Like other federal agencies, the U.S. Department of Housing and Urban Development is facing possible cuts to staffing and funding. The federal agency’s green and resilient retrofit program is intended to upgrade aging affordable housing. The program would also help fund proposals that reduced energy use.
But as the Associated Press reported, funding is being terminated by the Department of Government Efficiency and links to the program on the housing department’s site are no longer available.
Nonprofit leaders in the affordable housing industry say they’re still waiting for federal dollars that were promised. Managers of Smith Tower, an apartment building in Vancouver, say they were awarded funding but haven’t received the money. The construction is currently in limbo, The Columbian reported.
Margaret Salazar is the CEO of REACH Community Development, a nonprofit affordable housing provider. She joins us with more on how this affects Oregon’s housing crisis and what it means for low-income residents.
Note: The following transcript was transcribed digitally and validated for accuracy, readability and formatting by an OPB volunteer.
Dave Miller: This is Think Out Loud on OPB. I’m Dave Miller. Like other federal agencies, the U.S. Department of Housing and Urban Development (HUD) is facing huge potential cuts. These include a program called the green and resilient retrofit program, which could have impacts on existing affordable housing in the Northwest.
Margaret Salazar served as HUD’s Northwest regional administrator under the Biden administration. She’s now the CEO of REACH Community Development, a nonprofit affordable housing provider. She joins us now. It’s good to have you back on the show.
Margaret Salazar: Thanks so much, Dave. Thanks for having me.
Miller: I want to start with this program that actually I don’t think I’d heard of: the green and resilient retrofit program. What is it?
Salazar: Yes, the green and resilient retrofit program was part of the Inflation Reduction Act, which was passed by Congress in 2022. The larger act included a number of programs to help communities address climate change. The green and resilient retrofit program was the only significant investment in that bill that went directly to HUD. And it was a billion dollars to help providers, like REACH, to make capital improvements and upgrade existing affordable housing serving some of the most vulnerable people in our communities.
Miller: What kinds of projects in the Northwest was this money going to go towards?
Salazar: So here in the Northwest we had several providers that received grant awards. REACH received awards for two of our properties. One is the Admiral Apartments in downtown Portland. This is a small building. It’s a historic building that serves seniors, including accessible apartments and amenities for folks with visual impairments and hearing impairments. The other one was Powell Boulevard Apartments and this serves people with disabilities. So these are small properties that serve deeply affordable units for folks that are in need of housing stability.
Miller: The AP had a good article that alerted us to this issue as well, about a pretty large residential tower in Vancouver, Washington, that was going to be benefiting from this program. So for the two ones that REACH, that your organization focuses on, what are examples of the work that was going to be done?
Salazar: So while the program has green in the name, it’s really an affordable housing preservation and repair program. So we were looking to do things like switch out the aging HVAC systems, put in new windows, put in new roofs, solar panels, weatherize the units, and not only reduce costs for residents but improve habitability. And this was really one of the only programs that HUD has seen significant resources in recent decades to preserve our aging affordable housing stock. So that’s really what we were looking to do with the program.
Miller: What’s the latest you’ve heard about the status of this particular program and the specific money you were expecting?
Salazar: So what’s fascinating right now is that we’re hearing rumors that the program has been terminated. But to be clear, Dave, we have not received any formal notification from HUD, from Congress, from anyone in the federal government.
Miller: The website is down, is that right?
Salazar: The website is down, but we have not received any notification that the program is being terminated.
Miller: Can you get clarity from the people you had been in contact with in the office?
Salazar: We have had a difficult time getting in touch with those folks and as a former HUD official, I know a lot of folks at HUD and we’re imagining that it’s really difficult for them to talk about things that are so uncertain. For us, we’re gearing up to try to assemble the financing to make improvements to these properties. We’ve talked to residents about improvements that are coming. And really, the future of these properties hangs in the balance, as we’re looking to assemble just this one piece of the financing that it takes to preserve properties long-term.
Miller: This is an important point and one that we’ve talked about in the past when it comes to affordable housing, but what role does federal funding play in piecing together the financing for a project like this?
Salazar: So as I mentioned, HUD has not really had the opportunity to make a significant dollar investment in affordable housing development and preservation in this way in quite some time. Most of what HUD does is underwrite mortgages and then also provide ongoing rental subsidies to those vulnerable residents. So for a project like this, what we do is we assemble the HUD grant and then we layer on top of it funds maybe from the Portland Housing Bureau, from Oregon Housing Community Services, federal tax credits, and then of course private investment and private debt. So it’s a whole capital stack that needs to come together. It feels like rocket science sometimes, frankly, to get that done.
And what’s interesting is that while we’re so focused on affordable housing supply, and we all know that we need more supply of affordable housing, we as affordable housing providers are talking more and more about the need for funding to preserve, sustain and stabilize our existing affordable housing. In fact, it’s become such a crisis that we have elevated this to be our highest priority this year in Salem. Especially at a time when we’re seeing federal dollars being jeopardized like this program, we’re actually asking the legislature for $285 million in bond funding to preserve and repair affordable housing.
Miller: Well, let’s dig into this because I think you’re right. When we, on this show, have talked about affordable housing in the past, either tacitly or explicitly, the focus has been about building new units. We’ve talked a lot less about existing affordable housing. I think the one thing that comes to mind is in Phoenix and Talent and the fires in 2020, hearing about the destruction of what people called naturally existing affordable housing. So that was one time when it came to the fore.
So when you talk about the importance of preserving affordable housing, can you give us a sense for the numbers here of what’s at stake? And this is well past this one federal program. This is broadly around the state. What’s at stake if the status quo remains and there isn’t a lot more effort at retrofits of various kinds, fixes of various kinds?
Salazar: When we talk about preservation, we’ve talked a lot about the fact that, as a society, we’ve committed to building affordable housing, but we haven’t necessarily had a plan over the long-term to sustain that housing and reinvest in it. So across the state of Oregon, we have hundreds of homes that are at risk of expiring use agreements and affordability restrictions. We’ve talked about that for a long time. What we’re seeing more now is repair needs that are really skyrocketing. We just can’t on our own, as a regional nonprofit … we don’t have the deep pockets to be able to finance the repairs at the scale that we need them.
And then we have a new challenge that’s really a post-COVID era issue, where affordable housing providers really were hit with what we call the triple whammy. We had rising interest rates, which has made it harder and harder to finance housing development. We had skyrocketing costs of operating housing, including insurance rates which have just really gone through the roof.
And then the third piece, which is [that] so many families are still struggling to pay their rent on time coming out of the COVID crisis. So what that’s meant is that housing providers like REACH have had to find a way and sort of scrap together the resources to keep our properties open and keep them habitable for our residents, and now we’re coming to the table and saying we can’t do this alone. We need help from the legislature.
Miller: Is there a difference between upkeep for affordable housing units broadly and more market rate ones, or ones that have a higher rent or mortgage?
Salazar: I would just say that market rate housing providers are facing all of those same pressures.
Miller: Right. I mean, we’ve heard a ton about inflation, the cost of labor, the cost of materials, interest rates. So all of that is just nationwide, marketwide.
Salazar: That’s right. This is just part of being a housing provider more broadly, but we don’t have the flexibility as affordable housing providers to raise rents on folks, and because that’s the mission that we have undertaken and that we believe in. So it’s made that pressure all the greater, which is why when we see the retreat of federal resources, it means that we have to call on our state and local leaders to step in and be part of the solution.
Miller: As I noted at the beginning, you worked for the U.S. Department of Housing and Urban Development as the Northwest regional administrator. And you mentioned briefly that you know a bunch of people still there. I’m just curious how much you have heard from current or maybe former colleagues about what’s happening in that office?
Salazar: [clearing throat]
Miller: That’s a very careful pause.
Salazar: This is hard. It’s hard. It’s emotional for me, when you work with folks, they become like a family, especially when you have a shared mission. So what folks might not realize about HUD is that the majority of HUD’s staff are actually based in the field. So these are not nameless, faceless bureaucrats in Washington D.C. These are your friends and neighbors who are out working with local governments, working with tribes, working with housing authorities, working with nonprofits like REACH, working with homeless service providers. They’re out on the ground and interfacing with our communities every day and trying to come up with solutions.
What we’ve heard is that there are tremendous cuts coming, particularly to those field offices. And we’ve been talking really loudly about the need to make sure that we keep the Portland field office open and the Seattle regional office open, so that we have folks here who understand the housing challenges in the Northwest and can be our partners in solving them.
Miller: The left-leaning Center on Budget and Policy Priorities put out a report recently that looked into the likely effects of DOGE’s planned cuts at HUD. They include 50% staff cuts to the office that administers vouchers, public housing and Native American housing programs. And 84% cuts in the office that administers homelessness assistance and grants to help communities build affordable housing and recover from disasters. What impact do you think those cuts, if followed through on, would have?
Salazar: Simply removing the staff will not create more efficiency, because these are the staff that actually help expedite dollars getting out the door and they help communities solve problems. I mean, there are so many folks that call HUD and say, I need a waiver of this regulation. I need you to help expedite this issue so that I can move more quickly. Those are the staff that are there to help us. So that’s really the piece I want folks to understand is that unless you actually change those underlying regulations, all you’re doing is slowing down and gumming up the works to get resources out where we need them.
Miller: So you’re saying that this is not getting rid of red tape. This could actually make government both not save money, but also be more inefficient?
Salazar: Yes, that’s right. And then the other piece is around the real threats to the Office of Fair Housing and Equal Opportunity, who administers and oversees the implementation of the Fair Housing Act, which is still in law and statute, and we need it to be enforced.
Miller: I’m glad you brought that up because that same report that I’d mentioned, it said that the proposed cuts would mean a 77% reduction in staff in the office that enforces fair housing laws. Has this administration given any indication about how it will approach housing discrimination broadly? And you have a minute to answer that.
Salazar: There is a lot going on in the courts right now, and I encourage folks to take a look at that, but there’s a lot going back and forth around funding for fair housing enforcement. I would say disability rights is a big piece of fair housing that folks should be watching. And then certainly the question that’s on our minds is around families that have mixed immigration status, and that’s another thing that we’ll be watching very carefully.
Miller: Margaret Salazar, thanks very much.
Salazar: Thank you so much.
Miller: That is Margaret Salazar, who served as HUD’s Northwest regional administrator under the Biden administration. She’s now the CEO of REACH Community Development Trust.
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