Can more mean less? It might for New York, which will lose Housing and Urban Development funding if President Bush’s proposed new budget for the agency stands. Despite a slight increase in total funds–including 16,000 additional Section 8 vouchers–certain proposed cuts take community development funds away from the city and deprive public housing of needed money for repairs.
One massive cut would eliminate Economic Development Initiative grants, part of the Community Development Block Grant program. Historically, the grants have been obtained by members of Congress to fund local improvement projects; last year, for example, Rep. Nydia Velazquez acquired $225,000 to fund a study for revitalizing the Gowanus Canal area. “Given the cuts in the budget,” said Velazquez, “there will be a true lack of such opportunities. Last year, the HUD budget was practically gutted, and this year, we see the flat funding of an already gutted budget.”
Extinction for the economic development program would cost New York City $5.17 million total, money that is currently spent on projects as diverse as the rehabilitation of Harlem’s Renaissance Ballroom and rezoning studies in Staten Island. The program is a perennial target for budget-cutting Congressional conservatives, but this is the first time in memory that a president has proposed killing it.
Chandra Western of the National Community Development Association says the initiative’s reputation as a pork-barrel fund is misleading. “I would like to see it being used as it should,” she said, pointing to the program’s pivotal role in revitalizing downtown Providence, Rhode Island.
Larger trends in the budget will hit New York even harder. As promised by HUD Secretary Mel Martinez, the agency’s agenda now emphasizes homeownership. Initiatives include a homeowner tax credit expected to expand by 40 percent (amounting to 100,000 additional units), and a $213 million increase in a program that helps first-time homebuyers with down payments.
To accomplish that, the agency is shifting dollars away from efforts to develop and maintain rental housing–a big blow to New York, where just 53 percent of residents are in homeowner households, far below the national average.
The Capital Fund to repair public housing is taking a big chunk of the hit, totaling $417 million, or 15 percent of its budget. Sunia Zaterman of the Council of Large Public Housing Authorities called the cuts “tremendous,” adding, “It reveals a complete lack of understanding of capital improvement programs.” A HUD spokesperson asserts that the capital fund was cut because the agency suspected that municipalities were sitting on cash from previous years. Zaterman said that assessment flies in the face of the reality of capital improvement, where projects take years to plan and complete. “You must have a pipeline of funds to draw from,” she said.
HUD now proposes that housing authorities seek private financing for repairs. A New York City Housing Authority spokesman said that no local plans of the sort are currently being considered. But Artis Wright of the Community Service Society fears that private loans will grease a slippery slope to outright privatization. “What happens if the public housing authority can’t pay back the loan?” asked Wright. “Would they no longer be part of the public housing system?”