HUD Secretary Outlines Housing Goals. Discusses 2012 Budget

by devteam March 3rd, 2011 | Share

In his prepared remarks on the Dapartment of Housing and Urban Development’s fiscal year 2012 budget, HUD Secretary Shaun Donovanrnyesterday told the House Financial Services Committee that any spending allocations must meet a number of challenges. </p

Assisting responsiblernfamilies in the midst of housing crisis, providing quality affordable rentalrnhousing, transforming neighborhoods racked with poverty, rebuilding the nation’srnfederally-assisted public housing stock and ensuring that its tenants are partrnof the skilled workforce the new global economy requires are just a few.  Adding stress to the situation, these lofty  goals must be met in a cost-conscious manner because of America’s growing federal budget deficit and struggling economy.</p

Clearly education plays a major role in sustainable homeownership. Donovan saidrnto remain in line with President Obama’s State of the Union message, “Winningrnthe Future”,  America must out-educate, out-innovate, and out-build the restrnof the world and reform government to make it leaner, smarter, morerntransparent  for the 21st Century.</p

Werncannot out-educate, he said, if we lack quality affordable housing which preventsrnchildren from accessing good schools in safe neighborhoods or if homelessnessrnthreatens the continuity of schooling. rnFor that reason the budget includes support of the Choice NeighborhoodsrnInitiative to link HUD’s housing investments to a compatible Department ofrnEducation program and proposes to target housing vouchers coupled withrneducational and other supportive services to at-risk families with school-agedrnchildren.</p

An innovative clean energy economy is also vital.  Inrnorder to compete in the new century, HUD will work to improve the energyrnefficiency of 245,000 HUD-assisted affordable houses through energy retrofitsrnand completing green retrofits of 19,000 privately-owned, federally-assisted multi-familyrnunits.  </p

The President’s focus on repairing our existingrninfrastructure and innovating new ways of transporting people, goods and information willrnnot only put people to work now, Donovan said, but also spur investments thatrnbuild a stronger economy.  HUD’s budgetrnincludes $140 million for a joint program with the Environmental ProtectionrnAgency and Department of Transportation to help communities developrncomprehensive transportation plans to reduce families’ combined costs ofrnhousing and transportation.  The budgetrnalso proposes a $200 million rental assistance demonstration to rehabilitate America’srnfederally-subsidized affordable housing stock in a way that seeks to leveragern$7 billion in private debt and equity capital and, in the process, supportrnsignificant job creation in communities across the country.</p

To eliminate or streamline contradictory rulesrnand regulations in order to generate economic growth, HUD will continue tornfocus on improving the way it works with other agencies. Donovan pointed to thernexisting level of federal and non-federal interagency cooperation, saying it isrnunprecedented and vowing to continue and improve upon it.  </p

 The 2012 HUD budget is structured aroundrnwhat Donovan called five overarching goals from the Department’s five-yearrnStrategic Plan adopted in 2010.</p

Goalrn1: Strengthen the Nation’s Housing Market to Bolster the Economy and ProtectrnConsumers</p

While HUD expects the FHA will continue to supportrnthe housing market, it is critical that the Department pave the way toward arnrobust private mortgage market, a process it began many months ago.  FHA has already taken significant steps tornfacilitate the return of private capital and has strengthened its credit and riskrncontrols, improved lender oversight and enforcement, and tightened underwritingrnguidelines.</p

Goalrn2: Meet the Need for Quality, Affordable Rental Homes</p

While the median income of American families isrnover $60,000, families in HUD-assisted housing have a median income of $10,200rnand more than half of the tenants are elderly or disabled.  The vulnerability of these residents is why,rnDonovan said, we have chosen to protect the funding that houses these familiesrnand fully 80 percent of the proposed budget keeps current resident in theirrnhomes, provides basic upkeep to that housing, and continues to serve the most vulnerablernpopulations through homeless programs.</p

The Budget requests $19.2 billion for HUD’s Housingrnchoice Voucher Program which will help more than two million extremely low- tornlow-income families and 9.4 billion for Project-Based Rental Assistance to preservernapproximately 1.3 million units through funding for contracts with privaternowners of multi-family housing.</p

The Budget also callsrnagain for funding the National Housing Trust Fund (NHTF) at $1 billion.  NHTF, which has never been funded, wasrndesigned to provide capital to build and rehabilitate housing to fill the growing gap identified inrnthe recent Worst Case Housing Needs Report.</p

Goalrn3: Utilize Housing as a Platform for Improving Quality of Life</p

Donovan said HUD recognizes that stablernaffordable housing provides an ideal and cost effective place to deliver otherrnservices such as the Department’s recent program in cooperation with thernDepartment of Veterans Affairs to target homeless veterans. The Budget includesrnother programs for the homeless such as $2.3 billion for Homeless AssistancernGrants to maintain existing units and expand prevention, rapid re-housing andrnpermanent supportive housing.  The Budgetrnalso provides $953 million for Housing for the Elderly and for Persons with DisabilitiesrnPrograms and $499 million for new construction for elderly and disabled thatrnwill allow them to continue living independently in their communities. </p

Goalrn4: Build Inclusive Sustainable Communities Free from Discrimination</p

President Obama has made it clear that winning thernfuture depends on winning the race to educate children but, Donovan said, thatrnis not possible if we are leaving a whole generation of children behind in ourrnpoorest neighborhoods.  The budget bringsrnfederal partnerships to connect historically isolated people and neighborhoodsrnto local, regional, and national economies by providing $250 million for arnthird  year of funding the ChoicernNeighborhoods initiative.  This program willrncontinue transformative mixed-finance investments in high poverty neighborhoods,rnbringing private capital and mixed-use, mixed income tools to transformrnaffordable housing in five to seven neighborhoods </p

Goalrn5: Transform the Way HUD Does Business</p

 The need for responsible budgeting has neverrnbeen greater and making smart responsible choices depends on qualityrninformation so the Budget provides up to $120 million for the TransformationrnInitiative (TI) Fund which has begun to alter how HUD approaches itsrninvestments in delivering technical and capacity-building assistance, conductsrnresearch demonstrations and maintains and upgrades information technology (IT) systems.  </p

A key element of the transformation strategy is tornprovide predictable funding for high quality research and evaluation that can informrnsound policymaking.  Donovan cited as anrnexample the current allocation method of Housing Choice Voucher administrativernfees which is not based on rigorous and objective studies and mayrnover-compensate some public housing agencies while underfunding others. HUDrnmust rebuild its internal research capacity and work in partnership with thernresearch community to evaluate existing programs and design new policyrnapproaches to solve housing and community development challenges.</p

The Department must also use 21st</supcentury technology to protect the taxpayers' investment.  Funding for information technologyrnmodernization and development is not requested in the 2012 budget because ofrnsignificant balances available from 2010 and funds from 2011 to continue priorityrnIT development and enhancement efforts.  </p

Donovan said that, “Given the economicrnmoment we are in, HUD’s FY2012 budget proposal isn’t about spending more inrnAmerica’s communities – it’s about investing smarter and more effectively.</p


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About the Author


Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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