About 40 affordable housing advocates, tenants and community residents held a protest before a B’nai B’rith Housing New England (BBHNE) fundraising event in which William Kargman of First Realty Management was to be honored for his commitment to providing affordable housing.
Protesters say Kargman should not receive an award because as federally subsidized mortgages on his buildings expire, he has converted affordable units to market rate rents, decreasing the stock of affordable apartments in the Boston area.
Most recently, 173 units at Burbank Apartments in the Fenway neighborhood were converted to market rate in April, removing 10 percent of that neighborhood’s affordable housing, advocates said.
“We see the award as very inappropriate because Bill Kargman and his company have just ended the subsidies at Burbank Apartments and have dismantled affordable housing arrangements at other buildings,” said Sarah Horsley, civic engagement director at Fenway Community Development Corporation (CDC). Housing advocates normally support the mission of BBHNE, a nonprofit developer of affordable housing, she noted.
“We’re reluctant to picket another nonprofit,” Horsley said, “but we really need to stand up and say this is unacceptable.”
At the protest, representatives from Fenway CDC, Massachusetts Alliance of HUD Tenants (MAHT), City Life/Vida Urbana and Workmen’s Circle marched along with tenants, chanting and displaying signs as guests arrived for the B’nai B’rith event, held at the Harvard Club on Commonwealth Avenue.
BBHNE Executive Director Susan Gittelman said in an e-mailed statement that her organization had planned for some time to honor the Kargman family, since before the 2005 death of William’s father Max Kargman, who founded First Realty Management in 1970.
“As a family, [the Kargmans] invested a lot in providing safe homes and human service programs for tenants,” the statement said. “They were single-handedly responsible for providing some 3,300 units of affordable housing throughout Massachusetts — perhaps more than any other private entity.”
The issue is that the Kargman family owns a number of apartment buildings whose 40-year mortgages were subsidized in the 1970s by the U.S. Department of Housing and Urban Development (HUD) under an agreement that kept the apartments affordable for the life of the mortgage. As those mortgages expire, landlords have the option to bring the rents up to market rate, and the Kargmans have opted to do so.
The resulting rent increase can cause hardship for moderate-income tenants who do not qualify for subsidy vouchers. And even when tenants can stabilize their rents through an enhanced voucher system, the apartments are no longer under HUD restrictions. So each time a tenant leaves, the city’s affordable apartment stock is depleted.
The changes at Burbank will have an added effect of reducing diversity in the relatively high-rent Fenway neighborhood, according to a study conducted by housing research consultant Tim H. Davis with the University of Massachusetts Center for Social Policy. The study, cited in a Boston City Council hearing in March on the future of Burbank Apartments, showed that high rents take a disparate toll on elderly, disabled, minority and single-parent households.
Massachusetts has lost more than 7,100 federally-subsidized housing units since 1996, said Michael Kane, MAHT’s executive director, and some 15,000 more could be lost through 2012.
In Boston, 1,081 units have lost their HUD affordability protections or Section 8 subsidies in the past five years as HUD mortgages matured, according to Sheila Dillon, housing advisor to Boston Mayor Thomas M. Menino. The Kargmans have been responsible for 1,069 of these units, or 99 percent.
Other area landlords have found ways to keep their HUD buildings affordable, Dillon noted, including applying for various tax incentives and renewing project-based Section 8 contracts. (Project-based Section 8 vouchers keep specific units subsidized, as opposed to moving with the tenant.) Some have chosen to sell their buildings to nonprofits committed to affordability. Through these efforts, between 7,000 and 8,000 affordable units have been preserved in Boston over the past several years.
But the city has not succeeded in dissuading Kargman’s First Realty Management from converting to market rate.
“The mayor’s office has reached out to the Kargmans to try to preserve affordability,” Dillon said, “[but] the Kargmans have decided to go forward. We would certainly like them to continue the affordability, but we have not been able to convince them.”
In a prepared statement, William Kargman responded to the protest. “A small group of subsidized housing tenant advocates would prefer that Burbank Apartments remain a Section 8 property forever ... They ignore the fact that every low- or moderate-income resident who meets the federal income guidelines — every one — is protected and can stay in their units as long as they like, at a subsidized rent.”
Most tenants participating in the protest were not facing immediate rent increases or displacement, they said, but were concerned about neighbors ineligible for subsidies and about the loss of affordable units for future tenants.
“This was a wonderful thing the Kargmans started 40 years ago, but affordable housing is still needed,” said Ronda Jackson, 49, a longtime tenant at Stony Brook Commons in Roslindale, formerly High Point Village. The 540-unit complex, owned by First Realty Management, was converted to market rate last year.
Jackson was able to keep her apartment with the aid of an enhanced voucher, but for the sake of others hopes Kargman will reverse his decision at Burbank at least.
“For someone who has so much, it would be such a small thing,” she said.
Some tenants spoke about the landlord’s decision in moral terms.
“What William Kargman is doing is unfair,” said Richard Webster, 65, a retired telephone operator and cook who has lived at Burbank Apartments for 25 years. “People have a right to a decent place to live. It’s not a tenant right, it’s a human right.”
The Massachusetts Alliance of HUD Tenants (MAHT) rallied in Hyde Park last month to call for legislation to protect low-income tenants from dramatic rent increases and to bring attention to the loss of affordable housing units in Massachusetts.
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