No, the federal government should not build housing.

Representative Alexandria Ocasio-Cortez has introduced the Green New Deal for Public Housing Act, which would spend millions of dollars to retrofit public housing to make it more energy efficient. In and of itself, this is probably a good idea. Upgrading older buildings in government portfolios has the potential to save both taxpayers and tenants money in the form of reduced utility and operating costs.

But the problem with the bill is its repeal of the Faircloth Amendment, a change to the U.S. Housing Act, the law that governs federal public housing. The amendment, passed in 1998 as part of the Quality Housing and Worker Responsibility Act, ended the federal government's efforts to own and operate housing. why? That's because there was a partial consensus that the federal government doesn't know how to run housing efficiently, something the Green New Deal unintentionally acknowledges.

I posted about the history of public housing in the United States about a year ago, and the Faircloth Amendment was a response to billions of dollars needed to update severely under-maintained and aging buildings, and the government It clearly shows that social housing cannot be managed effectively or efficiently. The Low Income Housing Tax Credit (LIHTC) is deeply flawed because of its complexity. It also subsidizes bad local practices by funneling federal funds to jurisdictions that have created housing inflation with inflexible land use and zoning policies. But this is an example of the federal government recognizing that owning and operating a home was a mistake. But Rep. Ocasio-Cortez's bill ignores that lesson, proposing a return to massive federal investment in public housing.

The problem with public housing is not only the quality of the buildings, but also that once built, they must be maintained forever, or until the project is retired. Although the intervention failed, at least LIHTC attempted to use private investment and keep the building outside of federal control. The Green New Deal for public housing is a return to the quagmire of historically underperforming government-run housing programs. Investing more in dwindling housing stock without addressing fundamental issues such as property management, tenant ownership, and long-term sustainability is a misallocation of resources.

Rather than reviving old, failed models, why not explore innovative avenues to empower residents and revitalize communities? For example, by giving residents the option to own their own apartments. A “right to buy” approach could transform public housing from a permanent government liability to a source of wealth creation for low-income households. This approach will not only incentivize residents to maintain and upgrade their properties, but also foster a sense of ownership and community pride, leading to more sustainable and self-sufficient housing solutions.

If Ocasio-Ortez were truly a socialist, she would have a hard time finding a way to allow residents of federal housing to own and operate their own buildings. That would be a truly revolutionary move. We can pretend it was her idea and not Jack Kemp's. Instead, she wants to hand over even more control over housing to the very government that cannot pass a budget and is paralyzed by partisan bickering.

I don't think anyone would object to making old buildings more efficient. I wrote about it at length many years ago. Energy efficiency improvements, when done well, can make the value of future savings available today. For example, you can take out a loan for improvements and repay the debt with savings. In the case of public housing, efficiency can be combined with efforts to capture efficiency savings and put them back into residents' pockets. But the need to repair and renovate aging buildings is at the heart of the Faircloth Amendment. Building more housing, which the federal government must maintain, is an expensive and inefficient endeavor.

However, the federal government is the wrong entity to begin purchasing land, building housing, and operating it. As I have pointed out many times, if deregulation is allowed, the market can provide affordable housing to many people who need it. Those who still need subsidies should receive cash as rent, collective ownership of trust land can build equity for others, and finally, for those with the greatest need. , housing with intensive case management is the answer. Fortunately, so far, the Green New Deal for public housing is moving in the direction it should be going, but it's not going anywhere. But don't worry. In any case, by the end of this decade, the idea that the federal government will control most rental housing may prevail.