Slipping Away

As a wave of HUD mortgages expires in the next four years, an already dwindling supply of affordable units may nosedive with owners making windfall profits -- unless the right mix of federal legislation and local organizing can save the day.

Tenants Organize

Anticipating the flood of expiring mortgages, NAHT’s local affiliate in Massachusetts, the Mass Alliance of HUD Tenants (MAHT), is the first group to organize tenants in buildings whose mortgages are about to expire. They’ve had some notable wins, but the losses underscore the need for mandatory federal regulation to preserve affordable housing.

In the state’s first expiring mortgage building, MAHT helped the Bowdoin Residents Organization (BRO) in Malden in its negotiations with Winn Development, which purchased the development from its prior owners. In 2004, with MAHT assistance, the BRO negotiated a written agreement with Winn that preserves all 226 units as affordable housing for 99 years for the same income profile as previously served by the development (50 percent project-based Section 8, most of the remaining units below 80 percent of the area median income). BRO and MAHT also retained staff and an architect to help residents have input into the rehab design plans and relocation procedures.

The thing we’re most proud of is the 99 years of affordability, so that the people behind us who are struggling will have a place to raise their families,” comments Yvonne Putney, BRO president and grandmother of four.

In a different twist, the owner at Bradford Apartments (now Sycamore Village) in Lawrence, Mass. failed to apply for enhanced vouchers despite being eligible for them. MAHT helped the tenant group apply for vouchers directly from HUD (a national first) that protected many tenants from displacement after the mortgage ran out. Since then, a new owner has purchased the building and is accepting Section 8 vouchers — perhaps the first case of a building that left HUD programs being restored as low-income housing.

Other developments have been more difficult. In several Massachusetts buildings owned by First Realty Management (FRM), tenants have been harassed as they try to organize. Despite a vigorous “Save Our Homes” campaign and a fair housing lawsuit, tenants at High Point Village in Boston were unable to persuade FRM owner Bill Kargman to renew a 320-unit Section 8 contract under HUD’s Mark Up to Market Program, which pays full market rent to the owner while preserving housing for low-income families. Kargman chose to replace the low-income families with market-rate tenants instead. More than half the 540 High Point families have been replaced in three years, and High Point is now a “gated community” called “Stonybrook Commons.”

Because HUD multifamily housing is often the only racially diverse housing in suburban areas, conversion of developments like these often reinforces patterns of racial exclusion and re-segregation.

“High Point is no longer a family oriented development,” laments tenant leader Elaine Marin, who raised two biracial children at High Point. “The people moving in are young professionals with roommates, and units turn over fast. I don’t know my neighbors anymore.” Salea Perry, High Point leader and married mother of three, added: “It sickens my heart to know there are families out there in shelters that can’t move in because one man wants to make more money.”

Although MAHT considers High Point a loss, Marin, Perry and other High Point leaders have taken the “Save Our Homes” message to other FRM buildings. Their persistence paid off when Kargman announced plans to renew the expiring Section 8 contract for 266 units at Brandywyne Village in East Boston for another five years. FRM has since done the same at other buildings in Boston and Worcester. Veteran MAHT tenant leaders now are organizing tenants at Georgetowne and other expiring mortgage buildings.

Tenant organizing is essential and powerful, but it is not sufficient when owners, especially those in hot market areas, have few incentives to remain in subsidy programs and no requirements to sell to a preservation purchaser, even one making a fair market value offer.

MAHT has proposed state legislation, killed recently by the Massachusetts legislature, to allow cities to regulate rents after federal contracts end, as in Los Angeles, and to require renewal of expiring Section 8 contracts, which would save at-risk buildings at no cost to city and state governments.

NAHT and others are also advocating for federal legislation to stanch the loss of expiring use units.

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