Globe Article Makes Hash of Housing Policy

Posted by Matthew Schwarzfeld on July 7, 2008

Low-income housing experts and advocates are expressing frustration at a recent investigative article by the Boston Globe on Barack Obama’s record of establishing tax credits for privately developed affordable housing. The article has stirred considerable criticism of the Democratic presidential candidate, mostly on right-wing blogs.
“It was a total bag job,” said Michael Kane, the executive director of the National Alliance of HUD Tenants. “It was sloppy. The author clearly has no concept of the value of government-subsidized housing.”

The Globe‘s Washington bureau chief Peter Canellos argues that the story’s purpose was not to examine the value of tax-credit programs. “This was not a story on the merits of these programs, but on Barack Obama and his role as a political leader in Chicago dealing with the issue of affordable housing,” Canellos said.

Canellos formerly served as the Globe‘s housing-policy reporter. (The article’s author, Globe housing reporter Binyamin Appelbaum, has reportedly accepted a new job at the Washington Post. Citing Globe policy, he declined to comment.)

Applebaum’s article explores Obama’s connection to various low-income housing developers and managers of buildings where tenants suffer hazardous living conditions (and includes a video documenting these conditions). The developers — a list that includes Tony Rezko — received a state tax credit authorized by Illinois legislation co-sponsored by Obama in 2001. According to the Globe, several of the developers who received the tax credit have contributed more than $175,000 to Obama’s state and national campaigns in the past decade.

The article examines the tax credit primarily through the story of Grove Parc, a 500-unit building with a long history of negligent managers (some with ties to Obama). According to the Globe, “Grove Parc has become a symbol for some in Chicago of the broader failures of giving public subsidies to private companies to build and manage affordable housing — an approach strongly backed by Obama… .”

The facility was formerly managed by a company headed by Valerie Jarrett, a senior adviser to Obama’s presidential campaign and a member of his finance committee. As a result of strong tenant opposition to a federal plan to foreclose the property and eject subsidized tenants, the property is now managed by a nonprofit affordable-housing group.

National low-income housing groups agree that Jarrett’s company, Habitat Co., mismanaged Grove Parc. But they also argue that in the process of reporting this, the article mischaracterizes and ultimately smears what has actually been a successful policy of tax-credit programs for low-income housing. They cite four primary concerns with the article:

  • The tax-credit program is not presented in context. “It’s not clear to me which tax-credit program the article is referring to,” said Kate Walz, an attorney with the Chicago-based Sargent Shriver National Center on Poverty Law. Illinois has three tax-credit programs that help finance affordable-housing development. The 2001 Obama legislation created a tax credit for what is known as the Donations Tax Credit; the other two, funded by federal and state government, generate significantly more investment for low-income housing in Chicago. “The amount of funding for any one project generated by this particular program is miniscule,” said Bob Palmer, policy director of Housing Action Illinois. Experts observe that the article also neglected to mention that the program is highly popular: When it was up for vote in the state senate in 2001, 53 senators voted in favor with only 3 dissenting.
  • Obama’s role is misrepresented. According to those familiar with the program’s administration, Obama was not in a position to influence allocation of funds, as the experts interviewed believed the article implied. Funding decisions are made by housing authorities through a process in which elected officials have no significant role. Additionally, policy experts regard the key evidence cited in the article for Obama’s influence-peddling — signing a letter endorsing housing developers in his district — as standard practice. “Tenants are complaining about substandard conditions,” said Michael Kane of the National Alliance of HUD Tenants. “What should a public official do: secure the money or ignore them?”
  • The article misrepresents the state of Grove Parc. As evidence for the negative consequences of the Obama-led legislation, the article describes the deplorable conditions in Grove Parc and quotes several tenants. But advocates and other Grove Parc tenants reject this description. “Grove Parc is the poster child for turning a bad situation into a good outcome,” said Dina Levy, director of organizing and policy and the Urban Homesteading Assistance Board, a housing policy and advocacy nonprofit in New York.

According to Levy, Grove Parc indeed had its problems, but it is currently managed by a well-respected national nonprofit in partnership with the tenants themselves. “This part of the story was totally ignored,” said Levy.

  • Public subsidies for private low-income housing development is good public policy. More than anything, advocates worry about possible harmful consequences of a mainstream news article bashing public financing for low-income housing. In the opinion of Kane from the National Alliance of HUD Tenants, the article strongly suggests something sinister about government legislation that subsidizes construction and operations of low-income housing. The article “concludes that the whole system is a failure, even though the majority are well-run and well-maintained.”

The Globe article is not the first to call into question Obama’s legislative history on housing and poverty issues. Levy from the Urban Homesteading Assistance Board agrees that the Obama campaign should present its housing platform in more specific terms.

Canellos says the Globe story helps fill this void. “The reporting shows that Barack Obama considered himself an expert on affordable housing. He had strong personal and professional ties to some of the owners and managers of affordable-housing projects that had substantial problems.”

But Kane, Levy, and other advocates believe the article confuses, rather than clarifies, the complex public-policy questions it raises. Suggesting all subsidized private developments are a bad thing is like “throwing the baby out with the bathwater,” Kane said.

About the author more »

"Matt Schwarzfeld":mschwarzfeld@gmail.com is a freelance journalist who has written for the Village Voice, ProPublica, and City Limits Weekly. He worked as a policy analyst for a national criminal justice research firm for several years, and is now a graduate journalism student at New York University.

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COMMENTS

Joseph Kriesberg
16 Jul 08, 9:42 pm

The article was indeed confusing and painted with a far too broad of a brush. And I am not at all familiar with the developments in Chicago. However, I think the fundamental point was that Obama took campaign contributions and had close relationships with slumlords. I don’t know how fair that it is, but it is a serious allegation and one that should concern housing and tenant advocates. I also think it is fair game to look at where he gets campaign contributions. We all know that private owners have a great deal of influence on public policy and steer it to their benefit. The lack of a strong Expiring Use policy in this country is evidence of that (Illinois actually has some legislation on that issue - I wonder if Obama helped get it passed.) Housing advocates are often in a bind. If we point out the flaws in housing policies and/or the ways in which they benefit private owners more than tenants then we risk underming the very programs that we desparately need. But if we ignore the abuses, they will grow and grow and hurt our constiuency. This is a tough choice but at the end of the day I believe that housing advocates have to support transparency and accountability.

The Globe article had many flaws, but those flaws should not distract us from uncomfortable truths that may lie within.

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