PETRA Discussion

In the Creating Communities blog, I've discussed Preservation, Enhancement and Transformation of Rental Assistance Act (PETRA) here and here.  But I haven't gone in-depth into PETRA because it's an incredibly complicated topic.  Basically PETRA would-among other things- allow public housing to be privatized (sort of), which would bring in new funding for improvements and replacement, but also with it risks and other changes.

ShelterForce takes a look at PETRA in their Summer 2010 issue with a variety of articles, interviews and analyses. 

Peter Drier, author of one of the articles, summarizes it as thus:

Since 1973, Congress has failed to provide adequate funding to maintain and repair these (public housing) developments. In the past 15 years alone, about 200,000 units have been torn down. Only about 50,000 of those units have been, or are planned to be, replaced. After years of neglect, the nation’s remaining public housing projects now need $20 to $30 billion of critical repairs. Current subsidies aren’t enough to pay for decades of deferred maintenance.

The best solution would be for Congress to simply allocate the funding for a one-time infusion to make long-neglected repairs. But because there are so few people who live in public housing, and because they are not well organized, Congress has little incentive to do so.

So HUD Secretary Shaun Donovan, who has spent his career improving housing for the poor, has proposed that local housing authorities be permitted to borrow money from private lenders to help fill the funding gap. Some tenant groups and their allies worry that, if PETRA passes, private lenders will care more about the bottom line than about tenants’ needs, and put their lives, and their housing, at risk. They worry, too, that private investors might be careless stewards of this valuable housing resource. As one public housing tenant activist testified to Congress in May: “Make no mistake, the private market’s only motivation here is profit, and let us not forget that this is the same private market that just crashed our economy, took billions in taxpayer funded bailouts, and aren’t fixing the mess they created.”

The End of Public Housing article is harsh in their analysis.  After pointing out that PETRA is virtually identical to a previous proposal, “Public Housing Reinvestment Initiative” (PHRI), during the Bush Administration that was roundly rejected twice, the authors state:

TRA does not enable more funding for the existing public housing program. It opens up public housing as a new source to feed the addiction to credit. Under the banner of preservation, public housing ceases to be public as it passes into the cradle of debt and leverage with its future mortgaged off to banks for profit. As such, TRA, like the preceding shifts in federal assistance to Section 8, is not meant to truly help poor households and individuals, but is a means of getting the federal government out of the low-income affordable housing business.

While the Housing Authority of City of Milwaukee has been very fortunate in being the recipient of numerous HOPE VI awards which have enabled them to replace many of their aging buildings, there are many aging public housing buildings around the state and the nation that are in bad shape.  From a disability perspective, many of those buildings continue to be very inaccessible, and new funding would enable more accessible housing to be created in many communities.  But the risks (as summarized by the National Low-Income Housing Coalition (NLIHC)) includes:

• Subsidized units being lost in 30 years
• Units not being replaced on a one-by-one basis with some units being replaced by vouchers
• Weakened resident participation and tenant protections
• Residents would have the right to move out after two years using a voucher, but there are not additional money for vouchers meaning they would bypass people currently on waiting lists for vouchers

NLIHC also points out that HUD has never asked for additional funding to cover the capital needs of public housing.

I have been pleased with Secretary Donovan's HUD under President Obama.  While I have not agreed with some of their proposals and been disappointed by some of their efforts, the very fact they're making dramatic far-ranging proposals and sustainability planning which includes collaboration with other agencies show that they take their mission seriously.  The current status quo is not good enough for them, and they believe HUD and the U.S. government can, and should, do better.  They're willing to look for new ways to do things.  The question is, will they listen to the input from communities and advocates, especially on something as dramatic as PETRA?