RUTHFULLY YOURS

Crisis has come to NYCHA-land, as New York magazine once called the city’s public housing system to underscore the sheer isolation of many of its large projects. This past winter, more than three-quarters of the housing authority’s 400,000 tenants, in 176,000 apartments, went without heat and hot water. Mandatory lead-paint inspections were not performed, and then falsely claimed to have been done. The chairwoman of NYCHA’s board resigned under fire. Gov. Andrew Cuomo declared an official state of emergency and went to visit the projects for himself.

Readers may not be surprised, given the terrible reputation of public housing. But for years, a few utopian believers have insisted that New York is different. Take “Public Housing That Worked,” a 2009 book by Nicholas Dagen Bloom, a professor at the New York Institute of Technology. “The New York story provides a fresh perspective on familiar stories of housing failure,” Mr. Bloom writes, “by showing that, rare as it may be, a housing authority dedicated to everyday management can maintain housing even under trying conditions.” He describes NYCHA as having “comparatively tidy grounds” and “well-maintained high-rise buildings.”

That would be news to tenants such as Yajaira Cariani, a 36-year-old single mother of three who lives with her own mother in the Bushwick Houses in Brooklyn. She points to stained and leaking plaster and says there are days she must put out buckets in her living room to catch water pouring in from the roof. A woman on staff at a Baptist church in East New York monitors the Linden Houses, where, she says, “they just don’t pick up the garbage,” and thus rats abound. She tells of nonworking stoves and peeling paint—certified as lead-free, but who knows for sure?

Calling for repairs is vital, but it misses the point. The fundamental failure is in the very concept of public housing. Government, at long last, ought to exit a business in which it mistakenly became involved during the New Deal era. The intellectual case behind that movement appears, in retrospect, deeply misguided.

A key figure was Catherine Bauer, whose 1934 book, “Modern Housing,” argued that private residential markets were destined to fail many working-class households. The book included admiring accounts of early Soviet public housing, complete with rotogravure images. Bauer joined the Roosevelt administration and was credited as the author of the Housing Act of 1937. That law promoted for the nation the sort of program New York City had already launched: public-housing construction that would remove the profit motive and thereby allow for superior amenities. Crucially—and widely forgotten—the projects were meant to be self-supporting, maintained by rents and other revenues.

The reformers ignored a great deal. The slums they abhorred were actually dynamic neighborhoods, where homes—modest, to be sure—were often owned by residents, rather than by the vilified absentee landlords. In the St. Louis neighborhoods cleared to make way for the infamous Pruitt-Igoe towers, a quarter of homes were owned by their African-American residents. Many had private rental units.

In New York, the tenements of the Lower East Side were a starting point for immigrants who moved up to the attached homes of Brooklyn. Today, the city’s Tenement Museum celebrates what some call the “urban log cabin.” Public housing stripped the poor of these assets and moved them into homes they could never own.

Perhaps the trade would have been worthwhile if the dream of self-supporting, well-maintained public housing had come true. It did not. By 1971, St. Louis was demolishing the Pruitt-Igoe projects; Chicago ultimately would do the same with its infamous, crime-ridden Robert Taylor Homes. New York continued to think of itself as the exception, but the fundamental flaws could not be wished away.

The working class that Catherine Bauer had sought to serve voted with its feet, moving out to Levittown, N.Y., and beyond. Left behind were the poor, who could not afford the rents on which the Bauer model relied. When housing authorities around the country sought to raise rents to maintain aging buildings, Congress stepped in. Federal legislation passed in 1969 capped rents at a quarter of income.

Overnight, housing authorities, including NYCHA, began to be starved of funds, even as roofs leaked and elevators failed. New York might have realized revenue through commercial development—stores and offices—on project sites. But super-planner Robert Moses, in thrall to the “City Beautiful” ideal, had prohibited such development in the 1940s so as to provide residents with parking lots and green spaces.

Extricating government from this business may seem far-fetched. It should not be. A federal program called Rental Assistance Demonstration, developed by the Obama administration, allows private developers to take over public housing so long as they promise to keep the rent affordable for a negotiated period. New York could give tenants a buyout or limit their length of stay. (The average NYCHA resident has lived in public housing more than 17½ years.) Many projects sit on valuable real estate. The city could sell it and use the funds to support housing for those who truly have nowhere else to go, such as the low-income elderly or the disabled.

Despite decades of trying, public housing in New York is a failure. Perhaps it’s time for the city to try something else.

Mr. Husock is vice president of research and publications at the Manhattan Institute and author “America’s Trillion-Dollar Housing Mistake” ( Ivan R. Dee, 2003).