The federal government’s largest housing construction program for the poor has squandered hundreds of millions of dollars on stalled or abandoned projects and routinely failed to crack down on derelict developers or the local housing agencies that funded them.
Nationwide, nearly 700 projects awarded $400 million have been idling for years, a Washington Post investigation found. Some have languished for a decade or longer even as much of the country struggles with record-high foreclosures and a dramatic loss of affordable housing.
The U.S. Department of Housing and Urban Development, which oversees the nation’s housing fund, has largely looked the other way: It does not track the pace of construction and often fails to spot defunct deals, instead trusting local agencies to police projects.
The result is a trail of failed developments in every corner of the country. Fields where apartment complexes were promised are empty and neglected. Houses that were supposed to be renovated are boarded up and crumbling, eyesores in decaying neighborhoods.
This is just the tip of the iceberg. The Post writes about a local disaster:
In late 2007, then-Mayor Adrian Fenty sent a letter to the D.C. Council touting the developer’s experience, construction team and financing. The council swiftly approved the deal, lending $3.5 million in federal funds to help pay for the renovation of 98 units priced for the poor.
But the project died before a shovel ever hit dirt.
So what does current DC Mayor Vincent Gray do? He unveils a 2012 budget that includes $84 million for “affordable housing” (a $7 million increase from 2011, although still below pre-recession levels).
And what’s the reaction? This:
Proposed DC Budget Would Gut Affordable Housing Programs
Seems that Mayor Gray has decided that the District of Columbia should get out of the affordable housing business.
Hard to see how else one can interpret the end results of the proposed cuts and related policy changes the DC Fiscal Policy Institute details in its brief on the proposed Fiscal Year 2012 affordable housing budget.
One area of disproportionate cuts is in affordable housing, where the budget steals money out of the Housing Production Trust Fund (HPTF). This is no transfer payment program. It gives for-profit and non-profit developers loans to assist them in building affordable housing.
The construction financing market is tight, and it's a lot harder to get financing for affordable housing developments even if they're fiscally solid. If a developer can raise most of the money but not all, the HPTF lets them borrow the rest. On average, for each dollar coming from the HPTF, the developer has $3 of funding from other sources, so DC gets a 4:1 benefit for its investment.
Approximately 150 people filled the marble steps outside the Wilson building Tuesday night in defense of government programs that support affordable housing in the District of Columbia at the “Housing for All” rally sponsored by the Coalition for Nonprofit Housing and Economic Development, the Latino Economic Development Corporation, and Save Our Safety Net.
Holding bed sheets reading “Fund the Fund” and “Where will we sleep?,” housing activists, nonprofits, and DC residents called upon the DC Council to protect low- to moderate-income residents struggling to keep or maintain their affordable housing by restoring funding to key safety net programs. The Mayor’s budget cuts $18 million from the Housing Production Trust Fund, freezes a portion of the Local Rent Supplement Program, and cuts $20 million from homeless services including Housing First.
Yeesh. Tough crowd. The last one is accompanied by this hilarious picture of some protesters who are definitely in need of some affordable housing. And yes, Marion Barry was there.
Whatever you think of “affordable housing,” there is some evidence to suggest that maybe the current system isn’t functioning very well, and it might not be a good idea to pump even more money into it. So while it’s touching that the people most responsible for elimination of affordable housing in DC support affordable housing in DC, I think these people are more in love with the *idea* of affordable housing. And that’s easier to achieve, because it doesn’t require much more than painting some bed sheets, chanting at a rally, or looking at numbers in a budget and screaming if they go down (or, if they don’t go up as much as you would like).