Cisneros favors unique approaches to revitalize public housing, cities

June 25, 1993|By Chicago Tribune

WASHINGTON -- Henry Cisneros, the new, activist secretary of Housing and Urban Development, says he favors rent controls on subsidized housing, a speed-up in the sale of abandoned single-family homes to poor families and free space for Scout groups in the gang-infested housing projects of the nation's cities.

All this and more, he told reporters yesterday, will be required to relieve the squalor of urban areas and rebuild their economies with federal and local resources.

At the same time, Mr. Cisneros said, he will struggle with the exploding cost of previous mismanagement at the scandal-ridden Department of Housing and Urban Development. The agency could lose as much as $11.9 billion in the default of government-insured mortgages on apartment buildings, the department's inspector general has said.

While Mr. Cisneros said he will seek new powers to enable HUD to sell some of these buildings to reduce losses, he was blunt about his negligible chances of success.

"A good portion of [these projects] are going off the cliff," he said.

Though he spoke of an ambitious plan to reinvent HUD and broaden its role in community development in cooperation with other agencies, Mr. Cisneros conceded he has a long way to go with the agency, often criticized for its bureaucratic ineptitude. "It is worse than I thought," he said.

Mr. Cisneros said his predecessor, Jack Kemp, brought HUD "back from the brink . . . when a good argument might have been made for dismantling the place." Now, he said, the department can be instrumental in fighting poverty, crime and racism. Racism, he said, "has the potential to bring down the country."

As for providing space for Boy Scouts, Girl Scouts, 4-H Clubs, Big Brother and Big Sister programs and other youth-based organizations, Mr. Cisneros said such groups have not existed in public housing developments for 15 years.

"There are people who would rather not be in gangs if we could find something else for them to do. They are scared to death. They die in the gangs. They get locked into them. Of course, this is not a great population to find a troop leader."

Mr. Cisneros said a housing bill to be unveiled next week will seek an 18-month rent freeze for those in subsidized housing, to be followed by rent ceilings. He said the plan would seek to prevent rent from rising when a resident's income increases.

In addition, the legislation would be designed to prevent insurance companies from abandoning blighted communities. He said he has told insurance companies throughout the Midwest of his plans to crack down on the industry's alleged red-lining. Without insurance, he said, there can be no development.

Mr. Cisneros also plans to introduce Federal Housing Administration-insured loans with no down payments for low-income people. And he's talking to the White House about tougher measures to force financial institutions to invest in low-income areas.

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