Appropriators ask HUD to fix Gulf Coast funding glitch

Key lawmakers are urging the Housing and Urban Development Department to shield Gulf Coast housing authorities from the loss of nearly $140 million in rental assistance funds for low-income individuals and families that might result from a policy change in the recently enacted fiscal 2007 continuing resolution.

But HUD and House GOP appropriators argue that the agency has no authority to do so without a congressional fix, and low-income housing advocates are lobbying to alleviate the problem in the upcoming Iraq war supplemental.

In a letter to HUD Secretary Alphonso Jackson, House Transportation-HUD Subcommittee Chairman John Olver, D-Mass., Senate Transportation-HUD Subcommittee Chairwoman Patty Murray, D-Wash., and ranking member Christopher (Kit) Bond, R-Mo., wrote that HUD can allocate funds in a manner protecting hurricane-affected areas.

"Specifically, we are concerned that, under the department's interpretation of the law, public housing authorities that suffered devastating housing losses as a result of Hurricanes Katrina and Rita could be inappropriately penalized," they wrote.

A provision of the fiscal 2006 Defense spending bill sought by HUD allowed local housing authorities to redirect rental voucher funds to rehabilitation and reconstruction needs, the letter stated. Because of that change, complete data on voucher usage in the Gulf Coast over the previous 12 months for HUD to base funding on does not exist.

"We urge you to use the authority we granted you under the law to make formula apportionments that are consistent with known needs in these stricken areas," they wrote.

A HUD spokeswoman said the agency does not have such authority. "We are eager to work with Congress to remedy this issue," she said. "We share the same sense of immediacy in getting this resolved."

House Appropriations ranking member Jerry Lewis, R-Calif., and Rep.. Joseph Knollenberg, R-Mich., who were not consulted on the housing formula change, said it should be reversed in the supplemental. They wrote colleagues recently that more than half the public housing authorities across the country could lose money under the new formula, which uses the most recent 12 months of leasing and cost information as a basis rather than a three-month "snapshot" of data from 2004.

Democrats argue that many housing authorities are sitting on unspent funds they cannot use -- about $1.4 billion in all -- while other housing authorities do not have enough money for existing vouchers. The National Association of Housing and Redevelopment Officials estimates that the old formula resulted in the loss of as many as 150,000 vouchers since 2004.

The National Low-Income Housing Coalition said Congress should act to fix the Gulf Coast problem as part of the supplemental, which the House Appropriations Committee is expected to take up next week.

"Advocates are working with congressional staff to have language included in the supplemental spending bill excepting Gulf Coast public housing agencies ... that had unusually low leasing rates as a result of the 2005 hurricanes, from being harmed by this otherwise very positive policy provision," the group wrote in a memo to members last week.