Friday, December 08, 2006

Market rate rents, the elephant in our Section 8 housing project's boardroom

How many people are aware that in 1979, Jimmy Carter established a Section 8 affordable housing project in every city in America? And that my home town got one too? Our project is called "Savo Island Cooperative Homes" -- named after the first naval battle the United States won in the Pacific during World War II. It's located on Stuart Street, across the street from the fabulous Berkeley Bowl.

Savo Island is subsidized by HUD. It has a Board of Directors. It needs a rehab. Badly. The siding is falling off the buildings. The roofs really leak. There is a six million dollar rehab project now in progress. The Board of Directors has spent the last four years dragging its feet about the rehab. Why?

The elephant in the Board Room appears to be that if the rehab goes through, the market-rate Board members who are not on the HUD Section 8 subsidy program -- because their income is far too high, high enough for them to easily live elsewhere whereas the rest of us have no choice -- will have to pay higher rents. Hence the obvious foot-dragging on every aspect of this rehab. The rehab is now four years behind schedule. Our architects, our contractors, our project manager, our bankers and HUD are frantic. And since HUD won't pay Section 8 subsidies for below-code units, most of the residents here are frantic too.

Bottom line: Jimmy Carter's dream for my home town will no longer exist, 49 low-income families will lose their homes and the developers who hover over this property like vultures can finally get their hands on our prime real estate.

At the last Board meeting, the rehab was effectively stopped in its tracks. Again. One Board member (who, BTW, was involved in trying to shove the massive Ashby BART condo development project down our neighborhood's throat) sent a half an hour tearfully explaining to us that if we actually went ahead and approved the use of fiber-cement siding -- now safely used all across America and even recommended by environmentalists -- that Savo's old people and children would most likely DIE from the toxicity.

Elephant dookie.

The Savo Island rehab project is effectively dead. Because we have gone out on a financial limb that the Board then cut off, we've got a long fall in front of us. Contractors who have been forced to sit on their hands for over a year will have a lien on our property. Residents will have grounds for a lawsuit against Board members who put their own self-interest in front of the interests of the co-op. Our bank will foreclose on the loan. HUD will leave us high and dry. The local condo developers will score bigtime. I will lose my nice cozy home. And Jimmy Carter will lose too. But the ironic thing is that the market-rate Board members will lose also. Even though the rehab has been effectively blocked, their rents will STILL go up -- at least until the buildings fall apart and the place is condemned.