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the original policy ideals on which HUD was based no longer

look to it as their primary vehicle.  Since 1986, with the

passage of the Low-Income Housing Tax Credit, a generation

of community development corporations (CDCs) has used that

tax law to raise corporate capital to renovate inner-city

buildings and to build new housing complexes for lower-

income individuals.  The scale of that enterprise has been

significant.  The National Congress for Community Economic

Development estimates that there are some 2,000 CDCs operat-

ing in the United States and that in just the four-year

period from 1987 to 1991 such groups built or renovated

87,000 housing units.  They did so largely without direct

federal appropriations.  Projects undertaken by the groups

rely on the sale of tax credits to corporate donors and are

touted as public-private partnerships.  The sale of credits

and assistance with project financing often are arranged

through two national intermediary groups: the Local Initia-

tives Support Corporation, a Ford Foundation spin-off, and

the Enterprise Foundation.

There are reasons to be suspicious of the long-term

prognosis for the efforts of such groups.  Early analyses

have already found maintenance problems, for instance, in

relatively new developments.46  The Congressional Budget

Office also has been critical of the low-income housing tax

credit as a financing vehicle.47  The point is that even if

one believes in the Model Cities ideal or thinks that it is

a good idea to locate community residents who will oversee

the management of older apartment buildings or that such

plans can lead to economic development, a significant effort

toward those ends is now under way and has essentially

bypassed the central HUD bureaucracy.

Conclusion

There is grave reason to doubt the need for the Depart-

ment of Housing and Urban Development--not merely because it

is expensive, or because many of its programs have been

marred by scandal, or because much of the housing it has

supported has been poorly managed and is in poor repair.

Rather, there is reason to be skeptical about the need for

HUD because it has, from its inception, been based on sus-

pect premises:

· HUD Premise: Cities are and have been, since World

War II, in a state of crisis and decline.