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The St Louis Contrarian

Providing Independent and Intelligent Insight on St. Louis Public Policy Issues

Archive for the category “hud”

HUD Failure

This story is not specifically about St. Louis, it is about a failure of HUD that would effect all communities.

I have represented a HUD insured Section 8 project in another part of the country. Their 20 year Section 8 contract is due to expire. HUD requires an analysis called Mark to Market which requires analyzing the rent structure, usually adjusting the rents down and lowering the mortgage. It requires a rent comparability study which is like an appraisal.

HUD used poor comparables in their analysis resulting in the rents being lowered for the project. They used old comperables from when the market was low. I was hired to help appeal to HUD. We lost. As a result the project owners are opting out of affordable housing and turning their project into conventional housing at higher rents.

So HUD’s error which they refused to acknowledge has caused the loss of 62 affordable housing units. This is ironic considering their mission is to preserve it. Something tells me that my situation is not unique. Written by Paul Dribin

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HUD Loans in St. Louis County

The St. Louis Post Dispatch wrote today in a critical manner that St.Louis County had not utilized some $24 million in HUD loans intended to help distressed areas. These loans commonly referred to as 108 loans from the section of the housing act they fall under are part of HUD’s Community Development Program. HUD has threatened to pull back the funding if the money is not used.

It is not quite fair to be too critical of the county in this regard. First, the interest rates on the funds are only 1% lower than market and contain much more paperwork. Second, they do not work well on small projects such as housing rehab. The county needs to come up with one or two big projects for their utilization. Third they are loans not grants and the borrowers must be creditworthy. Finally, these loans are borrowed against future block grant funding, and in fact reduce the future funding by the amount of the loan.

The county had request a waiver for use of the funds and has not received an answer from HUD despite repeated requests for a decision. This whole thing smacks of HUD covering their collective asses. Written by Paul Dribin

Homelessness as Part of a Housing Continuum

In the housing world it seems for the most part that people deal either with affordable housing and homelessness. One develops and manages projects and the other provides services for homeless people. I have discovered that really affordable housing is one continuum with chronic homelessness where poverty and mental illness interact. Other people are periodically homeless due to circumstances such as job loss or divorce; these people are acutely homeless. Finally many other people on the continuum lack affordable housing and suffer from the results. They tend to pay too much of their income for housing, live in substandard housing, or double up. All of these folks need both housing support and social services to a greater or lesser degree. Housing practitioners would do well to view both housing and homelessness this way. Often our view of these issues get nuanced by our day to day work and funding sources. Written by Paul Dribin

More About Housing Tax Credits

Much is being written and discussed about the Governor’s decision to terminate Missouri State Affordable Housing Tax Credits. The loss of these credits will make affordable housing difficult to do and adversely affect a certain category of poor person. I am not in favor of eliminating these credits simply because there is really nothing else to work with in the affordable housing arena.

Nevertheless, the greed of some members of the affordable housing industry made this decision by the Governor inevitable. There are many developers, syndicators, attorneys, and consultants who have gotten rich off the program. Too much of a dollar of tax credits does not go for actual housing expenses. Many in the industry do not really care about poor people.

In addition, the Low Income Housing Tax Credit Program is both inefficient and ineffective. Inefficient for the reasons cited above plus a hugely complicated program. Ineffective because the program does not house poor people who need it the most. Tenants still must pay a $400-$600 monthly rent. Homeless people need not apply.

If the traditional public housing program was allowed the same per unit expenditures and site location it would have been a more efficient and effective housing program. Unfortunately, anything that smacks of public involvement is frowned upon these days. Written by Paul Dribin

Cheryl Lovell

Cheryl is the Executive Director of the St. Louis Housing Authority. The Authority owns low income public housing units housing thousands of very low income people. They also administer the Section 8 Choice Voucher Program which issues Section 8 vouchers for very low income people housed in private housing.

The Authority under Cheryl’s leadership has done a great job. They have substantially improved the buildings though extensive use of capital funds, successfully administered the voucher program, and is almost 100% leased up. The Authority has extensive social service programs to assist tenants in leaving poverty.

The housing authority was troubled when Cheryl took over, in the newspapers often with negative stories. None of that has gone on in the 19 years of her leadership. Great job! Written by Paul Dribin

The Myth of Pruitt Igoe

At the suggestion of a friend I finally watched the documentary The Myth of Pruitt Igoe. The whole subject is too vast for this one post, but the presentation was excellent. The experience was rather emotional, particularly seeing the testimony of former residents such as Ruby Russell who worked with me at HUD.

The presentation was pretty fair, doing a good job of avoiding simplistic answers. The basic premise is that things such as racism, project design, slum clearance, welfare rules, and so on. Where I believe the presentation was inaccurate was in attributing the problems at Pruitt Igoe to the population loss in St. Louis. While the city suffered population loss, the demand for public housing remained as high as ever with huge waiting lists.

Aside from the flaw of concentrating too many people in high rise buildings, the beginnings of the welfare state played a role. Previously, public housing did not even allow people on welfare to reside in their units. At the time of the development of Pruitt-Igoe, this rule changed and they pretty much let anyone in the project who was poor, regardless of background. The federal government at that time did not provide housing authorities with operating subsidies so all expenses needed to be covered by rent. Maintenance backlogs developed, repairs were not made, and the better tenants moved out.

During my housing career I had the privilege of being a friend and colleague of Tom Costello who was the Executive Director of the St. Louis Housing Authority at the time of the demolition. He has said the authority could simply not keep up with maintenance backlogs. He said George Romney, the Secretary of HUD at the time suggested total demolition. I have also known at former police officer at Pruitt Igoe. He said he would have 65 major cases to investigate every day when he came in.

The story of Pruitt Igoe is a tragedy and symbolized both the end of public housing and modernist architecture. I worked a year at the St. Louis Housing Authority in the late nineties. We received calls every week from people curious about Pruitt-Igoe all over the world. Architects would come on field trips to visit the site as if it was a religious shrine. Everyone needs to view this documentary. Written by Paul Dribin

HUD to Defund Fair Housing Grants in Missouri

Missouri passed a law about six months ago which made filing a discrimination or fair housing complaint more difficult. Many in the know advised against it primarily for moral reasons, but also because of the potential for lawsuits and possibility of listing federal funding. Well, the predictions have come true. HUD has written that if the law is not changed by March 2018 federal funding for fair housing enforcement will be terminated. That is because the state law is no longer “substantially equivalent” to the federal law. It would be just deserts if Amazon opted not to come here due to our redneck ways. Written by Paul Dribin

Don Roe

I am giving a shout out today to a great guy, the Planning Director for the City of St. Louis, Don Roe. I have known him for years to be a great and highly competent guy. He has had to exercise enormous tact and patience working with neighborhood groups, high level city officials, and the myriad and Byzantine policies of the City of St. Louis. When I worked for HUD he was always the go to guy to get things done. Written by Paul Dribin

Vouchers and Housing Policy

Research clearly shows that poor people who move to a more affluent neighborhood do better in life. Unfortunately most affordable housing in St. Louis and elsewhere is constructed in lower income neighborhoods. HUD, under the Obama administration had tried to address this problem.

Up until now, Section 8 fair market rents were set for an entire metropolitan area. Therefore the rent structure in Wellston was the same as in Ladue. On an initial limited basis, HUD is changing the policy and determining fair market rent by zip code, therefore allowing higher rents in more affluent areas. Where tested, the concept has seemed to work.

To be sure, the policy has detractors. Housing authorities complain the policy is too bureaucratic. Housing practitioners are concerned that the policy if fully implemented would drain inner city neighborhoods of population and good tenants. These are both valid issues, but I believe the policy should be tried. The Trump administration unfortunately is eliminating the new rule that would implement it. Written by Paul Dribin

NIMBY in Webster Groves

Lutheran Senior Services a great senior housing provider had proposed constructing a 50 unit tax credit affordable housing project on their campus in Webster Groves, where I live, a suburb of St. Louis. The community once again reacted harshly, opposing the project for all the usual reasons, noise, density etc, even though it would be part of an existing campus and hardly noticed. In 2004 I was hired by Lutheran Senior to help develop a 202 low income senior project with the same results. People in our community attend church on a regular basis but don’t seem to get the message. Written by Paul Dribin

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