Tenants Notified of Huge Rent Increases

By Brian Davis

             In early September, the residents of Vanguard Apartments on the East of Cleveland work to find that they were going to have to start paying market rent for their apartments.  This will have an impact on three hundred families and single adults, and presents a new problem for project based Section 8 for the Department of Housing and Urban Development.

             As the Grapevine has reported over the last year, there are certain building in Cleveland (11,600 units) that are entirely subsidized by HUD.  In the 1970’s, the United States government gave these apartment buildings a subsidy to rent to low-income individuals with contracts from 10 – 20 years.  The landlords agreed to charge all the tenants one-third of their income, and the Federal government would pick up the difference.  By the year 2002, all the contracts will expire in the entire country.  The street papers in San Francisco and Chicago have done a good job of reporting this issue.

             At this time, there is not enough money in the HUD budget to cover the renewal of these contracts.  What they are currently doing is reviewing every contract to decide on the merits of renewal.  Even if a project is renewed it is only renewed for a maximum of one year.  Allegedly the projects that are not renewed the tenants are given certificates to go find there own apartment and still pay one third of their income.  According to the Cuyahoga Metropolitan Housing Authority only 1% of the certificates are returned because the tenant cannot find a landlord that will accept the certificate.  Activists do not believe that this statistic is accurate.

             The certificates act the same as the project-based subsidy except they are not connected to a fixed structure.  The tenant again pays one third of their income, and the landlord gets a fix percentage of the market value of the apartment.  Besides the stigma attached to the certificate because it shows that a perspective tenant is poor, landlords are hesitant to accept Section 8 certificates because of the rules of the program and the recent changes in the law which have made it less attractive to landlords.

             During these last 20 years of project-based leases, many of the projects have become substandard, Organizations like the Cleveland Tenants Organization and the National Alliance of HUD tenants have consistently shouted abut the problem of a HUD landlords not maintaining the viability of the projects.

             Now the contracts are near expiration and many of the projects are substandard to the point of being uninhabitable.  HUD now, after all these years, is going into the projects and declaring the contracts in default because of massive disrepair.  The tenants in these units have been living with the disrepair for years, but now it seems that it is convenient for HUD to declare the projects in default to get out of the contracts.

             Vanguard is one of the substandard properties.  Staff from CTO characterize Vanguard as in “tremendous disrepair.”  HUD notified the property owner, Black Economic Union and Associated Estates Corp., that HUD will end the BEU/AEC subsidy because of the substandard conditions.

             HUD had, at the time, not decided what to do with all the tenants, and was trying to work out a smooth transition for the residents.  The property owner, against the advice and the rules of HUD, notified the tenants that in 30 days they would have to start paying market rate rents.  This would double and sometimes triple or quadruple the tenants’ rents. rents.

             At this time, HUD is offering all 300 families certificates to relocate.  They have called in the mortgage early on the Vanguard Estates, and have moved in a relocation company to assist with the tenants relocation.

             Officials of HUD could not be reached for comment.  Ward 14 City Council member Fannie Lewis, whose ward includes the Vanguard properties, said on WCPN FM radio, “We are not going to allow (our People) to be prostituted and then kicked to the curb.  This will empty the city of poor people.  It should be up to the landlords to rebuild.  Our plan is to put up single family units together.”

             Last year, a similar situation happened with the NOAH properties on the east Side of Cleveland.  Those people were given $500 in relocation assistance, and most tenants were given certificates.  According to Mary Schmidbauer, Tenant Organizer at CTO, two of the families at NOAH became homeless.  They lost tract of one family, and the other was not able to use their certificate because they could not find a landlord who would accept it.

             This new concern over substandard conditions in housing will continue at HUD with 450 properties listed as troubled throughout the United States.  Cincinnati has a large number of units on the troubled list.  Advocates in Cleveland are predicting that Longwood and Rainbow Terrace Apartments are the next properties to be targeted by HUD.  With HUD restructuring nationally, many HUD watchers feel that they want to get out of the business of subsidizing properties, which would mean that by the year 2002 all the project based Section 8 tenants will have to find other arrangement.  At this time, there is no room at the inn (shelters) I Cleveland, especially for families.

 Copyright for the Homeless Grapevine October1997-Nov. 1997 Issue 23