August 22, 2021

Call To Action: Reject MPHA’s 2022 MTW Annual Plan

Demands:

1. MPHA must hold virtual public meetings that are accessible to public housing residents and the larger community before the 2022 MTW Annual Plan is approved.  

2. Provide translation of the 2022 MTW Plan before Board & HUD approval.

3. Reject the regional MTW plan because Minneapolis residents will be displaced to the suburbs.

4. Reject The “Pathways Forward” plan which will disproportionately punish large families living in Public Housing.

5. Reject rent reasonableness for Section 8 project-based voucher subsidized housing because it will increase rents, accelerate gentrification and displacement.

6. Reject using RAD to privatize high rises and the demolition of 16 scattered sites because it will lead to displacement and increase rents.

Background/Analysis

Every year the Minneapolis Public Housing Authority (MPHA) must submit a document called the MTW Annual Plan to the U.S. Department of Housing and Urban Development (HUD). This document summarizes MPHA’s annual plans and its status as a Moving to Work (MTW) agency. MTW is a program that allows public housing authorities to skirt federal regulations with approval from HUD. In MPHA’s case, as an MTW agency, it is easier to move funds around and to implement privatization schemes such as Section 18 Demolition & Disposition and Rental Assistance Demonstration (RAD), policies that dismantle public housing and destroy Black and Brown neighborhoods of Minneapolis.

Even though MPHA is a public agency under the City of Minneapolis charter and HUD regulation, it has ignored public comments about its MTW plans for years. Minneapolis elected officials, Mayor Frey, and HUD continue to allow MPHA to undermine the voices of public housing residents, and other concerned residents of the city. These politicians and bureaucrats effectively allow MPHA to abuse, intimidate, and dehumanize public housing residents, and continue the agency’s egregious organizational culture that is rooted in racism and classism. As a result, MPHA’s 2022 MTW Annual Plan process and community engagement is no different from previous years’ plans. The central theme of each year’s plan is to outline how MPHA will end public housing, despite it being the most guaranteed way to secure housing affordability.

Even though MPHA’s 2022 MTW Annual Plan is 144 pages of complicated and deceptive language that MPHA does not want to explain, Defend Glendale & Public Housing Coalition identified serious issues and red flags that we are asking allies to reject by submitting a public comment to the agency. This call to action focuses on 6 issues in the 2022 MTW Annual Plan, each of which necessitates public comment and exposes MPHA’s true agenda: the further gentrification of Minneapolis. Public comment for the MTW plan is due on August 30th at MPHA. We urge all allies and supporters of public housing to submit comments concerning the below issues to MPHA and all Minneapolis elected officials listed in the call-to-action letter.

1- MPHA must hold virtual public meetings that are accessible to public housing residents and the larger community before the 2022 MTW Annual Plan is approved.  

MPHA sends out information regarding its annual MTW plans to all public housing residents by the week of July 30th. This year's citywide MPHA mailer to all public housing residents arrived in many residents' mailboxes late, on August 6th, 2021. The mailer provided time and place details for two in-person public meetings for Monday, August 9th, and Wednesday, August 11th. This short notice is a deliberate tactic on MPHA’s part to undermine transparency and reduce residents' engagement. The letter also mentioned a virtual Zoom meeting scheduled for Tuesday, August 10th. However, the mailer did not provide a Zoom link, call-in number, or any login instructions. This lack of accessibility is alarming for several reasons. Many public housing residents are disabled people or seniors who may have difficulty attending an in-person meeting. Second, immunocompromised residents and residents with unvaccinated children may not want to risk unnecessary in-person contact and would instead prefer the online option. In light of the recent rise of COVID cases with the Delta Variant and the short notice for in-person meetings. On August 9th, we emailed MPHA, Mayor Frey, and all Minneapolis elected officials, asking them to reschedule the Zoom meeting and send residents another mailer with clear and detailed instructions for remote participation by phone and/or computer. As usual, MPHA and elected officials ignored us. This is what silencing Black, Brown and disabled public housing residents looks like. We are asking MPHA to correct this and schedule virtual meetings with the Zoom link, call-in number, login instruction, and interpreters so public housing residents who can only go to virtual meetings have the opportunity to do so and comment on this process and plan. This has to be done before the 2022 MTW Annual Plan is approved by the MPHA Board of Commissioners.

2-. Provide translation of the 2022 MTW Plan before Board & HUD approval.

The 2022 annual plan is 144 pages. However, MPHA only translated 10 pages in the Somali language. MPHA failed to translate the 144 plans in Somali and in any other languages despite many Minneapolis public housing residents also speaking Spanish, Oromo, or Hmong.

Not providing correct language translation is a violation of residents' civil rights. Despite knowing this, MPHA gets away with it every year. In addition, citywide public housing residents do not have access to the annual plan itself. MPHA did not mail the 2022 MTW Annual Plan to the residents nor have they dropped off copies of the plan in the townhomes, high-rises, or scattered site homes. MPHA must make these corrections and fully and thoroughly communicate the plan to residents before the plan is approved by the MPHA Board of Commissioners.

3- Reject: the regional MTW plan because Minneapolis residents will be displaced to the suburbs.

For the past several years, MPHA has touted the possibility of expanding its MTW plan into the suburbs, creating a wider geographic area subjected to specific MTW deregulations. Since 2016, this has been federally allowable under the “regional MTW” program, which allows an MTW agency to propose policies in tandem with a nearby non-MTW agency. Page 26 of the 2022 plan explains that MPHA hopes to partner with the Metropolitan Council Housing and Redevelopment Authority (Metro HRA) to establish a “shared regional voucher” program. Metro HRA covers Anoka, Carver, and suburban Hennepin and Ramsey counties.

The new voucher program, according to MPHA, will revolve around three points, quoted below:

“PORTABILITY: Combining policies, procedures, and certain operations will make it easier for families to move within our jurisdictions, and create efficiencies in the operations of both agencies.

MOBILITY: The agencies propose to contribute vouchers to a joint pool where families might be served with enhanced housing-search assistance, enhanced rent support to afford neighborhoods with more expensive rents, and services focused on educational/economic empowerment for families in all neighborhoods.

PROJECT-BASED VOUCHERS (PBVs): The agencies would combine their power to shape the development of affordable housing by other developers, and to assure deeply affordable housing within these developments, by jointly contributing and issuing PBVs under a combined Request for Proposals.”

Although MPHA uses buzzwords that imply a focus on equity, the devil is in the details. The first point of “portability” means that MPHA and Met HRA want to make it easier to move low-income people around the entire metro area. With most low-income neighborhoods in Minneapolis, starting to gentrify or already rapidly changing, this point really means that MPHA will use the broadened regional MTW program to push residents out of the city, to areas in the suburbs or exurbs with less accessible public transportation, loss of community, fewer jobs, and fewer educational resources.

The point about how the regional MTW plan will bolster mobility also seems promising, until one realizes that none of the supposed benefits of a regional voucher pool are guaranteed. MPHA says that a regional voucher pool might offer better housing search assistance and rent support, but then it does not include any further details for what these programs would look like or how they would operate. As usual, MPHA guarantees nothing, because its aim is the exact opposite of the “economic empowerment” it tells the public it strives for.

The last point about project-based vouchers fully belies MPHA’s plan. First, MPHA relies on the meaningless buzzword of “deeply affordable housing”, a goal it gave up when it began to privatize its stock of public housing several years ago. Issuing more PBVs and pushing for more private development only leads to handouts to corporate “so-called” affordable developers. Affordability could actually be protected by preserving and expanding public housing but MPHA does not intend to do that.

The central irony here is that by pushing for the establishment of a regional MTW voucher program, MPHA is implying it has natural leadership when it comes to supporting residents. MPHA will not send out a mailer on time, provide information on how to attend a virtual meeting, or translate its own documents into the necessary languages. Supporting its residents has never been its core goal.

4- Reject: The “Pathways Forward” plan will disproportionately punish large families living in Public Housing.

On page 31, MPHA provides details on its proposed “Pathways Forward” plan, which aims to help families living in housing subsidized through project-based vouchers “graduate” to other forms of housing if they earn over 80% of the Area Median Income (AMI).

To explain why this is yet another tool for displacement, it is first important to examine the flawed and racist nature of AMI itself. Hennepin County's AMI is biased upward by the inclusion of the western suburbs. Further, by calculating a single AMI number, Hennepin County ignores racial differences in income. As a result, AMI in 2021 for Minneapolis and St. Paul, as well as dozens of white wealthy suburbs -13 counties in total, is egregiously high at $104,900 for families of 4. This is much higher than the average median incomes of most Black and Brown Minneapolis families. The AMI for Black families of four in 2018 was $33,436 when the AMI for majority-white families of 4 was $94,300 while the average income for public housing families of four in the last 3 years and more stayed the same at $20,656. stayed the same at $20,656.

With the COVID 19 Pandemic hitting Black and Brown communities the hardest, and poverty increasing, there is more income loss than income gains.

In addition, MPHA serves large working-class and low-income Black and Brown families, who can’t afford to rent homes at the current high rental market; the decision to push families earning over 80% of AMI out of PBV housing ignores something crucial: family size. At no point in the MTW report is family size mentioned. A household of two people earning 80% of AMI is very different from a household of six or more people earning that same income. The larger family has less disposable income and less ability to pay rent.

Many families in PBV housing are fairly large, with several children and also elderly dependents. MPHA admits that it wants to “graduate” families out of PBV housing because many PBV units are scattered-site homes with multiple bedrooms, homes that currently house large families, but are highly demanded properties for the city’s parasitic real estate sector and landlord class. If MPHA wants to “graduate” families they should enroll families in their rent-to-own housing program instead of displacing them.  

MPHA needs to explain what “graduation” actually means. It is clear that its ambiguity on this point implies that it intends to push large families who rely on subsidized housing into more expensive market-rate housing. It is also very clear that AMI is a very racist and classist measure penalizing the most vulnerable population and large families that can’t afford to rent in the current market.

5- Reject rent reasonableness for Section 8 project-based voucher subsidized housing because it will increase rents, accelerate gentrification and displacement.

In a brief section on page 6 of the 2022 MTW plan, MPHA explains a deregulatory plan to “increase the efficiency” of its local project-based housing voucher program. The plan revolves around reduced reliance on “rent reasonableness studies” - analysis of local area rents that are used to determine “contract rents” section 8 housing. The first part of the plan, which is not elaborated on when mentioned later on pages 55 and 56 reads

“First, MPHA may simplify rent reasonableness practices, by means that may include among others (1) allowing a new annual rent to go into effect without a new rent reasonableness study when the new rent would be authorized under the previous rent reasonableness study, and (2) omitting rent reasonableness studies for particular units and instead explicitly relying on completed rent reasonableness studies already completed for units with similar characteristics (e.g., same bedroom size and neighborhood).”

This plan is another step in MPHA’s process of abandoning the concept of fixed rent at 30% of residents’ income. Rent reasonableness studies themselves use market conditions to determine rental rates, but MPHA is now stating that even these ambiguous and inadequate studies are unnecessary. The result is that MPHA will have even more power to hike rents for PBV residents.

MPHA effectively admits this in the second part of this plan, writing

“Second, MPHA may stagger annual rent increase dates and may rely on increased fair market rents without rent reasonableness studies to authorize rent increases during interim periods that will facilitate the transition to staggered dates.”

MPHA is ignoring a key question: if PBV rents are going to be even more determined by the market, how much will rent actually increase for residents? As always, MPHA ignores the material needs of public housing and section 8 residents in its documents, burying the lead underneath bureaucratic jargon and the veneer of efficiency. Also, aren’t Section 8 Project-Based Vouchers supposed to be for low-income families, and the rents are not supposed to be above 30% of tenants’ income? Is MPHA a government agency or a developer? So now that MPHA privatized public housing and converted over 736 Scattered-Sites Single-family homes through Section 18 Demolition & Disposition and Elliot Twins through RAD, and now they are Section 8 Project Vouchers, rents will go up due to “rent reasonableness''. In addition, private investors/ banks will be involved and profit. The units will no longer be rented at 30% of the tenant's income but rather close to market-rate rents. We have been saying that rents will increase when public housing is privatized through Section 18 and RAD. MPHA finally admits this in writing. If MPHA implements rent “reasonableness”, thousands of low-income families will be out in the street.

6- Reject using RAD to privatize high rises and the demolition of 16 scattered sites because it will lead to displacement and increase rents.

In two specific sections of the 2022 MTW annual plan, MPHA details its proposal to use Rental Assistance Demonstration (RAD) conversion to dismantle public housing and bring it into the private market. RAD is an Obama-era program that allows for Public Housing authorities to effectively privatize public housing stock, by leasing the land to a private developer, ceasing to manage properties, and subsidizing rents through project-based vouchers instead of simply charging a fixed rent at 30% of income. RAD conversion leads to rent increases for the most vulnerable residents who are on a fixed income.

Out of the 42 high rises MPHA currently manages, it plans to privatize 26 - over half of them - through RAD conversion. The properties MPHA is putting on the privatization chopping block are listed below, in a table lifted from the annual report.

MPHA notes that most of these properties would be converted through the “RAD-with-debt” model, a process entirely unexplained in the annual report. However, Defend Glendale’s research found that “RAD-with-debt” is used to distinguish smaller scale RAD conversions from more large scale conversions, such as the transaction that privatized the Elliot Twins high-rises in 2018 to the end of 2019. “RAD-with-debt” only used the issuance of private sector loans to pay for renovations, as opposed to the larger scale use of private-sector debt and public sector tax credits. According to real estate lawyers, RAD with debt is used when renovations are less likely to be structural and more likely to be cosmetic.

RAD’s entire ostensible purpose is to fund needed renovations to public housing properties, which makes little sense considering many municipalities have enough money to do it themselves. After all, on pages 14 and 15, MPHA admits it has nearly $14 million in “reserves”, which can be used in emergencies or for “long-term” improvements.  

Nonetheless, by directly mentioning the “RAD-with-debt” model, MPHA is effectively admitting that large-scale renovations are unnecessary. There is nothing structurally wrong with the buildings. Instead, MPHA wants cosmetic improvements to make the buildings look more modern and accelerate the gentrification of the Northeast and the South Side, where many of the 26 properties are located.

High-rises are not the only properties MPHA discusses privatizing in this report. Also present are the 16 scattered-site homes MPHA intends to demolish and build denser buildings through RAD. The scattered-site homes were privatized from 2019 to 2020 through Section 18 Demolition & Disposition which allows MPHA and the City of Minneapolis to demolish the homes and displace16 families. Most scattered-site properties managed by MPHA are home to large families. Notably, the report does not mention the location or current characteristics of the 16 homes, but a data request uncovered their locations and MPHA’s plans for them. Many of these locations are in the North and South Sides, parts of the city that is beginning to gentrify.

Additionally, MPHA does not mention in any of the budgetary projections included in the report that it is using $4.6 million in federal American Rescue Plan stimulus money to fund the RAD conversion of these 16 homes. This is a discrepancy that MPHA must fix. Again, community engagement and transparency are not the objectives when MPHA releases the plan. Instead, it releases the document because it has to and it hopes that nobody will read them.

In addition, in prior years, MPHA stated in its MTW Annual Plan, they had over $23 million in reserves for emergency use. So, what happened to $9 million dollars? We don’t know of any emergencies the $9 million was used for. MPHA still has not installed the water sprinkles in the high-rises after they killed five people due to their neglect in Cedar-Riverside, and the state is funding the water sprinkles. MPHA did not build new public housing nor make all the repairs needed in the high-rises and scattered sites even though they receive over a 42% increase from HUD yearly capital funding. They have not used these reserves to pay for tenants' rents during the COVID 19 pandemic. Where is the money? There needs to be an audit.

On page 5, MPHA admits that the single-family homes are “sought after,” but they do not state by whom. The truth is that these single-family homes are a necessity for large multigenerational families, because of their high number of bedrooms and affordability, with public housing rents set at 30% of income. However, the people really seeking out these properties, referred to in the report, are developers who hope to leverage Minneapolis’ 2040 plan to pocket more cash.

RAD is a policy designed to entrench deregulation and gentrification. As research shows, residents rarely return to RAD properties after conversion, and private sector entities enjoy massive financial windfalls. It is another tool in MPHA’s and the City’s arsenal used to hand out money to developers and the landlord class, rather than to w Minneapolis residents. As it continues to use RAD to privatize public housing, MPHA lies to residents, telling them that MPHA will continue to manage the housing as public housing and nothing will change. Instead, MPHA transfers the housing to three similarly named private shell companies, each affiliated but legally separate from MPHA itself. Tell MPHA to reject RAD and be more transparent about its plans to displace residents and transform the city into a playground for the upper-middle class.

Conclusion

MPHA’s MTW deregulation status is used yearly to justify policies that will displace working-class, Black, and Brown Minneapolis public housing residents. As MPHA ramps up its deregulation and privatization regime with the full support of Mayor Frey and Minneapolis City Council, they don’t want public housing residents nor the larger public to be informed, and they don’t want to translate documents. It is the time for concerned Minneapolis residents and allies to emphasize that we have read through the deception and reject the privatization of public housing, the gentrification, and the destruction of our city.

Defend Glendale & Public Housing Coalition

defendglendale @ gmail. com | www.dgphc.org | facebook @ defendglendale    | twitter @ defendglendal  | Instagram @ defendglendale

P.O. Box 14616, Minneapolis, MN 55414

612 -389-8527