Roseland redevelopment should not be for the rich

By MAGDALENA RIDLEY - ROSELAND RESIDENT
Santa Rosa Press Democrat - Mar 18, 2007

Now that development in Roseland is on hold until we have an annexation plan, governmental officials sure seem serious about helping out. After years of neglect, it's suddenly all about fixing it up over here.
Toxic waste will be cleaned up and parks will finally appear, paid for with tax revenue from the redevelopment to come. It sounds beautiful.
Instead of people getting drunk in front of the boarded-up grocery store, I can see families strolling around a spacious plaza. Alongside the Joe Rodota Trail, storefronts and apartments could replace old warehouses and truck-storage yards. Where there are empty lots, we could have playgrounds or mixed-use buildings. I can imagine all of us Roseland residents smiling ear to ear as we walk around our clean, reinvested community.
Except redevelopment isn't that warm and fuzzy. Go to any recently redeveloped area and you can see how the original residents are excluded. In the beginning it is all about helping the neighborhood, but developers are interested in profits. Affordable housing and broad sidewalks are not nearly as profitable as expensive condos and luxury retail spaces.
When a place is driven by "economic feasibility" and "market demands," it gradually becomes too expensive for the very residents who were to benefit from the increased services and improved infrastructure in the first place. Which is why affordable housing is so important.
People live in second-rate neighborhoods because they are cheaper. Roseland is special because it has found ways to thrive in spite of that second-rate status. What has flourished here is a multicultural bastion of locally owned businesses and working-class residents. We should embrace that. The very idea of this unique community disappearing into a fog of high rents and chic stores makes me want to hold on tight to the dilapidated buildings, crummy roads and occasional shady characters.
Developers certainly won't mandate preservation of Roseland's working-class character. Sadly, it seems the city won't either. Santa Rosa requires only that 15 percent of any new housing development be affordable, and even that is easily waived. In mixed-use projects, there is no requirement. Citywide, new developments have been geared to the wealthy for just that reason - it is too easy to not bother with affordable housing.
But somebody has got to work in the grocery stores and do oil changes and teach school, and they deserve to live in nice places too. The Accountable Development Coalition, a broad group of local organizations that advocate for policy on developmental issues, has made an affordable housing recommendation for the Downtown Station Area Plan: 40 percent affordable units - 20 percent for individuals making under $42,000 a year, and 20 percent for individuals making under $63,000 a year.
These recommendations would be a good starting point for affordable policy in Roseland, and, really, they should be applied citywide. If we want our kids and workers to live here, we cannot just build luxury units in all the convenient spots and leave Burbank Housing to pick up the slack wherever it can.
Redevelopment in Roseland should include parks and a plaza and a community center. Existing occupied structures and our small businesses should be preserved. We should have police who are on foot. Most importantly, we must push for affordable housing. Redevelopment here could be amazing. It could be a chance to revitalize what is downtrodden and at the same time reinforce what is great. It could be a chance to sow hope instead of despair. Roseland and its residents, especially the kids, could finally get some acknowledgment and respect.
People talk about wanting to end the gang problem and stop crime and lower dropout rates, but they still want to treat the lower half of the economic spectrum like we are disposable. Redevelopment cannot magically erase the problems associated with not having money, but neither should it chase off everyone but the affluent. It should not be just another way in which the lower half is told they don't matter - especially here in Roseland, because we've already heard it enough.

Santa Rosa Settles Fair Housing Lawsuit

Halfway house, council reach agreement
By MIKE MCCOYTHE PRESS DEMOCRAT 3/14/07
Saying the city could ill afford to lose a costly lawsuit, the Santa Rosa City Council agreed Tuesday to pay $66,500 in damages and legal fees and to allow more people to live in a clean-and-sober halfway house.
"This is something we are being forced to do," Councilman Mike Martini said of the decision to allow The Living Place to house 12 people at its facility on Franklin Avenue.The group home opened in 2003. Within a few months, its operator, Jonathon Fong, became embroiled in a dispute with the city over whether he needed a use permit to operate the facility. While the city won that round, Fong sought to house 13 people in the home.
Two years ago, both the Planning Commission and council granted the facility permission to house up to 10 people, a combination of clients and staff. Fong filed a lawsuit in U.S. District Court in San Francisco, alleging that the limit violated the federal Fair Housing Act and the Americans with Disabilities Act as it applied to recovering alcoholics and drug addicts.
City Attorney Brien Farrell said Tuesday that rather than spending an estimated $300,000 on a lawsuit it could lose, the city reached an out-of-court settlement to allow Fong to boost his occupancy to 12 people. The settlement, unanimously approved by the council Tuesday, requires the city to pay Fong and his attorneys $32,500 in damages and $34,000 in legal fees. It also restricts the number of cars owned by residents of the house to nine, requires the addition of two parking spaces on-site and requires the operators to provide a hot-line phone number for neighbors to use if problems arise.
City planner Noah Housh said neighbors who attended a recent meeting said their primary issue is the "overall number" who will be living in the seven-bedroom home, near the corner of Lewis Road." Otherwise, they said the people there have been operating in a pretty respectful way," Housh said.
No neighbor showed up to speak against the settlement. David Grabill, a local attorney, said the settlement will provide additional space for those seeking recovery from alcohol and drug addictions. He urged the council to approve the settlement, which he said would allow the clientele "to be treated, not criminalized."

In Miami, a tangled tale of lost public housing

from the Christian Science Monitor
March 08, 2007
By Richard Luscombe

The feds are set to take control of a local agency amid charges that millions in public money were wasted or stolen.
MIAMI
When Caprice Brown and her three children were evicted six years ago from their rundown apartment in one of the most depressed areas of Miami, they were promised a sparkling new housing development that would revitalize the community.
Instead, they ended up in a single room of her aunt's already crowded house nearby. With little money for food and stripped of housing benefit vouchers, she slept on the floor while her sons aged 13 and 10, and her 11-year-old daughter shared the room's only bed. Then in January, she and her children moved into a private rental apartment.
Six years after the evictions, the 42-acre site in Liberty City that used to be their home remains demolished, fenced off, and abandoned.
Ms. Brown is among thousands of victims of one of the nation's biggest housing scandals, which saw millions of dollars of public money lost, squandered, or stolen while the Miami-Dade Housing Agency failed to deliver on promises of affordable new accommodations for its poorest citizens.
Hundreds of families were made homeless or simply disappeared from the system. They were waiting for help from an agency riddled by mismanagement and corruption, which is now the subject of a federal investigation that could have implications for low-income housing policy nationwide.
Meanwhile, the waiting list for public housing in one of America's most expensive cities for real estate has grown to more than 41,000 names.
"I'm angry about the lies that were told to us," says Brown. Her family was one of more than 850 uprooted when the agency pulled down the crumbling Scott Carver public housing project to make way for a partly government-funded revitalization project that was never built.
The stalled Scott Carver Homes project, for which the local authority accepted $35 million of government money, is the worst of many missteps dating back to 1998 that brought the agency to the attention of the US Department of Housing and Urban Development (HUD).
An audit released last week confirmed massive misuse of public funds, tax irregularities, and countless incidents of sloppy or suspicious recordkeeping. The agency, for example, employs only about 690 workers, yet 1,811 appeared on payroll records, 115 of them with Social Security numbers belonging to deceased individuals.
Another criticism was that at least $12 million was paid to developers, through a nonprofit corporation set up by the agency, for housing projects that were never started or were delayed. One developer, Oscar Rivero, faces criminal charges of taking $740,000 meant for 54 low-income houses in Little Havana to buy himself a luxury home in south Miami.
A second, Raul Masvidal, was arrested last Friday on charges of grand theft and organized fraud. Among his alleged crimes? Skimming $150,000 from public money to buy himself a sculpture of a watermelon.
HUD secretary Alphonso Jackson's response was to send a "hit squad" of seven investigators to Miami, and he announced last week that he intends to take the rare step of ordering a federal takeover of the agency's finances and services. Miami-Dade Mayor Carlos Alvarez is resisting, claiming that the county had turned a corner by replacing the agency's leadership with a new director of housing and team of experienced advisers.
"We've taken the most aggressive steps we possibly can, and I don't believe the federal government can do a better job," Mr. Alvarez said in a statement.
Those steps include new plans for the Scott Carver site that would see all 850 of the demolished units replaced. The original plan was to rebuild less than half that number.
The tug of war, however, goes far beyond local authority complacency and cuts to the heart of government policy toward public housing for the nation's poorest residents, experts say.
When it was set up in 1993, the Hope VI program was designed to inject federal funds into areas where public housing was "severely distressed," such as Liberty City, and build new developments mixing private and public accommodation.
But only 60 of the 237 projects funded with about $5.7 billion of government money nationwide have been completed. Meanwhile, many displaced families who were given vouchers to help them pay rent in the private sector lost their benefits through complications in the system.
Voucher problems exacerbated delays to Hope VI projects, says Chuck Elsesser, a board member of the National Low Income Housing Coalition and an attorney with more than 30 years' experience in affordable housing legislation. "When you look at the projects around the country, you ask two questions: Did it get built, and did the people come back?" he says. "A few do, but a lot get lost. In a short space of time families who had been living without any problems for decades were losing their subsidies and becoming homeless.
"Even with vouchers, you've got to have a landlord that will accept them. In Miami, they were sending people out into one of the hottest housing markets in the country. It didn't work here, and it did work in other areas," Mr. Elsesser adds.
Now some are urging Congress to do away with the program altogether. "Neither the housing agency nor HUD has done right by the people when it comes to Hope VI," says Tony Romano, organizing director of the Miami Workers Center, which is supporting displaced families. "The plan from the beginning was a failure. It's not about finishing what they started. It's time for a whole new plan."
Mr. Romano cites a study by the Research Institute for Social and Economic Policy at Miami's Florida International University that shows that more than half of 187 former Scott Homes residents interviewed lost their benefits, known as Section 8 vouchers.
Donna White, a spokeswoman for HUD, acknowledges problems but says it is unfair to judge the program by what happened in Miami. She points to Atlanta, Chicago, and Tampa, Fla., as areas where projects have been successful. "In some cities it hasn't been a nightmare. In some it has," she says. "I wouldn't like to paint a broad stroke on the program."
The program was never intended as an instant fix, says Susan Popkin of the Urban Institute's Metropolitan Housing and Communities Center, who has studied five Hope VI projects nationwide. "In Chicago, it started out a mess but over time it began working. But it took a strong support system and a lot of oversight to get there," she says.
Full HTML version of this story which may include photos, graphics, and related links

The Housing Bubble Starts to Burst

[Here's an article by Dean Baker, an economist and columnist for Truthout Online Magazine]
Is there anything as beautiful as the sound of surprised economists in the springtime? I haven't had this much fun since the NASDAQ started to deflate seven years ago.
Okay, enough of the gloating; while the collapse of the housing bubble was both predictable and inevitable, it is not pretty. Tens of millions of people will be hurt as they see much of the equity in their homes - money that most had counted on to support their retirement - disappear. Millions more will be forced out of their homes as they find that they are unable to meet the payments on adjustable rate mortgages that reset at higher rates. People who had worked hard and saved in order to become homeowners will see their dream disappear.
The timing and process of the unwinding of the bubble cannot be known, but the basic story is clear. Investors are finally realizing that the high-risk mortgages they have been holding are high-risk.
Mortgage brokers, who make their money on issuing mortgages, not holding them, had been anxious to get as many people as possible to buy mortgages. While old-fashioned bankers would demand large down payments and good credit histories, many mortgage brokers were happy to issue mortgages that they knew buyers could not pay off. Since the brokers dump their mortgages in the secondary market almost immediately after they are issued, they have little reason to be concerned about whether the buyer can actually meet the payments.
Mortgage brokers were able to entice more people into the housing market with low "teaser rates" that were often several percentage points below the market rate to which the loan would eventually reset. Many homebuyers who could meet their monthly payment on a mortgage with a 1.5 percent interest rate would be hopelessly over their heads when the mortgage reset to a 6.5 percent rate.
But, everything was fine, as long as home prices continued their rapid appreciation. If a homebuyer's income wasn't high enough to make the mortgage payment, the homebuyer could draw on the new equity created by a rising home price. As a result, delinquency and foreclosure rates remained low through 2004 and 2005, even as the number of high-risk mortgages soared.
However, the party began to end last year as house prices started to fall. The fall thus far has been relatively modest (around 3 percent nationwide), but with prices going in the wrong direction, most new homebuyers have no equity that they could rely upon to meet their monthly payments. As a result, delinquency rates began to soar in 2006. More than 10 percent of the subprime adjustable rate mortgages issued last year (the most risky category) were already seriously delinquent or foreclosed within 10 months of issuance. This is even before any of these mortgages reset to a higher interest rate.
With foreclosure rates soaring, the music is about to stop. The investors who bought up these mortgages in the secondary market are now refusing to lend more money. Credit is drying up for both the subprime and the Alt-A market, which is a notch above subprime in creditworthiness. These two segments of the housing market together accounted for 40 percent of the mortgages issued in the last two years.
If 40 percent of potential homebuyers suddenly have problems getting credit, it has to have a large impact on the housing market. Throw into the mix that the inventory of unsold homes is 25 percent higher than at the same time last year. And, the number of vacant units up for sale (normally an indication of a highly motivated seller) is up more than 40 percent compared to last year. Since house prices fell by three percent last year (six percent in real terms), it looks like we have the beginnings of a serious slide in house prices. And, a sharp fall in house prices will lead to more problems in the mortgage market.
That is the story of a collapsing housing bubble. It is not pretty. It was predictable. However, the experts either looked the other way or said everything was fine. And, the politicians pushed policies that persuaded many moderate-income families to buy overvalued homes that they could not afford. And the mortgage brokers made a fortune selling bad mortgages.
That is the way the US economy works these days. Those who mess up the economy do well, while their victims - in this case millions of moderate-income homebuyers who will lose their homes - pay the price for the experts' mistakes.
Dean Baker is the co-director of the Center for Economic and Policy Research (CEPR). He is the author of The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer (http://www.conservativenannystate.org/). He also has a blog, "Beat the Press," where he discusses the media's coverage of economic issues. You can find it at the American Prospect's web site.