The HUD Haggle

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A group of Lower East Side tenants say they have become pawns in the middle of high-stakes bargaining between their landlord and federal housing officials. They’re afraid their landlord will walk away from his contract to provide low-cost housing when it expires later this year, and that they may have to scramble to find new apartments. And while both the landlord and the feds deny it, the worried tenants feel that he is manipulating their fears in order to get a sweet deal in the end.

Lower East Side One houses on East 10th Street is part of the Section 8 program, under which the U.S. Department of Housing and Urban Development pays landlords to house poor renters. Tenants pay 30 percent of their income, and the government picks up the difference. But Phase One’s contract runs out this October, giving landlord William Hubbard the chance to leave the program if he wants to. Following HUD rules, Hubbard and his partners sent 150 tenants a letter last fall announcing the expiration of the project’s Section 8 contracts. This April, tenants got a second missive almost identical to the first one, with one difference: It said the landlord would renew the contract only if HUD offered him a satisfying deal.

The panicked tenants took the second letter as an indication that their landlord was leaning toward leaving Section 8. For days, they flooded HUD with hundred of phone calls begging the agency to negotiate with the owner to keep him in the program.

Many tenants are now convinced that the landlord deliberately sent the letter to agitate tenants, sending a signal to HUD that he was serious about his threat to back out. “It’s all about the almighty dollar. The landlord wants more money and HUD is trying to bargain with the landlord, and we’re caught in the middle,” contends G. Jenny Rivera, a Phase One tenant for 17 years. Maizie Torres, the president of the tenant association, says that tenants continue to fear that their landlord will leave the program if the housing department does not meet his expectations for an increased subsidy. “He wants us involved, to pressure HUD to meet his demands,” she says.

Hubbard claims his office believed that it needed to send the second letter to comply with HUD requirements. “The letter was not meant to alarm the tenants,” he says. “In fact, it was meant to reassure them that an alternative program was available that would allow the…program to continue, assuming we could work things out.”

HUD representatives insist that in any case, tenant input will have little impact on the final deal. A spokesperson says that the government’s renewal offer is determined by an independent appraisal, which can only be adjusted by a few percentage points. “We don’t call it a negotiation process,” explains Deborah VanAmerongen, Director of Multi-Family Housing at HUD’s regional office. “We are limited as to how much we can vary from how much our contracted appraiser said.”

Part of the confusion is that this contract renewal process is new, and housing officials and landlords are still working out the details. “There’s a lot of concern now because everyone’s in the dark,” admits Hubbard. “We anticipate meeting with the tenants to let them know what we plan to do once we finalize our plans with HUD.” Meanwhile, tenants are bracing for the worst. “I bought a bedroom set for my kids, but I can’t give the store a delivery date because I don’t know if we’ll still be here,” says Rivera, whose kids have been sleeping on mattresses on the floor. “I don’t want them to assemble the beds if I’m going to have to take them apart in a few months.”