TO THE VICTOR:

Northeast Loses in Reshuffling of Housing Aid (DAVID W. CHEN, 8/30/04, NY Times)

The Bush administration is replacing the nation's three-decade-old financing system for public housing with a new formula that will redistribute billions of dollars, chiefly from New York and other big, urban areas in the Northeast and Midwest to small, rural places in the South.

The plans represent one of the most far-reaching changes in housing policy in decades, and the Department of Housing and Urban Development is still working out many of the details. But already, housing authorities in the Northeast, including New York City, Baltimore and upstate New York, are talking about the need to lay off security guards, close day care programs or charge tenants for snow removal, air-conditioning and other services. Agencies in the South and the West, meanwhile, say they may finally be able to pay for their public housing maintenance needs.

Set to take effect in 2006, the new formula stems from the Quality Housing and Work Responsibility Act of 1998 that was sponsored by former Representative Rick A. Lazio, Republican of Long Island, and signed by President Clinton. It mandated a new way of calculating the federal government's $3.6 billion annual budget for day-to-day housing operations, such as labor, maintenance, insurance and utilities.

The existing formula, which dates to 1975, essentially allows established agencies to receive lump-sum payments to run public housing projects with minimal documentation. The new formula for calculating federal subsidies is based on the actual expenses incurred by a housing agency, and it is twinned with a new carrot-and-stick philosophy requiring all agencies to meet new performance standards.

Smaller housing authorities, especially in the South, have long complained that the old formula favors older housing authorities by paying them more than their actual expenses, while ignoring the growing costs of new agencies. A study by Harvard University last summer echoed those concerns, and recommended that the subsidy be reformulated to reflect housing costs better.

In theory, at least, many agencies and housing groups welcome the overhaul as a fairer formula. But the reality of slicing up the subsidy pie has provoked visceral reactions among winning and losing housing authorities similar to those in voter redistricting: it all depends on whether they get more or less than they did before.

About four-fifths of the nation's 3,100 or so public housing agencies are expected to gain money over the next two years, according to preliminary HUD data analyzed by the National Association of Housing and Redevelopment Officials. Dallas is scheduled to receive an extra $7.6 million, or a 70 percent increase. Hundreds of small agencies in the South, led by Texas and Florida, are poised to gain at least 50 percent.

The shift from Blue areas to Red is conspicuous, no?

Posted by Orrin Judd at August 30, 2004 10:54 AM