Public Housing in America: The 1998 Cap Explained

Most Americans picture public housing in America as a period piece: grim towers, a 1970s newsreel, something the country tried and abandoned. Half right. The country did abandon it. It never replaced it, and it wrote a law making the replacement illegal.

Roughly 1.6 million people still live in HUD public housing today, in fewer than a million units. The waiting lists to get in are measured in years and many are closed to new applicants entirely. This is not a program that failed and got retired. Congress capped it, starved its repair budget, and funded its demolition while the number of households who needed it kept climbing.

What is the Faircloth Amendment and why does it matter?

In 1998, Congress passed the Quality Housing and Work Responsibility Act. Buried in it was a provision now known as the Faircloth Amendment. It prohibits HUD from funding operating or capital subsidies for any public housing unit that pushes an authority above the number of units it had on October 1, 1999.

In plain terms: a city can tear down a 500-unit development, and it cannot build 500 new public housing units to replace them and receive federal operating support. The national ceiling was set to whatever existed in 1999 and has never been raised.

The population has grown by more than 60 million people since. Median rent has far outrun wages. The ceiling did not move.

Where did the demolished units go?

Mostly through HOPE VI, a program launched in 1992 to replace distressed developments with lower-density, mixed-income communities. The buildings that came back were usually better buildings. The unit math was usually worse.

A tower holding 600 deeply subsidized apartments would come down and return as townhomes holding perhaps 250 units, a portion of which went to market-rate and moderate-income tenants. The site improved and the number of families it could shelter fell. Residents displaced during construction often never came back.

Layer the Faircloth cap on top and the loss becomes permanent by statute. The unit is gone, and the law forbids replacing it with public housing anywhere else in the country.

Did vouchers make up the difference?

Vouchers became the main federal answer, and Housing Choice Vouchers now serve roughly 2.3 million households (HUD). That is real assistance reaching real families, and on its own terms the program works better than the towers did, because recipients choose their neighborhood instead of being concentrated in one.

A voucher is a payment rather than a home. It functions only if two conditions hold: a landlord willing to accept it, and a unit that exists at or below the local payment standard. In a market short millions of homes, both conditions fail routinely. Families receive a voucher, search for months, and hand it back unused.

That is the structural weakness. Public housing added units to the national stock; vouchers add none. When supply is the binding constraint, a demand-side subsidy sends more buyers after the same scarce apartments. The scale of that constraint is laid out in how many homes America needs and in the housing crisis explained.

Source: U.S. Department of Housing and Urban Development. Figures rounded.

What does the funding look like?

Underneath the cap sits a repair problem. The public housing capital needs backlog covers roofs, boilers, elevators, plumbing and lead abatement across the national stock, and it has been estimated in the tens of billions of dollars. Annual capital appropriations have run at a fraction of that.

Deferred maintenance is not neutral. A boiler that fails in January can condemn a building, and once those units come offline the Faircloth cap keeps them offline. Congress demolishes public housing every year without holding a vote on it, simply by appropriating less than the roofs cost.

Who is on the waiting list?

Households earning far below area median income, a large share of them elderly or disabled, plus working families whose wages never caught the rent. The federal minimum wage has sat at $7.25 since 2009 (U.S. Dept. of Labor) while the median home sale price climbed to roughly $400,000–$420,000 (NAR / Census).

Waits of several years are routine in large metros, and many authorities keep their lists closed for years at a stretch because the queue already exceeds any plausible turnover. The mechanics of that queue are covered in the Section 8 waiting list.

For anyone trying to navigate the system now rather than argue about it, how to qualify for affordable housing and how to get affordable housing cover the application side.

Could America build public housing again?

Legally, the Faircloth cap would need to be lifted or worked around. Some housing authorities have used a workaround — building units under a Faircloth-to-RAD conversion that counts against unused cap authority — and a handful of states and cities have started funding social housing outside the federal program entirely, using state dollars, land trusts and mixed-income models that cross-subsidize deeply affordable units.

Those experiments are small. They are also the only place in the country where the deeply affordable unit count is rising rather than falling, which is why housing advocates watch Montgomery County, Maryland and a handful of state programs far more closely than their size would suggest.

Congress froze the stock in 1998, funded demolition more consistently than construction, and shifted to a subsidy that cannot create a single apartment. Every one of those was a choice made in a room, on a date, by people with names. The waiting list is what those choices produced, and it runs on the same structural failure as why America stopped building cheap housing and the broken American dream.