Credit: Darrow Montgomery

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Five members of the D.C. Council sent a letter to Mayor Muriel Bowser on Thursday afternoon, urging her to restore funding cut from 10 community-based organizations (or CBOs) that provide housing counseling and other critical services to D.C. residents across the income spectrum.

Copied on the letter was the director of D.C.’s Department of Housing and Community Development, Polly Donaldson, who runs the agency that made the cuts to these organizations.

D.C. Council Chairman Phil Mendelson, Ward 1 Councilmember Brianne Nadeau, and At-Large Councilmembers Anita BondsElissa Silverman, and Robert White signed the letter. Nadeau chairs the Council committee responsible for overseeing homeless services in D.C., and Bonds chairs the Council committee responsible for overseeing its housing stock.

In the letter, the Councilmembers suggest reprogramming money from DHCD’s Housing Production Trust Fund (HPTF), a pool of money used to provide gap financing for affordable housing development in D.C. “The District budgeted a total of $99.2 million in the HPTF in Fiscal Year 2018. Of that amount, $50.8 million was to be funded with dedicated tax revenue. We learned that, to date, $56.0 million of dedicated tax revenue has been deposited in the HPTF. This means in the FY2018 HPTF dedicated tax revenues will be $5.1 million more than anticipated,” the letter reads. A spokesperson for the mayor did not immediately return a request for comment.

“It is important to understand that there is enough funding to restore these programs,” Nadeau told City Paper on Thursday afternoon. “The Council doesn’t have the power to do it, but the mayor does. We wrote this letter to ask her to use that power to restore funding [for] these essential programs.”

City Paper reported on Tuesday that DHCD made across-the-board cuts to a number of CBOs, reductions that reflect about 28 percent of the grants DHCD awards each of those organizations. Depending on the size of their grant, a 28 percent reduction could reflect a loss of up to $500,000. The cut came from a line item in DHCD’s budget called Neighborhood-Based Activities, which in fiscal year 2018 was funded at $9.5 million. For fiscal year 2019, that figure was reduced to about $6.1 million. 

The executive director of one organization affected, Marian Spiegel of Housing Counseling Services, told City Paper on Tuesday that HCS had already laid off one staff member and anticipated several more staff cuts. That’s in addition to a dramatic reduction of its counseling sessions required for residents interested in applying to the Inclusionary Zoning lottery, among other programs. 

Siegel told City Paper that a DHCD staffer indicated to her that the funds would be rerouted to cover costs associated with redeveloping parts of the 66-acre Walter Reed campus. 

In response to City Paper‘s specific questions about this point and others, a spokesperson for DHCD said on Tuesday that “federal pressure” to make cuts to the Department of Housing and Urban Development’s Community Development Block Grant program “resulted in making the tough decisions on the funding allocations for these community-based nonprofit organizations. We explained this expected outcome earlier this year, during DHCD’s budget oversight process last spring.” (Nadeau says that during the budget oversight process, the Council “is looking at the entire budget and trying to understand what the cuts mean. There’s a lot there. We don’t catch everything. I don’t think any of us understood how serious this cut was or we would have restored it.”)

CDBG is a federally funded program that gives jurisdictions flexible block grants to spend on anti-poverty and economic development initiatives. 

Federal budget data shows that, despite inclinations to the contrary, HUD has not yet made any cuts to its allocation of CDBG funds. During a phone conversation with two DHCD officials on Thursday, City Paper asked what kind of pressure the agency was referring to when it cited HUD as a partial reason for the cuts.

The officials acknowledged that while HUD has not yet made cuts to CDBG, budgeting funds for the next fiscal year is “almost like a game of Tetris—so even if we anticipated getting the [same level of CDBG] money, we had to go ahead and conservatively budget” to ensure that its fiscal year 2019 budget sufficiently funded development projects already in the pipeline.

DHCD’s approved fiscal year 2019 budget shows that the agency made about $5.6 million in combined cuts to its neighborhood-based activities and technical assistance budgets, nearly the same amount that it increased funding for DHCD’s Development and Finance Division’s project financing, the branch responsible for funding the development of housing facilities. (One of the DHCD officials called this comparison “apples to oranges.”) Two large projects already in DHCD’s pipeline that received CDBG funds include Bread for the City’s Southeast Center and, yes, the HELP USA Veterans Housing at Walter Reed, the officials confirmed.

But Nadeau argues that if the city doesn’t fund organizations to match programmatic increases with more staff, “the programs we’ve increased funding for are not going to be administered.” She cites Housing Counseling Services, which administers Housing Purchase Assistance Program information sessions that it will now have to reduce in scope, leading to months-long waits for entry to the program.

“When you add money to HPAP and expand down payment assistance—if there’s now going to be a three- to four-month wait for the programs, that money [we add to HPAP] isn’t going to move out the door, and people can’t take advantage of it,” she says. Nadeau adds that she’d then worry that budget analysts might interpret the unspent funds as an indicator that people aren’t taking advantage of the programs and consider cutting them.

“If anyone is in a position to understand how a cut impacts a contract or a partner, it’s the agency administering it,” she says. “And if they don’t, then that’s a problem.”