rather than making superficial adjustments, Musk and his team should consider completely phasing out “the projects” — through selling the properties and compensating tenants.

It is high time for the government to exit the housing sector — a field it never should have entered and has repeatedly shown it cannot manage effectively.

The primary justification for abandoning public housing lies in the deplorable state of the projects themselves — and the negative consequences they impose on their intended beneficiaries, the residents.

For instance, the largest housing authority in the country, that of New York City, is burdened with a staggering $80 billion in postponed maintenance, resulting in issues like ongoing leaks, mold, and malfunctioning elevators across its 326 “developments.”

The threat of falling debris is so frequent that scaffolding often remains in place for years — providing a haven for criminals.

This narrative is replicated nationwide; over the past two decades, more than 200,000 public housing units have been demolished due to being uninhabitable.

Foolishly, New York State is opting to utilize taxpayer funds for repairs on these aging structures, in which no sensible private investor would put their money.

It is even permitting tenant elections, where Housing Authority personnel can vote to select the same ineffective employees for repair tasks.

What should capture Musk and DOGE’s attention is that many public-housing locations are valuable real estate; their sale and redevelopment could ignite a construction boom for new housing, retail, and office spaces.

The property values are astonishing: The Baruch Houses on the Lower East Side are valued at around $111 billion.

The Ingersoll Houses along the thriving Brooklyn waterfront would also fetch substantial sums.

High-value public housing sites are scattered across the nation, in approximately 3,000 cities and towns of various sizes. Their potential should be unlocked.

The Department of Housing and Urban Development (HUD), which provides funding to local authorities, can encourage them to sell these properties by mirroring Musk’s strategy: cutting off grant support and making even temporary assistance dependent on initiating the sell-off.

The funding from grants, along with the considerable revenue generated from property sales, can instead be redirected to assist in relocating tenants — by providing incentives for them to vacate, thereby freeing up the project sites.

It’s crucial to acknowledge that public housing has negatively affected its tenants — trapping them in low-cost apartments while denying them the opportunity to become homeowners.

HUD policies inadvertently create dependency. In New York, the average tenant has resided in their unit for 20 years. Moreover, as a tenant’s income rises, so does their rent.

African Americans have been particularly marginalized; vibrant black neighborhoods, where homeownership was prevalent, have been destroyed to accommodate projects that allowed only the government to possess the property.

Other subsidized housing forms, such as Section 8 vouchers, yield similar adverse outcomes; the average resident remains in their unit for nine years.

Additionally, the system prioritizes individuals with the lowest incomes: single mothers with children represent the largest demographic of non-elderly individuals. This perpetuates long-term poverty.

Unlike cash welfare, subsidized housing imposes no time limits or work requirements.

The same issue affects the latest progressive housing initiative — developments financed via the Low-Income Housing Tax Credit. This program is based on the unproven premise that cohabitation between high- and low-income individuals is beneficial. The costs are staggering — for instance, California’s subsidized apartments average an astonishing $708,000 each.

As seen with public housing, tenants receiving reduced rent usually remain in tax-credit properties, forfeiting opportunities for upward mobility.

When public housing was introduced during the New Deal, its advocates envisioned it replacing private housing for the majority. The reality of American free enterprise has discredited that socialist notion.

Yet, over 9 million Americans are still trapped in poor conditions and dependency created by subsidized housing — nearly half of whom are African American.

New York, which houses 10% of the nation’s public housing, is tempted to seek new financial solutions for repairing it.

However, a cosmetic makeover today does not guarantee sustainable improvement in the future. Even the most dilapidated public housing, such as the now-demolished lakeside high-rises in Chicago, appeared appealing when politicians conducted grand opening ceremonies.

While private management, such as HUD’s Rental Assistance Demonstration program, can provide some aid, it does not eliminate the systemic issues that incentivize long-term dependency.

The truth remains that the government should not be involved in real estate.

With innovative ideas now being proposed in Washington, it’s time to dismantle public housing.

Howard Husock is a senior fellow in domestic policy at the American Enterprise Institute.