March 5th, 2018 –  For months, the Minneapolis Public Housing Authority (MPHA) and its director Gregory Russ have insisted there are no current plans for privatizing Minneapolis public housing. However, a “portfolio strategy” document from December 2017, put together by MPHA contractor CSG Advisors, Inc. after months of analysis, includes detailed recommendations for privatization, redevelopment, and other measures.

CSG Advisors is a private consulting firm that specializes in housing finance, especially for public housing agencies seeking to privatize. Its 109-page document, which the Defend Glendale & Public Housing Coalition (DG&PHC) has obtained through public records requests, includes the following recommendations for MPHA:

Glendale:

• CSG Advisors has recommended demolishing the Glendale Townhomes neighborhood, and redeveloping it. A third of the new units would be “market-rate” apartments, meaning private real estate speculators would bid up rents as high as possible, setting the stage for worsening gentrification of the area under the banner of “mixed-income” housing. [pg. 26-29]
• While certain units in theory would replace the existing townhomes, they would be privatized through HUD’s Section 18 or “voluntary conversion” programs, and owned almost entirely by private investors – not true public housing. The proposal also says only “residents in good standing” would be allowed to return, suggesting increased means-testing and other measures would be used to covertly screen for higher incomes and block certain families from returning. [pg. 6, 109]
• Returning families would be funded through so-called “Tenant Protection Vouchers” (TPVs), which can be tied to specific residents rather than the units themselves – meaning if and when those residents moved out for any reason, the subsidy would “sunset” (i.e., phase out) and rents could be raised [pg. 12]. And because similar redevelopments often see as few as one in four residents returning, many of the TPVs may not even apply to the new buildings at all – leaving units free to be marketed to higher-income families at higher rents.

Public housing high-rises:

• CSG Advisors has recommended for MPHA to privatize its high-rise properties, through Section 18, voluntary conversion, and/or the “Rental Assistance Demonstration” (RAD) program. [pg. 7, 43]
• RAD has been championed by the Trump administration, including HUD secretary Ben Carson, on many occasions. RAD privatizes building ownership and transfers residents to Section 8 vouchers, exposing them to discrimination by private landlords, as well as means-testing, budget cuts and rent hikes from the Trump administration. In fact, Trump’s recent proposed budget for HUD includes increased rent payments and new work requirements for Section 8 recipients. RAD would give the Trump administration the power to bypass state and local officials and force those measures onto residents, all while funneling more tax money into private hands.
• CSG Advisors specifically has recommended looking “closely” at Cedar High Apartments (often called “620 Cedar” by residents), Elliot Twins Apartments, and the James R. Heltzer Manor as early targets for privatization [pg. 13]. These buildings are all located in or adjacent to the Cedar-Riverside neighborhood, with mainly East African residents.

Other recommendations:

• CSG Advisors has proposed cutting MPHA’s security and tenant services, as well as a quarter of the staff carpenters, without specific measures to replace them [pg. 42, 84-85, 102, 104-105]. While these are framed as cost-cutting measures, they fit the well known pattern of “demolition by neglect” used by slumlords and property speculators.
• MPHA’s scattered-site properties (single-family homes) would be subject to privatization as well. That means 730 homes could soon be up for sale, displacing those families out of Minneapolis. [pg. 32]
• “Challenges” for MPHA under these proposals are noted to include revising MPHA’s charter and bylaws to allow it to “own, develop and manage non-public housing apartments” [pg. 58] and “units that are not subsidized” [pg. 65]. In other words, MPHA would no longer be a true public housing authority, and instead would transform itself into a semi-privatized developer, beholden to private investors and with little to no oversight from elected officials.

The proposals resemble a beefed-up version of MPHA’s previous plans for Glendale, which residents successfully defeated in 2015, spurring a City Council ordinance meant to prevent secretive redevelopment planning in the future. This resemblance suggests that CSG Advisors has not made these “recommendations” independently, but under the specific direction of MPHA and Gregory Russ. Just last year, in fact, Tanya Dempsey, a CSG Advisors consultant who now plays a leading role in MPHA’s contracts, was slapped with conflict-of-interest fines for an unethical revolving-door relationship with the New York City Housing Authority. CSG Advisors also has worked previously with Gregory Russ during his tenure at the public housing authority in Cambridge, Massachusetts. CSG Advisors’ contract shows it is being paid $300,000 by MPHA for its efforts now. It’s clear that MPHA has been dodging the City Council resolution by hiding its planning efforts behind a third-party contractor.

These proposals are unacceptable to the majority immigrant, Black, and working-class communities living in public housing. The Defend Glendale & Public Housing Coalition renews our call for the Minneapolis City Council to investigate MPHA’s activities and access public funding at the state and local levels – as well as for Mayor Jacob Frey to act now and keep campaign promises he made to public housing residents and the East African community.

Stop privatization NOW – keep public housing public!