Mission adrift
Affordable-housing developer faces scrutiny after fumbling before city panel

By Rachel Brahinsky

Members of the San Francisco Board of Supervisors are seeking an independent audit of Mission Housing Development Corp. after its director offered bizarre public testimony that seemed to validate accusations of fiscal mismanagement and harassment of employees who have complained the affordable-housing organization is abandoning its focus on low-income renters.

MHDC executive director Jose Wheelock was called before the board's Finance and Audits Committee Jan. 26 to discuss whether the city should continue to withhold $360,000 in community development block grants from the organization, which controls the vast majority of the Mission District's permanently affordable housing stock. Concerns over a lack of accountability and transparency prompted city officials to cut off the funds last June.

At the hearing Wheelock admitted he had hired a private investigator to interrogate his staff and was unable to clearly answer basic questions about the budget of the agency, which he has overseen since last spring.

"There was a coup attempt, and it failed," Wheelock told the committee, defending his decision to hire the investigator amid staff discontent with his tenure. "There was personal information leaked. Yes, an investigator was brought in to see who was leaking information," he said, adding, "there will be more investigations."

Wheelock later indicated to the Bay Guardian that the "leaked" information was his salary, which – as the head of a nonprofit that runs on public and foundation funds – is public information. He said he is paying the investigator "about $150 an hour" but didn't reveal which sources he was tapping to pay the contractor.

San Francisco has granted MHDC more than $3.7 million between 2002 and 2004, according to the city controller. The nonprofit is responsible for major new projects planned for the coming months, including the Valencia Gardens public housing rebuild.

The supervisors expressed concerns about the future of MHDC's projects because of the internal conflict that has come to a head over the past year (see "Whose Mission?," 2/25/04). Staffers, former staffers, and the Service Employees International Union Local 790, which represents MHDC employees, have leveled charges of mismanagement, harassment, and secrecy against Wheelock and the board of directors, particularly board president Larry Del Carlo.

Staffers and community members accused the directors of unilaterally shifting MHDC's attention from low-income rental housing for families and supportive-housing for formerly homeless adults to ownership projects for middle-income clients – while refusing to follow an open and democratic decision-making process.

Longtime executive director Carlos Romero, who strongly resisted such changes to the organization – which has helped retain much of the Mission's working-class character – was fired last winter. A few months later, city officials – led by Sups. Tom Ammiano, Chris Daly, and Aaron Peskin – responded to the turmoil by suspending MHDC's city funding.

Since then, critics of Del Carlo and Wheelock say the organization is being purposely starved of needed funding, even as the leadership makes dramatic shifts in programming that will likely impact who is able to continue living in MHDC housing. They detail their charges at www.savemissionhousing.org.

While Del Carlo has told us none of the accusations are true, Wheelock confirmed at least one key shift. Although a major part of MHDC's housing model has been to provide services to support residents, Wheelock has been accused of dramatically cutting tenant services over the past few months. When questioned at the hearing, he validated this charge, saying that MHDC is a "housing-development organization, not a service organization."

Ammiano challenged that shift at the hearing, saying the group's community-based service model is a big reason why the city supports MHDC. After the hearing, he announced plans to introduce a request for an MHDC audit at the supervisors' Feb. 1 meeting.

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