January/February 1998

Shelter Shorts

Rent Decontrol  =  Rising Rents & Falling Diversity

Three years after the repeal of rent regulations in Cambridge, Massachusetts, a survey of 1,000 tenants in formerly rent-controlled units shows skyrocketing rents and declining diversity. Median rents for decontrolled units jumped from $504 in 1994 to $775 in 1997, a 54 percent increase, according to a January 31 article in the Boston Globe. Turnover has also increased dramatically, with 38 percent of former rent control tenants moving since the repeal. Rents in units that turned over increased by an average of 85 percent.

Cambridge's strict rent control laws applied to 14,500 units before they were lifted in January 1995. The hikes have resulted in a shift in demographics in Cambridge, with many elderly and longtime residents leaving, and more affluent tenants, particularly students, moving in.

"Families are the ones getting hurt here," said Dan Wuenschel, executive director of the Cambridge Housing Authority. "We have, to a certain extent, been able to help the elderly and people with disabilities. But if you are a single mom or even a two-parent family, you are the one getting hurt."

A decline in federal housing subsidies has made the situation even more difficult for low-income renters. According to the Globe article, about 4,500 families are waiting to obtain rent subsidies or vouchers. Cambridge officials are lobbying the state legislature for a one-percent transfer tax on property sales, exempting the first $300,000, to add revenue to the city's affordable housing programs, currently funded at $7.5 million annually.

Opponents of rent control cited in the article argued that rents were artificially low under rent control, and they attributed a recent increase in rental housing construction to the repeal of the rent laws.

Cambridge Housing Authority: 617-864-2247.

After winning a two-year court battle  against  the Legal Aid Society of New York, the New York City Housing Authority (NYCHA) will begin offering preferential treatment to working families when filling vacant apartments in the city's public housing projects. This leaves some advocates concerned that many of the most poor in NYC will be left without a home.

The policy shift – in keeping with the general trend of national public housing policy – will assign a priority code to people with incomes near the upper limit of the eligibility among about 130,000 applicants for the system's 180,000 apartments, 6,000 to 8,000 of which become available every year. The poorer the family is, the lower its priority code will be, according to the Dec. 15 New York Times. Only families with members who are working, receiving unemployment benefits, or unable to work because of disabilities will be given any priority code at all.

Opponents of the changes insist NYCHA is trying to make up for a loss of federal dollars by raising rents. "The real issue," said Scott Rosenberg, litigation director for the Legal Aid Society of New York "is that the Housing Authority is seeking more income by the somewhat perverse means of excluding those in greatest need." Legal Aid did manage to prevent the plan from being implemented in 21 of the system's 320 projects, where the new policy was shown to conflict with a desegregation plan.

Although NYCHA has been one of the nation's most successful PHAs in maintaining a 50-50 balance of working-class and poor tenants, that ratio has been more difficult to maintain in the last decade. NYCHA officials argue that the new plan is the only way to prevent the city's public housing developments from deteriorating and ultimately being demolished, as has happened in other cities across the country.

"Housing is a privilege, not necessarily a right," said Sara Manzano, an assistant general counsel for the New York and New Jersey HUD office, which supports the changes in New York City. "We have to decide who gets the preference," she told the Times.

(See also More PHAs to favor working poor)

Compared to their progressive counterparts, the nation's 12 largest conservative foundations have been very successful in influencing public policy despite their more limited resources.

A 1997 report from the National Committee for Responsive Philanthropy (NCRP), Moving a Public Policy Agenda: The Strategic Philanthropy of Conservative Foundations, attributes conservative foundations' success to their concentrated efforts to provide large, multi-year general support grants to organizations advancing multi-issue, well-coordinated, and visionary conservative agendas. More than two-thirds of the total grant dollars from conservative foundations went to national organizations focused on influencing national policy. These foundations poured $77 million into their top five grantees in 1995 alone according to the report, particularly for projects that aimed to market their ideas through publications, advertising, and media campaigns.

Meanwhile, fractured progressive causes are constrained by smaller, single-year, one-issue grants administered by foundations too narrowly focused and intent on "accountability," Michael H. Shuman points out in The Nation magazine of Jan. 12/19, 1998.

According to the report, the top eight grantees on the progressive side operated on $18.6 million combined. The reason for this, Shuman said, lies in progressive foundations' unwillingness to get involved with partisan political issues, and their lack of focus on connecting local organizations to national efforts. He concludes that progressive foundations would more effectively spend their resources with fewer but larger grants to multi-year initiatives connected to larger national debates and movements.

Moving a Public Policy Agenda: The Strategic Philanthropy of Conservative Foundations, $25 from NCRP, 202-387-9177.

Poverty is Bad for Your Health

• A study recently published in the New England Journal of Medicine (NEJM) comes to what seems like a self-evident conclusion: economic hard times are bad for people's health. The report finds that having a low income appears to increase the odds of having a variety of physical and mental ills. The longer one's exposure to hard times, the worse the problems. The study found that people with low incomes during the entire time of the study were three times more likely than those with higher incomes to have trouble handling the basics of daily living, and three times more likely to suffer clinical depression. The study found no evidence, however, that poor health had caused people to have low incomes. Contact: NEJM, www.nejm.org; 617-734-9800.

• Retailers, developers, and marketers often dismiss central cities as places that are too costly, too crime-ridden, and too poor for businesses to thrive. But according to an article in the October 1997 issue of American Demographics, businesses are missing out on potentially strong markets. Statistics point to communities with larger concentrations of buying power and no competition while suburbia becomes increasingly "over-stored" and saturated. Some businesses have succeeded in catering to the often underserved and diverse needs of city dwellers and workers who commute to these neighborhoods. Contact: American Demographics, www.demographics.com

• The city of Durham, North Carolina, has learned that job creation doesn't necessarily lead to less poverty. Despite the recent recruitment of 11,000 jobs to Durham, 40 percent of the jobs there are held by non-residents, and about one-third of Durham's population lives in poverty. An article in Southern Exposure details the city's experience, and examines the hard-learned lesson that effective economic development programs must assess whether a company intends to commit to its community before investing tax revenue in development-related costs. The city found that effective job creation, training and placement strategies, as well as identification and coordination of support services, are needed to ensure that workers and employers benefit from an expanded job pool and contribute to reducing poverty. This recent issue of Southern  Exposure focuses on "The South at Work in the 1990s." Contact: Southern Exposure/The Institute for Southern Studies, PO Box 531, Durham, NC 27702.

• The Center for Community Change (CCC) has released a plan for a federally-funded public jobs program to help provide enough jobs for people leaving the welfare rolls. The program calls for moving $17 billion from government subsidies to corporations into a public employment effort. Companies that laid off the most workers between 1992 and 1994 received a total of $753 million in government subsidies, CCC's report documents. The report also lists alternative ways to finance a jobs program. Contact: Jerry Jones (author), 860-527-2422.

• Bank commitments to low-income communities across the country have improved thanks to the Community Reinvestment Act (CRA), according to a study by the National Community Reinvestment Coalition (NCRC). In the last 20 years, CRA has resulted in over $353 billion in agreements between banks and community organizations in low-income and minority neighborhoods. The annual level of CRA agreements has skyrocketed from about half a billion dollars a year between 1977 and 1991 to $57 billion a year over the last six years. Banks now recognize that "reinvestment is not only the right thing to do, it is the profitable thing to do," says NCRC President John Taylor. Contact: NCRC, 202-628-8866.

Incentives to Save

• The largest Individual Development Account (IDA) program to date has committed $12 million to IDAs for 2,000 people in 11 cities – from San Francisco to Barre, VT. The program matches each $1 deposited, up to $500 over four years, with at least $1. Some cities will match each $1 with up to $6.  Participants can withdraw the money for education or a new home or business. The program also offers money management training. To qualify, a family of four's income must be below $32,100. The Ford, MacArthur, and Joyce foundations and others have committed $8 million to the program, local sponsors have added another $4 million. For more information and the full list of cities in which these IDAs are available, contact the Corporation for Enterprise Development,  202-408-9788.

• A group calling itself the National Affordable Housing Coalition (NAHC) has been traveling the country charging for housing counseling materials already available free from 1,265 legitimate housing counseling agencies nationwide, warns the National Low Income Housing Coalition. The California Department of Real Estate has issued a desist and refrain order to NAHC for conducting real estate activity without a license. To find a housing counseling agency near you, call 800-569-4287; in Spanish: 888-466-3487; TTY: 800-358-6216. For additional homebuying information, contact Fannie Mae, 800-732-6643.

• Nearly three-quarters of whites own their homes, compared to 45.8 percent of blacks and 43 percent of Hispanics. In an effort to help close this gap, HUD and the National Association of Realtors will offer cultural sensitivity training for real estate agents. The program will teach real estate agents about the customs of minority groups. Agents who pass the training course and have no Fair Housing Act violations will get a federal seal of approval. HUD will not spend extra money but will reallocate existing funds for the program, Secretary Andrew Cuomo said. The Realtors® will contribute $250,000 and partner with local governments to raise more. Contact HUD at 202-708-1112.