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Housing Groups Argue Against Cuts in HUD Funding

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Housing Groups Argue Against Cuts in HUD Funding

Housing Groups Argue Against Cuts in HUD Funding

Housing Groups Argue Against Cuts in HUD Funding

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Rule changes could cost many big cities millions they receive for subsidized housing from the federal government. They claim the Bush administration reneged on an agreement that would have maintained much of the funding.

STEVE INSKEEP, host:

This is MORNING EDITION from NPR News. I'm Steve Inskeep.

Big changes are coming for the agencies that run public housing and the nearly three million people they serve. One Bush administration proposal would increase the amount of money that some housing authorities receive to cover their daily operations. Other big-city agencies, mostly in the Northeast and Midwest, would lose millions. Housing groups are accusing the federal government of breaking a deal that they say would lessen the pain. NPR's Cheryl Corley reports.

CHERYL CORLEY reporting:

Eight years ago, Congress posed this question: How much does it take to operate good quality public housing? Then lawmakers ordered the Department of Housing and Urban Development, or HUD, to come up with an answer by negotiating with housing groups, public housing tenants and their advocates to revise the government's funding formula. Housing groups say the proposal HUD is offering is not the compromise the committee crafted last year. Scott Keller is the deputy chief of staff at HUD. He says the agency had to pay attention to areas of the country that are growing and to a federal budget that's being pulled in so many directions. Keller says the revised formula is responsible to everybody.

Mr. SCOTT KELLER (Deputy Chief of Staff, Department of Housing and Urban Development): And not just for the housing authorities but also for the taxpayer. We have a lot of tension in this federal government, and it's all demand for funds.

CORLEY: Keller says under HUD's proposed rule, about 2,500 of the country's 3,000-plus housing authorities will receive a hike in operating subsidies. But housing groups say those that stand to lose will be hurt even more. Antonio Perez, the head of Milwaukee's Housing Authority, says the negotiated deal would have protected agencies by capping losses.

Mr. ANTONIO PEREZ (Milwaukee Housing Authority): We could have some predictability on the basis of those meetings about what we were going to potentially receive or not receive. By putting that aside and saying, `We're going to cherry-pick that negotiated rule-making,' it is like saying, `Let me tie you to a post and light a match at your feet, and I'll wait till you howl.' Well, we're howling.

CORLEY: HUD subsidies help public housing authorities cover the gap in what they need to operate and the income they receive from the rent residents pay. Nearly $3 1/2 million is set aside in HUD's 2006 budget, but housing authorities say they've long been underfunded. Many warn they'd have to cut day-to-day operations under HUD's latest proposal, operations like the recreation program at the Hillside development in Milwaukee.

(Soundbite of children)

CORLEY: Kids line up to play table tennis or pool at the Boys & Girls Club. Eight-year-old Aaron Akers(ph), hunched over the pool table, stick in hand, says he has a strategy.

AARON AKERS: Just hit any ball in.

CORLEY: How you doing?

AKERS: Good.

CORLEY: The club is located in Hillside's Family Resource Center. HUD's plan could put the center at risk since the Housing Authority uses operating funds to run it and other centers as well as managing 4,000-plus units of public housing. Associate director Steve Fallig(ph) says HUD's subsidy makes up about a third of Milwaukee's $22 million operating budget. They stand to lose more than $2 million under HUD's proposed rule.

Mr. STEVE FALLIG (Associate Director, Hillside Family Resource Center): That amount of reduction is so severe that we're going to have to look at services. It translates into every part of the Housing Authority's operation, everything that we do that is paid for from the operating budget will be questioned.

CORLEY: The head of the Resident Advisory Council, Sherry Reed Daniels(ph), says it's already difficult for the mostly single-parent households at Hillside to make ends meet.

Ms. SHERRY REED DANIELS (Resident Advisory Council): You can't cut the utilities; you've got to have light and gas. You can't cut the maintenance; plumbing's got to work.

CORLEY: And Fallig says HUD's reconfiguring will also put pressure on public housing authorities to look for tenants who can pay higher rent instead of serving very low-income families, those who need help the most.

Mr. FALLIG: And the question is, who is going to serve that population in the future? Financially, we won't be able to. Financially, we have to make a business decision that says, this is how much revenue we need to operate; this is how much we're getting in rents, and this is how much we're getting in subsidy and other grants we can cobble together, but all of that won't add up to enough to keep the doors fully open.

CORLEY: Other agencies, like those in New York, have the same argument, but HUD's Scott Keller says communities that will lose funds under the agency's proposal are exaggerating the impact.

Mr. KELLER: I think everyone wants to get their worst-case scenario out, and that's why it's incumbent upon us to evaluate these comments and to issue a rule, a final rule.

CORLEY: Before that rule is issued, housing groups say they hope their concerns will lead HUD back to the negotiating table. Meantime, a bill working its way through Congress mandates HUD to return to the agreement it worked out with housing groups. Cheryl Corley, NPR News.

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