HUD’s Transforming Rental Assistance Proposal Stirs Debate

Source: US Department of Housing and Urban Development

A recent proposal from the U.S. Department of Housing and Urban Development (HUD) has attracted both praise and concern among affordable housing advocates. The Transforming Rental Assistance (TRA) initiative—which has yet to become a formal Congressional bill—was recently presented to the House Financial Services Committee. The proposal has three broad goals 1) to streamline and simplify HUD’s numerous rental assistance programs 2) to allow public housing agencies to access private capital by converting to new funding contracts and 3) to promote resident choice regarding their housing’s location.

In his recent testimony before the House Financial Services Committee, HUD Secretary, Shaun Donovan, stressed the importance of the TRA initiative. He noted that the public housing stock “currently has a backlog of unmet capital needs that may exceed $20 billion dollars,” and that 150,000 public housing units have been lost in the last 15 years alone “through demolition or sale.”

Among the proposal’s supporters, Will Fischer, a Senior Policy Analyst with the Center on Budget and Policy Priorities, has called the TRA “the most important new initiative to preserve federally subsidized housing in more than a decade.” Fischer writes that the multi-year, $350 million dollar proposal “would help preserve an estimated 300,000 affordable apartments…in its first year.”

The President of the National Low Income Housing Coalition (NLIHC), Sheila Crowley, while noting that the proposal is “not perfect,” also supports the TRA initiative. “The TRA proposal demonstrates HUD’s dedication to preserving our nation’s underfunded public housing while protecting tenant rights and establishing mechanisms to provide extremely low income people with more housing options,” Crowley said in a statement on the NLIHC website.

However, the TRA proposal has garnered opposition as well. The National Economic and Social Rights Initiative (NESRI), and other housing advocates have questioned the proposal’s potential to lead to the privatization of public housing. With new funding contracts, owners would be able to take out mortgages for much needed building maintenance and repair. Some worry that in the case of a bankruptcy or foreclosure, the properties would fall into private hands, thereby diminishing the stock of affordable properties and undermining the rights that tenants enjoy with public housing.

In a joint publication with National People’s Action, Tiffany M. Gardner, Director of the Human Right to Housing Program at NESRI, has written that converting public housing to project-based section-8 units, “raises many questions and potential dangers, including public housing switching from public to private ownership and decreasing the accountability mechanisms currently available to residents. While both the public housing and project based Section 8 programs play important roles in housing our most vulnerable communities, both have a separate set of strengths and weaknesses and are not substitutes for each other.”

The issue of privatization has also been raised very prominently in a recent series of articles at the Huffington Post, involving Professor of Cognitive Science and Linguistics at the University of California, Berkeley, George Lakoff and HUD Secretary, Shaun Donovan. Lakoff first discussed the TRA proposal and the possibility that foreclosures would lead to privatization, here. Shortly afterwards, Secretary Donovan offered his own explanation and defense of the TRA proposal—stating explicitly that “What this bill won’t do is “privatize” public housing.” Donovan added that:

By allowing public housing properties to voluntarily tap their inherent value to meet their capital needs like owners of other affordable housing are able to do, this legislation levels the playing field – increasing the likelihood that properties will remain publicly owned and affordable to the lowest-income households.

In addition, HUD’s FAQ page on the TRA initiative specifically addresses the issue of foreclosure:

Q: Will there be protections to avoid losing units to foreclosure?

A: Yes. The rental assistance contract for converted properties would remain in place, whether or not the loan is insured by FHA. In the unlikely event that a lender forecloses on a loan, the property must remain affordable when transferred to a new public agency, not-for-profit organization or other owner.

However, questions regarding privatization remain. Following Donovan’s post, Lakoff issued another post of his own, this time drawing upon questions Donovan faced by US Representatives Barney Frank and Maxine Waters at the Financial Services Committee. While Lakoff is reassured that the bill has not yet been taken up by a Committee and “HUD’s attempt to privatize all of America’s public housing has been put on hold—for now,” he expressed concerns that linguistic finessing in the proposal allows HUD to simply define away the problem of privatization.

Damaris Reyes, representing National People’s Action—which describes itself as “a  Network of community power organizations from across the country that work to advance a national economic and racial justice agenda”— has also raised questions about the TRA proposal. In addition to questioning the possibility of privatization, whether units would remain affordable over the long term, and how the proposal would affect resident rights—Reyes has also introduced broader concerns:

The need for repairs and maintenance on this scale is irrefutable, but it is worth taking a moment to reflect on why there is such a massive amount of money needed to make our public housing viable. It is because the current Administration, previous Administrations, and Congress as a whole have failed to act. … We are here today discussing this bill because this country has refused to live up to its responsibility to care for our nation’s most vulnerable, and has starved public housing of the necessary resources. So now we are looking to the private market to save our public assets.

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