Federal lawmakers are pushing for an investigation of the Department of Housing and Urban Development’s (HUD’s) HOME program after the Washington Post reported that nearly 700 projects awarded $400 million have been idling for years.
“We are deeply concerned by these reports, particularly at a time when so many Americans are in need of affordable housing,” said Senate Banking Committee Chairman Tim Johnson (D-S.D.) and Ranking Member Richard Shelby (R-Ala.) in a joint statement. “Many communities across the country have successfully used HUD programs to create vital housing opportunities for their citizens. However, HUD, like any government agency, has a duty to safeguard taxpayer funds. The Committee takes its oversight responsibilities very seriously, and we plan to get to the bottom of this issue.”
On the House side, Rep. Elijah Cummings (D-Md.), ranking member of the Committee on Oversight and Government Reform, sent a letter to Chairman Darrell Issa (R-Calif.), requesting that the committee examine the allegations.
“Some of these allegations relate to projects dating back as far as 2001,” Cummings wrote. “If these allegations are accurate, they are very troubling. I am writing to request that the Committee examine these allegations in more detail, beginning with a briefing from HUD.”
The Post’s May 14 report said its “yearlong investigation uncovered a dysfunctional system that delivers billions of dollars to local housing agencies with few rules, safeguards or even a reliable way to track projects. The lapses have led to widespread misspending and delays in a two-decade-old program meant to deliver decent housing to the working poor.”
The HOME program is often one of the sources of funds pooled by affordable housing developers to build their projects. It often provides gap funding for developments financed with low-income housing tax credits.
“Sadly, the Post failed to recognize that, in spite of examples of incompetence and outright mismanagement by certain local governments, overall the HOME program works,” responded HUD on its Web site. “… Yes, there are problems when local communities pick bad developers, and it’s no wonder that projects stall or even fail as a consequence. But to lead readers to believe the whole HOME program is a failure and that HUD is ‘looking the other way’ is just plain wrong.”
HUD said the delayed projects that the Post cites are a small fraction of the 28,000 active developments and that many of these open projects are single-family homes that remain on the market because of the housing crisis.
The department also said it has cut the number of “open activities” by nearly 60 percent since 2005 and that it seeks repayment of any misspent money.
Under the Obama administration’s 2012 budget proposal, funding for HOME would be reduced by 9.5 percent. HUD is requesting $1.65 billion in HOME funds in fiscal 2012 to provide formula grants to states and localities.