The Poverty & Race Research Action Council (PRRAC) released, Is the HOME Program Affirmatively Furthering Fair Housing?, asserting that HOME Investment Partnerships program rental units are “disproportionately segregated by race and poverty when compared to total occupied housing units and renter occupied units.” The report also highlights data shortcomings hindering analysis due to HUD’s limited reporting requirements. The report offers suggestions that could improve local HOME program performance in line with HUD’s pending final rule regarding jurisdictions’ obligation to affirmatively further fair housing (see article in HUD section of this Memo).
NLIHC notes that the report identifies two structural features in the authorizing statute that may have the unintended consequence of concentrating HOME-assisted rental units in cities that have high concentrations of poverty and racial and ethnic minorities.
The HOME Investment Partnerships program is a federal block grant program that provides funds to 643 Participating Jurisdictions (PJs), which are states and certain units of local governments. PJs must use the funds to provide affordable housing that benefits renters or homeowners with very low or low incomes. For rental units, tenant rents must generally be capped at a fixed percentage of the area median income, and units must be occupied by income-eligible households for a set period of time. HUD’s Office of Community Planning and Development administers HOME.
PRRAC concludes that HOME appears to concentrate assisted rental units in areas with high concentrations of poverty and/or concentrations of non-white populations. PRRAC attributes such concentrations to two primary factors, the formula for allocating appropriated funds to PJs, and the requirement that PJs use HOME funds within their jurisdiction.
NLIHC notes that the National Affordable Housing Act of 1990, which created the HOME program, is the source of both the allocation formula and the requirement that HOME funds be spent within the PJ. The statute required HUD to devise a formula that, “reflects each jurisdiction’s share of total need for an increased supply of affordable housing for very low income and low income families of different size, as identified by objective measures of inadequate housing supply, substandard housing, the number of low income families in housing likely to be in need of rehabilitation, the cost of producing housing, poverty, and the relative fiscal incapacity of the jurisdiction to carry out housing activities without federal assistance.”
PRRAC asserts that “HOME funds are allocated to PJs based on an outdated formula that prioritizes poverty over opportunity,” resulting in “most of the money going to jurisdictions with high rates of poverty and need.” In addition, PRRAC reports that the allocation formula, in combination with the requirement that PJs use HOME funds within their jurisdictions, creates “clustering of HOME units in census tracts that have high rates of poverty and minority concentrations.”
PRRAC recommends changing the formula in a way that reflects opportunities in a jurisdiction and creates regional opportunities, and that gives families with the greatest need access to HOME-assisted housing in a wider range of neighborhoods. NLIHC notes that realization of this suggestion would require an amendment to the National Affordable Housing Act of 1990.
To provide more housing choices for low income households, PRRAC also recommends that HUD encourage or even create incentives for PJs to form consortia The statute allows geographically contiguous units of general local governments to form consortia. Because not all units of local government are automatically PJs, many PJs join together to form consortia. According to HUD, there are 142 PJs in consortia interested in taking a more regional, collaborative approach to meeting affordable housing needs.
The report is centered on three PJs, Baltimore, Hartford, and Milwaukee, all with highly segregated urban centers that have a large number of neighborhoods with very high concentrations of poverty. In order to mitigate poverty concentrations and residential segregation, PRACC urges HUD to devise means to encourage such PJs to form consortia with their more well-off neighboring jurisdictions that do not have large percentages of racial or ethnic minorities. PRRAC “acknowledges that in some metropolitan areas there may be a need to incentivize suburban participation in order to site HOME units in areas of high opportunity.”
PRRAC set out to undertake a national assessment but discovered that unlike other HUD programs, the HOME program has no centralized collection of project occupancy data by race, ethnicity, or income. Consequently, PRRAC focused on Baltimore, Hartford, and Milwaukee, comparing those cities’ HOME reports and other data with their Metropolitan Statistical Areas. PRRAC recommends that HUD include HOME occupancy data in HUD’s “Picture of Subsidized Households” which provides occupancy data for public housing, vouchers, project-based Section 8, and other HUD Multifamily programs.
For the three PJs studied, PRRAC comments that reporting in their Consolidated Annual Performance and Evaluation Reports (CAPERs) was inconsistent. CAPERs generally did not report the income category of the households assisted, had “almost non-existent” information on unit locations, no disaggregated information on the race/ethnicity of those assisted, and inconsistent information about whether units were targeted to elderly households or were open to all, including families with children.
NLIHC notes that the statute requires PJs to keep records that show a full description of each assisted project, including its location, form of HOME assistance, and the units or tenants assisted. Records must demonstrate that each family is income eligible, and that each assisted rental project meets the affordability and income targeting requirements for the required affordability period (which ranges from five to twenty years).
Is the HOME Program Affirmatively Furthering Fair Housing? is athttp://www.prrac.org/pdf/HOME-AFFH.pdf
More information about the HOME program is on page 241of NLIHC’s 2014 Advocates’ Guidehttp://nlihc.org/sites/default/files/2014AG-241.pdf