HUD bureaucracy builds barrier to low-cost housing in Howard

April 18, 1993|By Jackie Powder | Jackie Powder,Staff Writer

In September of 1988, Howard County housing officials were elated to hear about a $3.34 million HUD grant they saw as a "remarkable base" for increasing the county's stock of affordable housing.

Five years later, Allfa Pines, the Ellicott City town house development that was to be the centerpiece of the 50-unit project, remains vacant.

To Howard County Housing Commission members, the 24 empty homes stand as a monument to the seemingly impenetrable bureaucracy at the Department of Housing and Urban Development they say has stymied the project at every turn.

"What we ran into is almost inexplainable and although we have gone through it, we still don't understand it," said Barbara Peart, county housing commission member and president of the Howard County Housing Alliance.

"So many times what we thought were little things became big things in the eyes of the federal government. It's amazing that HUD functions at all," Ms. Peart said.

The county used a $1.2 million state Community Development Administration bridge loan to buy the unfinished 24-unit luxury .. development for $1.7 million at a June 1990 bank foreclosure sale. The housing commission was formed three months later to use the anticipated HUD money to develop 50 low- to moderate-income units.

While commission members had expected to begin renting town houses by fall 1991, the Allfa Pines project is only now going through the final stages of HUD approval. County Housing Director Leonard S. Vaughan said he hopes to have the first homes occupied by July and full occupancy by the end of the year.

The second part of the 50-unit project consists of 26 town homes scattered around the county, but the commission is awaiting HUD approval to buy the final four units.

"It's a real tragedy that we have had units sitting there since 1988 that could have been housing people on a 600-plus waiting list and taking people out of the Grassroots [homeless] shelter," Mr. Vaughan said.

From the beginning, commission members say they ran into one HUD roadblock after another, often waiting months for a signature from the department's Washington headquarters, even waiting for HUD to approve the commission as a legal housing authority.

Staff members from HUD's Baltimore field office who have workedclosely on the project acknowledge problems, but say that developing public housing is a difficult, complex process and that the Howard project was an unusual one.

"This was a very complex project and we were dealing with so many different issues," said Melissa Peters, a multifamily housing representative. "The fact that it's taken four years is not too bad, considering you had to set up a housing authority."

When the seven-member housing commission met for the first )) time in September 1990, the commissioners were eager to get to work after waiting a year for certification at the state and county levels. All the commission needed was HUD's stamp of approval receive the $3.3 million in grant money. It was not until July 1992 that HUD approved the commission and finally released the first portion of the grant money to pay back the state loan used to acquire Allfa Pines.

The wait was especially frustrating for commissioners because HUD required the county to form its own housing authority, rather than using the state Community Development Administration to develop the project.

"It seemed to me unusual that HUD demand we create a commission because the state couldn't represent us, and once we create the commission it takes over a year to give us the money that they had promised to give us once we created the commission," Mr. Vaughan said.

The county spent $178,845 in interest payments caused by HUD's two-year delay in transferring money to pay back the $1.2 million state loan. Mr. Vaughan and commission members say such delays may be inevitable because of the agency's confusing approval process involving three HUD offices -- the Baltimore field office, the regional office in Philadelphia and Washington headquarters. "One of my hopes is that the new secretary of HUD [Henry G. Cisneros] would take a look at the tiered bureaucracy and inefficiency created by having to go through the regional and national offices for things that should be delegated to area managers," Mr. Vaughan said.

If the Baltimore HUD office had more authority, he said, the project could have been completed two years earlier.

Another source of delays was applying to HUD for more money to complete the project because the original $3.3 million grant didn't cover the costs of acquiring 50 housing units. HUD applies the same cost caps per unit in Howard County as in Baltimore, even though real estate prices here are among the highest in the state, Mr. Vaughan said. The total cost of completing Allfa Pines and acquiring 26 other units is now $4,790,167.

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