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The Closing of Financially Troubled Sacramento Housing Nonprofit and the Death of Fair Housing

At the March 28th Sacramento County Board of Supervisors (BOS) meeting, the Board approved $1.7 million to pay property owners back rent and to repair damage toward Sacramento Self Help Housing (SSHH) homes under county contract (item 47). Around 175 tenants are covered by a county contract with SSHH - however, more than 400 tenants are not covered by a county contract and face experiencing homelessness… again. At the time of publishing this article, these residents are still in very real danger of losing their housing.

Quick note on what SSHH is/does - see image below (pulled from SSHH website)

First, let's talk about why SSHH was at risk for getting shut down in the first place!

Further down in the write-up you can find out more about what the public had to say about this decision!

During the meeting, the BOS heard unsettling information about the major nonprofit housing provider from the Deputy County Executive, Chevon Kothari, as well as from the Director of the Department of Homeless Services and Housing, Emily Halcon.

Kothari stated:

Due to significant financial and management concerns that we have had with SSHH for some time now, the County has made a decision not to renew our contracts for the scattered site housing program after our contract ends on June 30, 2023 … due to what the county is deeming as a mismanagement of funds

As part of Kothari’s statement, it was noted that the organization was two years behind on submitting its audited financials, constituting a material breach of their contract with the county. In the same week, SSHH board of directors voted to close the organization.

This mismanagement included SSHH seeking and receiving reimbursement for services and rents for which they did not pay landlords, and invoicing the county for costs they did not incur nor provide. Details about the mismanagement are still unknown and have yet to be shared publicly, but the county is conducting its own audit to be shared at a later date (this is in contrast to the City of Sacramento, who has never conducted an audit of the organization). There’s been talk that the former Executive Director John Foley misused additional funds given by Department of Human Assistance (DHA) in 2022 to pay thousands of dollars in unpaid rent to landlords and, chose instead to pay SSHH payroll. As reported by the Sacramento Bee, “SSHH has received about $36 million in contracts from the city and county since 2017.”

Budgeting and bookkeeping mistakes are inevitable, but diligent accounting, training, consistent board meetings, oversight, and annual audited financials will usually catch them before they spiral out of control and impact the housing of hundreds of formerly unhoused Sacramentans.

It is a big deal when a Deputy County Executive states on public record to County Officials that an organization contracted by the County has mismanaged funds. This signals that, perhaps, some lessons are learned. Consider that, less than two years ago, a grand jury appropriately slammed County officials for mishandling COVID relief funds and for a complete lack of oversight (read SJPC's coverage of that money mismanagement here).

See image below for the summary of the Grand Jury report!

County Officials had an opportunity to address the facts and concerns raised by Kothari, but the initial tone, optics, and diminishing of the facts (i.e. denying misconduct and wrongdoing) felt like being thrust into reliving the revelation that COVID relief funds were gifted to the Sheriff’s Department when hundreds of people were dying, and when highly qualified and respected women in management were undermined. More concerning was how several Supervisors were quick to defend the organization and its board members and former Director, characterizing them as good doers for our community and victims.

Supervisor Patrick Kennedy clarified that SSHH was not promised one million dollars and that the county never broke a promise, but that a proposal of $500,000 would be given to SSHH from District 2 funds and another $500,000 from District 3 funds contingent upon them meeting the performance guidelines and requirements that the federal government places on them. The primary reason they were not given this money was a result of them not providing audited financials.

County officials heard from the very people who were facing becoming homeless again and jobless as a result of SSHH mismanaging funds. While County Officials painted a picture of the agency and its former Director as good doers for the community, tenant comments about their experiences living at SSHH were strikingly different. They expressed being mistreated mentally, emotionally, and financially. One former tenant and employee courageously shared that they were sexually assaulted.

In July 2022, a tenant living at a SSHH house was verbally and mentally mistreated by a SSHH employee and the incident was caught on camera. Kenneth Green identified himself as the housing manager and quickly threatened to evict the tenant, a formerly unhoused resident and vet. The threat of eviction rolled off Green’s tongue with ease as if tenants had no rights nor would they be enforced.

Tenants living in SSHH houses being threatened with eviction isn’t surprising when you learn that the nonprofit has evicted at least 23 people over the past five years. It is unfortunate, however, because SSHH is responsible for enforcing tenant’s rights and fair housing act laws through a County and City funded Renter’s Helpline. One of the SSHH tenants described this inherent conflict during the BOS meeting stating, “… it’s like calling your landlord to report your landlord.”

Niki Jones, local unhoused advocate and organizer, described the lack of consistent internal review and outcome measures as being what put people in SSHH's scattered site housing monopoly at risk of losing their stability. Niki underscored the need for tenant protections and ensuring the voices of the people served by the County’s housing programs contribute to the development of new policy. Niki also emphasized the need for smaller community organizations to break through SSHH’s unchecked monopoly and provide the support that unsheltered people require.

Shelly Williams also gave a powerful comment - a snippet of which has been pulled below

I know that it's [SSHH] no better or worse than most programs of its kind…I want everyone here to understand that this is the homeless industrial complex. It's an expensive and degrading hamster wheel of a system that rarely translates into permanent housing...A system like that will always lead to shit like this. Please do so much more than the bare minimum that you could do today

For the full playlist of comments from the Supervisors & the public on this item click here.

Why does this all sound so familiar....?

(RE)INTRODUCING: the forgotten Regional Human Rights/Fair Housing Commission (HR/FHC)!

A decade ago the Regional Human Rights/Fair Housing Commission, a government body whose purpose was to provide education about and protect fair housing, was dissolved.

In light of the closure of SSHH, a major regional housing nonprofit, it’s important we take stock of what has and hasn't worked in the past to ensure safe and stable housing for all residents. It is crucial that we work to empower the hundreds of thousands of renters in our community to reimagine a system that truly protects tenants, preserves our affordable housing stock, and affirmatively furthers fair housing. There are several parallels between what happened with the HR/FHC and what is now happening with SSHH.

So, what was this Commission all about?

The Human Rights/Fair Housing Commission (HR/FHC) was founded in 1963 and focused its efforts on education and outreach programming on civil rights. The commission spent its last 33 years as a “joint powers authority,” governed by a board that included the cities of Sacramento, Citrus Heights, Elk Grove and Rancho Cordova, as well as the county of Sacramento. HR/FHC provided training on federal and state laws regarding illegal fair housing conditions. It also operated a tenant/landlord hotline for responding to questions around fair housing, equal opportunity, or other related management issues. When a fair housing complaint was generated due to some form of discrimination, HR/FHC recorded the complaint, documented the complaint with appropriate authorities, and provided advisement and mediation services to most complaint cases. When cases required legal services, HR/FHC referred complainants to their sister nonprofit agency, the Center for Human Rights Law and Advocacy (CHRLA).

Through extensive online research, including Analysis of Impediments (AI) to Fair Housing reports from multiple cities over the last two decades, it is clear that not only were hundreds of complaints generated, but that majority of them were related to mistreatment based on disability or race.

Understanding displacement is crucial to understanding the make-up of our communities and our neighborhoods and the homelessness crisis. Involuntary housing displacement is a stress-inducing life event that can cause and exacerbate both psychological and material hardship. We are facing an eviction epidemic.

In addition, Hispanic and Black renters, particularly Black mothers, experience evictions in greater numbers than white renters. Furthermore, displacement can have myriad negative health impacts on children

For example, moving can be disruptive for academic performance and result in severing peer and familial networks and childcare arrangements. On the other hand, staying put can enhance residents’ political power. As residents are displaced and dispersed away from other members of their community, voting blocs are diluted and communities become less organized, inhibiting their ability to advocate for needed changes.

Once upon a time, the City and County of Sacramento worked together and invested in protecting residents and preserving its affordable housing stock. HR/FHC provided a Tenant/Landlord Assistance Report that detailed types of inquiries by City Council District. This data included evictions, foreclosures, pay or quit notices, rent withholding, repairs, retaliation, nuisance, etc.

Understanding displacement and how it varies within and between neighborhoods in Sacramento is enormously challenging. In large part, that’s because we lack regional and local data that was once collected by the HR/FHC. Yet, we continue to see Sacramento’s Black/African American population dwindling overall, while also disproportionately increasing within our unhoused population

The Dissolution of HR/FHC and Death of Fair Housing and Human Rights

Considering the data HR/FHC collected and reported on, its legal arm that protected tenants against state housing law and Fair Housing Act law violations, and the costs savings it generated by mitigating cases that would have otherwise landed in the courts, the decision to disband it seems more political in hindsight. The negative impacts of it's closure offer important lessons regarding the current situation with SSHH.

In November 2013, the Sacramento Bee reported that HR/FHC was on its last legs after allegations of financial wrongdoing that prompted three major cities to cut funding support. An audit done earlier that year by housing officials at the cities of Rancho Cordova, Elk Grove, and Sacramento revealed salary overpayments to the commission’s executive director, improper charges for employee parking and failure to follow federal contracting laws. The cities cited the audit’s findings as reason for withdrawing their contributions to the commission. While the commission’s acting executive director said the agency continues to provide valuable services and the cities’ audit isn’t completely correct, she told supervisors

There are things we could challenge but it doesn’t matter – it’s over and done with

The three cities estimated they were overbilled about $12,000 combined in three years for former Executive Director Barbara Lehman’s salary and for parking that was not used by commission employees. The audit found that the overbilling was the result of Lehman’s payment agreement in which she was compensated separately for work for the commission and its nonprofit arm.

The cities also identified operational deficiencies. According to John Shirey (Sacramento City Manager at the time)

The agencies have identified [deficiencies], some repeatedly, and have made efforts to work with (commission) staff to address these deficiencies … and I no longer see added value in the city’s contribution

In five years, the commission’s annual budget dropped from $742,000 to $233,000, largely the result of funding cuts by the cities and the Sacramento Housing and Redevelopment Agency (SHRA).

The county and cities relied on the commission to help them reduce impediments to fair housing in order to meet federal requirements and receive Community Development Block Grants that assist low-income areas.

Sacramento County staff recommended that county supervisors stop funding and disband the agency. The recommendation said the cities found reliable alternatives for the same services by contracting with nonprofits such as Sacramento Self-Help Housing, and that the county could do the same.

As part of the controlled dissolution, according to Sacramento News and Review, the work of defending renters from discrimination and unfair billing practices scattered to an array of organizations, from the federal level down to community groups. Those contracts were overseen by SHRA and included the Pacific McGeorge Housing Mediation Center and Legal Services of Northern California (LSNC), which already mediate certain kinds of landlord-tenant disputes in the city of Sacramento to income eligible individuals and households.

For residents who didn’t qualify for both organizations’ restricted income levels or were undocumented, this left a gaping hole, which still exists today and is of critical importance as the costs of rents continue to outgrow wages.

And then there’s the “human rights” role the commission pursued through its nonprofit arm, which investigated fair housing complaints, tested rental properties, and performed annual fair housing audits. Yet, according to the Amended and Restated Joint Exercise of Powers Agreement

Because entities such as Pacific McGeorge Housing Mediation Clinic (HMC), Legal Services of Northern California, Disability Rights California (DRC), and the State Department of Fair Employment and Housing (DFEH) provide assistance for housing discrimination matters, the Commission does not need to remain in existence to meet the requirement to affirmatively further fair housing

Effective July 1, 2014 the Commission no longer provides services to the general public, and the cities of Elk Grove, Rancho Cordova and Citrus Heights withdrew as members of the Commission. The City and County of Sacramento, as the remaining members, have decided to wind down the affairs of the Commission.

Cities and counties relying on state agencies such as DFEH and nonprofits such as DRC to protect tenants and enforce Fair Housing Act laws without assessing their capacity is straight up dereliction of duty and pure negligence. Not to mention – Pacific McGeorge HMC disappeared not long after it was identified as a fair housing resource.

Something to seriously consider is – as of this date, the Commission still exists to satisfy retirement obligations, but could be revived if financed appropriately. The HR/FHC has an Executive Director and is currently in care of the Sacramento City Treasurer’s Office. If revived, it would also create decent government paying jobs with health benefits.

What's the takeaway?

It’s common knowledge that with new development and investment comes gentrification. New developments are also accompanied by rising rents and housing costs. When both of these events occur simultaneously without regulations, local oversight, and enforcement of state and local housing laws and fair housing act laws – marginalized populations living on the fringes are most at risk for being displaced, forcefully and unjustly.

The cities' and SHRA’s withdrawal of funding and support for the HR/FHC appear opportunistic when looking at an event that occurred the following year. In 2015, Sacramento revised the Mixed-Income Housing Ordinance, which originally established an inclusionary housing program that required 15% of all housing built to be affordable to low-income households and very low-income households. Under the revised version, an affordable housing impact fee was implemented which allowed developments with approved Inclusionary Housing Plans to pay a fee per each square foot of new development that would transfer to a housing trust fund INSTEAD OF requiring construction of affordable housing.

According to an academic report by SSHH Board Chairman Ethan Evans,

“…had the ordinance not been revised, nearly 2,000 more individuals and families who were experiencing increasingly expensive housing in the city could have found a home in Sacramento’s newest neighborhoods. To reverse and mitigate the damage done by the new housing ordinances, county and city leaders should assess the damage done, and where necessary either revert back to the original housing ordinance, or enhance requirements to better meet the need for safe, secure housing in the region.”

Perhaps the single most important lesson the past 50 years should have taught us by now is this: we cannot fix discrimination in housing via an anti-discrimination framework, and laws are only as good as intended if enforced properly.

Unfortunately, the city and county of Sacramento seem primarily interested in deregulation and avoiding responsibility rather than implementing race and class conscious measures to tackle American inequality at the root. SSHH was dysfunctional and the decision to close it may be correct, but it also provided housing for hundreds of people, and closing it without a replacement ready to go is irresponsible and dangerous. Sacramento has a history of moving in the wrong direction on housing, and this decision by the Board of Supervisors sadly seems to be a continuation of that legacy.

One last point - SSHH is currently responsible for enforcing tenant’s rights and Fair Housing Act laws through a County and City funded Renter’s Helpline - something to push for is the making sure the City and County jointly fund a tenant hotline (now that SSHH is closing) that would open up better job opportunities with living wages & health benefits for folks employed there.

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