Dianne's special deal

By TED SIEFER  |  October 29, 2008

The Kargmans “made windfall profits with little cash investment in the 1960s, and still more when they refinanced in the early ‘90s,” says Michael Kane, executive director of the Massachusetts Alliance of HUD Tenants, “and now they stand to make even more by going to market, all paid for by taxpayers and tenants.” Kane estimates the brothers own nearly a dozen large developments around the state that were financed with 40-year mortgages from the US Department of Housing and Urban Development that have reached or are nearing the end of their terms.

Given the nature of their business, members of the Kargman family have long sought to have their say in Washington and on Beacon Hill. Max, the patriarch, served as president of the National Advisory Council of HUD Management Agents. William, his son, was chairman of a national HUD managers lobby group in the early 1990s, and then head of the rental-housing division of the Greater Boston Real Estate Board, an influential Beacon Hill lobby. The Kargman brothers have also contributed to political candidates, with Robert donating nearly $39,000 and William nearly $11,000 since the start of 2007 to candidates in national races. Records in the Office of Campaign and Political Finance show that, along with members of their families, they have also over the past several years contributed to candidates at the state level, including Wilkerson — sums that collectively figure in the tens of thousands.

Lawmakers on Beacon Hill have wrung their hands over the issue of “expiring use” — how to keep affordable-housing owners from cashing in when subsidy contracts end — for a decade, but this year the matter finally came to the fore. Affordable-housing advocates estimate that, in addition to the thousands of subsidized units that have already been lost, another 8000 more could disappear over the next few years if owners choose not to renew federal and state contracts.

A passive push
All of this would seem to put Wilkerson on the other side of the political fence from the Kargmans. She represents a district with the largest concentration of subsidized housing in the state, and she has been the lead sponsor of several expiring-use bills, including one this past session, S.2192, that sought to protect tenants from eviction and allow municipalities to regulate rents when affordability contracts expire. In touting the bill, Wilkerson’s campaign literature noted that “This issue has become increasingly urgent given the affordable-housing shortage within Boston right now.”

Kane, the head of the HUD-tenant group, said that Wilkerson had been the point person for many of its legislative priorities. But during the past session, when the issue of expiring use was finally getting a serious hearing, Kane feels that Wilkerson “dropped the ball,” adding, “She didn’t lift a finger to save her own bill. We asked her to go to Ways and Means for support for months, and neither she nor her staff did anything.”

The State Senate did end up passing a different expiring-use bill sponsored by the chair of the Senate Housing Committee, Democratic State Senator Susan Tucker, of Andover, which gives the state the “right of first refusal” when owners seek to sell subsidized properties. But Kane considers it woefully inadequate since it allows owners intent on keeping their buildings, like the Kargmans, to simply opt out of affordability contracts. In any case, the bill never did pass the House.

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