U.S. Housing and Urban Development (HUD) Secretary Shaun Donovan has proposed new rules for HUD's HOME Investment Partnerships affordable-housing block grant program, including requirements for state and local governments to tighten their oversight and assessment of construction projects.
According to Donovan, the proposed changes will boost the performance and accountability of HOME, whose critics describe the program as a glaring example of taxpayer waste.
"Through these new steps, we want to expand HOME's impact and ensure that every dollar is used smartly to help families afford their homes," Donovan said in a statement Friday.
In addition to mandating that state and local governments develop a system for assessing the relative risk of projects and more closely monitor their HOME-funded sub-recipients, HUD's proposed rule would require governments to assess a developer's capacity and the long-term viability of the project before committing HOME funds.
The proposal would also require more frequent reporting by governments to HUD and set higher performance benchmarks, including specific time frames for taking corrective actions against participating jurisdictions that fail to complete projects that have already begun.
At a joint hearing between two House subcommittees last week, one of HOME's top opponents, Rep. Randy Neugebauer, R-Texas, said HOME funds come with "little or no strings attached."
"There are few rules, safeguards, underwriting standards or federal oversight on how the funds are used," he said. "On top of that, HUD has no reliable way of tracking projects since its antiquated data systems only allow the agency to track when money has been drawn – not the pace or progress of a project."
In his opening statement, Neugebauer additionally said his staff has identified at least $46.6 million in projects that "simply fell off HUD's books without creating one unit of affordable housing.’