SAN JUAN, Puerto Rico – U.S. Housing and Urban Development Secretary Andrew Cuomo and Governor Pedro Rosselló of Puerto Rico today signed an agreement that will create a new relationship between HUD and Puerto Rico and benefit all the island’s public housing residents.

Under the agreement, HUD will provide an estimated $130 million in additional funds to benefit the island’s public housing residents over the next four years, along with technical assistance to ensure that the funds are spent effectively and appropriately.

HUD will grant an estimated $20 million a year in increased operating subsidies for the Puerto Rico Public Housing Administration (PRPHA), the second largest public housing authority in the United States. HUD will also provide Puerto Rico with $50 million over four years in grants and technical assistance to make public housing on the island more affordable, livable and safe.

"This agreement will help families in need meet their housing needs," Cuomo said. "When Governor Rosselló was first inaugurated in 1993, he announced ‘a new beginning’ for the people of Puerto Rico. Today marks a new beginning in the cooperation between HUD and Puerto Rico."

The agreement settles a 25-year-old dispute over the housing authority’s operating subsidy. Puerto Rico filed suit four years ago to challenge the formula that HUD used to calculate the operating subsidy.

"I am pleased that this agreement will provide additional needed resources for adequate housing for our most vulnerable families," Roselló said. "I thank the Clinton-Gore Administration and particularly Secretary Cuomo for his leadership in reaching this settlement in benefit of the people of Puerto Rico."

The four main components of the agreement are:

• New Formula for Future Funding: At the completion of a Harvard Graduate School of Design study of the general funding formula for public housing, HUD will fully include PRPHA in a new formula developed from the study.
  
  
• Equal Treatment in the Interim: Until the new formula takes effect, HUD will treat PRPHA like other public housing authorities under an interim operating subsidy formula developed in negotiated rulemaking. HUD will increase PRPHA’s operating subsidy by an estimated $20 million a year to reflect more accurately the authority’s small, rural components.
  
  
  
• Assistance and New Oversight in the Use of Certain Funds: PRPHA will retain $49.43 million in grant funds over four years and be given increased flexibility in their use, subject to HUD approval of work plans. The funds are from the Section 5(h) Homeownership program, the Public Housing Drug Elimination Program, Development Funds, and sales proceeds from the Turnkey III Homeownership program.
  
  

Current HUD funding for Puerto Rico’s Housing Authority in Fiscal Year 2000 totals $261.4 million, which includes $86.9 million in operating subsidies. Congress appropriates an amount for operating subsidies each year that is divided among the 3,191 public housing authorities nationwide.

On Monday, HUD awarded two Puerto Rican non-profit organizations $150,000 in grants to help public housing residents get jobs and become self-supporting. Grants of $75,000 each went to the Corporación para el Desarollo del Oeste, Inc., and the Foundation for the Homeownership Development, Inc. The grants, awarded under the Resident Opportunities and Self-Sufficiency Program, will be used to provide job training, placement and other supportive services.