Below the Radar: HUD is Trying to Privatize and Mortgage Off All of America’s Public Housing
GEORGE LAKOFF FOR BUZZFLASH
The Obama Administration’s move to the right is about to give conservatives a victory they could not have anticipated, even under Bush. HUD, under Obama, submitted legislation called PETRA to Congress that would result in the privatization of all public housing in America.
The new owners would charge ten percent above market rates to impoverished tenants, money that would be mostly paid by the US government (you and me, the taxpayers). To maintain the property, the new owners would take out a mortgage for building repair and maintenance (like a home equity loan), with no cap on interest rates.
With rents set above market rates, the mortgage risk would be attractive to banks. Either they make a huge profit on the mortgages paid for by the government. Or if the government lowers what it will pay for rents, the property goes into foreclosure. The banks get it and can sell it off to developers.
Sooner or later, the housing budget will be cut back and such foreclosures will happen. The structure of the proposal and the realities of Washington make it a virtual certainty.
The banks and developers make a fortune, with the taxpayers paying for it. The public loses its public housing property. The impoverished tenants lose their apartments, or have their rents go way up if they are forced into the private market. Homelessness increases. Government gets smaller. The banks and developers win. It is a Bank Bonanza! The poor and the public lose.
And a precedent is set. The government can privatize any public property: Schools, libraries, national parks, federal buildings — just as has begun to happen in California, where the right-wing governor has started to auction off state property and has even suggested selling off the Supreme Court building.
The rich will get richer, the poor and public get poorer. And the very idea of the public good withers.
This is central to the conservative dream, in which there is no public good — only private goods. And it is a nightmare for democracy.
The irony is that it is happening under the Obama administration. Barack Obama, running for office, gave perhaps the best and clearest characterization of what democracy is about. Democracy, he has said, is based on empathy — on citizens caring about and for each other. That is why we have principles like freedom and fairness for everyone. It is why social responsibility is necessary. The monstrous alternative is having a society where no one cares about or for anyone else.
HUD, under the Obama administration, is about to take a giant step toward that monstrous society.
Here is a quote from the PETRA bill. It’s intent is to:
provide the opportunity for public housing agencies and private owners to convert from current forms of rental assistance under a variety of programs to long-term, property-based contracts that will enhance market-based discipline and enable owners to sustain operations and leverage private financing to address immediate and long-term capital needs and implement energy-efficiency improvements.
Along the way, tenants’ rights will be trampled, since tenants could not longer seek redress from the government through their public officials — because the government would no longer own the buildings.
Stop PETRA. This is urgent. There is a hearing next Tuesday, May 25, before the House Financial Services Committee and the Subcommittee on Housing, organized by Rep. Maxine Waters. Phone: 202-225-2201. Fax: 202-225-7854.
To write to the committee:
http://financialservices.house.gov/contact.html
Write to your Congressperson now.
If you want to sign a petition, go to:
http://www.gopetition.com/petitions/save-public-housing.html
Here is a letter from the National Association of HUD Tenants:
http://www.saveourhomes.org/kaymathew/trapositionpaper.pdf
Here is an informational website, with letters, background information, and alternative proposals:
And do what you can to get the word out. This requires a national discussion.
George Lakoff is the author of The Political Mind and Don’t Think of an Elephant! He is Goldman Distinguished Professor of Cognitive Science and Linguistics at the University of California, Berkeley.
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Public Financing of Private Development
In Richmond, Virginia our housing authority recently discussed "Mixed Finance Development" which is another way of saying public money being given to private developers for private developments.
Here's video of the discusssion on Mixed Finance Development with a hired consultant.
http://vimeo.com/11158751
Let's keep our public housing and let's make it better. I like 'garden apartments."
= = = = = = = = = = =
http://www.freeparty.us
"The ownership society"
This legislation seems consistent with the recently passed financial reform (sic) bill in the Senate. Here's a partial list of flaws from Karl Denninger at The Market Ticker:
Who are these guys trying to kid?
The most-important part of the bill, stopping derivative abuse, was watered down to the point of irrelevance.
The exceptions and exemptions that remain for OTC trading are big enough to drive 200 West Street through - sideways - and Goldman will do exactly that. So Now We have Financial Reform K. Denninger
We should fight against bills like this. At the same time, we need to recognize that we live in an age of controlled opposition where perceived victories are really just postponed defeats. We all know the pressure for real financial reform but those who claimed that they would deliver acted as skilled agents for the status quo.
We need fundamental systemic change, an entirely new ecnomic system based on human needs, substantial opportunities to produce useful goods and services, and respect for labor. There's no way to get there from where we are right now and there are just a very few in office who share that goal. We must end the perpeetual occupation of the United States by that biipartisan monstrosity, The Money Party.
once again...
More evidence that we are living through Bush's third term. A corporate Democrat is no different than a corporate Republican.
There Is A Slight Difference
Corporatist Democrats cry crocodlie tears when talking about the victims of corporatism. Corporatist Republicans can only gloat over their supposed superiority.
Privatizing Public Housing is Doomed to Fail Miserably
Ever wondered WHY the Bush administration never attempted to privatize public housing? Because of two things:
1) Pulbic housing is owned by STATES and/or MUNICIPAL governments. The Federal Government doesn't own a single such project, therefore, it has NO AUTHORITY to privatize them.
2) Public housing is RENTAL HOUSING, and rental housig is NOT PROFITABLE. There have been no new privately-owned RENTAL HOUSING built since the 1980s.
So where does Geroge Lakoff get his information about HUD privatizing public housing when it doesn't own any?
Privatizing Public Housing
Where I live in California, the county administers public housing, but management is done by a private company. The original loans to build public housing were awarded by HUD through bid contracts. These were very low interest, long term loans - 50 years is what I think I remember. They were built mostly in the 1970's. I don't know who owns the ground on which they were built. Over the years, there have been rumors that once a certain percentage of the loans were paid (I heard 50%) that the loans could be fully paid, and the owner would no longer be subjected to HUD's rules. Ultimately, the owner would be free to charge whatever rent he/she felt he/she could get.
Right now, there are many, many rentals sitting vacant, because people are leaving the area due to lack of economic opportunity. There are very few high paying jobs, because over the years as the mines and the lumber mills closed, the area has become more economically depressed. Most jobs are minimum wage at either restaurants, fast food joints, or convenience stores. (There are always seems to be an abundance of these types of businesses in semi-rural areas. Something that I have never understood.)
If public housing disappears in this area, it will add to homelessness, a growing number of rental vacancies, and a lack of human, minimum wage fodder to fill those jobs. While there are those who advocate the end of public housing, because they don't want to support it with their tax dollars; they must also realize that if there isn't a work force for mac do-do's, there will be no mac do-do's.
It makes me really wonder what the hell is wrong with the Obama administration. It looks like that a lot of the same people that worked under Clinton (it seems like the same ideas are prevailing) are here, again. And I thought we were rid of these folks. Actually, it is looking like nothing has changed since nixon took office.
privatization is corruption
Oddly, Obama got privatization exactly right on student loans and exactly wrong on everything else.
On student loans, he correctly said that privatization added a layer of cost for subsidies and profits for banks--money that could be spent directly on student loans if it were a government run program.
So by taking those loans away from banks, he made more money available for college students without necessarily increasing spending--a neat trick.
And yet on health care, K-12 education, and now public housing, he refuse to act on that same obvious analysis.
With health care, he refused to take it away from a private industry that added on arbitrary and excessive extra costs for their own profits. In the case of K-12 and public housing, he will make those services more costly and less effective by giving them to private contractors.
There is only one reason politicians like privatization: those who will profit from it can make campaign contributions and later offer jobs as lobbyists, CEO's, and board members when the politician leaves office. Public employees can't match that and a politician will only move to running a public agency as a bureaucrat if there is a way to use that position to enrich a past or future employer and get either a direct kickback of money or indirect in a future job.
And if someone gets a contract for a government function in this way, what are the chance there will be real accountability of how they do the job?
If the private sector wants to duplicate something the public sector does, great. Let them compete the way FedEx and UPS do with the Postal Service. But we don't need to funnel taxpayer money into private corporations pockets for that to happen.
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