Houston And Texas Letting Money For Low-Income Housing Go To Waste

According to a new report from a low income housing group, the City of Houston may have to repay millions of dollars in federal funds that were meant to clean up neighborhoods hit hardest by foreclosed homes.

"Houston has done demonstratively worse than other places," John Henneberger, director of the Texas Low Income Housing Information Service, tells Hair Balls. "It doesn't look good in Houston for this money being used."

It seems like just yesterday when the foreclosure crisis ruled the news cycle. And rightly so, because people were losing their houses in droves, and brand new suburban neighborhoods were becoming ghost towns.

Empty houses attracted crime, it wasn't fun to look at, and property values were in jeopardy. 

To combat the problem, the Bush administration launched the Neighborhood Stabilization Program in 2008, handing out federal money for cities to do things like buy and clean up foreclosed properties, or to just tear down the empty houses.

The idea is that the houses, once fixed up or rebuilt, could provide housing options for low-income families.

According to the report, Texas was given more than $178 million, and the Houston area got $37.4 million of that money.

Trouble is, Texas, and Houston in particular, isn't spending the money it was given. The state is ranked 43rd out of 50 in the amount of grant money it has spent.

From the report:

The Houston area received the most NSP-1 funds of any region of the state... While Harris County has committed all of its funds, the City of Houston looks perilously close to losing $11.8 million, although they are attempting to contract with a local nonprofit developer to buld affordable housing in order to meet the rest of their commitments.
The report added, "Fort Bend County is falling woefully short... appearing to have spent only the 10 percent administrative overhead allowed by the program, with no actual activity toward providing housing."

The city has until September 3 to spend the rest of the money -- about $12 million -- or it will lose the funds. 

Calls to the city's housing department, to find out the status of the program, have not been returned.

"If we lose [the federal funds], that will be several hundred low-income families that could have owned a home," Henneberger says. "I don't think anyone would say we need to turn this money back. It's a sad thing for any reasonable person."

Henneberger blames elected officials for not prioritizing and implementing the program.

"When it effects lower income people, it doesn't get a lot of attention," Henneberger says. "In Houston, the mayor should have been on top of it, because we're going to be shipping money to Ohio, Nevada and other places, using our tax dollars for their communities."

We also put in a call to the mayor's office to find out if anything is being done. If we hear anything back, we'll be sure to update.

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Paul Knight
Contact: Paul Knight