City Towers is owned by KDF Communities, a real estate investment firm specializing in low-income housing. Although KDF touts its “commitment to providing social services to [its] residents” [1], a brief survey of the conditions in the properties it owns immediately shows that its primary role in society is to profit from the exploitation of tenants. This is accomplished in part by paying no money to fund basic maintenance of the units it owns. However, we have to keep the bigger picture in mind, as well. KDF wouldn’t be able to do what it does without (as proclaimed on its own website) leveraging connections with “the largest and best-known lenders and investors in the industry including Bank of America, JER Hudson, Centerline, Citibank, East/West Bank, GMAC, Union Bank, US Bank, and Wells Fargo” [2] to buy and sell properties on favorable terms, and to navigate the arcane tax codes and housing subsidy laws to its benefit.
KDF isn’t the only for-profit company that has a financial stake in things staying bad at City Towers. One of their “industry partners” is VPM Management, a distinct entity that handles day-to-day affairs on site. Donald T McShane (mentioned in all three interviews in Part 2 of this series) is an employee of VPM, and is currently acting as property manager at City Towers. He used to work for Oakland Housing Authority, the selfsame government agency that now cuts his employer hundreds of subsidy checks each month. And the shadiness doesn’t stop in West Oakland: several properties in San Jose that are owned by KDF and managed by VPM have also been plagued by toxic mold, deadly fires, extended water shutoffs, neglected laundry facilities, bedbugs and roaches, and illegal rent increases [3-5].
It’s important to understand how the situation at City Towers fits in with the larger picture of the federal government’s elimination of public housing across the country. The government justifies these privatizations by saying they are “eradicating severely distressed public housing” [6] or addressing the billions of dollars of “backlog of public housing capital needs” [7]. However, we see proof at City Towers that government-subsidized housing under private management by no means eliminates severe distress in housing conditions for poor and working people. Furthermore, the government is still spending plenty of money keeping these developments running – it’s just that now the money goes to a private corporation. VPM Management and KDF Communities get paid full market rate for every unit, as defined by the Department of Housing and Urban Development [8], through a combination of resident rent (a minority of the total amount) and government subsidies. And yet the elevators at the Towers are broken, the stairwells smell like piss, and most of the units have severe habitability issues.
[To be continued]
[1] https://www.kdfcommunities.com/copy-2-of-environmental-commitment
[2] https://www.kdfcommunities.com/financial-capacity
[3] https://sanjosespotlight.com/owner-of-troubled-san-jose-apartments-is-a-lawsuit-magnet/
[4] https://sanjosespotlight.com/water-shut-off-for-east-san-jose-tenants-without-warning/
The United Front Against Displacement 