interviews
Labor and the White House
by Dave Weigel
March 31, 2021
This interview with Dave Weigel, national reporter covering politics for the Washington Post, was conducted and condensed by franknews and Payday Report.
DW | The White House's involvement in the Amazon union drive was a big surprise. I mean, we know where it could have originated, the union talked to the White House; they have kind of an open door with Biden that they didn't have with Trump. We know that Faiz Shakir, Bernie Sanders’ campaign chairman, and his group, Perfect Union, got involved. So, there was public pressure.
The fact that the White House and the president released that video was a big deal to people. And, he made this decision to get involved very early on in his presidency. It was within his first 50 days. He decided to do what hadn't been done before and give a message in support of the union. It was a very careful message. The new labor secretary, Marty Walsh, when asked specifically about Amazon, responded in more general tones.
But, no matter what happens, if you are in for a penny, you are in for a pound.
A lot of previous presidents, including Barack Obama, said a lot less about these union drives and, in doing so, limited their own exposure. If the drive didn't work, people didn't say that the president supported something that didn't work. The fact that Biden made a statement, early on, when it wasn't clear how this was going to go, is a real political statement of what they thought was important.
frank | How do you think his background plays a role in this?
He's always leaned in really hard and identified with workers in the same way he's tried to identify with different civil rights movements. Joe Biden has always wanted to be seen as the kind of person who is coming from Scranton, who has lived through the sixties, and who wants to jump to the front of the march if there is a struggle happening.
He frames everything in terms of fairness. He's not as natural as other members of the party in talking about this. When Bernie Sanders talks about this, for example, he talks about greed, he names CEOs, he says nobody deserves that much money, he talks about a maximum wage and how there should be no billionaires at all. Biden doesn't go that far. Biden has never gone after Jeff Bezos. He's never gone after individual heads of companies the way that Sanders does. He does this sort of a "Hey man, these guys are under assault, somebody needs to stick up for them."
That is something that he has always wanted to be part of his brand. Even when he was voting for trade deals like NAFTA as a Senator, he was never really comfortable. He had the same ideological mindset as a lot of the Democrats in the eighties and the nineties. He did it because he saw that that was the way things were moving and he voted strategically. But, the stuff that fired him up was when he could side with workers. It is the same thing with the projects he took on under Obama when he was Vice President.
During the Democratic primary, he didn't get the same amount of labor support that Hillary Clinton did, but, Sanders didn't get it either. There wasn't the same sort of a landslide of labor to get in early and say, this is our candidate. Instead, they were demanding more of the candidates.
I would cover presidential primary events with the Teamsters in Cedar Rapids or the Building Trades in DC and you would kind of look to the level of applause as an indicator. The interesting thing is that at those events Sanders would lay out the things he did and what he wanted to pass. Biden would go on at length about non-compete clauses and about wage theft and things like that. It was less, "I have studied all of the papers on this and I've decided this is my policy," and more of "this seems unfair and I'm against this thing."
I think the Democratic Party is increasingly understanding what labor can mean for them strategically.
Republicans have gotten kind of tangled up on labor. They have done better with union households, but they are basically the party of deregulation still. They've never really moved on the labor part of their messaging. That makes it easier for Biden to compete for these workers. When it comes down to it, Republicans want “right-to-work." Josh Hawley, who branded himself as a working-class candidate, for example, supports a national right-to-work.
Biden was very concerned with winning back more union households. Union workers were saying, “Democrats had the presidency for 16 years. What do they do for us?” Biden didn't have all the answers that labor wanted, but he was making a lot of specific promises about how he was going to act. He talked about infrastructure spending and about how he was going to run the NLRB and how he was going to approach employers. It was less than Sanders did, but that's way more than Democrats had done in the past.
I mean, the McCain/Romney era Republicans had no appeal to the sort of voters who voted for Obama twice and then voted for Trump. Biden only peeled back maybe 10% of them depending on where you're talking about, but it has made life easier for Democrats.
This fight has in large part been framed in the context of continuing a battle for civil rights. Do you see Biden lean into that messaging?
Biden did not really lean to the racial justice aspect or the civil rights legacy aspect of this labor fight. When the congressional delegation here came down a couple of weeks before the vote, they were much more explicit. Someone like Jamal Bowman or Cori Bush is much more comfortable saying that than Biden. That is the thing about Biden. He basically sets boundaries. He says what his position is and backs off and lets the action happen without his constant commentary. It's very different than Trump in that way too. And that's different than the Sanders position. And it's different than what Warren said her position would be as president.
Can you give us context on how or why you started covering this story?
I started covering the Amazon drive because of the president and members of Congress intervening. I mean, labor decided to get involved months before, but the fact that Democrats were getting involved was new. It has been interesting to monitor their investment in this over other Democratic Party causes.
There's a little bit of intervention from the Democrats, but not, I'd say equal to what Amazon is doing. They are not the advertisements on TV. We all know the Democratic party is kind of involved, but it is not the same political project that I've seen in other places.
There are two stories that kind of were happening at the same time; they have merged, but not completely. One is this labor drive, which is smaller than most drives that have succeeded. It is not overwhelming. You don't see labor signs everywhere you go. But, on the other hand, the level of national involvement is kind of new.
Had Biden said nothing, there would have been a story, but it wouldn't involve the White House, it wouldn't involve the Democratic Party, and it might not involve the PRO Act.
And I think that's going to change because of this.
New interview w/ @daveweigel @PaydayReport
— frank news (@FrankNewsUS) April 6, 2021
"The White House's involvement with the Amazon drive was a big surprise ... Previous presidents, Obama comes to mind, said a lot less. The fact that Biden did that early on is a political statement of what they thought was important." pic.twitter.com/MwYlmqE4xQ
That was a big decision Biden made to be a part of this.
Right. And that political story is interesting. The story here is much more independent. A lot of the people who've come in to help canvas are from smaller groups. You have Black Lives Matter and DSA groups from the area, but you don't have the Democratic Party getting involved in a huge way. I think that is something that people will revisit after the vote.
Should the Democratic Party, like most left parties in the world, be very involved with labor? Should they always take the side of labor?
Most social democratic parties are labor parties and they build up from there. Their coalition includes labor unions. In the British Labour Party, for example, labor has a role in electing the leadership. That is not the case here. That's the conversation I think they're going to start having when this votes over. For example, if there are, and the union says there are, hundreds of people around the country calling them saying, "Hey, I have some questions about what I can do at my fulfillment center in my town," that will be a question for Democrats.
And if Amazon wins, do you get spooked? Amazon has been very punchy in their PR. They might say that a bunch of elite Democrats stood with the union and the workers stood with Amazon. That is very comfortable turf for Amazon to be on, and that leaves a big question open for Democrats. If the union succeeds, throw all of that out the window. I think the lesson that everyone would take in that case would be that if it takes less than a three-minute video from the president to get momentum for something like this, then we should keep doing that. As we talk, I don't know the answer to that question. I think that is something that is going to be answered when the votes are in.
interviews
Uncertainty is the Universal Challenge
by Polina Bakhteirov
April 8, 2020
This interview with Polina Bakhteirov, a vice president of development with Omni New York, was conducted and condensed by frank news.
Will you tell me about your current work?
Omni is an exclusively affordable housing developer, established in 2004. Since then, we have acquired, developed, and managed over 17,000 affordable units across 11 states with an aggregate transaction value of around $3 billion. Omni has a reputation for acquiring very distressed properties and turning them around through extensive rehab and added security.
Prior to joining Omni, I spent about a decade in the public sector. Immediately before joining the firm, I was working in Newark, NJ on small business development with a focus on supporting and growing minority and woman owned business enterprises. Prior to that, I was the inaugural director of preservation for the New York City Housing Authority [NYCHA]. There, I built out the preservation team to implement NYCHA’s PACT plan, which stands for “Permanent Affordability Commitment Together.” I led the rollout of various federal subsidy conversion tools, such as the Rental Assistance Demonstration [RAD] and Section 18, to convert public housing units to project-based Section 8 funding.
These conversions require the housing authority to address the repair needs of each converted property, so we partnered with private and non-profit development teams to raise adequate financing to address the capital backlog and also to bring on new property management and increase on-site social services for residents.
What are your most pressing concerns right now?
I’m primarily concerned about our residents – their health, level of access to medically-accurate information, and ability to cover the costs of basic necessities. Many may be laid off or have hours cut back.
More broadly, low-income renters, especially those living in public housing, may not be receiving information on how to protect themselves from the virus and how to care for those in their homes who are, or may be, infected.
We know that across the board, public housing residents are predisposed to becoming sick with COVID-19 due to pre-existing conditions. Furthermore, 40% of NYCHA families are led by seniors who may contract the virus from their (sometimes asymptomatic) family members, while nearly one in four NYCHA residents are seniors who tend either not to have access to information virtually or are reluctant to trust it. What happens when these residents show up at their management office to pay rent and discover that they can only pay online, via phone, or by mail? Now this senior has unnecessarily left the safety of their home and potentially exposed themselves and others.
Another prominent issue is the lack of consistent government guidance for affordable housing operators. At this point, HUD has issued three consecutive sets of FAQs and more are expected. Sometimes, updated guidance rolls back provisions from previous iterations. For example, the agency changed its guidance on mark-up-to-market projects from what was originally a 5% rent increase allowance since rent comparability studies are suspended due to widespread stay-at-home orders, to now saying that they will issue additional guidance on the matter in the coming weeks. Any requirements for a second appraisal will be a practical challenge as appraisers are not consistently deemed essential workers from state to state.
Furthermore, HUD’s guidance on interim recertification of income for residents differs from that of some public housing authorities, including NYCHA. Even New York State has contributed to the litany of guidance discrepancies, reversing their previous stop on in-person real estate showings, inspections, and appraisals. Another confusing inconsistency that I’m experiencing on my portfolio at Omni is how various states are defining essential workers. For example, New York has carved out the construction of affordable housing as essential, but Philadelphia has shut down such development. My hope is that Phase 4 of the federal legislation will provide more guidance on infrastructure and specifically housing.
HUD wants to keep RAD transactions going, but some documents cannot be recorded. Numerous public land disposition processes are on hold, while others are moving forward but without defined timelines. That makes responding to certain Requests for Proposals [RFPs] more difficult. Should we proceed with architectural design or pause it? Will the changing needs of the community call for a different development program in 3-6 months? Furthermore, the halt of land use review processes may have a multi-year stalling effect on construction. We as developers are obsessed with predictability, so you can imagine our current state of mind. Nonetheless, I think we can all agree that the market will eventually recover, especially given its strength coming into the current crisis and what we anticipate to be even stronger demand for the affordable asset class coming out of the pandemic.
As the federal government contemplates all of its economic triggers, the LIHTC rate [Low-Income Housing Tax Credit Rates] is at a ten-year low of 3.12% for the month of April, and is expected to be even lower in May. This is actually an opportunity to push Congress to permanently set the rate at 4%, similar to how it has done so for 9% credits. Adding this additional layer of predictability to affordable housing finance will definitely be welcomed in this time of great economic uncertainty where underwriting of LIHTC deals - and in general - will most certainly become more stringent.
I believe our biggest areas of opportunity moving forward are in the urban multifamily market. Residential occupancy levels are typically 5% higher for the affordable asset class vs. market-rate units during economic recessions, so the next 12 months may be a greater opportunity to build more new affordable units. And as the federal government is determining the best way to support American renters, I think they should take heed of former HUD Secretary Castro’s proposal to make Section 8 - Housing Choice Vouchers - a federal entitlement for every eligible adult, just like Social Security and Medicare. Or enact a monthly renter’s tax credit for government unassisted households.
At Omni, we have discussed property management logistics, how we're going to continue to operate our sites at this time. It's everything from how are we going to collect rent, to who is on the properties cleaning, and how is garbage being collected.
What are you doing to enhance the safety of residents and employees alike?
In terms of property management, we're looking to stagger shifts. We're looking at reducing the onsite presence of employees to the extent possible, while still maintaining high-quality service. And then obviously examining various cleaning mechanisms and, and ensuring that those deep cleaning sessions are being implemented on a more aggressive schedule. We are also looking to see what work needs to be done immediately and what work is going to have to be delayed. And that's obviously challenging. We have to be able to communicate that to our residents. Other considerations are the policy on visitors to the properties, communications delivered in the languages spoken there, and supporting residents with alternative methods of paying rent and completing interim income recertifications. I’ve found guidance from the National Initiative on Mixed-Income Communities quite helpful when it comes to property management.
People already living in poverty are losing work – how do you protect your most vulnerable tenants?
There are various eviction moratoria coming from different state governors. It's an effective measure in terms of protecting folks from eviction for a period of time, but that doesn't solve our revenue and debt service issues. We still need a residential income coming in order to continue to run the buildings and to run the business. We are also of course worried about having to do layoffs internally.
A lot of our developments have Section 8 contracts on them. And so we hope that the additional infusion of funds from the federal stimulus will fill the gap when it comes to federally assisted households.
We also have properties that are strictly LIHTC (Low-Income Housing Tax Credits) where residents don't have a federal subsidy. We're still thinking through how we can support those folks and how long our reserves will last because of course, all these properties have reserves for emergencies. The biggest challenges that we are facing now, similar to the federal shutdowns we encounter from time to time, is that we just don't know how long this will last. That is really what we are grappling with now.
What do you think about a rent freeze?
That is tough, right? We are not in the business of evicting our residents. In the entirety of our existence over the past 16 years, we have come in and turned around properties that no one in the private sector wanted to touch. We don't want senior residents to lose their homes. At this point, we're trying to figure out how much leeway we can give on rent collection, while also ensuring that we have enough income to continue to operate. We don't want folks that have to choose between rent and other necessities.
I don’t believe that a full-on rent freeze or strike without support for property operators is the best economic solution, since many affordable housing owners have mortgages out on their developments that are securitized, and the investors in these mortgage-backed securities are often pension funds for public workers. Their inability to collect on those investments will have a negative economic impact on working and middle-class families. It’s very circular.
I think the new forebearance allowance for affordable housing owners is a stop gap measure, but there are a few issues. First, the time period (90 days) does not sync up with the “parallel” eviction moratorium of 150 days (120 days plus 30 days’ notice). Second, forbearance is reserved for federally-backed multifamily mortgage borrowers who were current on their loan payments as of February 1st. But we closed on a 2,600-unit property in mid-February with over 6,000 vulnerable residents – where does that leave us?
My top questions as of today are: