This week, the federal Housing and Urban Development department issued the list of waivers that groups seeking funding in the wake of Harvey and other disasters can apply for when asking for funding. The waivers can lift restrictions typically tied to HUD funding, like requiring a 30-day public comment period or restricting the use of funds for new housing construction to community based development organizations or other nonprofit entities only.
In its guidance, HUD explains that many of the waivers allow for an expedited recovery process but some are concerned the waivers could take away important feedback opportunities as plans develop for the funds and don’t put enough emphasis on housing.
“What I am very worried about is that when waivers are granted that there will be an incentive just because of how politics works to funnel more money towards buyouts for middle-income people and middle-income households,” said Amanda Timm, executive director of the Houston Local Initiatives Support Corporation.
The guidance comes after representatives from Texas sent a letter in September to HUD Secretary Ben Carson urging him to waive key requirements for recovery dollars, including lowering a requirement that 70% of funds from Community Development Block Grants go toward low- to moderate-income people. The letter also pushed for a shorter public comment period and increased flexibility for grantees to spend the funding on infrastructure as well as housing.
The block grants represent just one source of funding in addition to those potentially available after a disaster from HUD as well as funding from the Small Business Administration, Department of Transportation and the Department of Agriculture and the Federal Emergency Management Agency, which provides for debris removal, road repairs, and fixes to government buildings, among other things. But the CDBG dollars are among the most significant for a city’s long-term recovery and its housing recovery in particular.
Any grantee in the affected areas awarded CDBG dollars can apply for the specified waivers at least three days before the grantee expects to use those exemptions.
Of the exemptions requested by the state’s congressional delegation, only the option to shorten the public comment period was included in the guidance issued by HUD.
As for spending flexibility, HUD has in the past indicated a specific percentage of funds that must be spent on housing, that was not the case this time. Those funds would still have to be spent primarily in low- to moderate-income communities. Meaning that though the 70% threshold is still in place, there is no limitation on how much funding could be spent on projects outside of housing, including infrastructure.
The requests from the state’s senators and representatives and the response from HUD raised a number of concerns for many in the housing community, who continue to call for a focus on affordable housing.
“We had an affordable housing shortage before the storm hit,” said Timm. In addition to losing some subsidized affordable housing, Timm said the city’s naturally occurring affordable housing stock was also hit. “What we have seen is a huge impact on available housing period, which always impacts availability of affordable housing.”
The county supported seeking a waiver of the income requirements. Daphne Lemelle with Harris County’s Community Services Department said it was about efficiency. “It doesn’t mean you’re no longer serving as many low-income, you’re just reducing the burden,” she said.
But that’s precisely what Chrishelle Palay, Houston co-director for the Texas Low Income Housing Information Service, feared it would mean when her group wrote to HUD arguing against the waiver.
Government entities, said Palay, “if any goals are set they rarely have a tendency to exceed those goals.”
Both the city department of housing and the Houston Housing Authority have said they are committed to spending in communities with the greatest need and pushed back against calls to loosen restrictions on CDBG dollars, allowing them to be spent on infrastructure projects.
“Low-income families likely have the greatest recovery needs and we support a commitment to ensure that resources be targeted towards meeting the affordable housing needs of Houston,” said Brian Gage, Senior Policy Advisor at the Houston Housing Authority. “We hope that housing remains the primary focus of CDBG-funded disaster recovery efforts,” added Gage.
Similarly, Tom McCasland, director of Houston’s Housing and Community Development department, said “There are times when it’s appropriate to ask for those waivers but at this point we think its important to show the commitment that the money is going to go where the need is and traditionally the need is seen in neighborhoods that have the lower income levels.”
Though flooding was seen in some of Houston’s more affluent neighborhoods, almost a quarter of the households likely to be affected, according to a preliminary analysis, earned less than $25,000. The next largest group of households affected earned between $25,000 and $49,999, according to an analysis by the Kinder Institute.
Still, McCasland added, “We’ll keep an eye on it as the data comes in.” Though he said his department had initially sought shorter public comment periods, he said he feels feedback and engagement will be key to the recovery.
The shortened comment period, in effect through at least the end of the program year for grantees, remains a concern, however.
“When there are only seven days to review any of the documents and provide comment that will affect how those billions of dollars are deployed,” said Timm, “communities are at a disadvantage.”
Though HUD said it was “balancing the need to quickly assist families dealing with the aftereffects of these hurricanes while continuing to provide reasonable notice and opportunity for citizens to comment,” with the quicker comment period, Palay said a shorter window doesn’t always mean dollars on the ground faster. “Even when you limit the comment period it doesn’t meant the money gets out that much quicker,” she said, “and you’re taking the right away from people to really weigh in.”
Despite lingering concerns about whether the city engaged in discriminatory housing practices swirling around the city, McCasland said the mayor is committed to supporting affordable housing in the recovery. “When the mayor submitted his initial $22 billion request without a lot of data in front of us, early on he asked for $12.5 billion to go to housing and that request has been bumped up now. So you can see where his priorities are,” he said.
If funding goes first through the state for disbursement, McCasland said it would also have to prioritize housing. “If the state makes infrastructure a priority,” said McCasland, “that’s going to be a concern.”
Grantees can apply for additional waivers not included in the guidance but HUD has said those waivers would have to be very specific to need and use, according to the housing department.
Update: This story has been updated to clarify that the list of waivers issued by HUD is applicable to Community Development Block Grants in disaster-designated areas and not Community Development Block Grants-Disaster Recovery more specifically.