IN AN ACTION DESCRIBED AS “EXTRAORDINARY” BY A spokesperson for HUD, the agency has frozen $48 million in grant funding to Houston's Department of Housing and Community Development. The city has failed to rectify long-term deficiencies in its HOME program, which provides housing assistance to low-income families, says Brian Sullivan, a HUD spokesperson. When the city did not respond adequately to a Nov. 2, 2004, HUD letter detailing 25 deficiencies, the federal agency halted the 2005 allocation of $14.7 million and a $33.3 million line of credit provided through the Home Investment Partnership Act.

Among the findings in the Nov. 2 letter, HUD criticized the city for inadequate oversight and monitoring of subcontractors, incomplete and inaccurate data systems, and failure to correctly determine the income of HOME program beneficiaries, who must earn less than 80 percent of area median income as outlined by program rules. “We found wholesale deficiencies in their program, and we would expect wholesale improvements,” Sullivan says.

For its part, Houston's housing department is working to do just that, says Kevin Davis, a department spokesperson. Mayor Bill White replaced department director Daisy Stiner with Milton Wilson, a director of the U.S. Small Business Administration in Houston, on Jan. 1. “This is one of the director's top priorities,” Davis says.

HUD is encouraged by the housing department's new leadership. “The staff changes are very important,” Sullivan asserts. “We believe the mayor is now fully engaged in this issue, and it has to come from the top.”

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