Klindt, Thomas H.

English

Research Papers in Economics

SOUTHERN  JOURNAL OF AGRICULTURAL  ECONOMICS  JULY,  1973
DISCUSSION:  RURAL  HOUSING NEEDS AND  BARRIERS,
THE CASE  OF CENTRAL APPALACHIA
Thomas  H. Klindt
Deaton  and  Hanrahan  provided  an  excellent  enough  depends  upon  the  time  horizon  used.  If,
report  on  the  situation  of  housing  in  Central  considering  the  relative  needs  of  other  domestic
Appalachia.  Their  arguments  concerning  the  programs,  one  considers  any  positive  change  in  the
implications  to be drawn from the  situation  are that  housing  situation  to  be adequate,  then  the  existing
Central  Appalachia  had  a  disproportionate  share of  institutions  are  probably  adequate.  Alternatively,  if
substandard  housing in  1960  and  1970, examination  one  expects  housing  in  Central  Applachia  to be  on
of  some  barriers  to  increase  housing  construction  par  with the  rest of the country in a decade, then the
indicates that  public policy  has not been  effective  in  authors  are  probably  right  in  asserting  that  new
reaching  the  very poor, and therefore,  public housing  housing policies  are needed.
policy should be altered. policy should be altered.  2.  SHOULD  PUBLIC  TRANSFERS  TO  THE Three  questions  may be  raised  that  need  to  be  OO  EARMARKED  FOR HOUSING?
answered  before  implementing  new  public  housing
policy for Central Appalachia.  Two  alternatives  are  offered  for  alleviating  the
1.  IS  IT  CERTAIN  THAT  EXISTING  housing needs  of the poor in Central Appalachia.  One IS  IT  CERTAIN  THAT  EXISTING is a direct  income transfer; the other is a more heavily
INSTITUTIONS  ARE  NOT  LEADING  TO subsidized  housing  program.  My  comments  are
A RESOLUTION  OF HOUSING NEEDS? directed to the latter of these transfers.
The  authors  conclude  that  current  institutions  Three justifications  for providing  transfers  in the
are not  satisfactory.  Only  30,000 housing units  were  form of housing as opposed to direct income transfers
destroyed  or abandoned  in the  decade  from  1960 to  come  to  mind.  The first  possibility  is  that improved
1970,  representing  only  about  15  percent  of the  housing is a commodity that the poor would purchase
estimated  190,000  substandard  units  existing  in  if  they  had  additional  income.  To  the  extent  that
1960.  This  probably  does  not  underestimate  the  additional  income  was  used  to  purchase  improved
improvements.  housing  there  would  be  no  difference  between
Eighty-five  thousand  new  housing  units  were  providing housing transfers and income transfers.
constructed  in  the  region  during  the  decade  of the  A  second  possible  justification  for  earmarked
1960's,  representing  a  14  percent  increase  in  the  transfers  is  that  society  is  better  able  to  determine
number  of houses  during  a  period  when population  what  the individual needs than the individual himself.
decreased  by 11  percent. One must conclude that the  There is some precedence for this action, especially in
number  of  occupants  per  house  decreased  our food aid programs. In the case of housing, society
precipitously,  or perhaps more  realistically, that  some  might contend  that because  of their economic  status
housing  was  unoccupied  but  not  necessarily  the poor may be  too short  range in their planning to
abandoned.  However,  even  if these  improvements  in  recognize  all  of the  long  term  benefits  of improved
housing  were  somewhat  greater  than  indicated,  the  housing.  My  reservation  stems  from  the  logical
change  may still not be  great enough from the public  extension of this argument.
point of view.  The  third  justification  could  be  that  society
Whether  or  not housing improvements  are rapid  intends  for  benefits  to accrue  to  a selected  group  in
Thomas H. Klindt is assistant professor of agricultural economics  at Louisiana State  University.
69addition to  the  recipient  of the transfer.  It  could be  they  avoided  discussing  the  impact  of  those
argued  that  additional  monies  spent  on  housing  constraints  one  finds  no  basis  for  postulating  that
construction  might have  more induced impact on the  these  other  constraints  could  not  be  overcome  if
area  than  monies spent  for other  goods. However,  in  incomes were higher and more  stable.
order  for  housing  subsidies  in Central  Appalachia  to  If  stable  employment  and  higher  income  are
have  more  than  temporary  significance  in  terms  of  primary  constraints  to  adequate  housing,  then
increased  income  and  employment,  new  production  policies  aimed  at  combating  these  problems  might
other  than  housing must be elicited. Research on this  provide a  more  lasting solution to housing  problems.
topic  is  at  best  sketchy; however, beyond  some  first  Of  course,  there  are vast  numbers  of possible  policy
round  increase  in expenditures, the induced effects in  alternatives  to  these  problems,  including  subsidized
Central  Appalachia  would probably  be negligible.  employment,  policies  to increase  productivity  of the
No  answer  has  been  provided  to  the  original  human  factor,  or  perhaps  even  subsidized  mobility
question  of whether  or  not  transfers  to the poor in  from  the  area.  However,  treatment  of these  policies
Central  Appalachia  should  be earmarked  for housing.  goes well beyond the scope of this discussion.
However,  before making massive transfers in the form  Substandard  housing  is  a problem;  it always has
of  subsidized  housing,  public  decision  makers  (and  been  a  problem;  as  housing  standards  increase
researchers)  should  make  their  goals  clear  and  through time, it will likely remain a problem. But,  for
evaluate the effectiveness  of the alternatives.  economically  depressed  areas  such  as  Central
3.  SHOULD  WE  THINK  OF SUBSTANDARD  Appalachia,  housing  is probably no more serious than
3HOUSING  AS  A  PROBLEM  OR  AS  A  substandard  education,  substandard  health  care,  or HOUSING  AS  A  PROBLEM  OR  AS  A
SYSTEM OF A LARGER PROBLEM?  any  one  of  a  number  of other  issues.  All  of these
problems  appear  to  be  interrelated  and  have  their
An  allied  question  is  whether  it  might be more  roots  in  generally  low  levels  of  economic  activity.
efficient  to  attack  the  cause  rather  than  the  Solving  a  multifacited  problem  such  as  overall
symptom.  economic  growth and development  is  quite  difficult;
With  regard  to  the  first  of these two  questions,  however,  it  may be  the  only  long  term  solution  to
the  authors  indicate  that  housing  construction  is  a  each  of  the  component  parts.  We  can  expect  only
function  of  a  stable  and sufficiently  high income  to  short  lived  impact  from  policies  that  are  directed
induce  people  to  take  on long  term debt.  They also  toward  easily identifiable symptoms rather than more
allude  to  other  possible  structural  constraints.  Since  obscure  causes.
70

DISCUSSION: RURAL HOUSING NEEDS AND BARRIERS, THE CASE OF CENTRAL APPALACHIA

Abstract

Similar works

Full text

Available Versions

Research Papers in Economics