Salsich, Pater W., Jr.

English

University of New Mexico

Volume 14 
Issue 4 Fall 1974 
Fall 1974 
Housing Subsidies in the United States and England, by Daniel R. 
Mandelker 
Pater W. Salsich Jr. 
Recommended Citation 
Pater W. Salsich Jr., Housing Subsidies in the United States and England, by Daniel R. Mandelker, 14 Nat. 
Resources J. 583 (1974). 
Available at: https://digitalrepository.unm.edu/nrj/vol14/iss4/9 
This Book Review is brought to you for free and open access by the Law Journals at UNM Digital Repository. It has 
been accepted for inclusion in Natural Resources Journal by an authorized editor of UNM Digital Repository. For 
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Housing Subsidies in the United States and England
By DANIEL R. MANDELKER
Indianapolis: Bobbs-Merrill Co., Inc.,
1973, 226 pp., $9.50
"More and not less centralization of housing subsidy and related
programs, and more and not less government intervention in the
housing market"' is the conclusion Daniel Mandelker draws after a
recent examination of housing subsidy programs in the United States
and England. Noting the paradox of greater public attention being
given to housing issues as housing conditions improve, Professor
Mandelker cautions against approaches to housing subsidy programs
which the legal and administrative systems are not capable of deliver-
ing, and he argues for less dramatic changes to current programs.
Housing Subsidies is not a review of all federally sponsored hous-
ing programs but rather is a study of financial and related policy
problems generated by governmental intervention in the housing
market, with the emphasis placed on subsidized housing that is both
publicly owned and rented and which serves the lowest income
groups of the population. In the United States, this means the public
housing program that originated with the Housing Act of 1937;2 in
England, the council housing program begun in 1919 and changed
several times, the latest in 1972.' Mandelker notes that in both
countries a shift in public concern has developed because over the
past half century a substantial improvement in the housing supply
has occurred and many of the worst slums have disappeared.4 The
housing issue now is defined not so much in terms of housing short-
age as it is in terms of housing cost and housing quality.' Recogniz-
ing this shift in emphasis, Mandelker sets out to examine the "in-
creasingly important economic aspects of housing policy" and finds a
"history of confusion" in both countries "over the role that housing
*Professor of Law, Saint Louis University; A. B. University of Notre Dame, 1959; J. D.
Saint Louis University, 1965.
1. D. Mandelker, Housing Subsidies in the United States and England 226 (1973) [here-
inafter cited as Mandelker].
2. 42 U.S.C. § § 1401 et seq. (1970).
3. Mandelker, at 120-124.
4. The 1970 census indicates that substandard housing dropped from slightly less than
half (49 percent) of all occupied units in 1940 to less than one-tenth (7 percent) in 1970. F.
Kristof, The 1970 Census of Housing 1-4 (1971), reprinted in Mandelker & Montgomery,
Housing in America 89-91 (1973),
5. The President's Committee on Urban Housing commented in its 1968 report that
".. . the housing industry has shown remarkable ability to provide housing for those whose
incomes are sufficient to afford it." President's Committee on Urban Housing, A Decent
Home 121 (1968).
NA TURAL RESOURCES JOURNAL
policies should play in a strategy for solving housing problems."6
Mandelker selects programs that provide rental units for low income
persons, because low income persons usually rent and because meet-
ing the needs of low income families "has the highest priority and
presents the greatest challenge to public policy." 7
Mandelker notes that American public housing has traditionally
served the narrowly defined lowest income group in the population
with a generous national subsidy (two-thirds of housing costs in pub-
lic housing), whereas English council housing is not limited to the
poor but has met only 25% of the cost of such housing through a
national subsidy. Recent changes in housing policy in both countries,
along with growing pressures for a more general social strategy to
alleviate poverty, suggest to Mandelker reasons for comparing the
two countries' programs.
Will narrowing the English subsidy lead to the kind of social and
economic stratification that has been experienced in the American
public housing program? An examination of the American public
housing subsidy experience may provide some answers to this ques-
tion. Would broadening the American subsidy lead to the problems
of selection and distribution that the English have experienced?
Again, an examination of the English housing subsidy may provide
some insight on this problem.8
The book is divided into three basic parts. Chapters I and II in-
volve and discussion of the basic issues that enter into the policies of
a housing subsidy program. What is the appropriate level of housing
expenditure? What type of rent/income ratio (rent paid expressed as
a percentage of income) should be adopted? How should subsidies be
applied-as direct supplements to the tenant's rental expenditure, as
shares of housing costs? What role does the welfare system play?
Should housing subsidies be channeled through the welfare system or
should the two exist side by side? Who should be responsible for
housing subsidy programs-the national government, local govern-
ment, some combination of the two? Mandelker does not attempt to
answer these questions but merely points out that "decisions made at
any point in the subsidy system have an impact on other components
within the program." 9
The remainder of the book, with the exception of a concluding
chapter, consists of a detailed analysis of the American public hous-
ing program and the English council housing system. Chapters III and
6. Mandelker, at 4.
7. Id. at 5.
8. Id. at 8.
9. Id. at 41.
[Vol. 14
BOOK REVIEWS
IV describe the American program. Particular attention is given to
the subsidy formulas and rent policies of public housing and to the
federal-local structure of the program. The federal subsidy formula
originally placed the full burden of public housing operating costs
and local tax payments on the local housing agencies. Funds to meet
these costs were derived from rents. Rents were set by most local
public housing agencies on a portion of income and dwelling units
were assigned to tenants on the basis of need. But during the 1960's
the structure of local rent charges was severely strained by rising
operating costs and an increase in the number of fixed-income
tenants who simply could not afford higher rents. Congress respond-
ed with the so-called Brooke Amendment 1 0 which authorized fed-
eral subsidies for payment of operating costs and imposed a 25 per-
cent rent/income ratio as a maximum rent in the public housing
program.
Mandelker provides fascinating detail about the behind-the-scenes
struggle over the Brooke Amendment and the subsequent HUD regu-
lations implementing it. What emerges is a picture of conflicting
viewpoints: the highest levels of HUD clash with tenant representa-
tives and congressional power centers so strongly as to produce a
virtual impasse over the revision of federal public housing legislation.
Mandelker notes that Senator Brooke's amendment has had conse-
quences not foreseen by the senator and his supporters.
Public housing project revenues have been diminished even further
by the rent ceiling, while Congress has proved reluctant to meet in
full the subsidy burden that the application of the new rent ceiling
has imposed. What was intended as a marginal change to provide
financial relief to tenants and local authorities eventually opened up
for review the conceptual basis on which the entire program is
founded. Conflicts over legislative language and administrative regu-
lation reflect these pressures. The absence of full legislative and
administrative consensus on the character and future role of public
housing has led to an impasse in which Congress has authorized but
refused to financially support the new operating subsidy to the
extent that it is required.' '
Mandelker concludes his discussion of the public housing program
with the pessimistic observation that the stalemate is likely to con-
tinue for some time and that the federal government may withdraw
further from what he considers its full financial responsiblity for
housing need.
10. Named after its chief sponsor, Senator Edward Brooke of Massachusetts. Act of Dec.
24, 1969, Pub. L. No. 91-152, § § 212(a), 213, 83 Stat. 379, 388-9.
11. Mandelker, at 111.
October 19741
NATURAL RESOURCES JOURNAL
Chapters V-VII discuss the English housing program which is cen-
tered on publicly owned rental housing called council housing (be-
cause it is built and managed by the councils of local government
authorities). One major difference between the English and American
housing situation is that in England most rental housing is publicly
owned and all rental housing is subject to rent control. Another
difference is that practically all privately owned rental dwellings in
England were built before 1919 while no national subsidies for
council housing were available. This has produced a situation in
which rents for council housing average about 25 percent higher than
rents in private accommodation.' 2
Prior to 1967 the English subsidy was never related to the capital
cost of the housing. It usually provided for fixed annual payments
for each dwelling, payments which were far from sufficient to cover
principal and interest on the debt incurred in building the projects.
In 1967 a debt service subsidy was provided for the first time,1 3 but
this was repealed by the comprehensive legislation of 1972. The
1972 Act established a new rent standard for council housing units,
required rent rebates for those who need them, and provided for a
subsidy to help meet the cost of these rebates.1"
No income limits are placed on admission and most income cate-
gories in the English population are represented in council housing
projects. Major changes brought about by the 1972 Act include the
establishment of a national rent standard (the "fair rent standard")
for English council housing and a nationally-determined rent rebate
system for tenants who cannot afford the predetermined rent.1 I
Mandelker discusses the fair rent standard and the rent rebate system
in detail. The effect of these programs, in Mandelker's view, is to
shift a larger share of housing costs to tenants in local authority
housing. The "fair rents" will lead to comparatively higher rents for
the more desirable housing, which may cause local authorities to
shift more affluent tenants to those units to avoid high subsidy costs.
The rent rebate system will concentrate more on those who need it
(similar to the U.S. program), and higher rents will be charged to
those for whom the subsidy is unnecessary. This represents an at-
tempt to defuse the growing pressures on the English system brought
about by rising operating costs and higher standards.
Mandelker closes by offering some suggestions for housing policy-
makers. He feels that less rigidity in the programs is necessary to
12. Id. at 120.
13. Housing Subsidies Act of 1967, c. 29, § 2(2).
14. Mandelker, at 126-127.
15. Id. at 136-137.
[Vol. 14
achieve greater freedom of housing choice for individuals and sug-
gests two alternatives: 1) adjust quality standards in new construc-
tion by relaxing durability standards or by insisting on less space and
amenity in the dwelling (a step he quite accurately recognizes as
highly controversial), or 2) make greater use of the existing supply.
This raises the quality problem, for which Mandelker suggest a com-
promise along the lines of the English approach where housing of any
quality is accepted for subsidy so long as an appropriate adjustment
is made in the fair rent.1 6
Mandelker expressed concern that the proposed direct housing
allowance may not be able to achieve its stated goals of increasing
freedom of choice unless it can come to grips with the problems of
inflated rent, home ownership demands, and amount of subsidy to
be made available. (Will, for example, tenants be permitted to choose
units where rents are comparatively high?) Mandelker sees the Sec-
tion 23 leasing program as offering the potential for serving as the
"housing broker," which he suggests is necessary to provide a
bridge between the subsidized and unsubsidized housing markets
which will facilitate the ability of housing subsidy recipients to move
from one market to the other, and which will help remove some of
the disparity in rents which presently exists between the two sec-
tors.1 7
Most of the issues and suggestions discussed by Professor Man-
delker have been raised before.' I What sets this book apart is the
comparative approach, the emphasis on the implications of various
policy alternatives, and the incisiveness of the analysis by one who is
a recognized expert in the field. Although the style is tedious in spots
(constant reminders of "what we have seen" or "what we have
learned") and although all may not agree with Professor Mandelker's
emphasis on governmental intervention, the book is a major contri-
bution to what is becoming an increasingly complex and crucial na-
tional debate.
PETER W. SALSICH, JR.*
16. Mandelker, at 210. A push in this direction appears to have been taken in a recent
case in Missouri, where the Missouri Supreme Court struck down provisions of the St. Louis
minimum housing standards ordinance as arbitrarily applied to two dwellings because the
court found it would be economically impossible to raise rents the required amount (esti-
mated at $60.00 per month) to re-coup the expenses of code compliance and, in the court's
opinion, the specific code violations (lack of tub or shower bath) did not constitute health
or safety hazards, City of St. Louis v. Brune, Nos. 57428, 57429 (Mo. May 13, 1974).
17. Mandelker, at 220.
18. For a recent listing of major studies on housing subsidies, see Hoffman, Current
Issues Explored, 4 J. Housing 160 (1974).
BOOK REVIEWSOctober 19741


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