Essay on Recovery and reinvestment

Submitted By ebranow
Words: 4275
Pages: 18


The Recovery Act at the U.S. Department of Housing and Urban Development
The housing crisis placed the U.S. Department of Housing and Urban Development
(HUD) firmly at the forefront of the response to the Great Recession. Millions of
Americans had lost or were in danger of losing their homes. The inventory of quality, affordable rental housing was already far below demand. In 2007, only 44 affordable units were available for every 100 extremely low-income renters nationwide.
With credit markets frozen and new development stalled, HUD was positioned to play a critical role in providing much needed capital through the American Recovery and
Reinvestment Act (ARRA) of 2009. Congress saw that HUD funds could be used to rehabilitate blighted structures into green, energy efficient buildings, build new rental housing, stabilize neighborhoods battered by the foreclosure crisis, and help people facing homelessness. At the same time, thousands of jobs could be created or saved.
HUD staff had decades of experience in getting money out to its grantees, including local public housing authorities, state and local governments, and nonprofits. For HUD, business as usual focused on the financials. The primary concern of each program office was getting the money to their grantees. (Program offices are similar to agencies within other federal Departments.) Each program office operated in its own silo and gave limited attention to how the other programs contributed to the overall mission. However, that way of doing business would be challenged by the passage of the Recovery Act.
The Recovery Act required new reporting on outcomes, i.e., how many housing renovations were completed or how many people facing homelessness received assistance. The focus of these outcomes would be on the people and places that received assistance rather than the programs that provided it. These new requirements could only be met through collaboration across agency silos.

This case was written by Henry Hensley, U.S. Department of Housing and Urban Development, as part of the Recovery Act Case Program. The case is intended solely as a vehicle for classroom discussion, and is not intended to illustrate either effective or ineffective handling of the situation described.
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U.S. Department of Housing and Urban Development Placed-Based Reporting (A)

In addition to its annual appropriation, HUD received $13.6 billion across nine programs when the Recovery Act was signed into law in February 2009 (Attachment 1–List of
Recovery Programs). On top of the new reporting requirements, the act contained ambitious targets for the expenditure of funds. This money would need to be distributed to grantees and spent faster than any previous appropriation of its size and scale.
While HUD was able to get money for approved projects obligated to grantees, getting them to spend it was a different challenge. Supplemental appropriations had proven especially slow to spend in the past. For example, more than a quarter of the $20 billion in HUD Hurricane Katrina relief funds sent to the Gulf States remained unspent five years after the storm.
Decision Point
 Faced with a 30% increase in appropriations, HUD would be providing funds to grantees that had faced scrutiny in the past. How would you go about ensuring the additional funds could be spent quickly while also