More than a decade ago, the U.S. Department of Housing and Urban Development estimated Congress needed to spend $26 billion on construction projects for the nation’s stock of aging public housing developments.
After years of failure to address the problem, the backlog for unfunded capital projects has risen to an estimated $80 Billion.
These types of projects include repairing damaged roofs, replacing broken heating and air conditioning systems and reconstructing aging sewage lines — projects that directly affect the health and safety of the 1.2 million families living in public housing units across the country.
The safety net of a nation that has been struggling to find affordable housing is provided by public housing developments.
The following events will take place in February 2020 Center for Public IntegrityHUD requested information under the Freedom of Information Act. This request was for information about the long list of projects awaiting funding and the ones that were completed.
Despite repeated requests for updates from HUD, our request remained unanswered for 16 months until the Public and Indian Housing division reached an agreement to discuss it. Public IntegrityJoined HUD officials for a conference call July 9 to reach an agreement on the information that the agency would shortly release.
The weeks turned into months. On Dec. 21, HUD provided a document as part of a minor “interim response,” but we still have not received the bulk of the information we requested. HUD stated Thursday that it expected to release more information soon. It cited a backlog in requests and a drop of FOIA officers as the main reasons for the delay.
President Joe Biden’s proposed Build Back Better Act includes funding that would put a significant dent in the list of construction projects needed to keep public housing developments safe and sanitary. However, the future of this money is uncertain after Sen. Joe Manchin III (D-W.Va.) withdrew his support.
Two people from the National Association of Housing and Redevelopment Officials were interviewed by us to help us understand the importance of capital funding. Tess Hembree was the director of congressional relations and Eric Oberdorfer was the interim director of policy and programme development.
This interview was edited for clarity and length.
Public Integrity: How did you get to a situation in which we have an estimated $80 Billion backlog of construction projects and not completed them?
Eric Oberdorfer What’s happened over the years is that the capital fund has been chronically underfunded each year, but I don’t even think that there was a realization on the side of Congress that that was occurring until about 2010. HUD was awarded a large amount of money that year for a study. This was to determine how much money is still in the backlog and how much Congress would have to appropriate each year in order to complete all capital maintenance projects within a given calendar year.
The report revealed that there was a $26 billion backlog. In order for public housing agencies in America to meet their capital needs, they need $3.4 billion each year from Congress. There’s a pretty big discrepancy over what was provided versus the need. As a result, because of this underfunding, because of the fact that Congress has not met the obligation to fund the capital fund, we’ve seen the backlog grow pretty substantially year over year.
The more you wait to tackle a large capital needs project, it becomes more expensive. Part of that is inflation, but also just think about if you have a roof on your house that needs to be fixed: If you fix it right away, it’s probably going to be easier to do than if you wait two years to fix it once you have enough money piled up so you can do that. The more time you wait to complete these projects, it becomes more expensive. We have yet to reach the $3.4Billion that HUD in 2010 deemed necessary to cover all capital requirements for public housing.
One of the things I’ve come across in reporting this story is that HUD doesn’t track the backlogged projects, so $80 billion is an estimate, right? From what I understand, housing authorities had the option of filling out a capital needs assessment each year, but it wasn’t mandatory, so there is no full accounting for what projects are needed. Is this correct?
EO: Yes, that’s correct. The challenge that agencies have with physical needs assessments right now is that it is a time-consuming process to go through, it is expensive and the money isn’t there to be able to do it. One of the issues is that when you’re doing something like that, there’s still no guarantee that Congress is going to take any of that information and provide the appropriate level of funding so that those needs are met.
The 2010 study really demonstrated that, where HUD was able to go to Congress to say we need $3.4 billion appropriated annually to meet the needs and there’s a backlog of $26 billion. Congress still didn’t provide that funding, and in fact they cut the capital fund after that report came out. So there’s always a challenge when you’re dealing with limited resources and to figure out the best way to use those resources.
What would you expect a private-sector property manager to do?
EO: If you’re in the private sector and you have a big capital needs project, you can always go and take out another mortgage on the property. You can also go to the bank. You can use the property to raise additional capital and then put it towards the building. Because of how public housing is structured, public housing authorities don’t have the ability to do that.
The Build Back better Act sounds shaky at this point.
Tess HembreeTenuous is a positive interpretation of where we are at the moment. Manchin obviously dropped the bomb. [in December]Despite the efforts of some his colleagues to negotiate with him, he is a no-on Build Back Better. So at this point we’re not entirely certain what path Build Back Better has. Chances are they’ll have to pare it down a bit to fit the concerns of Manchin. So at this point we’re waiting to see what leadership decides to do, given the realities that they have of having a functional majority without being an actual majority in the Senate.
There are some positive rays of hope in this. One, a lot of the things Manchin has talked about being major concerns of his don’t really touch on the housing provisions, so I’m optimistic that if they do need to peel back some of the bill, that doesn’t really apply to the housing so maybe it can sneak in somewhere. But we’re going to have to be very mindful about aggressively pushing for housing to get included in the next iteration of whatever comes up.
Put this proposal in context to see how important it is for capital projects for public housing.
TH:NAHRO was established in 2013 by me. We had the 2010 study which showed that there was a $26 million backlog. We knew that the backlog of projects was growing at a rapid pace, as it was during the Budget Control Act’s inception and the sequestration. All the major cuts Congress made in the early teens meant that the problem would only get worse. We began messaging outside the annual appropriations to request some additional funding for capital projects we felt were necessary across the country. We asked for $25 million to address mold and lead paint because, given our situation with sequestration we felt that it was realistic, but still a stretch. We were successful in 2014 and 2015. It was a small step in the right direction. We never really thought we’d be having a conversation about clearing the vast majority of the backlog. And so fast forward to today, the strides that we’ve made in the housing advocacy community in bringing awareness of the problem and awareness of how much funding is needed I think has been impressive to see.
The public housing model as it stands now with current funding level through annual appropriations, I fear that we’re going to lose too many units in the future. We’re really going to have a conversation about whether the public housing model is sustainable if they don’t do something like Build Back Better. It’s compensating for decades of underfunding and, frankly, congressional mismanagement of a program that they were on the hook to provide funding for. It’s dealing with the past while preserving the program for the future. If it is passed, it will be a landmark bill that will be talked about for generations.
How important is public housing to the United States when it comes to the affordable housing crisis?
EO: There’s a little over a million families that are in public housing. What I always think about when I think of public housing is that it is — and I mean this literally — the only housing that is required to remain affordable in perpetuity. These are tough units. We know right now that we’re in a major housing shortage. We are aware of the difficulties in getting new units constructed. These are units that are necessary to keep affordable for low-income households in the country.
We lose something if Congress doesn’t provide the funding necessary for public housing to continue operating. There are vouchers available, and they are essential, but public housing is the only affordable housing in this country that isn’t dependent on what is happening in market. These are hard units that are there, that exist, and I think it’s the duty of Congress to make sure that public housing agencies are able to maintain and operate these units to the best of their abilities with an adequate amount of funding to do so.
TH: When we say the future of public housing is at risk, I don’t necessarily mean that one day the units will go offline and people will have to move out. It’s a gradual attrition. The 2010 study said we’re losing about 10,000 units per year of public housing. It is a sad fact that the housing units are becoming unfit for family living.
There are still a lot of families living in conditions that are getting to that point, and it’s unfair because Congress can’t provide adequate funding to ask them to live in those units.
This articleFirst appeared on Center for Public IntegrityIt is republished here by Creative Commons license.
