MPHA and City of Minneapolis are Privatizing over 730 Public Housing Single-Family Homes Knowns as Scattered Sites
Updated: July 10th 2019
What is Section 18 Demolition & Disposition?
**Section 18 is NOT the same as Section 8**
Section 18 of the 1937 United States Housing Act is a policy of the federal Department of Housing & Urban Development (HUD) which allows public housing authorities (PHA’s) to demolish and redevelop their properties under certain conditions. This is a voluntary program that PHA’s elect to pursue. The specific terms used for this process are “Demolition and Disposition.” Demolition means the destruction of housing, simple enough…but what does “Disposition” mean? Disposition is the transfer of public housing properties to private developers and authorities. Disposition allows private developers and nonprofit corporation to take ownership of public housing properties, allowing them to be converted into private, market-rate housing.
Section 18 in action means destroying and privatizing public housing and redeveloping the properties into new housing which is unaffordable to working, low income and poor people. Under Trump and Carson, HUD has significantly expanded Section 18 while simultaneously gutting tenant protections and resident consultation requirements. Trump and Carson have made it easier for PHA’s to obtain permission to dispose of their public housing by reducing the “obsolescence” requirement. Meaning that a PHA no longer needs to prove a unit is beyond repair in order to dispose of it.
Prior to 2018, Section 18 was encouraged by HUD primarily in situations where single-family homes were beyond repair and where funding was not available. Trump and Carson are now encouraging PHA’s to use Section 18, often in conjecture with another privatization scheme, Rental Assistance Demonstration (RAD), to dispose of public housing stock nationwide. This is a privatization scheme, the end goal of which is the end of public housing, the gentrification of neighborhoods, and the displacement of Black and Brown communities.
MPHA’s Section 18 Privatization Scheme
DGPHC has leaked documents proving that MPHA is aware of and taking advantage of Trump and Carson’s lax Section 18 enforcements. MPHA will use Section 18 to privatize over 736 units of single-family and duplex homes. These units, known as “scattered sites” are home to over 5,000 low-income people of color, the majority of whom are children.
MPHA will sell the 736+ single family homes for one dollar per unit to a new private non-profit that MPHA created called Community Housing Resources (CHR). This private non-profit will then create an LLC that will own .001% of the properties. The private investors that MPHA invites will own 99.99%. We are able to find very little information about this private non-profit, LLC, or private investors. During the May 16th, 2018 MPHA Board Meeting, Executive Director Greg Russ revealed that MPHA’s Section 18 scheme will result in units being converted to “workforce” housing, see 1:06 in this video. In the same meeting, Russ defined “workforce” housing as serving those making 80-120% Area Median Income (AMI). 80% AMI for a Minneapolis household income is $71,900 per year. The average income for a public housing family range between $14,201 to $20,656 per year. Following MPHA’s disposition of the scattered sites, current public housing families will be unable to afford the new units and will be displaced. During this same board meeting, Russ admitted that some of the scattered sites will be turned over to developers; see 1:43.
If MPHA’s Section 18 application is approved by HUD, thousands of low-income public housing families with children in Minneapolis will lose their housing. They will be priced out of their homes and their units will be turned over to developers and private investors. These tenants are disproportionately people of color, with the majority being Black, Hmong, and Black Muslims (East Africans), immigrants, refugees with limited knowledge of English, and a disproportionate number are elderly, children, and disabled.
How MPHA Undermined Public Housing Residents to Push this Application
On February 27th, 2019, Minneapolis Public Housing Authority (MPHA) Board of Commissioners voted to approve MPHA’s Section 18 application. This decision was made with no input from families that live in these homes and with no public process.
After talking with scattered site residents, it has become clear that residents were not notified or informed about MPHA’s Section 18 application and were not given the opportunity to comment on the application. Additionally, the scattered sites do not have a resident council to represent their interests. MPHA is aware of the lack of a resident council which is a violation and did nothing to ensure that resident voices were heard.
At this February board meeting, the only residents MPHA allowed to speak were members of the Resident Advisory Board (RAB). There were only five MPHA residents on the RAB, and not a single one was a scattered site resident. The RAB met only an hour and a half before the public board meeting. They did not understand the application and approved it while MPHA’s Jeff Horwich guided them to approve the application. Following this, the MPHA Board voted to approve the Section 18 Demolition & Disposition application without hearing from a single scattered site resident. When resident leaders from DG&PHC raised objections to this process and attempted to ask questions they were harassed, silenced, and eventually, MPHA called the police on them.
How Mayor Frey & MPLS City Council Undermined Public Housing Residents
Mayor Jacob Frey and Council-Member Lisa Bender wrote a letter to HUD in support of MPHA’s Section 18 application. Without this letter of support, HUD would be extremely unlikely to accept MPHA’s Section 18 Disposition & Demolition. Mayor Jacob Frey and City Council President Lisa Bender are pushing Trump and Carson’s plans to end public housing in order to gentrify the city and turn our remaining public housing into unaffordable housing developments for the wealthy. Bender and Frey wrote this letter of support without a full council vote and without any community engagement or opportunity for public comment. This is in clear violation of the City Council’s Core Principles of Community Engagement. When a national reporter asked Frey & Bender about this application several times, they did not respond. The people of Minneapolis have to hold Frey, Bender and the rest of City Council accountable for planning to end public housing, push Trump’s housing agenda, and destroy Black and Brown communities.
Resources on Section 18 around the country:
San Francisco, Dallas, Philadelphia, New Orleans, Oklahoma City
PDF Copy: https://tinyurl.com/Section18-Factsheet-Updated