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Page 15

In many ways, 1973 was a watershed for HUD.  It was the

year that President Nixon, having surveyed the problems that

had surfaced in the first generation of HUD projects, de-

clared a moratorium on new, subsidized construction.  The

Nixon administration moved instead on two of its own initia-

tives.  Section 8 of the National Housing Act of 1974 would

become the vehicle for providing rent subsidies to individu-

al tenants, in some cases tied to specific projects and in

others to "vouchers" that tenants could spend themselves.

Nixon also inaugurated the community development bloc grant,

a vehicle for directing federal monies to low- and moderate-

income neighborhoods wherever they may have been, not only

in the central cities.

Community Development Funds

Funding for community development programs may be the

least objectionable of HUD's spending, although it is by no

means clear that it justifies the existence of HUD as a

federal agency.  (HUD merely develops a distribution formula

and spending guidelines and forwards the funds to local

bodies to spend.)  Bloc grant monies reflect the American

belief that, even in the poorest neighborhoods, some sorts

of public goods must be provided.  Thus, we do not let the

street and sewer systems decay in neighborhoods that are or

become poor.  Much of such infrastructure will have a useful

life no matter the ultimate fate of the neighborhood; for

instance, water and sewer lines may serve older housing

stock but can also serve new industrial or residential

structures if the market demand in a particular locale

changes.

Because such improvements are otherwise funded at the

local level through property taxes, such infrastructure can

be hard to renew or replace if a jurisdiction must rely on a

declining tax base.  Thus, a case may be made for some level

of redistribution to support such infrastructure.  (In its

1995 budget, HUD was authorized to spend $4.4 billion on

community development bloc grants.)  It is by no means

clear, however, that the federal government should perform

that redistributive function.  It is arguably both unconsti-

tutional and inefficient for the federal government to do

so.  The Tenth Amendment was appended to the Constitution as

a reminder that the powers that are not delegated to the

federal government are reserved to the states or to the

people.  Whether or not state and local governments should