WASHINGTON - A House committee took an initial step yesterday in a bipartisan Capitol Hill attempt to salvage a public-housing program popular in Baltimore and other cities that has been targeted by the Bush administration.
The House Financial Services Committee approved legislation to extend the life of HOPE VI, a $5 billion, 10-year-old effort to rebuild or replace the nation's "severely distressed" public housing.
FOR THE RECORD - An article May 8 reported incorrectly that the House Financial Services Committee had approved a bill to extend the life of the HOPE VI program to rebuild or replace public housing. In fact, the housing subcommittee of the Financial Services Committee approved the bill. The Sun regrets the error.
Under the program, Baltimore has been awarded $148 million for the reconstruction or demolition and replacement of six major public-housing complexes. In some cases, high-rise buildings have been replaced with townhouses and low-rise apartment buildings.
`Served its purpose'
Alarm bells went off for the program's advocates in February when President Bush proposed a budget for the fiscal year beginning Oct. 1 that contained no new funding for the program.
"HOPE VI has served its purpose," Mel Martinez, secretary of Housing and Urban Development, told Congress in March.
The administration says $5 billion has been awarded to local public housing agencies to demolish 87,000 units, rehabilitate 10,300 others and construct 82,000.
It argues that public-housing agencies have been slow to use the funds, saying that by the end of the year, $3.5 billion awarded to them will remain unspent. It also asserts that the average cost of a HOPE VI unit is $120,000, compared with an $80,000 average under a HUD block-grant program.
"HOPE VI is not an efficient method for meeting the current and future capital needs of the public-housing program," Michael Liu, an assistant HUD secretary, told a financial services subcommittee last week.
"It just doesn't make sense to us to continue funding for this program at the expense of more cost-effective programs to serve the same ends," he said.
The administration is running into resistance from Republicans on both sides of Capitol Hill. The House bill approved yesterday on a voice vote by the Financial Services Committee was introduced by Rep. Jim Leach of Iowa, a senior Republican and former chairman of the panel. It would extend the life of HOPE VI until Sept. 30, 2005, a year beyond its scheduled expiration, and expand the program's scope to allow small communities to tap its funds
In the Senate, Sen. Christopher S. Bond, a Missouri Republican who heads the subcommittee that handles the HUD budget, and Sen. Barbara A. Mikulski of Maryland, the panel's senior Democrat, are expected to provide HOPE VI funding in the budget for the fiscal year beginning Oct. 1.
"We're going to look to provide something," said a Republican committee staffer, though the amount is uncertain. "It all comes down to how much money" the subcommittee has to dole out, he said.
"Senator Bond has been very supportive of the program," he said. "It has made a tremendous difference for a lot of communities. ... We are concerned about what we perceive as the premature elimination of the program."
For the current fiscal year, the panel and its House counterpart included $574 million in the budget.
`It's really critical'
Housing officials in Baltimore and other cities are trying to make the case to Congress that HOPE VI should not be cut at a time when other federal funds for the poor are being trimmed.
"It's really critical to cities like Baltimore that the federal government - particularly HUD - does not back away from the commitment that they really have to honor to provide resources to modernize, maintain and redevelop this public housing resource," said Lyle Schumann, deputy executive director of the Housing Authority of Baltimore City.
He noted that the $127.8 million HUD allocated to five Baltimore projects had "leveraged" $222.6 million in private investment and tax-credit financing for public-housing reconstruction.
"The administration wants to kill the one program that actually transforms neighborhoods," Mikulski told Martinez at a hearing in March.
In 1998, Mikulski saved a $20 million grant for replacement of the Hollander Ridge complex on the eastern edge of Baltimore after HUD's inspector general moved to have the funds rescinded on the grounds that the project did not meet the requirements of the law. Hollander Ridge was demolished, and the site was cleared. The funds are now earmarked for work at Claremont Homes in East Baltimore, Schumann said.