Oakland Housing Authority creates loophole to use Section 8 funds for public housing

Oakland Housing Authority creates loophole to use Section 8 funds for public housing

By Lynda Carson -- September 12, 2009

Oakland - The disposition plan for over 1,600 public housing units owned and operated by the Oakland Housing Authority (OHA), signals the end of public housing as we know it if other Public Housing Authorities (PHAs) follow suit and switch to the Section 8 model being promoted by the OHA for it's public housing program.

In a nut shell, the OHA wants to determine which of it's small scattered public housing sites that are occupied with very low-income households, will be sold off, so that the proceeds can be used to build much larger mixed income housing projects for higher income residents, like the Hope Vl mixed income housing projects that have displaced the poor all across the nation.

In addition, the current disposition plan will also be a huge drain on the Section 8 housing choice voucher program established for low-income, elderly and disabled people in the private housing market, because the use of Section 8 housing vouchers have been incorporated into the plan.

"It's my understanding that the OHA received approval from the Housing and Urban Development (HUD) earlier this summer for it's disposition plan, in addition to the plan to give Section 8 housing vouchers to around 1,600 households involved in the disposition plan that reside in Oakland's public housing units," said Adam Gold of Just Cause Oakland.

As for the OHA's plan to dispose of over 1,600 public housing units, in a September 2008 press release from OHA consultant Jo Ann Driscoll around a year ago, it states, "The OHA has been under funded by the federal government for 14 years, creating a significant backlog of maintenance and repair projects. While the federal government cuts its funding of the public housing program, funding for Section 8 vouchers receives strong federal support. The planned disposition will re-position Oaklands scattered site apartments to be funded by Section 8 instead of Public Housing."

"As part of the disposition plan, OHA will transfer ownership of the properties to a registered 501(c)(3) housing organization, that will be affiliated with the Housing Authority. The non-profit affiliate will be responsible for the management and maintenance of all the units on sites scattered throughout the City of Oakland and work closely with the OHA under binding agreements. Any excess cash flow associated with these properties, not needed for operation, maintenance or repair, will be restricted to use by the OHA to develop new low income housing."

The OHA contracts with HUD to provide public housing to low-income households in Oakland and is only reimbursed by HUD for around $500 per unit on a monthly basis, but under the new Section 8 model deviously being crafted, the OHA and their affiliates may be reimbursed by HUD for as much as $900 to $1,000 per unit if the plan works out to their way of thinking.

The obvious drawback of course is that the OHA is going to be intentionally draining precious resources from the Section 8 voucher program, to fund it's public housing program, while using poor public housing tenants to fund their various housing projects in the process.

As John Gresley puts it in a recent Oakland Tribune article, "The extra money will be used to finish rehabilitating the agency's aging and in many cases, blighted and crime-plagued housing stock, which is estimated to cost $100 million. The money will also be used for management of the properties. We're hoping they (public housing tenants with Section 8 vouchers) don't move and stay where they are at, but there will be some who want to leave. There are people who have been living for 10 or 15 years in one community and wanted to leave but couldn't get a voucher in the community where they wanted to move. These (vouchers) are portable so they can be used anywhere in the open private real estate market."

Originally the OHA planned to dispose of around 1,600 occupied public housing units for around $1 dollar per building or per parcel, while offering no safeguards to protect the low-income households from displacement of their housing, but decided to try to get Section 8 housing vouchers for the low-income families after the local community became outraged and concerned over the drastic proposals to privatize around half of Oakland's public housing units.

Regardless of the reasons offered by the OHA for it's disposition plan to privatize half of Oakland's public housing, when congress authorizes federal funding for the annual budget of each of the nations various housing programs, including the public housing program and the Section 8 housing program, there is a very good reason that barriers have been kept in place between each subsidized housing program to ensure that the federal funding reaches it's designated targets.

In this case, the OHA along with HUD's approval has figured out a way to break down the barriers between the established housing programs, so that the OHA can siphon off much needed funding from the low-income tenants in the Section 8 voucher program, to fund it's public housing program and privatized mixed income housing developments.

Eleanor Walden resides in a rental unit subsidized by the Section 8 program, and has been struggling for years to support her family while surviving on a very modest income, and said, "The basis of my disagreement with the housing authority is that they are pitting one group of poor people against another by grabbing funding from the Section 8 voucher program, to fund their public housing program. The capitalist system has been pitting the poor against one another since day one, and this is just another variation of the same old theme of robbing Peter, to pay Paul."

During this past August, Housing and Urban Development (HUD) has pumped around an extra $130 million into the nations Section 8 voucher program due to the huge funding shortfalls occurring in around 15% of the nations 2,400 Public Housing Authorities (PHAs), and HUD is currently trying to release an additional $400 million to assist section 8 programs across the nation to keep thousands of low-income families from being dumped out of the program and made homeless. However, HUD needs permission from congress to release the additional $400 million and would need some modification of it's authority beforehand, to do so beforehand.

As recent as Tuesday September 8, the housing authority of Glendale, California, voted to oppose reduced federal funding in the housing program that is forcing the city to freeze a portion of it's low-income Section 8 vouchers during a time that over 7,000 applicants are on the Section 8 voucher waiting list.

Another concern about the OHA plan to give Section 8 housing vouchers to around 1,600 public housing households, is that those who have spent years on Oakland's Section 8 voucher waiting list may have to wait much longer, while housing vouchers will be handed over to people already residing in federally subsidized housing.

Recently the Section 8 voucher funding crisis has become so extreme nationwide, housing authorities have had to spend around $750 million in reserves to save thousands of low-income families from becoming evicted or homeless during such hard economic times.

OHA consultants Ann Dunn and Jo Ann Driscoll were not very helpful when I reached them in the past few days to seek information about the new program moving forward that does not appear to even have a name, but breaks down the barriers between the Section 8 voucher program and public housing program.

Low-income Section 8 voucher holder, Nasira S. Abdul-Aleem, says, "Whoever it was in HUD that allowed the OHA to break down the barriers in the housing assistance programs so it can divert funding from the Section 8 voucher program, into it's public housing program, should be held accountable."

This new program, whatever it will be called in the future, raises a lot of questions that no one seems to want to address in great detail.

Individuals from Bay Area Legal Aid, National Housing Law Project and the Public Interest Law Project, have been among those that have been interested and have been trying to figure out how this new program will affect the nearly 1,600 public housing households in the buildings being disposed of by the OHA, and what the restrictions on the use of the Section 8 housing vouchers may be.

OHA consultants are expected to meet with small groups of the public housing households soon, to help them figure out their options.

Lynda Carson may be reached at, tenantsrule [at] yahoo.com