HUD Budget Cuts Would Accelerate Re-Segregation of High-Cost Cities, San Francisco at Top of List

The Trump Administration’s proposed Fiscal Year 2018 budget, announced Feb. 27, augments military spending by $54 billion — a 10 percent increase. The administration aims to offset that staggering cost by decimating non-defense cabinet departments’ budgets by the same 10 percent (Figure 1). These non-defense programs have for decades showcased positive impacts in communities of color. Such a revised budget would have devastating effects in low-income, immigrant communities like San Francisco’s Mission District.

Especially troubling is the $6.2 billion proposed cut to Housing and Urban Development (HUD). This equals a 13.2 percent decline in funding, with monies allocated dropping to $40.7 billion (Figure 2).

While the administration’s budget is basically a guideline, as Congress has the ultimate budget-making power, it stems from a philosophy that government hinders, rather than helps, underresourced communities to thrive. MEDA wholeheartedly disagrees.

It is a spurious concept that the way to “protect” low-income Americans is via defense programs: communities of color actually need protections from the inherent cultural obstacles or speculative markets that translate to reversing their opportunities to thrive.

HUD cuts would worsen re-segregation of the Mission
Over the past 15 years, 8,000 Latinos have been displaced from the Mission District — that’s over 25 percent of our community. More than almost any other neighborhood in San Francisco or the Bay Area, the Mission is beyond the tipping point of being the diverse, working-class, immigrant community it has always been to becoming the most costly and segregated. A neighborhood that realtors and developers alike tout as a Latino hub will by 2020 drop from 50 percent to just 30 percent Latino. This irony translates to a community unaffordable to anyone earning less than $75,000 a year.  

Living in California, where neighborhoods of opportunity for minorities are now commonplace, it is easy to forget that in other parts of the country minorities continue to face barriers in establishing inclusive communities. The Mission is one of the hearts of San Francisco as a Sanctuary City. In this day and age, it is even more imperative to ensure the historic strides this country has made in civil rights are not reversed.

The need to proactively address the Mission’s housing crisis was the impetus for the start of MEDA’s Community Real Estate team three years ago. To date, almost 1,000 units have already been preserved or produced. This jumpstart would not have happened without the HUD Rental Assistance Demonstration Program (RAD), which San Francisco used to reset public housing financing and management with the best practices of affordable housing. (Look for a soon-to-be-published blog, in which MEDA will share why RAD has made early inroads to reducing years of isolation.)

But there’s much more work to do.  

Our 2016 Mission Promise Neighborhood survey revealed our underresourced families are still the hardest hit by the speculative market and tremendous demand for housing of high-income professionals. Of the 584 survey respondents, 92 percent were renters, with 61 percent “severely cost burdened” by housing (defined by HUD as monthly housing costs that exceed over 50 percent of monthly household income). These families are small-business owners, janitors, nannies, educators, contractors: the caretakers of the local economy.

Slashing Community Development Block Grant (CDBG) equals the gutting of local economies
Community development is not possible without HUD money in the picture – an agency with a stated mission “to create strong, sustainable, inclusive communities and quality affordable homes for all.” A mission that aligns with that of MEDA.

Community development involves much more than developing and building affordable housing. For families to thrive, and for a community to support those families, it also means additional programs such as career and small-business development. MEDA’s asset-building programs all include financial literacy tools to arm over 7,000 underresourced clients annually, plus strengthen the institutions and systems needed for these families to succeed. In 2016, this supported over 2,100 positive financial gains for families, plus over 50 new homeowners and more than 40 new or expanded local businesses. These programs are also funded via HUD monies, meaning they are all now threatened by decreased funding.

Coupled with the proposed cuts to the federal health and education departments, a dire situation is in the making — one seemingly devoid of a strategy for ongoing community development work. When the previous administration greatly expanded the role of government as a partner to private enterprise and social innovation, the strategy was to update and realign government to best meet a community’s needs. It is myopic to slash budgets without review of their impact on the people and communities which they serve, as this expands the chasm between haves and have-nots across the nation.

Please write your congressperson today and ask them to do the right thing and not slash HUD’s budget.

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