Billionaires take control of Berkeley's public housing

Billionaires take control of Berkeley's public housing

By Lynda Carson - March 15, 2014

Berkeley - It's official. A March 13, 2014, memorandum from the Berkeley Housing Authority (BHA) announced that the disposition project to privatize and dispose of Berkeley's 75 public housing town homes closed as recent as Friday, February 14, 2014. A notice was sent out to all current residents advising them of the transfer of ownership.

The February 11, 2014, notice to Berkeley's public housing tenants from the BHA tells them that their 75 public housing units have been sold to the new ownership entity, Berkeley 75, LP, effective February 14, 2014. Additionally, the notice tells the tenants that Berkeley 75, LP, will be their new landlord, and that the BHA will no longer have any involvement in their tenancy. The tenants were advised that beginning February 14th and continuing through the end of the rehabilitation of their housing units that they can use Section 8 vouchers to move if they decide to do so. A phone number or address was not listed on the notice to the tenants in regards to how they can contact the new owners of their 75 privatized housing units.

Out-of-state billionaires Jorge M. Perez and Stephen M. Ross of The Related Companies took control of Berkeley's 75 public housing units on February 14, in a complicated deal that edged out local nonprofit housing developers. Many of Berkeley's low-income families have become displaced as a direct result of the sell out of Berkeley's 75 public housing units that originally were supposed to remain as public housing units into perpetuity, when they were built with taxpayer funding.

For background of the new owners of Berkeley's privatized public housing units, in 2010 it was reported that Jorge M. Perez owned 75% of The Related Companies, and that billionaire Stephen M. Ross a 95% owner of the Miami Dolphins football franchise, owned 25% of the multi-billion dollar development company.

After the billionaires targeted Berkeley's 75 public housing town-homes for privatization, during September, 2011, the Berkeley Housing Authority (BHA) announced that it had entered into an exclusive negotiating rights agreement with The Related Companies of California, LLC, that would last 90 days, with a possible 30 day extension to negotiate the full terms of the deal.

With political connections directly to the White House, Jorge M. Perez a co-founder of The Related Companies has been a major political fundraiser for President Barack Obama, Hillary Rodham Clinton, and was an advisor to ex-President Bill Clinton during his term in office.

In recent years Perez and Ross have also been involved in a major project to privatize many of Oakland's public housing units in a partnership with the Oakland Housing Authority (OHA), and the East Bay Asian Local Development Corporation (EBALDC), a so-called nonprofit housing developer. As a direct result of the partnership, during recent years the Oakland Coliseum Gardens public housing units were demolished, 178 low-income families were displaced from their homes, and the new rehabilitated project is now called Lion Creek Crossings at the former 22 acre site.

To give you an idea about the way EBALDC feels contempt for low-income public housing tenants, on the EBALDC website they currently refer to the old Coliseum Gardens public housing complex as the notorious 1964 OHA public housing development, when describing how nice the newer Lion Creek Crossings privatized rental housing project is. However, the website fails to mention that a 15 year old girl was shot and killed during late December of 2012 at Lion Creek Crossings along with a 14 year old boy who was also shot during that same incident, and that 15 year-old Hadari Askari was gunned down at the same housing complex on July 10, 2012.

Payments Now Being Made To Billionaires

According to released documents rents have been collected from Berkeley's former public housing tenants with an appropriate proration forwarded to Berkeley 75 LP, the new ownership entity. The BHA also delivered the first list of potential renters on February 20, to Berkeley 75 LP, for the newly privatized federal subsidized project-based units.

In addition, Berkeley 75 LP, is currently screening the first group of applicants for suitability as tenants at the eventually to-be rehabilitated 75 town homes. The potential tenants face a stiff double examination before being allowed entry into the former public housing units as new tenants, and have to be cleared by both Related and the BHA before moving into the privatized housing units.

The incorporation papers for Berkeley 75 Housing Partners, LP, were filed in Sacramento on 4/13/2012, and the entity address is located at 18201 Von Karman Avenue, Suite 900, Irvine California.

Once the privatized units are rehabilitated, inspected, and the new tenants are chosen with new contracts signed, the BHA will start earning as little as $75 per month, per unit in administration fees from the privatized public housing units sold to the out-of-state billionaires.

Jorge M. Perez one of the billionaire owners of the recently privatized public housing units, is known as the "Condo King" of Miami, Florida, because he has developed and owns so many condominiums in that region through The Related Companies/Related Group. He is also known as a billionaire Cuban American real estate developer.

Perez is also the majority owner of The Related Companies, which is also the parent company of The Related Companies of California, LLC, another wealthy housing development corporation.

Payments To Consultants To Privatize Berkeley's 75 Public Housing Units

On March 13, 2014, the BHA Commissioners also voted to pay an additional $23,241 in consultant fees to EJP/Praxis Consultants, and it appears that during the past three years the BHA payed EJP/Praxis consultants as much as $98,711 in total for assistance in privatizing Berkeley's 75 public housing units, and selling them to out-of-state billionaires Jorge M. Perez and Stephen M. Ross, of The Related Companies.

Additionally, documents reveal that on May 12, 2011, the BHA Commissioners voted to pay Overland, Pacific and Cutler an amount of $147,000 to relocate the tenants from their public housing units, and these amounts do not reflect the full costs of legal expenses and other costs associated with privatizing Berkeley's 75 public housing units.

Documented Sequestration Budget Cuts To Federal Housing Programs And Section 8 Vouchers

A 224 page Government Accountability Office (GAO) report released during early March 2014, reveals that the massive sequestration across-the-board budget cuts have savaged our nation's federal subsidized housing programs, including the Section 8 housing choice voucher program.

In total, according to the GAO report the Department of Housing and Urban Development (HUD) estimates that due to sequestration funding cuts Public Housing Authorities provided rental assistance payments to 42,000 fewer low-income households during 2013, compared to Fiscal Year 2012. HUD also estimates that sequestration funding cuts to Homeless Assistance Grants will lead to states and localities removing as many as 60,000 formerly homeless persons from housing and emergency shelter programs all across the nation, placing them at risk of ending up back onto the cold hearted streets of America.

Additionally, sequestration reduced funding for HUD's project-based housing assistance program, through which HUD makes payments to owners of multifamily rental housing units on behalf of around 1.2 million low and very low-income families. Available funding to renew contracts for this program decreased from $9 billion to $8.6 billion.

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