HUD should reject the State of Texas plan to misspend $3 billion in CDBG disaster recovery funds

The State of Texas is required to submit a plan amendment to HUD by September 30 outlining its final plan for spending the $3 billion in CDBG funds earmarked for Texas for disaster recovery from hurricanes Ike and Katrina. The state’s long road to producing this plan has been plagued by false starts and reversals.

The resulting plan is, in a word, terrible.

We at TxLIHIS as well as Texas Appleseed submitted extensive comments about the State’s “plan” to HUD. Appleseed’s and TxLIHIS’ comments can be downloaded. The HUD Secretary must now approve or disapprove the state’s plan. For the sake of the thousands of Texans who must depend on these CDBG funds to rebuild we hope he sends the State back to come up with a real and workable plan to spend the $3 billion on the Texas families who need help rather than throwing the funds into a political porkbarrel as the State’s plan proposes.

It will be tragic to delay assistance to hurricane survivors. But it would be more tragic to misspend the only funds available for rebuilding. We have been urging the State for over a year to conform the plan to federal law and Texan needs, but to no avail.

To summarize our full written comments, the proposed State of Texas Amended Plan for Disaster Recovery is inadequate and plainly inappropriate for the following reasons.

  1. Fails to properly prioritize individual recovery needs over public infrastructure, economic development, etc.
  2. As a consequence of allowing each COG and local government agency administering housing programs to make up their own eligibility guidelines, establish program activities and set different benefit levels, the Plan provides inconsistent and inadequate housing program benefits between geographic regions and between cities even within the same county, producing an unfair and discriminatory distribution of CDBG benefits.
  3. Allocates funds geographically through a flawed model comprised of weather reports with the result that funds will not be allocated based on actual disaster damages sustained in the community.
  4. Fails to make significant funds available specifically for housing repairs to owner-occupied homes — the greatest need in the wake of the hurricane disasters.
  5. Fails to acknowledge the demonstrable needs for and inadequately funds rental housing repair and rebuilding due to a prejudice on the part of COGs and local governments against rental housing because rental housing predominately houses low- and moderate income persons and people of color within Hurricane Ike impacted region.
  6. Does not analyze impediments to fair housing at the community level and fails to coordinate the allocation and program design of CDBG funds to promote fair housing and therefore fails to affirmatively further fair housing as required under the statute.
  7. Sub-allocates CDBG funds to jurisdictions that have stated their intent to use funds in a manner to eliminate rental housing and housing affordable to lower-income households, policies that are inconsistent with fair housing and civil rights laws.
  8. Funds overly expensive and inefficient local housing reconstruction programs as opposed to a much more cost effective state-administered program.
  9. Fails to provide explicitly for hazard mitigation to prevent a recurrence of storm damage to homes rebuilt with CDBG funds.
  10. Channels funds through institutions with track records of unreasonably slow and inefficient use of CDBG funds in the Hurricane Rita CDBG disaster recovery program.
  11. Adopts a funding Plan that the State knows cannot achieve the 50 percent low- moderate-income benefit statutory objective.
  12. Does not meet the minimum state planning threshold required in the statute.
  13. Does not meet the standards of a plan required under the statute because the Plan is subject to and is anticipated to be changed in significant ways after HUD approval.
  14. Renders public participation meaningless because the Plan was approved by state administering department governing boards prior to the end of the public participation process.
  15. Provides certifications to HUD that the State knows to be inaccurate.
  16. Fails to take steps to address ongoing civil rights and fair housing violations by local governmental entities that will be eligible to administer CDBG funds under the Plan.
  17. Adopts a regional allocation model that fails to provide funds sufficient to equitably serve the needs of low- and moderate-income persons, persons with disabilities and ethnic and racial minorities.
  18. Sub-allocates CDBG disaster recovery funds to Councils of Governments and other subrecipients knowing that some of these COGs, cities and counties have stated an intend to use funds to carry out projects unrelated to disaster recovery.