Affordable housing industry is dominated by for-profit corporations

Affordable housing industry is dominated by for-profit corporations

By Lynda Carson -- May 21, 2012

Oakland -- Imagine that. The so-called affordable housing industry is dominated by for-profit corporations and billionaires trying to get their hands on our federal or state public housing. Affordable housing developments discriminate against the poor with minimum income requirements, and once our public housing has been demolished or privatized, there will no longer be a place that poor people can call home in America.

According to a recent April/May release from Affordable Housing Finance, for-profit affordable housing developers currently dominate the affordable housing industry, and out of the top 53 affordable housing developers in 2011, 33 of them are for-profit corporations, and only 20 of them are nonprofit corporations.

Some so-called affordable housing developers get rich by targeting our federal or state public housing for demolition or privatization, in addition to exploiting properties with Low Income Housing Tax Credits, Section 8 properties with project-based contracts, Section 236 properties that need rehab work, Section 42 properties with expiring low-income restrictions, including Section 515 properties with loans that can be prepaid, and other HUD assisted properties in the HOME program, and other housing assisted projects that are hitting on hard times.

Currently, billionaire's Stephen M. Ross and Jorge M. Perez of the Related Companies of California, are involved in a notorious project to take-over and privatize Berkeley's 75 public housing town-homes. A project expected to displace all of Berkeley's long-time mostly black low-income public housing families, from their housing.

With political connections directly to the White House, Perez a co-founder of The Related Companies has been a major political fundraiser for President Barack Obama, Hillary Rodham Clinton, and was an advisor to ex-President Bill Clinton during his term in office.

With connections to HUD, and payed for politicians in their corner to assist them in developing so-called affordable housing projects in Oakland, Berkeley, San Francisco and elsewhere, The Related Company of California, a for-profit corporation, is listed as number 18, out of the top 53 affordable housing developers of 2011, and it's for-profit sister corporation "Related Affordable" is listed as number 4, out of the top 53 affordable housing owners all across the nation.

Both wealthy for-profit corporations are owned by out of state billionaires Stephen M. Ross and Jorge M. Perez, and they have made a fortune in the so-called affordable housing industry, and are targeting properties where public housing units once proudly stood. This includes Harbor Village in Los Angeles County, Hermosa Village in Orange County, Lion Creek Crossings in Oakland, Paseo Village in Orange County, Pueblo del Sol in Los Angeles County, Sakura Crossing in Los Angeles County, and Berkeley's occupied 75 public housing units.

Currently, the Related Company of California is also trying to get it's hands on San Francisco's largest public housing project known as Sunnydale-Velasco (Sunnydale), a 50 acre 785 unit public housing site.

Multi-billionaire Warren Buffet is even getting in on the affordable housing sham while the big bucks are still there, with his company Affordable Housing Partners Inc., a subsidiary of his $143.7 billion dollar holding company, Berkshire Hathaway.

Currently the top 10 affordable housing owners across the nation are; The Michaels Organization (for-profit), Pinnacle Equities (for-profit), AIMCO (for-profit), Related Affordable (for-profit), National Church Residences (nonprofit), Highridge Costa Investors, LLC (for-profit), Volunteers of America (nonprofit), Dominium (for-profit), Mercy Housing (nonprofit), and GH Capital, LLC (for-profit).

As recent as Wednesday May 16, the Related Companies of California, held an event in East Oakland with their partners from the East Bay Asian Local Development Corporation (EBALDC), and the Oakland Housing Authority (OHA), to celebrate the completion of phase 4 of their new housing project Lion Creek Crossings, formerly known as Coliseum Gardens public housing complex.

The event was expected to include Bill Witte, Related California President, Oakland Councilmember's Larry Reed and Desley Brooks, Mayor Jean Quan, Eric Johnson of the Oakland Housing Authority, Jeremy Liu of the East Bay Asian Local Development Corporation, Ophelia Basgal of HUD, Robert Rayburn of BART, Gabe Speyer of Bank of America, and Wendy Jackson of the East Oakland Community Project. William Witte joined Related in 1989, after he was the acting Director of the SF Housing Authority, with many connections to HUD.

The Coliseum Garden's mostly black low-income public housing families were displaced when their 178 unit public housing complex was demolished to make way for the Lion Creek Crossings privatized mixed income housing project, that was built by the Related Company of California.

During July of 2000, the City of Oakland and the Oakland Housing Authority (OHA) received a $35 million grant in Hope VI funds from the federal government, and the money was used to demolish the Coliseum Gardens, 178 unit public housing complex that was allegedly controlled in the 1970s and early 1980s, by drug-lord Felix Mitchell.

The Related Company of California, the East Bay Asian Local Development Corporation (EBALDC), and the OHA formed a partnership that displaced the 178 public housing families, demolished their 178 public housing units, and created a new housing development that was privatized and controlled by billionaires Jorge M. Perez, and Stephen M. Ross of Related.

It's expected that when all 5 phases of Lion Creek Crossings are complete that the project will have used a total of $34.5 million in Hope VI funds to leverage more than $223 million in total debt and equity, to displace the 178 low-income families from their Coliseum Garden's Public Housing Complex.

It was all part of a master plan to get back at and remove the East Oakland public housing communities that allegedly supported Oakland's drug-lord Felix Mitchell, who also generously operated a children's breakfast program and provided small subsidies to elderly people and families having hard times in East Oakland, before he was killed in prison during the mid 1980s.

After Felix Mitchell was murdered in prison in 1986, he was given an elaborate funeral with over 1,000 people in attendance in church, which included 10,000 spectators on the streets of Oakland, and a funeral procession stretching 8 miles long through the streets of Oakland. Oakland city officials became embarrassed, and decided to target the public housing tenants of the Lockwood/Coliseum area of East Oakland, for displacement from the community. Lion Creek Crossings was built to replace the Coliseum Gardens public housing complex.

Some people around Lion Creek Crossings housing development may believe that the spirit of drug-lord Felix Mitchell, may still be wandering around what was once known as the Coliseum Gardens public housing complex, and if you listen closely on a quiet evening, you still might be able to hear the haunting sounds of children's laughter as they yell out "roller roller," to warn Felix Mitchell whenever the Oakland cops are driving around near the old Coliseum Gardens public housing complex, now called Lion Creek Crossings.

ABC's Channel 7, covered the May 16, celebration at Lion Creek Crossings that was held by Related. According to Channel 7; Elsa Russaw says, "Safety is not what it should be."

[ABC reports - The development hasn't been without its critics. Russaw used to call Lion Creek Crossings home. She has since moved. She says the high-tech cameras and security gates are only an illusion of safety, and complaints to management from her and other low or fixed-income residents would often fall on deaf ears. "Of course, I don't speak for everyone, but I speak for most people. Most people have not enjoyed their stay here," she told ABC7.]

Nick Smith of Channel 7 also reported: "There are other charges ranging from the displacement of more than 100 low-income families to not enough jobs connected to the project for the residents of this community, all claims the housing authority flatly denies. "A lot of tenants that grew up at Coliseum Gardens did not want to come back by the time they were able to come back," said Eric Johnson with the housing authority."

The Oakland Housing Authority also used an additional $49 million from HUD in Hope VI grants to demolish and displace the low-income public housing families from the Lockwood Gardens, Chestnut Court, and Westwood Gardens public housing complexes, now privatized. With additional funds being used to demolish and privatize the Tassafaronga public housing complex.

Lynda Carson may be reached at tenantsrule [at] yahoo.com