Affordable Housing Institute : US

With the President’s State of the Union Address — traditionally, a forum for announcing government priorities akin to the Queen’s Speech — set for tonight, deficit reduction appears likely to take top billing:

 

[President] Bush has pledged to cut in half the size of the nation’s annual budget deficits, most recently $413 billion, by the end of his second term, and will send a tighter budget to Congress this year to help do so.  

 

The wars in Iraq and Afghanistan cost $452 billion in 2004.  Add the tax cuts that Bush wants to make permanent, and not much is left.

 

“The Bush reforms are done with just one thing in mind, to cut the federal budget,” said Bruce Katz, director of the Metropolitan Policy Program, at the Brookings Institution, a nonpartisan Washington think tank. Katz was Housing and Urban Development chief of staff under [President] Clinton.

 

If the budget is to be cut, it will be in “domestic discretionary spending,” the Federal term for programs that — unlike Medicaid and Social Security, which are entitlements — are funded annually from finite appropriations.  What are the housing targets?

 

 

Programs like HUD’s HOPE VI, which provided $6 billion to cities including Detroit to tear down dilapidated public housing and build mixed-use developments, likely will face tough budget scrutiny this year.  Detroit received $110 million in 1993 for the Jeffries West Homes, Villages at Parkside and Herman Gardens.

 

In 2000, HUD threatened to revoke more than $32 million in unspent HOPE VI money in Detroit because of delays on the Jeffries project, which is now nearly complete. In a 2001 report, HUD accused the Detroit Housing Commission of waste it said cost the federal government as much as $18 million.

 

Just seven of the 104 HOPE VI projects are complete nationally, said U.S. Rep. Joe Knollenberg, a Bloomfield Township Republican.

 

“It worked well in some areas and in others in was a disaster,” said Knollenberg, a member of the House Appropriations Committee and the HUD committee.

 

Yet Detroit, home of the above three properties, can point to some success in moving residents and families to self-sufficiency:

 

HOPE VI also awarded competitive grants to local housing authorities that creatively address physical, social and fiscal problems. Detroit was chosen as a HOPE VI site in 1993 and received funds for the Jeffries West Homes, the Villages at Parkside and Herman Gardens. Approximately eight partners are working with Family Service to reduce poverty. Residents are receiving assistance in getting services they need to obtain and keep livable wage jobs.

 

Meanwhile, back at the cuts:

 

Knollenberg said Bush likely would keep support for home ownership programs and also scrutinize programs like Section 8, the rental voucher program.  Costs for that program increased by 41 percent over four years ago.

 

“You are going to see them look very closely at [Section 8],” said Knollenberg. “The emphasis is going to be on the homeowner.”

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