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East Bay | Health, Housing, and Public Services

New Story-- Affordable Housing, or Not
by Lynda Carson ( tenantsrule [at] yahoo.com )
Tuesday Aug 24th, 2004 4:03 AM
Landlords Are Gouging The Section 8 Program, And Non-Profits Are Charging More Than The For-Profit Landlords!
Affordable Housing, or Not

Affordable Housing Out Of Reach For Many

By Lynda Carson August 24, 2004

Thats Darlene Maney standing next to the mural at the Hugh Taylor House as she stands with her sign that say's, Save Affordable Housing. Maney used to work for the East Bay Asian Local Development Corporation (EBALDC), and says, "My Message to the non-profits are that they have a commitment to the applicants to get them into their housing in a timely manner. It should'nt take 6 months to a year to get into low-income housing, especially if the units are prepared and sitting there vacant."

Section 8 vouchers and Section 8 project-based vouchers have been under attack by the Bush Administration, as can be seen recently in Alameda and in Marin County. When HUD recently terminated the project-based vouchers at 30 different affordable housing developments of Marin County, those projects no longer seemed so affordable to those that would some day try to find housing there in the near future.

Theres no doubt that affordable housing sounds great and that the term non-profit takes the edge off of raw capitalism. But what do those terms really mean?

In this day and age, the need for low-income and affordable housing seems imperative, and may explain why non-profit housing organizations are big business now adays.

To the multitude of poor and homeless people that never seem able to meet the criteria that would ever allow them to move into low-income or so-called affordable housing, the terms known as low-income housing or affordable housing seem to be quite meaningless or hollow, and if anything they seem to be a bitter reminder of what has been placed beyond their reach.

With the recent Section 8 funding shortfalls taking place across the nation, as HUD Secretary Alphonso Jackson relentlessly tries to convince the world that less is better when it comes to the needs of housing the poor, it has forced people across the nation to take a closer look at whats happening in the world of affordable housing and the Section 8 programs.

Some recently leaked documents from an Oakland non-profit housing organization known as the East Bay Asian Local Development Corporation (EBALDC), reveal that rents being charged in identical units at some of their properties are higher by as much as $300.00 a month and more if the tenant moves into a Section 8 project-based unit or has a Section 8 voucher. This was during the month of June 2004.

A Break Down Of The Hugh Taylor House During June Of 2004.

The Hugh Taylor House located on Seminary Avenue in East Oakland is owned and operated by EBALDC and has 43 rental units, with 25 of them set aside for section 8 project-based tenants, and the rest goes to regular renters that can qualify to move in.

Theres five Section 8 renters in one bedroom units with each being charged $928.00 a month, and theres seven non-section 8 renters in one bedroom units being charged $392.00 per month. The Section 8 tenants are being charged $536.00 more a month than the regular tenants are in identical units.

It's common for non-profit developers to charge more to Section 8 renters which then allows them to charge less to their regular customers while being able to pay the bills, and both Section 8 tenants and non-Section 8 tenants end up paying around 30% of their income if it all goes well.

Of course, if the vacancy rates are high in the building and vacant for long periods of time, it forces the rents up on every one, no matter what kind of financing that may have taken place to fund that kind of development in the first place. There were five vacancies during the month of June at the Hugh Taylor House and on average the rental units remain vacant there for at least 6 months or more before the vacancy is filled

Even though I assumed that EBALDC was charging the average minimum rents, $928.00 a month in that area of town on Seminary Ave, it still seemed a bit high, and I checked the average rent statistics for that area. The locals call it Cemetary Avenue because of so many shootings in that area of town, and it is a low-income area.

According to available stats from Home Finders for that area located below Mac Arthur Blvd, the average minimal rents being charged for one bedroom units are only $650.00 a month.

EBALDC a non-profit, is charging an astounding $278.00 more a month at the Hugh Taylor House for one bedroom units than the regular for profit landlords are charging in that same area for the average minimum rents being charged for one bedroom units.

The Hugh Taylor House also has thirty SRO's (single room occupancy), that are without a kitchen and the shower is located down the hall. On average, Section 8 renters in the SRO's are being charged $687.00 a month, and regular non-Section 8 renters in identical rooms on average are being charged $365.00 a month. Section 8 renters are charged $322.00 more a month than regular non-Section 8 tenants in the identical SRO's.

Checking the going rate for SRO's located in the local for-profit Hotels, I found the following.
The Sutter Hotel charges $560.00 a month for an SRO, the Ridge Hotel charges $475.00 a month for an SRO, and the Old Oakland Hotel charges $480.00 to $520.00 a month for an SRO and the prices vary according to the size of the room that may be available at any given moment.

The Lake Hurst Hotel offers SRO's for as much as $675.00 per month, but along with the room they offer 2 free meals a day to their renters for five days a week inside their dinning room.

As it turned out, at $687.00 a month being charged to Section 8 tenants at the Hugh Taylor House for an SRO, EBALDC charges more for their SRO's than all of the above mentioned for-profit Hotels do, including the Lake Hurst Hotel which offered free meals with their rooms.

Taking a look at the rents being charged at one of EBALDC's other buildings called Effies House during the month of June, the records show that Section 8 renters are being charged hundreds of dollars more a month than many of the other regular tenants that reside there.

As an example, during the month of June, one tenant in a one bedroom unit is being charged $550.00 per month, while a Section 8 tenant in an identical unit is being charged $806.00 a month. The Section 8 tenant is being charged $256.00 more a month than the regular non-Section 8 tenant pays.

On August 18, I contacted Lynette Lee, EBALDC's Executive Director, and asked for an interview. Ms. Lee agreed to the interview, and wanted to schedule a time for it to take place until she realized that the story was about EBALDC and the affordable housing crisis and the Section 8 crisis that was going on. Ms. Lee suddenly claimed that it was a conflict of interest for me to cover the story because I am one of the renters in her empire of more than 600 rental units which she controls.

Comparing Non-Profit Housing Organizations

After doing some research to compare EBALDC with other local non-profit housing organizations to see what they may have in common, I discovered a local one called Resources for Community Development (RCD).

Founded in 1984, in 2002, RCD currently had a portfolio of 970 affordable housing units and emergency shelter beds located throughout Alameda, Contra Costa, and Solano Counties. RCD had another 12 projects, totaling 613 units, in predevelopment and/or construction.

Founded in 1975, EBALDC developed over six hundred rental units of affordable housing as well as 190,000 square feet of retail and office space in Oakland and Emeryville.

In fiscal year 2002, RCD, a non-profit housing developer in Berkeley, turned out to have assets of $21,412,751, while during the same fiscal year of 2002, EBALDC which is also a non-profit housing developer, had assets of $23,876,277.

After subtracting the liabilities from their assets, RCD had a fund balance of $2,965,312.
In that same fiscal year, EBALDC had a fund balance of $17,749,264 that accrued after subtracting their liabilities from their assets.

The financials appear to reveal that through the years, RCD continued to use their funds to develop more housing units and emergency shelter beds, while EBALDC used their funds to pay off their properties and shifted into developing retail and office space rather than focusing on affordable housing projects.

Affordable Housing, or Not.

Fair Market Rents (FMR) are a cap thats been placed on the Section 8 programs and the landlords can ask for as much as they want so long as it does not go beyond the established Fair Market Rents established in any given area.

In Oakland, theres many areas of low-income housing that exist in which the FMR is actually set higher than what the for-profit landlords are charging in many areas. The result is that the Section 8 programs are being gouged because Section 8 renters are often being charged way more than their counterpart non-Section 8 neighbors are, and it's all perfectly legal.

According to Vivian Hain, "I think its a train robbery going on, and I think it's immoral for the non-profits to set up so-called affordable housing in low-income areas to fleece the government. My family tried to rent housing from the John Stewart Company and Affordable Housing Associates, and because we were on the Cal-Works program that only offered us a subsidy of $679.00 per month, we could never keep up with what the non-profits could get from the Section 8 program, and we remained homeless."

In a call to Oakland Community Housing, Inc. (OCHI), a non-profit housing developer of Oakland, I reached the Executive Director Dwight Dickerson, who was very blunt about his position and he said, "For project-based Section 8 housing, I think that you have to charge market rate rents to be able to pay off the mortgage for any given location."

Jeanne Cooke, pays $925.00 a month for a beautiful one bedroom unit with hard wood floors, which includes a dinning room in downtown Oakland and said, "I could never imagine living on Seminary Avenue, in East Oakland, to be charged more for a one bedroom unit by a non-profit than what I am being charged here."

According to John Stewart of the John Stewart Company which owns or operates more than 22,000 rental units in California, "It's a systemic problem. The cost of building and operating rental housing in California has become so costly, that even the non-profits have not managed to offer housing that is available to the homeless and very low-income families. For many, the cost of housing is beyond their reach no matter what we do."

Lynda Carson May be Reached At; tenantsrule [at] yahoo.com or 510/763-1085