US policy shifting on low-income housing. Less new construction, more private dwellings

Carla Klansky, who earns a modest wage working in a local wire factory, is part of the federal government's effort to stop building new housing and make better use of housing that's already built. To get by, Mrs. Klansky and her daughter Amy initially moved in with her parents and then with her sister. But she qualified for federal housing assistance and now pays 30 percent of her salary toward rent of a privately-owned duplex. Washington pays the rest.

``It really helps,'' she says of the federal aid. ``Otherwise, I probably wouldn't be able to have a place of my own.''

Extensive housing experiments during the 1970s piled up plenty of evidence that it is often the price rather than a physical shortage of housing that keeps many low income Americans from finding adequate shelter.

In accord with that finding, there has been a noticeable shift in federal-housing policy under the Reagan administration. It is marked by a turning away from new construction toward privately-owned existing housing to provide low-income housing.

And, while there are still 1.5 million public housing units scattered around the country, experiments are now underway to sell a number of them directly to tenants.

For years, the government has issued rental certificates that pay a portion of each month's rent. That program, tapped by Mrs. Klansky and close to one million other Americans, is known as section 8 of the US Housing Act.

It is popular, works well, and is the unofficial springboard for the Reagan administration's new five-year experiment with housing vouchers.

The largest portion of the experiment is aimed at helping families living in substandard housing rehabilitate it. A smaller part, involving 7,500 families in 61 target areas, aims at comparing the merits of vouchers vs. rent certificates.

Some observers insist the differences between the two programs are minor. David Garrison, director of Cleveland State University's Urban Center, for instance, says the rent certificate program ``looks, smells, and tastes like a housing voucher but it doesn't have all the bells and whistles.''

The key difference for the user is that, unlike rent certificates, vouchers do not restrict users to housing only of a certain rent level and to contributing a strict 30 percent of their income toward rent.

The housing authority will still pay the difference between 30 percent and the so-called fair-market rent in that area. But if a voucher-holder finds something cheaper or more expensive than average, he can pay less or more of his own income depending on his choice.

``We call that our shopper's incentive,'' says Department of Housing and Urban Development spokesman Peter Centenari.

This second part of the voucher experiment has only recently begun to gather steam. Both Seattle and the state of Michigan have begun distributing vouchers just in the last few weeks. Many, such as Wisconsin's Door County, are still waiting for the contracts with Washington to be approved and the money to arrive.

The Reagan administration claims vouchers are the best and cheapest way to get most future housing aid to America's needy. Those helped, it argues, gain a new ability to move where living costs may be lower and jobs more plentiful.

Some experts worry that rents may be forced upward and that voucher families could easily get in over their heads.

But there is relatively widespread philosophical support for the voucher concept -- even among liberal Democrats in Congress.

Most criticism is focused on the small scale of the experiment and the discounting of any need for new construction, even where housing markets are tight.

``Philosophically, I think it's a terrific idea, but it's hard to get really cranked up about what is really a very small piece of business,'' says Cleveland State's David Garrison. ``The needs are just gargantuan.''

James Follain, an urban economist who worked on the evaluation of some of the earlier voucher experiments, calls launching yet another experiment ``absolutely ridiculous. . . . This is the most intensively studied housing idea ever and the results are very consistent about the benefits. . .''

Gerald Benoit, who heads up HUD's existing housing program, says the administration wanted a larger and less experimental program but that it was Congress which authorized the project as a demonstration.

But some who closely monitor low-income housing developments, such as Barry Zigas, President of the National Low Income Housing Coalition, note that housing has already taken the deepest cut (over 60 percent since 1981) of any domestic-spending program.

``The main thrust of this administration in low-income housing has been to withdraw completely from a 50-year bipartisan federal commitment to it,'' he says.

Both Mr. Zigas and Mr. Garrison argue that a mixed program, including construction in some areas, is needed.

Yet Charles Orlebeke of the University of Illinois' School of Urban Planning and Policy notes:

``It's increasingly hard to document that we're actually short of roofs over people's heads. It gets into the whole area of needs vs. preferences.''

Most experts agree that the size of the current federal deficit makes federal aid from Washington even more unlikely, even were a Democratic administration to be in office.