June 10, 2011

The HOME program I Know

Cross-posted from the Washington Post.

The Post published a front-page story last month painting an ominous picture of local corruption fed by federal mismanagement on the part of officials who “largely looked the other way.” The multipart series “Million-dollar wasteland” on the HOME Investment Partnerships Program purported to uncover “a trail of failed developments in every corner of the country,” with millions of taxpayer dollars wasted on “troubled developers” and other bad actors.

That’s a far cry from the program that I oversee as President Obama’s housing secretary and that I worked with as New York City’s housing commissioner. The HOME program I know helps communities build affordable homes and rehab existing ones for low-income families.

The program provides down-payment assistance to help creditworthy families become homeowners and housing vouchers to poor families and those on the brink of homelessness.

HOME produced more than a million affordable homes in the past two decades and leverages nearly $4 of private and other public investment for every dollar it invests. The program was a semifinalist for Harvard’s Innovations in American Government award in 2005.

So, how did The Post arrive at such a different conclusion? Well, in part because its basic analysis of the program was so far off.

Let’s start with the number of projects that The Post deemed “stalled.” Late last year, of the 28,000 HOME projects underway across the country, The Post focused on 5,100 brick-and-mortar projects receiving at least $50,000 in funding. It reported finding significant delays or abandonment in approximately 700.

Although HUD provided data and information to The Post for more than a year, the paper has not shared with us the list of projects it generated. So after the articles ran, we conducted our own project-by-project review using The Post’s parameters. We determined that more than half of 797 projects that could have been flagged as “stalled” based on The Post’s criteria are finished.

Of the remaining projects, 97 have been canceled and their funding moved to viable projects, while 154 are progressing toward completion. The final 85 properties are experiencing delays, but in the vast majority of cases there is a simple reason for this: the recession.

As any real estate professional will attest, the recession has made it extremely hard to secure financing and build units. According to census data reviewed by HUD, 34 percent of all new housing starts from 2007 to 2010 were delayed at least three years.

In all, however, less than 4 percent of the projects in The Post’s sample of more than 5,000 HOME projects are currently delayed or canceled. That’s far fewer than the nearly 1 in 7 that The Post reported were significantly delayed — and it tells me that HOME’s success rate during the recession far outpaced the private market’s. What’s more, The Post gave the impression that when there were delays, federal money was wasted. In fact, when there are delays, money can be moved to other viable projects or must be returned if it is not used within five years.

The Post also accused the federal government of “trusting local agencies to police projects.”

In other words, it’s a block grant. HOME, which was signed into law by President George H.W. Bush in 1992, provides funds directly to state and local governments to meet local needs for affordable housing.

Instead of one-size-fits-all rules that tell communities what to do and how to do it, communities themselves select and contract with developers and monitor construction.

That’s not to suggest there isn’t a federal role. We take our oversight responsibility seriously, by holding localities accountable for spending block grant funds appropriately.

When a project isn’t completed according to our rules, we always force repayment of HOME funds — 100 percent of the time. Since the start of this program in 1992, local housing agencies have repaid $250 million. That includes funds taken back from agencies mentioned in the article.

Even before The Post stories ran, the Obama administration had taken important steps to ensure that every dollar is spent wisely. Last year we began automatically canceling projects that fail to get underway, which has freed up $290 million this year to be committed to viable projects.

To improve the already strong monitoring system, we’re also proposing rules so fewer developments run into trouble in the first place, including stronger standards for developers, tougher underwriting requirements and additional spending deadlines.

President Obama has said that we must rebuild America to win the future.

By producing a million affordable homes, by generating nearly $4 for every taxpayer dollar it invests and by ensuring that communities — not Washington — can decide what’s best for them, it’s clear that HOME is providing an excellent return for the taxpayer while making our communities stronger and better prepared to meet the challenges of the 21st century.

Now, that’s a story worth telling.

For more about what the Post got wrong, head here.

4 Responses to The HOME program I Know

  1. Pingback: HUD Secretary Shaun Donovan Responds to Washington Post HOME Article « Vermont Affordable Housing Coalition: News

  2. The problem Secretary Donovan is that when you leave it the ‘communities themselves to select and contract with developers and monitor construction’ the money never filters down to the needy homeowner for which it was intended but instead goes to city officials projects which should have been funded with city taxes.

    I am a single 70 old woman who lives in a home I purchased in Kingman, Arizona two years ago. I paid $50,000 cash on purchase and took out a mortgage for the rest. Since then I have made/invested another $50,000 on a new roof, tiled the kitchen, bathrooms and foyer, etc. Now, I come to find out my home is literally falling down on me. You would not believe the size of the cracks in my foundation. Additionally, wall cracks appear every day in crucial areas. I have an engineer’s report that states this home is a danger to me because it is collapsing. It seems that when my home was built in 1988 it was not built to Kingman city code, but I did not know this when I purchased. The builder is dead so I have no legal recourse. It is unsafe for me to live here yet I have no money for repairs, cannot sell the house as is, and would walk away if I were younger but at my age I cannot. Due to the economy, I am upside down on my mortgage, plus I am making mortgage payments on a house that is collapsing on me. Should I cease payments, I face eviction and homelessness. I filled out a CDBG grant application two years ago to help me fund repairs to my home but this CDBG grant money keeps going to the city of Kingman.

    You write about ‘taking responsibility and holding localities accountable for spending block grant funds appropriately’ but I am sorry to say you are not!

  3. I relocated Lake Charles,La. from Dallas Tx. to help care for My Father and Brother. Applied for Section #8 qualified for one bed room. If a home owner want to rent there 2 bed room home for the amount of My certifacate. Is it in the Section #8 Agent job discietion to question Me or the home owner on why is the rent so low.Agent asked Me,Is the house nice? also stated that person most be nice,I told Agent work was not done on house,inform her when it would be ready. Agent than asked for info on home owner, I complied,Agent than saided will when work done on house call back. So My question is why get the info on Landloard if I told You work on house was not done. Please can someone answer My question

  4. MR. Donovan I hope you get this e-mail but I think it too will be thrown away.because you dont care one way or the other.this manager elaine johnson at victory point appartment complex gets away with treating people like trash.how and why?.I put in for a transfer twice and twice she has blackballed my wanting to get away from her she made an 75 year old man take down curtains I made him.she told him she would treat him just as bad as she treats me.now how can she get away with this mess.then they make you sign a blank tax return form and if you dont she will evict you.and how does she get away with giving people only one day two days isnt thirty days.this is still the law but she says she is the law and her boss Jane hoover and ronny furguson stand by and do nothing they all collect the money people donate and do nothing.every one wants to move but she just acts so nasty and blocks the move I have been trying to get away from them for well over three years.my doctor said she is killing me keeping my blood preshure high.but you all do nothing at all so I have come up with my own news room and you will see how people who donate money to these causes fill about how you all let this wwoman get away with breaking the law she goes into our mail boxes reads our mail nothing is done she tells people to file fals police reports but when they loose she puts them out.I have talked to anderson cooper and every time she does things like this I will scream like when we got new keypads we were not givin the codes to change from heat to ac.but when I went to the news media she and furguson looked like fools.and so do you because they work for you.and untill she is put in jail or fired I will keep my news room going.people hate people who treat disabled people badly.and their bosses who let them get away with it every time just come talk to the tenants you’ll see or just keep looking at the web I’ll be on every day.I want to move to durkeeville but she black balled my move.are you going to help us or are you going to answer to the press every day I call you out

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