Affordable Housing Institute : US

[Continued from yesterday’s Part 1.]

[Previous Months In Review here: Aug 09, Jul 09, Jun 09, May 09, Apl 09, Mar 09, Feb 09, Jan 09]

 

By: David A. Smith

 

Continuing our review of September’s posts, technology changes interpersonal dynamics and in so doing reveals aspects of human nature, in particular that what matters in crime prevention is not the phenomenon of seeing but that of knowing one is being seen, in The robocop on the beat: Part 1, seen being seen:

 

Are you clicking on images you shouldn’t?

 

Some years back I formulated a more general version of this as the law of the observant herd:

 

 

The herd observes how sinners are dealt with.  In this case, sinners are noticed.  Not arrested, mind you; curiously, not even threatened.  Just noticed.

 

Crime doesn’t like being noticed.  So crime relocates.

 

Hopefully, with as little swag as possible

 

The occupants moved out soon thereafter.

 

The armadillo does what the residents can’t: it observes, it witnesses.  And in a metallic Christian way, it turns the other cheek and it takes punishment.

 

and Part 2, seen as one seeing:

 

In yesterday’s post, innovative police chief Steven Settingsgaard parked a retired police car conspicuously in front of a suspected drug dealer’s house.  Overnight it was demolished, but then something striking happened:

 

The dealer left the neighborhood soon after the incident –

 

Flush a predator from cover and the animal becomes unsettled and nervous; easier to capture.

 

– he was later arrested and convicted on a gun charge.

 

Evidently the emotional disruption played a powerful role in the physical disruption.

 

Find me worrisome?

 

With the disoriented giddiness of one who has staggered off the rollercoaster without losing wallet, lunch, or life –

 

That’s a lovely bridge to jump off, isn’t it?

 

– I examined, with more sympathy than its authors did, our retrospective on how we got through the financial precipice of last, 2008, in The mad experimenters: Part 1, being still breathing is winning and Part 2, I must have known it all along:

 

Despite Chairman Bernanke’s brave words a while back – in this selfsame Wall Street Journal – we may talk about exit strategy all we want, but there will be no substantial exit any time soon.

 

President Barack Obama goes to Wall Street Monday [September 14, 2009 – Ed.], the anniversary of Lehman Brothers’ collapse, to deliver a cautious victory speech. 

 

With Wall Street executives, as well as government officials, in attendance, the president also will admonish “to avoid a return to the practices on Wall Street that led us to the financial crisis and to recognize their obligation to help produce a wider recovery on behalf of the American people.”

 

Sounds good, I suppose.

 

If you don’t like “admonish,” how about “chastise”?

 

With a modicum of hindsight now available, do governments and central banks deserve credit for preventing catastrophe? The early verdict from most scholars, executives and government insiders is yes.  [What are bloggers, chopped liver? – Ed.]

 

How about bloggers?  I said yes at each stage:

 

March 24, 2008, the shotgun marriage of Bear Stearns to JP Morgan Chase: Banking on value.

April 22, 2008, explanation: Banking on value: the explanation.

April 28, 2008, how the Bear Stearns transaction went down: Anatomy of a coup

September 22, 2008, explaining the Paulson Doctrine(s): Part 1, prevent the second great depression

September 29, 2008, explaining TARP: Bailout or bonanza?

October 20, 2008, converting TARP into preferred-stock injections: Paying your rescuer: Part 1, you *will* do it

January 21, 2009: The GSE’s future: Part 1, we need the eggs

March 23, 2009: The AIG Hearings: Part 1, “Now that we’ve killed all the bomb-makers …”

 

What, you think that counts as evidence?

 

On the question of which of dozens of extraordinary interventions — rock-bottom interest rates, surging government spending, billions of taxpayer dollars injected into banks, sweeping government guarantees — made the biggest difference, there’s less agreement.

 

Sometimes the answer is, All of them.

 

An impromptu discussion at AHI led me to write down Three key questions to give your ecosystem a physical: Part 1, follow the critters, Part 2, follow the ownership, and Part 3, follow the money:

 

In the same way, when we consider a housing finance ecosystem, the blood plasma is money, and its tracing is a time-honored investigative technique.

 

“Follow the money”

 

When it comes to housing, the money moves in three dimensions: homes, people, and money:

 

1. Homes.  Providers and consumers finding each other.

2. People.  Sellers and buyers exchanging money for consumption and use rights.

3. Money.  Capital providers and capital consumers financing a home purchase.

 

Understand these three dimensions and you go a great ways toward placing an ecosystem in its space.

 

Thus, if you come new to a housing finance ecosystem, either because you’re visiting a country and want to buy or rent a home, or as a student, researcher, or consultant tasked with designing a new program intervention, you can learn a lot about the ecosystem if you follow the money through each of its three dimensions.

 

These questions are valuable for two reasons:

 

They are worth inspecting

 

1. They are discoverable.  Since everyone who might be an investigator can imagine the sequence of finding an apartment, buying a house, or finding a loan, they create a natural and surprisingly comprehensive line of inquiry for investigators.  More particularly, the questions are non-judgmental – they just ask about what is, rather than what should be or what might be or isn’t.

 

Question 1: Owner-consumer value chain

 

If you have housing (to rent or sell) and I need housing (to occupy or buy), how do we find each other and what kind of tenure relationships could we establish?

 

You’re new in town, and you need a place to live.  Think of all the sub-questions you’ll have.

 

1.       Can I find plenty of places, or are they scarce?

2.       How much space can I afford?

3.       Can I buy or do I have to rent?

4.       If I want to buy, how far out of downtown do I have to be?

5.       Is there enough good-quality rental?

6.       Is the government in the business of providing housing?

7.       Is the government in the business of subsidizing the supply side (helping create more homes)?

 

Now I’m going to ask you a simple question – do you feel … lucky?

 

2. They are measurable.  The results can be quantified – search costs, occupancy costs, closing costs.  Those costs make comparisons possible across ecosystems, and also make possible measuring the ecosystem’s evolution over time.

 

Question 3: Financing a home purchase

 

If I need to get a lot of money to buy a home, where do I get the money, and what does it cost (up front and over time)?

 

In every society, owning urban housing costs many multiples of a normal persona’s disposable housing income; indeed, among my rules of thumb for gauging a housing ecosystem (yes, that’s a blog post to come) is the better the housing ecosystem, the longer the period of time over which a buyer must obligate himself or herself to acquire property ownership. 

 

How long do I have to keep paying for this house?

 

Seldom is a month complete without some tale from the cradle of US apartment living, and our second-most-formal city, New York, which despite its reputation puts up with a shocking degree of informal settlements in Temporary permanence?:

 

You elected me temporarily, but maybe I could be permanent?

 

In New York City, formalization of sheds is literally just around the corner:

 

But others have higher ambitions: They want an all-new sidewalk shed — airy and elegant. The talk among architects, in fact, is that the city is about to launch a competition to design one.

 

Given time, New York’s sheds may become formal arcades – if not rivaling Bologna’s, then maybe New Orleans‘ French Quarter.

 

Formalizing the pedestrian shed: New Orleans arcades

 

In this post, I came bury sheds, not to praise them – but when you think about it, making sheds permanent by arcading them solves everyone’s problem.  It claims more city space for pedestrians, and more air space for additional structures.  The city becomes more dense, yet more livable.  The informal leads the formal, and in that lead, it changes the city.

 

The future of New York City’s sheds?  Torino’s arcades

 

If you leave them there for fifty years, they’ll be historic and then you can’t tear them down.

 

They claimed this was historic and had to be preserved

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[Previous Months In Review here: Aug 09, Jul 09, Jun 09, May 09, Apl 09, Mar 09, Feb 09, Jan 09]

 

By: David A. Smith

 

During September, I published a two-part post so depressing and sober it had taken me a year to take it out of inventory, about Winston Smith’s nightmare: The ultimate future city: 1984, Part 1, the poverty of slums and Part 2, the slums of poverty:

 

 

Perhaps the most famous year in fiction begins in the most tactile not-present:

 

It was a bright cold day in April, and the clocks were striking thirteen.  Winston Smith, his chin nuzzled into his breast in an effort to escape the vile wind, slipped quickly through the glass doors of Victory Mansions, though not quickly enough to prevent a swirl of gritty dust from entering along with him.

 

In previous posts, I’ve profiled visions of ultimate future cities.  Some of these visions are nightmares – and yet, nightmares that can see around us if we know where to look, in the slums inside.

 

Victory mansions? Soviet flats

 

The hallway smelt of boiled cabbage and old rag mats.  At one end of it a colored poster, too large for indoor display, had been tacked to the wall.  It depicted simply an enormous face, more than a meter wide: the face of a man of about forty-five, with a heavy black mustache and ruggedly handsome features. 

 

Big Brother is checking your mouse clicks

 

Only slightly more cheerful, albeit substantially closer at hand, was this grim multi-part story of Los Angeles public housing, in Distrust me just this once? Part 1, the need for trust, Part 2, the enemies of trust, and Part 3, how to build trust:

 

Slums persist in part because they have defenders.  Among those defenders are many slum residents themselves, for whom a lifetime’s experience has taught them, Trust no one, especially any well-dressed or well-spoken newcomer who claims, “I’m from the government and I’m here to help you.”  That makes any slum upgrading program a hard sell, as illustrated by this Los Angeles Times article about the obsolescent and miserable public housing property Jordan Downs:

 

Fred Smith, left, 37, has lived in the Jordan Downs public housing project in Watts most of his life.

 

Ronald Perkins and his neighbors were nearly outnumbered by the consultants and architects who showed up at the Jordan Downs community center.

 

Planning session for Jordan Downs

 

Resident participation is a cornerstone of HOPE VI, as slumdweller control is a cornerstone of Slum Dwellers International’s Urban Poor Fund.  But as Yogi Berra said, if people don’t wanna come to the ballpark, nobody’s gonna stop ‘em.

 

“Which is worse, apathy or ignorance?”

“I don’t know and I don’t care.”

– High school joke

 

The public housing system is structured around dependency.  Just as public housing’s financial schema makes housing authorities dependent on an autocratic HUD and behind that a fickle Congress, its residency policies – in particular, totally mean-tested rents and an allergy to evicting miscreants – promote resident dependency.  It is poverty trap and also an initiative trap, and it engenders passivity:

 

As mental palate-cleaners after such tough pieces were two bits of fluff.  I had a little fun with a Massachusetts state senator who assured us that in no way was he being at all hypocritical by buying his liquor in no-state New Hampshire rather than in new-tax Massachusetts, even though he had by purest coincidence traveled across the entire state, in Borderline behavior:

 

The absurdity of this is brought home when those who make the laws they expect others to observe flout their own handiwork, as did unlucky Massachusetts state representative Michael J. Rodrigues, who discovered the damning evidentiary power of a cell phone camera, and didn’t like it.  As gleefully reported by the populist Boston Herald:

 

State Rep. Michael Rodrigues, inset, a Westport pol, was spotted over the [September 1, 2009 – Ed.] weekend piling booze into his car – emblazoned with his ‘House 29’ Mass. license plate – at a tax-free N.H. liquor store.

 

A Westport lawmaker who voted to hike the state sales and alcohol taxes was spotted brazenly piling booze in his car – adorned with his State House license plate – in the parking lot of a tax-free New Hampshire liquor store, the Herald has learned.

 

This is not Michael Rodrigues’ car, and any inference to the contrary is unjustified

 

Savor the scene: a guardian of the public trust smuggling booze into his home state, caught red-handed violating a law he personally helped make more onerous:

 

Rodrigues, who was loading booze into his car, snapped “mind your own business,” the witness said.

 

“Rich, you’re giving smugglers like me a bad name.”

 

The witness’ account was also posted yesterday on Citizens for Limited Taxation’s Web site.

 

And it’s a doozy:

 

As my family and I were driving back from York Beach my wife asked me to pull off at the NH liquor store on 95 south at the Mass border. When I pulled around to get a parking space you can imagine my surprise to see what I could only assume to be a Mass state rep’s car. He also had a Deval Patrick/Tim Murray sticker on his back window – so I assume he’s a Democrat who voted in favor of the recent sales tax hike.

 

Our citizen journalist is right on both counts.  Mr. Rodrigues is a Democrat, and he voted yes on the tax hike.

 

The increase pushed the sales tax to 6.25% and slapped that same levy on booze – the first time alcohol has been subject to retail sales tax.

 

So the guy comes out with a couple of cases of booze in his carriage and loads them into his car. I asked him if this was “official” business or personal. He was surprised by my questioning and asked what business is it of mine as to what he’s doing. I told him I was a Mass citizen. He said it was personal – I pointed out the state car with official plates and he said it was “his”.

 

“That car is mine, not the state’s”

 

A far cry from Harry Truman, who smacked a stamp onto any personal correspondence he wrote when he was President.

 

I didn’t ask him why he was in NH purchasing alcohol instead of supporting Mass businesses and the 6.25% tax they just levied on us common folk…

 

Observe that Mr. Rodrigues’s district is about as far from New Hampshire as it’s possible to be in Massachusetts.

 

 

Place-based taxation is predicated on the assumption that consumers cannot flee the law’s grasping hand.

 

“Thank you, Thing!”

 

Later I floated some unmoored speculations in All at sea: waterworlds of the future:

 

We all live in a yellow submarine
Yellow submarine, yellow submarine

– Richard Starkey

Every one of us has all we need?

 

Perhaps it’s because, as city dwellers, we seek green space and crave privacy, but few destinations capture our imagination more than the idyllic deserted island.

 

Societal conventions optional

 

Yet we’re rational enough to realize that a tiny island will lack creature comforts – unless, that is, we build them, which seems the premise behind The Seasteading Institute, whose press release explains that a few months back:

 

The Seasteading Instiitute crowned the winners in its first Seasteading Architectural Design Contest to design the floating city of their dreams.

 

‘Floating city’ inevitably reminds me of Gulliver’s Island of Laputa, which Swift envisioned so he could satirize royal and aristocratic disengagement.

 

Wobbling along the cost of Balnibarbi

 

Seasteads are permanent, stationary structures specifically designed for long-term ocean living.

 

Which sounds good, until you realize that very few if any of these structures exist.

 

Maximizing our use of space!

 

Still, they make interesting speculations, so let’s take a look:

 

Serious sums can swing on metaphysical questions only a lawyer can love, as uncovered in You can check out any time you like:

 

At one end of the money-store continuum is physical property, which as I’ve often observed, is immovable, and as earth, it abides.  At another is financial property, which is just as ethereal.  Money is paper (or worse, just electronic bits) which have value only if we all believe it does.  Because we cannot physically relocate property, we are forced to use intellectual forms – title deeds, mortgages, loans, P&S’s – to convey ownership, which is a pure intangible.  Beyond the immutable of physical property and the intangible of ownership, we further slice ownership by adding new dimensions:

 

Two dimensions = land and real property.

Three dimensions (add verticality) = condominium, co-operative

Four dimensions (add time) = rental, time share

 

Each added dimension slices the occupancy/ use rights into a more discrete bundle, which on the one hand tends to add value (because you buy only as much as you need) and on the other complicates the contractual and financial relationships.  Indeed, by multiply slicing the ownership, an unscrupulous developer could tunnel through zoning regulations via a portable hole:

 

Nobody can pull a comb over my eyes!

 

In more serious news, we explored whether the third government housing pipeline, the FHA, will need substantial taxpayer equity like its two siblings, Fannie Mae and Freddie Mac, in Liberally prudent or imprudently liberal? Part 1, how we got here, and Part 2, how we’ll get out of it:

 

Will these folks …

 

 

… follow these folks?

 

An additional 2.4% delinquency on a $627 billion portfolio represents $15 billion more in delinquencies. 

 

The [FHA capital] ratio last year was around 3%, down from 6.4% in 2007.

 

An additional 2.4% delinquency is not the same as losses.  Loss = Default Rates x Principal-Writedown Given Default.

 

Let’s do some simple arithmetic.  How much of a writedown can FHA afford on those delinquencies?  40% losses on 2.4% delinquency represents 0.96% lost portfolio value.  In short, FHA had better recover 60 cents on the dollar.  Or else what?

 

If its reserves fall short, the agency is obliged to notify Congress, which could spark a commotion over the extent to which the government is funding losses in the housing market.

 

The Journal is mightily pumping its bellows; ’spark commotion’ is a far cry from ‘go bankrupt.’ 

 

Keep reading, we’re sure you’ll get fired up

 

A senior official at HUD, which oversees the FHA, said there is “no risk” that the FHA would require money from Congress if the ratio falls below 2%.

 

The Journal knows full well that FHA is the Treasury – it will keep going indefinitely, losses be damned, as long as Congress keeps giving its authority.

 

[Continued tomorrow in Part 2.]

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[Continued from yesterday's Part 1.]

 

By: David A. Smith

 

As we saw yesterday, for fifteen years Joe Slovo had been an informal settlement in the Cape Flats that resisted all attempts at structural improvement.  One night, that all changed:

 

Joe Slovo, March 2009

 

(A large set of pictures is here, from which this post’s images are drawn.  My quotes are from a report, written by Tom Herbstein of the University of Cape Town’s African Security and Justice Program (ASJP), and circulated by SDI member affiliate FED-UP, South Africa’s Federation of the Urban Poor led by Rose Molokoane )

 

Monday 9th March 2009

 

The fire began in Joe Slovo in the early morning.  Within a few minutes, it had spread widely, fueled by intense winds.  Eyewitnesses described the panic as people sought to save themselves, their families and possession from the flames.

At one point the fire bridged a road separating two sections of the township, as flaming sheets of PVC plastic were blown across.  Streetlights blew, cables melted.  So thick was the smoke it was impossible to breathe, let alone to save possessions. 

Thankfully, no lives were lost, no serious injuries sustained.  But 512 shelters burned to the ground.

 

Joe Slovo, March 2009

 

A palimpsest is a previously-written parchment that has been scraped clean.  Parchment was so valuable it had to be reused, so medieval copyists learned how to scrub the delicate surface, removing the former writing so new wisdom could be set down. 

 

Palimpsest – new writing perpendicular to the old

 

Like urban land that has to be reblocked before it can be formalized, and formalized before it can be upgraded.

 

What is blocking?

 

An informal settlement usually grows haphazardly; shacks are built where free space is available.  Blocking, a fundamental preparatory step for in-situ upgrading, reorganizes the shacks to align in rows, back-to-back, with straight pathways in between. 

I’ve encountered blocking around the world, particularly in East Asia, where CODI and ACHR use community-led reblocking, particularly along waterways and coastlines, to improve sanitation and enhance density.

 

After blocking, fires are more controllable, the community is safer for residents, and creates space for future upgrade of key municipal services.  The township has the possibility of formalisation as adequate mapping [to establish plots for entitling – Ed.] can take place.

 

Joe Slovo, March 2009

 

Blocking is intangible infrastructure – it creates the grid onto which critical utility services like water, sanitation, and electrical power lines can be laid.

 

The fire created a palimpsest – physically by demolishing the structures, politically by wiping out established notions of security, and economically by triggering large-scale disaster-relief funding.

 

The fire department was first on the scene, followed shortly by Disaster Management, and attempted to douse the fire, which helped until the pumps ran dry and could not be refilled, presumably due to a lack of hydrants.

 

Lack of public infrastructure led to lack of private property.  In Caesar’s Rome, homeowners were required to maintain filled leather water buckets on every floor and every corridor.

 

Joe Slovo, March 2009

The management of iKhayalami were woken by a call from the Joe Slovo leadership informing them that Joe Slovo was burning and needed their assistance. 

First payoff – there was already a political network of trust built up over several years.  Without that trust, the phone call would not have happened.

Later that morning the leadership began a count of the victims and to draw up a list of those who had lost homes and needed assistance. 

 

Enumeration is critical. 

 

That we may wander o’er this bloody field

To book our dead, and then to bury them.

 

“To book our dead, and then to bury them“

 

Also critical is community participation and community acceptance of those they now and trust:

 

A small confrontation developed between the community and the City when officials suggested bringing in bulldozers to level the area, so that the township could be rebuilt on flatter land.  However, the community was highly opposed to the proposal, not because they didn’t want the area flattened, but because distrust was so strong that they feared this may be just a ploy to clear the area and forcibly relocate the residents to Delft, which it wasn’t.

When iKhayalami arrived to assess the damage, it was then that the leadership suggested that however tragic the fire was, it created a blank canvas, in Joe Slovo, where they were able to rebuild in accordance with blocking. 

 

Ideas germinate and sprout – like the idea of a palimpsest.

 

It was also requested by the leadership that iKhayalami negotiate with Disaster Management, in regards to the distribution of material, as they were busy compiling the lists.

 

Joe Slovo, March 2009

 

I’ve encountered this dynamic in my work with SDI.  If one comes from the formal world, the world of suits and spreadsheets and laptops and vocabulary, one is automatically suspect.  Trust is earned but it is personal trust, not corporate or institutional, which means it must be personally maintained and refreshed. 

 

Disaster Management’s response was cool as they feared responsibility for any future fires may then be laid upon them. 

 

Entirely understandable – and intriguing shift of responsibility.  Do informal communities and informal settlers have the same rights to services as other city dwellers?  That depends on which government agency one encounters – and as more agencies treat those they encounter as having individual rights, more settlements gain community rights.  Bit by bit, the community is bootstrapped into the formal city. 

 

Plots marked with string: Joe Slovo, March 2009

 

That requires the community, for its part, to live up to its responsibilities of citizenship, one of which is mobilization.

 

While some officials were personally supportive of the idea, they insisted that previous attempts elsewhere had not succeeded and it was pointless trying to mobilise Joe Slovo, especially in the aftermath of a traumatic fire.

Furthermore, Disaster Management warned they would only be on site for three days, given the high number of emergencies they had to respond to. 

 

Joe Slovo, March 2009

 

That challenge threw down the gauntlet: if you cannot agree, and soon, you will all lose.

 

After that all emergency packs, clothes and food distribution would be suspended regardless of those still in need.

Disaster response requires having a plan all ready to go – and at Joe Slovo, people did not:

 

It was requested that Disaster Management withhold from delivering their starter packs to site until a clear plan had been agreed as to how to block Joe Slovo.

 

That required broad stakeholder participation:

Nonetheless, the leadership and iKhayalami decided to proceed and at noon a community meeting was held with the aim of both finalising the list of those who had lost accommodation and also to introduce the concept of blocking.  Five hundred people participated.

Joe Slovo, March 2009

 

There was an overall interest in blocking, although most residents still had yet to grasp the idea.  However, halfway through the meeting it was interrupted by Disaster Management announcing they were to begin distributing material. 

 

Although this caused a sudden panic amongst the community, and the meeting quickly dissolved as people rushed off to secure materials, it was felt the critical buy-in towards blocking had been attained.

More likely each householder was so preoccupied with securing his or her own packet of free goods that they did not have time to debate the nuances of blocking.  That created a temporary political vacuum which the technical assistance providers could fill.

 

Joe Slovo, March 2009

With the help of the leadership, iKhayalami began measuring out plots, using rope and pegs, in one corner of Joe Slovo.  Plots measured were 5m x 4m wide, and back-to-back, with a 1.5m walkway in between, deemed to be the maximum size to achieve both a reasonable degree of space for families, while fitting the original number of residents back in.

 

These are small houses; even allowing only a minimum of space between buildings, the typical dwelling will be one room, maybe 12m² (130 square feet), with no running water.  People will carry water back in jugs, and will use common toilets. 

 

Joe Slovo, March 2009

 

The size was also based on the assumption that material acquired by residents from the City would be used to supplement the iKhayalami shelters.

Joe Slovo, March 2009

Towards the end of the afternoon, iKhayalami started to erect their emergency army tents that allowed the community a safe place to sleep, close to site, so that commuting back and forth could be minimised.  This was a very popular move as people were also reluctant to leave Joe Slovo for fear of being evicted. 

Joe Slovo, March 2009

 

Large set of pictures here

 

By the end of the Monday, virtually no construction had begun on site, as people waited to see what would happen.

Joe Slovo, March 2009

 

Would the promises be kept?

 

[Continued tomorrow in Part 3.]

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By: David A. Smith

 

The best thing to happen to the informal settlers of Cape Town’s Joe Slovo township began with a spark:

 

March 9, 2009

On 9th March 2009, a fire razed 500 shacks to the ground, and left 1,500 homeless. 

 

(Unless otherwise captioned, all photos are from iKhayalami and cover the March 9-11 rebuilding days.)

 

What evolved was a partnership between the community and iKhayalami, where an entire section of Joe Slovo was planned, cleared and rebuilt using materials and expertise supplied by the NGO, and the labour and community access supplied by the leadership – all done at just 10% of the cost of more formal housing developments.

The story that follows (a large set of pictures is here, from which this post’s images are drawn) is remarkable for what happened but even more for what it demonstrates about why slums are both resilient and change-resistant, how they become political and economic stalemates, and what becomes possible when tragedy cracks options open.  It also flashes insights into the role of Mission entrepreneurial entities (MEEs) and the responsive power of networks.

 

 

Slums are dense – perhaps this too is part of their definition.  Every inch of land is used, every cubic of shelter space occupied.  People constantly rub and jostle people.  Bold strokes of movement – like, say, comprehensive redevelopment of the neighborhood – are impossible without clearing the space – the physical, political, social, and economic space. 

 

 

I heard the tale from a report, written by Tom Herbstein of the University of Cape Town’s African Security and Justice Program (ASJP), and circulated by SDI member affiliate FED-UP, South Africa’s Federation of the Urban Poor led by Rose Molokoane.

 

Rose Molokoane, at Rockefeller’s Bellagio Conference Center

 

The actors, in addition to the residents themselves, are FED-UP; iKhalayami, a grass-roots development MEE; the Community Organisation Resource Center (CORC), a technical-assistance network; and the City of Cape Town.

 

 

What’s in a name?  In the case of Joe Slovo, much.

 

The story begins fifteen years ago:

 

Joe Slovo is an informal settlement in the Langa township of Cape Town, South Africa.  With over 20,000 residents, it is one of the largest informal settlements in South Africa.  They have been in legal conflict for the past 15 years with government around their right to live in Langa.

Irresolution arises when legal authority collides with physical reality, because both are immovable objects.  The law may be an ass, for it is as stubborn; and people who have nowhere to go are just as stubborn in refusing to leave.

 

 

Joe Slovo was about to embark on an extended legal battle with National Government, around the actual and threatened relocation of residents to transit camps in the Delft area to make way for the N2 Gateway Pilot Housing Project.

 

Irony abounds in slums.  Here is government trying to upgrade a neighborhood, but the residents, deeply suspicious, refuse to be relocated.  They fear that once they have vacated their land, they will lose their leverage and hence their housing and their expectation of government service.

 

Adding to the irony is the settlement’s name.  Joe Slovo, with his wife Ruth First, was a key early all of the African National Congress (ANC), today South Africa’s ruling party.

 

 

For decades he and the ANC’s leadership – Nelson Mandela, Walter Sisulu – carried on an ongoing struggle to end apartheid.  They adopted a Communist line –

 

Winnie Mandela, Nelson Mandela, and Joe Slovo

 

– went to jail during the 1956 Treason Trial (charges later dropped –

 

Nelson Mandela on his acquittal

 

– went into exile –

 

 

– and upon his return in 1990 became founders of a new, fully democratized South African government –

 

 

– of which, in the final irony, Joe Slovo was the first housing minister.

 

Roughly three weeks into his tenure as housing minister, Slovo liked to recount, he had picked up the paper one morning to read New government announcement and reflexively muttered “what are those bastards up to now?”  Then he stopped, as he tells it, and said, “Hey – we are those bastards now.”

 

I am that bastard now

 

Thus the heirs of Joe Slovo were proposing to relocate the residents of Joe Slovo so that they could build a new Joe Slovo – and for fifteen years, stalemate had ensued, stalemate in the face of occasional tragedy:

January 2005

 

iKhayalami was first exposed to Joe Slovo after a large fire razed 3,000 shelters and left 12,000 homeless.

This was an opportunity missed, for action requires pre-tragedy organization.

While iKhayalami were not directly involved with Joe Slovo at this time, they began to look at ways to create a link with the community.

Joe Slovo, March 2009

 

Organization takes time, and requires an investment of trust.  That can start with savings:

October 2007 – A Fed-UP savings scheme initiated

A small savings ‘Federation’ (Fed-UP) was created in Joe Slovo, directly linked with the Community Organisation Resource Centre (CORC) and indirectly linked to iKhayalami.  Its aim was to support residents save money for future improvements to their own housing situation.  However, due to general lack of understanding around Fed-UP’s operations, coupled with suspicions by leadership, opposition blocked Fed-UP’s activities by discouraging membership and meetings within the community.

Slums have many enemies within – alternative power structures, ignorance, suspicion.  These are seldom defeated by direct assault; instead they are taken by slow, patient siege – and by people who take right action when opportunity presents itself.

 

Joe Slovo anti-eviction protests

 

In a slum, opportunity often comes disguised as fire.

 

Limited activities of Fed-UP continued until February 2008 when a smaller fire claimed 150 shelters.  iKhayalami, aware of the importance locally and nationally that Joe Slovo represented, made contact again with the intention of helping their limited number of Federation members who had lost homes and were now destitute.

Membership has its privileges – isn’t that the line?

 

A vital dialogue began between the Joe Slovo leadership, the Federation members and iKhayalami. 

 

Politic phrasing.

 

While the leadership were open to the offer of emergency assistance, they strongly opposed the idea of distributing shelters only to Federation members, a move they saw simply as dividing the community yet further. 

 

Joe Slovo, March 2009

 

Any alternate-power leadership loses its legitimacy if it does not deliver better benefits to its members than those obtained by non-members.  iKhayalami’s offer of help thus represented a direct threat to the incumbent power structures (which the report declines to name); worse for the incumbents was the offers’ unassailable legitimacy.  Who wouldn’t want a free shelter, and who wouldn’t understand that only thoser who had been members should get one?

 

Existing Federation members however, felt it unfair that after being penalized for taking part in the saving schemes, they now had to share the “benefits” with the rest of the community.

And quite rightly so! 

 

In this shift of attitudes not the shifting power allegiances; the Federation members now saw iKhayalami as a more promising ‘political party’ than the incumbent.  The result was a pragmatic fudge:

 

Very pragmatic

 

As material was only initially available for 10 shelters, and far more families were homeless, iKhayalami suggested that both the Joe Slovo leadership and the Federation members draw up lists of those most in need, which they did.

More power shift – now the Federation is acknowledged by the Joe Slovo leadership as a sovereign power with which to be treated.

To end the deadlock, these lists were compared by iKhayalami and 15 recipients selected between the two that tried to balance whom each group saw as most needy.  iKhayalami agreed to finance a further five shelters and consensus was reached.

Because affordable housing always costs money, stakeholders can often be brought to political consensus by a little more mother’s milk of politics – and some creative rationalization:

 

Extending support to non-Federation members was possible because while iKhayalami provides housing for Federation members, this relationship is not exclusive and the organization’s main aim is the upliftment in living conditions of the most desperate in poor communities.  Thus they had no objection to supplying housing units to non-Federation members in this moment of crisis.

Joe Slovo, March 2009, with Table Mountain behind

 

That last phrase is key – during crisis, human beings like other primates will suspend their territoriality in service to species protection.   Yet this was only a small crisis, and the solution was correspondingly small:

 

Communities are expected to participate in building their own shelters under the guidance of iKhayalami staff.  However, in this case, as only 15 shelters were constructed, and the most desperate were the ill and elderly, iKhayalami ended up building most of the shelters themselves.

As a long-time houser, I smiled at this rueful admission.  Whenever housing resources are scarce, there arises a tension as to distribution: serve the most people (shallow subsidy) or neediest people (deep subsidy)?  And if you subsidize the neediest, you reward dependency – which you can justify only if they are dependent through no fault of their own.

 

Small scale also prevented any slum improvement:

 

iKhayalami had also planned to block these shelters together but it was quickly realized that this would be impossible as any shacks had already reclaimed most of the burnt out area and the leadership were still not entirely understanding – or trusting – of the concepts proposed.  As a result, the shelters were built where they could be fitted in amongst the rest of the community. 

 

They still stand today.

 

Joe Slovo, March 2009

 

With a toehold, the new group expanded the reach of its coalition government:

 

The real success of this period was that a relationship had developed between the leadership and iKhayalami and, as people now understood the Federation’s saving scheme, membership in Joe Slovo soared.

Building on this, iKhayalami, with the Joe Slovo leadership, identified a need for a hall as community meetings were at that time being held in the open.  Money had been raised previously by iKhayalami for a community creche to be built somewhere in Cape Town and it was decided to channel these funds into a 54m2 iKhayalami structure, constructed in December 2008.

The newcomers kept bringing gifts, so the incumbent power structure kept tolerating their presence.

 

Joe Slovo, March 2009

 

The newcomers kept selling the vision:

Throughout this period, discussions had continued between iKhayalami and the leadership around the possible ‘blocking out’ of Joe Slovo.

The vision aligned with the goals of the formal power structure:

 

On 5th March 2009, a public forum was held in Gugulethu, Cape Town, organized by the Community Organisation Resource Centre (CORC), to which iKhayalami is linked, and the University of Cape Town’s African Security & Justice Program (ASJP).

The focus of the forum was on informal settlement upgrading, an area Cape Town’s mayor, Helen Zille [Now premier of Western Cape – Ed.] has voiced a commitment towards expanding.  The work of iKhayalami, their shelters and the concept of blocking was introduced. 

 

Thirty members of the Joe Slovo leadership attended and participated in the event.

Then came the fire.

 

Joe Slovo, March 2009

 

[Continued tomorrow in Part 2.]

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By: David A. Smith

 

The older I get, the less I give credence to future-tense verbs: I’m going to X, I will Y.  I place much more reliance on past-tense verbs and durations – for the last decade I’ve Z’d.  So as I read the following Boston Globe article on a praiseworthy idea, and my eye caught the future-tense verbs (in blue bold italic) I found my initially upbeat assessment steadily turning ever more glum:

 

You got a problem with my gloom?

 

The city of Boston plans to purchase foreclosed apartment buildings still occupied by tenants in an effort to stem evictions under a pilot program officials say is the first of its kind in the nation.

Mayor Thomas M. Menino today [October 28, 2009, five days before the Boston mayoral election – Ed.] is expected to unveil the buyback program, which will initially involve 12 apartments in five properties owned by Bank of America Corp. that are located in neighborhoods devastated by foreclosures in recent years.

 

Twelve apartments in five properties is a drop in the bucket – yet every program starts somewhere.

 

Menino said that over the next six months he wants to expand the program to include other lenders and buy as many as 100 occupied apartments.

 

“Here we go, Boston, here we go”

 

This one could serve a genuine need, because, as I posted two years ago in zombie landlords, foreclosure is a destabilizing event:

 

We had a handshake deal on the rent

 

But even having a lease is no protection against a post-foreclosure eviction. Under Massachusetts law, foreclosing owners are not required to honor leases signed by the former owner.

 

That’s remarkable — not that landlords would want it, but that the legislators deferred to their desires.

 

The mortgage industry says its members are not equipped to act as landlords.

 

Hire one. 

 

 

There are plenty of management companies.

 

“Why, yes, we’ll happily evict your tenants for you!”

 

Buying foreclosed apartments and simultaneously executing a new lease with the sitting resident turns the home into long-term rental … and what’s the harm in that?

 

“The tenants are the victims. It is not their fault they were foreclosed upon,’’ Menino said. “Not only is this good for the tenants it is also good for the neighborhoods.’’

 

One of the foreclosures that might be candidates

 

Is there harm in trumpeting something one has not done?

 

The city has not yet negotiated a price with Bank of America, but the money to buy the five buildings will come from $8.2 million in federal funds set aside to buy and renovate foreclosed homes.

 

Here we have an advanced form of political vaporware: a pledge to do something in the future, in exchange for your votes – your political equity – today.  That’s outstanding political calculus, of a type I’ve encountered before, most memorably in Egypt, when as a subcontractor to a USAID prime contractor, I designed and built financial projections for a 500,000-home affordable housing production program that President Hosni Mubarak announced one Pharaonic day on the campaign trail, seeking to keep his winning plurality above 90%.  I designed the program; I wrote the financial model; I highlighted the key decision variables; I sent the proposal forward.  Mubarak got elected overwhelmingly, and I never heard further if the program ever advanced beyond that initial conception.

 

“What did his models say it would cost?”

 

The properties will then be resold to homeowners, nonprofit groups, or private developers.

 

Otherwise known as “people we haven’t located yet.”

 

City officials said they have also applied for [A deflective version of 'maybe we will get' – Ed.] another $39 million under the federal Neighborhood Stabilization Program.

 

Otherwise known as “money we haven’t got yet.”

 

Can we apply for money too?

 

Renters are increasingly being forced to vacate homes reclaimed by lenders through foreclosure auctions. In Boston, more than 75% of those displaced through foreclosure are tenants with no direct involvement in the owner’s mortgage problems, city officials estimate.

 

While granting the statistic, it doesn’t prove the hypothesis.  Boston has had very few homeownership foreclosures; they’ve concentrated in investor-owned absentee-landlord properties.  If the rate of eviction is increasing, that’s not because of the high percentage of rental foreclosures, but rather because the lenders have finally got their procedures in place to deal with their foreclosure backlog.

 

Traditionally, lenders have been reluctant to sell foreclosed apartment buildings that remain occupied because of liability and other issues.

 

It’s an issue of touch and risk.  Making the decision to keep a resident in an apartment requires ‘touch’ – some granular knowledge that’s specific to the market, property, and resident.  It also requires some risk tolerance because (x) the tenant may have counterclaims (warrant of habitability) against the owner, and (y) many buyers of foreclosed homes would rather use them for ownership or renovation rather than having to deal with the tenant themselves. 

 

It’s easier to secure if you’re out of it

 

Tom Lin, a senior vice president at Bank of America, said the program is an innovative way to stabilize neighborhoods as well as to allow lenders to unload properties.

 

Generally, foreclosed homes “sell much quicker vacant than occupied,’’ he said, but lenders are beginning to consider alternatives.

 

Compared to the touch costs of making the rental-continuation decision and the risks of keeping the tenant in place, the interim rent isn’t worth it.

 

Often, [foreclosing lenders] resort to evictions or strike deals known as “cash for keys’’ in which tenants are given money to move out.

 

You can post all the notices you want, but it’s often easier just to pay a few bucks for the resident to go away

 

Voluntarily, that is. If there is an oversupply of foreclosed homes, which there may be, the tenants can readily find new housing.  So cash-for-keys may prove a good deal for them.  Nevertheless, there’s a human-interest story in protecting these renters, which means there’s both political capital to be accumulated and a policy case to be made.

 

Lisa Alberghini, cochairwoman of Coalition for Occupied Homes in Foreclosure, a local housing group, said she is pleased the city has taken the initiative in assisting renters living in foreclosed properties.

 

A while back I had the singular honor and personal pleasure of being paired with Lisa as the 2009 Vision Award winners from the National Housing & Rehabilitation Association (NH&RA).

 

A good picture of Lisa, animated as usual

 

She’s on the side of the angels, and smart to boot.

 

“The idea that the bank agrees to sell properties with tenants still in them and the city has the opportunity to dispose of them without displacing the tenants, it’s just remarkable,’’ said Alberghini, president of the Planning Office for Urban Affairs, a nonprofit housing development group affiliated with the Catholic Archdiocese of Boston. “I hope it prompts others to step forward and do the same.’’

 

Agreed.  If it can be worked out – the touch and the risk – it can add value.  For that the city can play a significant role, both in doing the work and in the abating the risk.

 

Bank of America’s portfolio includes about 330 foreclosed Massachusetts properties, Lin said.

 

Boston housing chief Evelyn Friedman –

 

Renovating them one at a time: Evelyn Friedman

 

We met Evelyn in the blog 4 ½ years ago, in our tour of the Hotel Dartmouth historic rehab, when she was executive director of Nuestra Comunidad CDC.  As so often happens in the housing roundelay, she’s now on the government side, interacting as a resource provider with people just like her former self.

 

– said tenants of the 12 apartments being bought are unaware of the plan, but that they will soon be contacted.

 

In fact, therefore, nobody’s actually done anything.  The intentions are praiseworthy, yet the properties are not purchased, nor are the rehab or transfer funds in place.

 

The program builds on an ongoing campaign to purchase abandoned foreclosed properties in hard-hit areas of Dorchester, Roxbury, and Mattapan, she said. Since last year, the city has bought 10 vacant buildings and is in the process of closing deals on 28 others.

 

Tenant organizers yesterday praised the fledgling buyback program.

 

“Praise us, we’re going to grow!”

 

The scale is small, and the delivery is slow.  By the time the program reaches any meaningful level of activity, most of those who were at risk will have solved their problem one way or another.  Still, it’s a start, and if the volume of foreclosed small rentals does spike, at least there will be a mechanism in place, and people who have an understanding of how to use it.

 

“This is a good thing for occupied tenant buildings,’’ said Steve Meacham, a community organizer with the Jamaica Plain housing organization City Life/Vida Urbana. “It is certainly a step forward.’’

 

One step forward?

 

Although the program is being made public six days before the mayoral election, Menino insisted the timing was not motivated by politics.

 

Insisted.  Residents have not been notified, properties have not been purchased, resale buyers have not been identified, and transfer funding has not been secured.  We were just so bursting with enthusiasm that we wanted to tell all the voters now, even though we couldn’t tell the twelve lucky households.

 

Just a happy coincidence.

 

“Luck favors me, doesn’t it?”

 

He said the intention is to demonstrate to federal officials that the city is at the forefront of anti-foreclosure initiatives as it seeks more funding.

 

Let us now praise famous Menino and his praiseworthy intentions.

 

PS  Like President Mubarak, Mayor Menino won re-election.

 

“Was it ever in doubt?”

 

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