"The truth will set you free. But first it will piss you off."

Gloria Steinem

Friday, September 26, 2014

“Section 8” Is A Myth. What’s the REAL Problem Here?

I was going to conclude my series on Subsidized Housing with some thoughts on the questions you should be asking your public housing authority about why the Housing Choice Voucher Program operates so differently in your real world than it does in Bureaucracy World.  Disturbing news out of Norristown, Pennsylvania—and part of the reaction to it— suggest yet again that many of you have the right understanding of the core issue, but devote way too much of your anger at the wrong target.  So I will instead write about how the news from Norristown helps to put “Section 8” in a better context.  But the questions will be included.
The Norristown case involves those old favorites, cronyism and favoritism (it can be difficult to distinguish between them), and how useful it is to know people in the right places.  It appears that the Norristown’s housing inspector allowed a District Justice to rent out an apartment without a license, and presumably, inspections.  He has been relieved of his job, and everyone eagerly awaits further revelations, or at least news.
Part (and only part, I am pleased to say) of the reaction has been to reflexively lump this case under “Section 8”.  That’s where my problem comes in.  The tenant in this case did not hold such a voucher.  She is a woman who has worked hard all her life, is now elderly but still pays the full rent.  “Section 8” simply doesn’t apply in this case, but it certainly helps to make my point about how people see a housing issue in their community and automatically blame it on  “Section 8”. 
What has happened in Norristown cuts to the very core of the housing issues in many towns.  The Norristown case—and the response to it—offer a microcosm of what takes place in the minds of a great many all over this country.  Some of you have focused from the beginning on the real issue, the (alleged) corruption, but there are those who require little incentive to damn a welfare program before establishing the facts.  The result is no action, exactly when action is warranted.

Myths are accepted, not fought, and “Section 8” is a myth.  Not the program itself, but what putting the term in quotation marks signifies, that so many layers of spin and misinformation that have been lathered on the reality as to hide its actual shape.  There is truth at the core of every myth; but once people have coated it again and again with their personal/political agendas, the truth is obscured beneath them, and by accepting the myth people believe what the spin doctors want them to, not the truth. 
The most pernicious aspect of the “Section 8” myth is how it discourages people from actually doing something about the housing problems they see all around them.  When people drive by a depressed neighborhood, past the dilapidated residences and trash-strewn yards, where residents seem to have nothing better to do but hang out all day, how many do you suppose quickly think “Section 8”?  Once they do that, the battle is lost.  After all, It’s Section 8; it’s a Federal giveaway.  We can’t do anything about it.
There are two misstatements contained here.  First, it’s probably not “Section 8,” and second, you can do something about it.  You can call your local housing authority and complain.  Here’s where those questions I was going to focus on come into play.  Don’t just call and complain; know what violations are taking place and ask the right questions to find out why.  Remember, in the absence of you pointing out a failure to comply with a regulation, a government bureaucracy isn’t going to do anything.  Here are just a few of the basic questions; you can take it from here.
Does the authority’s employees perform those required inspections, or does it contract them out?  What do they look for?  There is pretty much a standard building code in place across this area, so are its standards the same as those of the municipality?  Do re-inspections take place?  If so, how often and for what reasons?  I suggest you obtain copies of the “Housing Assistance Payments Contract” that I mentioned previously to find out what the landlord should be doing.  Anyone interested in doing something about HCV problems in their neighborhood should start with obtaining a copy of that contract.  Armed with that and your own eyes, locate a specific problem and report it to the housing authorityRemember my earlier point about attacking each case on an individual basis; have the basic facts—dates, addresses—available when you call.  Wait for follow-up, then repeat as required until results are achieved.  Notice that I did not use the word “names”.  It’s actually best to avoid them; the safeguards for personal privacy are many and unforgiving.  I’ll bet we never learn exactly what the Norristown Codes Inspector actually did, because that comes under “personnel matters” and will be kept private.
If it’s not “Section 8,” you can call and complain anyway; just call the phone number for the Codes Enforcement department of your local municipality.  In fact, always call that number first.  After all, shouldn’t the supervision you want to see in the HCV Program also be taking place next door, where no voucher exists?  Can you tell the difference between a house not properly monitored by the MCHA and one not properly monitored by your municipality?  And besides, aren’t ALL houses supposed to be subject to municipal standards, whether inhabited by a HCV recipient or not? 
What’s the Real Problem Here?  Aren’t we really talking about slipshod work, overlooked violations, cronyism and favoritism in the administration of our towns themselves?  Does it really matter whether the house is “Section 8” or not?  Shouldn’t ALL housing be held to the same standards of codes and regulations?
If all you really want to do is bitch, then by all means complain about “Section 8”.  You’re right actually.  The Federal Government is not going to do anything about the program until the next major shakeup in Congress, and it is certainly not going to do anything based on your request (or mine).  Thus you get to do what you really want to do—complain—secure in the knowledge that the target of your ire will be unaffected, and therefore available to you in the future.
But if your goal is to actually make things better, stop obsessing on "Section 8," Housing Choice Vouchers, Public Housing or any of that.  Events in Norristown offer an opportunity to focus on what I less than humbly suggest is the much bigger problem.  The emerging--but already smelly--story in Norristown is right on point about conditions in too many of our municipalities today, and says a lot more about how money, connections and the corruption that results from their intersection than any individual "Section 8" abuse story ever could.  It's a bigger issue, because it can encompass many "Section 8" components and still rank them rather low on any cost-to-our-communities scale. Communities the size of Norristown and Pottstown, Pennsylvania--not to mention larger ones--face housing issues with many facets, and all the "Section 8" programs lumped together are actually just a component of them.  Abuse in these programs exists alongside abuse that has nothing to do with it.  Let's stop using a buzzword to explain away a problem and instead learn more about the real world before we identify the villain and demand reforms.  The root of the CORRECTABLE problems in both Norristown and Pottstown--and I submit, elsewhere--lies in the porous collection of inspections, corrections and follow-up that is supposed to see that the rules are actually being followed regardless of whose rules they are.  That's why you pay taxes to your municipality as well as to the Federal Government; not just to write laws and regulations, but to enforce them.  Complain about taxation--and what it is spent on--all you want, and see what it gets you.  But if you unite and offer specific positive suggestions, your voice in your community can actually change things for the better.  It's up to you.

Friday, September 19, 2014

Surprise! For Landlords, It IS All About the Benjamins

Last week I closed with the question of why would a potential landlord even consider entering the Housing Choice Voucher Program.  Why get involved in a program that essentially encourages its beneficiaries to lie, cheat and steal? 
If you doubt this, look at it from the voucher holder’s point of view:  The program punishes you for being honest.  If you report an increase in income—even if it’s legal—your voucher amount stands to go down.  Need to take in an extra family member, even temporarily?  Don’t tell the MCHA; that’s changing your “household composition,” and it could cause problems.  Unhappy about how your landlord is treating you?  Better keep your mouth shut if you don’t have the time or the resources it will take to interface with the bureaucracy, because you landlord probably does, at least enough to deal with the likes of you.  All things considered, what’s the reason for being honest, outside of being caught for being dishonest?
That might be your potential tenant’s point of view.   Why rent to the type of people who would cheat the very program that benefits them?  If they would do that, they would cheat you, right?  This is not exactly a formula for a smooth landlord/tenant relationship.
And then there’s the Federal Bureaucracy to deal with, forms to fill out, the additional inspections of your property, and all that.  Why then would landlords want to be in the program, if they have to deal with both low class tenants and the Federal Bureaucracy?
Okay, let’s acknowledge the reliability factor.  A substantial portion of the rent is paid not by the tenant, but by the MCHA directly to the landlord.  The tenant may have more excuses than cash on the rental due date, but the check from the MCHA is going to arrive unless there is a postal strike.
But you know the real reason, of course.  It’s all about the Benjamins.  The HCV Program is a financial boon to those who, in my humble opinion, deserve it the least.  They would be the landlords who own and rent out the cheapest half of the housing in our towns and cities.  That’s because the HCV Program financially benefits the bottom feeders in the urban real estate market.  Housing Choice Vouchers are a guaranteed source of additional income to these landlords, much more than they would make did the program not exist.
This wasn’t part of the plan, but it is a major part of the result.  These low-rent landlords (I mean that as much figuratively as literally) purchase the cheapest houses they can find, all too often in Norristown and Pottstown.  If just rented out, these housing units would not command even the local community’s median rent, let alone that of the county.  If a voucher holder is about to move in a cheap apartment, or if an existing tenant receives a voucher, the landlord can raise the rent, quite legally it seems, as long as it does not exceed the “Fair Market Rent”.  Profit is rent minus expenses, and they know that if they accept HCV recipients, a higher rent is basically forced on them, courtesy of the taxpayers.  Who would refuse such a deal?  Besides, bottom-feeder landlords are not overly concerned with building maintenance, because that eats into the profit.  You don’t think they purchased those old houses to help preserve our irreplaceable stock of existing urban housing, did you?  As I pointed out above, renting to HCV tenants greatly lowers the chance that those tenants are going to complain about substandard conditions.  Unrepentant exploitation of the HCV Program fattens thus such a landlord’s profit from both ends.
This is where the true evil of concentrated Housing Choice Vouchers in specific communities becomes more apparent.  Towns like Norristown and Pottstown suffer from having so many voucher households end up there, some of whom are not exactly a benefit to the community.  On top of that, the concentration imposes a financial penalty on the non-voucher households that live in the community.  That’s because the Housing Choice Voucher Program artificially maintains a higher local rent than the neighborhood and the housing units would otherwise warrant.  The HCV Program’s commitment to the “Fair Market Rate” artificially raises the average rent across an entire neighborhood, affecting everyone.  The MCHA pays the extra for the voucher households, but all other renters in the neighborhood have to pay the difference out of their own pocket.  If you are not on the program and live in the neighborhood, you pay a higher rent because of the program.  All this, of course, in neighborhoods where conditions are already at the lower end of the scale, because that’s where the money is in such a skewed real estate market.  Any landlord with an apartment that is good enough (and located in a good enough neighborhood) to command above the “Fair Market Rent” simply has no economic incentive to enter the program.  His neighbors might not be too happy about it either.  This last can be important in a community that has few (or no) housing choice vouchers.  When the local municipality joins in the exclusion effort (unofficially, of course), the resulting peer pressure helps to keep vouchers out.  Those towns already swamped with vouchers end up getting more; it’s a vicious, self-reinforcing circle, lowering the condition of a community while keeping rental costs artificially high.  When disgusted homeowners leave, the low-rent landlords swoop in, pick up the property for a depressed amount, and look for equally low-rent tenants.  That’s why I bet all such slumlords would sanctimoniously support a funding increase for the HCV Program; much of it will end up in their pockets. 
Yes, the HCV Program encourages its recipients to cheat, but it encourages landlords to cheat more, because they stand to make more.  If landlords properly maintained their properties and exercised care in their rentals, the biggest money leaks in the system would close, and it would make tenant cheating both more difficult and less rewarding.  Of course, if wishes were horses, even beggars would ride, so we will have to take a more difficult approach if we want to actually see results. 
Next week we will simultaneously narrow and broaden our focus and ask the question: What's The Real Problem Here?

Friday, September 12, 2014

Housing Choice Vouchers: Here's What Is SUPPOSED To Happen

In Bureaucracy World, the Housing Choice Voucher Program works precisely like this:
A household seeking a voucher applies to the MCHA.  He/she fills out several forms, wherein he/she lists each person in the household and all sources of income, among other things.
The MCHA conducts background checks, including a criminal one, to make sure that all voucher recipients are of good character and honest.  It totals the household income and determines the critical 30% figure that the household can pay for rent.  It then calculates how much assistance will be given, i.e., the difference between the 30% figure and “The Fair Market Rent”.
With everything in place, the household then seeks out housing for which it has qualified (that pretty much means number of bedrooms).
Once the household has found housing of the right size whose landlord is willing to submit to the rigorous standards that will be imposed on him, the MCHA again enters the picture.
Every potential housing unit is first inspected by the MCHA, thus ensuring that it meets all current code standards.  If any deficiencies are found, the landlord quickly makes them good until the MCHA is satisfied.  The potential landlord then signs a “Housing Assistance Payments Contract” with the MCHA, in which he devoutly promises to follow the rules.
Once everyone is satisfied and all standards fully met, the landlord and the tenant execute a standard lease, and the household moves into its new home.  They faithfully pay their share of the rent—and dutifully report all future changes in either household income or composition—while the landlord ensures that they continue to live in a safe and healthy environment, the MCHA punches another ticket toward its “A” grade, and everyone lives happily afterward.  God Bless America.
What a wonderful world this would be.  Of course, that phrase comes from the song about the guy who “don’t know nothing ‘bout history,” so be advised.
Let’s examine the basic structure of this all-American fantasy for its weak spots, because they are where The Benjamins leak out.  We will climb our way up the leakage scale, because more leakage means more expense to you, the taxpayer.  Let’s follow the money, continuously asking the same question: who stands to profit by not following the rules?
The voucher program is a tri-party arrangement; the housing authority, the income-eligible household and the private sector landlord.  If each fulfills its end of the bargain, then harm is mitigated, and the larger good may actually surpass the local damage done.  Maybe.  If any party fails in its obligations, however, it only encourages one or both of the others to do so also.  An increasing scale of harm results. 
If the failure is on the part of the tenant, it is in the interests of both the landlord and the housing authority to either correct the failure or expel the tenant.  Money is usually involved somehow, but neither the landlord or the housing authority stands to profit (Yes, the landlord may be “in on it,” but let’s keep a reasonable balance here).
If the landlord fails to keep his part of the bargain, things get complicated because the profit motive enters into it, at least for the landlord, who has a very personal understanding of the concept.  Correcting the problem is in the interests of both the tenant and the housing authority, but ratting out one’s landlord is rarely in the interests of the tenant, so the housing authority may not even be informed of it.
If, however, the housing authority fails to do what it is supposed to do—properly monitor the reality of what the other two components are doing—then both the other components have the opportunity for illicit profit.  Both are also prime candidates for seizing such an opportunity, so trouble is pretty much guaranteed.
That’s why we will conclude this financial ascent focusing on the MCHA.  Ironically, that’s where you will find by far the least actual malfeasance, but how diligently the MCHA performs the functions it is supposed to do makes all the difference, either opening or closing loopholes through which the two other components either profit improperly or be forced to obey the rules, as the case may be.
That’s also why I begin with malfeasance by the tenant.  It is frequently the most obvious and is the most castigated because it is the most wrong in the eyes of most people.  I’m going to disagree with that assessment based solely on my adherence to The Benjamins as my guiding criteria, not by comparing the heinousness of various crimes.  Tenant malfeasance in the Housing Choice Voucher Program is yet another example of “gaming the system from the bottom”.  I don’t ignore it, I don’t mitigate it, I encourage relentless pursuit and elimination of all examples of it, but I contend that “gaming the system from the top” costs us all a lot more.  It’s nowhere near as obvious, and easy to overlook.  But if you follow the money, it’s not where you start that counts, it’s where you end up.  That is the route we will follow, and the next post moves up the scamming ladder, because we will add the possibility of profit that is legal, although of dubious morality.  
The real cost of tenant malfeasance is very locally focused, in the immediate neighborhood, and The Benjamins are only one method of measuring it.  That real cost to a neighborhood and its people is the reason I’m going to wrap up this post with some non-advice about what to do.  There is not necessarily any actual difference between malfeasance and crime, so it’s best you stay as far as possible from both.  I don’t want to ignore this enormously important aspect of the problem, but neither am I qualified to make any valuable contribution to those who find themselves among it.  I would never offer any fatuous, from a distance advice to anyone about how to deal with a situation in your neighborhood.  There are several things more important than The Benjamins, and always put them first.
Let me finish with a question.  Why, given “what everybody knows about housing voucher holders,” would a potential landlord even consider entering a program when they could easily—and legally—avoid it and all the obvious hassle?

Gee, what do you think?

Friday, September 5, 2014

Housing Choice Vouchers: What Can You Expect From A Bureaucracy?

The problems that Housing Choice Vouchers present to Norristown and Pottstown—as well as other towns—need to be addressed.  The question is not who is to blame, but who is to blame for what.  Our focus is on the central player in this ongoing drama, the Montgomery County Housing Authority (MCHA).  The question thus becomes what can we realistically expect from it, and in what areas?  The key to that, in turn, lies in understanding just what the MCHA is.  That’s no mystery, it’s a Government Bureaucracy, and that is a beast we need to understand at a very fundamental level.  The fact that it is a Federal bureaucracy only makes it more dispersed than any other level, and thus the hardest to target.  Bureaucracy is sensitive to only a few, carefully targeted pressures; most of those applied are wide of the mark, and are shed like water off a duck’s back, to no discernible effect. 
At the root of this is the fundamental disconnect between bureaucracy and the real world.  The fiercest critics of the MCHA are those who live in the real world, often near its clients.  They view the problems on an individual basis, and at no small risk to themselves.  They know something is wrong, not just because of the numbers around them, but in the behavior of all too many of the program’s beneficiaries, their neighbors.  This viewpoint is widely shared at the municipal level, for all the obvious reasons.  If those in closest contact with voucher recipients issued grades for program achievement, the MCHA would probably flunk.
Did you know that the Department of Housing and Urban Development (HUD) does grade each of its local housing authorities on how they do their job?  And did you know that the MCHA routinely receives an “A” grade?  How can this be, if local discontent is so rife?  This is actually one of those rare cases where the answer is simple: the MCHA earns its high grade by strict adherence to the regulations that govern its work, not by striving to address the issues that those regulations create when they interact with the real world.  It’s not that the people don’t care, they do.  They are professionally trained in a field that does not pay all that well and offers little emotional job satisfaction, but they do it anyway and would like to continue.  That means they do it strictly according to the regulations, and to them alone.
I cannot emphasize this too strongly.  There is nothing strange at all about this, every organization does i.  Policies and adherence to them are rigidly enforced, in fields that range from finance to football.  Government bureaucracies alone, however, are not required to “win,” offer the best service, beat the competition, offer a better price, whatever.  There is usually no competition, because no one has figured out a way to make money doing it.  In such a structure, career advancement begins with—and depends on—rigid adherence to the rules.  That’s the core of the disconnect, because bureaucracies undertake the activities that require dealing with a great many people, who thus present a great many difficulties interpreting just how they fit into the regulations.  And they must fit into the established niches; a bureaucracy has no choice but to assign them to one if they are to do anything for them at all.  This holds true in all fields, at all levels.  Few of you deal with HUD, but each of you deals with the DMV, right?  Need I say more?  Rigidity does tend to increase as you go up the government food chain, but it is evident everywhere.
Bureaucracies are the worst in insisting on fitting a complex reality into a rigidly arranged structure, but let’s be fair here.  How many of you work for a company that allows you to deviate from its policy?  Or lets you allocate money in different amounts or to different people that the rules specify?  Thought so.  So why expect it from a bureaucracy?  Remember, it’s spending YOUR tax money.  Don’t you want every precaution taken to avoid waste and graft?  Do you really want a Federal agency to be able to just experiment with your money?
In the interest of full disclosure, I must reveal that after my graduation from college, I worked in a Federal bureaucracy.  My time was spent playing a very small role in what in what I believe to be a contender for the title of “most colossal and corrupt bureaucratic waste of money ever”.  I also know a little something about trying to help those most in need with entirely inadequate resources while adhering strictly to rules written by the type of bureaucracy whose office has no windows to the real world.  I loved my work, but I quickly established an adversary relationship with the Federal bureaucracy itself, and hence my tenure was brief.  The fundamental lesson, however, has stayed with me, and has remained relevant in my later professional studies.  It provides a clarifying filter through which to understand what you can get a bureaucracy to do, and what you can’t.
While conducting an interview at the MCHA, and despite my hard-earned underlying assumption about what the answer would be, I asked Joel Johnson and his assembled staff what plans they had to address the problem of too many housing vouchers in specific locations.  Their answer was prompt and delivered without hesitation.  They plan to do nothing further than the one thing they already do.   They do it because it’s the only thing HUD allows them to do, and even that’s optional.  They wouldn’t lose any grade points if they didn’t do it.  The lesson is clear: do not look to a bureaucracy for new ideas; there is virtually no reason for one to generate them.
Real, fundamental change in the several HUD programs we lump together as “Section 8” will require careful, reasoned action by Congress, and we all know that’s not going to happen anytime soon.  So, if we actually want to do some good, let’s look at what can be accomplished under the existing program regulations.  In a previous post I argued that we can only discuss Public Housing or any of the various Low Income Housing Tax Credit programs on an individual basis.  Last week I made the too-often overlooked point that vouchers are not held by any “THEY”.  That means that issues with Housing Choice Vouchers also need to be addressed on an individual basis.  Recipients are individuals, and deserve that.  The MCHA only administers regulations, but it interacts individually with each recipient household and each landlord to ensure that relevant portions of its regulations are enforced.  Or at least it is supposed to.  These are the areas where public pressure, properly applied has a chance of being effective.  So, let’s focus on actually making things better, and save your venting for Facebook.

This week's post was about what you can't get a bureaucracy to do.  Next week we get more detailed and discuss what the MCHA is actually supposed to do.  That's where you, the readers, get to chime in, because you know the reality in your neighborhoods.  I will work on getting that message passed along, and together we will monitor what happens, or doesn't.  It's a long-term endeavor, and very tiresome, but it's worth it.