A myth in his own mind

As housing secretary, Jack Kemp had one big idea. Too bad it didn't work.

By David Corn

Published October 9, 1996 10:17AM (EDT)


It was another hearing day for a House subcommittee overseeing housing policy during the Bush years. The majority staff director, Frank DeStefano, had prepared an opening statement for the committee chairman accusing a Cabinet official of demagoguery.

Unbeknown to DeStefano, the Republican minority staff had obtained a copy of the remarks and faxed it to the Cabinet member. Shortly before the hearing was to begin, the door to DeStefano's office burst open, and Jack Kemp, the Secretary of Housing and Urban Development, came striding in, waving a copy of the text. "I am not a demagogue," an agitated Kemp yelled.

A Republican aide rushed forward to tell Kemp that the offending line actually had been deleted since the copy was forwarded to Kemp. Don't worry, the GOP aide said, what counts is what goes into the record. "What counts is what you think of me," Kemp snapped. "I'm not a demagogue, and I do care about the poor." He then turned to DeStefano: "I'm going to show you I am not what you think."

Jack Kemp tried to use his four years at HUD to show that this boisterous ex-jock with enthusiastic hair is not what many people think of Republicans -- that he is a conservative who really does care about the poor. And he has spent considerable time on the campaign trail in normally Democratic inner-city neighborhoods trying to prove it. He will likely burnish this image in tonight's vice-presidential debate, which pundits are touting as the kick-off for Kemp's own run for the presidency in the year 2000.

But many of those who knew Kemp at HUD are less than enthusiastic. They
describe Kemp as obsessed with tangential policies and fond of
quick fixes to complicated and tough issues.

Kemp's stint at HUD revealed his modus operandi: look for a magic-bullet idea, embrace it with religious fervor and advocate it on faith. After all, he believes a return to the gold standard will unleash America's true economic power. He preaches the gospel of supply-side economics, the most faith-based (and discredited) policy prescription to emerge in recent decades.

At HUD, Kemp's cure-all was the idea of transferring ownership of public housing to tenants. It was cheap, appealing and easy to swallow; who could argue with giving poor people their own property? But the problems -- as those left to pick up the pieces found out -- were numerous and more complex than Kemp had time for. Many residents, warehoused in the worst high-rise projects, did not want to own their homes; they wanted to get out. Others could not afford the upkeep, utilities, and taxes -- not without decent-paying jobs, training, and day care. (At that time, the average annual income of a public housing tenant was about $7000.)

Moreover, such transfers reduce the supply of affordable rental housing when inexpensive rental stock is already low. And they cost money. Apartments have to be renovated before being turned over. At one of the models for Kemp's tenant ownership crusade, the Kenilworth-Parkside project in southeast Washington, D.C., HUD spent between $100,000 and $150,000 per unit to rehabilitate and transfer the apartments to tenants. "We could have bought three units in Washington for three different families for the amount of money we put into transferring each unit," remarks one congressional aide.

"There was an overemphasis on home ownership at the expense of providing decent rental housing opportunities," says a senior HUD official under Kemp. "When you have millions of people who do not have decent, safe, sanitary housing and when many of them have to pay more than 25 percent of their income for rent, what is the justification for putting money into moving people from renters to owners -- while you deny decent living opportunities to those not being served?"

An official at the Bush Office of Management and Budget who worked on housing issues is less polite: "Anybody who believes you can sell off all public housing to tenants and they will live happily ever after is smoking something. The numbers just don't work out."

Kemp was caught in an ideological bind. As someone who describes himself as a "progressive conservative" and a "bleeding-heart conservative" who wants to reach out to minorities and inner-city Americans, he could not, as fellow Republicans do, claim that a free market alone would solve America's housing problems. But as a conservative he needed to find a different avenue than the traditional solution of government grants to citizens or to housing contractors. Spending taxpayer dollars to transfer public housing to private hands -- to poor people's hands -- was an ideologically consistent answer. And it brought with it the perfect photo op: Kemp passing keys to excited and hopeful low-income African Americans. He came up with a wonderful, inspiring name: HOPE -- Home Ownership for People Everywhere.

"I'm a strong advocate of home ownership," says Walter Sevier, a deputy regional administrator under Kemp. "It provides political and social stability. But there's a point where home ownership is not feasible. I don't see how it's feasible for a typical public housing family to buy a home, even a unit in a condo or co-op, and also deal with taxes, insurance, and maintenance. With these families, HUD, other agencies, and the free enterprise system has to do what it can to get their incomes up. I don't know why he didn't see that."

In the metropolitan Washington area, local officials complained that public housing shortages were exacerbated by Kemp's push for tenant ownership, because under Kemp HUD made it easier for localities to obtain federal funds for resident ownership projects than for building new low-income housing. As Patricia Ticer, the mayor of Alexandria, Va., explained, "You're selling off the units you need to keep, depleting the resource for new renters. Most of the suburban jurisdictions need to increase the stock of publicly-assisted housing."

For years, Kemp tussled with the Democrat-controlled Congress about funding for HOPE. He always wanted more -- and spent much of his time fighting over a small slice (about $150 million) of a $24 billion agency budget. He leaned on public housing authorities to push HOPE and to accept proposals for ownership transfers, even when the proposals were not well developed. "He really did care," says the Bush OMB official. "He enjoyed being with public housing tenants more than any other group. And he loved talking about resident ownership. Unfortunately, it's not the answer -- and it meant that Kemp didn't focus on other things."

Shortly after Kemp settled into HUD headquarters, a scandal exploded. An inspector general's report revealed that influence-peddling and political favoritism had raged through the agency. Prominent Republican consultants (such as former Interior Secretary James Watt) had pocketed millions of dollars for helping developers win politically rigged contracts.

Kemp moved fast. He suspended housing programs in which abuse had been discovered, and he cobbled together a reform package that tightened monitoring and curtailed the ability of outsiders to influence HUD decisions. But an overly cautious Kemp also put the brakes on other activity throughout HUD. "Some people in and out of HUD felt that Kemp went too far and the agency became risk-averse to the point of not doing anything and not approving any housing projects that might conceivably fail," says the OMB official.

"As it turned out," a senior HUD official from Kemp's days recalls, "reforming HUD was great publicity, and Kemp liked that. Here was a potential presidential candidate cleaning up the foul HUD. But much of what needed to be done, the long-term problems, went unaddressed." Those problems -- mismanagement, inadequate staffing, $25 billion in modernization and repair needs, scores of overlapping, highly-technical programs, a dark forest of baroque rules -- were too much for Kemp to absorb. "Changing HUD would take years," this past HUD official remarks. "Kemp wanted change within three months. He became so frustrated at running HUD. He essentially gave up and cut himself off from much of the agency."

That was easy for Kemp, a man of many interests, to do. He is easily distracted, as anyone who has ever heard him speak can attest. One day a senior HUD official visited Kemp in his office. She looked at his desk. Not one piece of paper on it had anything to do with HUD. Instead she saw memos and clippings regarding monetary policy and reports on relations with China.

In his last year at HUD, Kemp coaxed $161 million for HOPE out of a skeptical Congress. But 95 percent of this money went into planning grants, not actual transfers of apartments. And the HUD inspector general and the General Accounting Office raised questions about these funds being misused by consultants and groups drafting proposals for specific transfers.

Ultimately, Kemp's crusade fizzled. He was left not with an empowering revolution in U.S. housing policy and "home ownership for people everywhere" but with a few demonstration projects bearing mixed results. More importantly, HUD's major problems went unaddressed. A 1992 G.A.O. report noted, "The underlying causes of the HUD problems uncovered in 1989 involve long-standing department-wide deficiencies that remain largely unresolved. These department-wide deficiencies -- inadequate information and financial management systems . . . ; weak internal controls; inappropriate organizational structure; and insufficient staffing -- leave the Department open to fraud, waste, abuse, and mismanagement."

"Kemp never approached the HUD job in an operational manner," says a former Republican Senate aide who tended to housing issues. "He was not interested in what activities the department is involved in -- HUD is filled with so many technical problems -- and how to make better use of the programs. He's not the type to get his hands dirty. He was like a congressman, concerned with big picture matters and the bully pulpit. So he latched on to mainly one concept he was excited by. I would sit in on meetings with him regarding housing bills in Congress. After four years at HUD, it was clear he did not know his own programs well."

Few who worked with Kemp doubted the sincerity of his desire to help low-income residents with HOPE. But it was a sincerity attached with singular fixation to an almost simpleminded notion: resident ownership could change all. Regarding housing policy, Kemp basically had one thought -- and that was enough.

"Jack thinks his tenure at HUD was very successful," says one of his top aides at HUD. That's a testament to Kemp's powers of positive thinking.

Quote of the day

Just don't do it

"I can see where we have to control drugs and I support that, but this was an innocent
bottle of Advil."

-- Debbie Olson, mother of Brooke Olson, a junior high school student in Houston suspended from school after drug-sniffing dogs found a bottle of Advil in her backpack. (From "Student Suspended for Bottle of Advil," reported Wednesday by Reuters news agency.)

David Corn

David Corn is the Washington editor of the Nation, a columnist for the New York Press and author of a political suspense novel, "Deep Background" (St.Martin's Press).

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