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Housing renovation funds may displace hundreds of families

Submitted by News Desk on Mon, 03/09/2009 - 3:43pm
Source: 

Stop the displacement: Pack the CEDA meeting Tuesday, March 10, 2-4:30 p.m., at Oakland City Hall, Hearing Room 1, first floor

Oakland - Low-income renters have long complained about being barred from so-called affordable housing developments because they do not earn enough money. And residents of those developments live in fear that renovation schemes will end up displacing them.
© Michael Democker, Times-PicayuneIn recent months, two Notices of Funding Availability (NOFA) were made available for affordable housing projects by the City of Oakland. NOFA-1 is for new construction and substantial renovation of low-income housing, and NOFA-2 is for the renovation of existing low-income rental housing. The funding comes from HUD’s HOME program and other sources.

During November 2008, 11 NOFA applications were submitted to the City requesting $13 million in funding to renovate, rehabilitate or preserve a number of low-income housing sites citywide, placing hundreds of low-income renters at risk of being displaced due to a lack of housing available for relocation while their homes are being renovated. Some of these NOFA applications seek funding to renovate properties that they have not acquired beforehand - properties that are currently in legal dispute.

John Murcko, an attorney for the tenants at the California Hotel, says, “The district attorney and the state attorney general should commence an immediate investigation of Oakland’s CEDA [Community and Economic Development Agency], Marge Gladman and the office of the mayor of Oakland. Once again, the City is giving away property that the City should keep and run as low-income housing. The purpose of government is to provide for the general good of the people. The purpose of developers, landlords and banks, is to make money at the expense of working people, tenants and homeowners.”

In the past eight months, when over 500 low-income renters in housing developments abandoned by Oakland Community Housing Inc. (OCHI), including the California Hotel, were faced with displacement, many refused to move after realizing they had nowhere to go. The latest batch of NOFA applications include some from developers who are seeking funds from the City of Oakland in an effort to take over some of OCHI’s abandoned properties, regardless of the legal issues that may be involved.

The developers will seek approval of their NOFA applications by Oakland’s Community and Economic Development Agency (CEDA) during a 2 p.m. meeting on March 10, before seeking approval by the City Council on March 17. A few months from now, more NOFA applications may be filed by developers who are seeking additional funds if needed to finish their projects.

As part of the NOFA process in Oakland, the developers seeking letters of support for their NOFA proposals may go before one or more committees before seeking a final vote of approval by CEDA and the City Council.

During a few committee meetings in recent months, it was Marge Gladman of CEDA who presented an overview of the latest NOFA and NOFA-2 requests on behalf of the developers seeking letters of support. In addition, Gladman gave her own nod of approval to the proposals before the committee members voted on them.

Astonished by what was occurring during one meeting, some committee members suddenly expressed alarm that they were being asked to offer letters of support for the rehabilitation of several occupied OCHI sites by developers who have not acquired the properties beforehand, while the legal status of OCHI’s properties is still in question, since the housing organization has dissolved and become nonfunctional in recent months.

During a Nov. 3 meeting of the Central City East Project Area Committee (CCEPAC), its members had numerous questions and concerns about the legal status of the properties OCHI abandoned and the City’s response, according to documents. Concerns include legal and financial issues, the other lienholders of OCHI properties and the City’s methods of addressing their questions.

Resources for Community Development (RCD), a local housing developer, is seeking developer fees and legal fees to enable it to take control of some of the properties OCHI abandoned. On Nov. 3, Eugene Smith of CCEPAC questioned whether this would be a welcome takeover and whether CCEPAC should be involved before the property was legally acquired by RCD and renovated with NOFA funds.

Through NOFA, the City is offering developer’s fees of $5,000 per unit up to $150,000 per building. The $5,000 appears to be a bonus in addition to the renovation funds.

During recent months the City of Oakland has asked a number of developers to work with the City in taking over OCHI’s 25 housing developments. Though they have been abandoned by OCHI, they are still occupied by renters.

In addition to seeking developer fees and legal fees from the City, RCD is also seeking $1.2 million in NOFA funds, according to CCEPAC documents, to renovate Marin Way Court by addressing some dry rot, water and soil erosion issues and a roof replacement. Abandoned by both OCHI and the John Stewart Co., Marin Way houses 20 low-income families.

RCD is also asking for $2.4 million in NOFA funding to renovate Eldridge Gonaway Commons, built in 1982, another property abandoned by OCHI. It houses 40 low-income families. RCD’s NOFA proposal seeks funds for dry rot repair and the replacement of exterior structural support and garage doors.

CCEPAC member Sheryl Walton expressed concern about RCD seeking funding for properties that are only around 25 years old through CCEPAC.

Corona Rivera of CCEPAC asked why certain maintenance issues were not addressed at these properties and Lisa Motoyama of RCD responded that the previous owners may not have been made aware of the issues, but that the issues are present now and need to be addressed.

CCEPAC member Kathy Chao wanted clarification on RCD’s desire to ask for funds on a project they don’t own, and asked how will RCD conduct improvements on such a property?

East Bay Asian Local Development Corp. (EBALDC) is requesting $1.3 million in NOFA funding to rehabilitate Slim Jenkins Court, where 32 occupied two-bedroom low-income homes were abandoned by OCHI.

As the CCEPAC members expressed astonishment, questions and concerns about the legal status of OCHI’s abandoned properties and the methods the City is using, Marge Gladman of CEDA tried to soothe their fears by stating that OCHI is insolvent and unable to maintain its properties.

“The City of Oakland has asked a number of developers to work with the City in this process, and the amount requested for developer and legal fees is acceptable by the City. Otherwise, the various issues associated with OCHI properties could be inherited and need to be addressed. This NOFA-2 process is one of the processes that the City has set up to help address the former OCHI properties,” Gladman said.

Drasnin Manor was completed by OCHI in 1993 at a cost of $2.4 million for very low and low-income households. It includes a courtyard, a community room, laundry room and parking for its residents and was worth around a $5.3 million as of May 2008. Documents reveal that Drasnin Manor’s gross income is estimated to be around $15,000 per month. During recent years the City of Oakland loaned OCHI an additional $1.5 million to operate and maintain their numerous properties.

Albert Casey, a low-income renter, lives with his family at Drasnin Manor and was shocked by the latest NOFA proposals heading before CEDA and the City Council. “I am flabbergasted by what has been happening to OCHI’s properties and wonder why an investigation has not taken place. No one from the City has been telling us anything, and the thought of developers trying to seek NOFA grants or loans to renovate properties that they have not acquired and do not own sounds totally illegal and un-American to me.

“I am very concerned about our situation at Drasnin Manor, and I want people to know that I will not be forced out of my housing,” said Casey. “Since OCHI abandoned us around last May, the tenants have still been paying their rent, we still have a resident manager on site, and there’s around 10 families or more residing here that have not been frightened into moving away. We do not want to move. There’s nowhere to go.”

Presently the rental housing vacancy rates are 2.7 percent in Oakland and only 2.5 percent in Alameda County, according to NationalRelocation.com, making it very difficult indeed to find housing for low-income renters in the East Bay.

During June of 2008, Oakland’s City Council voted to release $900,000 in relocation funds to help OCHI displace over 500 very low income households out of their properties throughout the City. Many families were told that their best option would be to move into transitional housing - homeless shelters - because funding was inadequate to relocate the poor, elderly, disabled and their families into permanent housing.

Just Cause Oakland, an organization promoting tenants’ rights, was not aware that the latest batch of NOFA applications included several requests for funding by developers who have not acquired the abandoned OCHI properties beforehand. During several months of the past year, the organization joined up with OCHI’s abandoned tenants at the California Hotel, Nueva Vista, Drasnin Manor and Marin Way Court in their battle to save their homes.

According to an Oct. 7, 2008, statement from CEDA, NOFA is intended to facilitate emergency repairs and capital improvements as well as assist in the financial improvement of nonprofit owned affordable housing. There’s no mention that NOFA funds or the NOFA process is meant to assist in determining the legal status of abandoned properties in Oakland, and it appears that Gladman, the lured in developers and the City of Oakland may be intent on subverting the original intent of the NOFA process and may be misusing precious funds.

A recently as Aug. 6, 2008, 53 residents of the California Hotel and their attorney, John Murcko, filed a $53 million claim against the City of Oakland, believing that some city officials and OCHI may have been involved in a scheme to violate their rights and displace them. Marge Gladman and Sean Rogan of CEDA were both named as defendants.

In addition, the tenants of the California Hotel also filed a $2.5 million lawsuit against OCHI in recent months, after OCHI tried to unlawfully evict them from their housing and threatened to cut off their water and utilities.

Now comes NOFA. Try to imagine being a low-income renter facing displacement by renovation schemes just because the City and some greedy developers want to find out if it is legal to use NOFA funds or the NOFA funding process to take over properties whose legal status is questionable.

If the City can cover legal fees for the developers getting caught up into this NOFA morass, in all fairness the City should also find it reasonable to cover the legal fees of the low-income tenants being placed at risk of displacement when they end up in court fighting to save their housing.

Among the low-income tenants at risk of being displaced from their housing in future months due to NOFA renovations are some who reside in abandoned OCHI properties: Marin Way Court (20 units), Eldridge Gonaway Commons (40 units), Slim Jenkins Court (32 units), Drachma Housing (14 units), Hugh Taylor House (43 units), Oakland Point (9 buildings for low-income renters), Effie’s House (20 units), Casa Velasco and Posada de Colores (100 residents) and Marcus Garvey Commons (22 family townhomes). Each housing site is currently occupied.

Project Pride, located at 2545 San Pablo Ave., wants to rehabilitate 20 units in an existing vacant residential building and seeks $1.2 million dollars in NOFA funding. No tenants would be placed at risk.

Resources for Community Development (RCD) is seeking $840,000 to rehabilitate Drachma Housing, an occupied 14-unit scattered site managed by the John Stewart Co. and developed by RCD.

Unity Council seeks $1 million in NOFA funding to rehabilitate two of their properties, Casa Velasco and Posada de Colores, with a total of 100 residents or more. Unity Council claims that they cannot raise the rents high enough to cover the costs of the needed renovations at both properties.

CCEPAC documents also reveal that according to EBALDC’s Mary C. Lucero-Dorst, all the residents of Effie’s House will have to eventually be relocated due to planned renovations and that EBALDC plans to split them up so that one half of the tenants will be relocated for six months during renovations, and then they will switch and have the other half of the tenants relocated.

Documents reveal that relocation costs for the tenants were not factored into EBALDC’s $1.7 request for NOFA funds brought before CCEPAC during its Nov. 3 meeting. EBALDC filed its NOFA applications with CEDA on Nov. 17, 2008, and, according to documents, EBALDC plans to seek NOFA-2 funds for a total of six projects. Currently their top priority is Effie’s House.

A total of $13 million in NOFA funds or more have been requested during the current NOFA process, and the developers will ask Oakland’s Community and Economic Development Agency (CEDA) to approve their NOFA requests during a 2 p.m. meeting on March 10, before seeking approval by the City Council on March 17.

The current NOFA process in Oakland, which includes OCHI properties in the mix, raises many legal questions and may result in the displacement of hundreds of low-income families from their homes in the coming months.

Lynda Carson may be reached at tenantsrule@yahoo.com.

tenantsrule@yahoo.com