By Brian Park
In the Brooklyn neighborhood of Brownsville, public housing residents and their elected officials are voicing their concerns regarding pending legislation that could dramatically alter the funding and ownership structure of the nation’s public housing market.
Brownsville is home to the largest concentration of public housing developments in the entire nation. Within this one-square mile neighborhood, nearly 23 percent of Brownsville’s 85,161 residents live in New York City Housing Authority (NYCHA) developments. Comparatively, in all of New York City, NYCHA residents represent only 8.4 percent of the total population.
Because of this large concentration, Brownsville stands to be one of the areas most affected by the new legislation. Currently in its drafting stages in Capitol Hill, the Preservation, Enhancement and Transition of Rental Assistance Act, or PETRA, was first introduced to a congressional committee on May 25, by the head of the U.S. Department of Housing and Urban (HUD), secretary Shaun Donovan.
Citing a lack of federal resources and the HUD’s own inefficiency in dispersing funds, Donovan presented PETRA as a long-term solution to the nation’s public housing crisis. According to Donovan, the HUD owns a “backlog of unmet capital needs,” primarily for delayed repairs and renovation, in excess of $20 billion.
The HUD currently administers thirteen different rental assistance programs, each with its own unique set of rules, guidelines and staff. One of the aims of PETRA is to simplify its current system into one, streamlined process thereby quickly and efficiently meeting the needs of public housing tenants.
There is little objection to those reorganization measures but what has engendered most of the criticism are the proposals in the law that would shift funding for America’s public housing from federal resources to private capital.
Under the new guidelines set forth by PETRA, public housing authorities, like the NYCHA, will be able preserve federal funding by entering project-based contracts with the HUD, but at the same time, would also be allowed to seek private funding in the form of assisted ownership.
In his testimony to the House Financial Services Committee, Donovan emphasized that such a deal would be voluntary, but that the introduction of free market discipline, in this case private capital, is “key to meeting the current and ongoing capital needs of HUD’s public housing portfolio.”
Advocates say the potential introduction of private capital represents the most dramatic policy change in the history of America’s public housing. And while PETRA’s supporters, like NYCHA chairman John Rhea, are lauding Donovan for his progressive approach, some critics of the proposed legislation are calling it an attack against the nation’s poor, and that privatization undermines federal control and regulation over public housing.
Congressman Barney Frank, chairman of the House Financial Services Committee, questioned Donovan on the ramifications of PETRA, specifically on the issue of privatization. “Is there then a private entity standing in the shoes of government,” asked Frank. “What are the constitutional implications of that? That’s what concerns me.”
As outlined by PETRA, a public housing agency (PHA) that agrees to a project-based contract and enters into an assisted ownership agreement with a private entity will be subject to a use agreement with the HUD for a term of no less than 30 years. However, public housing advocates are concerned that at the end of such an agreement, an unregulated PHA will be able to raise rents, sell a development or yet worse, a development may be foreclosed due to financial negligence.
Christine Burke has lived in the Howard Houses for 15 years. She also serves as the president of her tenant association. Burke first heard of PETRA at a community information session about the legislation. Like many other public housing residents in Brownsville, she is concerned that the introduction of private resources and assisted ownership agreements will eventually force low-income tenants like herself out of their homes.
“When you privatize something, whoever owns it like a landlord, they can raise their rent. It could be a good thing, if the economy was better and there was more employment,” said Burke. “I can’t see raising the rents, going up on the rents and going so high that you just have to move in a cardboard box somewhere.”
Said Sandra Wilson, “Something has to be done but I don’t think PETRA is it. Banks coming in, taking over—they might come in and fix it up, but at what cost to us?”
According to 2008 census data, 48.1 percent of residents in Brownsville and nearby Ocean Hill received some type of income support—be it public assistance or supplemental security income. Census data shows that residents in the 11212 zip code for Brownsville have a per capita income nearly half that of the United States average—$10,666 to $21,587—and that 38.3 percent of all individuals were living below the poverty line, as opposed to 12.4 percent for the entire nation.
Congresswoman Yvette Clarke represents Brownsville in New York’s 11th district. While she has yet to definitively state her outright support or disapproval of PETRA, she believes the potential unintended consequences of privatization produces more questions than answers.
“Many of my constituents have raised this very concern,” said Clarke. “If this issue is not addressed, many believe that they could be put at risk of potentially losing access to one of the few sources of affordable housing left in our city, which many families of this community rely on for shelter.”
While no one is arguing against public housing reform, residents and advocates are unwilling to accept the legislation as it is. At the behest of chairman Frank and the House Financial Services Committee, Donovan and the HUD are currently in the process of redrafting PETRA so as to better ensure that public housing remains under some measure of control by the federal government, even after the conclusion of any agreement.
For Christine Burke, whatever good intentions and promises of long-term security that Donovan and the HUD profess do not deter her from her own personal projections of what might be if PETRA and privatization became a reality, as disturbing as they are.
“Maybe not right away, but it would probably throw Brownsville into a third-word country type scenario,” says Burke. “A lot of people live here. If everybody had to get a cardboard box, there wouldn’t even be enough room in Brownsville. Because that’s how many people are here.”
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