Development Pressure

A look at ethics questions raised by the political activism of the Mission Housing Development Corp.

On paper, the Mission Housing Development Corp. would seem a sleepy nonprofit cubicle farm, similar to hundreds of others that populate San Francisco. Officially, it's in the business of using federal, state, and city grants to build and manage low-income apartment buildings.

But during the past few months, this group's office has gained fame as the site of a seismic fissure in Mission politics. Neighborhood activists and politicians have attended rallies, held public hearings, and been quoted in numerous news articles, saying the group's entire board of directors should step down. The board's supposed transgression: the firing in April of Executive Director Carlos Romero, a popular leader of the Mission Anti-Displacement Coalition, a group that spearheaded the late-1990s anti-dot-com battles against for-profit commercial development.

"The board is out of touch with the community," the San Francisco Chroniclerecently quoted Supervisor Chris Daly as saying.

This and other attendant rhetoric, cited in multiple stories in at least four S.F. newspapers, contains elements of classic social struggle: The Mission Housing board, made up of 1970s- and '80s-era Hispanic social activists, represents the comfortable, moneyed old guard, politicians and activists said. Romero's band of young staffers, by contrast, forms a revolutionary vanguard struggling to keep private developers from pushing downtrodden residents further into poverty.

"Of course, the rich aren't going to like that," Daly has been quoted as saying, "and neither will the board, which is more aligned with property owners looking to make money off of housing."

But behind this public yarn is a simpler tale of a city-financed organization run amok under a charismatic leader, and a part-time board of directors that didn't seem to know what was going on. Now, the board is scrambling to correct what could have been unethical activities by staff members, who may have improperly used a government-funded payroll to advance political goals.

"We read in the paper about SLUG," says Mission Housing board Chairman Larry Del Carlo, referring to a recent scandal involving the nonprofit San Francisco League of Urban Gardeners, where bosses allegedly pressured city-paid gardeners to campaign and cast votes for Gavin Newsom for mayor. At Mission Housing, employees paid with government funds apparently came to see political activism as a primary aspect of their jobs. "We don't want to be another SLUG. Nonprofits have to be careful. And we're being careful," Del Carlo says.


The Mission Housing Development Corp. is a 33-year-old nonprofit organization that manages apartments housing about 2,300 low-income Mission District residents. The group is perhaps better known for providing ground troops for zoning battles in the neighborhood in the wake of the late-1990s dot-com boom.

Under the tutelage of Romero, the group gained fame in the late '90s and early aughts as one of the city's most outspoken, effective, and busy activist organizations in San Francisco.

Staffers would perform activist work -- such as testifying at hearings, attending rallies and political meetings, meeting with politicians and other public officials -- under the moniker "Mission Anti-Displacement Coalition," a group run by Romero and Mission Housing Co-Executive Director Eric Quesada. Employees apparently politicked during working hours on the MHDC payroll. And the widely distributed Anti-Displacement Coalition phone number happened to also be the line on Quesada's Mission Housing desk.

A tax-exempt nonprofit organization is allowed to spend a minor percentage of its budget on political activity, as long as the spending can be defended as furthering the group's nonpolitical goals. However, on its federal tax return for 2001 -- the group's political-activism heyday, when Mission Housing staffers were testifying, rallying, and meeting with pols hither and yon -- the group contends that none of its payroll or other funds was used for political activity. According to the San Francisco Business Times, during the past five years the organization received $1,888,425 in public grants. Most of the organization's money goes to staff salaries, the tax return claims.

Beyond the apparent use of public funds for political lobbying, Mission Housing staffers may also have improperly pressured low-income tenants in Mission Housing properties, allegedly telling them that they risked eviction unless they attended political rallies supported by Mission Housing staff. A letter sent by the Mission Housing board this March to low-income tenants states: "[W]e assure you that no residents in our buildings are in any danger of losing their apartments. Anyone, MHDC staff included, telling you that you will lose your housing is lying. No one, staff or board members, have any business telling residents that they must attend the noontime rally today or any other gathering."


The letter to the right of this text provides a glimpse into the type of ethical dilemmas apparently created by Mission Housing's dual political and business roles. The letter was sent in 2002 by a real estate broker representing Mission Housing; in the letter, the broker offers to buy a Mission Street building that had been slated to become an apartment complex. Mission Housing employees, under the auspices of the Mission Anti-Displacement Coalition, had successfully lobbied public officials to withhold permits for the project. The broker then wrote that "If your current buyer decides that the city has made his project economically not feasible, MHDC has the wherewithal and political juice to complete the project."

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