Public housing rehab sparks fears of privatization

Mel Reeves/MSR News RAD protesters in front of MPHA offices on May 22, 2019.

News Analysis

Debates around Minneapolis’ public housing woes have been brewing for years. Agencies like the Minneapolis Public Housing Authority (MPHA) and public housing advocates both contend there is a crisis — with the City’s 6,245 units in need of major repair and inadequate funding provided by the government to do so.

However, the road to resolution has been fraught with protests on whether proposed solutions will actually keep public housing public and affordable. Just last month, tenants from Glendale Townhomes and Elliot Twins Towers gathered to voice opposition to proposed plans by the MPHA to rehabilitate housing through the Rental Assistance Demonstration (RAD) project. Protesters said the MPHA refused to take public comments at the monthly board meeting, so they took to the streets on May 22.

Tenants say that the MPHA’s efforts will lead to private ownership of the properties, as MPHA would transfer ownership of properties to a nonprofit it would control. “RAD, along with the efforts to privatize scattered site public housing, could spell the end of public housing,” said Ladan Yusuf, activist and Glendale resident. “Scattered-site” homes refer to homes occupied by low-income families throughout the city.

The following week, on May 30, the Fifth Congressional District DFL (CD5) joined in the debate, passing a resolution regarding perceived threats to Minneapolis’ public housing via its renovation efforts.

The CD5 said, via Facebook, that these efforts “often result in hundreds (sometimes thousands) of people being displaced, and the public housing being replaced with privatized or sub-contracted to predatory management companies.”

MPHA, however, says its efforts are solely to upgrade and rehabilitate housing that has fallen into disrepair. “Nothing the public housing authority is considering contemplates the loss of a single unit, or giving up public control,” Jeff Horwich, MPHA Director of Policy and External Affairs, previously told the MSR via email. “The RAD program includes, in black-and-white, an absolute right-to-return to any property that has major work done. Residents cannot be permanently displaced, as a matter of federal law.”

With oversight from the Department of Housing and Development (HUD), RAD is designed to help agencies bring in private dollars to aide in their capital efforts. The program is the brainchild of former Minnesota Fifth District Representative Keith Ellison.

“If we write the RAD bill properly, we will not be losing public assets,” Ellison said in an interview with Shelter Force in 2012. He added, “If the private sector can help, and we can retain ownership of that public asset, I’m willing to at least see if it’s workable.” He also aimed for “a lot of tenant engagement.”

Residents and housing advocates, such as Defend Glendale & Public Housing Coalition, say that the initiative in its current form is more of an attempt to privatize public housing than to rehabilitate it.

RAD’s program structure allows housing agencies to partner with private and nonprofit enterprises to secure funds, as well as to change one form of subsidized housing to another. In this case, MPHA is moving to convert around 175 units at Elliot Twins to RAD properties. The authority has also begun the application process to convert another 730 units to a project-based voucher system.

This is a marked change from Section 8 vouchers that are tenant-based and may be used anywhere within the family’s current jurisdiction or within any jurisdiction with a Housing Choice Voucher program. With project-based, the tenant must live in specific housing available to them and will no longer receive benefits once they move.

Photo by Ridwan Osman Protester holding signs that means “We don’t want RAD” in Somali.

But, like other housing agencies across the country, the MPHA says continued budget shortfalls are forcing them to find monies to rehabilitate and renovate public housing that has fallen into disrepair. Much of their ire stems from consistently underfunded public housing from across the country, which has led public housing agencies to seek alternative funding sources.

Horwich told the MSR those private dollars are needed to address a budget shortfall. According to him, $140 million is needed for basic repair needs such as heating and cooling systems and pipings. Congress has only allocated $14 million.

He said the RAD program would allow MPHA to inject millions of dollars of funding into existing publicly subsidized housing by borrowing from a bank, philanthropic organization, or foundation.

Horwich explained that this is why MPHA is seeking out a “private enterprise that is able to invest in public housing.” In exchange for their investment, the investor would be allowed tax credits on their taxes. “The banks are in it for business reasons,” explained Horwich. “Does that private enterprise get to raise the rent? The answer is no.”

HUD is responsible for overseeing RAD and enforcing all of the guarantees made to tenants, including rents not being raised and existing tenants not having to be rescreened for a voucher. It also includes the right of tenants to organize and have a say in the design of renovations.

“Lots of promises have been made on paper,” housing advocate Fouzia Abdishakur told the MSR. She said she has been alerting Elliot Twins residents of the possible pitfalls with the RAD rehab. “Our concern is that sometimes these promises have not been fulfilled. Government saying ‘trust us’ just does not work,” she added, sharing residents’ fears that once the private sectors’ agreements with the City expire, they will lose access to affordable housing.

“The City of Minneapolis and MPHA want to end public housing as a public good,” added Yusuf. “This will displace over 12,000 people, the majority of whom are Black and Black Muslims, seniors and disabled. This is the same plan that Trump and Ben Carlson are pushing.”

Defend Glendale has co-founded a new coalition, Keep Public Housing Public Minneapolis Coalition, to address their concerns with the MPHA. The MSR will continue to follow affordable and public housing issues as they unfold.