Leaked HUD plan sends chill through Philly housing community

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Housing and Urban Development Secretary Ben Carson speaks to HUD employees in Washington, Monday, March 6, 2017.

Philadelphia officials know that the leaked budget proposal that suggested the Trump administration considered cutting billions of dollars from the Department of Housing and Urban Development was just that -- a proposal.

But the fact that it was floated at all sent an alarming signal to the city’s housing advocates, who say large cuts to the agency could have a dramatic impact on Philadelphians.

“I have no idea what we would do,” said Council President Darrell L. Clarke. “Unlike in prior years, the Republicans control all facets of government -- there was always a president to put a stopgap on those drastic cuts. Given the makeup of our current government, I’m really concerned about where the backstop will be.”

The city benefits from millions in federal housing funds, including grants that help fight foreclosures and funding for its ambitious and controversial redevelopment plan for North Philadelphia’s Sharswood neighborhood.

The proposal, reported in the Washington Post on Wednesday, suggested cutting more than $6 billion from HUD's existing $46.5 billion budget, slashing funds to city and state housing authorities by 13 percent, and eliminating the Community Development Block Grant program -- which, Clarke said, Philadelphia relies on for a number of neighborhood support programs across the city.

HUD spokesman Jereon Brown said the document leaked to the Post was an early one, and part of a budget process with “a lot of back and forth between agencies.” The  HUD budget proposal has since changed, he said, but he said he hadn’t seen the latest proposal.

“This is a normal process of going back and forth,” he said. “I'm not sure how you would be able to determine the impact on Philadelphia, because the document the Post reporter was given was a very early document.”

A spokesman for the city’s Planning and Development Department declined to comment until the Trump administration releases its formal budget proposal.

Kelvin Jeremiah, the head of the city’s housing authority, said the proposed cuts would be “catastrophic," but said that because the leaked document was only a preliminary proposal, “it is important not to panic.”

Clarke said that even preliminary proposed cuts were cause for concern.

Community Development Block Grant funds -- which, under the leaked proposal, would be eliminated -- have helped residents facing foreclosure keep their homes and repaired dilapidated houses for poor homeowners. They’ve also provided assistance to small businesses in commercial corridors in far-flung neighborhoods of the city that haven’t experienced the retail boom Center City has. The Post story suggested that the HOME Investment Partnerships Program, which the city has used to develop affordable housing, would also be cut under the proposal.

Brown said that, though he had not seen the leaked document, officials compiling the budget proposal had suggested other programs that could offset those cuts.

Rasheedah Phillips, the managing attorney for the housing unit at Community Legal Services, said housing advocates find themselves in a difficult spot -- “everything’s so speculative that it’s really hard to know what to do.”

“I think [the proposal] sends a lot of mixed signals,” said Phillips, whose organization provides legal assistance to low-income Philadelphians. “I think what you’re hearing from the administration is that they want to help ‘inner cities’ and they want to stabilize urban communities, but this would contribute to the destabilization of communities and families.”

Federal housing funds have been decreasing in Philadelphia for more than a decade. In 2002, according to city financial records, the city received $88 million from HUD. This year, it got $47 million, of which about $39 million was in Community Development Block Grants. The city's housing authority gets 94 percent of its $371 million in annual funding from HUD. 

“Block grant proposals have been significantly diminished, and we’re already in a downward spiral,” Clarke said. “With these proposed reductions, it would close doors and eliminate programs. I don't know how we would absorb this level of cuts -- I anticipate a significant increase in homelessness, and it would impact a number of employment opportunities and existing jobs.”

Jeremiah said any cuts to HUD’s capital funding program -- which, in the leaked document, would be cut by 32 percent -- would “jeopardize” renovations on older PHA buildings. And the Sharswood development plan -- which aims to essentially remake a North Philadelphia neighborhood with new affordable housing units and a revamped commercial corridor, and which opened its first 57 houses in November, could be affected by the cuts considered in the proposal, Jeremiah said.

At the ribbon-cutting for the new Sharswood houses, Clarke said, “I told Kelvin, ‘You better hurry up and schedule the next groundbreaking, because I’m not sure what we're going to see in the near future once this administration takes off.' And this is exactly what I was talking about.”

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