Finding State Funding for “Public Purposes”

by Brian Davis

            In  1990, Ohio voters approved a Constitutional Amendment known as State Issue One that made housing a “public purpose” in Ohio.  The Ohio Housing Trust Fund (HTF) was established to address housing needs as a dedicated source of income available to help low and moderate income people achieve affordable housing.  The HTF has received from the state just over 6% annually of the funds recommended by the Governor’s Advisory Committee on Funding.

            The Advisory Committee in 1992 and again in 1994 recommended $50 million annually as a reasonable, achievable funding level for the HTF.  To date the fund has received allocations of $5 million in 1993, and $3 million in 1994 as well as 1995.

            Gary Suladonek, a west side Ohio representative, opposes state funds for housing programs.  “I never supported it.  It is not a public purpose,” Suladonek said.  “In my campaign , I didn’t promise a rose garden, nor did I promise a house with a rose garden.” Suladonek went on to say that government cannot solve all the problems in the world, and said that “a charity organization” needs to deal with the lack of affordable housing.

            The director of the Coalition on Homelessness and Housing in Ohio (COHHIO). Bill Faith, questions whether politicians are seriously responding to housing as a public purpose, as politics as usual.  “There has not been a serious attempt to deal with the trust.  I don’t think that the legislature followed [the Issue One] mandate very well.  For housing, which is expensive, $3 million does not go very far” Faith said.  He did add that the commitment looks better with the release of the Governor’s 1996-7 budget, but is still not up to the level of need.

            The 1996/1997 budget proposed by Governor George Voinovich raises the mortgage recordation fee, which is a charge for filing mortgage documents with the county recorder.  This, combined with the $3 million from the general budget, would give the HTF $12.8 million in 1996 and $16 million in 1997, depending on the volatility of the housing market.

            An increase in the recordation fee would add approximately $769 per document to the fee collected by the county recorder for filing mortgage documents. The real estate industry is on record as opposing any increase in the recordation fee because they feel it would harm housing sales.

            Karen Kerns Dresser of the Ohio Department of Development, which oversees the HTF, was very encouraged by the announcement that Voinovich was attempting to increase funding.  She said, “We do what we can to address the housing needs.”

            The Housing Trust Fund attempts to address the needs of all low to moderate income Ohioans in the area of shelter.  In Ohio, a worker with a full-time job must earn $6.80 an hour to afford a HUD “ fair market rent” unit, and must earn a full-time hourly wage of $8.38 – almost twice the minimum wage to afford a modest two bedroom apartment.

            The need for affordable housing is dramatically illustrated by the fiscal year 1994 Comprehensive Housing Affordability Strategy (CHAS) report which shows that more than one out of every five households (23%) experience some type of housing need.  Families may be living in housing that they cannot afford or that is overcrowded, or they may be one of the 147,000 Ohioans, 40% of which were families with children who experienced a period of homelessness in any recent year.

            “Housing and need affects the bottom one-fifth in terms of income,” according to Faith.  He added, “That need has been there a long time and has not been addressed by the state government.”  As of September 1994, with only $11 million allocated to the HTF since 1993, the program has made some progress in making housing a public purpose.  In addition to other rehabilitation, repair, and homeless prevention services, 205 new affordable units were constructed, 350 first-time home buyers received down payment and/or closing cost assistance, and 921 construction work jobs were created.

            Other than a few Republican representatives, support is fairly broad-ranged for the Housing Trust Fund, according to Matt Perrenod, Housing Policy Director of COHHIO.  Finding a dedicated source of revenue to achieve the $50 million annual funding goal is the problem.  Proposals for funding sources include raising the real estate conveyance and the mortgage recordation fees.

            For more information, contact the Coalition on Homelessness and Housing at 614/291-1984, or the Office of the Governor, or your local Ohio congressional representative.

 Copyright Homeless Grapevine Issue 9 March – May 1995

Famicos Assists with Low Income Housing

By Patricia Cichowicz

            For years the American dream has been defined by owning your own home.  Most Americans sometimes aspire to, or at least admire, the goal of owning a house.  To the nation’s poor this is usually totally out of reach.  A small group of dedicated professionals are organized to make home ownership a reality for low income families.

            Famicos Foundation began as a housing organization 25 years ago.  It is probably the oldest community development housing operation in Cleveland, boasts Sister Joan Gallagher, CSA the associate director of Famicos.

            With a crew of only 10 people, Famicos, under the direction of James Williams, sets out to find houses that not only provide a good home for a family but can feasibly be rehabilitated to the strict City of Cleveland codes.

            Once the home is located, Famicos purchases it for $6,000 to $10,000 by buying fire damaged houses or those taken in drug raids or by the city for code violations.  It is then up to Ken Tench to write up specifications and estimates for its rehabilitation.

            As a member of a large group, The Cleveland Housing Network, they then bid for funds from the city, state or Federal grant and loan programs.  Cleveland Housing Network is a corporation of 12 neighborhood groups that pool their resources to more efficiently deal with neighborhood housing problems.  Cleveland Housing Network inspects the intended property, approves the funds, and asks for bids from minority contractors to do the work.

            During the period of renovation, the property manager seeks a family with needs that fit this particular house.  The prospective home owner’s income and background are checked in the same way a bank screens a prospective borrower..  Once the family is “fitted” to a home, a sliding scale is used to determine the monthly payment and length of the mortgage.  The family is encouraged to make choices in the renovation process like choosing the colors of paint and carpeting.

            The property managers keep in touch with the homeowners after the property is sold, and can help with future maintenance needs.  Famicos follows the Cleveland Housing Network’s code for rent-to-own leases.

            Are they nice homes? “Well I love mine,” says Diane Wilson, who is not only a Famicos homeowner, but it also a property manager for Famicos.  She said that Famicos provides safe, affordable, quality housing for low income families.  Last year Famicos put 35 families into their own homes, and in total they have renovated somewhere near 300 homes.

            Famicos not only provides home ownership opportunities but their six apartment buildings allow for a sliding scale to determine rent payments for low income and small families.

            To quality for Famicos Foundation assistance, a person must have 50% or less of the median income for the federal government.  Again, Cleveland Housing Network’s code is used in determining the lease regulations and eligibility of an applicant.

            The idea of property renovation, sale and management of houses and fitting low income people into houses as developed by Famicos is an example of successful management of government funds.

 copyright Homeless Grapevine Issue 9 March - May 1995
 

 

Prejudice Rears Its Ugly Head

By Bob Boclear

Hello, once again. I still need $300 to get my commercial driver’s license insurance reinstated. Also I’m still waiting in the CMHA line

I was in the flats around 9 p.m. distributing the Grapevine when all of the sudden a man came towards me. I thought he was coming to get a copy, but instead he grabbed me around the collar and choked me to the sidewalk. There were plenty of witnesses. He had no reason to do it, but he did.

            He said to leave his customers alone. I said that I was at least 300 feet from his establishment. The club owner said, “You are the scum of the earth.” Once again, prejudice against homeless people. We got into a heated argument. The police came, and did not consider my side of the story. There was a woman with the club owner who said she was a police lieutenant who told the police the story. They believed everything that she said.

            In another incident, my friend and I were distributing the Grapevine near the St. Vincent Hospital when once again, all of a sudden a security officer twisted my arm around my back and put me up against a fence. Personally speaking, this guy treated me fairly, but the manager of the business was brutal and derogatory.

            He tried to beat my friend up, and went off on me when I was trying to explain to him that all we were doing was spreading the word. The point that I’m trying to make is, “Stop this prejudice! Try to understand and help us get out of this bad situation.” Like I always say, I hope to be writing a happier and more pleasant article next time. I can be reached at 344-1580. Thank you for reading our paper, and God bless you.

Copyright by the Homeless Grapevine published issue 9 Spring 1995

Habitat for Humanity: A Hand Up, Not a Handout

By Deborah Winch

Although many of Ohio’s housing needs are so-called “invisible” needs, what has become increasingly evident is the fact that Ohio is experiencing a housing crisis.

                        According to Ohio’s Fiscal Year 1994 Comprehensive Housing Affordability Strategy (CHAS), a state document that estimates housing needs and recommends a plan to meet them 23% of all Ohio families suffer from visible housing problems-living in housing that they are unable to afford or living in substandard or overcrowded conditions.  Many of these households live paycheck to paycheck and are just one crisis away from homelessness.

            The CHAS report states that 40% of the 147,000 Ohioans who experienced a period of homelessness in 1991 (the most recent figures available) were families with children.

            Cleveland’s need for adequate housing was dramatically illustrated during a recent lottery held by the Cuyahoga Metropolitan Housing Authority to issue section 8 certificates and vouchers, which entitle a family to subsidized housing assistance.

            “Last year we had a Section 8 lottery and 40,000 families applied, “according to Scott Pollack, Executive Assistance to CMHA’S chief Operating Officer.  The response to the lottery was overwhelming compared to the 1500 vouchers available.

            “The situation continues to worsen,” stated Jim Cain, Associate Director of the Coalition on Homelessness and Housing in Ohio.  The root causes aren’t being addressed.”

            According to government housing experts, the solution to Ohio’s housing crisis lies not merely with providing shelter, but with providing shelter that is decent, affordable and not temporary.

            Eight years in Cleveland, a small group of people decided to take matters into their own hand – quite literally.  They organized the Greater Cleveland Habitat for Humanity (GCHFH), an affiliate of Habitat for Humanity, the international grass-roots Christian housing ministry.

            Many people are familiar with the Habitat name because of ex-President Jimmy Carter’s highly publicized work with the organization, but what many people do not know is that Carter is not the founder of the organization.

            Lou DuChez, GCHFH’S Volunteer Coordinator, calls Carter “our best-known volunteer,” but Habitat is actually the product of a wealthy young couple’s determined effort to save their troubled marriage.

            Millard Fuller’s workaholic habits brought him wealth but nearly destroyed his marriage to his wife, Linda.  The Fullers, in an attempt to start over, gave up their lavish lifestyle, sold their luxurious homes and speedboats, and donated the cash to charity.

            The Fullers were especially moved by the housing plight of low-income Georgian families.  Although hard working, many could only afford to live in shacks and shanties, often without heat or plumbing.  Unable to save for the down payment of a home, these families were locked out of the American dream of home ownership.

            Millard Fuller directed the talent and energy that had once made him wealthy into a massive plan to stamp out poverty housing.  In 1976 Habitat for Humanity was born.

            From a modest operation that began in tiny Americus, Georgia (population 18,000), Habitat has grown to operate in 36 countries.  Its goal is to eliminate poverty housing worldwide.  There are 1122 affiliates in the United States alone.

            Habitat has a unique approach to fighting the housing crisis.  The organization accepts no government funding and is entirely dependent upon volunteer labor and donations for the construction and repair of houses and its general operating expenses.  Habitat does, however, accept government funds for the purchase of streets, utilities, land or old houses needing restoration, providing that the acceptance of such funds has no provisions that would violate Habitat’s principles.  Volunteers work with the program’s future homeowners to build or refurbish houses, which are sold to the families at cost.

            In the place of the down payment, the families invest not dollar equity but “sweat equity” – several hundred hours worth of labor on Habitat homes.  The Families make small monthly mortgage payments that include taxes and insurance, generally for a period of 20 years.  Those payments are used to support the construction of more houses.

            Since its inception in 1987, GCHFH has done quite well, according to Dan Willis, GCHFH’S Community Affairs Coordinator.  The organization has evolved from completing one or two homes a year to completing 13 homes in 1994.

            The rate of mortgage defaults for Habitat families nationwide is minuscule at less that one percent.  Cleveland’s record is even better – not one family in Cleveland has ever defaulted on its mortgage, Amazing, Willis points out, because many of these families were considered “un-bankable” by traditional lenders.

            Habitat is not just about building homes, but about building community relation sand realizing depressed neighborhoods as well.  GCHFH must be invited into a community by a neighborhood development council.  As long as he communities are willing to work, GCHFH is willing to work with them.

            “We really react to neighborhoods that want us to build in them,” says Stephen Frey, director of GCHFH.

            Currently, GCHFH is actively building in the Central neighborhood of East 30th, and in the Hough neighborhood of Luther Avenue.

            Next year will prove to be GCHFH”S most challenging yet.  In celebration of Cleveland’s bicentennial, GCHFH is planning a “Bicentennial Village” – revitalization of an entire neighborhood in just one year.

            “It is a major undertaking, “says DuCHez, with emphasis on “major.” Substantial aid is coming from the International Habitat office to revamp the Fairfax neighborhood, which encompasses the area bordered by Cedar Road, East 80th, East 103rd, and Woodland Avenue.  GCHFH’S goal is to build 50 homes on its own and to induce private developers to match that number.

            Volunteers will be needed for the Bicentennial Village.  Willis said that turnout has been extremely encouraging with last year 2,000 people showing up at worksites.  Cleveland has a great need for housing, Frye asserted, but also a great deal of resources.

 Copyright by the Homeless Grapevine published issue 9 Spring 1995

Housing Policies Benefit Wealthy Americans Too

by Jean Taddie

     The United States federal government spent $17.5 billion in 1990 on housing for people with limited incomes, according to a report in the 1993 Statistical Abstracts of the U.S. This figure seems very large and many people have the impression that our government spends a lot (too much?) on housing for low-income people. Since housing funds must be approved annureduced or cut from the federal budget. With a new conservative congress and pressure for welfare reforms, this year may be critical to the shape of our national housing policy. Before any decisions are made about our nation’s housing policies, we should first examine the situation from a broader perspective.           

     To people who manage the budget of a household, $17.5 billion seems like a huge amount of money. But when compared to the federal government’s 1990 outlays of $1,252.7 billion, the housing benefits paid to low-income households account for less than 1.5% of the total. Let’s take a look at what this money paid for.

     The federal government spends much of its lower-income housing funds on rental subsidies through the Department of Housing and Urban Development (HUD). Funds were divided into categories: Section 8 lower-income housing assistance ($10.6 billion), low-rent public housing ($4 billion), and other benefits (rural housing loans, rural rental housing loans, and interest reduction payments for a combined amount of $2.5 billion).

     Section 8 benefits help low-income tenants pay their rent in privately owned buildings. Recipients pay 30% of their income to the landlord and the government pays the difference. Low-rent housing includes funds that the federal government pays to local housing authorities who are responsible for managing the low-rent units. Unfortunately, these programs do not reach many who are needy. For example, according to a 1993 Congressional Quarterly Researcher report on public housing, while 4.3 million Americans lived in low-rent public housing in 1990, 13 million more families meet federal guidelines for housing assistance but do not receive housing aid.

     Federal subsidies for low-income housing assistance is only one piece of the federal housing structure. The government also provides tax deductions for homeowners who pay mortgage interest and property taxes. The amount of this tax break is even more significant to the federal budget than are benefits for low-income rent subsidies. Whereas payment of low-income housing benefits increases federal expenditures, tax deductions decrease federal income. Either way, their is less money to be spent on other things.

     A 1993 report compiled by the Low Income Housing Information Service shows that upper-income homeowners get much more subsidy from our housing policies than do lower-income homeowners or renters. While renters in 1989 (all figures are stated in 1992 dollars) received about $14.8 billion (in 1992 dollars) in aid, homeowners received $64.7 billion (in 1992 dollars) worth of benefits through tax deductions.

     When these figures are analyzed by household income, the upper-income brackets received substantially more subsidy than did lower-income households. Rental households with less than $20,000 income received about 92% ($13.6 billion) of the direct housing subsidies. This $13.6 billion only helped 31% of the rental households with very low income (less than $10,000) and 12% of the rental households with income between $10,000 and $20,000. Homeowner households with less than $20,000 received less than 1% ($600 million) of the benefits from income tax deductions and fewer than 10% of these households received any benefit from the deductions.

     On the other hand, upper-income households with income over $65,000 received the lion’s share — about 63% or $41 billion —of the tax benefit. More than 80% of the upper-income homeowner households benefited from these tax deductions. Thus, households with income over $65,000 receive more benefits from our housing policies. Furthermore, the percentage of households benefiting from subsidies was substantially greater in upper-income brackets than in lower-income brackets, according to the Low Income Housing report.

     All in all, Americans subsidize housing in several ways, including direct subsidies and tax deductions. Direct subsidies accounted for much less money than did tax deductions. This is unfortunate for the low-income households because they receive most of the benefit from direct subsidies like Section 8 and public housing. On the other hand, upper-income groups receive most of their benefits from tax deductions. While pressure is building to reduce the amount invested in direct subsidies to the poor, little discussion is given to changing our tax deduction system so that it is more equitable for lower-income and rental households.

     The American public continues to subsidize wealthy homeowners. Any change to housing policies should consider all of these factors. When debating our housing policies, we must decide: Should we cut direct subsidies to the poor or should we limit tax benefits to the wealthy?

Copyright by the Homeless Grapevine published issue 9 Spring 1995

Different Colors

By John Agostin

I look up at the rainbow, and its so sublime,

God loved different colors from the dawn of time.

When you see different colors you should love them too,

All those different colors are a part of you.

Red and yellow makes orange, red and white makes pink.

When you see different colors they should make you think

If colors work together then they realize

There is not different color that they can despise

How did these different colors ever last so long,

When every color’s right, and every color’s wrong?

A wise ma once said, that different colors are one

If you start subtracting colors then you end up with none

Different colors are never either bad or good

There is a common color, that’s the color of blood

If we’re turned inside out, then we’re all the same

A color’s just a color because it has a name.

How can someone change the color that they are?

It’s like a candle trying to become a stare.

When you classify a color you become a fool

No color’s better than another, that’s a rule.

If different colors go to war, then who will win?

When colors fight each other it becomes a sin

But if they blend together, they could be so bright

That if you’re color blind, you’ll be restored to sight

I look up at the sky and see the setting sun

With many different colors another day is done.

What will be tomorrow?  I ponder my heart

If colors rise together, we’ll get a brand new start.

 

 Copyright by the Homeless Grapevine published issue 9 Spring1995

Changes Imminent at the Department of Housing

            The election of a Republican majority is expected to bring gale-force winds of change to entitlement programs in the United States, and at the eye of this storm is the Department of Housing and Urban Development (HUD).

            In 1993, Henry Cisneros, Secretary of HUD, and Assistant Secretary Andrew Cuomo brought a broad vision to the department of reform and expansion. They brought a plan of working closer with local communities to promote programs that were viewed as successful and pruning those viewed as wasteful.

            After the death of a homeless individual in 1994 outside the HUD headquarters in Washington, Cuomo said in a press release, “The Secretary’s number one priority is fighting homelessness.” And, in fact, the fiscal year 1995 HUD homeless budget proposal was doubled to more than $1.7 billion.

            HUD has always had a significant impact on the Cleveland community, according to Lucy Loughead of the Cleveland HUD office. The Cuyahoga Metropolitan Housing Administration, public housing facilities, and 28 agencies that attempt to find housing are all overseen by HUD. Comprehensive Management empowerment money is funded through HUD. Mortgage insurance and the Federal Housing Authority for low income housing is a HUD program. In addition, homes are acquired and sold back in the market through HUD. Many homeless service organizations receive partial funding from HUD.

            Last year a slick package was put together called “Continuum of Care," which outlines a reorganization of McKinney Homeless Assistance Funds to better serve the needs of the community. States and localities would be given a lump sum of money and the guidelines of providing a safety net, or Continuum of Care, specifically for the homeless. Included would be outreach programs, emergency shelter, transitional housing, and supportive and permanent housing in conjunction with job training, education and substance abuse programs. The plan was hailed by homeless advocates as innovative and resourceful, according to Bill Faith, Director of the Coalition on Homelessness and Housing in Ohio (COHHIO).

            “In November, the whole playing field changed. The Clinton administration is now on the defensive,” said Jim Cain, Assistant Director of COHHIO.

The press release for the 1996 HUD budget was 18 pages long. Only seven lines mentioned the homeless. With the change in the 104th Congress, Cisneros relegated homelessness from top priority to seven lines of text.

            The plan “fundamentally changes federal housing policy and the department’s structure,” said Cisneros. HUD proposes to consolidate 60 separate programs into three broad performance funds or block grants.

            Fred Karnas, Executive Director of the National Coalition for the Homeless (NCH), said, “The President’s budget sets back several years of steady progress in focusing federal attention on the needs of the growing number of homeless, men, women and children in this country.” NCH claims that three block grants will harm the homeless population by making it harder for the homeless to access housing.

            “In too many cities, NIMBY (not-in-my-backyard) and mean-spirited policies have made life unbearable for homeless people. By giving decision-making regarding homeless funds to state and local elected officials with few, if any, strings attached, the President’s budget feeds into this thinking and ultimately will increase homelessness and misery,” said Karnas.

            Various Republican congressional representatives and the Office of Management and Budget have suggested dismantling the Department of HUD. According to Faith, it appears that this block granting proposal may be a preemptive step to stave off HUD's total annihilation.

            Faith added, “I’m concerned about restructuring the McKinney targeted services for homeless people. When [funds for homeless services] are thrown into bigger block grants then they won’t be targeted to help the homeless.” If the administration’s proposal for HUD reorganization passes, housing development projects will have to compete with shelters and transitional housing providers for a share of the federal pie. This is similar to the lion, the boa constrictor, and the alligator all sitting down at the table to calmly share the prized young antelope. “The real problem is not HUD or the reorganization,” said Faith. “We need to focus on the appropriations process.” During the week of February 27th, the Congressional appropriations committee proposed a recission of fiscal year 1995 funds of $7.3 billion of already committed money. Faith said, “It is unprecedented move. It scares me. HUD is taking the lion's share of the budget cuts.”

            “This is much worse than we thought it would be,” commented Faith. This means that no one on the Section 8 low income housing waiting list will get housing this year, and funds already committed to projects could be terminated.

            Faith claims that Cleveland could do well with local control of federal block grants in comparison to other cities, while in conservative or entitlement-hostile states and communities “we might not be in such great shape.” The volatility of the local political climate could make homeless services change dramatically and quickly. Instead of doing battle with one organization (HUD) for social change, if the HUD reinvention plan passes, the battle for services will take place in hundreds of communities around the country.

            The president of the NCH board of directors, Anita Beaty, said, “We are already seeing experiments with moving federal decision-making from Washington to local governments and the result is not often good." The local governments have refused to adequately address the needs of those who are poor or without political clout. Beaty adds, “Without strong targeting language, and protection for fair housing and civil rights, the Administration’s proposals will further widen the gap between haves and have-nots in American society.”

            “By reducing HUD’s 60 programs to three, HUD has essentially drawn a huge bull’s-eye on its building for Congressional budget cutters to shoot at,” said a NCH press release. Cisneros said, “HUD’s survival is critical to America’s future. The country needs a federal commitment to communities, to its cities, to affordable housing, and to the housing needs of the poorest and most vulnerable citizens.”                          

            The HUD wagon train seems to running scared after being spooked by the Republicans. Many will fall off before the reigns are again brought under control and calm heads prevail.

 Copyright by the Homeless Grapevine published issue 9 Spring 1995