“HOPE SF”? The Case for a Public Housing Bond

by Sara Shortt on February 21, 2007

In September, the Mayor announced that he would use “all of his political capital” to pass a bond measure which would finance the rehabilitation of the City’s most distressed public housing developments. While the bond idea was a new one for many of us, the concept of leveraging local funding to rebuild the city’s public housing came as no surprise to advocates familiar with the recent trends in federal housing policy.

It used to be that the federal government through the Department of Housing and Urban Development (HUD) provided grants to local communities to assist in revitalizing deteriorating public housing stock that was originally constructed in the 50s and 60s. Throughout the country, cities were facing problems with housing that had fallen into serious disrepair from a combination of aging and years of deferred maintenance. These buildings were in such poor condition that aggressive repairs alone would not make them habitable in the long term.

Major structural improvements were needed since these properties were not built to be sustainable for so many years. Many of these original public housing projects were also large in scale, geographically isolated from the rest of the city and were dense in population.

Many were poorly designed high rises where poverty became increasingly concentrated and crime flourished. Recognizing the problem, Congress developed the HOPE VI program in 1993. HOPE VI gave millions of dollars to cities that were than able to rebuild severely distressed housing. San Francisco was able to use $118.5 million in HOPE VI funds, combined with other sources, to rebuild 1,253 units at 5 sites.

Public housing developments in the Western Addition (Hayes Valley and Plaza East), North Beach, and the Mission (Bernal Dwellings and Valencia Gardens) were rebuilt. It is a very different time than in 1993. Consistent with their agenda to devolve federal funding to local governments, to encourage privatization and to reduce the role of the federal government in housing programs, the Bush administration has taken an axe to the HOPE VI program.

The President has proposed the elimination of funding for three consecutive fiscal years. As a result, the program has gone from $570 million in 2004 to only $100 million in 2006 (which remains only thanks to Congress).

Yet with or without federal funds, San Francisco has 2,500 units that are delapitated and in serious need of revitalization. The Housing Authority reports a backlog of $245 million in capital needs for their properties ,which accrues by $7 million more annually. Capital improvement needs are projected to climb to $798 million to be over the next 30 years. Since we can no longer count on federal funds, we must create local solutions to the problem.

The HUD funding that was once able to address some of the modernization needs, the “Capital Fund”, has also fallen prey to the administration’s ideologically-fueled drive to decimate public housing programs. The Capital Fund has been cut by 8 percent a year for the past 6 years. The San Francisco Housing Authority’s capital funds have been reduced 55%, from $23.8 million in 1991 to $13.2 million in 2006.

Meanwhile, construction costs have increased by 203 percent during the same time. The Housing Authority simply can’t pay for rebuilding units without HOPE VI or equivalent funds. There is less and less money to do major rehabilitation projects with the dwindling Capital Funds. This leaves the cheaply constructed, poorly designed and aging public housing stock in substandard conditions.

Yet due to sharp reductions in federal funds, the Housing Authority also can’t afford to keep up with the monumental repair needs that plague the deteriorating housing stock built 60 years ago. Nationally, Public Housing operating budgets, which finance ongoing maintenance, have been cut by $1 billion since 2001.

Housing Authority funding has been pro-rated at far below the need for successive years. In 2004, Housing Authorities were funded at only 89% of the need. And in 2005 it was at 91%. Last year, funding was at only 85% of the need and this year, it is proposed at the lowest levels ever, 76%. This would mean a 24% cut and would leave the San Francisco Housing Authority short by $3.5 million dollars. The SFHA has reduced staff by half (from 500 to 250) in the last 5 years and in November was forced to terminate 26 more employees. More layoffs are certain.

The aggressive starvation of housing authorities means that our public housing residents live in deplorable conditions. Residents of Potrero have filed lawsuits because of the persistent black mold in their units which makes their children sick with asthma. Others at the building went without heat for months this winter. At Hunters View, families contend with raw sewage leaking from pipes onto their front lawns.

And despite the 25,000 families on the waiting list, 200 units remain vacant because they are unfit for habitation. We simply can not allow these buildings to deteroriate completely. It is our responsibility as a community to ensure that residents do not continue to live in unsafe and unsanitary conditions.

One such solution is the Mayor’s bond idea. The Mayor says that the idea came from New York. But around the country, local governments who are in the same tight spots are making decisions about the future of their public housing. Some are developing creative financing solutions such as bonds and public/private partnerships.

Others have decided its just not worth the trouble. Most familiar is the effort to raze New Orlean’s public housing in the aftermath of Katrina. But this is happening in areas where natural disaster provides no excuse. In St Petersburg, Florida the city has decided it is too expensive to rebuild their largest public housing property and they have proposed to sell the 318 units to a private condominium developer.

In Atlanta there are plans to raze 3,000 public housing units rather than redevelop them. We have a city that wants to save its public housing. But this can’t be done without locally generated funding. Our only alternatives are disposing of the properties outright or letting “de facto” demolition occur by doing nothing and allowing for complete detieroration.

The “devil is,” of course “in the details” and it is crucial that the city allow for meaningful particpation of residents in determining the future of their housing to make HOPE SF really work. The HOPE VI program had a fatal flaw that must not be replicated here.

Not all of the public housing units demolished were rebuilt, leading to a significant loss of units. In San Francisco, over 200 units have been lost through HOPE VI redevelopment. This new program must mandate one-for-one replacement and right of return for existing tenants and no tenants should be forced to relocate off site.

There must be a strong commitment from the Housing Authority and the city to inform and involve the residents and the community in the process of implementation. We must also remain vigilant in demanding that our voices are heard as decisions are made about the development plan. We are up against the wall when it comes to our public housing. The 2,500 units are much too precious to lose through aging or through disposal.

Our only option is to find the money we need to make the units livable again.

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