Officials make smart call on federal funds

Kudos to Pasco commissioners for resisting a misdirected sales pitch from local Realtor boards. The commission correctly plowed most of a federal windfall — money from the Housing and Economic Recovery Act — into a rehabilitation program intended to redevelop poor housing stock and make it available for purchase by people with moderate incomes.

The $19.5-million to Pasco, part of more than a half-billion-dollars coming to the state, is intended to help ease the economic crisis. In Pasco, 8,700 homes are for sale, of which 1,700 are in foreclosure, said Greg Armstrong, president of the West Pasco Board of Realtors.

On Tuesday, commissioners allocated $9-million to an existing program in which non-profit agencies acquire abandoned or blighted housing, the county oversees rehabilitation work, and the redeveloped home is sold to qualifying homeowners.

The benefits are significant. Non-profit agencies profit from the resale price or an administrative fee. Contractors and tradesmen are put to work on the remodeling jobs. Abandoned or foreclosed housing stock is improved and families that previously had been renters are eligible to become homeowners.

Commissioners also set aside $6.5-million, or one-third of Pasco's share of the federal outlay — into a program offering down payment assistance to buyers. It was this program that Realtors championed as a better way to move buyers into foreclosed homes.

The U.S. Department of Housing and Urban Development didn't buy that approach and kicked back an earlier version of the county plan for a rewrite. Community Redevelopment Director George Romagnoli said he believed HUD would support the $6.5-million down payment program.

The effort includes a buyers' remorse clause. If commissioners later believe the down payment program is more effective, they can update this plan within 24 months.

Realtors, however, were not placated and pushed the county for a $10-million allocation as well as a citizens advisory panel to oversee the spending. Commissioners declined the self-serving suggestions.

Throwing money toward down payments might help generate sales commissions on foreclosed homes, but does little to help employ building tradesman and contractors, nor does it target the worst of the available housing stock or benefit the neighborhoods most in need of improvement.

Also providing an imperative counter-point to the commission was Tom Smith of General Home Development in Dade City. He noted the program advocated by Realtors would provide a short-term benefit that wouldn't stimulate additional activity until the homes are resold — typically an average of seven years after closing. Money repaid to the rehabilitation program, however, provides capital for a revolving loan program to help revamp other housing stock in the future.

The county plan also includes money to demolish homes beyond repair, building some special needs housing, training and administration. The money is to be committed within 18 months and be spent within four years. Excluded from the program are the cities that do not participate in the Community Development Block Grant program and the Land O'Lakes to Wesley Chapel region where foreclosures are not as prevalent as the rest of the county.

HUD still must approve the county's plan, which is to be submitted Monday. Inviting rejection a second time was not a chance commissioners were willing to take. It was the smart call. Jeopardizing a significant community benefit to placate a vocal special interest would have been leadership at its worse.

Officials make smart call on federal funds 11/29/08 [Last modified: Friday, December 5, 2008 8:16pm]

    

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