Predatory Gentrification

I just got a call this morning from another tenant in a HUD affordable building that a large developer would like to control and tear down. These calls trickle in.


If you think predatory lending is bad, wait until you hear stories of arson, poisonings, break-ins, physical attacks and stalking designed to get tenants and homeowners to leave their homes. Billion dollar development companies could simply pay people to leave. However, that would leave a clear record of what was happening. The average tenant and homeowner don’t understand how the money and economic warfare game works in the situation. So, terror is more effective and much more profitable. As a former Assistant Secretary of Housing, I find the lure of gentrification profits to be one of the most significant sources of terrorist funding globally.

Here is what I advise.

First, you need to make your story and documentation accessible. There are very few reporters who can write about your story. The ones that might be interested need you to make your story easy to understand and to document, if not interesting and entertaining.

Here is an example of a site I created when my company was litigating with HUD:

Hamilton Securities Litigation

Two, you need to understand the tactics that you are dealing with:

Anatomy of a Swat from a Lawyers Perspective

Third, you need to understand that predatory practices whereby powerful corporate and banking interests use illegal and unethical tactics to expropriate wealth from the middle class and poor are common and that the law may or may not be relevant. Some or all of the HUD field office, HUD inspector general, the police, your municipal and congressional representatives may or may not be in a position to help you.

Dillon, Read & Co. Inc. & the Aristocracy of Stock Profits

Permanent Links — Mortgage Markets

Fourth, you are going to be much more successful if you can retain a good attorney who has experience in these types of HUD situations. Be careful to check references and historical performance as one way that attorneys make money is to work for you, while selling you out to the other team. You do not necessarily need them to represent you. You may be better off representing yourself and having them teach you as a consultant behind the scenes.

One of the most effective people I know who dealt with one of these situations in New York City, swears by John Fisher and his website:

Tenant Net

4 Comments

  1. What a great article.

    All one has to do is put the “un-related” pieces together and the picture always comes out clear.
    The strategy never changes… If it works then it is continually used until it doesn’t work.

    It Atlanta this very thing is being played out to the letter with Bowen Homes, a long time housing “project” that is now desired by the wealthy/powerful.

    The same for Hunter’s Point in San Francisco–and many other places I’m sure.

    This article is well worth review/keeping.

    Best wishes

  2. The problem is country wide and worldwide. We see the tenants and poor in China rousted from their homes for the Olympics. As they were in the Athens Olympics. The Multinational corporations will do anything that their partner, the ‘state’, gives them permission for and most of the time we pay for our own eviction.

  3. Who will establish a site where these stories could be collected and used to educate tenants and community members in other cities?

    I know of a developer that preys on HUD-financed non-profit-run affordable housing projects. Goes in with investors as a special limited partner having the right to approve construction draws for rehabbing units. Refuses to approve draws. Throws project into bankruptcy. Gets the court to replace the nonprofit GP with himself and his corrupt management team. Puts in own construction and management and bleeds the project dry, using project cash flow to feed his other non-HUD projects, and blames the tenants for the poor condition of the project. Gets the court and HUD to approve tearing down units that have not been rehabbed because funds ran out. HUD doesn’t care. The local judges, lawyers and other support this. He’s done it multiple times and will continue to do it. Eventually, the low-income tenants will be kicked out and gentrifying developers will get the land to build luxury condos. Neighbors think the fault is with the low-income tenants…

    I’ve been told of another case of a major city rehabilitation agency using HUD CDBG funding to fund a master slush fund for local politicians, judges, etc. City gets the owner of low-income project approved for rehab to use “friendly” construction company, which tells the owner he has to kick back a portion of the loan proceeds for the slush fund. Honest owner says “no.” City cites owner for having code violations or whatever and attempts to foreclose for a non-monetary breach. Owner decides to get alternative funding and pay back loan from city. He repays loan but city won’t release mortgage. City sues him for specific performance to force him to use HUD funding! Over the years, honest owner can’t hold onto any lawyer — each one resigns. Friends disassociate from him.

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