Housing Activists Criticize Lack of Financial Access

A proposed federal plan designed to prevent the possible loss of thousands of low-income apartment buildings was sharply criticized by Los Angles housing activists this week for failing to provide tenant groups access to critical financial information.

City housing experts asked that officials from the U.S. Department of Housing and Urban Development make public “prepayment” plans filed by developers who want to sell the federally subsidized properties. Tenant organizations say they need the data to determine whether they can purchase the apartment buildings.

HUD officials say they cannot make the prepayment plans public because of confidentiality laws concerning the finances of each owner.

“The lack of information has served as an impediment to tenant groups who want to respond to the prepayment plans,” Neelura Bell, assistant housing coordinator for Mayor Tom Bradley’s office, told HUD officials Thursday night at a public hearing in downtown Los Angeles. “Obtaining documents from HUD is often a difficult and frustrating process.”

Hundreds of thousands of low-income apartment units are in jeopardy across the nation because of a program that allows developers of subsidized housing who obtained low-interest loans in the 1960s to pay off their long-term mortgages early.

In Los Angeles, hundreds of the buildings could be sold in the next few years--either to nonprofit groups and tenants who want to keep the projects affordable or to other developers who may want to convert the properties to get a higher return on their investment.

After Congress revised a law last year aimed at preserving much of the country’s low-income housing stock, HUD officials drafted revised guidelines to spell out how the prepayment program would work. The guidelines are expected to be approved later this year.

HUD is holding a series of hearings across the nation to receive comments on the proposed plan. Los Angeles, which has 136 federally subsidized apartment developments eligible for prepayment before 1997--including large low-income, inner-city housing projects--was chosen as the site of the first hearing.

“These regulations don’t even give us an opportunity to sit down with project owners or HUD before the building is sold,” said Regina Hyman, a tenant group leader from the Holiday Venice Apartment complex. “The way this thing has been set up, without seeing the prepayment plans, tenants don’t stand a chance of buying these buildings.”

During the two-hour meeting, HUD officials listened without comment to complaints from more than a dozen tenants. City housing officials also asked that the federal agency expand the scope of the prepayment guidelines to include more relocation funds for tenants who are displaced when their buildings are sold.

Bell suggested that HUD allow cities “to have some say” in the approval of prepayment plans, rather than give sole authority to the sprawling federal agency. Half of Los Angeles’ 23,000 low-income apartment units will be eligible for prepayment in the next two years.