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HUD'S MISMANAGEMENT CREATES HOUSING CRISIS FOR MOST VULNERABLE AMERICANS BY SLASHING FUNDS 30 PERCENT Some of the most vulnerable members of our society - the elderly, children and persons with disabilities - are facing a 30 percent loss in housing funding this year. HUD unexpectedly notified Local Housing Agencies (LHAs) on Jan. 6 that their Operating Subsidy would be slashed by 30 percent. HUD admits the drastic cut is due to its own miscalculations and inadequate information systems. LHAs across the country are reeling from the news, grappling with how to manage a cut of this magnitude. They are making every effort to minimize service disruptions but a dramatic reduction of this size will make it virtually impossible. Immediate impacts include staff layoffs and cuts in basic management services such as routine maintenance calls and preparing vacant units for already long waiting lists of families. Fewer affordable housing units will be available for occupancy. Other services likely to be reduced include safety and crime prevention programs; resident services; day care and after-school programs; job training and education programs. These cuts will also undermine critical public/private partnerships that bring much-needed private investment to public housing neighborhoods including revitalizations brought about by the highly successful HOPE VI program. Public housing serves more than 3 million low-income people across the country - almost 45 percent of them seniors and persons with disabilities. One million children live in public housing. These vulnerable citizens will bear the burden of HUD's miscalculation. This reduction in federal funding comes one year after the Administration killed the successful Public Housing Drug Elimination Program (PHDEP). PHDEP provided essential law enforcement services to enhance community-policing efforts and also funded drug prevention and youth programs. The Drug Elimination program proved enormously effective in reducing crime in public housing communities and surrounding neighborhoods across the country. In an ironic twist, HUD justified killing PHDEP by claiming its activities could be funded through the Operating Subsidy, which now will be cut by 30 percent. Even more alarming, LHAs that began their fiscal years on Oct. 1, 2002 have just been notified by HUD that they will receive only 54 percent of their operating funds until further notice. Many LHAs are concerned about meeting payroll obligations and providing basic services in the immediate weeks. Without more money, nearly one fourth of the housing authorities in the country will run out of operating funds on April 1, 2003. As this funding crisis deepens, HUD has failed to take any action to seek additional funding. We call on President Bush and Congress to ensure that LHAs can continue to provide well-managed, safe and decent housing. This can be accomplished by providing $250 million in emergency supplemental funds to cover the FY02 shortfall and adequate funds to meet operating needs for FY03. ###
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