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The High Cost of ‘Affordable’ Housing

17 Jul

There is an affordable housing crisis across the country. The demand for affordable housing far exceeds the supply. In the nation’s poorest big city, the Philadelphia Housing Authority spends nearly $400,000 for each new “affordable” rental unit. With 42,886 people on its wait list, PHA would need $17,154,400,000 — more than four times the annual operating budget of the City of Philadelphia — to provide housing for those currently on its wait list. And by the way, PHA’s wait list is closed:

PHA closed its Public Housing Program wait lists on April 15, 2013. The wait list will reopen when PHA determines that the average wait time for housing has reached an acceptable level. The public will be notified through advertisement on this website.

Frontline and NPR recently investigated how billions are spent to house the poor but fewer housing units are being built.

In December 2016, PHA welcomed residents to 57 new apartments that cost the housing authority a whopping $21.9 million. The project was partly financed with Low-Income Housing Tax Credits (LIHTC). Before the paint was barely dry the contractor, Domus Inc., filed a lawsuit alleging PHA “repeatedly changed the terms of the contract, refused to cooperate with the contractor and delayed payment.”

Domus v. PHA

If Domus wins its case, the cost for one unit of LIHTC-funded “affordable” housing could be more than $400,000. To put PHA’s construction costs in context, the median home value in Philadelphia is $142,000. The city’s median income is $41,233; 44 percent of households have an annual income of less than $35,000.

Domus and PHA will face off before Common Pleas Court Judge Patricia McInerney on July 18, 2017. Stay tuned.

Life on Parole

10 Jul

It has been less than two weeks since now former Philadelphia District Attorney Seth Williams pled guilty to one count of violating Pennsylvania bribery law. U.S. District Court Judge Paul Diamond was so outraged by Williams’ mountain of lies, he revoked his bail and ordered his immediate detention.

Seth Williams - Go Directly to Jail

When Williams is sentenced in October, Judge Diamond will likely impose the statutory maximum of 57 months and a $250,000 fine. Club Fed will be hard on Williams but not as hard as the life that awaits him as a returning citizen. At the recent Beyond the Walls: Prison Healthcare and Reentry Summit, speaker after speaker underscored that reentry begins inside the walls. So if the former DA has TV privileges, he should check out Frontline’s “Life on Parole,” a look at Connecticut’s efforts to reduce recidivism.

The documentary airs on PBS on Tuesday, July 18. To check your local listing, go here.

A Room with a View of the Blues

26 Jun

Earlier this month, I attended a panel discussion on “Art in Public Space” held in the Hamilton Garden of the Kimmel Center. As I waited for the program to start, I checked out the view from the top floor. What I saw left a hole in my heart.

PRI Vacant Lot

The hole is where Philadelphia International Records once stood.

PRI Collage - June 4, 2017

Kenny Gamble and Leon Huff have earned their place in history.

Kenny Gamble - Leon Huff - History

Sadly, the building that held the stories of the songwriters, musicians, producers and arrangers is now lost to history. For the love of money, African Americans’ cultural heritage was erased from public memory.

Gamble and Huff sold the historic building to Dranoff Properties which plans to build a luxury hotel and condos for the one percent. Three years after the demolition of “309,” there’s just a hole in the ground. The reason: Dranoff Properties is waiting for a corporate welfare check to the tune of $19 million before breaking ground on the “biggest, tallest and most expensive” project the company has ever done.

In the poorest big city in the country, spending taxpayers’ money to further enrich the rich is the sound of Philadelphia.

Corruption is What Makes Philly

15 May

In the run-up to the Democratic convention, the 2016 Democratic National Convention Host Committee launched #WhatMakesPhilly, “a social media campaign to energize Philadelphians about the Convention coming to town and highlighting what makes the city the unique.”

#WhatMakesPhilly Campaign Announced

What makes Philly unique? It continues to live down to its reputation as “corrupt and contented.” One of the longest serving congressmen, Chaka Fattah, is now serving time in federal prison. City Council Majority Leader Bobby Henon is under FBI investigation.

Bobby Henon FBI Raid - 8.5.16

District Attorney Seth Williams, who no longer has a law license, is under indictment. One of the candidates running in the May 16 primary election to succeed him is in debt up to his eyeballs.

Tariq's Tax Liens

And we now know the real winner of the host committee’s #WhatMakesPhilly social media campaign was the committee’s executive director, Kevin Washo. Last week, the Philadelphia Inquirer reported that Washo paid himself a $310,000 bonus:

On Nov. 25, all 12 of the host committee staff received bonuses. In addition to Washo’s $310,000 check, rewards ranged from $13,357 for the office manager, who was paid $3,000 monthly, to $220,000 for the chief financial officer, who was paid about $8,000 monthly.

In the host committee’s report to the Federal Election Commission, Washo’s bonus is described as “Consulting Services-Political.” On Dec. 23, 2016 — five months after the convention ended — he collected $13,805.96 in “salary.” By then, Washo had already been hired by powerhouse law firm Cozen O’Connor “to assist clients with government relations across Pennsylvania as well as in Washington, D.C., and New York.”

Cozen - Kevin Washo

Washo may soon need a lawyer.

Philadelphia Magazine detailed the other bonuses.

Philly Mag - Staff Bonuses

The nearly $1 million in bonuses were authorized by Host Committee Chairman Ed Rendell. Philly’s culture of corruption is so embedded that Rendell, a former mayor and governor, brazenly said:

No donor did this out of the kindness of their heart. They all wanted access. They got exactly what they donated for. No donor should feel cheated.

Why should donors “feel cheated?” After all, they received “access” and a tax deduction. Millions of dollars of donations to the host committee were funneled through the Philadelphia Convention and Visitors Bureau Foundation. The financial scheme appears to violate the absolute prohibition on political campaign intervention by a Section 501(c)(3) tax-exempt organization. The bonuses also facially violate IRS rules against self-dealing.

So on Mother’s Day, I decided to file a complaint about these greedy mothers (half the word) with the IRS and the Federal Election Commission. When I visited the host committee’s website to find out who was on the board of directors, I discovered the site has been partially wiped clean (perhaps “with a cloth or something”), including its home page, sponsors and area partners.

Also on Sunday, Gov. Tom Wolf issued a statement denouncing Rendell and Washo for not returning the $4 million surplus to the state:

I am disappointed that when the host committee discovered there was a surplus, the first call was not to the Commonwealth of Pennsylvania to discuss returning the money to the taxpayers. The commonwealth supports large events that have an economic benefit to Pennsylvania and the region, but when there is leftover funding, that money should be returned to taxpayers. I am disappointed that the surplus was instead spent on bonuses and grants.

Wolf requested that Auditor General Eugene DePasquale review the host committee’s audit report.

UPDATE: Three Republicans — Senate President Pro Tempore Joe Scarnati, Senate Majority Leader Jake Corman and Senate Appropriations Committee Chairman Pat Browne — have called for an audit. In a letter to Auditor General Eugene DePasquale, they wrote:

The revelations over the past several days are particularly troubling. It is undisputed that the DNC had no less than $4 million I unencumbered funds upon completion of the event. A small group of individuals including former Governor Rendell chose to allocate the excess on targeted special interest initiatives and exorbitant bonuses, one greater than $300,000. We were not contacted at any point by the officials at the DNC, the Governor’s Office, or DCED (who administered the grant) about the surplus. No efforts were made to return any portion of the surplus to the Commonwealth.

Kevin Washo and the other host committee staff will have to use their taxpayer-funded windfall to pay for lawyers.

Stay tuned.

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