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)