HUD ‘Investment’ Spending Seen as Boon to Decaying Urban Areas

WASHINGTON —  For cash-short cities and states that have long sought increases in federal aid, the Clinton Administration’s economic stimulus package proposes to fund projects ranging from road repairs to drug counseling and job training for the homeless.

Proposed “investment” spending by the Department of Housing and Urban Development may total $15 billion over the next five years. That could especially help decaying urban areas, such as South-Central Los Angeles, where housing and job training needs are most acute.

And to the relief of public housing advocates, HUD Secretary Henry G. Cisneros has backed away from a budget-cutting proposal originally included in the economic stimulus plan that would have eliminated the department’s longstanding public housing construction program.

When the economic plan was unveiled two weeks ago, Cisneros announced that 30% of the public housing construction funds would be cut and the remainder merged with HOME, a two-year-old block grant program that is supposed to let cities decide whether to build new public housing units, or simply fix older buildings and provide rent subsidies to low-income tenants.

Groups representing public housing agencies and members of the House subcommittee on housing and community development vowed to fight merging the public housing construction and HOME programs. Even Administration officials have criticized HOME as being complicated, inefficient and badly organized.

In a speech last week to the National Council of State Housing Agencies, Cisneros announced that HUD’s “latest discussions with (the Office of Management and Budget) make it possible to reverse some of the earlier rumors that may have been out” about cutting off funds for new public housing.

“Bless his heart,” said Gordon Cavanaugh, general counsel for the Council of Large Public Housing Authorities, based in Washington. “We are very pleased, and we are pleased that the secretary personally is committed to the program, and we are pleased that he won his argument with OMB.”

Public housing advocates estimate that 1.4 million people live in public housing projects. Another 1 million names are on waiting lists. But as demand has increased, the federal government’s commitment to building new housing units has dropped--an 85% reduction from 1981 to 1993.

The current budget authorized $1.7 billion this year for new construction of housing for the poor, elderly and handicapped.

While the construction program will remain independent, Cisneros plans to place a major emphasis on a revamped HOME program, which requires local governments to provide matching funds for a variety of housing projects, including new construction and assistance to first-time home buyers.

“It is our intent to make the HOME program more efficient. . . “ Cisneros said when he announced HUD’s projects in the economic stimulus plan.

Cisneros also said that, for the first time, police and security guards will be placed at federally subsidized housing projects as part of an anti-crime package to be funded through the agency.

Money will be used for security alarms and lighting, anti-gang and recreational programs, and job training for disadvantaged youths, he added.

In the short term, HUD’s portion of the stimulus package for this year would include spending $11.6 billion--including $2.5 billion in the HOME program--money already budgeted but not yet spent because it was tied up by bureaucratic regulations, officials said.

The U.S. Conference of Mayors endorsed the Clinton package, including major tax increases and spending cuts.

“I think it would be most unfortunate if this plan breaks down in partisanship, in knee-jerk, negative reactions,” conference President William Althaus of York, Pa., said last week.

Congress and the Administration also have received a stern warning from the mayors--that the stimulus package will not work unless the money is available soon.

“If you enact this stimulus package in August, it cannot be done,” Althaus said. “Last year, after the riots in Los Angeles, the Congress of the United States discovered cities. We were very popular for a month or two and everybody wanted to help us and they wanted to give us more summer youth job money. Some of the cities of America got new summer youth job money in August. And we have said to the leadership, we have said to the Administration, ‘Don’t do that to us again.’ ”