HUD's Share of Stimulus Funds: Where Did the Money Go?

The American Recovery and Reinvestment Act of 2009 was signed into law by President Obama on Feb. 17, 2009. The Recovery Act included $13.61 billion for projects and programs administered by HUD. Nearly 75 percent of those funds were allocated to state and local recipients within days of the act's being signed into law, and according to HUD, almost all of the remaining 25 percent of funds have been awarded via competition.

At that time, more than two years ago, HUD vowed that Recovery Act investments in the agency's programs would be both swift and effective. These investments, HUD said, would generate tens of thousands of jobs, modernize homes to make them energy efficient, and help the families and communities hardest hit by the economic crisis.

What has happened in the past two years? Plenty, according to a report issued by HUD in March 2011. The bottom line, the report says, is that America's cities are “better prepared to be sustainable economic engines.”

The report is titled The American Recovery and Reinvestment Act: Working for America's Cities. Through its tracking and analysis of how the Recovery Act funds were utilized, HUD says the funding has helped to “position American cities to out-educate, out-innovate, and out-build our competitors.” This can be accomplished through the “collaborative and innovative approaches initiated during the implementation of the Recovery Act,” which have laid the foundation for American cities “to win the future,” says HUD.

In releasing the report, HUD's Deputy Secretary Ron Sims said, “As this data shows, the Recovery Act is rebuilding our communities by putting people back to work today, laying the foundation for long-term economic growth. But it's also helping us win the future by changing the way government does business.”

Sims said the report revealed that the Recovery Act “ushered in a new era in the way government approaches challenges, through partnerships between private enterprise and government agencies as well as more significant interagency collaboration. Initiatives made possible because of the historic investments of the Recovery Act have yielded lessons that will have long-term implications.

“The immediate impact of the Recovery Act pulled us back from the brink, saved jobs, and reinforced cities,” Sims added. “The legacy of these initiatives will be cities that are prepared to facilitate sustainable growth and a system that will implement future change efficiently.”

How the Funds Were Applied

The report shows that funding from the Recovery Act was concentrated in several key areas. Findings of the report include:

Sustainable Communities. Collaboration between HUD, the Environmental Protection Agency (EPA), and the Department of Transportation (DOT) initiated new ways to give cities a competitive advantage and solve multiple problems with a single investment. That led to the creation of a Sustainable Communities Initiative that encourages links between residential centers to commercial, educational, and corporate hubs through well-designed transit. Regions that embrace similar planning and approaches will be better prepared to attract jobs and private investment, the report concluded.

Weatherization. HUD collaborated with the Department of Energy (DOE) to coordinate the distribution of $5 billion in funds directed to weatherize homes and help American families reduce their energy costs. In the long-run, through such investments, America will be less dependent on foreign oil, the report stated, and homeowners will have lower utility bills and more money to spend or save for retirement.

Partnerships. Nationally, the Recovery Act directly stimulated $153 billion in private co-investment through matching grants, tax credits, loan guarantees, and direct loans. By the end of the act's implementation, it is further projected that about $100 billion in Recovery Act funding will be matched by $280 billion in additional funds outside the federal government. This leverage in turn spurs production in various sectors of our economy, HUD stated in the report, from the contractor who installed the technology to the manufacturer who built it to the truck driver who delivered it. Overall, this has a tremendous short-term impact beyond federal funds alone.

Homelessness Prevention. Programs such as Homelessness Prevention and Rapid Re-Housing (HPRP) are helping to change the way cities allocate resources and address problems. The impact of the Recovery Act in our cities will mean more efficient institutions that are making needed improvements to spur innovation and build foundations for winning the future, the report stated. HPRP created a system that allowed individuals and families, facing life on the streets, to make specific payments that enabled them to cover their rent or move back into their homes. The report reveals that, to date, more than 875,000 people—including 21,000 military veterans—were kept off the streets and in their homes because of this innovative program.

The full report can be viewed online at http://portal.hud.gov/hudportal/documents/huddoc?id=Urban_Recovery.pdf.