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HUD Is Trying to Privatize and Mortgage Off All of America's Public Housing

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The Obama Administration's move to the right is about to give conservatives a victory they could not have anticipated, even under Bush. HUD, under Obama, submitted legislation called PETRA to Congress that would result in the privatization of all public housing in America.

The new owners would charge ten percent above market rates to impoverished tenants, money that would be mostly paid by the US government (you and me, the taxpayers). To maintain the property, the new owners would take out a mortgage for building repair and maintenance (like a home equity loan), with no cap on interest rates.

With rents set above market rates, the mortgage risk would be attractive to banks. Either they make a huge profit on the mortgages paid for by the government. Or if the government lowers what it will pay for rents, the property goes into foreclosure. The banks get it and can sell it off to developers.

Sooner or later, the housing budget will be cut back and such foreclosures will happen. The structure of the proposal and the realities of Washington make it a virtual certainty.

The banks and developers make a fortune, with the taxpayers paying for it. The public loses its public housing property. The impoverished tenants lose their apartments, or have their rents go way up if they are forced into the private market. Homelessness increases. Government gets smaller. The banks and developers win. It is a Bank Bonanza! The poor and the public lose.

And a precedent is set. The government can privatize any public property: Schools, libraries, national parks, federal buildings -- just as has begun to happen in California, where the right-wing governor has started to auction off state property and has even suggested selling off the Supreme Court building.

The rich will get richer, the poor and public get poorer. And the very idea of the public good withers.

This is central to the conservative dream, in which there is no public good -- only private goods. And it is a nightmare for democracy.

The irony is that it is happening under the Obama administration. Barack Obama, running for office, gave perhaps the best and clearest characterization of what democracy is about. Democracy, he has said, is based on empathy -- on citizens caring about and for each other. That is why we have principles like freedom and fairness for everyone. It is why social responsibility is necessary. The monstrous alternative is having a society where no one cares about or for anyone else.

HUD, under the Obama administration, is about to take a giant step toward that monstrous society.

Here is a quote from the PETRA bill. It's intent is to:

provide the opportunity for public housing agencies and private owners to convert from current forms of rental assistance under a variety of programs to long-term, property-based contracts that will enhance market-based discipline and enable owners to sustain operations and leverage private financing to address immediate and long-term capital needs and implement energy-efficiency improvements.

Along the way, tenants' rights will be trampled, since tenants could not longer seek redress from the government through their public officials -- because the government would no longer own the buildings.

Stop PETRA. This is urgent. There is a hearing next Tuesday, May 25, before the House Financial Services Committee and the Subcommittee on Housing, organized by Rep. Maxine Waters. Phone: 202-225-2201. Fax: 202-225-7854.

Click here to write to the committee.

Write to your Congressperson now.

If you want to sign a petition, click here.

Here is a letter from the National Association of HUD Tenants.

Here is an informational website, with letters, background information, and alternative proposals.

And do what you can to get the word out. This requires a national discussion.



George Lakoff is the author of The Political Mind and Don't Think of an Elephant! He is Goldman Distinguished Professor of Cognitive Science and Linguistics at the University of California, Berkeley.

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