Unfair Housing in Fair Housing

The federal government has long battled to provide housing for the poor and the elderly. The Department of Housing and Urban Development, for example, has a series of schedules and regulations that provide support for these goals. Their Section 202 program runs along the following lines: “HUD provides capital advances to finance the construction, rehabilitation or acquisition with or without rehabilitation of structures that will serve as supportive housing for very low-income elderly persons, including the frail elderly, and provides rent subsidies for the projects to help make them affordable.” HUD Website.

For years, the federal courts and HUD have been fighting to introduce minority affordable housing into middle class neighborhoods who have fought back under the premise that such lower-income housing has a negative impact on their existing house values. Effectively, federal statutes (primarily the Fair Housing Act of 1968) and regulations passed to implement those statutes – known generally as those “Fair Housing” requirements – literally force such minority housing to be open to individuals who might not have otherwise been able to afford living in such “better neighborhoods.” In short, the law and regulations made sure there was no local ability to keep “outsiders” out, and federal courts have added the necessary teeth to enforce these efforts.

But what happens when such minority/elderly projects are actually being built in the communities where those minorities already live, but where there is simply “not enough” housing to meet demand? Where the “insider-locals” already fall into that lower-income paradigm. Let’s face it, there are cities in the United States, where the real estate market has been on fire, in which the entire real estate market in every shade of every community has skyrocketed in cost and value. A million dollars buys you an 800 square foot closet, on average, in the overheated San Francisco market, which makes life that much more difficult for local minorities. Rents parallel the rising cost of the underlying real estate.

So when the San Francisco City Council determined that the poor and elderly needed more housing choices within their own local sub-communities, they voted, for example, to construct the new Section 202, federally subsidized, Willie B. Kennedy Apartment complex (pictured above), offering 98 single and one-bedroom choices in the SF Western Addition neighborhood (in the Tenderloin) where many elderly and African-American lower income residents already lived.

When the complex was announced in 2012, the local builder/operator wrote: “The Project is being constructed alongside the Rosa Parks Senior Apartments, a building acquired by TNDC [Tenderloin Neighborhood Development Corporation] [to be completed] in 2016 from the San Francisco Housing Authority as a RAD [“Rental Assistance Demonstration”] project. 32 studios and 65 one-bedroom units at Willie B. Kennedy will be restricted to senior households earning less than 50% AMI [“Area Median Income”]. To help meet San Francisco’s Ten Year Plan to End Chronic Homelessness, 20 units will be set aside for formerly homeless seniors.”  TNDC Website, 2/9/2012.

An open lottery for such lower-income applicants, with one giant string, was the mechanism for allocating the new residences. The giant string? To insure that outsiders didn’t grab all the units, noting that just living in SF was prohibitive for a whole horde of SF residents, the City Council made it clear that 40% of those units would be prioritized for those already living in the area immediately surrounding the new complex. San Francisco’s City Council was fighting their city’s accelerating gentrification trend, as lower-income minorities were being rather significantly squeezed out of the entire SF market.

In mid-August, however, the Department of Housing and Urban Development found that the efforts to bolster local minorities’ remaining in their own community was running afoul of the Fair Housing provisions that prevented discrimination against outsiders moving into such new Section 202 housing… even as the City’s goal was to stem gentrification and encourage minority occupancy.

Clearly, the underlying 1968 federal statute was not written to fight gentrification, which wasn’t the big issue back then; it was to build low-income housing, mostly on land in middle class neighborhoods. Today, there are simply additional housing problems, where the old law doesn’t work. “The [above HUD] decision pits a civil-rights law written decades ago to protect minorities from discrimination against a city trying to stem their displacement. And it heightens debate over how far cities can go in trying to maintain racial diversity…

“The effect [of that 40% local priority in the lottery], in one of the remaining San Francisco neighborhoods with a sizable black population, is that black tenants would have been more likely to receive some of the units. Long-time residents most threatened by the area's rising costs would have more likely benefited from the city's effort to create affordable housing here.” New York Times, August 18^th. So that law that was intended to benefit low income minorities (including black and elderly citizens) is required to be applied in a way that hurts the demographic it was intended to help. Yup!

Not only is housing in many major inner cities nasty for the elderly and the urban poor, but life can be very difficult for workers in lower level food services, hospitality, retail sales, clerical and secretarial, etc. services. Even entry-level jobs for professional and college-educated people usually do not pay enough to support nearby rentals. They either live far away with long (and often costly) commutes or live with families or with roommates stacked like sardines in tiny apartments. These cities need these workers, but the real estate market fights affordability at every turn. They need homes in or near their existing communities, not in middle class suburbs miles away!

The continuing income polarization, notwithstanding some serious softening in home prices (see my August 18^th, House, House, House blog), pits fewer people at the top of the economic ladder, who are acquiring key real estate in major urban markets, against lower-income incumbent residents. The wealthy buyout older buildings at staggering prices and reconfigure that real estate into chi chi upscale residences and office towers. With the values of the underlying real estate responding to this excessive demand, with rents following real estate prices, the lower-income residents are simply pushed out of their old homes over time. Gentrification. Even for working Americans, 70% of whom have lost buying power steadily over the last several decades, housing affordability increasingly eludes them as well. The rich live where they want to; the less affluent where they have to, no matter the strain, cost and inconvenience.

I’m Peter Dekom, and trying to tilt the playing field to level away from the one percenters plus the rest of the top of the economic pile and back to “most of us” is clearly extraordinarily difficult, and outmoded laws that are unlikely to find a sympathetic “amendatory” ear in a conservative Congress just won’t cut it anymore.