Urban Politics #69: Spending Money On SHA’s Rainier Vista

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By City Councilmember Nick Licata.

Urban Politics (UP) blends my insights and information on current public policy developments and personal experiences with the intent of helping citizens shape Seattle’s future.


Spending Money On SHA’s Rainier Vista

I’ve joined City Council Member Peter Steinbrueck, County Council Member Larry Gossett, and State Representative Velma Veloria in opposing the Seattle Housing Authority’s (SHA) proposal to the Department of Housing and Urban Development (HUD) for $135 million in HOPE VI dollars to redevelop its Rainier Vista garden community. The 37th District Democrats and King County Democrats have also passed resolutions to send a letter to HUD about their reservations as well. Here is a summary of the concerns raised.

1. The lack of broad tenant support for this redevelopment

The original HOPE VI proposal for “renovating” Rainier Vista had a substantial tenant support but after two years of meetings with residents, the proposal changed to a demolition and rebuild project. As a result 170 residents have signed a petition opposing the redevelopment and the Rainier Vista Leadership Team Board is seriously divided: the Board’s vote to support the proposal was 7-5.

2. Public funds could be spent renovating rather than demolishing Rainier Vista

A SHA memo states that “to bring all of the units up to code and add an on-site drainage system would cost $37.5 million.” This begs the question, why are we considering a $135 million dollar total redevelopment because of a need for a $37.5 million renovation? SHA says that they could not cover a renovation of this magnitude consequently they are seeking Federal funds that are available but that also require far more extensive work at 9 times the cost.

An alternative approach suggests that gradual renovations could be pursued. SHA receives $13 million a year for modernization from HUD and $13 million for operations. SHA should develop a plan for phasing in improvements over a period of years, to avoid a single lump sum financial hit to their budget. It would seem doable since SHA has already phased in renovations at Rainier Vista over the last two years to make $8 million of infrastructure improvements.

3. Public housing units serving those below 30% of median income could be lost

There are 481 units at Rainier Vista, home to families with an average income of $9,400 or approximately 20% of median income. The current HOPE VI plan contemplates replacing those 481 units serving the very poor with only 250 units of public housing serving very low income people.

If SHA committed to one for one replacement of public housing units serving comparable income populations at this site, the project would at least not displace residents. It is commendable that the proposal adds 200 homes for purchase for families making 80% of median income (approximately $40,000/year for a family of 3), 100 units for very low-income elderly, and 300 homes for purchase without any income eligibility restrictions. Yet, the current proposal displaces one segment of the population for another. We currently have 15,000 households in Seattle on a waiting list for the very public housing units SHA wants to demolish.

There are also 130 units of off-site replacement housing in SHA’s plan, but these are not funded at this time. The plan proposes to partner with non-profit developers to build these units, with SHA paying a fraction of the costs. The rest of the funds would come from the state trust fund, state tax credit dollars, limited state bond cap, or city levy dollars. These are scarce public funds that should be used to expand our stock of low-income housing not for replacing existing low-income SHA units.

4. The HOPE VI Federal program may push Seattle residents out of the city

Another SHA memo states that at the SHA redevelopment of the Holly Park garden community, (see Urban Politics #17 and #37), “of the 240 people who chose Section 8 as their relocation option, 62% found housing in the City of Seattle.” Section 8 is a Federal assistance program using rent vouchers that allows the recipient to find an apartment anywhere.

Unfortunately, market rents in Seattle generally exceed HUD thresholds, the result being that HUD will not pay the landlord the full difference between the voucher and the market rent. With Seattle neighborhoods having a vacancy rate between 1 and 2 percent, renters with Section 8 vouchers already are having a hard time finding housing. Consequently many displaced Rainier Vista tenants will likely be pushed out of the city.

I’m concerned that those who can’t find housing in Seattle will reconcentrate into suburban pockets of poverty, contradicting the HOPE VI goals of mixed-income communities. A National Housing Institute report on HOPE VI notes “in San Francisco many developments being demolished are predominately minority occupied, often in well-integrated, mixed income neighborhoods. When given a portable voucher, many choose to move to more heavily minority neighborhoods with lower median incomes – often in areas where they can afford to rent. An investigation by the Chicago Reporter cited similar findings in that city.”

5. Conclusion

The HOPE VI goals of integrating support services with public housing and developing mixed-income communities are laudable goals. Yet in the face of shrinking federal housing dollars, this program could have the unintended consequence of actually reducing the number of public housing units for the poorest segments of our community. The same National Housing Institute report cited above states that more than $3 billion dollars has been spent to “redevelop” 47,856 units of public housing. The result has been a loss of 23,000 public housing units, and of about 7,600 hard-units overall.

I am not only concerned about SHA’s Rainier Vista HOPE VI project. I also hope that HUD and Congress re-evaluate HOPE VI’s impact on Public Housing Authority’s throughout the nation. We need to determine two things: 1) if their ability to serve the poorest of the poor in communities has been curtailed with this program and 2) if federal funding might be more effectively spent were it used to renovate rather than demolish low income housing communities like Rainier Vista.

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