HUD Leaves the Business of Housing

Alphonso Jackson is leaving HUD, and he’s leaving under a cloud of criminal investigation for corruption in the handing out of federal contracts…but there are a lot of other reasons he should be leaving which sadly aren’t getting enough attention in the press. As a political appointee, and therefore an entirely political animal, you could argue that he is simply following the party line, following orders. I think we’ve all heard that before. Why wasn’t he fired in 2006 when he boasted in a public speech that he had revoked a contract with someone when they told him they did not like Bush? Or when he was accused in a lawsuit by a local Housing Authority of trying to force them to sell land to a developer he knew, and then gutting their budget when they refused? Now he’s the one resigning, I know it’s under pressure, but clearly he’s been allowed to save face.

Still, the deeper, much more important issue here is the reality of a federal government steadily dis-investing in housing in this country even as real wages are falling, rents are skyrocketing, the population of homeless folks is being swelled by women and children, and almost everyone but the very wealthy are only a paycheck or two away from eviction. A serious illness in the family or a lay-off and many of us would be in trouble. Given the sub-prime mortgage crisis, many thousands have already lost their homes. So lets take a look at those lucrative New Orleans contracts that are currently under investigation, what exactly was the federal government paying contractors to do in New Orleans? It certainly wasn’t to build housing for the thousands of refugees spread across the nation. New Orleans is actually a perfect case study showing how the federal government is slowly withdrawing from public housing and leaving hundreds of thousands of citizens vulnerable to the bubbles of the market. And no one will be bailing them out.

In 1996 there were 13,500 public housing units in New Orleans. 9 years later, just before Katrina, that number had already been reduced by almost half to 7,100 through programs like Hope VI; 2,000 of those units were vacant, scheduled to be demolished. 5,146 families lived in public housing before the hurricane. How many have been allowed to return? About 1,000 families. And HUD continues to put forward the plan to demolish another 5,000 units, of which they are proposing to replace around 20%. The federal government will have gone from providing 13,500 homes for needy families to a grand total of around 2,000 homes, all within the space of 12 years.

I heard a lot of speculation on the news about the mindset of those people who had refused to leave New Orleans. Leaving aside the fact that many poor people did not have the means to get out of town, I believe this definitely bears out their fear that once they left, they would not be allowed back. Poor people aren’t stupid, and balancing personal risk with keeping your home is a dilemma that many would find very hard.

The other way, less direct way that HUD is putting people onto the streets? When the Federal Housing Authority insures the mortgage of a low-income home-buyer, and that home-buyer defaults on their mortgage, then the FHA pays the mortgage off and turns the property over to HUD. Buildings between 1 and 4 units are eligible for FHA insurance, so HUD receives a number of buildings with between 1 and 4 families living in them as tenants. Their policy is to evict all of the tenants, which they can do even in rent-controlled areas, and then auction off the building. The much-publicized wave of foreclosures and the crash of the sub-prime market has undoubtedly had thousands of silent and unremarked victims. I worked with one such building several years ago where we were trying to arrange the sale of a foreclosed upon 4 unit building to a local non-profit affordable housing developer. Our goal was to keep the tenants in the building as all four families had lived there for over 10 years, and one of the tenants had lived there for over 20 years and was incredibly active in the work to improve the neighborhood. We managed it in spite of HUD, one of their employees actually told me over the phone that they were “not in the business of housing.” There are a multitude of witty answers possible to such a statement, but my jaw dropped and I could not think of a single one. Still, the woman was right, it certainly seems true that the Department of Housing and Urban Development is no longer in the business of housing.

Also published at http://www.allvoices.com/users/Andrea#tab=blogs&group=2,widget=blogs&page=2&filter=popular

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