Sign the petition here to Save Public Housing:
Read George Lakoff’s Article, “HUD is trying to Privatize and Mortgage off All Of America’s Public Housing” on the Huffington Post blog at:
Ending Homelessness through grassroots action and advocacy
Sign the petition here to Save Public Housing:
Read George Lakoff’s Article, “HUD is trying to Privatize and Mortgage off All Of America’s Public Housing” on the Huffington Post blog at:
Continuation of Letter to Secy. Donovan
Under current law, conversion from public housing to project-based Section 8 must
include a transfer of control, such as a change of ownership or a transfer of units through
a land lease agreement between the housing authority and a nongovernment entity.
Therefore, any proposed disposition or conversion would significantly increase the
influence of private and for-profit development interests on public space.
When housing authorities relinquish control over their public housing, it is unclear what
mechanism, if any, is in place for residents to seek redress for issues and conflicts with
private development companies. In Los Angeles, for example, the Pueblo Del Sol Public
Housing Community is currently under a 55 year land lease to a private developer which
maintains the property, sets property rules and collects residents’ portion of the rent, as
well as the government subsidies. The private developer has imposed tighter restrictions
on residents since taking control of the property, including more stringent eligibility
requirements. As the development is no longer managed by the housing authority,
residents must try to negotiate with a private company that is operating under a private
market model with little to no regard for tenant needs or the vital societal role affordable
housing programs serve.
Even if HUD creates a hybrid board of ownership, which includes representation from
local housing authorities and nongovernmental actors, it is unclear whether or how
residents will have redress through government agencies as is currently available in
public housing. Hence, any proposal would have to ensure a process whereby the
government remains accountable and accessible to residents’ needs and concerns.
3. Under the HUD proposal, resident participation and representation will
be severely undermined.
Public housing residents are currently protected under the Federal Code of Regulations
Title 24, Section 964, which provides for resident organizing rights. These organizing
rights include, but are not limited to, the formation of recognized resident councils,
participation in annual review processes and entitlement to specific grievance
Public housing residents subject to disposition to project-based Section 8 currently lose
these protections. In the aftermath of a conversion, resident councils must be
reconstituted as tenant organizations subject to Federal Code of Regulations Title 24,
Section 245. Since Section 245 does not encompass the same set of rights and protections
as Section 964, it is likely that residents will lose some of the safeguards and protections
provided under Section 964. Additionally, since project-based Section 8 units are
privately owned, there are fewer protections against evictions than in public housing.
Therefore, under any proposal, HUD must ensure that individuals and communities are
able to take an active role in the decision-making that impacts their housing rights. Since
project-based housing is not government-owned, federal standards of participatory
decision-making do not apply. Hence, HUD must ensure that participatory protections,
including but not limited to Regulation 964, remain intact under any new scheme.
4. The HUD proposal will likely exacerbate the long waiting lists currently
faced by those seeking to access affordable housing programs.
In cities across the country, waitlists for public and subsidized housing have thousands of
applicants, some of whom desperately wait many years for a housing unit to become
available. Under the current HUD proposal, those residents seeking to opt into the
Section 8 voucher program would be given priority over those already on the waiting
Similar to the Section 8 voucher program, waitlists for public housing units have tens of
thousands of applicants. When public housing developments are converted to projectbased
Section 8, site-based lists specific to the property are created, taking the
development off the public housing waitlist. Site-based lists force prospective residents
to complete an application for each development. To maximize their ability to obtain
housing, prospective residents are required to fill out multiple applications and be subject
to approval at each project-based Section 8 development, adding more red tape to an
already arduous application process.
Any HUD proposal must ensure that those currently on waitlists do not wait even longer
for units they desperately need and are not forced to reapply on site specific lists.
5. Residents have little legal recourse should this proposal violate their
HUD’s current proposal is not unique. Administrations throughout the years have tried
with varying degrees of success to reform the agency and its programs. Regardless of
whether a reform succeeds or fails, it is the residents that ultimately bear the brunt of
HUD’s decision-making. After witnessing the recent mortgage crisis, it is disturbing to
think that public housing, which was immune because of its fully public nature, will be
exposed to the same market forces that recently caused a wave of foreclosures.
Additionally, HUD administrations in the future may use TRA to further privatize the
nation’s public housing stock. HUD has not adequately addressed concerns that TRA
could eventually mean the loss of this valuable affordable housing to market-rate
Consequently, any proposal must include a resident approval process. The approval
process, which would determine whether local housing authorities are able to move
forward with project-basing plans, should be developed and overseen by residents and
other key stakeholders. Additionally, a private right of action must be included to ensure
that residents have adequate legal redress should the current proposal fail to meet the
community development objectives envisioned by HUD.
The U.S. government passed the Housing Act of 1949, in which the government pledged
to realize: “as soon as feasible . . . the goal of a decent home and a suitable living
environment for every American family, thus contributing to the development and
redevelopment of communities and to the advancement of the growth, wealth, and
security of the nation.” Additionally, international human rights instruments speak to the
human right to housing. Article 25(1) of the Universal Declaration of Human Rights,
which was unanimously adopted by all the member countries of the United Nations,
states: “Everyone has the right to a standard of living adequate for the health and well
being of himself and of his family, including … housing …”
We urge your office to give serious consideration to the issues raised in this letter. Public
housing provides a vital resource for low-income residents and is a crucial part of
ensuring last resort housing for all our citizens. Our nation and human rights principles
have long recognized the importance of guaranteeing to every citizen the right to
housing. Therefore, we call on your leadership in ensuring that HUD’s decision-making
does not undermine the intrinsic value of public housing being owned and operated by
the government and compromise the human rights principles your office has embraced.
We look forward to working with you and your staff as you work towards making the
public housing system stronger and preserving our nation’s affordable housing programs.
Campaign to Restore National Housing Rights
Center for Constitutional Rights
Housing Justice Movement
National Alliance of HUD Tenants
National Economic and Social Rights Initiative
Nation People’s Action
Right to the City (RTTC) – HUD Working Group
Western Regional Advocacy Project
Beyond Shelter – Los Angeles, CA
Coalition LA – Los Angeles, CA
Coalition on Homelessness – San Francisco, CA
Data Center – Oakland, CA
Lamp Community – Los Angeles, CA
Los Angeles Coalition to End Hunger and Homelessness – Los Angeles, CA
Los Angeles Community Action Network (LACAN) – Los Angeles, CA
People Organized for Westside Renewal (POWER) – Los Angeles, CA
People Organized to Win Employment Rights (POWER) – San Francisco, CA
Union de Vecinos – Los Angeles, CA
Cabrini Green Local Advisory Council – Chicago, IL
Chicago Anti Eviction Campaign – Chicago, IL
Coalition to Protect Public Housing – Chicago, IL
Jewish Council on Urban Affairs – Chicago, IL
Lakeside Action Coalition – Chicago, IL
Lawndale Alliance – Chicago, IL
People for Community Recovery – Chicago, IL
Mayday New Orleans – New Orleans
Survivors Village – New Orleans, LA
Alliance to Develop Power (ADP) – Statewide, MA
Minnesota Chapter of the National Lawyers Guild – Minneapolis, MN
Minnesota Tenants Union – Minneapolis, MN
Northside Neighbors for Justice – Minneapolis, MN
Coalition to Save Harlem – New York, NY
Concerned Citizens of Greater Harlem – New York, NY
Community Voices Heard – New York, NY
Families United for Racial & Economic Equality (FUREE) – New York, NY
Good Old Lower East Side (GOLES) – New York, NY
Housing is a Human Right – New York, NY
Jews for Racial and Economic Justice – New York, NY
st Coalition for Worker & Immigrant Rights – New York, NYNew York City AIDS Housing Network (NYCAHN) – New York, NY
New York Solidarity Coalition with Katrina & Rita Survivors – New York, NY
Picture the Homeless – New York, NY
Communities United For Action (CUFA) – Cincinnati, OH
Street Roots – Portland, Oregon
Northeast Pennsylvania Organizing Center – Wilkes Barre, PA
Residents of Public Housing in Richmond Against Mass Eviction – Richmond, VA
Organizing Neighborhood Equity (ONE DC) – Washington, DC
René Francisco Poitevin, New York University
David Harvey, Graduate Center of the City University of New York
Gilda Haas, University of California – Los Angeles
Jacqueline Leavitt, University of California – Los Angeles
Peter Marcuse, Columbia University
Mark D. Naison, Fordham University
David Wagner, University of Southern Maine
Centre on Housing Rights and Evictions – Geneva, Switzerland
International Alliance of Inhabitants – Genoa, Italy
Priority Areas – The Church of Scotland – Edinburgh, Scotland
Popular Action Front of Action on Urban Planning – Montreal, Canada
No-Vox International Solidarity Network – Paris, France
March 19, 2010
Secretary Shaun Donovan
U.S. Department of Housing and Urban Development
451 7th Street S.W.
Washington, DC 20410
Re: Human and Housing Rights Organizations’ Opposition to HUD’s
Transforming Rental Assistance Initiative (TRA) and 2011 Budget Proposal
Dear Secretary Donovan:
As human rights and housing rights organizations working around the country, we
applaud the efforts your administration has taken to address the housing crisis facing
residents of public housing. We are particularly encouraged by your office’s embrace of
human rights and your commitment to ensuring that our national housing policy reflects
its grounding principles.
As such, we are writing to express our strong objection to the Department of Housing and
Urban Development’s (HUD) Transforming Rental Assistance Initiative (TRA) as
outlined in the 2011 budget proposal, and, in particular, the proposal’s conversion of the
public housing program to a project-based scheme.
As national and community-based organizations working to improve the housing
conditions facing our nation’s most vulnerable communities, we believe TRA fails to
address the housing needs of low-income communities and falls woefully short of
guaranteeing the human right to housing.
Although we appreciate the need to secure much needed funding for the public housing
program, increasing the influence of private capital on our nation’s public housing system
would inevitably create a conflict between profit driven interests and the needs of lowincome
residents. Additionally, as we have witnessed in this current economic downturn,
over-dependence on private investment capital for the development and maintenance of
our national housing system is not a sustainable solution. Consequently, we hope that
you reassess HUD’s current approach and consider different alternatives for addressing
the needs of public housing communities.
We have outlined below our reasons for opposition to the plan.
1. The proposed conversion of the public housing program to a projectbased
system threatens the permanence of our nation’s public housing
stock, and the much needed affordable housing it provides.
Public housing is currently the only permanent, affordable housing stock in the country.
It has long provided much-needed, deeply affordable housing to those most in need.
Disposition of public housing to a project-based Section 8 scheme potentially eliminates
the permanent affordability and long-term availability of these units. This loss would
detrimentally impact the ability of local governments to address the growing U.S.
housing crisis, would destabilize entire communities, and would increase homelessness.
As currently promulgated, the Section 8 program does not supply a permanent stock of
affordable housing units. Contracts between private owners and the government have
time restrictions, and owners have the ability to opt-out of the program once a contract
expires or prior to its expiration pursuant to certain guidelines. According to HUD’s own
data, “as many as 13,000 Section 8 contracts will expire by 2013, meaning 800,000
privately owned buildings could potentially be put up for sale or have the rents on their
apartments raised to full market rates.”
1 Hence, under any new scheme, HUD mustensure there is no loss of hard public housing units currently in use, and that those units
remain at their current levels of affordability. There must also be guarantees that, during
the conversion process, there is no displacement of residents, and, in instances of
rehabilitation, there be phased rehabilitation and adequate, on-site relocation support and
assistance. Additionally, HUD must ensure one-for-one replacement of all public housing
units. This includes one-for-one replacement based on unit (bedroom) size.
Under the HUD proposal, housing authorities may be permitted to leverage public
housing through mortgage-backed loans from private banks. Mortgaging public housing
makes developments vulnerable to foreclosure and adds a financial burden, over time,
through decades of interest payments. Additionally, HUD’s plan to seek private
investment for construction capital may further encroach upon the integrity of this
valuable public resource. Dependence upon private capital could have dire consequences
in the event of loan defaults. In order to prevent the loss of public housing to the private
market, mortgage-backed loans must be FHA-insured. In addition, HUD must create a
process, which is developed and overseen by residents and other key stakeholders, by
which the financial health of housing authorities participating in any new program would
be evaluated. This evaluative process would serve as a potential safeguard to ensuring
that housing authorities with weak financial positioning do not fall victim to private
interests, leaving residents vulnerable to private takeovers.
Ultimately, if the goal of HUD’s proposal is to improve conditions in public housing – a
mission we fully support – as has been stated by various HUD officials, we implore you
to advocate for adequate funding of the public housing program through government
appropriation rather than risking the long-term affordability that this vital resource
provides to residents and communities throughout the country.
2. The HUD proposal may lead to the loss of government control and
oversight of the public housing program, negatively impacting
government accountability and transparency.
(See the continuation of this letter on the next post)
FACT SHEET ON PUBLIC HOUSING AND HUD’S MORTGAGE PLAN
Prepared by Los Angeles Coalition to End Hunger and Homelessness
In a nutshell, HUD’s legislation is devised to attract private banks and other private investors to provide loans which leverage against Public Housing property. How will this work?
Public Housing Facts and Historical Background:
-Public Housing is owned and operated by the government, namely the local Public Housing Authority (PHA) through a contract with HUD.
– Public Housing Authorities have been lobbying for 100% disposition of Public Housing. As a result, HUD approved requests for several cities to completely eliminate their Public Housing stock. As a result, the City of Atlanta, GA and the City of San Diego, CA have completely eliminated their public housing stock.
– HUD estimates a $24 billion funding shortfall for capital improvements on Public Housing. Although Congress did provide $4 billion in stimulus money in FY2010 for Public Housing capital improvements, this is just a small amount needed according to their estimates.
– Based on their powerpoint, HUD anticipates leveraging $7.5 billion in one year from private banks and other private funding under the Transforming Rental Assistance Program.
– Public Housing is our most stable form of affordable housing. For large families, the disabled, the elderly and other tenants who otherwise cannot find housing in the private market (even with a Section 8 voucher), Public Housing is essential to ending or preventing homelessness.
– Tenants in both Public Housing and Project Based Section 8 pay 1/3 of their income toward rent and the Federal government subsidizes the rest. The difference is that Public Housing rents are set by formula and Project Based Section 8 rents are set at market rate. Tenants also have more organizing rights and protections, including a comprehensive greivance policy under Public Housing (CFR 964) as opposed to Project Based Section 8. This legislation weakens the greivance procedure for tenants as well as other rights and protections.
– HUD’s plan is to allow Public Housing Authorities to convert all of their Public Housing stock to Project Based Section 8, give the PHA’s more money (2 to 3 times more in some cities) per unit, and have the PHA leverage that money against the property in the form of a mortgage from a private lender. The money from the loan is to be used to fix up the property. Please note that the legislation is unclear on which entity will actually own the property after conversion, whether the Public Housing Authority or a Public/Private partnership or a private developer. The law currently states that in order to convert Public Housing, ownership must change.
– The bill also provides for HUD to consolidate all 13+ assisted housing programs into one big program. The appropriations for each program would be consolidated into one program item in the budget under Section 8, potentially making it more vulnerable to funding cuts. Cuts from the Congressional budget would lead to cuts in subsidy payments to the PHA’s which could lead to foreclosure.
OTHER PROBLEMS WITH THE PLAN:
The problems are many with this scheme.
– It puts some control of public property in the hands of the banks or other private interests, which come in as a private funding partner. There are no controls on banks rebundling these loans and selling them off to other banks, there are no controls on the amount of interest paid to the banks, there is no protection against PHA’s overleveraging the property (other than a review by HUD), there is no protection against foreclosure – other than the fact that the “use agreement” with an affordable convenant made between the previous owner of the development and the tenant will remain intact even after foreclosure, although it stipulates on page 11 of the draft legislation that “the Secretary may modify this requirement if the Secretary determines the converted units are not physically viable or financially sustainable, or if necessary to generate sufficient lender participation, and following such determination may require the transfer of the contract for assistance to one or more other properties.”
– In order to attract private lenders, public housing must be seen as a commidity and the owner as an asset manager. The units themselves, as well as the tenants, will be seen as assets. Because of this, we are concerned that banks will put pressure on the owners to choose only the most desirable tenants financially, those with higher incomes, stable employment, good credit history, etc. This will preclude the most vulnerable tenants from acquiring an affordable unit.
– The leveraging of Public Housing to make capital improvements will set a dangerous precedent of taking out mortgages on other public property to pay for repairs. One can imagine a future where public schools, libraries, our national parks, etc, are mortgaged to banks in order to make improvements. (Please note that the authority to mortgage public housing was adopted in 1998 when changes to the 1937 Housing Act were made under the Bush Administration. This, however, only resulted in short term bonds on a couple of properties because public housing was not set at market rates and was therefore not desirable to banks. This legislation is designed to make public housing more desirable to private lenders).
In short, this legislation appears to be a scheme for the privatization of Public Housing. It will encourage PHA’s to take out loans in order to fix up the property, therefore guaranteeing mortgage interest income to banks from taxpayer dollars for decades to come. It will cost the federal government more money in the long term to pay interest to fund property improvements, rather than to just pay for them outright.
– This legilsation also brings with it the myriad problems of Project Based Section 8 as detailed in the letter from the National Alliance of HUD Tenants at http://www.saveourhomes.org/kaymathew/trapositionpaper.pdf , including expiring use contracts where landlords can opt out of the affordable housing program at the end of the contract period.
– The obvious solution to fixing up Public Housing is to provide funding directly through appropriations. It makes more sense for this to be a jobs program which would put contractors and skilled tenants to work through a direct appropriation, rather than paying interest to banks for decades and jeoporadizing our public housing stock.
– Congress appropriated $4 billion in stimulus funds this year for Public Housing capital improvements. If Congress committed to an additional $4 billion for 5 more years, we would have the funding necessary to make these improvements.