Housing authority races time, fights fears, in restructuring with no ‘Plan B’
Hundreds of public housing tenants are hearing for the first time about the Cambridge Housing Authority’s plan to drastically change the legal and financial structure of the system that houses them. Many are frightened and angry, despite assurances that their rent, rights and everything else important will stay the same.
Meanwhile, authority officials have worries of their own, racing against an uncertain deadline as they embark on an equally uncertain strategy to finance $300 million in needed construction updates in the face of shrinking federal aid. Without the money, they say, many aging developments will crumble to the point where the authority can no longer operate them. The agency has already stopped doing all but ordinary maintenance tasks because of cuts in federal aid.
The authority plans to transfer almost all its housing to private companies affiliated and controlled by CHA. Legally, more than 2,100 apartments would no longer be public housing. Tenants would get federal rent vouchers that would preserve the status quo for them while giving the authority almost double the public subsidy it now gets. Private ownership would also let the authority tap into private investment, both loans and special tax credits for investors in low-income housing.
It’s an ingenious strategy to get around the federal starvation of public housing — but far from a sure thing. For example, what if the U.S. Department of Housing and Urban Development doesn’t give enough rental subsidy vouchers to cover all 2,108 units that will be transferred? If the number is close, the authority might use existing rent vouchers to fill the gap, reducing the total supply of affordable housing units in Cambridge, CHA officials said. (They promised to hold public meetings if the gap is “substantial.”) Or, if the number isn’t close, the authority might not transfer all its housing, or simply abandon the plan.
What if Congress starts to make significant cuts in the rental assistance program, similar to those for public housing? That could happen, although federal lawmakers seem to have greater respect for programs that help private landlords and the banks that lend to them, officials said.
Popularity could be a problem
Perhaps the most important uncertainty stems from the popularity of the strategy. Housing authorities across the country are applying to transfer an estimated 16,000 public housing units to the more generous rental assistance subsidies, CHA Executive Director Gregory Russ told city councillors at a Jan. 31 briefing. What will HUD do when it realizes how much its obligations will balloon?
Matthew Schwartz, president and chief executive of the California Housing Partnership, which has advised many housing authorities on financing strategies, said converting public housing to project-based vouchers can be “a powerful financing tool to revitalize older public housing properties if handled appropriately.” But given the current HUD budget, Schwartz said, “there is unlikely to be enough funding to enable all authorities who are interested to take advantage of this tool. This may lead HUD to change its policies regarding who can access these replacement vouchers.”
“It could be a good thing for Cambridge, but it’s not a sustainable national policy unless Congress decides to place a premium on fixing up older public housing and appropriates more short-term money, which Congress declined to do the past two budget cycles and appears unlikely to do in 2012,” he said.
The question is when federal officials will kill the strategy, not if, Russ said, so “There’s some urgency to this.”
“A lot of anxiety”
So the authority is continuing its effort. Its board approved the plan Jan. 23 and submitted it to the federal government, where it faces a series of regulatory hurdles. A team of CHA administrators has been traveling to individual developments to present the plan to tenants.
At each site, they unfurl a screen and present a 20-minute PowerPoint show outlining the benefits and, yes, the risks of the change, along with the ways CHA intends to minimize the risks. Many tenants aren’t persuaded.
One recent evening at the Pisani Center on Washington Street, the management headquarters for the Washington Elms and Newtowne Court complexes, one woman interrupted at the mention of bank loans: “Yeah, the banks steal from everyone!”
Questions and angry comments continued at the end of the PowerPoint. “Section 8, it is so bogus,” one tenant said, referring to the federal rent voucher program. “What happens if they decide to cut that program?” another said. “Where will we go?”
“If they mortgage it, I’m homeless,” another tenant said. Said another: “They will put college kids in here.”
One tenant at an unnamed development sent a panicky e-mail to Elaine DeRosa, head of the anti-poverty agency Cambridge Economic Opportunity Committee, saying she feared she would be forced to buy her apartment. Other tenants called the authority with the same misinformation, along with fears that low-income housing would disappear.
“There is a lot of anxiety,” Bill Cunningham, an outreach worker for the Alliance of Cambridge Tenants, told city councillors at a CHA briefing Jan. 31. “People are mistrustful … We are trying to calm people down.” The tenants’ group shares that anxiety about preserving Cambridge public housing long term if Congress continues trying to dismantle the program, he added.
Wondering about Plan B
Cheryl-Ann Pizza-Zeoli, voucher co-chairwoman of the tenant group, and other affordable-housing advocates praise Cambridge for its efforts to protect tenants. “If the housing authority does nothing, the risks are greater,” Pizza-Zeoli told tenants at one CHA presentation. “Other housing authorities have done things we wouldn’t want to happen here, things like time limits [on occupancy] and flat rents not set according to income.”
At the City Council briefing, former housing committee chairwoman Marjorie Decker called the plan “the most significant thing that’s happened to public housing since the inception of public housing.” Decker indicated she supported the plan; the council does not have to approve the change.
Not all tenants have reacted with fear and fury. At the Millers River development on Lambert Street in East Cambridge, tenants were calm — yet asked pointed questions.
For example: “If this doesn’t work, what is Plan B?” said one man, drawing this blunt reply from authority Planning and Development Director Terry Dumas: “If this doesn’t work, we’re going to be faced with choosing what units we’re going to keep and what we won’t keep.” After the presentation, the questioner, who refused to give his name, observed: “There is no Plan B.”
Margaret Moran, a CHA planning consultant, was hoarse and fighting a cold as she led a tenant meeting Saturday at the Corcoran Park development on the Belmont line, her sixth presentation in nine days and the second at Corcoran Park, to counteract rampant rumors after the first. “This is not an attack from the housing authority on public housing,” she said, and her answers seemed to reassure the 30 tenants.
“I really appreciate the time and effort you have taken to calm our fears,” one woman said.
Moran emphasizes her personal commitment to low-income housing at every meeting; she also doesn’t sugarcoat the risks of the fundamental legal and financial changes the authority proposes. At this Saturday meeting she mentioned for the first time her fear that federal officials will end the option before Cambridge can act.
“My biggest concern is that, after we’ve put everyone through this [turmoil], at some point HUD is going to say, ‘This is going to cost a lot more money. It doesn’t make sense.’ They will close the door on us,” Moran said.