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Hope VI suit names Kelly

D.C. tenants echo Louisiana complaint

(Published Oct. 8, 2001)

By JOHN DeVAULT

Staff Writer

D.C. Housing Authority Executive Director Michael Kelly, who headed the Housing Authority of New Orleans before coming to Washington, is accused in a lawsuit there of conspiring with other officials to force thousands of public housing residents from their homes to make way for an upscale housing development.

The New Orleans allegations mirror many of the complaints of public housing tenants in the District, who also have been displaced by recent redevelopment efforts at their complexes under the federally funded Hope VI program.

The lawsuit filed last month by current and former residents of the Desire public housing complex in New Orleans alleges that Kelly and other officials illegally developed a plan that "intentionally forces...residents to abandon the community that they have lived in since birth and relocate to other rundown neighborhoods and houses in an effort to create an affluent neighborhood to attract middle-class African-Americans and Whites."

Kelly declined to comment on the suit through a D.C. Housing Authority spokesman.

"Our company policy is not to comment on pending litigation," said DCHA spokesman Leo Alexander. Kelly’s actions since taking over the D.C. Housing Authority are not at issue in the lawsuit.

Kelly headed the New Orleans public housing agency from 1995 to 2000.

Fundamentally, the lawsuit alleges that the Housing Authority of New Orleans (HANO) under Kelly and his successor improperly administered Desire’s redevelopment under the guidelines of the U.S. Department of Housing and Urban Development program called HOPE VI, which is funding much of the work at Desire.

According to HUD guidelines, the program is principally intended to "improve the living environment for public housing residents of severely distressed public housing projects" through rehabilitation or complete redevelopment of those housing complexes.

To that end, the guidelines require public housing authorities to involve current residents in the planning and implementation of the redevelopment work "at every phase," and to provide job training and financial skills development to ensure that every resident has a chance to find a place in the new mixed-income community.

Washington has received four HOPE VI grants: for the Townhomes on Capitol Hill, East Capitol Dwellings, Wheeler Creek (formerly Valley Green) in Southeast Washington, and Frederick Douglass/Stanton Dwellings (to be re-named Henson Ridge), also in Southeast Washington.

In addition, DCHA applied for a fifth grant in April, to redevelop the Arthur Capper-Carrollsburg Dwellings near the Navy Yard in Southeast Washington. Hope VI funding also has been sought to help redevelop Kentucky Courts on Capitol Hill.

A group of Arthur Capper-Carrollsburg residents is contesting the proposed redevelopment of their complexes. Several people involved in that effort said the accusations in the Desire residents’ lawsuit sound familiar.

"It sounds like everything we’re going through," said Brian Green-White, an Arthur Capper-Carrolsburg resident and a member of United Public Housing Residents of Washington, a group which in April filed a protest petition with federal authorities against DCHA’s proposed HOPE VI-funded redevelopment of the Arthur Capper-Carrollsburg residences.

"It especially sounds like the experiences of the people at places like Stanton-Fred Douglass, because they’ve already gone through all this stuff that we’re trying to prevent happening here," Green-White said.

The petition given to HUD officials alleges that DCHA and its developers failed to meaningfully consult with Arthur Capper-Carrollsburg residents in planning the proposed new community, as HOPE VI regulations require.

Most Arthur Capper-Carrolsburg residents are opposed to DCHA’s redevelopment plan, said Madeleine Fletcher, another UPHRW member. "More than 67 percent of Arthur Capper-Carrollsburg residents have signed a petition saying they object to DCHA’s plans," she said.

The UPHRW petition to HUD also says that Arthur Capper-Carrolsburg residents face eviction from their homes without a realistic hope of finding adequate replacement housing, or of being able to find a home in the new development.

An Aug. 8 letter to UPHRW from Larry Dwyer, the DCHA director of planning and development, says that DCHA expects to relocate Arthur Capper-Carrollsburg residents to other D.C. public housing complexes or to give residents subsidized "Section 8" housing vouchers, for use in the general marketplace.

But Fletcher said that according to DCHA’s own figures, there are 11,097 names on the current waiting list for a place in D.C. public housing. The reported occupancy rate is 98 percent. And she said the current waiting list for Section 8 vouchers in Washington "is more than 16,000 people."

"Half of the people who do get Section 8’s can’t find eligible housing in the D.C. area before their vouchers expire," Fletcher said. She said UPHRW also is considering filing a lawsuit in connection with HOPE VI-funded projects in Washington.

Elaine Carter, a resident of the Stanton Dwellings, said that at Stanton Dwellings, residents had been pressured to leave their homes. DCHA officials "come around and say, ‘You’ve got to go, you’ve got to go.’ And finally some people get worn down, and move," she said.

"It’s the same thing all over the country," Carter said.

According to Charles Cotton, a lawyer representing the New Orleans residents, the suit alleges that Kelly and others violated a 1992 written agreement between the authority and the Desire Area Resident Council that promised Desire residents the job training and other skills development they needed to qualify for entry into the new, mixed-income complex that the city planned.

In addition, Cotton said, that agreement promised Desire residents 35 percent of demolition and construction jobs in the redevelopment of their community.

"We’ve got it in writing," Cotton said. "The residents...were promised training and jobs as contractors and sub-contractors. It never happened."

The suit asks that the residents be compensated for "all past, present and future losses which are allowed by law" and that 30 percent of all future jobs in the complex’s redevelopment be given to current or former Desire residents.

In a succession of revised plans for the new development, the suit alleges HANO reduced the number of low-income units planned, pushed residents out of their homes and into substandard housing to allow demolition to proceed, and set up arbitrary, unreasonable standards for residents who wished to move into the finished, mixed-income development.

Many residents have been "forced out" of Desire, the suit alleges, and also "have been required to sign documents waiving their rights to return after the community has been redeveloped."

"(T)he defendants have intentionally developed rules…which ensure that former residents…will, in all likelihood, be forever displaced," the suit says.

"They demand that residents who apply have been prompt on payment of rent for the past two years," Cotton said. "Do you know anybody who isn’t occasionally late with their rent--or their mortgage payments?"

Cotton said the redevelopment also reduced the number of low-income units from 1,200 to 400. "So, of course, they can’t accommodate all of the original residents. So now people are given papers to sign to waive their rights," he said.

The suit also asks the court to investigate the possibility that Kelly and other officials "used inside information that was supplied to them to make economic gains for themselves rather than assist the Desire Public Housing Development residents that they were being paid to serve."

The suit alleges that New Orleans Works, a nonprofit corporation set up by Kelly and others, may have been involved in providing services that had been promised to Desire residents.

"New Orleans Works was going to do some goods and services in the community," said Cotton, "and that’s a conflict of interest" with the jobs and services agreement between HANO and the residents, he said.

"We’re trying to prove our allegations. We haven’t gotten into discovery yet," Cotton said. "We don’t want to ascribe anything illegal to Mr. Kelly at this point."

New Orleans housing authority general counsel Deborah Wilson declined comment on the lawsuit.

Frank Nicotera, who served as HANO’s general counsel during the time Kelly headed the agency and who is now a New Orleans Works board member, disputed the lawsuit’s claims.

"That’s absolutely untrue," he said of the charge that New Orleans Works engaged in any activities that deprived Desire residents of job opportunities.

Nicotera said that New Orleans Works was set up simply to satisfy a federal requirement that only independent organizations, not housing authorities, may apply for low-income housing tax credits.

"It was a legal accommodation (HANO) made to try to get some badly needed low income tax credits," said Nicotera. "That’s it. I don’t understand where they’re getting (the charges) from."

Copyright 2001, The Common Denominator