FY 99 Budget
A. Step 1: Close the Competence Gap
I. A Two-Step Strategy
Shortly after taking office in February of 1997, Secretary Cuomo
announced that to survive, the Department of Housing and Urban
Development would have to reinvent itself. To fulfill its mission
of helping revitalize America's communities, HUD would have to
demonstrate that it is a competent steward for taxpayers' investments
- HUD would have to restore public trust.
In one year, HUD has made great strides in proving
that it can be reformed, to show that it can competently deliver
programs and services to communities. HUD's organization is changing
- consolidating within and across our programs, creating new functions
to better serve the taxpayers and communities, streamlining our
In 1997, HUD initiated a historic Management Reform
effort, cracked down on waste, fraud, and abuse, averted a national
housing crisis, created more affordable housing opportunities
for Americans, and revived HUD's historical commitment to fair
HUD's FY 1999 budget begins to reap the rewards of
this commitment, as HUD shifts its focus from management reform
to enhancing program design and resources to serve communities.
- Reorganizing to Deliver Results.
on private sector practices, HUD has fundamentally restructured
its operations by consolidating routine functions into "back
office centers" and improved customer service by establishing
"storefronts" to present a user-friendly HUD to communities.
HUD has created new cross-cutting real estate assessment and
enforcement centers to protect its investment of billions of federal
dollars in public and assisted housing. And the Department has
taken steps to consolidate its program structure and streamline
the program application process to improve customer access to
the full range of HUD resources.
- Streamlining HUD's Workforce. Through
unprecedented employee personnel actions such as buy-outs and
personnel reorganization, the Secretary has been able to streamline
operations. HUD's workforce is now 9,050, down from 10,600 at
the end of 1996. To date, HUD has posted and filled 1,100 positions
in the new organizational structure, has 90 percent of new managers
in place in the new structure, and executed 1,000 buyouts.
The Secretary negotiated a historic agreement with HUD unions
to work cooperatively to staff the new streamlined HUD with no
layoffs before 2002. Virtually all personnel actions will be
complete by March 1, 1998.
More importantly, HUD is deploying staff where they
are needed most, to provide effective monitoring and oversight
of troubled housing projects and troubled PHAs, and to provide
value-added front-line services to HUD customers in their communities.
- Changing HUD's Culture. Zero Tolerance
for Waste, Fraud and Abuse.
Secretary Cuomo took office, he vowed that precious Federal resources
would no longer be squandered. HUD and the U.S. Department of
Justice have launched a "Get Tough" campaign to crack
down on FHA-insured and Section 8-assisted property landlords
who abuse federal housing programs to enrich themselves while
failing to provide safe and decent housing for those in need.
HUD's beefed-up enforcement has resulted in over 100 debarments
in 1997, more than three times the 1996 total. The ensuing investigations
have led to total cash recoveries for taxpayers of over $20 million
in 1997, compared with about $15 million in recoveries in 1996.
In July 1997, Secretary Cuomo appointed an FBI agent
to oversee the new Enforcement Center. Its mission:
protect the taxpayers' investment and restore the public trust.
Working cooperatively with the Department of Justice, the FBI
and other law enforcement teams, the new Enforcement Center will
take action against those found abusing HUD programs. The Enforcement
Center will also proactively generate an ongoing Fraud Control
Strategy that identifies potential fraud situations and develops
appropriate policy responses to ensure that fraud is stopped before
- Using Technology to Improve Services.
Inside and out, HUD is
incorporating the benefits of new technology to more efficiently
manage and deliver services. Using state-of-the-art technology,
HUD is integrating the 89 financial systems into a single, user-friendly
system that helps managers make decisions and clearly shows how
communities invest their HUD dollars. New technology has made
it possible to consolidate FHA single family processing from 81
field offices into four regional processing centers, and reduce
processing time from 4 to 6 weeks to 2 to 4 days. HUD is introducing
computerized kiosks across the country to provide the public with
useful information, such as tips on buying a home and descriptions
of how HUD helps create jobs in their community. The kiosks will
use inter-active software and video, including mapping software
that shows how HUD funds are invested in each neighborhood.
HUD's management reform is not complete. In 1998,
we will continue to keep our focus on broadening and deepening
the roots of reform to ensure that new systems are brought on
line, new centers are opened and operating, and HUD's ways of
doing business are changed. HUD's zeal for eliminating waste fraud
and abuse will not diminish. By September 30, 1998, our major
implementation efforts will be substantially complete.
Already, HUD's commitment to reform has paid dividends
with the public and with the Congress. Last year, Congress passed
the first major housing legislation in five years, solving a potential
Section 8 crisis facing the agency and the public. This legislation
ended excessive subsidies to private landlords and will save taxpayers
$562 million this year, nearly $1.6 billion over five years, and
billions of additional dollars in the future. Also at HUD's urging,
Congress increased HUD's 1998 budget to renew expiring Section
8 contracts assisting 4.4 million Americans, and provided sufficient
resources to renew the growing number of expiring contracts through
B. Step 2: Close the Opportunity Gap
HUD did not undertake management reforms solely to improve administrative
capacities. Rather, HUD has worked to restore public confidence
in order to win more resources to create jobs, stimulate economic
activity, house low- and moderate-income Americans and end the
plague of housing discrimination.
The Clinton Administration has taken note of the
progress that HUD has made in reforming itself. The result: the
smartest, strongest budget in a decade. New funding for HUD is
up by $1.8 billion, a significant increase for program activities.
Virtually all program areas receive increases under
HUD's FY 1999 budget proposals. But HUD's budget is not simply
about spending more money in the same old programs. Where programs
have proven track records - like, HOME, CDBG, and the Homeless
Continuum of Care - HUD is investing more resources.
But HUD's budget also enhances and improves its programs.
The budget invests in several reinvented programs:
- new flexible vouchers targeted to meet the needs
of welfare recipients making the transition to work and to homeless
families ready to leave shelters or transitional housing;
- a Community Empowerment Fund which enhances the
existing Section 108 and Economic Development Initiative programs
to provide capital to businesses and to create jobs in city neighborhoods;
- a new HOME "bank" allowing communities
to leverage private sector resources with their HOME dollars to
produce more housing; and
- using CDBG funds to stimulate better regional
cooperation between cities and counties.
Funding for initiatives to produce Jobs and Economic
Development is increased by a billion dollars, including $400
million for a new Community Empowerment Fund; $50 million more
for CDBG, combined with reduced set-asides, effectively increases
CDBG funds by $238 million; 50,000 new Welfare to Work vouchers
designed to help welfare recipients find and retain jobs; and
a doubling of funds for Brownfields redevelopment. In addition,
the budget includes $150 million per year for 10 years for a second
round of urban Empowerment Zones, funded on the mandatory side
of the budget.
This budget also puts HUD squarely back in the housing
business. In addition to renewing all 2 million units with expiring
Section 8 contracts, the budget provides:
- 100,000 new vouchers used for targeted purposes,
including the 50,000 for welfare to work and 34,000 for permanent
housing for homeless individuals and families;
- increased FHA loan limits, which allows 600,000
more hard-working American individuals and families to qualify
for FHA mortgage insurance each year;
- a new HOME Bank, which combines increased funding
for HOME and a new HOME loan guarantee feature that will allow
communities to borrow up to five times their HOME grant funds;
- $25 million for Homeownership Zones;
- enhanced funding for public housing, with full
funding of operating subsidies and HOPE VI revitalization efforts,
along with an increase of $50 million in capital subsidies; and
- a 73 percent increase in funding for fair housing
activities to help meet the Secretary's pledge to double fair
housing enforcement actions.
The goal of HUD's FY 1999 budget is to be a better
partner for communities to empower them to address their full
array of needs. To accomplish this goal, HUD has provided both
more resources and better tools for communities.
Content Archived: January 20, 2009