May 30, 1996 - From the May, 1996 issue

TPR Exiting Los Angeles Interview: SRO Housing’s Andy Raubeson

After 13 years at the helm of Single Room Occupancy Housing Corporation (SRO Housing), Executive Director Andy Raubeson is stepping aside and returning to his native Portland. Raubeson, a seasoned developer of affordable housing and service provider in downtown Los Angeles’ “Skid Row”, offers and in-the-trenches perspective on the needs of downtown housing providers. He offers insights into the impact of the recent L.A. County Board of Supervisors’ 25% cut in general relief payments on our community and on investments in SRO and public-assisted housing.


Andy Raubeson: "(T)he California Legislature has passed legislation… that (enables) counties to limit general relief to only three months out of any 12… If that happens, you are going to have permanent housing with general relief clients as tenants that can’t survive.”

Andy, you have announced that you leaving SRO Housing this summer, after 13 years in what you have often described as a "job of a lifetime." Share with our readers what you hope your contribution has been. 

I was recruited from Portland to Los Angeles by the Community Redevelopment Agency (CRA) in 1983 to set up a non-profit similar to the one I had established in Portland. The CRA had tried, on a number of occasions, to improve the quality of life in what they now call Central City East, but which most people call "Skid Row." They had funded a park, Gladys Park, that became so bad that the employees of the Department of Recreation of Parks refused to enter to clean it without police escort. With CRA assistance, we were able to create a second park in an even less desirable area of Skid Row. Within two years of successfully operating the new park, the City decided to let us redesign Gladys Park.

During the same period, the city had, through the CRA, funded a number of private owners of hotels on Skid Row for substantial renovations. The buildings were trashed within months, however. The public could not see where any of the money went. The City concluded that if money was going to be spent on housing, there had to be an entity managing the funds that knew what they were doing. SRO Housing Corporation became that entity. 

If we had faltered, there would not have been any of the development you see today in Central City East. I think that the SRO Housing Corporation, and I myself, I guess, can take some credit. Not just for what we've done, but for what others have done, because we started giving the city some successes. Without successes, the CRA would not have funded other non-profit developers.

In a June, 1995 TPR interview, "Unintended Impacts of Welfare Cuts," you discussed the then impending drop of general relief from $295 to $212 (and you indicated that it had once been $343). The cuts have now taken effect. Given those cuts in general relief and pending welfare reform/cuts nationally, what are the future prospects for SRO Housing?

It now will be extremely difficult for an operator such as us to maintain the quality of our housing. I say extremely difficult, but not impossible.

In order to do new developments with the current state of subsidies available, I see it as virtually impossible to put together accurate pro forma’s that reflect the true demographics of the people you will have an opportunity to serve and make it work. 

Actually, the worst is yet to come. When we talked in 1995, the powers that be were talking about reducing the monetary amount; now the California Legislature has passed legislation, which has been signed by our Governor, that allows counties to limit general relief to only three months out of any 12.

This is enabling legislation. The county does not have to drop its general relief back from a year-round program to a three month program. However, the County is truly in fiscal difficulties and certainly the temptation will be great to do that.

If that happens, you are going to have permanent housing with general relief clients as tenants that can't survive. You can't have someone pay you rent for three months and then go nine months until they go back on a source of income. I haven't done any in-depth study, but my gut tells me that this is real trouble—there will be a cutback in the length of eligibility and that this cutback will devastate the single room occupancy housing stock.

You indicated in that same TPR interview that about $100 million of public/tax credit capital has already been invested in downtown SR O's and housing in the '80s. What are the prospects for these investments in our downtown? Will we have defaults? 

Some or it may not survive. It certainly won't all go into foreclosure. Some of the weaker projects around the edges might. There are so many "ifs". Many will survive even if only on a year-to-year basis will Congress provide and will HUD continue Section 8, project-based assistance to facilities like this. My guess is they will. It is a very thin line to walk to have the annual refunding of something like that, rather than five year renewals as we now have. 

Probably there will be some project based assistance available and projects that have it will survive. There will be very little in the way of local subsidy in the foreseeable future. Coupled with the loss of incomes from the potential tenant population, and with government's ratcheting down at the same time, it's very difficult to foresee a happy outcome. 

Having worked for years in putting these hotel projects together and managing them, what are the likely consequences for our community and businesses in Los Angeles of ratcheting down the public resources available for housing? 

I'm a bit old-fashioned in my thinking. I have always believed that the only realistic answer to "let them eat cake" is "off with their heads." People will not starve nor let their children starve. There is going to be a clash of values between the have's and the have­not's as sure as we sit here. I'm not sure that will happen in my lifetime. If we continue on this path, we are in for insurrection—things that will make the "burn baby burn" experience of the late 1960's seem tame by comparison. 

You cannot neglect public housing without creating more homelessness. In the case of public housing the U.S. taxpayer has invested $90 billion in capital (current book value is probably over $300 billion). To let it fall into disrepair or to demolish it is a huge mistake and will create huge problems for our society. 

Given Federal and County cutbacks for programs like those that SRO administers, from what sources will future operating subsidies for SRO Housing and like non-profits come? 

People are going to have to be innovative. There may not be a single stream of revenue. I will give you some for instances. We recently upgraded a number of rooms and bought spaces on a board at the Greyhound depot. We have two vans, one to the Russ Hotel, one to the Panama Hotel, where people can pay much less than at a standard hotel, but much more than we charge residents, with the goal to increase cash flow into the building. 

In what were formerly all-male hotels, we have redesigned and created some special security measures so that we can have women's wings. In late April I met with the Department of Public Health officials to let them know we can accept the referral of women. This change will result in increased numbers of referrals. Since the Department of Health Services pays a higher rate than self-payers, this will result in increased revenues. 

In many ways, our large hotels operate very much like the airlines. They have some seats that they sell at an excursion rates, really cheap, and some much higher rates that businessmen pay who don't stay over Saturday nights. The trick is to have just enough of the one so that you can afford to do the other. That is the juggling act we are trying to do now—to attract more higher paying patrons to cover costs for lower­paying patrons. 

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If in the future, public money comes unrestricted from the federal government in the form of block grants either to the state or localities, how will low-income citizens fare in the to-be-expected political infighting locally for scarce public funds?

In two words—not well.

I know that the current wisdom is that you put decision making closest to the people, to the community. But, we must ask, is that really going to be the result? There have been federal protections placed on such things as Community Development Block Grants. These protections were only put in place after groups like the Center for Community Change led the charge to get "targeting" so that some of the early worst examples were reined in. I believe that the states, and this state in particular right now, are bad places to put federal money. When that block grant money comes down, watch and see where the first money is spent—setting up new staff in Sacramento.

Paint us a picture of how need and resources intersect.

Local government, at least partially because of Proposition 13, has less ability to meets the needs of people that it wants and needs to serve. It is true that local government has not always spent money as wisely as it could have. Even saying that, they need the resources if we're going to give them the responsibilities to serve the needs of very low-income people. I do not have any confidence that "demolition" or new block grant formulas will improve access for low-income people and organizations who serve them. 

I think the answer is to go back to a system of local taxation and allow governments to raise enough taxes to meet the needs of their citizens and hold them accountable. In other words, reform the tax reform known as "Prop 13." Where there are genuine national priorities to be met, the Federal Government should provide grants to local and/or non-profit, locally based service providers.

When times are really tight, it gets to be a nasty thing that happens for the allocation of resources, and we have not fared well lately at either the City or County level. I think that those who care about the downtown core of this great City have to realize that the residential portion just east of the office towers needs to survive and have a certain degree of, for lack of a better word, comfort. You cannot have a cancer in one part of the civic body and have it not affect the other parts. 

Sketch out what you might write the Mayor—a hypothetical exit memo—evaluating his administration's contributions to meeting the needs of the most vulnerable in our City. Refrain from being ''politically correct." 

The Redevelopment Agency here, under the leadership of Jim Wood made a courageous and enlightened policy decision in deciding to renew the Skid Row housing stock. Jim's death this past year left a tremendous void in my life. Jim was truly forward thinking and courageous. 

The Housing Department has not been a player in renovating S.R.O's and I'm not sure why. It may be something so simple as a bureaucratic competition; perhaps the CRA carved out that niche, and the Housing Department is not going to help them out with anything. It may be just a matter of philosophy. This form of housing, by its nature, is not decent, safe, and sanitary by traditional housing standards. I don't know the answer. But I do know that LAHD has not been a player in this form of housing.

The Housing Authority has tried to be a player and has not done it well. But on the whole, the Housing Authority, as far as its role with SRO's, has been a pass through. Of course any Section 8 has to go through the local housing authority, and I think they administer it well. They process the paper quickly. They don't set up road blocks to very low income people qualifying. Quite the opposite, they are very accommodating. I have a very good feeling about the Housing Authority. 

HUD Secretary Cisneros in 1994 came out with a proposal to change the federal government's policy towards homelessness entitled "Priority Home: The Federal Plan to Break the Cycle of Homelessness." Has that plan's recommendations ever impacted SRO Housing, and what thoughts have you on such initiatives? 

When you start throwing phrases to me like "reinventing government" and "priority home", etc. I assume that you know the answer: that it is pretty much bullshit. The Bush administration, as a matter of fact, was even better at coming up with nice sounding titles for doing nothing. How does this one sound: "Safe Haven For the Mentally Ill", or 'Thousand Points of Light." 

I don't see any grand plan that changes and touches me. I see that Henry Cisneros is an extremely bright and effective administrator. The person that I deal with most often is Andrew Cuomo, whom I would call brilliant, hardworking and truly a great Assistant Secretary. I think they've done some good things, but their attempts to reorganize the Department has been mainly smoke and mirrors. 

Any successes that they have had, and they have had successes, has been a result of their abilities to deal with those problems, not their ability to reform that vast institution known as HUD. 

In closing, what kind of person should succeed you at SRO Housing in light of the declining support in the city, county, and the nation for public assistance and housing? 

I would first say that the job is open. My departure is a great opportunity for someone to come into. We have good people up and down the line and I've always resented any attempt to personalize our organization as a "one-man show." SRO Housing Corp. is not a one man show. 

I believe that people are more important than systems. The main element I think we need is a person who has a true sense of mission to serve low income people. That is, this Executive Director position is something more than a job. The person must be a value system in place. In other words, this job is not a stepping stone in a career. It's a mission.

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