FY 1999 Annual Performance Plan

Provide Empowerment and Self-Sufficiency Opportunities for Low-Income Individuals and Families, Particularly the Nation's Poor and Disadvantaged

Introduction

To effectively implement this objective, the Department has proposed an initial four-pronged action plan to begin implementing the Personal Responsibility and Work Opportunity Reconciliation Act of 1996:

• Creation and retention of jobs;

• Use of tenant-based rental assistance to link welfare recipients to jobs;

• Coordination of housing assistance with Welfare Reform efforts; and

• Provision of services to help welfare recipients make the transition from dependency to work.

HUD is in a unique position to assist in helping people move from welfare to work. Through public housing, Section 8, and CDBG target areas, HUD programs have a physical presence where the poor live. HUD programs provide flexible assistance capable of effecting different interventions that may be necessary to promote self-sufficiency. HUD can both provide the assistance needed to create and retain jobs and provide the training and other service that lower income individuals need to be able to take advantage of those jobs. Flexible formula grants, like CDBG, let communities take advantage of more restricted funding provided by other agencies. CDBG, for example, can fund local plans for promoting self-sufficiency. It can also fund services that may be needed to help people take advantage of opportunities provided through the Departments of Transportation and Labor. HUD, in fact, is working with other agencies to help promote self-sufficiency. For example, its JOBS Plus demonstration is jointly funded and closely coordinated with HHS. HUD's Bridges to Work demonstration features coordination with Transportation.

Strategies

Creation and Retention of Jobs

Bringing jobs and job access to distressed communities requires working with other Federal agencies and contributes to the Administration's goal of making welfare reform work. Targeting neighborhoods with high concentrations of poor families, including those on welfare, HUD's core economic development programs can be used to generate jobs that will be available to welfare recipients entering the work force. The programs summarized below will produce good jobs for those neighborhoods.

Empowerment Zones and Enterprise Communities (EZ/EC) (Round II)

A key element in the strategy to produce suitable jobs in distressed areas and empower low- and moderate-income persons to take advantage of those jobs is the EZ/EC program. Each of the 72 Urban EZ/ECs has developed performance benchmarks which provide a blueprint for an entrepreneurial way to distribute funds and to fulfill commitments. Those benchmarks are compiled into a unique Strategic Plan for urban revitalization, which monitors these zones and communities closely and helps ensure that progress proceeds in an orderly fashion.

HUD promotes partnerships with private and community service providers who can help residents achieve self-sufficiency and has proposed an expansion of Empowerment Zones to help communities create more job opportunities. Current strategy includes legislation to create another round of 20 EZs and 80 new ECs across the country. These new EZs and ECs would focus on moving residents from welfare and poverty to work.

CDBG, Economic Development Initiatives (EDI) and Section 108

Section 108 allows communities to leverage private funds for large-scale job creation and community development initiatives. EDI grants supplement these programs by providing grants for large-impact projects. EDI money may be used to capitalize innovative financial institutions and has already been used very successfully for this purpose. CPD will continue to improve the leverage of CPD programs by focusing job creation activities on the Section 108 loan guarantee along with the EDI grants.

Section 3

Section 3 of the Housing and Urban Development Act of 1968, as amended by the Housing Act of 1992, requires that economic opportunities generated by HUD financial assistance shall, to the greatest extent feasible, be given to low and very low-income persons. This applies to public housing programs and to programs for housing rehabilitation and construction and other public construction projects. It is a program that essentially links low-income and welfare recipients to jobs.

Priority for training and employment is provided to low-income persons who are residents of public and assisted housing, residents of the neighborhood where the programs are being operated, participants in Youthbuild, and homeless persons. Priority in contracting is also given to businesses which offer opportunities to these classes for low-income persons. The Department will aggressively work with recipients and their agencies and contractors to reach eligible Section 3 residents and to help them access jobs, training, contract opportunities or other economic benefits.

CPD and other HUD programs: Welfare reform measures

CPD is now working with other program areas of HUD to develop strategies to provide jobs to long-term welfare recipients. These proposals have not yet been finalized. There are hundreds of projects all over the United States funded under the CDBG program listed in the 1995 Action Plans which offer support activities to improve the lives of public housing residents. Often these fund self-sufficiency programs for public housing residents.

Coordinate Housing Assistance with Welfare Reform Efforts

Rent Incentives to Reward Work

Creating income diversity in traditional public housing through rent incentives helps to retain/attract working families and encourages families to move to work or better work. Mechanisms such as ceiling rents will permit PHAs to retain and attract working families by setting ceiling rents that reflect market value. PHAs are also creating work incentives for newly-employed families by allowing them to retain more of their incomes as they meet the "costs" of transitioning from welfare to work. The use of site-based waiting lists, where they can be implemented in full compliance with all fair housing laws, increases public housing's attractiveness to working families by permitting them to choose where they live.

HUD supports changing public and assisted housing rent rules that discourage work. When tenant rental payments are tied to income, any increase in income leads to an automatic rent increase. To prevent this disincentive, HUD has supported ceiling rents in public housing and provided Housing Authorities with the flexibility to disregard some or all earned income.

Provision of Services

Regional Outreach Counseling

Counseling can help Section 8 recipients - who are often welfare recipients - identify housing locations that improve access to jobs and supportive services throughout a metropolitan area.

Neighborhood Networks

The program, Neighborhood Networks, provides computer learning centers and education and employment services in privately owned assisted housing developments. These centers are funded from existing project revenues and reserves and do not require new appropriations.

Youthbuild

Youthbuild is a highly effective program that provides at-risk youth with educational and employment skills. The program offers 16 to 24 year old high school dropouts general academic and job skills training, as well as apprenticeship constructing and rehabilitating affordable housing.

HOME Tenant Based Rental Assistance

Jurisdictions may use HOME funds to provide tenant based rental assistance to assist welfare recipients as they transition to jobs. HOME tenant based rental assistance is a flexible resource which communities can integrate into locally-designed plans to assist persons with special needs, including those participating in self-sufficiency programs.

Linkage to HUD 2020: Management Reform Plan

CPD approves over 1,300 competitive grants a year, but staff reductions of 23% since 1992 have prevented adequate monitoring. The introduction of the Grants Management System includes an annual comparative review of all entitlement grantees, showing the full spectrum from "best practices" to high-risk projects and cities in need of technical assistance and monitoring. Structurally, the Office of Block Grant Assistance and the Office of Affordable Housing will be combined into the Office of Community Development.

For other reforms which will impact on this objective, see also the Linkage section under earlier objectives, especially Community Resource Representatives (Objective #1).

External Factors

As with other objectives, HUD's ability to provide self-sufficiency opportunities is constrained by the nature of its programs. Where HUD provides flexible assistance to cities, counties, housing agencies, and States to use at their discretion, HUD has no direct control over the extent to which the funds will be used to address this objective.

Also as with other objectives, broad economic factors greatly affect the extent to which low income people will become self-sufficient. Vigorous, sustained economic growth will do more to promote self-sufficiency than HUD can do. And a decline in the economy will more than offset HUD's best efforts.

The job readiness of those with low incomes is another key external factor. Where people reach adulthood with little education, there are limits to the types of jobs to which they can aspire. Certainly, HUD-funded job opportunities and services can help, and along with educational and training opportunities funded through other agencies, they should have an important impact. But realistically, relatively few people who have reached their 30s with little education, with families, and little work history, will achieve great success in this economy.

Annual Performance Goals

The ultimate goal of this objective is to move an increasing number of residents of assisted multifamily projects off welfare. The measurement of this indicator will depend on future collaborative efforts between HUD, HHS and Labor. Providing economic opportunities for low and moderate income persons through creation and retention of jobs will also be the result of coordination with other agencies. However, HUD can measure the number of jobs created as a direct result of HUD funds, especially EDI and Section 108. We also can increase annually the number of partnerships that help residents achieve self-sufficiency in each Empowerment Zone and Enterprise Community.

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