Waukesha County CDBG 2011 Recommendations

Waukesha County has announced a public hearing for the 2011 Community Development Block Grant (CDBG) recommendations.  Unfortunately, I cannot find a link to it online.  HUD funds the CDBG program which allocates money to entitlement communities for use to meet their needs.  Communities generally are given a lot of flexibility in how they use the money.

CDBG funds may be used for activities which include, but are not limited to:

• acquisition of real property;
• relocation and demolition;
• rehabilitation of residential and non-residential structures;
• construction of public facilities and improvements, such as water and sewer facilities, streets, neighborhood centers, and the conversion of school buildings for eligible purposes;
• public services, within certain limits;
• activities relating to energy conservation and renewable energy resources; and
• provision of assistance to profit-motivated businesses to carry out economic development and job creation/retention activities.

Any decision that Waukesha County makes on CDBG recommendations have to follow the Consolidated Plan.
 
This year's funding recommendations is anticipated to cover $1.6 million in grants, ranging from $2,942 for Dousman Village  for "Public Facilities" to $288,000 to Waukesha County for "Administration." 
 
Without knowing the details of the applications, I cannot really comment, but offhand, I'd say the most weak recommendation is $21,289 to Oconomowoc for "Economic Development."
 
Oconomowoc is the city that created the Pabst Farms and didn't include any affordable housing in the development.  According to HUD, each activity must meet one of the following national objectives for the program: benefit low- and moderate-income persons, prevention or elimination of slums or blight, or address community development needs having a particular urgency because existing conditions pose a serious and immediate threat to the health or welfare of the community for which other funding is not available.
 
Offhand, without seeing the proposals, I'd be hard-pressed to say how Oconomowoc would qualify for this.  I'm sure there were other applications that would meet those goals in a better way.

Update:  The Public Hearing is on September 15th at 3 PM at Waukesha County Administration Center at 515 W. Moreland Blvd, Room 355-59 in Waukesha.  For more information, contact Glen Lewinski, Community Development Coordinator.  Requests for accessibility accommodations have to be made at least 48 hours prior to the meeting.

Third round of Neighborhood Stabilization Program announced

HUD has announced the third round of Neighborhood Stabilization Program, continuing to focus on foreclosed properties.  This round will have $1 billion available to states and communities.

The funding announced today is provided under the Dodd-Frank Wall Street Reform and Consumer Protection Act. To date, there have been two other rounds of NSP funding: the Housing and Economic Recovery Act of 2008 (HERA) provided $3.92 billion and the American Recovery and Reinvestment Act of 2009 (Recovery Act) appropriated an additional $2 billion. Like those earlier rounds of NSP grants, these targeted funds will be used to purchase foreclosed homes at a discount and to rehabilitate or redevelop them in order to respond to rising foreclosures and falling home values.

Previously, HUD Secretary Donovan announced the "First Look" program and the third round of NSP funding is designed to work with this program.

First Look gives NSP grantees an exclusive 12-14 day window to evaluate and bid on properties before others can do so. By giving every NSP grantee the first crack at buying foreclosed and abandoned properties in these targeted neighborhoods, First Look will maximize the impact of NSP dollars in the hardest-hit neighborhoods – making it more likely the properties communities want to buy are strategically chosen and cutting in half the traditional 75-to-85 day process it takes to re-sell foreclosed properties.

The City of Milwaukee received $2,687,949 with the rest of the state receiving $5,000,000 for a total of $7,687,949.  Looking at the rest of the states, it looks like every state, territory & D.C. received a minimum of $5 million, which doesn't really make sense-does sparsely populated states like Alaska, Wyoming, the Dakotas, and Vermont really need $5 million each?  Probably a bit of politics in this distribution.

California ($149,308,651) and Florida ($208,437,144) are the big winners-or rather, the losers-in this round.

Snapshots on how communities are doing in their previous NSP grants can be found here.

Lack of oversight in Foreclosures

This is such a mess.  It's my contention that lack of regulatory oversight led to the collapse of the housing market, and the same lack of regulatory oversight is leading to abuses in the foreclosure process.

The NY Times article on what is happening in Florida should be a cautionary tale for all communities that are facing waves of foreclosures.  While it's not as bad in Wisconsin as it is in Florida, it's something that community leaders should learn from.

Google Invests Millions into Affordable Housing

Google has announced a partnership with U.S. Bank to invest $86 million into affordable housing in seven communities across the country, including Milwaukee (City? County? Metro area?).

Google is bringing fresh capital to the industry at a time when many developers of low-income housing projects have been faced with significant financial gaps. Their commitment to affordable housing marks a continuing expansion of the affordable housing investor base beyond traditional investors such as banks and insurance companies.

To date, mostly banks and insurance companies have been investors in the Low-Income Housing Tax-Credits offered by the federal government. But in this rough economic times, many have been hesistant.  The prices of tax credits have fallen far, from 94-95 cents on the dollar in 2006 to as low as 69 cents on the dollar at the end of 2009, if not lower.  This means that when a developer sells the tax credits awarded, the developer will not receive as much cash as the company may have received in the past.

The lower cost of tax credits may have made it more attractive for non-traditional investors like Google.  For more explanation of other benefits to Google, read this analysis. 

A report has estimated the size of the tax credit market to be less than $4.5 billion in 2009, less than half of its peak of approximately $9 billion in 2007. 

They're projecting 480 units nation-wide will be created as a result of the investment. Just a drop in the ocean on what is needed, but a welcome addition.  Reading this article on Multifamilybiz.com makes me think that those seven communities were selected mostly because of pre-existing relationships with developers who may already have projects in the pipeline.