Loading...
HomeMy WebLinkAboutMINUTES - 10191993 - 2.1 CO. I HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA TO: BOARD OF COMMISSIONERS FxoM: Richard J. Martinez, Executive Director DATE: October 19, 1993 SUBJECT: REINVENTING THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION I. RECOMMENDED ACTION: APPROVE letter dated October 19, 1993 to Housing and Urban Development (HUD) Secretary Henry Cisneros offering suggestions for "reinventing HUD", and AUTHORIZE signing of the letter by the Chair of the Board of Commissioners of the Housing Authority of the County of Contra Costa, as recommended by the Advisory Housing Commission. II. FINANCIAL IMPACT: None. III. REASONS FOR RECOMMENDATION/BACKGROUND: At the September 21, 1993 Joint Workshop of the Advisory Housing Commission and the Board of Supervisors/Commissioners, the Board indicated its interest in offering suggestions to HUD Secretary Cisneros on his much publicized attempt to "reinvent HUD" . Housing Authority staff has put together a letter listing ten suggestions by which HUD could reinvent itself. At its Regular Meeting on Monday, October 18, 1993, the. Advisory Housing Commission moved to adopt this letter of suggestions, and authorized signing of the letter by the Chairperson of the Advisory Housing Commission. Additionally, the Advisory Housing Commission recommended that the letter be approved by the Board of Commissioners and signed by the Chair of the Board. IV. CONSEQUENCES OF NEGATIVE ACTION: Should the Board of Commissioners elect to not approve this letter and authorize signing by the Chair of the Board, the Housing Authority would miss an opportunity to express its interest in assisting the U. S. Department of Housing and Urban Development in its attempt to reinvent itself. CONTINUED ON ATTACHMENT: YES SIGNATURE RECOMMENDATION OF EXECUTIVE DIRECTOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S) : ACTION OF BOARD ON / 1, /!93 APPROVED AS RECOMMENDED OTHER VOTE OF COMMISSIONERS I HEREBY CERTIFY THAT THIS IS A UNANIMOUS (ABSENT ) TRUE AND CORRECT COPY OF AN AYES: NOES: ACTION TAKEN AND ENTERED ON THE ABSENT: ABSTAIN: MINUTES OF THE BOARD OF COMMISSIONERS ON THE DATE SHOWN. . cc: County Administrator Housing Authority ATTESTED_ PHIL BATCHELO , CLERK OF THE BOARD OF COMMISSIONERS AND COUNTY ADMINISTRATOR BY DEPUTY HOUSING AUTHORITY of the COUNTY OF CONTRA COSTA 3133 Estudillo Street • P.O. Box 2759 • Martinez, California 94553 FAX (510) 372-0236 November 24, 1993 The Honorable Henry Cisneros Secretary U.S. Department of Housing and Urban Development 451 Seventh Street, S.W. Washington, D.C. 20410 Re: Reinventing the U.S. Department of Housing and Urban Development Dear Secretary Cisneros: The Board of Commissioners, the Advisory Housing Commission, and staff of the Housing Authority of the County of Contra Costa (HACCC) are pleased that you are reexamining the way the U.S. Department of Housing and Urban Development conducts business and its role in fostering affordable housing and community development across the nation. We appreciate the opportunity to offer our suggestions for "Reinventing HUD." Our detailed recommendations are set forth below. In summary, HACCC recommends that HUD reinvent itself in the following ways: (1 ) empower local public housing authorities to administer programs by providing encouragement and technical assistance; (2) give high performing agencies financial rewards for their good management practices; (3) encourage mixed income public housing communities; (4) strengthen the ability of local agencies to provide services that go beyond shelter to include resident initiatives and economic development; (5) stimulate regional comprehensive planning; (6) reform the public housing rent structure so that residents will not be penalized for going to work; (7) recognize the need for increased operating subsidies; (8) resurrect and restructure the public housing development program; (9) simplify the Section 8 Certificate and Voucher Program; (10) devise and implement a federal strategy on homelessness; (1 1 ) urge bank and thrift regulators to promote lending for low-income housing development, and (12) champion the development of a federal "infrastructure bank" that would target assistance to communities meeting affordable housing goals. 1 Empower Local Public Housing Authority Managers and Provide Technical Assistance HACCC would like to see a dramatic shift in the Department's philosophy toward local public housing authorities (PHAs), which are responsible for the day-to-day operation of the country's largest and most important housing programs - public housing and the Section 8 rental assistance program. In our view, the principal role of HUD should be the provision of support and technical assistance to enable PHAs to meet their primary mission of providing decent, safe, and sanitary housing for low-income citizens in their communities. HUD's success should be measured by its ability to help local agencies provide more and better services, not by the number of regulations enforced. In the past few decades, fulfillment of our basic mission to house Contra Costans has become more and more difficult as federal funding has withered, the housing stock has aged, the resident population has become poorer, and the urban environment has experienced further economic distress. As a result, our staff has been forced to work harder, jump higher hurdles, and be more creative in their efforts to accomplish their basic service-oriented mission. While the tasks facing HACCC have become more complex, HUD has diminished its role as technical assistance provider and has concentrated instead on regulatory oversight. Every year we are forced to divert increasing amounts of time from providing services to responding to HUD's regulatory requirements and inquiries. As you said during your confirmation hearing, HUD's approach to PHAs over the past decade has been characterized by a "gotcha" mind-set, an approach that is counterproductive and regulation-laden. We would like to see HUD reclaim its role as enabler/technical assistance provider to local PHAs and substantially decrease its regulatory and program oversight functions. HUD should de-emphasize micromanagement and inculcate flexibility in its management culture. We want HUD to be as enthusiastic about serving our residents as we are and to provide us the help and the flexibility to do the job. Give High Performing Agencies Financial Rewards HUD should support and facilitate entrepreneurial activities by PHAs, especially for high performing agencies with proven management capabilities. This PHA has worked hard to provide quality housing and services to its residents. HUD has recognized formally that HACCC is a "high performer" according to the Public Housing Management Assessment Program (PHMAP) standards. As a result of our recognized success, high level HACCC staff has taken part in technical assistance teams that assess the management weaknesses of troubled agencies and offer recommendations for improvement. While we are happy to share our staff to enhance the public housing of other communities, we would like to see rewards for us, and agencies like us, in the form of increased, more flexible funding and decreased reporting requirements. 2 Encourage Mixed-Income Public Housing Communities This Housing Authority strongly believes that neighborhoods and public housing residents will be better served when mixed-income housing is emphasized. We would like to mix all income levels in our developments from families with little or no earned income to those with the means to pay market rent. Despite the Housing Act of 1937's directive that we seek to include "families with a broad range of incomes" and avoid concentrations of low income persons, federal preferences for tenant selection and income limits on admitting families between 50% and 80% of median income have severely curtailed our ability to accomplish our desired income mix. Moreover, the federal preferences and income limits, when combined with restrictive development regulations, serve to exacerbate community opposition to public housing (the "Not in My Back Yard" syndrome) making any scattered site acquisition or new construction very difficult. We think mixed income housing soothes the concerns of many citizens who might otherwise object to public housing in their community. HUD could support our efforts to build more diverse public housing communities by seeking statutory changes to the Housing Act to enable PHAs to attract a broader income mix to public housing. This makes sense from both financial and social perspectives. Families at the higher ranges of eligibility will pay higher rents (which will reduce the operating subsidy needed from the federal government) and working families will serve to connect other residents to the larger community. Support Resident Initiatives and Economic Development Our agency looks at housing as more than a brick-and-mortar endeavor. We want to expand the economic horizons of residents, strengthen their families, get them on the road to self-sufficiency, and, where possible, homeownership. We think it is critical that we recognize the nexus between decent, safe, and sanitary housing and economic stability. Families in public housing need supportive services such as day care or job training, but there is no funding available for us to assist them. We participate in the Family Self Sufficiency Program and the Family Unification Program under the Section 8 Program. We have worked with other groups to bring day care and Head Start facilities to our developments. We offer youth sports programs such as Midnight Basketball. We can only reach a few families with these programs because the funding is so inadequate. Moreover, it is difficult to implement a Family Self Sufficiency Program for public housing residents because HUD offers no money to administer the program. HUD should actively support local efforts to foster economic development opportunities in public housing communities by assisting with our efforts to partner with local social service agencies and recognizing the need to fund such activities in our operating budgets. Stimulate Regional Comprehensive Planning At HACCC, we consider it essential to recognize the nexus between employment, 3 housing, social services, and transportation. Too often housing for low income families is developed in areas that are remote from other communities, unserved by mass transportation, and far from job opportunities and social service agencies. HUD should stimulate the formation of regional planning councils with representatives from a range of groups including residents, PHAs and other housing providers, redevelopment agencies, social service organizations, transportation officials, business organizations, labor unions, and other interested parties. Regional planning councils could devise comprehensive development and revitalization strategies that incorporate the need to provide jobs to pay for housing, to create housing that is accessible to stable job opportunities, and to establish transportation routes that get people to jobs. Reform the Rent Structure in Public Housing The current method of determining rent in public housing discourages families from seeking and maintaining jobs. A resident making the transition from public assistance to employment faces both an immediate rent increase due to increased gross income and the loss of other important benefits that are tied to income, such as Medicaid and food stamps. There is no transition period permitted for the family to set aside savings to adjust to its new budget. In addition, because HUD has not implemented the provision in the Housing Act that permits PHAs to set ceiling rents, a newly employed family can find itself paying more to live in public housing than it would in the surrounding neighborhood. Thus, such families are often better off economically if they leave public housing. PHAs should be pennitted to establish long-term ceiling rents appropriate to their communities so that stable working families stay in public housing longer. This will give these families time to establish economic security and prepare for home ownership. HUD should also reexamine its method for calculating the base income from which a family's rent is derived. Currently, rent is based on gross income, rather than adjusted, the deduction for dependents is very low, and there is no deduction permitted for family medical expenses (as there is for elderly residents). We think it is vital for HUD to implement the income deductions contained in the National Affordable Housing Act of 1990 that provide for the following: - $550 deduction for each dependent family member - $400 deduction for elderly and disabled families - a deduction of family medical expenses exceeding 3% of annual income - a deduction for child care expenses that enable one family member to be employed or to pursue education - a 10% deduction for earned income We understand that HUD is looking at establishing a 18-month grace period for rental increases for newly working families. While HACCC believes the grace period is an important first step in rent reform, we believe it should be implemented in concert with 4 locally detennined ceiling rents and the authorized deductions from income. Recognize the Need for Increased Operating Subsidies and Security Funds The current funding formula for public housing, the Performance Funding System (PFS) bears little relationship either to performance or to actual operating costs. The current formula fails to recognize the growth in the types of expenditures that PHAs have been required to make since the formula was first developed in 1975. The PFS formula does not include employee benefits, security, trash and garbage collection, hazardous materials testing and abatement, as well as the cost of the growing regulatory reporting requirements. Moreover, our agency is committed to providing services and expanded programs to support resident economic initiatives, which we believe should be incorporated in the PFS. In addition, HACCC believes that the formula allocation for the Community Development Block Grant (CDBG) Program should be increased and revised to include a set-aside exclusively for public housing security costs. The security-related demands on our agency are immense and the costs are exorbitant. There is no single source of funding that adequately addresses the full-range of security-related needs. CDBG is an important source of funding for filling the gaps of the more narrowly defined programs and allows PHAs to initiate complete security programs. Revive the Public Housing Development Program HACCC believes that the public housing development program should be resurrected and restructured. HACCC would like to see the program fully funded because it is the most efficient method for mixed-income rental housing. As previously discussed, HACCC's goal is for public housing and its residents to be an integral part of our community, not stigmatized, isolated enclaves. Good design is a good investment because it can reduce maintenance costs, it makes the developments more attractive to higher income renters, and it makes public housing more acceptable to the surrounding neighborhood. The current design restrictions in HUD's regulations combined with limits on total developments costs make it nearly impossible to build public housing that blends in with the look of the surrounding community, absent a waiver from HUD. HUD's design regulations are so prescriptive that even if a PHA raises local funds to pay for the amenities necessary to develop attractive marketable housing, HUD will reduce its grant by each local dollar raised, which effectively eliminates the PHAs ability to include the amenities. We also believe that HUD's oversight of the design process should be severely diminished. As long as our development team keeps within reasonable cost guidelines, we believe they 5 should have full authority for design decisions.' Our agency has not undertaken any new development under the public housing program in 10 years largely due to these constraints. If the program were changed to be more flexible we would be interested in developing or acquiring mixed income affordable housing under the program. Simplify the Section 8 Certificate and Voucher Programs The Section 8 Certificate and Voucher Program is more difficult to administer than it needs to be. Our Fiscal Director has to complete 10 separate requisitions to draw down funds for each fragmented portion of the Section 8 program. Portability presents significant administrative problems. HUD should establish uniform procedures, forms, and training to ensure consistency on portability and reduce administrative conflicts between PHAs. HUD should also reevaluate its method of detennining Fair Market Rents (FMR). Under the present system, HUD determines the FMR for each area of the country on a yearly basis. Frequently, HUD's method for determining the applicable FMR is out of step with the trends in the local rental market. When the FMR is too low, our clients are unable to find housing. When the FMR is too high, landlords clamor for higher than true market rent using HUD's FMR as justification. HUD should consider seeking statutory amendments that would enable it to establish five year FMR ranges within which PHAs are permitted the flexibility to set rents according to the market conditions. The administrative fee could be set at an average for the projected rents over the five-year period. Homeless Programs The issue of homelessness has consumed the financial resources of this county. Federal housing policy does not adequately support local communities in their efforts to deal with this pressing social need. HUD needs to work with housers, social service providers, and local governments to devise a comprehensive approach to the multi-faceted needs of the homeless from emergency services, to transitional housing, to appropriate long-term housing. Current federal homeless programs are too narrowly defined and too poorly funded. Promote Lending for Low-Income Housing Development 1 PHAs are at a competitive disadvantage to other developers of low-income housing because of the overregulation of the development program. Other nonprofit housing providers funded through CDBG, the HOME Program, the Section 202 Program, or the Low Income Housing Tax Credit often are able to build housing that is more attractive than public housing. PHAs could deliver attractive housing faster and cheaper than these other methods if the public housing development program with its front-end grant of construction funds is revived. While the Authority could create a non-profit subsidiary to take advantage of these other funding streams,when stripped of its prescriptive elements, the public housing development program is a more efficient means to create new housing. 6 Government should not be the sole financier of affordable housing for rent or homeownership; local banks and thrifts play a key role as well. Under current federal regulations, however, private financial institutions are discouraged from making loans for affordable housing construction because such loans are classified in the same risk category as loans for commercial construction. While HACCC understands that HUD does not regulate lending institutions, we would like to see the agency, in its role of advocate for revitalization of American communities, encourage the Federal Reserve Board, the Office of Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Office of Thrift Supervision, and Congress to ease restrictions on this type of lending. Banks experiences with profitable Community Reinvestment Act portfolios demonstrate that lending to build communities can be safe and successful. Champion the Development of an "Infrastructure Bank" Building communities involves more than simply erecting structures on vacant land. Roads, water lines, sewer connections, and utility hook-ups are also required and are costly for the developer and the local governments. HUD should work with other federal agencies that provide infrastructure assistance to introduce the concept of an "Infrastructure bank" that would target communities making progress on their affordable housing goals. Under this system, all sectors of the community will see the benefits of providing housing for everyone, regardless of income. Conclusion HACCC has been encouraged by many of the new ideas you have discussed in recent months. Our greatest desire is to have HUD join us in our efforts to provide better services to Contra Costa County residents. We look forward to working with you to craft a new partnership to improve communities here and across the nation. Sincerely, Tom Torlakson Bernie R. Bautista Chair, Board of Commissioners Chair, Advisory Housing Commission