Restructuring plan would replace Office of Housing and Community Development

Philadelphia’s Office of Housing and Community Development turns 38 this year, and City Council President Darrell Clarke is celebrating by proposing an amendment to the Home Rule Charter that would eliminate the office as part of a wider restructuring of the city’s municipal government.

Clarke’s proposal, described in an earlier article, would create a cabinet-level Office of Planning and Development that would put various city agencies, boards, and commissions under the direction of a single mayoral appointee. The idea is to formalize some city functions that aren’t currently included in the Charter and to coordinate the city’s efforts at planning, zoning, housing, preservation, and code enforcement.

It isn’t clear how swiftly Clarke is hoping to move the plan forward. The bill has not yet been scheduled for a committee hearing, and Clarke’s office told PlanPhilly the proposal was intended to start a conversation about improving the development processes in the city. Whatever happens with the proposal, any charter change would have to be approved in a ballot question by a majority of voters.

As currently formulated, though, the proposal would eliminate OHCD and replace it with an Intergovernmental Housing Commission, which would manage the Housing Trust Fund and report to a Deputy Director of Housing within the new Office of Planning and Development. A provision in the bill says that all non-civil service employees could be transferred to civil service positions within the Division of Housing and be required to pass a civil service exam within one year in order to keep those positions. That provision would apply to every OHCD employee, according to Paul Chrystie, the communications director for the Office. The current functions of OHCD, which include administering Community Development Block Grants and coordinating various housing and redevelopment initiatives, would be transferred to the Division of Housing as well.

In an attempt to understand how Clarke’s proposal might impact housing and development policy in the city, PlanPhilly took a look at the history of OHCD. (In a separate report, a commission appointed by Mayor Michael Nutter in the wake of the building collapse at 22nd and Market streets last year proposed splitting apart the Dept. of Licenses and Inspections. PlanPhilly will look at that proposal in a future article.)

COORDINATING DEVELOPMENT PROGRAMS

The Office of Housing and Community Development was created by Mayor Frank Rizzo in the mid-1970s in response to a change in federal funding for cities. Prior to that period, federal funds for urban renewal were granted on a programmatic basis; there was some money for housing here, some money for blight clearance there. Starting in 1974, the government began administering Community Development Block Grants, eliminating the categorical funding and giving cities more leeway in how they spent federal redevelopment money.

“During the Nixon Administration, the federal government made the switch from funding urban renewal projects on the so-called Model Cities program to consolidating all of that money into the Community Development Block Grant,” said John Gallery, the former director of the Preservation Alliance who also served as the first director of OHCD under Rizzo. “So the approach was to give a big chunk of money to cities and allow them to do whatever they wanted within a fairly broad and flexible set of guidelines.

“A lot of cities—Philly was one, but not the only one by any means—used the flexibility of the guidelines to put money into existing city services,” Gallery continued. “To pay for trash collection, to pay for police, to pay for excessive numbers of patronage employees at different agencies, including the Redevelopment Authority here.”

Because the city was taking money meant for revitalization efforts and using it to plug holes in the general operating budget, Gallery said, the federal government threatened to take some of that money back. Gallery was brought in as a consultant—he was then serving as dean of the architecture school at the University of Texas—and he concluded that the city needed to stop spending CDBG funds on police and sanitation and to greatly reduce the workforce at the Philadelphia Redevelopment Authority.   

OHCD was set up in 1976, and took on the task of coordinating the functions of various city agencies that had been created to administer very specific streams of categorical federal funding that were now consolidated in the Community Development Block Grant, said Jim Hartling, an early OHCD employee who now works with Urban Partners and the Fels Institute of Government at Penn.

Gallery said that it took a year or so to pull back CDBG funds from the Streets Department and the police and that Rizzo pushed through a major wage-tax increase early in his second term to fill the holes in the budget. (That tax increase resulted in a major political backlash and a failed effort to recall the mayor.)

Gallery said he was given substantial control over PRA—he said he was able to fire 200 employees—and over the Philadelphia Housing Development Corporation, a quasi-governmental agency, and parts of the Planning Commission. Under his direction, OHCD began a number of economic development efforts, and carried out a housing rehabilitation plan based on individual neighborhoods.

OHCD still creates the consolidated plans for how to spend the federal block grants, and substantial portions of those flow to the Redevelopment Authority and the Philadelphia Housing Development Corporation.

‘AN AGENCY WITHOUT A MANDATE’

In the early 1980s, with a new mayor in office, the city’s housing and development efforts had come under fire from the Committee of Seventy, an independent nonprofit group that advocates for good government. In an exhaustive Housing Governance Study, the Committee described a lack of coordination of city efforts to create and preserve affordable housing for Philadelphians earning low and moderate incomes. The more-or-less independent Philadelphia Housing Authority was “an unaccountable monolith,” the report concluded; OHCD was “an agency without a mandate.”

“Only traces of [housing] policy have been carried around in the minds of various influential figures at different points in time, but they have been implemented on a short-range basis,” the Committee wrote.

As a non-Charter office under the mayor’s direction, OHCD was susceptible to the policy whims of different administrations. In its report, the Committee stopped short of advocating any particular reforms, but it did entertain the idea of amending the Home Rule Charter to formalize the city’s responsibility to provide and preserve affordable housing.

“[The] success or failure of the city’s housing effort at any given time all boils down to the commitment of a mayor to make it work,” the Committee wrote.

CONSISTENT REDUCTION OF FUNDS

In addition to changing levels of interest and commitment from different mayors, OHCD has also dealt with a constantly shrinking allocation of Community Development Block Grant money.

“Clearly we need more affordable housing than we have, and the funding sources for that are headed in the opposite direction from resolving that problem,” said Paul Chrystie of OHCD. “Our mission is to create and preserve affordable housing, to create suitable living environments and community revitalization, and the funds that help us do that are shrinking rather than growing.”

The Philadelphia Housing Authority’s wait-list is closed, with more than 100,000 applications and an estimated ten-year waiting line. An estimated 31 percent of households in the Philadelphia metro area are cost-burdened, meaning residents pay more than 30 percent of their income toward housing.

“A lot more money was available in the early years and the expectation is that the money will continue to decline,” said John Kromer, who led OHCD under Mayor Ed Rendell in the 1990s.

AMENDING THE CHARTER?

John Gallery, Jon Kromer and others interviewed for this article were noncommittal about Clarke’s proposal. The restructuring may be a good idea, they said, but more time and discussion is needed to sort out the details.

Ellen Kaplan, the Committee of Seventy’s interim president, said she’s concerned about “the seemingly growing trend of adding new city departments to the Charter,” even though the Committee supports two such proposals on the ballot this fall. Clarke’s proposal needs to be vetted through generous public discussion, Kaplan said, and she’d be suspicious of efforts to amend the Charter during 2015, which would “tie the hands of the next mayor.”

Both John Kromer and John Gallery said the key point is that the various housing and development agencies need to work together. To that end, Council President Clarke’s office pointed to a positive development: OHCD and PHA recently cooperated on issuing a request-for-proposals to finance new affordable rental units pursuant to Clarke’s affordable-housing initiative announced last spring.

“Proposals for consolidation or creating new agencies come and go,” said Kromer. “It’s sort of cyclical.”

(During the 1990s, Rendell pushed for a wide-ranging charter update meant to formalize the functions of various agencies. The amendments were defeated at the ballot.)

Representatives of OHCD and the Mayor’s Office did not want to comment on Clarke’s legislation, saying they would testify if and when the bill gets a committee hearing in City Council.