An earlier version of this story is "Billionaires take control of Berkeley's public housing" [link], published 2014-03-15.
2014-03-18 by Lynda Carson [email@example.com], posted to [https://www.indybay.org/newsitems/2014/03/18/18752786.php]:
Berkeley - A March 13, 2014, memorandum from the Berkeley Housing Authority (BHA) announced that the disposition project to privatize and dispose of Berkeley's 75 public housing town homes closed as recent as Friday, February 14, 2014. According to the BHA, a February 11, 2014, notice was sent out to all current public housing residents advising them of the transfer of ownership of their public housing housing units to a private entity.
Meanwhile, current and former Berkeley public housing tenants are speaking up and shedding a little bit of light on what has been happening at Berkeley's 75 public housing units once the decision was made to privatize and sell their public housing units to out-of-state billionaires Jorge M. Perez and Stephen M. Ross, of The Related Companies.
Contrary to the claim by the BHA that a notice was sent out on February 11, to notify Berkeley's public housing tenants that their homes have been sold to some out-of-state billionaires, it appears that not all of the public housing tenants have been properly notified about the takeover of their housing.
Kenya Johnson and Francesca Barnett have spent a number of years living at a public housing unit on Russell St., in Berkeley. On Tuesday March 18, Francesca Barnett said, " Where we live there is a duplex and a house located at this property. All three units are still fully occupied with public housing tenants. I live in a two bedroom unit with my room mate Kenya. There is nothing that I can say about our building being sold. Far as I know we have not received a notice yet telling us that our home has been sold. In fact, around two weeks ago someone came by and told us that our building has not been sold. I have lived here around a year, and my room mate has lived here for around four years or more. I definitely am under the impression that my home was not sold yet, and that we are still public housing tenants. I am surprised to hear that our housing has been sold if that is the case. We were told that depending on who buys the property, that it will be the deciding factor on what will happen to us. We were advised that we may receive a 30 Day Notice, or a 60 Day Notice telling us that we may have to move somewhere else, when the building is sold. But it depends on who will buy our housing. They do not allow us to have a say in regards to what happens to our public housing."
The February 11, 2014, notice to some of Berkeley's public housing tenants from the BHA tells them that their 75 public housing units have been sold to the new ownership entity, Berkeley 75, LP, effective February 14, 2014. Additionally, the notice tells the tenants that Berkeley 75, LP, will be their new landlord, and that the BHA will no longer have any involvement in their tenancy. The tenants were advised that beginning February 14th and continuing through the end of the rehabilitation of their housing units that they can use Section 8 vouchers to move if they decide to do so. A phone number or address was not listed on the notice to the tenants in regards to how they can contact the new owners of their 75 privatized housing units.
Out-of-state billionaires Jorge M. Perez and Stephen M. Ross of The Related Companies took control of Berkeley's 75 public housing units on February 14, in a complicated deal that edged out local nonprofit housing developers. Many of Berkeley's low-income families have become displaced as a direct result of the sell out of Berkeley's 75 public housing units that originally were supposed to remain as public housing units in perpetuity, when they were built with taxpayer funding.
Former public housing tenant Terry Pete said, "I was pressured out of my public housing around a year ago after living in Berkeley's public housing for much of my life. I was pressured out of my housing and have been made homeless. I had to move in with some of my relatives to avoid living on the streets. I was not given a Section 8 housing voucher and moved because the stress was so horrible living at the public housing project once they started to pressure tenants out of their public housing units. The stress caused major health problems for me. Many others were pressured out of their housing also, and someone needs to look in to what has happened to us."
For background of the new owners of Berkeley's privatized public housing units, in 2010 it was reported that Jorge M. Perez owned 75% of The Related Companies, and that billionaire Stephen M. Ross a 95% owner of the Miami Dolphins football franchise, owned 25% of the multi-billion dollar development company.
After the billionaires targeted Berkeley's 75 public housing town-homes for privatization, during September, 2011, the Berkeley Housing Authority (BHA) announced that it had entered into an exclusive negotiating rights agreement with The Related Companies of California, LLC, that would last 90 days, with a possible 30 day extension to negotiate the full terms of the deal.
With political connections directly to the White House, Jorge M. Perez a co-founder of The Related Companies has been a major political fundraiser for President Barack Obama, Hillary Rodham Clinton, and was an advisor to ex-President Bill Clinton during his term in office.
In recent years Perez and Ross have also been involved in a major project to privatize many of Oakland's public housing units in a partnership with the Oakland Housing Authority (OHA), and the East Bay Asian Local Development Corporation (EBALDC), a so-called nonprofit housing developer. As a direct result of the partnership, during recent years the Oakland Coliseum Gardens public housing units were demolished, 178 low-income families were displaced from their homes, and the new rehabilitated project is now called Lion Creek Crossings at the former 22 acre site.
To give you an idea about the way EBALDC feels contempt for low-income public housing tenants, on the EBALDC website they currently refer to the old Coliseum Gardens public housing complex as the notorious 1964 OHA public housing development, when describing how nice the newer Lion Creek Crossings privatized rental housing project is. However, the website fails to mention that a 15 year old girl was shot and killed during late December of 2012 at Lion Creek Crossings along with a 14 year old boy who was also shot during that same incident, and that 15 year-old Hadari Askari was gunned down at the same housing complex on July 10, 2012.
Elsie Smith was another public housing tenant in Berkeley, and said, "I was a public housing tenant for fourteen years and moved out of there around two years ago when they offered me a Section 8 housing choice voucher and told me that they wanted to sell my housing. They put a lot of pressure on us to get out of there. I am lucky, because things turned out alright for me. However, it did not turn out so well for others that did not want to move out of their long time public housing."
Eleanor Walden a former Berkeley Rent Board Commissioner said, "I have heard of problems with elderly people being given a notice of two days to get out of their housing lately. Berkeley used to be a moral island that was better than many other places, but now it is no better than cities in Mississippi. We put people on the streets, and there is no morality here any more. We sit back and wait for the axe to fall, and fear that our lives will be eroded and demeaned by people that throw a lot of money around, and displace us in the process. I am horrified by what is going on and do not know what we can do about it. It is inhumane and it is a bad situation for the poor in Berkeley at this point. It is an injustice to the low-income families in Berkeley who face displacement because their public housing has been sold to some billionaires."
Payments Now Being Made To Billionaires -
According to released documents rents have been collected from Berkeley's former public housing tenants with an appropriate proration forwarded to Berkeley 75, LP, the new ownership entity. The BHA also delivered the first list of potential renters on February 20, to Berkeley 75, LP, for the newly privatized federal subsidized project-based units.
In addition, Berkeley 75, LP, is currently screening the first group of applicants for suitability as tenants at the eventually to-be rehabilitated 75 town homes. The potential tenants face a stiff double examination before being allowed entry into the former public housing units as new tenants, and have to be cleared by both Related and the BHA before moving into the privatized housing units.
The incorporation papers for Berkeley 75 Housing Partners, LP, were filed in Sacramento on 4/13/2012, and the entity address is located at 18201 Von Karman Avenue, Suite 900, Irvine California.
Once the privatized units are rehabilitated, inspected, and the new tenants are chosen with new contracts signed, the BHA will start earning as little as $75 per month, per unit in administration fees from the privatized public housing units sold to the out-of-state billionaires.
For additional information, Jorge M. Perez one of the billionaire owners of the recently privatized Berkeley public housing units, is known as the "Condo King" of Miami, Florida, because he has developed and owns so many condominiums in that region through The Related Companies/Related Group. He is also known as a billionaire Cuban American real estate developer.
Perez is also the majority owner of The Related Companies, which is also the parent company of The Related Companies of California, LLC, another wealthy housing development corporation.
Billionaires Made Out Like Some Fat Rats In Public Housing Takeover -
Public records reveal that the out-of-state billionaires got a sweet deal for their efforts to grab Berkeley's public housing units from the poor. It cost The Related Company around $35 million to buy Berkeley's 75 public housing units, at a cost that works out to be around $99 per square foot, even though the median price of housing in Berkeley is currently going for around $454 per square foot.
Public records also reveal that the City of Berkeley loaned the Related Companies of California $400,000 in predevelopment costs to fund some of the costs associated with the disposition and rehabilitation of Berkeley's 75 public housing town homes from the Berkeley Housing Authority. However, the $400,000 loan was later converted to a grant that left the taxpayers holding the bag, and made the taxpayers responsible to pay off the loan.
Payments To Consultants To Privatize Berkeley's 75 Public Housing Units -
On March 13, 2014, the BHA Commissioners also voted to pay an additional $23,241 in consultant fees to EJP/Praxis Consultants, even though the deal is done and the public housing units have already been sold. And it also appears that during the past three years the BHA payed EJP/Praxis consultants as much as $98,711 in total for their assistance in privatizing Berkeley's 75 public housing units, and selling them to out-of-state billionaires Jorge M. Perez and Stephen M. Ross, of The Related Companies. The original cost was expected to be as little as around $37,000 for consulting fees to EJP/Praxis before the costs shot up to around $100,000.
Additionally, documents reveal that on May 12, 2011, the BHA Commissioners voted to pay Overland, Pacific and Cutler an amount of $147,000 to relocate the tenants from their public housing units, and these amounts do not reflect the full costs of legal expenses and other costs associated with privatizing Berkeley's 75 public housing units.
Documented Sequestration Budget Cuts To Federal Housing Programs And Section 8 Vouchers -
Despite the sale of Berkeley's 75 public housing units to some out-of-state billionaires, budget cuts to HUD's federal housing programs may eventually result in higher rents for the new tenants moving in to the privatized former public housing units in Berkeley.
A 224 page Government Accountability Office (GAO) report released during early March 2014, reveals that the massive sequestration across-the-board budget cuts have savaged our nation's federal subsidized housing programs, including the Section 8 housing choice voucher program.
In total, according to the GAO report the Department of Housing and Urban Development (HUD) estimates that due to sequestration funding cuts Public Housing Authorities provided rental assistance payments to 42,000 fewer low-income households during 2013, compared to Fiscal Year 2012. HUD also estimates that sequestration funding cuts to Homeless Assistance Grants will lead to states and localities removing as many as 60,000 formerly homeless persons from housing and emergency shelter programs all across the nation, placing them at risk of ending up back onto the cold hearted streets of America.
Additionally, sequestration reduced funding for HUD's project-based housing assistance program, through which HUD makes payments to owners of multifamily rental housing units on behalf of around 1.2 million low and very low-income families. Available funding to renew contracts for this program decreased from $9 billion to $8.6 billion.
No one could be reached at the Berkeley Housing Authority for comment at the time this story was published.