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Greed fuels demand for project based vouchers by nonprofit developers

October 28, 2009

by Lynda Carson

Effie's House
Effie's House
Oakland – The Oakland Housing Authority recently released a “Public Notice of Project Selection for Participation in the Project-Based Voucher Program” that may have set in motion a frenzy of greed by nonprofit 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 Corp. (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). Another 11 PVBs were issued to EBALDC, contingent on its acquiring site control of Slim Jenkins Court, also abandoned by OCHI, and 84 PBVs were awarded to EAH Housing in partnership with OHA, also subject to site control of the Park Village Apartments in Oakland.

Project-based vouchers are highly sought after by so-called nonprofit housing developers for their redevelopment projects, including residential buildings that house low-income renters. The PVBs often are used to leverage loans from banks, creditors or cities, and they maximize the rent subsidies the developers receive. A PBV entitles low-income renters to pay no more than 30 to 40 percent of their income for rent, with the rest of the rent subsidized by the federal government.

Unlike the Section 8 Tenant-Based Voucher Program – or 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 belong to the rental unit, not the tenant. A PBV may be contracted to a rental unit for as long as 10 years.

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

The U.S. Department of Housing and Urban Development (HUD) does not allow the same rental unit to be subsidized by both the tenant-based and project-based vouchers.

If the four targeted tenants give up or lose their Section 8 tenant-based vouchers, they will not have a Section 8 voucher to use if they face eviction or an emergency or want to relocate to another location. In addition, they’d be 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.

On Oct. 6, the four targeted households received a peculiar memo dated Oct. 5 from Mary Lucero Dorst of EBALDC, stating that EBALDC wants them to give up their tenant-based vouchers because EBALDC wants to convert their apartments to the project-based voucher program. Very little information was provided as to how this conversion could negatively affect the tenants if they give up their Section 8 tenant-based vouchers, and there was no phone number or contact person mentioned for tenants 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 wants the 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 and there was no discussion beforehand with the tenants. In addition, the four targeted tenants did not receive any kind of notice 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.

Despite the extreme pressure being placed on the tenants to give up their Section 8 vouchers by the rich and powerful nonprofit housing organization, the memo states that the transfer would be voluntary.

The four targeted tenants received an additional memo on Oct. 13, pressuring the tenants to sign the contract and give up their Section 8 vouchers. On Oct. 15, Danny Chen, manager of Effie’s House, went door to door asking the tenants to give back the memo, even if they did not sign it.

Out of the 21 apartments at Effie’s House, 10 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 tenants in the one-bedroom units who already have Section 8 tenant-based vouchers into giving them up so that EBALDC may maximize its profits.

It would make more sense for EBALDC to welcome the opportunity for those in studio apartments to benefit from conversion of their homes into the PBV program. This way 14 households could benefit from federal housing assistance programs, rather than only 10.

In addition, two weeks ago a low-income renter – a Haitian immigrant – who has lived at Effie’s House for the past 20 years or so received notice of a MAJOR rent increase for his one-bedroom apartment, increasing the rent from $711 per month to about $1,000. The tenant has not been notified whether EBALDC may want to convert his apartment into the project-based voucher program, and he may be faced with homelessness due to such an extreme rent increase that is due in January.

According to Rentometer, an online service that offers comparisons of rents in a given zip code, currently 42 percent of rental housing listings for one-bedroom apartments cost less than $1,000 per month in the Effie’s House zip, even though the housing is owned and operated by a so-called nonprofit developer.

Currently the annual rent increase in Oakland is set at 0.7 percent maximum for all applicable rental housing units and is effective July 1, 2009, through June 30, 2010. Residential properties owned by nonprofits in Oakland are exempt from Oakland’s Rent Adjustment Program, and nonprofits may raise the rent for any reason or no reason at all by as much as 100 percent or even more annually if they choose to do so.

Lynda Carson may be reached at tenantsrule@yahoo.com. Note that in addition to her interest as a reporter, Carson is a resident of Effie’s House facing pressure to give up her Section 8 voucher.

One thought on “Greed fuels demand for project based vouchers by nonprofit developers

  1. Norene M Tighe

    This is currently happening in our complex. It has elderly and disabled people stressed out because we won't sign the contract or any papers as a matter of fact. They are pressuring us by daily inspections and threats. Do we have any recourse? This is Massachusetts and prior to this the company gets 64000 a month for rent, yet my toilet still says 1974. Nothing has been done in here and mickey mouse fixes are rampant. This greed is horrible. I am trying to stand up for myself but we are all disabled and cannot fight and have no money for a lawyer. Any help would be great.
    Thank you
    Norene M Tighe
    norene2002@aol.com

    Reply

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