Lapsed housing funds fuel despair

Here we go again. Unfortunately.

The city’s fumbling of federal funds that could have helped with affordable housing has caused it to lose nearly $2.4 million in federal HOME money, and is putting another $7.5 million at risk. The failure to use these funds in a timely manner is galling enough, given Hawaii’s homeless and housing crisis — but doubly so, coming a mere year after the U.S. Department of Housing and Urban Development (HUD) warned the city against its dysfunctional handing of federal grants.

In a scathing Aug. 26, 2016, audit, HUD’s Inspector General took the city to task for questionable practices involving the acquisition of apartment complexes intended to boost the city’s inventory of affordable rentals. Those practices put $15.9 million at risk, and after months of back and forth, the city conceded to repay the federal agency $1.45 million.

This time around, millions of federal dollars lapsed, despite allocations being good for five years.

Two projects that went south, in particular, would’ve helped address Oahu’s dire need for low- and moderate affordable housing via property purchases using federal Community Development Block Grant (CDBG) funds: one on Vancouver Drive near University of Hawaii-Manoa, the other along Kamoku Street near ‘Iolani School.

Contracts to buy were signed at the end of April, city spokesman Jesse Van Dyke Broder told the Star-Advertiser. “However, for various reasons, including concerns that the purchases may not be justified in strict compliance with HUD requirements,” the city determined that completing the transactions would not be in its best interests, so were canceled.

These failures are dismaying, given the time, resources and manpower spent, only to come up empty. City officials continue to struggle with timeliness and efficiency — and the failure to improve has dire consequences. Hawaii has the highest rate of homelessness per capita, and Oahu has an estimated 24,000-unit housing shortfall.

Further, the city’s inability to use money in a timely fashion has put at risk another $7.5 million in CDBG funds, which are used in low- and moderate-income communities for things ranging from building police and fire stations, to renovating properties for housing.

In explaining the delays in spending the HOME and CDBG funds, city Managing Director Roy Amemiya cited missed deadlines due to working with private-sector partners.

That harkened to a separate, recent flareup between the city and nonprofit agencies, in which delay in receiving federal funds came close to disrupting services for senior citizens and “meals on wheels” recipients.

Coordination, clearly, is a struggle for government — not just between the city and its private nonprofit partners; but also interagency, between the two city departments handling the CDBG program: Budget and Fiscal Services (BFS) and Community Services (DCS).

Last year’s HUD audit blasted the city’s defective system for handling CBDG money. It found that the BFS and DCS departments “did not function well with each other, and the additional layer of the second department slowed grant administration.” Projects could sit idle for a significant length of time. Department responsibilities were not clearly defined. The two directors “had equal authority, and there was no clear resolution process.”

“The City’s decentralized grant administration process created dysfunction, inefficiency, and wasted grant funds,” HUD stated. “The dysfunction and inefficiency caused the City to be repeatedly at risk of failing the HUD timeliness test.”

The federal agency recommended, reasonably so, that the city consolidate the grant program into one department under leadership with a proven record of compliance with clearly defined lines of responsibility.

But with the recently lost $2.4 million and another $7.5 million in jeopardy, it’s evident that deep-rooted problems remain. This, despite the city’s overly optimistic spin.

“The City has been working together with HUD to improve its grants management system to strengthen program compliance with clearly defined lines of authority and responsibility to better implement the CDBG program,” the city told the Star-Advertiser Wednesday. “The City is streamlining the project selection process, prioritizing the use of CDBG funds … and more clearly defining the division of responsibilities between Budget and Fiscal Services (BFS) and Community Services (DCS).”

Sounds good. But the proof of true improvement will be when federal dollars are used for actual projects, not allowed to lapse.

Our communities are struggling with increasingly visible homeless encampments. Federal money is available to help ease the affordable housing crisis, if only local officials can improve their management of funds. Take a hard look around — inefficiency is helping to enable these growing waves of homeless now washing over our neighborhoods.