November 07, 2011
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Written by: HUD Public Affairs. Originally posted here.

Today, the Washington Post highlighted a small number of stalled housing developments funded under HUD’s HOME Investment Partnerships Program to conclude that there are “continuing problems” with the program. 

The facts about HOME’s success speak for themselves.  Over its 20-year history, HOME has produced more than a million affordable homes for low-income families in more than 600 communities.  It’s helped nearly half a million people—440,000—become new homebuyers and put a roof over the heads of a quarter-million low-income households who need a helping hand paying the rent.  And it’s created jobs – leveraging nearly $4 of private and other public investment for every dollar it invests. 
 
HOME is particularly important today, at a time when 5.6 million American families pay more than half of their income towards rent and the recession has driven millions of Americans into poverty – 2.6 million from 2009 to 2010 alone, and 43 million Americans in all.
 
If there is any fundamental challenge for the HOME right now it’s the economic slowdown.
Given the state of the economy, and that the Post deployed 54 reporters to look for stalled projects, it’s not surprising that they would find some.  Indeed, countless public and private housing developments alike have ground to a halt during the recession and its aftermath.  Yet even still, as we have argued since May, affordable housing development funded through the HOME Program is actually performing BETTER than the private market.
 
In today’s article, the Post focuses on a group of developments where fewer units were built than originally planned. That’s a classic example of how the economy has impacted housing development leading to developments needing to be downsized.  In those cases, the HOME subsidy for the units not built is either returned to HUD or redirected to other developments.
 
After the Post published a story in May that alleged nearly 700 HOME projects were stalled, HUD took the Post story seriously and carefully checked the status of those projects. It is strange that today’s story attempts to portray these actions in a negative light. You might think the Post would be pleased that HUD was responding to their alleged findings. In fact, contrary to the Post’s claim that Secretary Donovan wouldn’t comment, a team from HUD, including the Secretary, met with the Post to review their allegations. We repeatedly asked the Post to provide the list of 700 projects that they claimed were stalled. They repeatedly refused. So we ran our own list using the criteria described by the Post in their article and discovered that more than half of projects that could have been flagged as “stalled” based on The Post’s criteria are actually finished.
 
All this is not to suggest there aren’t troubled developments – or that HOME can’t be improved.  Soon after taking office in 2009 this administration started work on a proposed a new set of rules for HOME. The new rules were announced last week and would:
  • Require state and local governments to adopt policies and procedures to improve their oversight of projects, develop a system for assessing the relative risk of projects, and more closely monitor their HOME-funded sub-recipients; 
  • Require state and local governments to assess a developer’s capacity and the long-term viability of the project, before they commit HOME funds to a project;
  • Require more frequent reporting by state and local ‘participating jurisdictions’ to enable HUD to more closely track projects once they’re under way; and
  • Set a higher ‘performance bar’ by establishing specific timeframes for taking appropriate corrective actions against participating jurisdictions who fail to complete what they started.
To be clear: HUD has a zero tolerance for fraud or waste.  When state and local governments misspend HOME funds, we force them to repay those funds – every dollar.  This new rule and other changes we are making to improve grant management will ensure HUD receives more and better information from state and local jurisdictions receiving HOME funds and the developers they do business with so that fewer developments get into trouble in the first place. 
 
The Post is right to expose problems where they find them. But to draw sweeping conclusions about HOME based on a handful of examples is just wrong. In the midst of a housing crisis and with poverty on the rise, it’s worth asking: How much worse off would America be without programs like HOME?