Real Estate

Trump’s HUD budget cuts 42-year-old community assistance program

In this 2012 file photo, then-Mayor Michael Bloomberg joins Obama administration HUD Secretary Shaun Donovan at the grand opening of the Via Verde affordable housing development in the Bronx.
Enid Alvarez | NY Daily News | Getty Images

Republicans and Democrats alike have cut ribbons at community centers, neighborhood rehabilitation projects and affordable housing developments — and for the past 42 years those initiatives have been supported by the Community Development Block Grant Program.

Now, President Donald Trump wants to wipe out the program, according to the budget proposal released Thursday by the Office of Management and Budget. The program's current year funding is $3 billion.

"The Federal Government has spent over $150 billion on this block grant since its inception in 1974, but the program is not well-targeted to the poorest populations and has not demonstrated results," the budget proposal says. "The Budget devolves community and economic development activities to the State and local level, and redirects Federal resources to other activities."

The cut is part of a $6 billion, or 13 percent, reduction in the fiscal 2018 budget for the Department of Housing and Urban Development. The budget also includes $35 billion for HUD's rental assistance programs and proposes reforms to that program. HUD Secretary Ben Carson has been highly critical of public assistance, suggesting that too many Americans have become dependent upon it.

"The president said he was going to go after wasteful and duplicative programs, programs that simply don't work. A lot of those are in HUD," OMB Director Mick Mulvaney told reporters. "We've spent a lot of money on Housing and Urban Development over the last decade without a lot to show for it. Certainly, there are some successes but there are a lot of programs that simply cannot justify their existence and that's where we zeroed in."

The community development program has garnered bipartisan support since President Gerald Ford signed it into law in 1975. Roughly $150 billion has been allocated to a growing number of "entitlement communities" — generally larger cities and counties, as well as states, according to HUD. Today, roughly 1,200 cities, counties, and states participate.

The community development program provides funding not just to affordable housing but for public facilities improvements like parks, health-care and child-care facilities, neighborhood rehabilitation and disaster relief. It also provides public services for seniors, youth and the disabled, among others. In 2016, close to 74,000 households received housing assistance and more than 9 million Americans benefited from public services, according to HUD's website. The program also created 17,545 jobs.

"It's the life blood for many cities," said Stephen Glaude, CEO of the Coalition for Nonprofit Housing and Economic Development and a former HUD undersecretary in the first Bush administration. "It's considered one of the most flexible federal programs in that it allows local communities to determine their greatest needs."

Glaude said he expected the program to be cut but never dreamed it would be eliminated, especially given its bipartisan popularity.

"To come in and blatantly eliminate these programs because you're trying to meet a budget number without talking to the stakeholders, the constituents of these programs, is a little concerning. In fact, it's more than a little concerning. It's actually alarming," he said. He added that without the community development program, the number of affordable housing projects that a city could do would drop dramatically, at a time when cities across the country are struggling to keep pace.