HUD on the Hill
On Wednesday, the Senate Banking Subcommittee on Housing and Transportation held on oversight hearing on HUD’s management challenges. Witnesses included Deputy Secretary Alphonso Jackson, Stan Czerwinski of the GAO, and Carolyn Federoff of AFGE.
The GAO once again noted that FHA single family insurance and multifamily rental assistance programs remain at high risk of waste, fraud, and abuse. Also, the root causes of HUD’s problems continue to be: HUD does not have the right people with the right skills in the right positions; HUD does not have adequate oversight of third parties, such as contractors; and HUD has inadequate information systems.
The Deputy Secretary assured the Committee HUD is working on all of these problems. And by the way, HUD’s computer systems should be able to talk to each other in the next “couple years.”
Going, Going, Gone….
Both the House and Senate approved HR 4775, the FY 02 Supplemental Appropriations Act for Further Recovery From and Response To Terrorist Attacks on the United States. Included in the $2.4 billion worth of offsets to pay for the $28.9 billion bill were a $388.5 million recission in Section 8–or other accounts if there is not enough unobligated money there. The bills originally passed by the House and Senate each called for a $300 million rescission.
Appropriations Committee Actions for FY 03The Senate VA-HUD bill (S. 2797) and the Agriculture Appropriations (S. 2801) bills have been reported by the Appropriations Committee. General summaries of the bills follow. The Committee reports, (Senate Report 107-222 and Senate Report 107-223, respectively) can be accessed and viewed online at:
https://thomas.loc.gov/home/approp/app03.html
HUD Funding
HUD funding totals $32.1 billion–$66 million below the FY 02 enacted level, and an increase of $734 million above the budget request.
S. 2797 provides a total of $17.4 billion for Section 8. All contract renewals are funded, enhanced vouchers are funded, and the bill provides 15,000 new incremental Section 8 vouchers. The Senate FY 03 level represents an approximately a $2 billion increase over last year, but roughly $115 million short of the Administration’s request. This funding “short-fall” appears to be the result of the Committee’s rejection of the Administration’s request for 34,000 incremental vouchers. The Committee explained:
The Committee did not provide the administration’s request for an additional 34,000 new vouchers because of ongoing concerns over the effectiveness of tenant-based vouchers in providing decent, safe, and affordable housing to low-income people. The Committee is deeply concerned that the tenant-based voucher program offers a false promise of rental choice that recipients cannot realize. In many instances, voucher holders have limited choices, and end up concentrated in the same low-income neighborhoods. This result is antithetical to the goals of the program, which include resident choice, mixed-income housing, and decent living conditions. The Committee urges HUD to make voucher reform a priority for the Department.
Likewise, the Committee urged the Administration “to use all available tools at its disposal to preserve existing project-based Section 8 units.”
With strongly worded report language, the Committee restored funding for HUD’s Office of Rural Housing and Economic Development to last year’s level of $25 million. The Administration intended to eliminate funding.
CDBG funding is set at $5.05 billion–a $50 million increase above the FY 02 appropriation, and a $317.5 million increase above the budget request.
For HOME, $1.95 billion is recommended. This exceeds last year’s funding level by about $104 million. It is $134 million short of the Administration’s request. This can be partially explained by the Committee’s rejection of HUD’s $200 million request to offer down payment assistance to first time home buyers through the “American Dream Downpayment Fund.”
The consolidated appropriation for Section 202 and 811 housing is $1,033,801,000. Section 202 totals $783.3 million, which includes up to $50,000,000 for the conversion of section 202 housing to assisted living facilities, and up to $53,000,000 for service coordinators. Section 811 is funded at $250.5 million. These figures represent an increase of $9,650,000 for section 202 above fiscal year 2002 level, including recaptures, and an increase of $9,650,000 for section 811 over the fiscal year 2002 level. The Committee also noted its concern “about the growing costs of renewal contracts” within these programs.
There is a glimmer of hope for Section 236 modernization needs in S 2797. The Committee directs HUD to make $100 million from contract authority in excess of required payments for FY 03 available for the capital costs of rehabilitation for projects eligible under section 236. In their words, “The Committee believes that these funds should be dedicated to the rehabilitation of HUD assisted housing, including housing for elderly and disabled people.”
Lead based paint programs receive $201 million–$75 million above the budget request and $91.2 million more than last year. Of this total, $75 million is directed to a new lead hazard reduction demonstration program for major urban areas having the highest number of pre-1940 rental units, significant deterioration of paint, and a disproportionately high number of document cases of lead-poisoned children. Additionally, HUD may use $10 million for the Healthy Homes Initiative to identify and address housing-related illnesses–such as black mold.
Funding for the Rural Housing Service
The Committee recommended a total of $1,589,766,000 for the Rural Housing Service–$115 million more than the 2002 level and $61 million more than the budget request.
The big news on the Agriculture Appropriations bill (S. 2801) is the restoration of the Section 515 new construction funds. The Administration had proposed NO funding for Section 515 production. The Committee recommended $50 million for new construction, $50 million for servicing and rehabilitation, and $20 million for equity loans.
Rural rental assistance payments are funded at $730 million–roughly $29 million above FY 02, and $18 million more than the budget request. The Committee added, “The Committee provides an increase in this account and expects the Department to provide rental assistance for new construction, servicing and debt forgiveness including offering assistance to units that are occupied by tenants that are rent overburdened and projects experiencing financial difficulties beyond the control of the owner.”
