NEW HUD BUDGET WILL EXPAND AND PRESERVE AFFORDABLE HOUSING, BENEFIT SENIOR CITIZENS AND CREATE JOBS

• Remarks by the President on Signing of Veterans/HUD Bill
• Excerpts from Press Briefing by Secretary Cuomo
• Back in Business: Key Provisions of HUD's FY 2000 Budget
• Estimated HUD Assistance for Selected Programs by Entitlement Community

WASHINGTON - The landmark $26 billion Department of Housing and Urban Development budget for Fiscal Year 2000 signed into law by President Clinton today will expand and preserve the supply of affordable housing, benefit senior citizens, create jobs, and help revitalize communities.

"This legislation is important and not just for what it will achieve but for how it was achieved," President Clinton said. "It was achieved because members of Congress chose to put aside partisanship and work with us in good faith, on matters crucial to the future of our nation."

HUD Secretary Andrew Cuomo joined the President in saying the HUD budget was a model of how bipartisan cooperation can be used to resolve remaining budget disputes.

"This is the best HUD budget of the Clinton Administration," Cuomo said. "The budget is a direct result of President Clinton's strong and effective advocacy of HUD programs, his willingness to veto any budget that failed to provide adequate funding, and his work with Congress."

"This budget benefits our nation by putting HUD back in the business of creating and preserving desperately needed affordable housing, jobs and economic development for America's people and places in greatest need," Cuomo added. "The budget is also a vote of confidence in the performance of the Department of Housing and Urban Development and the management reforms we've successfully implemented. "

Cuomo said the budget, which provides $1.5 billion more for HUD programs than the Department received in Fiscal Year 1999, includes:

• 60,000 new rental assistance vouchers - the largest expansion of affordable housing in seven years - along with increased funding for public housing, and a new initiative to protect residents of subsidized housing opting out of the Section 8 program.

• A Housing Security Plan for Older Americans that will enable HUD to develop a broad range of housing options to meet the changing housing needs of senior citizens.

• Major job creation and economic revitalization initiatives that include the new America's Private Investment Companies (APIC) initiative, a second round of new Urban and Rural Empowerment Zones, and redevelopment of formerly polluted commercial and industrial sites know as brownfields.

• Increased funding for public housing authorities, homeless assistance and prevention programs, and the fight against housing discrimination.

• Making HUD's Community Builders a permanent part of the Department.

"Last February I said the budget President Clinton proposed for HUD would open new doors to opportunity for people throughout this nation," Cuomo said. "Today, I can say that the budget the President has signed achieves this important goal."

Here is a more detailed look at the highlights of the new HUD budget:

EXPANDING AND PRESERVING AFFORDABLE HOUSING

• $347 million to provide new Section 8 rental assistance vouchers to 60,000 low-and moderate-income families. This exceeds the 50,000 new vouchers in HUD's 1999 budget. The expansion in this critical program follows a four year period between FY 1995 and 1998 when Congress failed to appropriate any funds for new Section 8 vouchers.

• An increase in public housing operating funds from $2.8 billion in 1999 to $3.1 billion in 2000, and funding of $575 million for the HOPE VI public housing revitalization program. These programs are transforming public housing by removing and replacing the worst units, restoring troubled public housing authorities to financial integrity, demanding household accountability and promoting greater income diversity.

• Extending and expanding a HUD initiative that will benefit people already living in apartments that receive Project-Based Section 8 rental assistance subsidies. During the past year, communities across the country have experienced the loss of thousands of units of affordable housing when landlords opted out of the Project-Based Section 8 program. When this happens, residents who can't afford big rent increases have to move out of their apartments, and many have nowhere to go. In the next five years, more than 900,000 HUD Project-Based Section 8 contracts with rental property owners will expire. In April, HUD began an emergency initiative to address the growing problem of opt-outs. The new HUD budget supports the approach HUD took in April by incorporating the emergency initiative into law. The initiative provides market rents to below-market properties most likely to opt out, giving landlords of high-quality housing an incentive to remain in the Section 8 program. To protect residents living in apartments that withdraw from the Project-Based Section 8 Program, the budget allows HUD to provide rental assistance that will allow residents to continue paying their current rents. The budget also takes other steps to protect residents.

• This initiative provides a full range of options - a continuum of care - to meet the housing needs of America's senior citizens. This includes: 1) Continued funding of HUD's successful Section 202 elderly housing program at last year's level of $660 million. 2) A $50 million increase in funds to hire service coordinators, who help senior citizens get services they need to continue living in their HUD-subsidized apartments. 3) $50 million to convert existing HUD senior housing to assisted living facilities for senior citizens who need a higher level of care. The legislation also allows seniors already receiving assistance through housing vouchers to use the vouchers in assisted living facilities for the first time, enabling many to avoid moving into more institutional and expensive nursing homes. 4) An expansion of HUD's reverse mortgage program, which allows older Americans to borrow against the value of their homes without selling the homes, so they don't have to sell their homes to get needed cash.

CREATING JOBS AND REVITALIZING COMMUNITIES

• $4.8 billion - a $50 million increase - for the Community Development Block Grant (CDBG) program, which is the mainstay of HUD's economic development activities. CDBG provides local communities with flexible tools and resources to meet local community development priorities and objectives.

• $20 million for the new America's Private Investment Companies (APIC) program. The $20 million investment provided in the legislation is designed to stimulate the investment of over $540 million in privately issued, government guaranteed loans and an additional $275 million in private equity capital. These funds will help businesses create jobs in inner cities and rural areas.

• $70 million for communities selected earlier this year as part of a second round of Urban and Rural Empowerment Zones. The Empowerment Zones are designated areas that receive important federal tax incentives as well as direct federal, local and private funding for economic development and social services. A total of $55 million will go to these Round II Urban Empowerment Zones: Boston, MA; Cincinnati, OH; Columbia/Sumter, SC; Columbus, OH; Cumberland County, NJ; El Paso, TX; Gary/East Chicago, IN; Huntington, WV/Ironton,OH; Knoxville, TN; Miami/Miami-Dade County, FL; Minneapolis, MN; New Haven, CT; Norfolk/Portsmouth, VA; Santa Ana, CA; and St. Louis, MO/East St. Louis, IL. In addition, a total of $15 million will be provided to the following Round II Rural Empowerment Zones: Cordele, GA; Fargo, ND; the Oglala Sioux Reservation in SD; Riverside County, CA; and Ullin, IL.

• $25 million for Brownfields Redevelopment. Redeveloping Brownfields - moderately contaminated former commercial or industrial sites - and stimulating new investment to create jobs at the sites is central to the task of tapping markets in distressed communities, especially in inner cities and older suburbs.

OTHER PROGRAMS

• A $45 million increase for HUD's homeless assistance and prevention programs for a total of over $1 billion, to help ensure the continued success of the innovative Continuum of Care strategy. The additional funding will support coordinated community approaches to moving homeless people and families to stable, permanent housing and into jobs and self-sufficiency.

• A $7 million increase to provide $232 million for the Housing for Persons With AIDS (HOPWA) program, which provides a broad range of housing and service assistance.

• A $4 million increase to provide $44 million to fight housing discrimination. The increase will fund HUD's groundbreaking nationwide audit of housing discrimination. The audit will provide an in-depth examination of discriminatory barriers and create a detailed understanding of the patterns of discrimination in housing for rent and for sale nationwide. This is the first such effort to include all of America's major racial/ethnic groups and to cover urban, suburban, and rural communities.

• The budget also preserves and makes permanent HUD's innovative Community Builders Program, which has made HUD more responsive and effective in serving the American people. The Community Builders have been widely praised by independent experts on government reinvention, including: Booz-Allen & Hamilton, Ernst & Young, Andersen Consulting, Harvard's Kennedy School of Government, and author David Osborne. The budget preserves the jobs of the 400 Community Builders serving in permanent positions. The additional 400 Community Builders serving in two-year temporary positions will be allowed to serve in those positions until September 1st, 2000. They will be able to compete for 400 new permanent Community Builder positions.

• The budget also continues funding at 1999 levels for the following programs: $1.6 billion for the HOME program allowing HUD to continue to utilize this important tool for enhancing the capacity of the nation's affordable housing producers; $43 million for the Youthbuild program that provides educational and job skills training for at-risk youth while expanding the supply of affordable housing; $80 million to reduce health hazards from lead-based paint; and $25 million for HUD's Office of Rural Housing and Economic Development for affordable housing, economic development and capacity building efforts in rural and Native American tribal areas. The budget also increases funding for the Section 811 housing program for people with disabilities to $201 million from $194 million in 1999.

Content Archived: January 20, 2009