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Abstract Over the past decade, public housing has become the nation's “housing of last resort.” This article examines the emergence of this social role and describes the conditions of resident economic and social distress that have accompanied it. In this context, the article also evaluates the problem assessment and recommendations of the National Commission on Severely Distressed Public Housing, which released its final report in August 1992. This evaluation is used as the basis for proposing a new social role for public housing defined around the concept of social capital. The commission correctly identified concentrations of resident distress, such as high proportions of extremely poor and female‐headed families, as a major problem facing distressed public housing. However, the recommendations of the commission were much less satisfying. Rather than confronting directly the tenant selection policies that have produced these aggregations of resident distress, the commission held to an unrealistic optimism that social services and economic development initiatives could relieve these conditions. For changes in public housing tenant selection policies to occur, an alternative social role for public housing must be defined. Under this alternative role, a primary objective of the public housing program would be to give residents access to social capital. Such an approach would ensure that families of the working poor are integrated with the nonworking poor in public housing developments, thereby fostering those sinews of community connection and trust the essential features of social capital and the sources of hope and opportunity.