Congresswoman Maxine Waters Condemns RAD Public Housing Privatization Scheme

Congresswoman Maxine Waters Condemns RAD Public Housing Privatization Scheme

By Lynda Carson - December 19, 2014

Oakland — Public housing is home to over 1.2 million families across the nation, and is mostly filled with the elderly, disabled and low-income women with children. The Bay Area is home to thousands of low-income public housing tenants.

In an effort to save public housing in Oakland, Richmond, San Francisco, Alameda County and all across the nation, a December 10 letter to President Obama from Congresswoman Maxine Waters (D-CA), the Ranking Member of the Committee on Financial Services in the House of Representatives, condemns the Rental Assistance Demonstration program (RAD).

RAD is the latest attempt by the federal government to privatize and sell off our nation’s public housing stock to the multi-billion dollar so-called affordable housing industry.

The top ranking Democrat on the Committee has openly spoken out in recent months against the interests of the multi-billion dollar affordable housing industry and their lobbyists efforts to have Congress privatize our nation’s public housing stock through the RAD program. In past years with help from mayors across the nation, the affordable housing industry has done everything possible to break down the barriers between public housing, and so-called affordable housing.

In a Dec. 10 letter to the President, Waters states: “I am writing to express my concerns about the expansion of the new demonstration program at the U.S. Department of Housing and Urban Development (HUD) that could have far-reaching and potentially long-term negative consequences for the nation’s public housing stock and the residents who rely upon this important resource. While created with the intention of preserving the nation’s stock of deeply affordable rental housing, I believe HUD’s Rental Assistance Demonstration (RAD), may very well do more harm than good in diminishing a crucial public asset. I strongly urge the Administration to rethink its current strategy for preserving public housing, and renew the government’s commitment to advocate for full funding for the program.”

Despite her letter to the President, during the past week President Obama signed the latest $1.1 trillion federal Spending Bill (H.R. 83). Among other things the latest spending bill expands the RAD program from allowing 60,000 public housing units to being privatized, to 180,000 units to be privatized and sold to the so-called affordable housing industry.

In the same federal budget bill, the public housing capital fund for FY 20015 is budgeted at $1.875 billion, compared to $2.500 billion in FY 2010, and the public housing operating fund has been slashed by $335 million since 2010.

Public housing has been available for the poor, elderly and disabled since the 1930s, and the public housing program currently provides housing to 1.2 million families as a major part of the nation’s social safety net. Many of the people residing in the public housing program face major problems and may find it impossible to find rental housing in the private housing market. Making matters worse, most so-called affordable housing developers have minimum income requirements in their projects that discriminate against the poor.

Condemning the strategy of privatizing and selling off our nation’s public housing through RAD, Waters goes on to state: “Rather than devise a strategy to improve federal funding and support for public housing, the Administration’s solution to its chronic underfunding of public housing is RAD.” Waters believes that the capital needs backlog for public housing would be addressed by providing $5 billion annually for 10 years, an amount less than one half percent of the Administration’s discretionary budget authority.

Additionally, Waters states: “Moreover, the preservation of the public interest in properties converting to for-profit ownership is left up to the discretion of the HUD Secretary and can be redefined at any time.” Waters is concerned that future Administrations may not want to preserve the public interest in RAD. “Additionally, RAD permits public housing to be transferred to private nonprofit ownership in virtually all situations. The quality of continued public ownership and control thus depends on the transactional documents of each RAD conversion, and unfortunately those materials are not generally readily available to the public for review.”

During the past year public housing residents have complained about the lack of transparency in the RAD program and have united with union employees working at local housing authorities across the nation including San Francisco and Baltimore, to protest and speak out against RAD.

In the on-going effort to convince the President that RAD is a bad idea, Waters said: “Collateralizing the public housing program to raise mortgage debt creates risks of potential default and foreclosure.” Concerned that RAD places the low-income residents at risk of foreclosure Waters also points out problems with Section 8 funding that RAD depends upon: “Moreover while the statutory intent is to maintain affordability even in the face of foreclosure, it is wholly unclear whether the Section 8 Housing Assistance Payment (HAP) contract will survive in all cases, since HUD might decide to terminate it or the foreclosure sale purchaser might refuse to accept it. The use agreement does not guarantee use of a Section 8 contract, complete with the affordability restrictions and tenant protections.”

“Put simply, if the price of accessing private capital is to put public housing ownership at risk, then that price is too high,” she declares. “A more appropriate and sustainable approach would be for the federal government to provide adequate funding directly to the public housing program.”

In addition to RAD destroying thousands of good union public housing jobs across the nation, RAD pits low-income renters in the Section 8 program against public housing tenants needing Section 8 vouchers. Because RAD results in displacing tenants from their public housing units, the tenants are pressured to accept Section 8 vouchers to find another place to reside. Vouchers that may not be worth much as the on-going massive sequestration budget cuts destroy the Section 8 voucher program.

According to a November 2014 report by the Center on Budget and Policy Priorities (CBPP), massive sequestration budget cuts that are still in effect have resulted in the loss of 100,000 Section 8 vouchers (Housing Choice Vouchers) during 2013. Unless the sequestration budget cuts are ended which is unlikely once Republicans take total control of Congress on January 1, 2015, public housing tenants pressured to accept Section 8 vouchers because of the RAD program are being placed at risk of homelessness.

In San Francisco, the scheme to privatize 3,491 public housing units through the RAD program is currently underway involving a number of so-called nonprofit housing developers including: The Tabernacle Community Development Corporation, Mission Economic Development Agency, Bridge Housing, Mercy Housing California, John Stewart Company, Japanese American Religious Federation, Tenderloin Neighborhood Development Corporation, Community Housing Partnership, Bethel A.M.E., San Francisco Housing Development Corporation, Ridgepoint Non-Profit Corporation, Community Housing Partnership, Glide Community Housing, Bernal Heights Housing Corporation, Bridge Housing Corporation, Chinatown Community Development Center, and the for profit housing developer Related California, owned by out-of-state billionaire's Jorge M. Perez and Stephen M. Ross. The expansion of RAD will result in many more public housing units being privatized in San Francisco.

According to HUD, during March of 2014 California had 38,719 public housing units. Oakland had 2,121 public housing units. Alameda County Housing Authority had 72 public housing units. San Francisco Housing Authority had 6,592 public housing units. Richmond Housing Authority had 715 public housing units. The Housing Authority of Contra Costa County had 1,777 public housing units, and the Housing Authority of Marin County had 496 public housing units.

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