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Public housing advocates worried

By CORY REISS WASHINGTON BUREAU
Sarasota Herald-Tribune (Florida)
February 15, 2005
 

WASHINGTON

Representatives of the nation's housing authorities and poor tenants raised their hands around a square conference table last spring, and the hand of a top federal housing official joined them.

After months of negotiations, the panel of 27 agreed to a plan that was expected to increase daily operating subsidies by some $700 million in the first year, to $4.2 billion, while reforming how public housing is managed.

Michael Liu, the assistant secretary for housing at the U.S. Department of Housing and Urban Development who wielded veto power over the process, rounded the room with handshakes. Housing authorities thought the new scheme would start in 2006.

"I would say there was a generally good feeling on the part of everybody," said Ted Van Dyke, a policy analyst for the Public Housing Authorities Directors Association.

The negotiated plan, however, wasn't publicly offered as a rule. Last week, President Bush released a 2006 budget proposal that would leave operating subsidies short of the deal by $800 million, a cut from previous years.

The future often looks hard and uncertain from the windows of America's 1.2 million public housing units -- often known derisively as "the projects."

These days, the future of public housing itself appears bleak.

 

The reversal of fortune on operating dollars is not an isolated letdown for local housing agencies.

Total spending on public housing has been sliding, from $7.1 billion in 2001 to $5.7 billion next year if Congress continues to follow Bush's lead.

Meanwhile, funding for private-sector rental vouchers and homeownership incentives are on the rise.

The opposing trends have housing advocates worried that the administration is sacrificing public housing, the oft-maligned alternative to homelessness, for market-driven approaches.

Sen. Mel Martinez of Florida, a former HUD secretary under Bush before he resigned in 2003 to run for the Senate, called public housing "the least most successful part" of HUD. The Republican said the administration wants it to run more like a business.

"It ought to be giving a result for the investment, and we know public housing is not a good model," said Martinez, a member of the Senate Housing and Transportation Subcommittee.

Liu said in an interview that HUD remains committed to public housing and a proposal of the sort that was struck last year on operating subsidies. Others who were at the negotiating table last year say fiscal reality may have set in.

Local housing authorities are cutting staff because of short operating dollars and watching buildings crumble as capital investment funds take annual hits.

Nationally, about 123,000 units have been demolished since 2001. Another 45,000 are expected to meet the wrecking ball. HUD has approved about 40,000 units to replace them, Liu said. Fewer units, he said, require less money in the capital fund for repairs and improvements.

Since 2001, Congress has slashed capital funding from $3 billion to less than $2.6 billion, with another cut of $250 million in Bush's budget for next year.

The budget plan again proposes eliminating the HOPE VI redevelopment program, which since the late 1990s has provided about $3.8 billion to demolish and replace dilapidated developments. The program was cut from $574 million to $149 million last year, and to $144 million for 2005.

Bush even plans to take back the 2005 grant money, which hasn't been distributed.

Republicans dominate Washington, but some have mixed feelings about the direction being set.

Rep. Katherine Harris, a Republican on the House Housing and Community Opportunity Subcommittee, has fought Bush on HOPE VI. Her hometown of Sarasota has been trying to win a HOPE VI grant to replace a decrepit development called Janie Poe.

Harris said she wants to see the broader solution if HOPE VI is going to be axed and is confident that public housing is evolving, not going extinct.

"I'm not going to predict doom and gloom," she said.

As the champion of a law that provides down-payment money for first-time low-income homebuyers, a Bush priority, Harris is in line with Bush's goal of moving people into an "ownership society." Bush proposes $200 million for that down-payment program, up from the $50 million Congress approved for 2005.

Liu said the growth of a rental voucher program for privately owned property has eaten into money for public housing.

Last year, President Bush proposed to cut spending on the voucher program, known as Section 8, and turn the funding into block grants to states. This year, Bush proposes a $1 billion increase in the voucher program in hopes of enacting his voucher reforms.

Housing advocates say the government is allowing public housing to fall apart and then condemning it.

Those are old complaints with fresh support.

Harvard University completed a congressionally mandated study in June 2003 that showed severe operating shortages for many of the nation's 3,200 housing authorities. Researchers devised a formula for how much each unit should cost to operate based on factors such as geography and private-sector considerations.

For example, the difference between funding and need in Florida's housing authorities ranged from 1 percent too much money to 83 percent too little. Sarasota should be getting 70 percent more.

Some other authorities are raking it in. Niagara Falls, N.Y., for example, was getting 41 percent too much.

The study prompted Congress to direct HUD to negotiate a fairer system with stakeholders and reforms that would make public housing developments run more like private real estate. Liu said the White House and other agencies need a chance to "massage" the plan negotiated last June.

"What we did was historic, and we are still committed," Liu said.

He would not commit to a timetable, but budget documents say a proposed rule may be released this year and could possibly start in 2007. Some in the housing sector who thought 2006 was the target are skeptical.

Sunia Vaterman, executive director of the Council of Large Public Housing Authorities, said the failure of public housing is becoming a self-fulfilling prophecy.

"There is no future if we follow this road," she said.