#085 Jan/Feb 1996

Continuing Lack of Resolution in Washington

We are now firmly into that peculiar form of government known as a Continuing Resolution (CR). To call it a form of government may be too generous; rather, it would […]

We are now firmly into that peculiar form of government known as a Continuing Resolution (CR). To call it a form of government may be too generous; rather, it would be more accurate to describe it as the absence of government. After two federal shutdowns, and with President Clinton appearing to be winning the public opinion battle, the leadership in the House of Representatives finally blinked on January 26, and then promptly left town. They passed a CR that will keep the unfunded departments, including HUD, open and operating until March 15. The Senate followed suit, and the President quickly signed it only hours before a third shutdown was scheduled to begin.

The CR approved for HUD closely tracks the appropriations bill that President Clinton vetoed in January, especially as it applies to funding levels. HUD receives $20.4 billion under the CR but may obligate funds only on a pro rata basis (ie. 45 days worth). This may cause problems within some program areas that obligate and spend out early in the year…well, actually not so early. We will reach the halfway point in the federal fiscal year two weeks after this CR expires.

The CR is not just a funding vehicle. It also contains many of the policy changes to programs from the appropriations bill, especially the so called “savers” – those policy riders that will result in budget savings, usually at the expense of tenants. These policies include minimum rents ($25 or up to $50 at PHAs’ discretion) in public and Section 8 housing; repeal of limitations on annual rent increases due to employment; repeal of federal preferences; changes in income adjustments; reduction in fair market rents; and a 3 month delay in the reissuance of certificates and vouchers. While these changes are now the law of the land (at least until March 15), it is unclear when and how they will be implemented by PHAs.

What’s next in this ongoing budget saga? Well, the CR for HUD is just a part of a larger debate that now appears headed for a final resolution with the November election. Both Republicans and Democrats seem content to put the hard policy choices aside (especially in the areas of Medicare, Medicaid, and welfare) and let the election decide those issues – creating the prospect that mixed election results will elevate CRs to an art form. In the interim, there will be temporary spending agreements that both sides will be able to spin as victories, but few expect to see a spring and summer of 45-day CRs.

After the return of Congress in late February, we are likely to get a reworked appropriations bill acceptable to the President or a long-term CR that lasts through the year. One positive outcome of this game playing is that many Senate Republicans have become increasingly annoyed with House tactics. After passing their CR, House members promptly adjourned, leaving the Senate to either rubber stamp the CR or allow another government shut down. This is likely to give the Senate much more backbone in future battles with the House over funding and policy, lest they, like the President, be perceived as irrelevant to the process.

After such a long appropriations struggle, some housing advocates are pleased, or at least relieved, with this outcome. It is, the argument goes, the best possible deal we could have gotten from this Congress. That may be true, and there are positives to point to – funding for preservation, Section 8 contract extensions, put-backs to public housing and homeless programs. But we are making a terrible mistake if we communicate complacence and acceptance. The housing budget was reduced 25 percent this year and last. We better start raising hell if we expect to stop the bleeding.

From the Center for Community Change

Reinvention II: “Go to the People, Learn from Them, Love Them…”

By Lisa Ranghelli and Ed Gramlich

HUD’s draft of its Reinvention II (R2) plan begins with the above lines from an ancient Chinese proverb. Despite these sentiments, R2 is weak on ensuring real involvement from the low-income residents who are the intended beneficiaries of CDBG, HOME, McKinney, and HOPWA programs.

R2 portrays the new HUD as a “right-side-up, community first” agency that decentralizes its operations and trains its shrinking staff to better serve communities. Yet HUD does not want to work directly with community-based organizations or low-income residents; instead, HUD sees mayors as its constituency, since “the mayors know their local communities.” Housing advocates are wary that R2 will give even more power to mayors and public housing managers, with little required input from residents.

In addition to merging the McKinney programs into one block grant known as the Homeless Assistance Fund, R2 proposes four changes for CDBG, HOME, and McKinney.

First, jurisdictions would be asked to set vague “Performance Measures” allowing them to evade (seek waivers of) HUD procedures, or to compete for extra money. Second, the “extra money” would come in the form of “Bonus Pools.” An extra 10 percent of CDBG, HOME, and McKinney would be available for HUD-determined priorities: currently, “brownfields” elimination, homeownership, and homeless activities oriented to people with multiple problems.

Advocates have concerns about these two changes. “Performance Measures” as described by HUD do not link money and program activities to the most severe needs in the community; nor do they call for or enable genuine public participation. A jurisdiction could easily “perform” well by only providing housing rehab to households at the $33,000 income level – totally ignoring the needs of renters earning minimum wage.

There are many problems with HUD’s Bonus Pools. One major concern is that these pools can be tapped even if a jurisdiction didn’t spend a dime of its CDBG, HOME or McKinney money on “very low” or “extremely low” income people. Likewise, the bonus money doesn’t have to be spent to meet the needs of very low income people.

The third change would allow jurisdictions to move up to 10 percent of their CDBG, HOME, and McKinney money (along with Public Housing Modernization and Drug Elimination money) from one program to another. For example, 10 percent of each fund could be skimmed off and put into CDBG for street repairs or other general government functions. Although any “flexing” of funds would have to be in the Consolidated Plan, no HUD approval would be required. Advocates also worry that this is one small step towards full consolidation of all programs.

A fourth change, called “community partnerships,” is presented only as an amorphous sketch. It would allow jurisdictions to seek HUD approval to “merge some or all federal housing and community development programs [not just HUD programs] into one seamless, integrated funding stream.” HUD says that a “community partnership council could become the single recipient of all federal funds.” While HUD suggests members of such a council might include nonprofits and advocates (as well as builders and lenders), low income people are not in the mix.

The Senate intends to draft an authorizing bill in April dealing with CDBG, HOME, McKinney, rural housing, and HUD’s “mark-to-market” (now called “portfolio reengineering”). The Senate is seriously considering merging McKinney into HOME – a disastrous idea. It is unlikely, however, that a bill will actually move through Congress this year

“Save Brooke” Campaign Gathers Steam
It now looks like the Lazio public housing authorizing bill (HR 2406) – which would repeal the Brooke Amendment and the Housing Act of 1937, eliminate tenant protections, deregulate public housing, and provide inadequate opportunity for resident input in public housing authority decisions – will go to the House floor for a vote in late March and then on to conference committee. (The Senate bill, S. 1260, was passed during a snow storm in January.) Groups still have time in the next few weeks to make a difference by weighing in with policy makers on the bill, sponsored by Rep. Rick Lazio (R-NY).

House Banking Committee staff warned advocates that if rent reform is not adequately addressed in the bill, repeal of the Brooke Amendment, which caps public housing rents at 30 percent of family income, could be attached to whatever HUD appropriations legislation is passed. This move would be disastrous, and difficult to challenge.

Meanwhile, Senate Banking Committee staff stated last week that whatever rent structure Congress finally adopts for public housing tenants will be applied to project-based Section 8 residents in subsequent legislation. Now more than ever, public housing and section 8 residents need to mobilize to challenge this attack on tenants in HUD-subsidized housing.

Groups should tell their Representatives to oppose the public housing reform bill, especially the repeal of Brooke. Postcard and call-in campaigns are already underway in over a dozen states. The message to House members is: oppose the repeal of Brooke in H.R. 2406, and urge Rep. Lazio to remove that provision from the bill before a full House vote. The message to Senators is: oppose repeal of the Brooke Amendment in the conference committee, and when the conference report goes to the Senate for a final vote. If you are represented by one of the following Senators or Representatives, it is urgent that your voice is heard: Senate: Mack (FL), Bond (MO), D’Amato (NY), Bennett (UT), Kerry (D-MA), Sarbanes (D-MD), Dodd (D-CT), Bryan (D-NV), Boxer (D-CA), Moseley-Braun (D-IL), Murray (D-WA); House: Lazio & Kelly (NY), LoBiondo & Roukema (NJ), Castle (DE), Bereuter (NE), Leach (IA)

The Administration will also be involved in conference negotiations, and needs to hear from tenants. The message to the President is: veto any bill that repeals the Brooke amendment. The Center has several thousand postcards available to send to the President and to members of Congress.

In addition, national housing advocacy groups are planning a joint series of conference calls with local groups to coordinate strategies for the Brooke Campaign.

For further information about R2 or Brooke, contact: Lisa Ranghelli at CCC, 202/342-0567.


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