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  • 02.17.17

Demystifying HUD

It’s the “meat and potatoes” of cities and towns. It’s also deeply misunderstood.

Demystifying HUD

Like many large federal departments, the Department of Housing and Urban Development (HUD) is complex and misunderstood.

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Since its founding in 1965, HUD has made it possible for millions of low-income people to obtain housing through subsidies, and for cities and towns to build affordable housing through grants. But that’s not the full extent of what HUD does. Its benefits are felt by virtually everyone living in any incorporated area. And now, it’s poised to be reshaped by Ben Carson–President Trump’s pick to lead the agency–who has expressed skepticism of government assistance and fair housing, both important components of HUD’s mission (but certainly not all of it).

What’s more troubling still is that the debate around HUD isn’t driven by facts, but by stereotypes that don’t reflect its full mission. Because it’s widely misunderstood, HUD has become a political flashpoint.

For example, the agency hasn’t built any public housing since the 1970s but rather provides funds to state and local governments for construction and maintenance. Section 8–one of its voucher programs that provides money to renters–has been compared to a racial slur. Additionally, not all recipients of government assistance for housing live in public housing projects–many reside in privately owned affordable housing developments–and HUD beneficiaries are homeowners, too, not just renters.

Holly Leicht, who was regional administrator for HUD Region II, which includes New York and New Jersey, from 2014 to 2016, recently spoke at the Architectural League of New York to demystify what HUD really does today. We caught up with her after the talk to learn more about some of the biggest misconceptions about HUD. “HUD for me was definitely a black box, and I think it is for a lot of people,” she tells Co.Design.

[Photo: Alex Wong/Getty Images]

HUD Doesn’t Only Benefit “inner cities”

When Trump nominated retired neurosurgeon Ben Carson to lead HUD, he remarked: “We have talked at length about my urban renewal agenda and our message of economic revival, very much including our inner cities.”

While there is a population threshold for receiving HUD funding, inner cities–which Trump speaks about with great disdain using racially loaded code-speak–and the larger metropolitan areas of which they are a part are not the only recipients of money from the department. Smaller towns and municipalities can band together to create county-level consortiums to reach the minimum population threshold, which is at least 200,000 people from incorporated and unincorporated areas (or 100,000 but less than 200,000 if the majority are low- and moderate-income residents). Right now, there are over 400 county consortiums in the United States that receive HUD benefits.

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“Especially with smaller cities and towns, there’s not a lot of income they can use for infrastructure, housing, and social services,” Leicht says. “They are very dependent on HUD funding . . . without that money there aren’t a lot of resources they can avail themselves to.”

For instance, Elizabeth, New Jersey, population 127,500, received HUD money to renovate the main branch of its public library, for homelessness prevention and re-housing programs, and for its public housing authority. According to Leicht, it also received grants for walking paths and historic preservation–improvements that benefit the entire city. “There’s a real breadth and a lot uses [for HUD money] from basic services to systems projects,” she says. “It’s the meat and potatoes of keeping a city going.”

The Dry Line, N.Y.C. by Bjark Ingels Group[Image: Bjarke Ingels Group]

HUD isn’t only about public housing

Here’s one thing that Trump actually gets . . . kind of. “It’s a big job, and it’s a job that’s not only housing, it’s mind and spirit, right, Ben?” he said during his Black History Month address.

Roughly 75% of HUD’s $47-billion annual budget goes to rental assistance, much of which is tenant-based rental assistance, not traditional publicly owned housing. In terms of urban development, the majority of HUD’s annual community planning and development budget is comprised of a program called Community Development Block Grants (the second largest line item is homelessness assistance). For the 2016 fiscal year, about 45% of funds distributed under this program went to public improvements and public programs such as updating water and sewage systems, building parks and recreational facilities, repairing streets and sidewalks, job training, and youth programs.

Leicht thinks this type of funding could potentially help in the context of any big infrastructure project planning from the Trump administration, especially as it relates to resiliency projects.

“For areas affected by disaster, HUD has become one of the major vehicles for getting funding to those areas for recovery and for building more resilient infrastructure going forward,” she says. “While FEMA funding is tied to rebuilding after storm activity, HUD funding is more flexible, and it’s been a source for more forward-looking projects.”

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The forward-looking project Leicht is nodding to is Rebuild by Design, a competition launched after Hurricane Sandy that invited architects to come up with ways to make New York Harbor less susceptible to climate change and storm-related disasters. Today, the Dry Line–a flood buffer and public park that snakes around Lower Manhattan–by the Danish firm Bjarke Ingels Group is under development as a result of this competition. The project received $511 million in funding from HUD.

“There isn’t an obvious place for projects like those to get funded,” Leicht says. “If there is a big infrastructure bill, and if the projects are in vulnerable areas, they could incorporate resiliency measures. At this point, HUD is a catchall and would be the best way to look at broader funding sources.”

Outside of disaster recovery and resilience, HUD is also closing the digital divide–working to provide internet access in public housing through its ConnectHome program.

[Photo: Flickr user Dan DeLuca]

HUD doesn’t perpetuate the cycle of government dependence

One long-held myth often trumpeted by conservative opponents of government assistance is that it discourages people from working hard, a belief Ben Carson shares. But other forces–like inflation, the rising cost of real estate and rent, and stagnating wages–contribute to the fact that people need government assistance with housing.

“There are a lot of misconceptions about who lives in public housing and a very large percentage is working poor,” Leicht says. “They’re working and priced out of options in other areas. There are also misconceptions about why people are staying in public housing and why they’re there. The concept of public housing started as a leg up, a temporary solution where you would move to other housing. This has become a harder model because cities have become too expensive.”

While HUD doesn’t track unemployment data on who receives housing assistance, it does calculate from where households receive the majority of their income. In 2016, 26% of households received most of their income from wages, 4% received most of their income from welfare, and 66% received most of their income from other sources.

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In 2016, the National Low-Income Housing Coalition published a report on housing affordability called “Out of Reach.” It analyzed the cost of renting apartments in major metropolitan areas across the country in comparison to local minimum wages, and concluded that “in no state, metropolitan area, or county can a full-time worker earning the prevailing minimum wage afford a modest two-bedroom apartment. In only 12 counties and one metropolitan area is the prevailing minimum wage sufficient to afford a modest one-bedroom apartment.”

In 2011, the Center on Budget and Policy Priorities, a think tank, found that elderly or disabled households comprise nearly 50% of housing vouchers; of households who are not elderly or disabled, 75% are employed.

This challenge is especially urgent in cities with high rents and low vacancies, like New York, San Francisco, and Boston. “Public housing is the only place where working poor can live,” Leicht says. “Another issue that came out in the press was an analysis of people with higher incomes than you would associate with public housing. And it was a tiny percentage, but most of the people in New York City. If you’re a congressman in Iowa seeing the income, you think it’s outrageous. But in N.Y.C. you can be legitimately making that income and not be able to afford housing.”

Indeed, HUD is designed to benefit low- and very low-income families, but specific programs expand HUD’s reach to help other vulnerable populations, through rental-assistance programs like Section 8 and tenant-based rental vouchers that people can use for privately owned housing. Section 202 provides money for senior housing, and there are programs for disabled people, programs for American Indian and Alaska Native tribal governments, and for veterans.

The general housing struggle has ripple effects in areas like public health, education, and unemployment. “In studying homelessness, one thing we’ve seen is that there are a lot of social services that you can provide to people, whether that’s job support or mental health or education, but if a person doesn’t have a home and a home base, it’s hard for the other things to stick,” Leicht says. “To me, when you’re looking at the range of challenges in cities, so much stems from, ‘Does a person have a home?’ There’s no question that in a lot of cities affording homes has been a challenge, and even in places that people don’t think of as a high-cost city, the quality [of housing] isn’t good. Public housing is in a precarious place where there needs to be serious investments in order to keep it, but at the same time there’s been a lot of disinvestment from Congress.”

More Regulation Probably Won’t Solve HUD’s Problems

The Department isn’t without its problems, and has had a string of high-profile stories about mismanagement. A 2011 Washington Post story argued that there was “a pattern of HUD projects that were stalled or abandoned.” (HUD issued a statement in response saying that there were many incorrect facts and exaggerations.) In 2013, an investigation revealed that the New York City Housing Authority–which receives the majority of its funding from HUD–was sitting on more than $1 billion of unspent federal money.

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The natural call from lawmakers has been more regulation, which Leicht doesn’t agree with. She argues that what’s needed is more staff who understands the bureaucratic minutiae, and can help local agencies and developers navigate them more effectively. “From my perspective, one of these weird ironies that happens is when there are signs that anything is going wrong, the tendency is to tighten regulations and compliance requirements,” she says. “What you really need are more people on the front end who can work with the cities to figure how to spend money up front.”

For example, HUD doesn’t build housing or community development projects; rather, it distributes money to local governments. There are many caveats in the rules such that some legitimate uses of public funds are actually not permitted under HUD’s rules. Take Section 108 of the CDBG program, which grants loans to help cities with projects related to economic development and neighborhood revitalization, including demolition of properties. Leicht recalls an instance where the mayor of Schenectady, New York, wanted to tear down blighted houses and turn the lots into an urban farm because that area couldn’t support a housing market.

“It was questionable if you could demolish and not rebuild,” Leicht says. “We had some back and forth, but the parameters of the program were intended to do demolition in preparation for immediate economic development through housing or new uses, but not an urban farm. To us, it may seem like a legitimate urban use, but where the parameters were made, this type of use probably didn’t exist.”

The majority of funding misuse Leicht saw happening at HUD wasn’t intentional, but was borne from misunderstanding. “It was almost always related to complicated regulations and not enough staff capacity to understand these regulations, so the inadvertent misuse of funds [didn’t mean] spending money to go on a junket in the Caribbean, but spending it on a legitimate urban use, but not within the four corners of [HUD policy]. As Congress cuts funding and as the staff at agencies gets cut, there are fewer staff resources to do technical assistance. The work that HUD and agencies can best do is up-front partnering work with grantees, saying, ‘Here’s how you can and can’t spend the money.’ The more you shrink staffing resources, the more that they are approaching compliance from the back end as opposed to the front end.”

As with most matters relating to the federal government today, the only certainty is uncertainty. The way we talk about these agencies really matters. Before voters and politicians praise, lambast, or debate HUD’s practices, they have to know what HUD actually does. Throwing around quotable quips doesn’t adequately embody an agency. Those phrases carry weight.

While Carson has spoken out against government assistance and has described fair housing as a “social engineering scheme,” calling into question some of the policies that have helped millions of people from all walks of life, Leicht remains optimistic about HUD. “Because it has an impact in every city and state, people will realize its value,” she says. “I think there was some negativity about Ben Carson, but at the end of the day, and certainly as he said in his hearing, he’s very supportive of recognizing the value of HUD to communities. I’m choosing to be optimistic. The career staff is so dedicated and so mission-oriented.”

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Correction: An earlier version incorrectly stated that Community Development Block Grants were the majority of HUD’s budget; the majority of HUD’s budget is tenant-based rental assistance and CDBGs are the biggest source of spending for community development projects and the next largest budget item after rental assistance.

About the author

Diana Budds is a New York–based writer covering design and the built environment.

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