Authorization legislation covering Community Development Block Grants (CDBG), the HOME Investment Partnerships Program and homeless assistance is expected to be introduced in the House and Senate probably within the next month or so.
A proposal by Representative Rick Lazio (R-N.Y.), chair of the House Housing and Community Development Subcommittee, is most sweeping. He would replace the Department of Housing and Urban Development (HUD) with a new Department of Communities, in which CDBG and HOME would be consolidated into one block grant. Senator Connie Mack (R-Fla.), chair of the Senate Housing Opportunity and Community Development Subcommittee, prefers NACo’s approach, namely, retain CDBG and HOME as separate block grants and consolidate McKinney homeless assistance into another block grant.
The Senate scheme closely tracks the Administration’s revised blueprint for reorganizing HUD by retaining CDBG and HOME and authorizing a homeless assistance block grant. While retaining core CDBG and HOME programs, HUD wants to put more emphasis on performance measures with incentives, in the form of performance bonuses, given to jurisdictions that HUD determines to be exemplary. HUD proposes that funding for CDBG, HOME and homeless assistance be increased by 10 percent in order to pay for these bonuses, which would be awarded competitively.
This raises the concern that appropriators would not increase funding for these programs, but instead reduce the amount that otherwise would be allocated to entitlement counties, cities and states. HUD also proposes greater local flexibility by allowing jurisdictions to move some portion of funds between their CDBG and HOME accounts (select jurisdictions would be able to “flex” all of their funds around).
While NACo advocates local flexibility in administering these programs, there is the danger that flexing would blur the distinct purposes of CDBG and HOME.
The clock is ticking fast, so introduction of these bills and relatively swift action must get underway if an authorization bill is to get to the president’s desk this year.
HUD programs currently are funded through a continuing resolution in effect until March 15. The temporary spending measure maintains FY95 freeze-level funding for CDBG at $4.6 billion and the HOME Program at $1.4 billion, which are the levels approved by the conference committee for the VA-HUD and Independent Agencies appropriations bill that the president vetoed.
The department has allocated 45 percent of CDBG funds and 46 percent of HOME funds — their pro rata shares covered by the continuing resolution. Congress can pass another continuing resolution (either short-term or one that extends through the fiscal year) or revise the VA-HUD appropriations bill by providing more funds for the president’s priority programs.
The Senate passed, Jan. 10, a public housing reform bill (S. 1260) which gives public housing agencies greater administrative flexibility.
It authorizes two new block grants: a capital fund for physical improvements and an operating fund. A companion House bill, H.R. 2406, which has cleared the House Banking Committee and awaits floor action, authorizes one block grant instead of two.
Both bills allow public housing agencies to demolish obsolete units without having to replace them one-for-one with new units; repeal federal preferences on who should reside in public housing in favor of local choice in selecting tenants; facilitate mixed-income projects, which can be developed in partnership with the private sector; and merge Section 8 vouchers and certificates. A troubling provision in H.R. 2406, which is not in the Senate version, would permit HUD to redirect or withhold a jurisdiction’s CDBG funds if the department determines that the actions or inaction of local government substantially contributed to the public housing being distressed.
EDA is a survivor. It is currently funded through the continuing resolution, in effect through March 15, at $348.5 million, the level agreed to by the conference committee for the Commerce appropriations bill. This is roughly $100 million less than EDA’s FY95 appropriations. However, there is still legislation lurking to eliminate the Department of Commerce. It has passed the House, but not the Senate. It could be attached to something, but accuracy of a crystal ball yields to speculation at this time.
(Prepared by Haron Battle, associate legislative director.)
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