Greed fuels demand for Project Based Vouchers by non profit developer

Greed fuels demand for Project Based Vouchers by non profit developer
By Lynda Carson

October 16, 2009

Oakland -- Recently the Oakland Housing Authority (OHA) released a notice called, "Public Notice of Project Selection for Participation in the Project-Based Voucher Program," that may have set in motion a frenzy of greed by non profit housing developers wanting to maximize their profits.

The OHA has recently awarded 50 Section 8 Project-Based Vouchers (PBVs) to Affordable Housing Associates (AHA) for Willow Place Senior Homes, 10 PBVs to East Bay Asian Local Development Corporation (EBALDC) for Effie's House, 14 PBVs to Resources for Community Development (RCD) for their Drachma Housing project, including another 19 PBVs for RCD, subject to acquisition of site control of Marin Way Court, a development abandoned by Oakland Community Housing, Inc. (OCHI). Plus another 11 PVBs to EBALDC, which is also subject to acquisition of site control of Slim Jenkins Court, being another housing development abandoned by OCHI, and 84 PBVs were awarded to EAH Housing in partnership with OHA, also subject to acquisition of site control of the Park Village Apartments, in Oakland.

Project Based Vouchers are highly sought after by so-called non profit housing developers for their redevelopment projects, including residential buildings that house low-income renters. The PVBs often are used to leverage additional loans from banks, creditors or Cities, while maximizing rents in their residential properties, all at the same time. Additionally, if a low-income renter is eligible to move into a PBV rental unit, they do not have to pay more than 30 to 40 percent of their income for rent, with the rest of the rents being charged to be subsidized by the federal government.

Unlike the Section 8 Tenant Based Voucher Program (Housing Choice Voucher Program) which allows tenants to use their housing assistance vouchers to move freely about in the privatized rental market, the Project-Based Vouchers (PBVs) belong to the rental unit, not the tenant. A PBV may be contracted to a rental unit for as long as ten years.

The notice of PBVs being awarded in Oakland has already set off a frenzy of greed, and 4 residents of Effie's House have been targeted and are facing pressure to abandon and give up their Section 8 tenant based housing assistance vouchers, because they reside in one bedroom rental units that the East Bay Asian Local Development Corporation wants to convert into Project-Based Voucher units.

The Department of Housing and Urban Development (HUD) does not allow the same rental unit to be subsidized more than once during the same time, by the Section 8 federal housing assistance programs.

If the 4 targeted tenants give up or lose their Section 8 tenant based vouchers, they will not have a Section 8 voucher on hand to use if they face eviction, or an emergency, or want to relocate to another location, in addition to being locked into a new one year lease, in which they would be penalized or face further sanctions, including eviction for breaking the terms of the new contracts EBALDC wants them to sign.

As recent as October 6, 2009, the 4 targeted households with Section 8 tenant based vouchers received a peculiar Memo dated Oct. 5, from Mary Lucero Dorst of EBALDC, stating that EBALDC wants the Section 8 tenants to give up their housing assistance vouchers, because EBALDC wants to convert their apartments into the Project-Based Voucher program. There was very little information passed out in regards to how this conversion could negatively affect the tenants once they gave up their Section 8 tenant based vouchers, and there was no phone number offered or contact person mentioned, for tenants to reach if they have any questions about the pressure being placed on them to give up their vouchers.

In addition, there was a new Oakland Housing Authority contract attached to the Memo, that Ms. Dorst of EBALDC wanted the 4 targeted tenants to sign as further means to pressure them into giving up their Section 8 vouchers, even though Ms. Dorst does not work for the housing authority (agent), and there was no discussion before hand with the tenants. In addition, the 4 targeted tenants did not receive any kind of notice beforehand from the Oakland Housing Authority about giving up their Section 8 vouchers, and the Memo from Ms. Dorst did not mention anything in regards to what the tenants should do with the contract presented to them, after being signed.

Despite the extreme pressure being placed on the tenants to give up their Section 8 vouchers by the rich and powerful non profit housing organization, the Memo states that this is voluntary.

The 4 targeted tenants received an additional Oct. 12, Memo on Oct. 13, that EBALDC wanted the tenants to sign in an effort to pressure them into giving up their Section 8 vouchers, and on Thursday Oct. 15, Danny Chen (manager of Effie's House) went door to door asking the tenants to give back the Oct. 12, Memo, even if they did not sign it.

Out of the 21 apartments at Effie's House, 10 apartments are one bedroom units, and the rest are studio apartments. Rather than converting any of the studio apartments into the PBV program where low-income renters may welcome the prospect of cheaper rents, EBALDC decided to try and pressure the low-income tenants residing in one bedroom units that already have Section 8 tenant based vouchers, into giving up their housing assistance vouchers, so that EBALDC may maximize their profits.

It would make more sense for EBALDC to welcome the fact that the 4 Section 8 tenants with vouchers at Effie's House are already receiving rental assistance, and that greed should not stand in the way of those in studio apartments that may benefit by cheaper rents if their rental units were converted into the PBV program. This way 14 households could benefit from the federal housing assistance programs, rather than only 10 households at Effie's House.

In addition to the frenzy of greed occurring within EBALDC to maximize profits, two weeks ago a low-income renter (Haitian Immigrant) who has been a resident of Effie's House for around the past 20 years, received notice of a MAJOR rent increase for his one bedroom apartment, increasing the rent from $711.00 per month to around $1,000 per month. The tenant has not been notified whether or not EBALDC may want to convert his apartment into the Project-Based Voucher program (PBV), and may be faced with homelessness due to such an extreme rent increase that is due sometime in January.

According to Rento Meter, an online service that offers comparisons of rents in a given zip code area, currently 42% of rental housing listings for one bedroom apartments cost less than $1,000 per month within the same area code where Effie's House is located, and owned and operated by a so-called non profit housing developer.

Currently the annual rent increase in Oakland is set at 0.7% for all applicable rental housing units, and is effective July 1, 2009 through June 30, 2010. Residential properties owned by non profit housing organizations in Oakland are exempt from Oakland's Rent Adjustment Program, and non profits may raise the rent for any reason or no reason at all in their rental units by as much as 100% or more on an annual basis, if they choose to do so.

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

(Note: Though reporting on this issue, please note that Lynda Carson is a resident of Effie's House facing pressure to give up a Section 8 voucher.)