This Week: Housing in the Federal Budget

"Quote" of the Week

Housing and the Bush Budget

Seven Federal Housing Programs Slated for Elimination

Greetings,

This week I write about federal housing programs. By way of full disclosure, I myself have benefitted from such programs. The house I have lived in since 1990 was renovated, and the purchase price was subsidized, as part of a program that aimed to promote home ownership among low-income residents in my neighborhood. I'm certain that I would not be a home-owner today if it were not for those federal funds.

If a lesson is to be learned from this week's issue, I guess it would be this: When we pool our money for the common good, as in the housing programs summarized this week, I think you'll see that good things can happen. And what is not so easily seen, but is equally true, is that when we choose instead to spend our money on maintaining The Empire and conducting a sham "War On Terror," many more good things cannot happen, because there is no money to pay for them.

One other "lesson" may be this: Although I did a substantial amount of research to produce this issue (write me and ask for my sources if you like), it really was not that difficult to find any of the information you see here. It's so easy to find, in fact, that the negligence of the corporate media in failing to inform the public about the uses to which their tax dollars are being put is painfully obvious. Don't you think?

Investigatively yours,

Nygaard

"Quote" of the Week

Here are the opening words from a front-page story in the Washington Post of March 1:

"The U.S. government's humanitarian relief agency will significantly scale back emergency food aid to some of the world's poorest countries this year because of soaring global food prices..."

That's not true. The budget for emergency food aid could be increased to maintain current levels of aid. Although the unwillingness to do so may have been stimulated by rising prices, the prices are not the reason. It's about priorities and values, and taking responsibility for them. It's not about being powerless in the face of "the market."

Housing and the Bush Budget

Last week I mentioned that the federal budget proposed for 2009 by the Bush administration calls for the reduction or elimination of 151 federal programs that the "President" says are "wasteful or bloated." This week I take a closer look at some of those programs, just to see if they really are "wasteful and bloated." Since the headlines these days are filled with news about the "housing crisis," I decided to take a look at seven programs slated for elimination that have to do with housing. There are three additional housing programs slated for reduction, but would not be eliminated. I didn't look at those; no room.

The details you'll soon see, and some patterns will be apparent. One is that all of the programs serve low or "very-low" income people. Another thing is that the programs seem to be effective to varying degrees, according to many people—often including the White House itself. You'll see the doomed programs described as being "ideal," as being "generally well-run," as having "impressive records," as being "desperately-needed," as being "very effective, well-managed," and as being programs that "work."

It's hard to say how many people have directly benefitted from these "wasteful" programs over the years, but it is certainly in the millions. And the effects go far beyond the direct effects on the individuals involved. The lives of neighbors and entire communities are made better when housing stocks are improved and jobs are provided in the process of improving them.

Last week I also said that I feared that the size of the numbers in the federal budget—all those "billions" and "trillions"—might make it seem like some of these 151 programs must not matter much. After all, their budgets are only in the "millions." I hope the list that follows, brief and superficial though it is, might challenge that perception.

Seven Federal Housing Programs Slated for Elimination

Program #1: The Farm Labor Housing Program (FLHP)

According to the U.S. Department of Agriculture (USDA), which houses the program, the FLHP "provides capital financing for the development of housing for domestic farm laborers."

The Housing Assistance Council, a is a nonprofit based in Washington DC that works on housing for the "rural poor," points out that the FLHP is "the only nationwide program designed to provide housing for farm laborers." About the program, they say:

"Historically, the [FLHP] has financed the majority of farmworker housing projects nationwide. The program is ideal in many ways, often providing 90 percent or more of total development costs via a combination of low-interest loans and grant funds. Perhaps its greatest benefit is the ongoing project-based Section 521 Rental Assistance offered, allowing rents to adjust as low as necessary. Unfortunately, financing levels for this program have been reduced and are far below demand levels."

The "far below demand" budget allotment for the FLHP in 2008 is $22 million. The Bush budget calls for the program's termination in 2009. This would save enough money to fund the U.S. occupation of Iraq, at current spending levels, for one hour and 55 minutes.

Program #2: Multifamily Housing Direct Loans (MHDL)

The MHDL program, also run by the Department of Agriculture, "help[s] rural communities build affordable housing," according to Illinois Senator Dick Durbin. According to the White House, "USDA's multifamily housing programs provide: (1) loans for construction of facilities, and (2) rental assistance. USDA generally lends to private developers, financing both the construction and rehabilitation of rural rental housing for very low-income, elderly, and handicapped rural residents." Looking at both the direct loan and the rental assistance programs, the White House's own assessment states that they "are generally well-run," and that the multi-family programs "achieve what [they were] designed to do..."

Nonetheless, the Bush budget calls for the program's termination in 2009, which would save $30 million. That's exactly the amount budgeted this year for something called the "Reliable Replacement Warhead" program, which the Council for a Livable World says "may be viewed as a provocative and unnecessary move by the United States to modernize its nuclear arsenal, which would undermine the Non-Proliferation Treaty."

Program #3: Mutual Self-Help Housing Grants

A third USDA program is the Mutual Self-Help Housing program, also known as Section 523. The USDA describes the program this way: "Mutual Self Help Housing is the construction method where participating families ... utilize their own labor to reduce the total construction cost of all homes built by the group. Participating families are organized into groups generally of 4 to 10 families. The Mutual Self Help Housing program is targeted to low and very low income families who are unable to obtain modest housing through conventional methods. The savings from the reduction in labor costs, allows otherwise ineligible families to own their homes."

The USDA continues, "Last year [2003 at the time of this report], more than half of the participating Self-Help families were minorities. Nearly 40 percent of those building their own homes were Hispanic. Because of this impressive record, expanding the Self Help program has been recognized as one of the keys to increasing minority homeownership."

The executive director of the Washington State Housing Finance Commission, Kim Herman, in 2006 underlined that "One of the program's many virtues is how well it has served minorities." Herman was excited back then about "President Bush's enthusiastic support of the program," which was evidenced by a "Five Star Commitment" to the program made in 2002 by Mr. Bush, with the "goal of helping 5.5 million minority families attain homeownership by 2010."

Sixteen months ago, when Herman made his comments, he was lamenting "a current shortfall in funding." But even that was too much for the Bush administration, and the 2009 Bush budget calls for complete termination of the $39 million that Self-Help Housing Grants are due to receive in 2008. That $39 million represents six one-thousandths of one percent of the official Pentagon budget for 2008.

Program #4: Single Family Housing Direct Loans (Section 502)

Section 502 loans "are primarily used to help low-income individuals or households purchase homes in rural areas. Funds can be used to build, repair, renovate or relocate a home, or to purchase and prepare sites, including providing water and sewage facilities."

The National Rural Housing Coalition—which "promotes and defends the principle that rural people have the right, regardless of income, to a decent place to live or an affordable home, clean drinking water, and basic community services"—had this to say: "Section 502 is the only federal program targeting homeownership opportunities to low- and very-low-income rural households... Since its inception, Section 502 has provided loans to almost two million families at an extremely low cost to the federal government of less than $11,000 in budget authority per unit. Unfortunately, while there is unprecedented demand for Section 502, actual loans made to low-income people are decreasing in number. ...as of August 2006 [the program] had on hand over 37,000 loan requests totaling $3.5 billion."

The Section 502 budget for 2008 is $105 million, about three percent of the demand of at least $3.5 billion (no doubt higher now). But even that three percent is slated to be eliminated in the 2009 Bush budget. This amount is slightly more than the cost of a single F/A-18E/F Super Hornet fighter jet, of which the Navy is purchasing 36 in the coming year.

Program #5: Revitalization of Severely Depressed Public Housing (HOPE VI)

The history of public housing is a long and tortured one. When the first public housing complexes were built, says the National Housing Institute, they "symbolized a generous system, giving comfort to Americans who needed help finding shelter." But they "gradually transformed into the symbol of urban decay," and by the 1980s Ronald Reagan was using them as a symbol of "crime, poverty, and crumbling infrastructure." In response, Congress created the HOPE VI program in 1993 "to transform the housing, communities, and families suffering from the conditions" that had evolved.

HOPE VI has had successes, but also many problems, including a net loss of public housing units, many forced relocations, a top-down bureaucratic structure, and many often-traumatic disruptions in the lives of residents. Still, as Kevin E. Marchman, Executive Director of the National Organization of African Americans in Housing testified in 2003, "HOPE VI works and it needs to be reauthorized." Joan Walker Frasier, speaking on behalf of Everywhere And Now Public Housing Residents Organizing Nationally Together (ENPHRONT), also stated that "the HOPE VI program should be re-funded and reauthorized," with "comprehensive reforms" made in the process.

Two responses to this program—and the "distress" it was intended to address—have come out of Washington. One response is a bill in the House of Representatives, sponsored by California Democrat Maxine Waters, to re-authorize and reform the program. That is H.R.3524, which passed the House on January 17th and went to the Senate.

The other response is the response of the Bush administration, which would like to terminate the program. This would "save" $100 million, approximately seven one-hundredths of one percent of the amount the U.S. has officially spent (so far) in attacking and occupying Afghanistan.

(An indication of the care with which such cuts are made is seen in the Bush mis-naming of the program on its list of program terminations. Bush calls it "Revitalization of Severely Depressed Public Housing." It is actually "Severely Distressed Public Housing.")

Program #6: The Rural Housing and Economic Development Program (RHED)

According to the National Low Income Housing Coalition, "RHED provides resources to support comprehensive community development efforts that will address the unique housing and economic development needs of rural communities." RHED emphasizes help to "certain regions and populations," such as "Central Appalachia, the Lower Mississippi Delta, the Border Colonias, farm workers and Native Americans."

The Bush Administration has proposed eliminating RHED in each budget request from 2003 through the present. Congress has always funded it anyway, but the amounts are shrinking. NLIHC says that "The continued threats to RHED raise serious concerns for local and state organizations around the country fighting to preserve and create affordable rural units. Federal funding for rural housing programs administered by the USDA has dramatically decreased over the past 20 years and RHED [administered by the Department of Housing and Urban Development] provides a desperately-needed complement to these increasingly scarce rural housing funds. RHED has successfully helped local organizations in high-need rural areas, especially in Indian Country, to increase their capacity to meet their communities' needs."

The Rural Housing and Economic Development 2008 budget is $17 million. That's about three one-thousandths of one percent of the amount the U.S. has officially spent (so far) to invade and occupy Iraq.

Program #7: Bureau of Indian Affairs—Housing Improvement Program

On June 27th of last year the National Congress of American Indians passed a resolution specifically supporting the continuation of the BIA's Housing Improvement Program (Resolution #ANC-07-031). In it, they said that the program "has become a very effective, well-managed program that can be proven to be accountable in providing housing grants to the tribe with good track records," and that the program " targets the neediest of the needy, where overcrowding, financial hardship, elderly and disabled are the major stipulations for funding..."

The Bush administration wants to terminate this program, at a savings of $14 million. Consider that the courts are currently considering the case of Cobell v. Norton, which is "a class-action lawsuit filed on June 10, 1996, in U.S. District Court in Washington, D.C. to force the federal government to account for billions of dollars belonging to approximately 500,000 American Indians and their heirs, and held in trust since the late 19th century," according to Elouise Cobell, the plaintiff who is a member of the Blackfeet nation in Montana. The total amount of money owed by the federal government in this case may be as high as $200 billion or more. The fact that the Bush budget proposes to "save" $14 million dollars—seven one-thousandths of one percent of the Trust Fund settlement—by cutting Indian housing is almost surreal in its cruelty.

NOTE: There are three federal housing programs in addition to the seven above that are slated not for termination, but for severe cutbacks. For reasons of space I decided not to go into detail on those.