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Golden Gate Village Resident Council vs. Marin Housing Authority - An Untold Story - Part IV
A multi-part series investigating the extraordinary story behind the case of Golden Gate Village Resident Council vs. Marin Housing Authority, and the challenge of housing those most in need in Marin County.
The Big Squeeze
The case of Golden Gate Village Election Committee, Hazel Goff, Gerald Taylor and Gladys Denis vs. Marin Housing Authority, Interim Executive Director Edward Griffin was settled and dismissed “with prejudice” (a legal term meaning it’s “final”) on April 4, 2014. The Settlement talks had gone on for six months since being ordered by United States Magistrate Judge, Maria-Elena James, on October 2, 2013. Essentially, the settlement ended up exactly where the whole thing began, before MHA General Counsel, Filmus, refused mediation, almost two years earlier.
The MHA had to abandon their convoluted legal claims and had to officially recognize the GGVRC as the official resident council of Golden Gate Village. But that didn’t stop them from making the whole settlement process as painful and difficult as possible.
The MHA Commissioners, through their legal representation at Cholakian & Associates, used every tactic in the book to stall, extend hearings, throw down roadblocks and bring up entirely new arguments in lame attempts to “re-try” the case during the mediation process.
By January of 2013, the parties were no closer to settlement than they were when it started.
GGV legal counsel, Levin, told the Court that “a number of irrational and ill-advised actions by Defendants have seriously impaired the prospects for settlement of this case.” He argued that the “defendants repeated bad faith conduct destroyed their credibility.”
Bay Area Legal Aid had already severely cut the amount of the attorney’s fees they were rightfully due for winning the case, in the hopes of just getting it done and settled quickly (they were asking for less than $100 per hour). But that wasn’t enough for MHA. They wanted further reductions and didn’t want to even pay for Court costs incurred by GGVRC.
In addition, MHA was now also withholding important correspondence with HUD from 2013, under the pretext of having “attorney-client privilege.” This correspondence was essential to prove that MHA had misled the Court in saying that HUD had officially supported their positions – which HUD did not do. Their pattern of behavior was, per Levin, the same as it had been “since the outset of the matter.”
Levin continued,
Negotiating with Defendants presents challenges similar to “whack-a-mole” because just when one issue appears to be settled, Defendants change another one of their positions and render the entire exercise moot. Unfortunately, Defendants appear to have mistaken Plaintiff’s good faith efforts to find reasonable middle ground as instead a starting point to negotiate this matter down to the point of absurdity.
The MHA negotiator also made it a condition that every minor point discussed had to be approved by the Marin County Housing Commissioners (aka the Marin Board of Supervisors), which contradicted the Court Settlement Order, which stated that
…its governing body shall designate one of its members or a senior executive to appear at the Settlement Conference with authority to participate.
In the end, MHA waited until the very last hour on the very last day that they could to sign off on the Final Settlement Agreement, without incurring financial and legal penalties. It appears that they were determined to screw with the GGVRC for as long as they could, just to show them that they could.
For any of us who’ve tried to contest something done by the County, all this has a familiar ring to it.
Meanwhile, what were the County Supervisors doing during all this time? The answer is, as little as possible. In January of 2014, Supervisor Kate Sears became the chair of the MHA Board of Commissioners, and in that capacity could have helped speed the settlement of this case on behalf of her Golden Gate Village constituents in District 3.
She apparently chose not to intervene.
I recently asked Lewis Jordan if he thought MHA should have prosecuted this questionable case against its own tenants or should have settled it before it got to court. His response was to claim attorney-client privilege for all of his communications with the MHA Commissioners and the Board of Supervisors. I reminded him that my question had nothing to do with “attorney-client privilege” and that the case was settled without any “non-disclosure” or “confidentiality” agreements whatsoever. I was just asking him what he thought in retrospect.
He once again cited attorney-client privilege.
In March of 2014, the Plaintiffs were asked to sign the Settlement Agreement. However, Gerald Taylor was hesitant. He was concerned because GGVRC still did not have any assurance that MHA would give them back their meeting space on the property. MHA assured him, through communications with Levin, that they would keep that promise.
To date, their old meeting space has not been returned to them.
The Aftermath
The victory for the Golden Gate Village Resident Council also turned out to be a victory for the other MHA properties. A resident of Kruger Pines in Mill Valley recently told me how happy he was that his complex now had its own resident council, instead of being forced to just have one representative on the old Agency-Wide Resident Council. He was grateful to Gerald, Hazel and Gladys for what they’d done.
The last time I saw Gerald Taylor, he just shook his head and mused, “I still don’t understand why they were so against us having a resident council.”
The 2015 Golden Gate Village Physical Needs Assessment
Under Lewis Jordan, MHA has worked to increase the overall HUD rating at Golden Gate Village (it was about 80 percent in 2014). However, in general, conditions there have continued to deteriorate, if only because of the project’s advanced age, wear and tear, and the lack of needed major capital improvements.
On May 27, 2015, the MHA published an updated Physical Needs Assessment and Energy Audit for Golden Gate Village, prepared by EMF Consultants.
The report summarized some of the major results of its investigation. The detailed cost breakdown tables are a long list of required upgrades, replacements and repairs, including every conceivable type of work item from critical seismic upgrades to replacement of water lines and faucets. It notes the need for new curbs and paving, flooring, paint, boilers, cabinetry, masonry, glass and door replacement, and extensive plumbing, heating and electrical work, including replacing all existing electrical panels, which were notorious for overheating and causing fires.
The cost estimates were projected going out 60 years to 2064. In a word, the estimated costs were going to be expensive: $16 million dollars needed in immediate repairs and about $7 million more in the following five years, for a total of $23 million. And that was just to bring the property up to minimum standards. No frills were included. But this was just an estimate. To date, no one has actually bid on the full scope of the work.
In my estimation, based up my inspection of the and on my involvement in rehabbing some 2,000 units of multifamily housing, the final amount will likely be significantly more.
The Trend Is Not Your Friend
A bit of history and overview about why we find public housing in this situation might be helpful at this point.
Since Richard Nixon took office in 1968, the federal government has been trying to extricate itself from the housing business. More and more responsibilities to create affordable housing have been shifted toward the private sector and local housing authorities. Under the Reagan Administration, the 1980’s saw some of the biggest changes with the creation of the Low Income Housing Tax Credit Program (1986) and the issuance of Section 8 tenant vouchers (1983).
Tax credits for building or renovating low income housing allowed private, for profit and nonprofit developers to finance their projects by selling the tax credits they received to corporations and Wall Street syndicators who in turn sold them to individual investors in the form of derivatives. Similarly, Section 8 vouchers theoretically “stimulated” the housing market by directly subsidizing tenants instead of projects.
HUD describes the program as follows:
The housing choice voucher program is the federal government's major program for assisting very low-income families, the elderly, and the disabled to afford decent, safe, and sanitary housing in the private market. Since housing assistance is provided on behalf of the family or individual, participants are able to find their own housing, including single-family homes, townhouses and apartments. The participant is free to choose any housing that meets the requirements of the program and is not limited to units located in subsidized housing projects.
This all looks good on paper, but the realities have been quite different.
The major problem has been that Congress has failed to sufficiently raise the total housing subsidy, increase the number of tenant vouchers available or the tax credit allocations, annually, and in many cases has even lowered them. Overall, HUD’s annual subsidy funds have been dramatically lower than required to own and manage low income projects. This is not accidental. It’s part of a very conscious effort to get rid of the federal government’s public housing liabilities.
Because of this, many of the projects developed under public housing programs from the 1940’s, 50’s, and 60’s have been torn down, and low income projects developed under programs such as the Moderate Rehabilitation program, which converted tens of thousands of run down market rate properties to new Section 8 projects, have reverted to market rate projects after they were unable to make the numbers work or they went bankrupt.
This step by step, program by program dismantling of the 1937 public housing model continues unabated to this day. For Golden Gate Village, the trend has not been their friend.
At this point, the entire federal public housing program is probably dysfunctional beyond repair and there is little doubt that Congress is trying to squeeze it dry to get the federal government out of the housing operating business for good. The victims of this are public housing authorities, such as MHA, across the country and all the residents who depend on them.
Since Golden Gate Village was built in 1960 based on this old model, it’s become somewhat of an anachronism. MHA is forced to constantly jerry-rig its finances to keep it going.
The Financial Squeeze at MHA
Reviewing the accounting at the Marin Housing Authority is a bit of a trip through the looking glass. Their accounting methods are not “normal.” However, this is not MHA’s fault, but HUD’s requirements under its Public Housing program. Still, after deciphering the code one thing becomes clear. The MHA is in a financial squeeze.
To begin with, MHA is required to operate under a balanced budget. Their revenues are determined by antiquated agreements and formulas established by HUD and they are relatively inflexible from one year to the next. Meanwhile, their operating costs for maintenance, utilities, health insurance, materials, and so forth, are going up year to year, just as they are for the rest of us.
If they have a shortfall, they have no ability to raise rents to match their costs.
HUD provides MHA with two types of subsidy for Golden Gate Village. The majority of funding is accounted for under the “Low Rent Public Housing” program and the remainder is under the “Public Housing Capital Fund.” In addition, MHA collects percentages of the rents from tenants, based on their ability to pay, and they also pass through certain costs to the tenants (some utilities, wear and tear, repairs, etc.).
None of these revenue streams appears to be totally predictable. They vary considerably from year to year and there isn’t much forward guidance to plan for the long term. So as it is, MHA is pretty much a “hand to mouth” organization from an operations standpoint. This in itself is problematic, but what makes the whole thing worse is that the federal subsidies are grossly inadequate to begin with, and the annual costs adjustments are far too skimpy to keep up with actual operating costs and inflation in Marin.
From 2008 to 2014, the total GGV federal subsidy rose just a fraction over one percent per year. This is similar to the way the government calculates Social Security payments. According to the feds, there is no inflation, so Social Security has barely risen in recent years (no change at all for next year), despite the fact that they have increased Medicare premiums considerably over the same time period.
Because of this, MHA has been fighting a war of attrition. A full review of MHA accounting shows that they’ve been cutting costs across the board since 2012, including steadily reducing tenant services, repairs and maintenance, and also MHA’s overall operating and administrative costs.
Doing the Math
Golden Gate Village has 300 units, comprised of 44 one bedroom units, 132 two bedroom units, 111 three bedroom units, and nine four bedroom units, with the remaining four units currently being used for other purposes (storage, maintenance, office space). In 2014, the total federal subsidy for Golden Gate Village from federal funding programs was approximately $2,299,000. Tenant rent revenues were about $670,000 (an average tenant rent of $189 per month) and other types of revenues, including other federal grants programs, totaled $59,977, for a grand total of approximately $3,028,977.
In 2014, Golden Gate Village operated at a loss of $216,310 (income minus expenses). As of December 31, 2014, MHA had only $604,607 available in the Golden Gate Village cash reserves account.
Clearly, major capital improvements, as outlined in the Physical Needs Assessment, are out of the question, and there is no way that MHA will ever be able to accumulate $23 million to substantially renovate Golden Gate Village. However, things just can’t keep going along the way that they are. That would be financially unsustainable, and if the MHA were to become bankrupt or public housing “servicing” were to be privatized, as it has been in parts of Texas, it would lead to even worse outcomes for public housing residents.
We Can’t Afford “Affordable” Housing
“Greed is Good” ~ Gordon Gecko
Those words, written for a fictional movie character in 1987, seem to be the watchword for our times and the financial justification for the “New Urbanism” movement. To believe that the disease (over-reliance on the theory that markets can solve all problems) will somehow be the cure for our lack of housing affordability is really pretty bizarre. Yet this is exactly what is going on all around the country (in Marin, think WinCup).
Inexplicably, uber-progressives, who otherwise are against all things that concentrate wealth at the top, are drinking this Kool-Aid by the gallon. They are in love with the idea of building more massive, high density housing projects that are predominately luxury housing, but include a smattering of so-called “affordable” units. Meanwhile, nonprofit and for profit developers alike are only too happy to have their “grassroots” support.
The GGVRC wants nothing to do with this kind of “gentrification.” Gentrification is defined as:
The buying and renovating of houses and stores in deteriorated neighborhoods by wealthier individuals, which in effect increases property values and displaces low-income families and small businesses.[1]
As things work right now, nonprofit developers come to cities and housing agencies and propose new projects that at best promise to provide about 20 percent of the new units as “affordable.” However, in Marin “affordable” means units for tenants with incomes at 33% of Marin median income to as high as 150% of Marin median income, or about $33,000 per year to $150,000 a year in income for a family of four.
This doesn’t even come close to providing any housing for most of the people who presently live at Golden Gate Village. They cannot afford any of the “affordable housing” addressed in the County Housing Element, or Plan Bay Area, or otherwise being talked about in Marin.
Unsurprisingly, the GGVRC doesn’t want gentrification, even though they have told me that they would like to see Marin City grow in a way that allows individuals to be able to “move up [out of public housing] without having to move out” of the community. However, their reasoning is that most of the benefits of gentrification will accrue to the luxury housing side and all the impacts will be borne by the low income side, including the wholesale displacement of low income residents.
They’re probably right.
Gentrification is now being challenged almost everywhere, not just in California, but in communities across the country. In San Francisco, the South of Mission (SOMA) neighborhoods are suffering a staggering loss of existing affordable units and the demise of existing local serving, family run businesses due to the frenetic pace of redevelopment. In Boulder, Colorado, they are proposing a ballot measure to give neighborhoods voter approval over any zoning changes.
As I’d said, Lewis Jordan has made it a point to repeatedly assure GGV residents that they have nothing to fear. He’s said that no matter what happens to the property, no one will be displaced. County Supervisors also scoff at the notion that anyone would be displaced by redevelopment. They treat anyone who even suggests that as being misinformed or worse.
But in truth, their “no one will be displaced” mantra may end up being a hollow promise beyond their control.
As I noted earlier, federal regulations requiring the one to one replacement of any public housing units lost, was repealed almost twenty years ago (San Francisco does have its own version of that law still on the books). The only requirement now is for a public housing agency to give the existing residents a first option to move back in after the two years it takes to tear down and build or renovate units. However, realistically, where will people go during those two years?
One thing that is assured is that existing GGV resident would be unable to find low and very low income, Section 8 housing here in Marin, if they could even get a Section 8 voucher (there is presently a long waiting list). They would most likely be forced to move to inferior, inner city locations such as downtown Oakland and Richmond, but may not even be able to find housing there.
MHA disagrees with me on the displacement issue. Lewis Jordan contends that a high percentage of existing tenants would move back. So I asked Brad Paul, the current Deputy Executive Director of the Association of Bay Area Governments (“ABAG”), and the former, eight year, Deputy Mayor of Housing under Mayor Agnos in San Francisco, how many residents, in his experience were able to return to the projects in these kinds of situations. His answer was that less than five percent ever come back because most have nowhere to go and must move to wherever they can find employment or subsidized units, which includes leaving the State.
Though the housing authority would have to provide them with some small compensation for “moving expenses,” most would have to go on to start new live somewhere else.
Historic Landmark Status for Golden Gate Village
In an effort to ensure the preservation of Golden Gate Village, GGVRC vice president, Royce McLemore, recently hired San Francisco-based Garavaglia Architecture, Inc. to conduct an “historic resource evaluation” of Golden Gate Village.
The report concluded:
The subject property at Golden Gate Village complex displays a high level of historical significance or integrity that would qualify it for listing as a multi-building historic resource on the National Register of Historic Places or on the California Register of Historic Resources.
Supervisor Sears has indicated that she thinks the County should consider the report’s findings [2]. But I don’t think the community should put much faith in that. Kate Sears’ track record at GGV is not encouraging and she is not known for ever taking a bold stand on anything, unless it gets to a point where it’s inevitable, in which case she sticks her neck out as little as possible and follows the crowd.
MHA itself has yet to officially comment on the Garavaglia report. Other Marin Supervisors have been quoted as saying that they are aware of it, but haven’t read it.
Not in their backyard, I guess.
McLemore recently told the Marin IJ, “We want to get the word out that we are on historical property and these buildings have to be treated as historical moving forward. This is unique and unlike any public housing in America.” From an architectural stand point, that is unquestionably true.
In McLemore’s view, which is corroborated by Aaron Green in his book, Golden Gate Village is the “sister” project of the Marin County Civic Center, which is already a State and National Historic Landmark and was recently nominated as a “UNESCO World Heritage Site.” That designation is probably the highest honor that can be bestowed upon a work of architecture. Other sites on that list include the Taj Mahal, the Great Wall of China, the Great Pyramids of Egypt, Chartres Cathedral, the Parthenon in Athens, Chichen-Itza in Mexico, and the Kremlin, just to name a few.
Unfortunately, for GGVRC, there are very limited sources of historic preservation funding and GGVRC itself doesn’t even have the money required to seek the historic federal and state designations. In addition, though having a property on the National Historic Register will certainly help ensure its preservation, it can actually increase the costs of renovation significantly because certain standards of care must be met.
Still, GGVRC’s efforts to get the project recognized for its historical value makes perfect sense, considering their present options, but in and of itself, it’s not a cure for the more immediate financial challenges.
That is a much more complex challenge.
[1] Dictonary.com
[2] Marin IJ
Read PART II - The Handwriting On the Wall
Read PART III - The Straw That Broke the Camel's Back
Read PART V - It Takes More Than A Village
Bob Silvestri is an architect, former Section 8 housing developer, a Marin resident for over 22 years, and founder and president of Community Venture Partners, Inc.
This series was made possible by the generosity of our donors. Please consider donating to CVP to allow us to continue to assist under-served voices in Marin.