By Jake Blumgart
When New York City Mayor Bill de Blasio announced his administration’s plan on May 19 to help dig his city’s public housing authority out of its $16 billion capital-needs hole, attention quickly focused on the plan’s reliance on a controversial initiative with a wonky name: “infill” housing. Infill housing calls for some of the “underused” spaces in public housing projects to be leased out to private developers, who will then be charged with building a mix of low- and market-rate housing on the sites. Among some advocates, the plan has fueled fears that the city is opening the door to privatization.
Yet, even as debate has simmered over infill housing, there has been little discussion about the city’s decision to include another controversial program in its housing plan: the Department of Housing and Urban Development’s Rental Assistance Demonstration program (RAD). RAD will be applied to only some 1,400 of almost 180,000 units, making it an admittedly fractional part of de Blasio’s preservation campaign. But it is being broadly pushed throughout the rest of the country, where housing authorities are equally desperate to find a fix to their budget woes. Similar to the infill solution, it seeks to attract private capital to bail out the nation’s underfunded public housing.
The RAD program is one of the Obama administration’s answers to the dire problem of the United States’s decaying public-housing stock. Most developments were built in the middle of the last century and require repairs commensurate with their age. HUD recently found that the nation’s 1.2 million units need at least $25.6 billion in capital repairs. But Congress has proved unwilling to provide the funds needed to restore a New Deal legacy program that is anathema to the ideology of Republicans and centrist Democrats. The Center for Budget and Policy Priorities has noted that the program’s capital and operating fund “lost 25 percent of its inflation-adjusted value since 2001” (emphasis theirs).
Read More The Obama Administration Is Expanding a Program to Fix Up Public Housing—Too Bad the Program Might Also Privatize It | The Nation.
RAD is nationwide as it has also arrived in Ogden, Utah. There, Kier Corporation, the owner of a single room occupancy building downtown, is renovating it using these funds. Curiously, it is said that they did not provide the Ogden Housing Authority with a required 12 month notice regarding their plans. Whether this suggests financial irregularities in the program, or is just an oversight, cannot be determined. Although recall the notorious tenure of Samuel Pierce as Secretary of HUD during the Reagan years. It is not known whether Jim Kier participated in the Mod Rehab kickback schemes going on then, but Kier and Pierce were acquaintances and had met together shortly after the program was introduced. Both of these persons have since died.
Cities distribute HUD’s largesse to private landlords even when the latter fail to provide any housing at all: In 2008, Ogden Properties LLC walked away from another low-income downtown building after receiving $330K to convert it to offices, having evicting its tenants with only a week’s notice. This building currently stands as an empty shell, fenced off because of its unstable condition. The city has not attempted to recover the money.
On the other hand, without all the middle-players at the trough, no subsidized housing would exist. Buying off the real estate industry was something Roosevelt had to do to get his National Housing Act through Congress in 1934.