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Lost but Not Forgotten: A Look into the Impact of Eliminated Funding for HUD Programs

With great power comes great responsibility, and with great responsibility comes budget appropriation.  With each new presidency, new values are reflected in decisions made surrounding the federal budget. President Trump’s administration promised greater defense spending and protection for veterans without an increase in the deficit, thus implying drastic cuts to many other programs and agencies. However, some programs face deadlier fates than reduced funds, crucial affordable housing programs such as Community Development Block Grants (CDBG), HOME Investment Partnerships, and Choice Neighborhoods programs face possible total funding elimination in the proposed 2018 budget for FY18. In light of their possible removal, here is a brief history on the impact each of these programs have made in the fight for housing accessibility.

 

COMMUNITY DEVELOPMENT BLOCK GRANTS (CDBG)

  • Main gist: CDBG programs are the main source of revenue for developing solutions for community development and economic recovery, whether the problem be economically, socially, or physically sourced.

  • What is at stake: Community development, the arts, rebuilding efforts post-natural disasters such as Hurricane Sandy, local economic development, infrastructure, ADA accessibility, housing rehabilitation. 

  • FY17 appropriation: $3 billion*

HISTORY 

Enacted in 1974 through the Housing and Community Development Act, CDBG’s have had a tremendous impact on local governments abilities to address issues of economic development and affordable housing.  The program was created through the merging of seven individual competitive grant programs to create a block grant, thus giving local governments the ability to tailor their spending dollars according to their specific goals and needs. Past examples of CDBG projects include relief efforts from Hurricane Sandy, mortgage foreclosure prevention in large cities, and making affordable housing more environmentally sustainable.

STRUCTURE 

CDBG’s are broken up into eight program areas:

  1. Entitlement Communities

  2. State Administered CDBG

  3. Section 108 Loan Guarantee Program

  4. HUD Administered Small Cities

  5. Insular Areas

  6. Disaster Recovery Assistance

  7. Neighborhood Stabilization Program

  8. Colonias

HUD divides the communities assisted by CDBG’s into two categories: entitlement and non-entitlement. Entitlement communities are comprised of “central cities of Metropolitan Statistical Areas (MSAs); metropolitan cities with populations of at least 50,000; and qualified urban counties with a population of 200,000 or more (excluding the populations of entitlement cities)”* Areas that do not meet those qualifying factors are known as non-entitled communities. To determine how much funding a given community receives, HUD calculates an amount based off of population and area demographics such as density, poverty levels, overcrowding, et cetera.

This program requires that a minimum of 70 percent of CDBG funds must be used for activities that benefit low- and moderate-income persons. Said activities must meet an objective from the following list: benefit low- and moderate-income persons, prevention or elimination of slums or blight, or address community development needs having a particular urgency because existing conditions pose a serious and immediate threat to the health or welfare of the community for which other funding is not available*.

EFFECT OF FUNDING ELIMINATION 

The 2017 budget allocated $3 billion towards CDBG programs. With complete elimination, hundreds of thousands of low income residents will feel its absence. In 2014, the block grant program allowed for 28,000 individuals to find permanent employment, 95,000 homes to be rehabilitated, and financed public improvement projects that benefited approximately 3.3 million people*. Without federal assistance, state and local governments will be thrown into the deep end in order to make up for such drastic budget eliminations (on top of the rising costs of other expensive budget items such as infrastructure).

 

HOME INVESTMENT PARTNERSHIP PROGRAMS (HOME)

  • Main gist: HOME is the only federal program that supports the construction, restoration, and maintenance of affordable housing. 

  • What is at stake: The safety of those who live in public housing units, public housing unit conditions, affordable housing availability, tenant retention.

  • FY17 appropriation: $950,000*

HISTORY 

HOME was developed as part of The Cranston-Gonzalez National Affordable Housing Act of 1990 which aimed to retain affordable housing, strengthen public/private partnerships, and expand Federal rental assistance for very low income families among other things.

STRUCTURE

Where CDBG’s use block grants, HOME utilizes formula grants (non-competitive, formula-calculated amounts of money) to aid States, localities, and nonprofit organizations. Focusing more specifically on affordable housing, HOME aids in building, buying, and rehabilitating affordable housing units for rent/homeownership. Participating jurisdictions are awarded the formulated amount annually. The program has four main values:

  1. HOME’s flexibility empowers people and communities to design and implement strategies tailored to their own needs and priorities.

  2. HOME’s emphasis on consolidated planning expands and strengthens partnerships among all levels of government and the private sector in the development of affordable housing.

  3. HOME’s technical assistance activities and set-aside for qualified community-based nonprofit housing groups builds the capacity of these partners.

  4. HOME’s requirement that participating jurisdictions match 25 cents of every dollar in program funds mobilizes community resources in support of affordable housing.

States are automatically eligible for HOME funds and receive either the calculated formula allocation or $3 million, whichever is greater. Local jurisdictions are eligible for at least $500,000 under the formula ($335,000 in years when Congress appropriates less than $1.5 billion for HOME). If there is a community that does not qualify for individual allocation, they may legally bind together with neighboring localities in order to meet the threshold for direct funding*.

EFFECT OF FUNDING ELIMINATION

As is evident in the allocation of funds between states and localities, there is already a large lack of funds for localities to support themselves in the way the Trump administration expects them to- and this is with funding. Without HOME, there will be no federal programs that focus purely on the construction, maintenance, and revitalization of affordable housing.

 

CHOICE NEIGHBORHOODS PROGRAM 

  • Main gist: The Choice Neighborhoods Program aims to aid HUD assisted neighborhoods by encouraging local, community lead efforts to create vibrant communities from the inside out. 

  • What is at stake: Decreased educational quality for low income children, low housing availability/affordability, lack of neighborhood safety, continued concentration of poverty.  

  • FY17 appropriation: $132 million available for awards*

HISTORY 

Choice Neighborhoods is a relatively new program first introduced under the Obama administration as part of the Neighborhood Revitalization Initiative.

STRUCTURE

The program has three main goals:

1. Improve housing by replacing distressed public/assisted housing with high-quality, well managed mixed-income housing.

2. Improve educational outcomes and intergenerational mobility for youth with social services.

3. Promote public and private reinvestment in distressed neighborhoods to offer the kinds of amenities and assets, including safety, good schools, and commercial activity.

In order for communities to be eligible for funding, they must develop a comprehensive neighborhood revitalization strategy plan, otherwise known as a Transformation Plan. This must be done in collaboration with local agencies/investors and must follow the guidelines expressed in the three main goals.

EFFECT OF FUNDING ELIMINATION

Choice Neighborhoods has lead to millions of dollars worth of reinvestments into distressed communities across the country. Without this federal support, there will be little incentive for localities to prioritize revitalization as they do not have the financial means to do so without federal assistance.

 

How to get involved/resources

Though oftentimes federal decision making may seem out of our hands, there are many was you can get involved today to stop the destruction before it begins:

  • Rallies

    • Join an advocacy group in your area (or start your own!) and encourage a demonstration and/or rally.

  • Education 

    • Thoroughly educating yourself on an issue you plan to advocate for is essential when considering rallying or confronting your local representative. Here is a stellar resource provided by the National Low Income Housing Coalition on all you need to know regarding affordable housing and community development efforts.

  • Contacting local officials and representatives

    • Though you may not be able to be directly heard on the federal level, local governments are the safest bet when attempting to instigate immediate change. Here are some tips on how to best go about approaching your local representatives.

  • Donate

 

“If poverty is a disease that infects an entire community in the form of unemployment and violence; failing schools and broken homes, then we can’t just treat those symptoms in isolation. We have to heal that entire community. And we have to focus on what actually works.” – Barack Obama, July 18, 2007

Ellie Muraca