Library, School, Now State Funding - UNcommitted 2/17/03

Qualified Applicant Does NOT Mean The Check Is In The Mail
Attachment 16 page 57 of the Housing Authority of Portland's Hope VI grant application lists a commitment by the state of Oregon to HAP's Columbia Villa remodel project for:
Private Activity Bonds - $20,500,000
Low Income Housing Tax Credits (LIHTC) $44,792,656
Neither of these funding sources has been applied for much less authorized by anyone in the state of Oregon.

The Oregon House Ways and Means committee sets the limits of Private Activity Bonds in what is generally known as the biennial "Bond" bill. It appears very late in the session and when passed does not take affect until July 1st. The Bill itself or the Staff Measure Summary of the Budget Report, which would convey legislative intent, could include instructions Not to issue bonds to a certain project.

Once Private Activity Bonds are authorized a committee composed of:
1. State Treasurer, Randal Edwards (role)
2. Deputy Director Department of Administrative Services, Theresa McHugh (role)
3. Ruby Haughton, Legislative and Public Affairs Director CAREOREGON (individual)
choose which of the Competitively Bid applications will receive funding. Positions 1 and 2 on this committee are an elected public official and a representative of another. Elected officials are generally known to be sensitive and often responsive to public opinion. It is unknown whether two out of three of these individuals would be willing to face the camera's and growing citizen opposition and say they believe it is good public housing policy to significantly increase the number of tax-payer supported low-income housing clients in the neighborhood that already has the highest number of tax-payer supported low-income housing clients in Portland, Multnomah County and the state of Oregon.

LIHTCs have about a $9 million negative effect on Oregon revenue. The Revenue committee can make adjustments to LIHTC authorizations if it chooses. All options are on the table during our state's fiscal crisis.

All LIHTC applications are reviewed by either the finance committee or the steering committee (depending on which type of LIHTC is requested) of the state Department of Housing and Community Services. Thirty to fifty percent of grant requests are rejected. Those that pass are forwarded on to the Director of that agency for approval. All state agencies report to the Governor.

Time is on the side of the growing constituency of citizens and businesses that believe the Columbia Villa remodel project is bad public housing policy. If the strength of this citizen and business constituency and or other historical circumstances prevail then major funding sources will dry up.

Let's Do The Numbers
The Housing Authority of Portland is facing a potential 30% cut in funding from HUD.

The Oregon Legislature is facing a potential $2 billion budget shortfall.

Multnomah County can't afford the Voter Approved drug and alcohol treatment center at the under construction Wapato jail. It also can't find the source of the $4 million dollars HAP says is theirs which certainly was NOT approved by voters.

The Portland City Council has no general fund money to back up its pledge to give HAP $20 million for the Villa remodel. Instead the council will try to "steal" $20 million from the Interstate Light Rail Corridor Urban Renewal Fund. Serious controversy has plagued HAP regarding its disingenuous role with regard to these funds from the time HAP asked to be included in the Urban Renewal District with a promise that it only wanted leverage with HUD not dollars. Other more deserving applicants for this limited amount of money will surely challenge HAP and City Council efforts to "cheat" them out of what is their due.

The federal deficit is $300 billion and growing like a weed. Budgetary priorities include reducing taxes and cutting spending on social programs including those related to public housing. Expenditures for WAR and Iraq, Afghanistan, (North Korea?) nation building will add additional HUNDREDS OF BILLIONS to the federal deficit. The inevitable higher interest rates and inflation are predicted by many economists. Inflation and interest rates have a major impact on almost everything including all kinds of building projects.

As the dollars diminish in Quantity and purchasing power is it likely that the Quality of a product or service will increase or decrease?

The ability of the US economy to quickly recover in the midst of one or perhaps even two wars is uncertain.

Is there anyone who has ever had anything built or remodeled, publicly (including the military) or privately, that would quarrel with this well know sentiment, "building projects always take twice as long and cost twice as much as you imagined at the beginning"?

My house is forty years older than any house at Columbia Villa. I expect to get at least another couple of decades worth of use out of it. What is the current tax-payer equity in and the true market value of the land and the houses that are public property that HAP is about to sell and demolish?

The implications of all these economic factors combined with the fact that HAP's Villa remodel is Bad Public Housing Policy should encourage every player with money in the game to take it off the table. It's a losing hand.