Why Can’t HOME Deliver the Affordable Housing Goods?

In the late 1980s, a Connecticut legislator asked a deputy housing commissioner why his agency wasn’t building enough multifamily housing despite the bonds the legislature authorized for that purpose. The commissioner responded that the Housing Department (now, the Economic and Community Development Department) didn’t actually build housing, but channeled the funds to other organizations—mostly nonprofit organizations and public housing authorities. The ability of these intermediaries to build multifamily housing depended on several factors, including knowledge, expertise, and experience building such housing.

A recent Washington Post article hints there are similar issues with the U.S. Department of Housing and Urban Development’s HOME program. It describes how HOME dollars allocated for specific affordable housing projects either weren’t spent or failed to deliver the promised number of units.  The fallout: “Congress last month cut the HOME program’s budget by $600 million—nearly 38 percent—citing mismanagement.” Housing advocates countered that this was a bad move, “estimating that the program will produce 31,000 fewer homes this fiscal year.”

Was Congress wrong to cut a program that apparently isn’t delivering the goods?  Charlotte, North Carolina’s housing director Pamela Wideman thinks so, citing several successfully completed HOME-funded projects. But, she also provided a clue as to why other HOME-funded projects couldn’t put numbers on the housing boards. “In the past…local housing officials sometimes partnered with smaller nonprofit developers, a HUD requirement, and cut checks before construction started.” She even described a proposed 25-unit project that received $160,000 in HOME money in 2001 that today is an empty lot.

Wideman’s solution: more-aggressive HUD involvement in the projects. “In my mind,” she said, “it’s been reactive from HUD when pressure is coming. It should not be in this reactive or crisis mode.”