HUD has proposed to radically overhaul the Federal
government's relationship with America's communities. There are
three components of this reinvention.
Sweeping Program Consolidation
HUD proposes to consolidate 60 major HUD programs into three
performance-based funds:
The Community Opportunity Fund (COF) will stimulate
community revitalization. All current HUD grant programs for
community economic development--including Community Development
Block Grants (CDBG) and Economic Development Initiative
grants--will be consolidated into this fund. Localities and
States will have broad flexibility to use resources to stimulate
business growth and expand job opportunities in distressed
communities.
The Affordable Housing Fund (AHF) will support production
and rehabilitation of affordable housing. All current HUD grant
programs for production and preservation of housing for low- and
moderate-income households will be rolled into this fund, which
will be administered by local and State governments.
Housing Certificates for Families will provide direct
assistance to low-income households for affordable rental housing
and for homeownership. All current public housing, assisted
housing, and Section 8 rental assistance programs will be
combined into this certificate fund, which will be administered
by public housing agencies (PHAs).
Transform Public Housing
Second, HUD proposes to phase out direct subsidies to public
housing authorities. Instead of subsidizing buildings and
bureaucracies, HUD would provide direct assistance to residents
who would be able to make their own choices about where they
live. This approach would force PHAs to compete with private
landlords for subsidized and unsubsidized tenants. When this
transition is complete, public housing will be indistinguishable
from conventional housing, and it will be a true asset to
communities.
Create a Federal Housing Corporation
HUD will transform the Federal Housing Administration into a
business-like, government-owned corporation: the Federal Housing
Corporation (FHC). FHC will transform today's FHA into a
results-oriented, financially accountable operation while
ensuring its capacity to continue serving the homeownership and
affordable rental needs of people and places that the private
sector leaves behind. It will utilize the strengths of private
market partners to expand homeownership opportunities. The new
corporation will continue to serve the needs of working families
who require low-downpayment loans, and residents in central
cities, older neighborhoods, and other underserved markets, and
develop more affordable rental housing.
The reinvention proposal will transform HUD from a lumbering
bureaucracy to a streamlined partner with State and local
governments. Significant downsizing is anticipated, reducing
HUD's current workforce of 12,000 today to fewer than 7,500
employees. The current 80 field offices will shrink to roughly
60.
Content Archived: January 20, 2009