Wednesday, November 25, 2015

DC Government Fails to Use $Millions of HUD Money, In Apparent Effort to Speed Up Gentrification

I recently attended a "Socialist Salon" on gentrification and the fight against it in the District of Columbia.  It was sponsored by Metro DC Democratic Socialists of America (DSA).  I was invited by another anti-Exelon testifier I had met at the recent Public Service Commission hearing.  Although they are strong Bernie Sanders supporters they hope this will not keep us from cooperating in fighting gentrification.  I can assure them, that at least in my case, it will not.

Their guest speaker at this anti-gentrification salon was Claire Cook, an organizer with the activist group ONE DC.  Ms. Cook divided us into several teams and then asked specific questions on low and middle income government figures, housing costs in DC, numbers of people on housing waiting lists in DC (72,000), and other pertinent questions.   After the teams presented their answers, we went into a more general discussion of the issues and possible solutions.

The younger members of the group seemed more interested in activism and ideals, whereas the older attendees focused more on specific things like legislation which could be used to modify and reduce the problem.  I feel both are necessary and need to be coordinated both to stimulate action and to make sure action is on target.  One guest there seemed particularly knowledgeable about the depth and complexity of the problem and I asked her to write me a guest article for posting.

Guest Post by Angela White Narain

Condition of Housing in the District of Columbia
Democratic Socialist Salon session, Nov. 19, 2015

In addressing some pressing issues on housing in the District of Columbia, Clair Cook, the guest speaker at the Salon, wanted to investigate yet again, the creation and development of a land trust and put in place limited cooperatives for low wealth folks to live in.

In 1998 Rick Eisen, esq and I were charged with the major responsibility of finding out why limited equity cooperatives did not work then in the District of Columbia.  I had asked my employer not to lend to a specific project of limited equity cooperatives that Hope Housing was developing in the Congress Heights neighborhood, because right across the street at that time, there was a major drug market.  I told them people will not buy and stay across the street, but in sum, within the next year several million banks dollars, and nonprofit lender dollars were lost because of the investment made in communities at that time when the market was not right for it.

The city has returned over $140,000,000 million dollars in the HOME Investment Partnership Program (HOME) funds from  DC Department of Housing and Community Development  to the Federal Government that could have been used to build thousands of affordable housing units.  DC has had this serious problem for years with HUD regarding their HOME funds, which are part of our federal entitlement dollars that we get from HUD every year.

That evening I suggested to the Salon group they should attend the Planning Meetings that are held every year, in which the city is supposed to use the comments to create a document called, a Consolidated Plan.*  This represents our invoice to HUD for our five federal entitlement programs to be acquired for the development and preservation of affordable housing in the District of Columbia.  In addition to HOME, the other 4 programs are:  Community Development Block Grants (CDBG), Housing opportunity with Aids (HOPWA), Supportive Housing Opportunity Program (SHOP), and Emergency Shelter Grants (ESG)

When I was a technical assistance provider for HUD under the HOME Technical Assistance Grant that I got [clarify?], we were asked to come into the District to see why DC was not using their HOME funds properly.  The Director at that time was Merrick Malone and manager was Mary Hammond and they would not let me and my team come in as directed by the DC HUD Field Office.  They have been returning money to HUD ever since, and not building housing for low wealth people on purpose.

Thus, regarding all of the last 3 former Mayors and including this one, their Homelessness initiatives are jokes.  They have been a way to pay out money to their friends for Homelessness Reports and Committees, as well as Commissions that they have never implemented.  The New Communities Initiatives is a major disaster but was created in the spirit of trying to create a replacement for the Hope VI Program, which is the demolition of public housing projects.

The best major redevelopment project is the Wheeler Creek Project wherein I used to serve on the board of directors, and is one of 5.  Other major public housing projects that are slated for redevelopment are: Barry Farm in Ward 8, Lincoln Heights - Richardson Dwelling in Ward 7, Northwest One in Ward 6, and Park Morton in Ward 1. The New Communities Initiative is funded through public bond financing that allows the District to leverage funding for development projects.

The amount of displacement of residents in public housing that has been done by the District has been criminal and the conditions of the units before they left have been horrible.  Harassment by local government for the redevelopment of Barry Farms has occurred over a 15 year period, starting in Mayor Williams' Administration.  To date over 20,000 people have been displaced.

For further information you can reach Angela White at her email address: on any housing issue.

Additional comments by G. Lee Aikin:
Angela reports a total of 5 federal grant programs that provide housing related money to DC.  If the city has returned $140,000,000 to the feds over the years for the HOME program, I wonder how much money DC has failed to use from the other 4 programs she mentions?

* Unfortunately, the Consolidated Plan meetings for this year were already held in October and November.  However, this link provides contact information to follow up on this planning, and to learn when the next meetings will be held in 2016.

I decided to backtrack on some of the DC history and personnel.  I found that in February 2015,  Merrick Malone was appointed along with Kimberly Black King to the DC Housing Authority's Office of Capital Programs as Director and Chief Development Officer respectively.  Mr. Malone was a former head of DC Dept. of Housing and Community Development and Deputy Mayor of Economic Development during the Kelly and Barry administrations.  In addition to DC, he also has experience from Detroit in urban transformations in downtowns, school systems and neighborhoods.

The various DC administrations have worked vigorously to reduce the amount of housing for low wealth people and families.   Recently (9/17), the Current Newspapers have taken a look at this important issue.

While there is some evidence for suggesting that high concentrations of uniformly low wealth people may cause some problems, tearing down their homes and creating a homelessness problem is not the answer.  This article written almost 2 years ago describes this issue and how it has been conducted at Barry Farms and other locations and some of the results.  Wall to wall gentrification is not the solution.  In addition, the DC Housing Authority is also forcing people out of public housing to fix, flip and sell properties to gentrifiers.

Here is a very useful national map showing how much hourly wage one would need for a two bedroom rental in each state and DC.  The $28 an hour DC wage is even higher than what one needs in high priced California.

Here is information provided by Historic Washington activist Mary Rowse [March 2018]

Audit: D.C. agency used funding to house poor residents for other needs
By Paul Schwartzman, The Washington Post, March 20, 2018

Material below is quoted or summarized from the much longer article linked above. 

"The D.C. government has used a $1 billion fund established to create affordable housing and stave off gentrification to repay the federal government millions of dollars for mismanaged grants, the D.C. Auditor said in a new report Tuesday."

"Since 2001, the Housing Production Trust Fund, as the program is known, has doled out nearly $750 million in grants and loans to developers to build or preserve thousands of units of affordable housing." 

This audit, is the first comprehensive examination of the program.
"From 2009 to 2014, DHCD steered $16.6 million from the fund to the Department of Housing and Urban Development to make up for the city’s “ineffective management of federal grants,” according to the audit." 

The audit indicates DC has poor results in collecting on loans to developers thus failing to replenish the trust fund.  It asserts DC's Chief Financial Officer has failed rigorous oversight.

“We have made huge investments of taxpayer dollars in affordable housing through the Housing Production Trust Fund but we haven’t gotten our money’s worth,” said D.C. Auditor Kathy Patterson. 

Mayor Muriel E. Bowser (D) and DHCD director Polly Donaldson explain a number of disagreements with the audit findings.

"A 2017 audit concluded that it could not evaluate the fund’s performance because DHCD’s data was 'unreliable.'" 

"The report also found that over the life of the fund, the District had failed to ensure that 80 percent of its annual disbursements were used to create affordable housing for the city’s poorest residents, as required by law."

"Nearly 70 percent of the fund’s disbursements were used for residents making up to $88,000, the audit found." 

The article then discussed complicated movements of funds involving HUD, DHCD, HPTF and elsewhere.  The result was fewer $millions for housing.

The audit also found DHCD has used the trust fund to finance various small projects which were not "caught and redirected."

Here is information provided by DCSGP activist Jenefer Ellingston [Feb. 2016]

The head of a House panel wants information from the Obama administration on how many over-income families live in public housing—and how many needy families are still on waiting lists for assistance.
Oversight and Government Reform Committee Chairman Rep. Jason Chaffetz, R-Utah, wants the Housing and Urban Development Department to hand over by Feb. 10 all documents related to over-income public housing residents going back to October 2013, and wants a briefing on the issue for congressional staff by the end of this week. Chaffetz also requested the “annual number of over-income families and families on waiting lists for each year since 2005 for each public housing authority that participates in HUD’s public housing program,” according to hisJan. 27 letter to Secretary Julian Castro.
A controversial HUD inspector general report released in July estimated that the department would pay $104.4 million over the next year for public housing units occupied by over-income families that could otherwise be used for low-income people. HUD disputed that figure, saying the IG’s methodology to estimate the subsidy cost of housing over-income families contained a “serious flaw.”
The report, which attracted attention from Capitol Hill, included some extreme examples of over-income families living in public housing. In one case in New York City, a family of four that has been living in public housing since 1988 had an annual household income of $497,911 in 2013. But the number of over-income residents identified in the audit represented just 2.6 percent of all public housing households, and in most cases the families in question were over-income by less than $10,000. The term “over-income” applies to those public housing households that earn more than the income threshold established for their locality.
HUD would not comment on the Chaffetz letter. “Our protocol is always to respond directly to the requestor,” said department spokesman Jereon Brown. The committee had not yet received a response as of Jan. 29, said Chaffetz spokeswoman MJ Henshaw.
Under HUD regulations, once accepted into public housing, individual households and families can stay as long as they like regardless of increased earnings, provided they comply with rental agreements and remain good tenants. When a family in public housing becomes over-income, they no longer receive a subsidy from the government for their rent; they pay the unit’s full rent themselves.
HUD has said public housing authorities already have the ability to evict over-income tenants. A 2004 HUD rule allows PHAs to move families in public housing to the private market if they earn more than the income limit, “allowing authorities to address over-income families within the context of their own unique demographic and economic situations,” the IG report said.
In September, HUD sent PHAs a letter reminding them of their authority and flexibility in evicting over-income households. “HUD strongly encourages PHAs to utilize the discretion available to them to remove extremely-over-income families from public housing,” wrote Lourdes Castro Ramirez, HUD’s principal deputy assistant secretary for Public and Indian Housing, in the Sept. 3 letter. Ramirez recommended PHAs use some available tools to deal with the issue, including using the local area median income for program income limits instead of the national AMI, which HUD uses in certain markets with significantly higher incomes. HUD also suggested PHAs create a “preference for return” to public housing for those over-income households that are evicted if their income drops after moving out.
There are more than 3,000 public housing authorities across the country. Many PHAs count on the rent money from over-income families to help boost their budgets. 
HUD told auditors that if all over-income families were removed from public housing, it would need to request “nearly $116.5 million more in public housing operating subsidies annually,” according to the IG report. The presence of such households also helps de-concentrate poverty in public housing, and create sustainable mixed-income communities, according to HUD, PHAs and affordable housing advocates.

After I have given more thought to this issue or receive additional information, I will add to this article in the near future (you all come back).  Comments with information welcomed.

No comments:

Post a Comment