HUD rule change sparks debate
Mayor Bruce Tobey of Gloucester, Mass., has witnessed his seaside city transform from a thriving fishing port to a growing community with a light industrial employment base. More than 3,000 miles across the country, Mayor Pro Tem Bev Perry of Brea, Calif., has seen her city change from an old oil town into a residential mecca.
Now, Tobey and Perry have joined a chorus of local lawmakers throughout the nation who are angry at the U.S. Department of Housing and Urban Development for proposing to change the rules that determine whether municipalities have properly addressed fair housing needs in their communities. At stake, according to National League of Cities estimates, is more than $4 billion in federal funding distributed through the Community Development Block Grant program and three other federal formula grant programs.
“[The rule changes] could [affect] a major source of federal funding for cities,” says Cameron Whitman, NLC senior legislative counsel. The proposed rule, first published last October, gives HUD the authority to withhold CDBG funds from cities and counties if it thinks they have ignored fair housing problems. “We rely on the CDBG grants for a lot of critical projects where funding might not be available,” Tobey says. “Without the money, a lot of folks get hurt.”
NLC warns that the new rule would allow HUD to base its fair housing certification and compliance decisions on four criteria: whether a fair housing complaint (that the agency feels is merited) has been filed; whether the Department of Justice has filed a fair housing civil action against a jurisdiction; whether a fair housing violation has been reported by an individual or a fair housing advocacy group; or whether reports have been completed by public or private entities that detail a fair housing violation. Whitman says NLC is particularly concerned that HUD’s decision to withhold critical funding could be based upon unfounded allegations. The organization fears the rule would offer few avenues of appeal for local governments.
Additionally, she says, the rule changes could give the federal government much more flexibility in determining a community’s critical needs. For example, a city with an equally serious lack of housing for both the elderly and classes protected under the Fair Housing Act may not be able to set its own priorities without risking its CDBG funding. “It means HUD can subjectively decide whether it likes your criteria or not,” Whitman says.
The thought of the federal government deciding how her city can become a better place to live infuriates Perry. Currently, Brea uses a major portion of its CDBG money for community development and for low interest loans to landlords who agree to renovate apartment buildings into affordable housing. “For somebody to come from outside the community and tell us we are not doing it right is a slap in the face to my community,” Perry says.
HUD spokesman Peter Ragone denies that the proposed rule is an attempted power grab by the agency. He says HUD is trying to “establish a performance standard” for all communities so that they have a clear understanding of the agency’s definition of fair housing. Ragone also disputes the notion that HUD will have unbridled authority to withhold federal grants from cities and counties.
The agency still will have to follow established rules and guidelines in order to withhold block grants, he says. Additionally, he says, “the rule will not be put into effect until there has been an exhaustive period for public feedback.” (The comment period for the rule ended Feb. 2.)