Members of Congress call for probe of HUD’s HOME affordable-housing program

May 17, 2011

A bipartisan group of federal lawmakers is calling on Congress to look into the nation’s housing-construction program for the poor, citing years-long delays and other breakdowns that have thwarted the production of hundreds of affordable-housing projects.

Senate Banking Chairman Tim Johnson (D-S.D.) and Sen. Richard C. Shelby (Ala.), the panel’s ranking Republican, said Monday that they will seek to investigate the Department of Housing and Urban Development’s HOME program, which delivers $2 billion a year to local housing agencies to build and renovate homes around the country.

Rep. Elijah E. Cummings (Md.), the ranking Democrat on the House Oversight and Government Reform Committee, also called for an investigation, sending a letter on Tuesday to committee Chairman Darrell Issa (R-Calif.).

“It’s quite disturbing,” Cummings said. “I expect every dime to be spent effectively and efficiently. The American people are not getting what they bargained for. This is one that hits home — literally.”

Three other lawmakers — Reps. Spencer Bachus (R-Ala.), chairman of the Financial Services Committee; Randy Neugebauer (R-Tex.), chairman of the subcommittee on oversight and investigations; and Judy Biggert (R-Ill.), chairman of the Ssbcommittee on housing and insurance — sent a letter to HUD on Tuesday demanding detailed information about delayed projects and the agency’s oversight.

A year-long Washington Post investigation , published this week, found that nearly 700 construction projects awarded $400 million have been idling on HUD’s books — some for a decade or longer — leaving a blighted trail of empty lots and abandoned buildings in neighborhoods nationwide. HUD cuts checks but does not track the pace of construction and often fails to spot delayed or defunct projects, The Post found.

“We are deeply concerned by these reports, particularly at a time when so many Americans are in need of affordable housing,” Johnson and Shelby said in a joint statement.

HUD officials defended the HOME program this week, noting that the 700 projects cited by The Post represent 2.5 percent of 28,000 active developments. Officials added that some of the projects are delayed because “we’re in the middle of a housing crisis in this country.”

The Post did not attempt to track all 28,000 open projects, instead analyzing 5,100 deals worth $50,000 or more. Hundreds were started years before the housing crisis. In addition to the 700 projects, The Post identified 600 development deals that have never drawn any money even though it has been available for a year or more, tying up $250 million. In January, HUD started canceling these projects.

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