March 3, 2010
National CAPACD News - March 2010
2) Applications for Community in the Capital are coming up!
3) Pre-Convention web videoconference program to be announced
1) Federal Policy Update: The President’s Proposed 2011 Federal Budget - What is at stake for low income neighborhoods and communities?
The Big Picture
As community-based organizations struggle to assist communities impacted by double digit unemployment and a shrinking social safety net, what relief and long term vision does the President’s budget offer?
The Center for Budget and Policy Priorities (CBPP) notes that despite the self described spending “freeze,” the President is in fact proposing a total $266 billion increase in economic relief. The CBPP describes this total amount as “well designed” to prevent a “double dip” or second recession.
But other progressive voices questioned a budget that caps social spending but grows the military. The Center for Community Change makes a strong case that the President’s agenda and proposed budget does not do enough to end the present crisis. Economist Paul Krugman calls the modest extension of the stimulus “an awesome national failure." Proposals for employer tax credits and other business tax relief are predicted to have limited effect, with unemployment to remain at current levels until 2012. At the same time, the proposed budget does little to help recession-hit states avoid deep cuts to public schools, health programs, and social services.
As the jobs and budget debate shifts to Congress, conservative Democrats and Republicans are calling for deeper cuts in social spending. Meanwhile, progressive Democratic representatives have sought a more robust federal response to the economic crisis. Despite uncertainty over the outcome of the debate, we begin here with an assessment of the Administration’s proposals for housing and community development.
The 2011 U.S. Department of Housing and Urban Development (HUD) Budget
The 2011 Budget reflects the Obama Administration’s first opportunity to fully present its priorities for community development. Overall, the proposal calls for an increase of more than $1 billion in actual HUD programmatic spending. But in order to support new initiatives the proposal reduces support for some important programs within the agency.
For example, the proposed budget cuts the HOME program by 10% (approx. $175 million)--a program that funds state and local government affordable housing construction and rehabilitation. It completely “suspends” funding for new Section 202/818 housing for seniors and the disabled-for a combined cut of about $750 million. Other cuts include reducing support for nonprofit fair housing organizations. If approved by Congress, these cuts will adversely impact some very viable existing programs.
As it reduces funding in some areas, HUD proposes to create or strengthen others. One important new initiative entitled “Transforming Rental Assistance” seeks to reform support for public and assisted housing and to provide more flexibility to low income families. HUD also seeks to fund a new comprehensive homeless prevention program; the National Housing Trust Fund (which has yet to be funded by Congress), and a number of other programs (for a complete and official description see here). We provide an initial assessment of three new initiatives.
1. Catalytic Investment Competitive Grants ($150 million): HUD proposes to create a new economic development grant program within CDBG. Each year, after a national competitive application process, HUD will grant to about 10 projects at $5-30 million per contract for innovative economic development projects that are relevant to other key HUD initiatives (e.g., Sustainable Communities). HUD intends that the funds be packaged with other HUD funding (e.g., Section 108 loan guarantees) and with private and other public financing - HUD will require projects be leveraged at a 3 to 1 ratio. In a webcast, Mercedes Marquez, Assistant Secretary for Community Planning and Development, said that projects should be place-based, but at scale.
2. Sustainable Communities ($150 million): Although this is not a new budget item (it was first included in the 2010 budget), the Sustainable Communities initiative is now being launched and its elements are only now becoming clear. In this month’s advance notice for $100 million in grants from the 2010 fund, HUD proposes to award grants of up to $5 million each to support regional planning and programs that support sustainable development and practices. As presently proposed, the funding appears to primarily benefit regional planning agencies or local government consortia. Whether or how neighborhood or community based voices and organization will be included is unclear. However, the initiative could result in a long term shift in the allocation of resources within regions, with potential adverse impacts on communities that are left out (more on the proposed program guidelines in a separate alert).
3. Capacity Building ($60 million): HUD has consolidated its Technical Assistance Programs (HOME, Community Housing Development Organization (CHDO), (Community Development Block Grant (CDBG), etc.) and combined it with the Section 4 program (previously a direct HUD Budget line item for LISC, Enterprise and Neighborworks). This amounts to a combined annual budget of $60 million. In FY 2010, the Section 4 budget was $25 million). At least some portion of the $60 million will be open for competition for national and regional intermediaries, or consortia and partnerships that include such intermediaries. The stated intent is that the Capacity Building will now be less oriented towards specific programs and more flexible and responsive to emerging problems. The funds are intended to support creative solutions and implementation of new HUD initiatives such as Choice Neighborhoods, Sustainable Communities and the Catalytic Competition Grants. Intermediaries will assist nonprofits and local governments. Capacity Building funds must be matched with private funds on a 3 to 1 ratio. One potential downside of the elimination of the targeted CHDO TA program is that neighborhood and community based programs may be less able to access support for capacity building.
More changes on the horizon: The FY 2011 proposed budget and comments by HUD administrators reflect an overall effort to more increase targeting of existing funding towards Administration policy priorities, particularly sustainable communities and economic development. For example, Secretary Donovan and others have indicated HUD will soon be creating a new Consolidated Plan process to target block grant funding (including CDBG and HOME). Such reforms could be very welcome, assuming that they also sustain and value what is best about the diversity of American cities.
Other Housing Related Budget Issues:
Three budget items outside of the HUD budget may be of interest to CAPACD members engaged in housing development or counseling.
1. National Foreclosure Mitigation Counseling: The Administration proposes to increase funding for NeighborWorks America’s foreclosure mitigation counseling program from $65 million in 2010 to $113 million in 2011. As in previous years, HUD approved intermediaries will be eligible for grants to be administered by NeighborWorks America.
2. Extension of the Low Income Housing Tax Credit exchange program: The Administration has proposed to extend the critically important tax credit exchange program to support the development of low income housing. The program originated with the economic stimulus program last year and continues to be of high importance to the development of low income housing. Advocates had proposed that the program be expanded and enhanced but these suggestions were not included in the Administration proposal. In the meantime, the extension’s prospects in Congress have become much less certain. See updates on advocacy to support of the housing tax credit program.
3. National Housing Trust Fund: While funding for the NHTF was included in the House jobs bill in December, the Senate’s much more narrow jobs bill omits it. Advocates continue to seek a source to launch the program. For more updated information see NLIHC’s page.
What is next?
The House Appropriations Subcommittee on Transportation, Housing and Urban Development (THUD) has begun to review HUD’s proposed budget. But these discussions are in the context of a larger debate on the overall budget that threaten to impact total spending levels. In the meantime the struggle for passing the Housing Tax Credit and Trust Fund remain in high gear. Action needs to be taken now to support these programs. National CAPACD is tracking developments and staff will be supporting elements of HUD’s and related budget items. Please address your comments and questions to and .
2) Applications for Community in the Capital are coming up!
National CAPACD’s annual advocacy training - Community in the Capital - will be held on May 23-26, 2010 in Washington, DC. This year, we will be particularly encouraging applications from experienced staff at member organizations with an interest in connecting community development issues with policy advocacy. Look for more details later this month.
3) Pre-Convention web videoconference program to be announced
Later this month, National CAPACD will be announcing the launch of our first web ‘Virtual Townhall’ series to connect members with key federal officials, leaders, and experts for discussions on critical issues facing our movement. The discussions will lay a foundation for topics to be addressed in greater depth at our Annual Convention, which will be held in Washington, DC on September 26 - 29, 2010.
4) National CAPACD Staff News
We would like to welcome Sherilyn Tran as the newest member of the National CAPACD team! Sherilyn is our new Housing Program Coordinator, and will be based out of the West Coast office. She will be working to build and support our national housing counseling network. Sherilyn grew up in Oakland, California and was active in community activism during her undergraduate years at UC Berkeley. Prior to graduate school she worked as an organizer with a multiethnic youth program in Richmond, California. She received a Masters in Urban Planning at NYU, and while living on the East Coast interned at member organization Renaissance Economic Development Corporation. Sherilyn may be contacted at .
Long time National CAPACD colleague, Josh Ishimatsu is also joining the National CAPACD team, and will be serving as our ACTION Technical Assistance Program manager. Josh has more than a dozen years of experience in building nonprofit housing and community facilities. He was most recently Director of Real Estate Development at one of National CAPACD’s founding member organizations - Little Tokyo Service Center in Los Angeles, California—and partnered with a number of National CAPACD members in the Los Angeles region in community development projects. Josh has a joint JD and Masters in Urban Planning from UCLA. Josh will be based out of our Oakland office. Josh may be contacted at .
