Oakland's NOFA funds are sought to settle OCHI's legal issues
By Lynda Carson February 23, 2009
Oakland -- Throughout past years many low-income renters have bitterly complained that they have not managed to get into so-called affordable housing developments because they do not earn enough money, and for those residing in such developments the fear always exists that renovation schemes will end up displacing them.
In recent months, two Notices of Funding Availability (NOFA) were made available for affordable housing projects by the City of Oakland. NOFA-1 is for new construction and substantial renovation of low-income housing, and NOFA-2 is available for the renovation of existing low-income rental housing. The funding comes from the Home program funded by Housing and Urban Development (HUD) and other sources.
During November 2008, eleven NOFA applications were submitted to the City requesting $13 million in funding to renovate, rehabilitate or preserve a number of low-income housing sites citywide, placing hundreds of low-income renters at risk of being displaced due to a lack of housing available for relocation needs during renovations. Some of these NOFA applications include several requests from developers who are seeking funding to renovate properties that they have not acquired beforehand. Properties that are currently in legal dispute.
In the past 8 months, when over 500 low-income renters in housing developments abandoned by Oakland Community Housing, INC. (OCHI) were faced with displacement from their housing (including the California Hotel), many refused to move after realizing they had no where to go. The latest batch of NOFA applications include some developers who are seeking funds from the City of Oakland in an effort to takeover some of OCHI's abandoned properties, regardless of the legal issues that may be involved.
The developers and their NOFA applications will seek approval by Oakland's Community and Economic Development Agency (CEDA) during a 2pm meeting on March 10, before seeking approval by the City Council on March 17. A few months from now, more NOFA applications may be filed by developers who are seeking additional funds if needed to finish their projects.
As part of the NOFA process in Oakland, the developers seeking letters of support for their NOFA proposals may go before one or more committees before seeking a final vote of approval by CEDA and the City Council for their funding requests.
During a few committee meetings in recent past months, it was Marge Gladman of CEDA who presented an overview of the latest NOFA and NOFA-2 requests on behalf of the developers seeking letters of support. In addition, Ms Gladman went on to give her own nod of approval and support for the building rehabilitation proposals, before the committee members voted for, or against the NOFA requests.
Astonished by what was occurring during one meeting, some committee members suddenly expressed alarm that they were being asked to offer letters of support for the rehabilitation of several occupied OCHI sites by developers who have not acquired the properties beforehand, while the legal status of OCHI's properties are still in question since the housing organization has dissolved and become nonfunctional in recent months.
During a recent November 3, meeting of the Central City East Project Area Committee (CCEPAC), it's members expressed numerous questions and concerns about the legal status of OCHI's abandoned properties and the methods the City is using, according to documents. Many of the concerns are in regards to legal and financial issues, the other lien holders of OCHI properties and their actions or concerns, including the City's methods in addressing their questions.
Resources for Community Development (RCD) a local housing developer is seeking developer fees and legal fees regarding the acquisition and legal issues arising from it's desire to take control of some of OCHI's abandoned properties. On November 3, 2008 Eugene Smith of CCEPAC questioned whether this would be a welcome takeover, and wondered whether they (CCEPAC) should be involved with RCD before the property was actually legally acquired by RCD, before the planned renovations of the property would be funded by NOFA.
Through NOFA, in addition to the millions available for renovations the City is offering developers/owners, $5,000 per unit in developers fees for up to as much as $150,000 per building to renovate their properties, is also being offered. The $5,000 in developers fees appears to be a bonus in addition to whatever percentage the nonprofit developers might make by contracting the work out to others.
During recent months the City of Oakland has asked a number of developers to work with the City in taking over OCHI's 25 housing developments (still occupied by renters) that have been abandoned by OCHI, since the housing organization dissolved in recent months.
As a result of being lured in by the City, in addition to seeking developer fees and legal fees from the City, RCD is also seeking $1.2 million in NOFA funds according to CCEPAC documents to renovate Marin Way Court by addressing some dry rot, water and soil erosion issues, including a roof replacement. Marin Way Court was abandoned by OCHI and the John Stewart Company during recent months, and houses 20 units of low-income renters.
RCD is also asking for $2.4 million in NOFA funding to renovate Eldridge Gonaway Commons (built in 1982), another abandoned OCHI housing development with 40 units of low-income renters. RCD's NOFA proposal seeks to address dry rot issues, and the replacement of exterior structural support and garage doors.
CCEPAC member Sheryl Walton expressed concerns about RCD seeking funding for properties that are only around 25 years old through CCEPAC.
Corona Rivera of CEEPAC asked why certain maintenance issues were not addressed at these properties and Lisa Motoyama of RCD responded that the previous owners may not have been made aware of the issues, but that the issues are present now and need to be addressed.
CCEPAC member Kathy Chao wanted clarification on RCD's desire to ask for funds on a project they don't own, and asked how will RCD conduct improvements on such a property?
In addition, East Bay Asian Local Development Corporation (EBALDC) is also requesting $1.3 million in NOFA funding to rehabilitate Slim Jenkins Court, an occupied 32 two-bedroom low-income housing development also abandoned by OCHI.
As the CCEPAC members expressed astonishment, various questions and concerns about the legal status of OCHI's abandoned properties and the methods the City is using arose, and Marge Gladman of CEDA stepped up to the plate and tried to soothe their fears and concerns by stating that OCHI is insolvent and unable to maintain their properties.
Ms. Gladman told the astonished CEEPAC members that OCHI is insolvent, and the City has been trying to find developers to assume OCHI's properties and maintain them. "The City of Oakland has asked a number of developers to work with the City in this process, and the amount requested for developer and legal fees is acceptable by the City. Otherwise, the various issues associated with OCHI properties could be inherited and need to be addressed. This NOFA-2 process is one of the processes that the City has set up to help address the former OCHI properties," Gladman said.
Drasnin Manor was completed by OCHI in 1993 at a cost of $2.4 million, for very low and low-income households, and includes a courtyard, a community room, laundry room and parking for it's residents, being worth around a $5.3 million as of May 2008. Documents reveal that Drasnin Manor's monthly gross income is estimated to be around $15,000 per month and during recent years the City of Oakland loaned OCHI an additional $1.5 million to operate and maintain their numerous properties.
Albert Casey is a low-income renter with family at Drasnin Manor, and was shocked by the latest NOFA proposals heading before CEDA and the City Council. "I am flabbergasted by what has been happening to OCHI's properties, and wonder why an investigation has not not taken place. No one from the City has been telling us anything, and the thought of developers trying to seek NOFA grants or loans to renovate properties that they have not acquired and do not own sounds totally illegal and un-american to me. I am very concerned about our situation at Drasnin Manor, and I want people to know that I will not be forced out of my housing," said Casey. "Since OCHI abandoned us around last May, the tenants have still been paying their rents, we still have a resident manager on site, and theres around 10 families or more residing here that have not been frightened into moving away. We do not want to move. Theres no where to go."
Presently the rental housing vacancy rates are 2.7 percent in Oakland, and only 2.5 percent in Alameda County according to NationalRelocation.com, making it very difficult indeed to find housing for low-income renters in the East Bay.
During June of 2008, Oakland's City Council voted to release $900,000 in relocation funds to assist OCHI in the effort to displace over 500 very-low income households out of their properties throughout the City. Many families were told that their best option would be to move into transitional housing (homeless shelters) because the funds being administered by the company providing relocation services were inadequate, lacking the resources needed to relocate the poor, elderly, disabled and their families into permanent housing.
Just Cause Oakland an organization promoting tenant's rights, was not aware that the latest batch of NOFA applications included several requests for funding by developers who have not acquired the abandoned OCHI properties beforehand. During several months of the past year, the organization joined up with OCHI's abandoned tenants at the California Hotel, Nueva Vista, Drasnin Manor and Marin Way Court in battle to save their housing.
According to an October 7, 2008 statement from CEDA, NOFA is intended to facilitate emergency repairs and capital improvements, as well as assist in the financial improvement of non-profit owned affordable housing. Theres no mention that NOFA funds or the NOFA process is meant to assist in determining the legal status of abandoned properties in Oakland, and it appears that Ms. Gladman, the lured in developers and the City of Oakland may be intent on subverting the original intent of the NOFA process, and may be misusing precious funds.
A recent as August 6, 2008 53 residents of the California Hotel and their attorney John Murcko filed a $53 million claim against the City of Oakland - believing that some city officials and OCHI may have been involved in a scheme to violate their rights, and displace them from their housing. Marge Gladman and Sean Rogan of CEDA were both named as defendants in the $53 million claim against the City.
In addition, the tenants of the California Hotel also filed a $2.5 million lawsuit against OCHI in recent months, after OCHI tried to unlawfully evict them from their housing and threatened to cut off their water and utilities.
Now comes NOFA. Just try to imagine what it would be like to be a low-income renter facing displacement by renovation schemes, just because the City and some greedy developers want to find out if it is legal to use NOFA funds or the NOFA funding process to takeover properties whose legal status is questionable.
When considering that the City finds it acceptable to cover the legal fees for the developers getting caught up into this NOFA morass, in all fairness the City should also find it reasonable to cover the legal fees of the low-income tenants being placed at risk of displacement, when they end up in court over legal issues while fighting to save their housing.
Among the low-income tenants at risk of being displaced from their housing in future months due to NOFA renovations, including some who reside in abandoned OCHI properties; they may include the residents at Marin Way Court (20 units), Eldridge Gonaway Commons (40 units), Slim Jenkins Court (32 units), Drachma Housing (14 units), Hugh Taylor House (43 units), Oakland Point (9 buildings of low-income renters), Effie's House (20 units), Casa Velasco and Posada de Colores (100 residents), and Marcus Garvey Commons (22 family townhomes). Each housing site is currently occupied.
In some detail, Project Pride located at 2545 San Pablo Ave, wants to rehabilitate 20 units in an existing vacant residential building and seeks $1.2 million dollars in NOFA funding. No tenants placed at risk.
Resources for Community Development (RCD) is seeking $840,000 in funding to rehabilitate Drachma Housing, an occupied 14 unit scattered site managed by the John Stewart Company, and developed by RCD.
Unity Council seeks $1 million in NOFA funding to rehabilitate 2 of their properties including Casa Velasco and Posada de Colores, with 100 residents or more residing at the combined properties. Unity Council claims that they cannot raise the rents high enough to cover the costs of the needed renovations at both properties.
CCEPAC documents also reveal that according to EBALDC's Mary C. Lucero-Dorst, all the residents of Effie's House will have to eventually be relocated due to planned renovations and that EBALDC plans to split them up so that one half of the tenants will be relocated for 6 months during renovations, and then they will switch and have the other half of the tenants relocated. Documents reveal that relocation costs for the tenants were not factored into EBALDC's $1.7 request for NOFA funds brought before CCEPAC during a November 3 meeting. EBALDC filed it's NOFA application/s with CEDA on November 17, 2008 and according to documents, EBALDC plans to seek NOFA-2 funds for a total of 6 projects. Currently their top priority is Effie's House.
A total of $13 million in NOFA funds or more have been requested during the current NOFA process, and the developers and their NOFA requests will seek approval by Oakland's Community and Economic Development Agency (CEDA) during a 2pm meeting on March 10, before seeking approval by the City Council on March 17.
The current NOFA process in Oakland which includes OCHI properties in the mix, raises many legal questions and may result in the displacement of hundreds of low-income families from their housing in the coming months.
Lynda Carson may be reached at firstname.lastname@example.org