Press Release   
For Immediate Release 
September 30, 2008 

Contact:  Ricci Graham  
(510) 763-0370  

Local leaders say HUD allotment shortchanges region

Oakland, CA – Congresswoman Barbara Lee (CA-09) announced today that the U.S. Department of Housing and Urban Development (HUD) has released a formula that determines funding levels for communities that have been decimated by the foreclosure crisis, with an estimated $10.3 million directed to Alameda County. Of that amount, $8.2 million is reserved for the city of Oakland.

In response to the release of funding levels that is part of the Housing and Economic Recovery Act of 2008, Congresswoman Lee expressed concern about the allocation of Community Development Block Grant (CDBG) funds that will be dispersed to communities hard hit by the foreclosure crisis. Congresswoman Lee announced her intention to quickly move to work with local stakeholders to ensure the federal funding reaches those hardest hit by the foreclosure crisis in the 9th Congressional District.

Under H.R. 3221, the Foreclosure Prevention Act, which was signed into law on July 30, 2008, HUD will disperse $3.92 billion in CDBG funding nationwide, with $145 million in funding going to California. Of that, $8.2 million in CDBG funding will be directed to Oakland, and an additional $2.1 million to other communities throughout Alameda County. The CDBG funding will be used to acquire and rehabilitate foreclosed properties that have been vacant for over 90 days.

The funding, which Congresswoman Lee fought to ensure was included in the legislation, is intended to help restore home values and prevent blight and crime in neighborhoods that have been devastated by an overwhelming number of foreclosures. 

“Though I am pleased we were able to secure this much needed funding for our communities being devastated by the foreclosure crisis, I remain concerned about the overall California allocation,” Congresswoman Lee said. “Several of my colleagues and I have written a letter to HUD Secretary Steve Preston calling for a review of the formula and asking that it be adjusted to recognize the devastating impact of the foreclosure crisis in the state of California.”

Congresswoman Lee noted that California is slated to receive $12 million less in CDBG funding than the state of Florida.

Oakland Mayor Ron Dellums, Assemblymember Sandré Swanson and Alameda County Supervisor Keith Carson joined Congresswoman Lee in urging HUD officials to reexamine the funding formula.

 “With regards to the issue of foreclosures, anyone familiar with this crisis knows that the city of Oakland and the county of Alameda have been hit extremely hard,” said Mayor Dellums. “Many of Oakland’s neighborhoods have been devastated by this crisis, and I join my colleagues in expressing our disappointment in what appears to be a fundamentally flawed and unfair formula.”

Alameda County Supervisor Keith Carson agreed and said more CDBG funding needs to be directed to Alameda County in order to properly address the crisis. “California has the second highest foreclosure rate in the country, second only to Nevada,” said Carson. “The HUD allocation of $2 million does not adequately address the needs of working families in our communities who are struggling to hold onto their property.”
 
Swanson agreed that time is of the essence “in dealing with long-vacant foreclosed properties.”

“Increasing blight attracts crime, bringing down property values, and straining local police services that are often stretched too thin already,” said Swanson.  “Given the incredibly high rate of foreclosures in the State, it is imperative that HUD reexamines its funding formula to ensure that California receives the funds it needs to properly address this crisis.”

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