FOR IMMEDIATE RELEASE February 11, 2005	Contact: Michele Anapol (202) 466-2121 x226 manapol@nhc.org

FEDERAL BUDGET PROPOSAL TO RECONSTITUTE KEY HUD PROGRAM THREATENS FUTURE OF COMMUNITY DEVELOPMENT AND ECONOMIC PROGRAMS NATIONWIDE

NHC Urges Administration to Abandon Proposed Plan to Reconstitute the CDBG Program at the Commerce Department, Proposal Would Severely Limit Community Development Resources and Partnerships

Washington, DC – Today the National Housing Conference (NHC) responded to the FY 2006 Federal budget proposal released this week, urging the Administration to abandon its plans to reconstitute key programs, in particular the Community Development Block Grant (CDBG) program, lodging them at the Department of Commerce rather than the Department of Housing and Urban Development and at the same time drastically reducing funding. According to NHC, the proposal would in effect eliminate the CDBG program as it is currently constituted and severely limit the resources and partnerships necessary to effectively lead combined housing and community development initiatives nationwide. Specifically, under the proposal, CDBG would be one of 18 community and economic development related programs, including the Community Development Financial Institutions (CDFI) fund, reconstituted at the Department of Commerce under a new program funded at $3.71 billion called the Strengthening America’s Communities Program. CDBG has provided multipurpose development grants to state and local government’s for 30 years, and housing leaders nationwide are very concerned that the enormous success of this program will be significantly negatively impacted through the proposed changes.  NHC strongly supports greater program efficiency and effectiveness, but questions whether the real reason for this so-called consolidation is mainly to reduce funding for key community development programs.

“The proposal to reconstitute the Community Development Block Grant Program at the Department of Commerce and to slash funding is destructive and misdirected” said NHC President and CEO Conrad Egan.

“This proposal negatively impacts the future of local areas and regions that rely on the program, and turns back the clock on the progress already made in strengthening and revitalizing communities nationwide. It is particularly ironic and troubling that this proposal comes at the same time that good-faith negotiations were underway with Administration officials to improve the performance and monitoring of this essential program,” continued Egan.

NHC also believes it is important that both the tenant-based and project-based Section 8 voucher programs continue to be funded at least at the levels necessary to support the full extent of services and benefits provided under the current rules of those programs; that public housing funding must be raised to the clearly documented level of need; and that funding for rural housing and housing for the disabled must be fully restored.

NHC pointed to the importance of budget proposals aimed at serving the homeless, such as approximately $1.4 billion in funding for Homeless Assistance Grants. Additionally, a total of $300 million over four years is proposed for a Prisoner Re-entry Initiative, providing $25 million of HUD funding for FY 2006 specifically, which will help ensure that those exiting from prison make successful transitions to community life and long-term employment.

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