Making a ‘hard situation even worse’: Philadelphians ask mayor to rethink housing cuts

The city’s proposed spending plan leaves $45 million less for affordable housing programs. The cuts threaten four multifamily projects, among other programs.

City Councilmember Helen Gym and Mayor Jim Kenney. Gym has challenged proposed cuts to city housing programs. (Emma Lee/WHYY)

City Councilmember Helen Gym and Mayor Jim Kenney. Gym has challenged proposed cuts to city housing programs. (Emma Lee/WHYY)

The federal government is giving Philadelphia tens of millions of dollars in emergency pandemic funding to help keep residents safe and housed, but proposed budget cuts will still leave a major gap in housing assistance programs in the coming year.

The federal money targeted to help with housing costs — a portion of the $276 million Philadelphia received from the federal CARES Act — totals $26 million. But due to budget cuts proposed by Mayor Jim Kenney, along with projected drops in fee collections and the expiration of a bond measure, the amount of money going to two of the city’s main housing programs — the Housing Trust Fund and the Basic Systems Repair Program — is still set to drop by nearly $45 million in the new fiscal year that starts next month.

“It’s a great thing that the government has reached out to do COVID stimulus money specifically to relieve pressures on housing issues,” Councilmember Helen Gym said.

But, she added, “we are extraordinarily shocked, depressed, and appalled that the administration would have allocated a lot of the money away from the Housing Trust Fund and from urgent needs.”

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During a finance committee hearing held Monday, residents and affordable housing advocates pleaded with the council and the administration to restore the trust fund. During one call into the hearing, which was held online, resident Dorian Jones said he was a disabled senior citizen and had recently resorted to sleeping in his car.

“I have struggled to find accessible housing, for years, that I can afford. There are already so few safe, affordable rental units for people living with disabilities,” Jones said. “If City Council allows the mayor to cut funding from the Housing Trust Fund, they will make a hard situation such as mine even worse.”

A brief burst of help for renters

The administration is working to close a $649 million budget shortfall linked to the coronavirus shutdown. Kenney wants to cut the trust fund and other programs so he can focus on his core priorities of education, public safety and economic development, said Anne Fadullon, director of the Department of Planning and Development.

The federal government’s $26 million Community Development Block Grant (CDBG) COVID fund infusion will be shared among a number of city programs. The largest chunk — $11.5 million — is going to emergency rent assistance, according to a council budget document. The city is also putting $2 million provided by the federal HOME Investment program into aid for tenants. With a combination of those funds and donations, the program is already helping 4,000 households, city officials say.

However, the recipients must show a COVID-related loss of income and they can only receive assistance for three months. In addition, the administration is at the same time canceling two new PHLRentAssist programs Kenney had planned to launch in the coming months — rental vouchers and cash grants — that would have provided $6 million in aid.

The second largest chunk of the federal funds, $3.8 million, will go to the city’s basic repairs program, which pays for roof, electrical, plumbing and structural repairs for income-eligible homeowners. A related program by two nonprofit organizations that also funds repairs will receive $500,000, slightly less than before.

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Combined with $10 million in regularly scheduled federal funding, the COVID grant will give the repair program a total budget of about $14 million in the coming year, down from $25 million previously, Fadullon said. A five-year, $100-million city bond that had been helping fund the repairs program has been exhausted and is not being renewed.

As a result of the lower funding level, the basic repair program and other home improvement programs will serve an estimated 3,000 fewer households over the next 12 months, Fadullon said.

Another $2.8 million of the pandemic emergency monies will boost funding for housing counselors and lawyers working to head off evictions and foreclosures. Those programs would receive about $8.5 million total compared to $6.2 million in the current year.

While any resulting increase in that staffing will be helpful, the added funding would not add even one more counselor at each of the city’s approximately 25 housing counseling agencies, said Beth McConnell, policy director of the Philadelphia Association of Community Development Corporations.

“It could get us maybe 13 additional housing counselors, for a crisis of a scope that we have never experienced,” she said. Those staffers would “not only have to help people avoid evictions but also foreclosures at the same time, while also trying to help people become first-time homebuyers. So it’s not quite the scale of what we need.”

McConnell noted that the city has also not budgeted any money for counselors and lawyers for a new eviction diversion program that Gym and other councilmembers are trying to create. In addition, Kenney wants to sharply cut the Philadelphia Eviction Prevention Project, which provides lawyers for renters in landlord-tenant disputes. Its $2.1 million budget would be reduced by 75%.

Other CDBG COVID allocations include $1 million for emergency mortgage assistance, half a million to help homeowners resolve tangled-title issues, and $1.6 million to help eligible residents pay their utility bills. The latter represents an increase from this year’s $1.1 million budget for utility assistance.

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Pleas to restore flexible funding

The city’s Housing Trust Fund could be used to boost support for some of the services needed by residents impacted by the pandemic, such as rental assistance and home improvements, in part because it does not come with the restrictions that accompany CDBG funds. It is also used to subsidize affordable housing construction projects.

Over the last two years the trust fund has been budgeted at least $20 million annually, plus at least $12 million from mortgage- and deed-recording fees. But Kenney has proposed zeroing out its general fund allocation, and a drop in real estate activity is expected to reduce the fee revenue to just $8 million.

Fadullon said she knows of four housing projects that may not proceed because of the Housing Trust Fund cuts, each of them potentially containing multiple units. Total spending on affordable housing production is expected to fall to $14 million, representing a $10 million decrease.

It is unclear where Kenney could find money for the trust fund, given the city’s dire financial state and calls to restore other areas that face deep cuts or elimination, such as arts and cultural programs. More than a dozen councilmembers have called for the mayor to reverse a proposed $23 million increase in the police department budget, which could free up funds for other agencies.

McConnell said some portion of the $276 million in overall CARES Act funding has not yet been spent or earmarked and could potentially be available for housing and small business needs that are connected to the coronavirus. City officials have not said how much money remains. Future allocations of those funds will need to be negotiated by the mayor and council, McConnell said.

In addition, the federal government is due to release another batch of CARES Act funding, and Congress may approve another economic stimulus bill in the near future. House Democrats last month passed a $3 trillion bill that includes aid for state and local governments, enhanced unemployment benefits and other provisions.

The city budget must be passed by the end of the current fiscal year on June 30.

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