It’s Time for Congress to Restore $6B in HUD Funding

Republican presidential candidate Ben Carson speaks at the National Press Club in Northwest D.C. on Oct. 9. Photo by Nancy Shia
Ben Carson (Photo by Nancy Shia)

From youth yearning for the time to have their own place, to older Americans hoping to age in place, the need to have a home is a shared concern of consumers of all ages and locales. It’s where children are raised and memorable moments dwell. It’s also where many people rest, reflect and shut out the worries of the day.

Right now, the future of our country’s commitment to housing is in jeopardy. In the recently released White House Budget Blueprint, the Department of Housing and Urban Development (HUD) will not resemble its former self. While some programs are proposed to become smaller, others are identified for extinction. Fortunately, while the president proposes a budget, Congress must hold hearings that offer opportunities to amend what some would deem indefensible.

The irony is that so many HUD programs and services that have enjoyed longstanding, broad and bipartisan support across the country are among those proposed to end.

For example, since 1974, HUD’s Community Development Block Grant (CDBG) program has provided local and state officials the flexibility to fund local priorities for services, projects and partnerships. Whether the need was affordable housing, blight removal, community supportive services or a way to leverage capital in redevelopment projects, local concerns have guided how to make the best use of federal funds.

According to the White House Budget Blueprint, CDBG would absorb $3 billion of HUD’s proposed $6.2 billion agency cut. Reactions from municipal leaders and organizations were swift.

“From CDBG block grants, to Community-Oriented Policing Services, the programs targeted for cuts provide support for millions of working Americans and help cities invest in public-good projects like police stations, food banks and domestic violence shelters,” said Matt Zone, a Cleveland council member and president of the National League of Cities (NCL), an organization that advocates for 19,000 cities, towns and villages. “These unprecedented cuts would be devastating to all our nation’s cities — with the worst impacts felt in small towns and rural communities.”

Yana Miles, a policy counsel with the Center for Responsible Lending, noted that, “In housing, the proposed budget would end some of HUD’s most successful programs that help underserved communities, including Community Development Block Grants, the HOME Investment Partnerships and Choice Neighborhoods.”

Two of the HUD programs that Miles cites are the focus of another proposed $1.1 billion in cuts: Choice Neighborhoods and the HOME Investment partnerships program.

The Choice Neighborhoods program provides funding and technical assistance to support local community efforts to improve struggling neighborhoods dotted with distressed public or HUD-assisted housing. Like CDBG, eligibility is formula-based and requires a formal revitalization strategy or Transformational Plan.

In December, HUD announced that from 34 competitive applications, five cities were selected to receive grants totaling $132 million: Boston, Camden, Denver, Louisville and St. Louis. An estimated 1,853 units of severely distressed public housing will be replaced by nearly 3,700 new, mixed-income, mixed-use housing units as part of an overall effort to revitalize neighborhoods

For every $1 in Choice Neighborhoods funding, awardees and their partners typically leverage for their projects an additional $5 in public and private funding. Together, the five cities are expected to leverage $636 million through other public/private sources and expect to stimulate another $3.3 billion indirectly to magnify their impact.

The HOME Investment Partnerships program focuses exclusively on creating affordable housing opportunities for low-income families. Until now, it has also been the single largest block grant dedicated to expanding this housing sector. Formula grants for states and local communities are often awarded in partnership with local nonprofit organizations to build, buy, and/or rehabilitate affordable housing for either rent or homeownership.

For the nation’s 1.2 million families who live in public housing, the proposed budget blueprint will take $1.3 million from facility improvements and another $600 million in operational costs.

These and other severe funding cuts proposed are the exact opposite of what Dr. Carson testified to during his confirmation hearings. On Jan. 12, before the Senate’s Banking, Housing and Urban Affairs Committee, he said, “[I]t’s difficult for a child to learn at school if he or she doesn’t have an adequate place to live. In these situations, government can and should help. However, I believe we need to ensure that the help we provide families is efficient and effective.”

By his own admission, Secretary Carson has never worked in government before. Now as the head of a key cabinet agency, he and his senior staff would be well-served by learning which programs work well and should be preserved from heavy-handed budget cuts.

Since World War II, FHA-backed mortgage loans have provided funding for millions of Americans. With down payments as low as 3.5 percent, families who cannot afford a large down payment for a conventional loan, can make that important transition from renter to homeowner. In recent years, FHA-backed loans are the most used by black and Latino consumers.

HUD’s history of service has many more examples of how modest public investments have and can continue to leverage larger private funds. The programs that fostered this success deserve to be supported and funded at levels that will continue to benefit the nation.

Charlene Crowell is communications deputy director for the Center for Responsible Lending. She can be reached at Charlene.crowell@responsiblelending.org.

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