What did you think when you saw the millions of dollars in kickback money . It was amazing. I mean, this is a huge amount of money. If you werent following the money, how do you know that the lowincome housing tax credit is working . Narrator tonight, frontline and npr take a hard look at poverty, politics and profit. Frontlinis made possible by contributions to your pbs station from viewers like you. Thank you. And by the corporation for public broadcasting. Major support for frontliis provided by the john d. And catherine t. Macarthur foundation. Committed to building a more just, verdant, and peaceful world. More information is available at macfound. Org. Additional support is provided by ford foundation, working with visionaries on the front lines of social change worldwide at fordfoundation. Org. The park foundation. Dedicated to heightening Public Awareness of critical issues. The john and Helen Glessner family trust. Supporting trustworthy journalism that informs and inspires. And by the frontline journalism fund. With major support from jon and jo ann hagler. And Additional Support from the charina endowment fund. Laura sullivan i never imagined that a story about lowincome housing would lead me here, to an upscale resort in costa rica. Los suenos is a dream world, with fancy condominiums and private villas, a firstclass hotel, golf course, and its own private marina. Id come here because our investigation into the money spent to house the poor had taken us into a hidden world of secret Bank Accounts and shell companies. But im getting ahead of myself. To understand what brought me to costa rica, i have to take you back nine months earlier, to where our story begins. As our city grows, the number of Affordable Homes is doing the opposite. Its shrinking. Some are calling it the worst affordability crisis in u. S. History. Sullivan last year, we started spending time in dallas, in neighborhoods like this, where making rent has been getting more and more difficult. The struggle is real out here. I mean, you know, this is, this is every day for me. Itll wear you down, you know, because youre seeing it every day. Peoples rent checks have just been going up and up and up, and i dont see any end in sight. These are people who have jobs and children. How yall doing . Theyre saying that no matter how hard they work, they still cant find enough here to put a roof over their head. Well, this is the eviction. All right. Sullivan there are more than 40,000 evictions in dallas every year. Shes supposed to pay 400. Sullivan an estimated 2 1 2 million across the country. Yeah, get, get a couple of more people here. You can go ahead and start moving this. Sullivan over the past decade, average Household Incomes have declined while rents have been rising. And thats pushing more and more people, like carla powers, to the edge. So what happened to you today . I was at work. I work two fulltime jobs. Im trying. Its a struggle, and its real and its, and its hard. Seriously, yes. Sullivan how hard has it been to find housing out here that you can afford . Horrible, its freaking horrible. And thats how i ended up in this slum. I didnt want to be here. I didnt want to be here. I dont have horrible credit, you know what im saying . But its just hard. Its just hard. Sullivan like millions of americans, carla and her family are caught in the long wake of the 2008 financial crisis. What happened when we hit the foreclosure crisis is that all of a sudden, millions of families lost their homes. They became renters, competing in the same rental housing market, and at the same time, incomes were going down even if you could keep your job. And that led to a rental affordability crisis in this country thats as bad as its ever been in our history. Did he come with a dolly . We have over 11 million renter households that are paying more than half of their income towards their rent each month. That means that they are, you know, one emergency, one brokendown car, one illness, one missed day of work away from not being able to pay the rent. They are really at risk of losing their homes altogether and becoming homeless. Sullivan every year, the federal government spends nearly 50 billion to help the poor with rent and get them on the road to better lives. Over the past year, weve been investigating the two key programs that try to do that to see whether theyre working the way they should and why so many people are struggling. In dallas, and elsewhere, we kept hearing how the largest of the programs, section 8 vouchers, covers just a fraction of those in need. Section 8 applications. Thousands of residents have been fighting for a chance to get Public Housing assistance. Sullivan when the vouchers are handed out, the response is overwhelming. Chaos this morning in the parking lot as tempers flared over the citys plan to hand out the section 8 applications. There are some people been here since sunday morning, monday morning. Its ridiculous. Sullivan the voucher pays the difference between the monthly rent and what renters can afford. More than two million households use them, but wait lists can be years long. Well, how big a deal is it to get a section 8 voucher . Only one in every four households that are eligible for and in need of Housing Assistance get it. It was a dangerous scene. Thousands of people hoping for section 8 vouchers ran for a spot in line. Theyre hoping to win what is essentially a housing lottery. So its the 25 who have the vouchers that are the lucky ones within this kind of a system. Sullivan we wanted to see how section 8 would work out for three of the lucky ones in dallas, which, like many cities, has a tight rental market. They should pick up that mess. Sullivan farryn giles and her son have been staying at her exhusbands apartment for the past two months. We got to walk kind of fast, too, because youre not going to get to school in time for breakfast. You got to keep up. Sullivan shes held a variety of jobs since moving to dallas seven years ago. Ive been a cashier, ive been a stocker, ive been a caregiver, ive been a welder, ive done clerical work, stuff like that. Oh, mom made cupcakes last night. Sullivan but even when working, she says its been hard to find a place she can afford. What did you think when you got the voucher . I thought. This is freaking awesome i felt like it was an opportunity for me to gain more stability. This area in general i would like to get away from. Sullivan what is it about getting out of this neighborhood . Work. Work. I want to live near a place where there are better job opportunities. You know, it took me six years to get my voucher, but i got it. You can best believe im going to utilize it. Yeah, hi, do you guys accept the section 8 vouchers . Sullivan Linda Higgins says one unexpected event upended her life, leaving her so distraught that keeping jobs has been difficult. I was working at jc penney, and my son died in 2002. I started living with different people in the family, not able to afford to pay rent. Sullivan it sounds like a section 8 voucher means a lot to you. It does. I havent had a place of my own for, since 2002. Sullivan is it scary that it can all fall apart . Thats why im heading up to the shelter. Sullivan i met Cartis Harris in a walmart parking lot in south dallas. Cartis has seven kids and was living in a shelter, but before that, she says they often lived here, in her van. Sullivan you slept in here with seven kids for a couple of months . It wasnt, like, all the time, all of them, but yeah. At some point in time, we was. Like, in between, like, trying to find a motel, or other peoples houses to sleep in. If it wasnt, like, panning out, we would, you know, go find somewhere to park and sleep in my van. Sullivan what do you say to the kids . They understand . Because they know. Yeah. Sullivan they know youre trying. Do you have an area you dont want to live in . The hood, like, the hood. Sullivan why not . Why . Because i dont feel like dealing with it. I dont want nobody breaking into my house or, like, trying to beat up my children or break into my car. You get into it with somebody, you got to deal with that. Sullivan you want out. Yeah. Like, im tired of it. Like, why wouldnt i want better . In fact, i went from an apartment to living in my van to living in a shelter, like. Yeah, im not going to go backwards. Id rather go forward, you know . You going to press the button, carla . Youre going to press the button for mama. Sullivan we kept in touch with farryn, linda, and cartis as they tried to find a place that would take their vouchers. They have up to 90 days or theyll lose them. And what theyre hoping for is one of the main goals of the section 8 Voucher Program the chance to move to neighborhoods with better opportunities. Researchers from harvard and stanford took a look at this and found conclusively, for the younger kids, theyre significantly more likely to finish school, go to college, finish college, get better jobs, earn more money, not have teen pregnancies, not get involved in crime and drugs, and the younger the kids are when the families make the move, the bigger the impact. Zip code is destiny. Thats no joke. Sullivan one of the hottest zip codes in dallas is the northern suburb of mckinney. Three years ago, it was ranked the best place to live in america by money magazine. Today, the area is booming. New apartments are popping up everywhere. I was meeting a developer whos trying to bring more lowincome housing to the community. Hi sullivan hi, im laura. Hi, Terri Anderson. Sullivan Terri Anderson has spent her career in the field of Affordable Housing. Please, if you could put this on. Sullivan shes building an apartment complex here, between mckinney and the neighboring city of frisco. Can we see it . Yes, lets go. Sullivan all right, so tell me, whats this going to look like . Therell be two very large buildings and. Sullivan andersons plan is to build 132 apartments. Its classa construction and were really excited about it. Sullivan some marketrate, some at reduced or affordable rates, and some units set aside for section 8 vouchers. But her plan hit a roadblock with the Frisco City Council. We thought we were going to have support, and instead, the city actually called a public hearing for our property, and about 250 angry residents showed up. Sullivan some residents voiced concerns about traffic, others about overcrowding in their schools. Hi, nice to meet you. Sullivan and some were just opposed to having lowincome housing in their neighborhood. Well, why did you pick this spot . Nicole humphrey is a local opponent of the development. What is your concern when it comes to section 8 and lowincome . The lifestyle i feel, like, that is, goes with section 8 is usually working single, maybe single moms or people who are struggling to keep their heads above water. And its not. I feel so bad saying that, but its not. Its just not people who are, i guess, of the same class as us, which sounds bad, but i dont mean that in a bad way. Sullivan some people would say, you know, look, they maybe not, have not had the opportunities, their kids are not going to have the opportunities that your kids are going to have in this neighborhood. Can they share in that . The, the problem with that is, i hear a lot of the unfair, of, oh, we havent been given this or that, or we havent been afforded things that you might have been afforded. I dont look at multimillionaires and think, why dont i have a yacht . Why dont i have a private jet . Its, its a mindset, i feel like. Sullivan do you think that you maybe are stereotyping the folks. Oh, i totally am, 100 . Its not. It works both ways. I, im definitely not a racist and im not bigot, but i, i think i hold a little bit of a stigma against people who are different. We dont want nomads. We dont want people who dont have roots. I just dont want that to be what my community is about. Sullivan a vote on whether to help anderson get the money she needed was brought before the Frisco City Council in march of 2015. Sullivan the opponents won the day. attendees applaud sullivan but even without local support, anderson was able to line up loans and grants to move forward with construction. Then, more problems. Our superintendent has been threatened, issued a warning, a criminal trespass warning. The police have actually blocked our entrance. Sullivan have you ever seen anything like this in the years that youve been developing . I have not. Theres an issue with some building on the easement and the right of way. Sullivan frisco city Officials Say they support Affordable Housing and arent trying to stop andersons project. They just want her to comply with the citys building rules. Anderson complained to the department of housing and urban development, which is now investigating whether her project is being discriminated against. It is a concerted effort to shut down development of a property they do not want in their neighborhood. Move move sullivan two years ago, just miles away. Get on the ground. Sullivan a confrontation between Mckinney Police and black youth went viral. That girl right there, running. Sullivan the incident became another flashpoint over policing and race. yelling sullivan but behind this confrontation were tensions over housing. What was happening at that pool party was, you had white patrons of the pool shouting at black patrons, go back to your section 8 housing. Then they started verbally abusing, telling me i need to go back to my section 8 home and stuff like that. On your face yelling sullivan the Mckinney Pool Party was a reminder of how inseparable housing and race have been, and of federal policies that divided our cities more than 80 years ago. In 1933, the Public Works Administration began to build Public Housing. And the important thing to know about is that they built segregated Public Housing in cities across the country that had never known segregation before. Sullivan then, in the 1940s and 50s, the government bankrolled a mass migration to the suburbs. The federal Housing Administration subsidized singlefamily homes outside central cities for white families only. Twothirds of the people in our country now live in a metropolitan area. Mostly the growth is in the suburbs. At the same time, industry left urban areas. So poverty became even more concentrated, making lowincome segregated neighborhoods even more desperate economically than they had been previously. Are we going to sock it to them now . protesters respond are you ready . Sullivan by the 1960s, the segregation and desperation boiled over. chanting race riots swept the country. yelling, sirens blaring segregation was something that was eating us away. Most of the focus of civil rights work had been in the south. But by the mid 60s, we were making that turn towards the north, and in the north, segregation was the issue, housing segregation in particular. We want a strong fair housing bill, and thats the only thing thats going to make this stop. people cheering and so its no mistake that the Fair Housing Act, which had been stalled in congress, is passed just days after Martin Luther king is assassinated. Sullivan the act outlawed all discrimination in housing and went further. The Fair Housing Act was now saying, were going to aggressively and affirmatively look for ways to create opportunities for integrated housing and to encourage local jurisdictions to do so. Sullivan within years, as conditions in Public Housing deteriorated, new alternatives were enacted, like section 8 vouchers. So the section 8 Voucher Program was created to continue assisting lowincome people with their housing cost needs, right . So a household could take their voucher and move to a higherincome, higheropportunity neighborhood. Sullivan vouchers would help some of the poor pay their rent. But as old Public Housing projects came down, new affordable options were needed. And by the early 1990s, the government had launched a new construction program, relying on the private sector. It was called the lowincome housing tax credit. And so the idea of the lowincome housing tax credit emerged as a way to create a new Publicprivate Partnership that would allow more Affordable Housing to get built. Sullivan the program would spur billions of dollars in private investment to remake the image of Public Housing. It would also open the door to a whole new set of players and politics. So you both were interested in the same thing. Back in dallas, i met developers who were among the earliest to see opportunity in the new Tax Credit Program. Together, brian and Cheryl Potashnik became some of the most successful Affordable Housing developers in the country. I think at one time we were ranked in the top ten and the largest in the state. Sullivan they got their start in the neglected neighborhoods of south dallas, areas where the demand for Affordable Housing was greatest and the Tax Credit Program was set up to help. The potashniks showed me how the program works. The i. R. S. Gives billions in tax credits to the states. Then the states award the credits to developers. And this is you guys. Yes. Sullivan who sell them for cash to investors, mostly banks. The developers use the cash to help build apartment buildings. And because taxpayer money pays for most of it, they can charge the lower rents that are required. Its like when you buy a house, you have to put a down payment. Thats your equity. Thats. The tax credits give us the equity to build the apartment complex. Sullivan could you build these properties without tax credits . No. No. And it wouldnt be possible to build the quality of hous