Public Comment

Non-profit Developers Scheme to Grab Section 8 Vouchers and Public Housing

By Lynda Carson
Thursday October 24, 2013 - 08:43:00 PM

Local non-profit so-called affordable housing developers including Affordable Housing Associates, Resources for Community Development, and the East Bay Asian Local Development Corporation have teamed up with local and national organizations that are pushing for Rental Assistance Reform (RAR) legislation to be passed in the House and Senate, that is harmful to the poor.

The non-profit organizations are pushing for rental assistance reform (RAR) legislation that will result in fewer Section 8 housing choice vouchers for the poor, higher rents for public housing residents, and the acceleration of the privatization of conventional public housing projects into privatized mixed-income residential housing developments for higher income renters. Developments that are being promoted by so-called non-profit and for profit affordable housing developers who want to get their hands on public housing properties locally, and all across the nation. 

If lawmakers cave in to the pressures of the so-called affordable housing industry, the impact of RAR will result in more Section 8 housing choice vouchers being taken away from low-income renters in Oakland and all across the nation, so that they can be converted into project-based vouchers to fund so-called affordable housing projects for wealthy developers. 

Currently under federal law, each Public Housing Authority (3,300 PHAs nation wide) is allowed to grab as much as 20% of the funding granted to them that is meant to be used for Section 8 housing choice vouchers for low-income renters, and convert the funding for use as project-based vouchers. Project-based vouchers that wealthy non-profit and for profit so-called affordable housing developers can use to fund their projects. 

The so-called affordable housing industry wants RAR legislation to be passed that would allow all 3,300 PHAs to convert a whopping 25% of their Section 8 housing choice vouchers, into project-based vouchers for the wealthy so-called affordable housing developers and their projects. This is 5% more than what is currently allowed under federal law, and would be a great hardship on low-income Section 8 housing choice voucher holders. 

This means that hundreds of thousands of low-income renters may be at risk of losing the funding for their Section 8 housing choice vouchers, because wealthy so-called non-profit and for profit developers want more project-based vouchers to fund their projects. 

In California alone, during 2011 when Governor Jerry Brown put more than 400 redevelopment agencies out of business, the so-called multi-billion dollar affordable housing industry began looking for other funding sources to continue it's empire building. The industry decided on grabbing as much conventional public housing property as possible, and wants to loot the Section 8 housing choice voucher program for more project-based vouchers. 

The so-called affordable housing industry is pushing for RAR legislation to be passed in the House and Senate as soon as possible and it may be tucked away inside legislation heading for Congress as soon as December 13, 2013. 

RAR is a trojan horse of stealth legislation that was created under the guise of helping the poor, but actually promotes higher rents for poor people in public housing and the Section 8 housing choice voucher program, and scales back itemized deductions for medical and child care used by the poor for rent reductions in those programs. 

If passed into legislation RAR would also set "flat rates" for higher income public housing tenants closer to market levels. In total the Congressional Budget Office (CBO) estimates that poor people in public housing and the Section 8 voucher program would pay about $1.75 billion more in rent over a five year period because of the loss of itemized deductions for medical and child care, in addition to the major rent increases that would be imposed on public housing tenants. 

Another aspect of RAR if passed into law, it would change federal law so that higher income families would be assisted by the nation's federal housing assistance programs. Presently 75 percent of vouchers and 40 percent of project-based Section 8 and public housing units must be allocated to households with incomes at or below 30 percent of the local median income when they enter the program. RAR would instead require that those vouchers and units go to households with incomes at or below 30 percent of the local median or the federal poverty line, whichever is higher. By subsidizing the rents of higher income renters instead of low-income renters, the CBO estimates that the change would raise rent revenues and cut program costs by $1.12 billion over five years, because families admitted into the programs could afford somewhat higher rents. 

RAR also supports the Rental Assistance Demonstration program (RAD) that accelerates the privatization of conventional public housing, and tests the conversion of public housing and Section 8 moderate rehabilitation units to project-based vouchers or Section 8 project-based rental assistance, and allows similar conversions of units from the Rent Supplement and Rental Assistance Payment programs. 

On Sept. 24, 2013 in San Francisco, Poor Magazine, the San Francisco Bay View newspaper, Causa Justa/Just Cause, POWER and WRAP united for an emergency STOP THE ILLEGAL SELLING OF OUR HOUSING EQUITY, STOP THE RAD press conference, on the steps of City Hall in protest against RAD. 

Mayor Ed Lee and the San Francisco Housing Authority want to privatize as many as 3,000 public housing units out of 6,054 public housing units, and hand over their day-to-day operations to some very eager non-profit housing developers. The so-called affordable housing developers are drooling at the thought of how many fortunes could be made by grabbing as many public housing units as possible for privatization, while displacing the poor with their major renovation projects that eventually will result in new gentrified housing projects for higher income, and middle class renters. 

HUD Secretary Shaun Donovan was in San Francisco on Sept. 24, to promote RAD while people protested against RAD at City Hall, and Donovan signed off on Mayor Ed Lee's scheme to privatize the public housing projects of San Francisco. 

Oddly, the latest continuing resolution (CR) signed into law by President Barack Obama early morning October 17 to end the government shutdown contained an anomaly that extended the Rental Assistance Demonstration (RAD) project through January 14, 2014. It was the sole anomaly in the CR for HUD. 

RAR also seeks to create more Moving-To-Work (MTW) demonstration Public Housing Authorities, and seeks to give some of the 33 existing MTWs more flexibility. 

Authorized by Congress in 1996, the Moving To Work (MTW) demonstration program was created for a limited number of PHAs to try out new and different ways to save money, and find cheaper methods to deliver housing services. However, MTWs have morphed into agencies that are becoming notorious for abusing the funding from Congress. Funding that was meant to assist the poor. 

During April 2012, HUD was under fire by the Government Accounting Office (GAO), that ridicules any assertions by HUD that an MTW's activities can be evaluated properly. 

The GAO is an investigative arm of Congress with the power to examine matters related to the receipt and use of funding by Congress, and the GAO believes that MTWs are not regulated enough to properly evaluate how they are operating. 

As was reported by the National Low-Income Housing Coalition (NLIHC), during a March 29 oversight hearing of THUD and DOT programs in Washington D.C., that HUD Inspector General David Montoya (IG) publicly criticized the Public Housing Authority of Philadelphia, as an example of the corruption of MTWs. 

Inspector General David Montoya stated that the PHA in Philadelphia is an MTW demonstration program that was legally allowed to use $1.1 million of it's funding to fight against the oversight of the IG's office, and was allowed to use money to hire outside legal counsel to shadow "IG staff" that were auditing the housing authority, when it could have used the money on housing the poor instead. 

RAR may be tucked away inside legislation heading for Congress as soon as December 13, 2013. 

Lynda Carson may be reached at 

Click below to see what the GAO has to say about demonstration Moving-To-Work (MTW) housing authorities... 


Below is a small list of more organizations that support Rental Assistance Reform RAR... 

• Center on Budget and Policy Priorities 

• Consortium for Citizens with Disabilities Housing Task Force 

• Corporation for Supportive Housing 

• Council for Affordable and Rural Housing 

• Council of Large Public Housing Authorities 

• Enterprise Community Partners 

• Institute of Real Estate Management 

• LeadingAge 

• Local Initiatives Support Corporation 

• National Affordable Housing Management Association 

• National Alliance to End Homelessness 

• National Apartment Association 

• National Association of Home Builders 

• National Council of State Housing Agencies 

• National Housing Trust 

• National Leased Housing Association 

• National Low-Income Housing Coalition 

• National Multi Housing Council 

• Public Housing Authorities Directors Association 

• Stewards for Affordable Housing for the Future