HUD Secretary Testifies on Budget; Announces Partnerships with Other Agencies

Shaun Donovan, Secretary of the Department of Housing and Urban Development (HUD) told the Senate Appropriations Subcommittee on Transportation, Housing and Urban Development and Related Agencies the department’s FY 2010 budget proposal is a “forward thinking budget with new ideas for driving energy efficient housing, sustainable, inclusive growth, and revitalization of neighborhoods of extreme poverty.”

Donovan said the budget achieves five objectives:

First, it addresses the housing and economic crisis by combining resources with tools to prevent foreclosures and making credit available to those in need. Second, it “returns the federal government to its leadership role as a catalyst for expanding the availability of decent and affordable rental housing.” He said the budget does this by providing funding for the Housing trust Fund, fully funding public housing, providing funding for tenant-based assistance and funding for homeless programs.

He said the third objective of the budget is to invest in urban and rural communities through funding for the community development block grant (CDBG) program and the Choice Neighborhood program. The Choice Neighborhood program replaces the HOPE VI program. Donovan said the new program builds on the successes of HOPE VI but is expanded to include improved access to jobs, schools and increase public transportation opportunities. A fourth objective is to create more efficient housing and sustainable growth. Donovan would like to see housing which requires less transportation and more energy efficient homes.

The final objective is to transform the way HUD functions, according to Donovan. To accomplish this, Donovan said the department is seeking to set aside one percent of its funds to allow HUD to increase it research and development, improve its technology and increase the technical assistance it offers.

Donovan is scheduled to testify before the House Appropriations Subcommittee on Transportation, Department of Housing and Urban Development June 19 at 10 a.m. The testimony will be carried live via web cast. The subcommittee received its overall allocation of funds for next year. Each appropriations subcommittee received an allocation which determines how much it has available for the departments and programs in its jurisdiction. The FY 2010 allocation for this subcommittee is $68.8 billion which is $13.8 billion more than the FY 09 allocation of $55 billion.

HUD Partners with Other Agencies

An interagency Partnership for Sustainable Communities was recently announced by U.S. Secretary of Transportation Ray LaHood, U.S. Secretary of Housing and Urban Development Shaun Donovan, and U.S. Environmental Protection Agency Administrator Lisa P. Jackson which is designed to improve access to affordable housing, more transportation options, and lower transportation costs while protecting the environment in communities nationwide.

The agreement establishes six principles to guide interagency coordination:

1. Provide more transportation choices.

2. Promote equitable, affordable housing.

3. Enhance economic competitiveness.

4. Support existing communities.

5. Coordinate policies and leverage investment.

6. Value communities and neighborhoods.

HUD Deputy Secretary Ron Sims and Acting Surgeon General Steven K. Galson issued a national 'call to action' to confront the prevalence of home-related preventable diseases such as lead poisoning and asthma. Sims and Galson unveiled HUD’s Healthy Homes Strategic Plan and the Surgeon General's Call to Action to Promote Healthy Homes as a coordinated effort with other public and private partners to stimulate a national dialogue about creating healthier homes.

HUD's Strategic Plan focuses on four key goals:

1. Building a National Framework: Foster partnerships for implementing a healthy homes agenda.
2. Creating Healthy Housing through Key Research: Support strategic, focused research on links between housing and health and cost-effective methods to address hazards.
3. Mainstreaming the Healthy Homes Approach: Promote the incorporation of healthy homes principles into ongoing practices and programs.
4. Enabling Communities to Create and Sustain Healthy Homes: Build sustainable local healthy homes programs.

The Call to Action also offers a consumer-friendly punch list of things every family can do to make their home healthier and safer including:

1. Check gas appliances, fireplaces, chimneys, and furnaces yearly and change furnace and air conditioning filters regularly.
2. Keep children safe from drowning, lead poisoning, suffocation and strangulation, and other hazards.
3. Improve air quality in their homes by installing radon and carbon monoxide detectors, eliminating smoking and exposure to secondhand smoke, and controlling allergens that contribute to asthma and mold growth.
4. Improve water quality by learning to protect and maintain private water wells.

Up Coming Conferences

The National Housing Conference will hold its Solutions for Working Families:
2009 Learning Conference on State and Local Housing Policy June 28-30 in Chicago.

The National Association of Housing and Redevelopment Officials (NAHRO) will hold its summer conference in Portland, Oregon July 16-18.

The National Alliance to End Homelessness will hold is annual conference July 29-31.

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Affordable Housing Developers Urged to Have Voices Heard, Be Ready for Great Deals

Carol Galante, Deputy Assistant Secretary for Multifamily Housing at the Department of Housing and Urban Development (HUD), urged affordable housing developers to aggressively advocate before the government and philanthropy to ensure they have a seat at the table when decisions affecting housing are made.

Galante was the keynote speaker at the 2009 Annual Meeting and Awards Luncheon for the Housing Association of Nonprofit Developers (HAND). HAND was formed in 1991 to support a professional community of housing providers in order to increase the supply of affordable housing in the Washington, D.C. metropolitan area. HAND was incorporated in June 1998 and is an IRS-approved 501(c)(3) non-profit organization. HAND is open to all nonprofit and for-profit housing developers, technical consultants, lenders, local governments, and advocates.

The annual meeting is held each June and features the presentation of the HAND Housing Achievement Awards. The awards recognize the finest in affordable housing projects, programs, and organizations during the preceding year.

Galante said she wants to be a bridge between the Department of Treasury and HUD. Helping the credit industry move forward is one of three goals she hopes to accomplish during her tenure at HUD. She said there are not enough investors for the market and that it needs to be broadened to include other players such as utility companies. These new investors can be encouraged to be good corporate investors thru the low income housing tax credits (LIHTC). She wants to ensure HUD programs work better with the tax credits programs. She said there was a NOFA issued in April with a closing date of June 29 which seeks comments on how the programs can better perform together.

Her second goal is to draft new approaches to preservation and new development. She wants to maintain long-term housing affordability as much as possible. She points to the housing trust fund legislation and the president’s proposed successor to the HOPE VI Revitalization program as examples of trying to expand the assisted housing stock and incorporate schools and retail in neighborhood design.

Her third goal is to make multi-family FHA program more widely available. She said HUD programs are like “your dad’s Pontiac, they haven’t changed much.” She said there are a lot of tools which are not financially available for affordable housing in today’s market which presents an opportunity for FHA.

She offered five recommendations to participants:

1. She said they must be aggressively advocating for what is needed with government and philanthropists over the next year to ensure they have a seat at the table when decisions on housing are made.
2. She said it would be wise to assess their organizational strength at this point in time. “What do you do best? What is your value added? Focus on your portfolio and put it in the best position,” she said.

3. Be ready to acquire property. She believes there will be huge discounts on high end quality property which will be made available in many markets that can transition into effective mixed income housing.

4. She encouraged the developers to plan new mixed use, transit oriented, green developments.

5. Finally, she said to stay nimble, innovative, and be creative to get the deal done.


$1.5 Billion in New Market Tax Credits Awarded

On May 27, the Department of Treasury announce it was awarding $1.5 billion in New Market Tax Credits to 32 organization scattered throughout the country.

In making the announcement, Treasury Secretary Tim Geithner said, "Many communities have been left with a shortfall of financial support and are unable to pursue desperately needed projects, leaving residents to fall even further behind. The New Markets Tax Credit program helps break that cycle by providing an incentive to invest in communities to break ground on new projects, create jobs, and offer much needed services."

The 32 organizations receiving awards have identified principal service areas covering 33 states, the District of Columbia, and Puerto Rico. The NMTC Program, established by Congress in December 2000, permits individual and corporate taxpayers to receive a credit against federal income taxes for making qualified equity investments in investment vehicles known as Community Development Entities (CDEs). The credit provided to the investor totals 39 percent of the cost of the investment and is claimed over a seven-year period. A majority of the taxpayer's investment must in turn be used by the CDE to make qualified investments in low-income communities.

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Bill Protects Renters Caught in Squeeze Due to Foreclosure

Congress passed legislation which prevents landlords facing foreclosure from evicting renters. The bill allows renters to stay in their homes for 90 days after the foreclosure notice. The bill is designed to prevent the eviction of tenants who pay their rents but could lose their homes because their landlord’s property fell into foreclosure. The bill extends the same protection to voucher holders. The bill is effective immediately upon signing and expires in 2012.

NLIHC Toolkit for Renters in Foreclosure

Renters facing the prospects of foreclosure can receive helpful hints by using the National Low Income Coalition’s Renters in Foreclosure Toolkit. It provides useful information for those at risk of losing their home due to the landlord’s property falling into foreclosure. Established in 1974 by Cushing N. Dolbeare, the National Low Income Housing Coalition is dedicated solely to achieving socially just public policy that assures people with the lowest incomes

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NHC Receive MacArthur Award

The Washington, D.C.-based National Housing Conference (NHC) and its research wing, the Center for Housing Policy, was one of three national organizations to receive the MacArthur Foundation’s Award for Creative and Effective Institutions.

Each organization received up to $650,000 which can be used for a variety of activities including purchasing new office space, developing training and research facilities and technology upgrades. Winners of the MacArthur Award for Creative and Effective Institutions with operating budgets of $1 million or less receive $350,000. Those with operating budgets between $1 and $2.5 million receive $500,000. And those with operating budgets between $2.5 million and $5 million receive $650,000.

Other US organizations receiving awards include:

1. The Center for Neighborhood Technology based in Chicago, Illinois which uses cutting-edge research to develop transformative approaches to improving the environmental sustainability and economic health of urban areas.
2. The Chicago Community Loan Fund also based in Chicago which provides low-cost, flexible financing and technical assistance, including the promotion of sustainable building practices and good design to small and mid-size real estate developers in the Chicago area.
3. NHC has advocated for affordable housing for more than 75 years. The Center focuses on research and policy reports to better educate policy makers and the public on the affordable housing problem in America.

In announcing the awards, the Foundation emphasized it does not seek or accept nominations. Organizations must demonstrate exceptional creativity and effectiveness; have reached a critical or strategic point in their development; have budgets of less than $5 million per year; show strong leadership and stable financial management; have previously received MacArthur support; and engage in work central to one of MacArthur’s core programs.

Vice President to Speak at Mayors Conference

Vice President Joseph Biden is the headline speaker for the Unites States Conference of Mayors 77th annual conference which will be held in Providence, Rhode Island June 12-16. A review of the draft agenda can be found here. Also expected to speak to the mayors is White House Senior Advisor Valerie Jarrett and Housing and Urban Development Secretary Shaun Donovan.

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Obama Proposes Increase in HUD Budget, Eliminates HOPE VI

President Obama released details of his administration’s 2010 budget which includes increases for key housing and community development programs, replaces the HOPE VI programs and suggests legislative language will be offered to more deeply target Community Development Block Grant (CDBG) funds.

Highlights of the proposed 2010 budget for the Department of Housing and Urban Development (HUD) include:

1. A total budget of $43.7 billion, a $3 billion increase above the FY 2009 enacted figure of $40.7 billion.

2. A slight increase in funding for the Public Housing Operating Fund. The administration proposes an increase to $4.455 billion and claims it will fund operating expenses at 100 percent.

3. The budget reduces funding for the Public Housing Capital Fund to $2.244 billion which is slightly below the 2009 figure of $2.450 billion. According to the administration, the reduction is due to the $4 billion funding made available to the program through the American Recovery and Reinvestment Act of 2009.

4. The budget includes $1 billion to fund the Housing Trust Fund.

5. The proposed funding for the Community Development Block Grant (CDBG) program is $4.5 billion but the administration indicates it will submit legislative language to “better target” these funds. There will be a major legislative battle between low income advocates and state and local elected and appointed officials over this issue.

6. The budget includes a slight increase funding for both tenant-based and project-based vouchers. It calls for $16.189 billion in tenant-based renewals (a slight increase from the $15 billion in the Omnibus bill) and $7.7 billion for project-based assistance (a $600 million increase).

7. The budget does not provide an increase in the Home Program but proposes to maintain the FY 2009 funding level.

8. The budget proposal eliminates the HOPE VI program and replaces it with a new Choice Neighborhoods Initiative with a proposed funding level of $250 million. The proposed initiatives funded under this program appear to be similar to the HOPE VI program but allows for a broader array of eligible applicants beside housing authorities to include non-profits, local governments and for-profit developers.

9. Homeless programs will receive a seven percent increase un funding under the budget proposal.

10. The budget includes funding for HUD’s Sustainable Communities Initiative which is designed to integrate housing and transportation initiatives to create a regional approach to sustainable development. The proposed funding for the initiative is $150 million.

11. The budget provides $243.6 million for the Community Development Financial Institutions (CDFI) Fund including $113.6 million for the CDFI Program and $80 million for the Capital Magnet Fund. The Capital Magnet Fund is new program authorized to increase capital investment for the development, preservation, rehabilitation, or the purchase of affordable housing for low-, very low-, and extremely low-income families.

HUD Secretary Shaun Donovan is tentatively scheduled to testify on the FY 2010 budget in the House on May 18.

Study Finds Stimulus Jobs not Enough to Pay for a Home

The Center for Housing Policy released a study May 7 which showed affording a home is still not within reach despite the influx of federal stimulus dollars.

The study, Paycheck to Paycheck: Wages and the Cost of Housing in America, took an in-depth look at housing affordability for five construction-related occupations that would likely see a boost from the stimulus package. This included construction managers, carpenters, equipment operators, long haul truck drivers and construction laborers. The study found homeownership is unaffordable for each of those positions except for those performing as construction managers. The Center, which is the research arm of the National Housing Conference, included a section which covers common questions asked about the study.

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