new influx of federal dollars to city

News from City Hall
City of Kansas City, Mo.

FOR IMMEDIATE RELEASE: Sept. 26, 2008
CONTACT: Mary Charles, city communications officer, (816) 513-1356
City awarded $7.3 million to combat housing/foreclosure crisis

The U.S. Department of Housing and Urban Development today announced that the recently passed Housing and Economic Recovery Act of 2008 will provide the City of Kansas City, Mo., with $7,323,734 in funding to help stabilize neighborhoods hit hard by foreclosures and sub-prime mortgages. The state of Missouri will receive $42,664,187, and the City will have the opportunity to access a portion of that money for the same purpose.

"This influx of federal money will help us target those neighborhoods especially hard hit by the recent housing crisis by fixing or demolishing blighted property and providing assistance to low- to moderate-income homebuyers," City Manager Wayne A. Cauthen said. "It will not solve every problem in our urban core, but will bring relief to people who have suffered the most."

Housing and Urban Development Department guidelines allow state and local governments to acquire land and property; to demolish or rehabilitate abandoned properties; to offer down payment assistance to low- and moderate-income homebuyers; and to create land banks to assemble, manage and dispose of vacant land for the purpose of stabilizing neighborhoods and encouraging private investment and re-use of that property.
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All of this sounds great but read closely. Regardless of the tag line, under current Housing and Urban Development guidelines the money isn't availabe to combat the housing/foreclosure crisis. The money can be used to help those who want to buy a house or demolish properties but isn't available to help refinance high-interest rate loans or restructure existing debt. Programs to help rewrite high-interest rate mortgages into more manageable debt needs to be forthcoming if the Main Street is to see relief.

The City has 18 months in which to spend this money. Congress will have to act quickly, which likely means no sooner than the first of next year, to rewrite HUD policies for real help to trickle down to Main Street. You thought this year was tough, wait till 2009. If we can make through that one, we'll recover.