SUN Wins Agreement On Maintenance Of Vacant HUD Houses

SUN has been a participant in the National People’s Action (N.P.A.) coalition for almost 20 years. Over 1,000 residents, working in neighborhood groups from over 30 states across the country, gather in Washington, D.C. and work to change federal policies and improve their local neighborhoods.

One of the many N.P.A. victories that that has had a positive impact on Syracuse was the agreement with H.U.D. to radically improve the maintenance of the vacant houses owned by the federal government. With intense board ups, weekly inspections and large signs with emergency phone numbers posted on all the properties, H.U.D. went from being the biggest slumlord in Syracuse to having the best kept vacant houses in the city.

H.U.D. also benefited from this partnership. Due to their improved condition, houses on the H.U.D. list do not linger for months and years–they sell in weeks. Because the houses have not been stripped of all their value, copper pipes, water heaters and wood fixtures, the houses also sell for a higher price.

Unfortunately, the Bush administration recently decided to award new contracts to maintain and sell H.U.D.’s inventory of vacant houses. SUN contacted the new maintenance company for our area to schedule a meeting. The regional manager in New Jersey agreed to come, but was pessimistic about their ability to meet our demands on board ups. According to the new company, their request to continue the maintenance policy in Syracuse was denied by a low level official in HUD’s Philadelphia regional office.

SUN told the manager that we were meeting in Washington during the N.P.A. conference with a HUD official with slightly more authority–Secretary Alphonso Jackson. We agreed to have our meeting in Syracuse a week after the N.P.A. conference. On the Thursday after our conference, three officials from National Home Mortgage Solutions toured the H.U.D. houses in our neighborhood and met with 20 members of our Housing Leadership Team. National Home’s attitude on the day of our meeting was completely different from the week before. SUN presented National Home’s regional manager with a 10-point agreement on how houses should be maintained in our neighborhoods. National Home signed with no objections.

SUN leader Barbara Devoise co-chaired this meeting–her first such experience. It was easier for her since she had just returned from her first N.P.A. conference. At the end of the meeting, with the agreement signed, Barbara was wrapping up the meeting by asking National Home what they wanted out of this meeting. The regional manager replied without hesitation: “We’re going to do whatever you want.”

How The City Blows $9 Million Of Housing Money A Year

Politicians use a couple of metaphors to explain tough economic times. One is, “city residents are a family and we’re all in this together.” The other is, “the city is going to be run like an efficient business.” In Syracuse, if you live in a low-income neighborhood, you have probably heard both metaphors. What hasn’t been said is the truth: “Dad blew the family’s savings on gambling and the business was managed like Enron.”

There is a housing crisis in Syracuse’s south and near-west side. These neighborhoods make up 15% of the city’s households yet include nearly half of the city’s 1100 vacant houses. Bank foreclosures are booming with over 300 since July 2001. A neighbor is lost here every three days. Ten percent of the houses have more than one property code violation, a rate twice that of any other city neighborhood. Less than one-third of neighborhood families own their home, compared to 40% in the city overall and 64% in the county.

The federal Department of Housing and Urban Development (HUD) provides the city of Syracuse roughly $9 million annually through the Community Development Block Grant program. Given this stipend, why are all the programs dealing with housing in Syracuse either woefully underfunded or nonexistent? Why is there a two-year waiting list for the only program in the city that helps families finance serious home repairs? Why is there no program to rehabilitate abandoned houses?

Why isn’t $9 million a year enough to deal with the housing crisis? The short answer is that 60% of the budget is spent on non-housing programs. Administrative costs, training budgets and particularly economic development loans eat up the money before it gets to our neighborhoods. The city borrows money against Section 108 loans (another HUD program) to make business loans. The city has to repay the loans to HUD if the businesses fail. In the past 11 years the city has built up a $22 million dollar debt to HUD, forcing the city to take $6.2 million out of its Community Development Block Grant budget to repay HUD.

What have these economic development loans accomplished? Not much. Former Mayor Roy Bernardi built a new building for a company that promised to make plastic toecaps for work boots (and then diversify into eyeball implants!). The company never manufactured a thing. The largest project was the decision to buy an old department store downtown and fix it up with all kinds of high-tech gizmos to lure NiMo’s customer service center as a tenant. When NiMo was bought up and downsized by National Grid, the call center went back to headquarters and the newly renovated building sits largely empty.

Syracuse United Neighbors (SUN) has been an outspoken critic of HUD 108 loans. We held a press onference on the steps of City Hall in 1992 to point out the danger of using money intended for low-income families as collateral for loans to fly-by-night businesses. Unfortunately, SUN has been proven correct. For the past decade, it has seemed like any white guy in a suit could come into City Hall with an outlandish business plan and walk out with millions of dollars. Meanwhile, families struggling to keep their homes in good repair, but who live in neighborhoods neglected by mainstream banks, have to wait two years to get a home improvement loan.

This past year, SUN convinced the city Common Council to build more oversight into future Section 108 loans. After passing a bill sponsored by Stephanie Miner, the Common Council now has final approval on all Section 108 loans. The shadowy and pseudo-governmental Syracuse Industrial Development Agency had approved all Section 108 loans prior to this bill’s passage.

The Section 108 loans we have now will continue to haunt us. Annual repayments of $2 million will be routine, with several years’ payments higher than that. While SUN members have met with HUD officials in Washington and gained a commitment to rewrite the terms of these loans, this is just a temporary fix. The city will end up paying more in interest by stretching out the duration of the loans.

Syracuse politicians looking to solve this problem should remember both of the aforementioned metaphors: run the city like a business by repaying your family the money you took out of the savings account. Budget the money for low-income housing now; everything else should come later.

SUN Protest Draws Powerful Support

SUN’s Flag Day protest of President Bush’s proposed cuts to the budget of the Section 8 Housing Choice Voucher program is already having results.

In today’s Post-Standard, the lead editorial states that “Section 8 housing subsidies are a success story for the Department of Housing and Urban Development.”

The editorial goes on to say that SUN, the Greater Syracuse Tenants Network and ADAPT “were correct to criticize the president’s priorities.”

What is most heartening was the quote from U.S. Representative Jim Walsh, our Congressman and the head of the committee that decides HUD’s budget. For the first time, he has gone on record as opposing Bush’s cuts: “It wont pass muster with me and I suspect Congress would have huge problems with that.” The editorial states that Walsh’s goal is to provide at least level funding for Section 8 subsidies.

While this is an important victory, it is only a partial one. While Section 8 vouchers are successful, they do not reach all the people who need help. While 2,899 Syracuse families have Section 8 vouchers, there are 3,543 families on the waiting list for the program.

Common Council Drags HUD 108 Loans Out Of The Back Room

Syracuse United Neighbors held a press conference on the steps of City Hall in 1992 warning that the use of HUD Section 108 loans could jeopardize the city’s Community Development Block Grant budget.

12 years and $6.2 million dollars of lost CDBG funds later, the Common Council has finally listened to SUN and its repeated calls to end the secrecy behind the use of these risky economic development loans. Council legislation now mandates that all future loans are subject to approval by two-thirds of the Common Council.

SUN would like to thank Councilor Stephanie Miner for her hard work on this issue. Councilor Miner listened to the concerns of SUN’s members, helped get legislation written and bucked the resistance she got from those in a position to profit from keeping everything the same.

SUN members met with eight Common Councilors to ask them to support this legislation. We are pleased to see that this bill passed unanimously.

CDBG & The City Housing Crisis

The following is a transcript of SUN’s testimony at the Community Development Block Grant Public Hearing held on March 10, 2004.

My name is Maria Johnson and I am a member of Syracuse United Neighbors.

There is a housing crisis in our neighborhood.
The city has over 1100 vacant houses and nearly half are in SUN’s census tracts–an area that has only 15% of the city’s households. Bank foreclosures are booming–over 300 since July 2001 in SUN neighborhoods–we lose a neighbor every 3 days. 10% of the houses in SUN’s neighborhoods have more than one code violation. This rate is twice as many as any other city neighborhood.

CDBG budget priorities hurt homeowners, benefit bureaucrats.
Housing Commissioner Ortiz and Mayor Driscoll cut $625,000 from the funding for families to pay for home repairs. That money would have paid for another 35 families to replace roofs, rebuild foundations and other needed repairs. The only program to help families finance home repairs has a year waiting list.
At the same time, the Mayor and Commissioner increased by $185,000 the amount of money they pay in salaries and overhead to the city Departments of Community Development and Economic Development. 24% of all CDBG and HOME funds goes to these two city departments in overhead costs.

HUD 108 loan repayments have caused the cuts in the budget.
The City is forced to repay HUD over $2 million this year for bad economic development loans. The City has lost over $6 million out of the CDBG budget in the past decade. This is money that could have been spent to repair our homes and improve our community. Mayor Driscoll has repeatedly said he would lobby HUD in Washington to reduce our payments–but nothing happens.

SUN’s Demands

1) Distribute the cuts in the budget equally–reduce the overhead paid to city bureaucrats and give that money back to programs serving our citizens.

2) More money needs to be put into the programs that this budget was created for: helping families repair their homes and reducing the number of vacant houses.

3) We must stop the bleeding from the HUD 108 loans. We urge the Council to pass legislation creating Council oversight and approval of all HUD 108 loans.

We’re also inviting Mayor Driscoll on March 27th to accompany SUN to Washington–we have a bus, a hotel room and a confirmed appointment with Acting HUD Secretary Alphonso Jackson. Get on the SUN bus Matt! Save our neighborhoods. Mr. Mayor, prove that you care about taxpaying homeowners.

A Story About Syracuse

(SUN handed out this flyer at the city of Syracuse’s Public Hearing on the 2004-05 Community Development Block Grant budget on Wednesday March 10, 2004)

A city and its residents are often compared to a family. This is a story about the family of Syracuse.

Syracuse’s ex-husband was a gambler. He gambled on wild economic development schemes that promised big payoffs. He hired an employee to locate these crazy schemes. He built a new building for a company that promised to make plastic toe-caps for work boots (and then diversify into medical eyeball implants!) He bought a big building and fixed it up with all kinds of high tech gizmos to lure the local power company as a tenant, going deeper and deeper into debt.

These high risk gambles were big failures, leaving the family of Syracuse with large debts. The ex-husband left town and ironically wangled a job with the city’s largest creditor.

The city’s new husband has taken responsibility for paying off the loans. He called a big family meeting. He told everyone that times are tight and that all the funds for services for the family would have to be cut–the fund for house repairs and the funds for services for the kids would all have to be sacrificed. “Don’t worry,” he assured the family, “we’re all in this together.”

When the family got a look at their new budget they were amazed to find that not everyone was sharing in the family’s sacrifice. The new husband had increased the salaries for all the household’s servants, as well as the fees paid to the family’s accounting firm–the same group that had advised the spendthrift ex-husband. The family begged the new husband to go to the creditor and negotiate a better deal on the loan terms. He said he’d get around to it–but he never did.

Unfortunately, this is a true story.

Cast of Characters

Ex-husband–former Syracuse Mayor Roy A. Bernardi (current Assistant Secretary at HUD in Washington, D.C.)

New Husband–current Syracuse Mayor Matthew J. Driscoll

Boot Toe Caps/Ocular Implants–Spectrum Med Systems
(Defaulted on $2.5 million loan)

Big Building w/ high-tech gizmos–Addis & Deys Building
(City took out $18 million loan to purchase and rehab.)

Household Servants–Dept. of Community Development
Administration and Technical Services:
(2004-05 Community Development Block Grant budget increase: $127,629 Total budget allocation: $2,337,664–6% increase)

Family Accounting Firm–Dept. of Economic Development Technical Services:
(2004-05 Community Development Block Grant budget increase: $58,163 Total budget allocation: $518,163–11% increase)

Family’s largest creditor–HUD Section 108 Loans ($6.2 million in repayments out of CDBG in the last decade, $2 million this year alone).

SUN Pushes Mayor for More Housing Assistance–No Commitments…Yet!

At a public meeting held on December 10th, members of SUN pushed the mayor to commit himself to helping the low income neighborhoods of the south and near-west sides rebuild their crumbling housing and reduce the number of abandoned houses. Our commonsense solutions were met with stalling and vague statements of sympathy.

Hey Matt: we don’t care if you feel our pain, we want you to do something about it!

Specifically:
$150,000 in CDBG funds to start a mortgage default counseling program. A similar program saves 89% of its clients homes in Rochester.

$2 million in CDBG funds for home repair. The current program has over 100 people on the waiting list and repair costs have increased 30% due to new federal lead regulations.

Take $10 million from the Syracuse Neighborhood Initiative and fund repairs to abandoned buildings in our neighborhoods. Our south and near-west side neighborhoods make up 15% of the city’s households, but have nearly half of all the abandoned houses.

Hey Matt: we’re not giving up.