Saving Affordable Housing Table of Contents.
Especially at the state and local levels, government must shed the notion of providing programs for the people. The operative philosophy must not only be government for the people, but of and by the people as well.
Just as streets can be made safer and schools can be improved when residents and parents become involved, the record indicates that endangered housing can be most effectively rescued when residents are involved in that effort, along with government and nonprofit community-based groups.
Formerly, most government-sponsored low-income housing programs provided rental opportunities that asked little of residents except to fill out the requisite paperwork. It is clear from our research that in the future programs must offer more, and require more, of beneficiaries. Only by doing so will residents develop a sense of ownership, responsibility, pride and participation that will foster close-knit relationships and community-organization building, which are vital components of the civil society.
Care must be exercised, however, to ensure that residents and CDCs have adequate resources, capacity, and skills so as not to be overwhelmed by their new managerial responsibilities. New programs should take a graduated approach, assessing the skill and potential of each resident group or CDC and providing the technical skills and resources to build and sustain strong resident involvement and leadership as it emerges and matures.
America's strength resides in our families and communities, where the character and values of our citizens are formed. A new direction in public policy that transcends the old debate between government and market solutions is needed to place new emphasis on America's "third sector" – the voluntary associations and institutions of community.
2. The key goal of these new federal housing policies should be to preserve the endangered stock of publicly subsidized housing while empowering community-based groups to strengthen Ameri –ca's social and economic fabric. This will mean expanding resident participation and ownership and linking residents to community support services.
3. This new policy should also expand the capacity of community-based nonprofits to develop, rehabilitate, and manage much of this housing stock in an efficient, professional, and community-minded fashion.
A housing policy that aims to improve neighborhoods should increase the capacity of entrepreneurial nonprofit developers that have formed in an effort to save entire communities. Americans want to live in safe neighborhoods where they can raise their children. Nonprofits should focus not only on physical requirements such as open space and density, but on organizing against drugs and crime, and fighting for increased services, such as transportation and retail development – things that make urban communities attractive to people who have some housing choices.
Focusing resources on this nonprofit sector is not the same as handing over public services to the private marketplace, as with tax vouchers for private schools, or government subsidies to private, profit-seeking developers and landlords. Subsidizing profit-seeking developers to preserve housing for the poor – feeding the horses to feed the sparrows – as we did in the 1960s and 1970s provided windfalls for the wealthy while helping only a small proportion of the poor. Spending money on community-based institutions, as this report shows, can lead to efficiency and success. Policies that build on these successes will help convince the public that such programs are the type of government we need.
4. Finally, the "elements of success" – entrepreneurial leaders committed to resident participation, self-help, and building a sense of community; management excellence; and technical assistance – comport with both liberal and conservative ideology. If there is consensus that the nation is to have a national housing policy and the current one needs fixing, what better way to fix it than through new programs that promote these elements?
HUD and all other government agencies must share power with residents. Our own study, as well as others we cite, show that when residents have that power, problems get solved. If HUD's Reinvention II program or any other legislation or program simply shifts power from one government agency to another, problems will persist.
Most subsidized housing projects are in distressed urban neighborhoods. They suffer from years of deferred maintenance. Many were poorly constructed and quite a few were badly designed – ugly warehouses for the poor. If HUD withdraws its insurance and project-based subsidies, some private owners will simply walk away from their projects. (Indeed, many already have, once the tax breaks have run out).
Turning these projects into cooperatively-owned housing will only work if they are redesigned and improved so that people with choices will choose to live there. Otherwise, they will be eyesores, deteriorating slums, contributing to further urban decay.
We know HUD projects restricted to low-income residents concentrate and segregate the poor in ghettos. The goal should be to turn these projects into mixed-income developments. HUD's Reinvention plan is on the right track, with mixed-income projects a central part of the new plans. But rather than handing projects over to private developers at public auctions, HUD should turn them over to resident-owned cooperatives or nonprofit community development groups (see below). This will require some continuation of HUD oversight. But with proper support, a 10-year goal of "cooperatizing" – not just "privatizing" – these taxpayer-funded developments would succeed.
Unlike former HUD Secretary Jack Kemp's Hope program, this doesn't mean simply turning over the keys of existing projects to tenants or nonprofit developers. It requires HUD to continue providing funds for improvements and maintenance. It takes time to organize and educate tenants to begin the goal of improving their developments. Those who want to leave should be encouraged to do so, with appropriate long-term vouchers. Those who stay should have technical and financial assistance.
When HUD's production subsidies dried up in the 1980s, private developers walked away from inner cities. Into the vacuum stepped a new generation of housing reformers with roots in these neighborhoods (like the ones detailed in this report). Today, there are over 2,000 such groups. Although not all are as sophisticated as the ones studied in this report, they are rooted in their communities, sponsored by neighborhood associations, churches, social agencies, tenant groups, and unions. They have found increasing support from foundations, local governments, and business partnerships.
The first generation of CDCs in the 1960s and 1970s included many well-intentioned but naive (even incompetent) reformers. The new generation, as this report shows, is more savvy and entrepreneurial. These groups have already overcome enormous challenges and obstacles. They operate in the most troubled neighborhoods and against overwhelming odds. Despite this, they have accomplished much. Yet these successes are typically unheralded, in part because these groups do not have expensive public relations firms or lobbyists trumpeting their accomplishments, so the mainstream media pay them little heed.
In most other industrialized nations, the "social sector" plays a key role in providing human services and housing. CDCs are the kind of "intermediary" institutions that conservatives and liberals both extol. (Dreier and Hulchanski 1990) In the past few years, an increasing proportion of the major federal programs – especially HOME, CDBG, and the low-income housing tax credit – have been allocated to nonprofit housing groups. For example, while the HOME program requires cities to target at least 15 percent of the funds to nonprofits, most large cities exceed that threshold.
HUD should make the nonprofit sector the major delivery system for saving affordable housing. However, in consolidating its many programs, whether HUD directs funds to states or cities, it needs to attach some important strings. The nonprofit sponsors should either create limited-equity, resident-owned cooperative housing developments, or provide residents with a strong voice in managing rental properties.
Organizations should also be encouraged to combine local organizing with development. Without a strong organizing effort, the groups are less likely to succeed. Groups can learn how to negotiate with the various private and public agencies, but without empowering their own organizations, they will be negotiating from a position of weakness.
Training programs for community organizations should also address the following:
Community groups should actively seek to improve media coverage of the urban condition and community-based efforts to save affordable housing. Government should facilitate this by, for example, providing partial funding for nonprofit-sponsored conferences and workshops for journalists on urban issues and community-based problem-solving. Groups could also sponsor walking tours of their neighborhoods for reporters and editors and encourage the media to give community organizations a regular voice through op-ed columns and special pages (as The Los Angeles Times does now).
Groups need training in management and monitoring skills. This means helping to dramatically expand the nonprofit housing industry's management sector. Community residents should be recruited to develop careers in housing management, etc., and community colleges and educational institutions should offer training courses and degree programs in housing management. Governments should look to well-run public housing agencies to share some of their expertise (along with lessons from public housing management mistakes) with the nonprofit and resident-owned housing sector.
Community organizations need access to computers for desktop publishing for newsletters and other forms of communication, for research (such as Census, HMDA and crime incidence reports), and to compile membership lists. Policy should enable them to tap into on-line programs, such as HandsNet and the World Wide Web. They should have access to videos and local cable TV to enhance their community education and training efforts.
CBOs need funds to hire experts who can help evaluate housing rehabilitation and financing estimates, architectural design and zoning guidelines, and other data, and generally provide technical assistance. To promote community access to expertise, the federal government might encourage community groups and local colleges and universities to form partnerships, based on existing successful models. These include the Center for Community and Environmental Development at Pratt Institute in New York and the Policy Research and Action Group in Chicago, where academic researchers work closely with community groups not only to provide technical knowledge and scientific expertise, but to train community organizations to utilize these tools.
Through this program, the administration should provide funding to resident organizations in HUD-assisted developments for leadership and organization-building training. National, regional, and local intermediaries (training centers, organizing networks, state housing finance agencies) with track records in training and community organizing could serve to channel funding to local CBOs with a track record of success. Examples in our study include the Colorado Housing and Finance Agency, ACORN, and MHI. Through a notice of funding availability (NOFA) process, HUD can select training centers and networks to undertake this assistance effort. These intermediaries not only offer experience and a track record, but also economies of scale that would allow them to develop new training materials specifically geared to public and subsidized housing – videos, training manuals, workshops, and so on.
Initial funding should be for at least three years – sufficient time to expand capacity, train leaders, and show results. These intermediary groups, in turn, would identify CBOs and tenant and resident groups with which they could work. The program requirements and goals should be clear in terms of achievable results – a significant growth in the number of grassroots organizations with the capacity to address the social, economic and physical conditions of their developments. Tenant management and/or ownership would be one of many possible outcomes, but it need not be the sine qua non of resident empowerment.
The program should also aim to not only strengthen residents' organizations in specific developments, but also encourage networking among developments in the same city and among organizations in different cities and parts of the country. The program should support training workshops and conferences that bring tenant leaders together.
Tenants in HUD-assisted housing should also have some direct way to voice their concerns to HUD. This could include subsidies granted directly to the tenant group to monitor the management firms and develop their organizational capacity. HUD could develop a system to formally recognize tenant organizations. These groups could elect or appoint representatives to regional advisory boards that would meet regularly with the regional administrator or top official in the HUD local office. This is one way for HUD staff to stay informed about such matters as management, public safety, maintenance, leadership development, and other related concerns.
The EHEP program should also provide direct operating support to housing groups, such as Urban Edge and ACORN Housing Corporation, that wish to improve their surrounding community through basic community improvement efforts and allied programs. Two existing programs provide something of a model. In 1985, Congress began funding the Neighborhood Development Demonstration Program (NDDP). Since then, the NDDP has provided direct support (a maximum of $50,000 a year) to CBOs. These funds have also helped raise private funds for neighborhood development. Through the NDDP, 206 organizations have received 286 NDDP grants for housing, economic development, and neighborhood improvement projects. In 1992, about 280 organizations applied for about 40 awards. The success of the "demonstration" program led Congress last year to enact the John Heinz Neighborhood Development Program, a permanent version of the NDDP. Funding for the NDDP, however, had been quite small – $2 million a year. The Clinton Administration supported increased funding for the Heinz program.
Elements of the Heinz Neighborhood Development Program should be incorporated into the Endangered Housing Empowerment Partnership Program (EHEP). The program should also have several key components:
2) Second, HUD would provide direct funding to CBOs engaged in a variety of community improvement efforts, but only those who contract with one of the national training centers/networks that HUD has identified as competent to provide technical assistance. This initiative should be administered by the federal government. Local governments should not direct organizing and training initiatives.
3) State and local governments should, however, participate actively in EHEP by developing and implementing a plan to save endangered properties in their jurisdictions. State and local governments can bring flexibility to preservation programs. This flexibility is indispensable because housing at risk due to defaults, prepayments, and other causes is related to conditions in local housing markets as well as specific properties' physical and financial conditions. Further, the effect of defaults or prepayments on communities, states, and tenants across the nation is changeable. State and municipal governments may be able to respond more quickly and effectively to local changes.
A state plan should reflect how the given state agency, working with CBOs and residents, proposes to maintain existing units for low-income households. The plan should include specific proposals, and should identify all anticipated financial contributions.
Additionally, under the EHEP program, the government should make every effort to prevent rent increases beyond 30 percent of a tenant's income. And while bringing in moderate-income tenants is an important way to increase a development's stability, low-income and very low-income tenants should occupy most of the units.
Government support should also encourage community organizations, although they may work in economically diverse neighborhoods, to make sure low-income people are well-represented on their boards. Organizations' leaders and governing boards should be democratically elected by members, and organizations should be required to hold regular meetings and develop ways to remain accountable to members and the community.
In choosing which groups to support through the EHEP program, the federal government should be careful to extend eligibility to bona fide community organizations. Although a church or group may engage in physical development and/or service delivery, it would have to show a strong interest and a plan for the mobilization and empowerment of neighborhood residents.
If the federal government is going to serve as the check writers for housing preservation, which we believe it should, it must be sure to include strict accountability standards. As it devolves its authority to states and mayors, the federal government must be sure not to preclude effective citizen involvement, oversight, and authority.
This is especially important with Congress's recent passage of HR. 2406, which further devolves programs into block grants. HUD's own Reinvention II plan seems to increase the authority of mayors while allowing them the option to disregard citizen groups. These proposals are deceptive. The rhetoric is community empowerment, but the subtext is devolution to local government, relinquishing of the federal government's responsibility, and allowing virtually no citizen involvement or oversight on the use of funds. It is contrary to the lessons of our study.
Copyright 1996
Saving Affordable Housing Table of Contents.