Telephone: (913) 551-5870 http://www.hud.gov/oig/oigindex.html Fax: (913) 551-5877 U.S. Department of Housing and Urban Development Great Plains Office of District Inspector General for Audit, 7AGA Gateway Tower II - 5th Floor 400 State Avenue Kansas City, Kansas 66101-2406 April 6, 2000 Audit Related Memorandum 00-KC-231-1801 MEMORANDUM FOR: William B. Rotert, Director, Office of Community Planning and Development, 7AD FROM: Ronald J. Hosking, Acting District Inspector General for Audit, 7AGA SUBJECT: City Housing Policies City of Kansas City, Missouri We have completed a review of the City of Kansas City, Missouri’s City housing policy, strategies and activities. This was a joint review conducted with the Kansas City, Missouri City Auditor. Attached is a copy of the jointly issued report detailing the results of this review. In short, we found that the City of Kansas City needs a housing policy. It currently bases its housing policy on what is contained in its Consolidated Housing and Community Development Plan, which includes only vague descriptions of the City’s housing strategies. When these strategies are used to measure performance, any outcome can be viewed as a success. We also found that the City did not maintain current housing related data that could be used for identifying and developing effective housing policy, strategies and activities. This report recommends that the City Manager take certain actions to ensure that the City develops and maintains an effective housing policy and accurate housing related data. We did not identify any instances of non-compliance with HUD’s requirements related to the City’s Consolidated Housing and Community Development Plan. Therefore, the report does not contain any recommendations for action by your office. The report does, however, suggest that the City involve your office by seeking advice and assistance while implementing the recommendations. We are providing you with a copy of this report to assist you in your future monitoring and technical assistance responsibilities. If you or your staff have any questions or comments, please feel free to call me at (913)551-5870. Distribution Attachment Telephone: (913) 551-5870 http://www.hud.gov/oig/oigindex.html Fax: (913) 551-5877 DISTRIBUTION: Deputy Secretary, SD, Room 10100 Chief of Staff, S, Room 10000 Special Assistant to the Deputy Secretary for Project Management, SD, Room 10100 Acting Assistant Secretary for Administration, S, Room 10110 Assistant Secretary for Congressional and Intergovernmental Relations, J, Room 10120 Senior Advisor to the Secretary, Office of Public Affairs, S, Room 10132 Deputy Assistant Secretary of Administrative Services/Director of Executive Secretariat, AX, Room 10139 Director of Scheduling and Advance, AL, 10158 Counselor to the Secretary, S, 10234 Deputy Chief of Staff, S, Room 10226 Deputy Chief of Staff for Operations, S, 10226 Deputy Chief of Staff for Programs and Policy, S, Room 10226 Director, Office of Special Actions, AK, Room 10226 Deputy Assistant Secretary for Public Affairs, W, Room 10222 Special Assistant for Inter-Faith Community Outreach, S, 10222 Executive Officer for Administrative Operations and Management, S, Room 10220 Senior Advisor to the Secretary for Pine Ridge Project, W, Room 10216 General Counsel, C, Room 10214 Director, Office of Federal Housing Enterprise Oversight, O, 9th Floor Mailroom Assistant Secretary for Housing/Federal Housing Commissioner, H, Room 9100 Office of Policy Development and Research, R, Room 8100 Inspector General, G, Room 8256 Assistant Secretary for Community Planning and Development, D, Room 7100 Assistant Deputy Secretary for Field Policy and Management, SDF, Room 7108 Government National Mortgage Association, T, Room 6100 Assistant Secretary for Fair Housing and Equal Opportunity, E, Room 5100 Chief Procurement Officer, N, Room 3152 Assistant Secretary for Public and Indian Housing, P, Room 4100 Chief Information Officer, Q, Room 3152 Director, Office of Departmental Equal Employment Opportunity, U, Room 5128 Director, Office of Departmental Operations and Coordination, I, Room 2124 Chief Financial Officer, F, Room 2202 Director, Enforcement Center, V, 200 Portals Building Director, X, Real Estate Assessment Center, X, 1280 Maryland Avenue, SW, Suite 800 Director, Office of Multifamily Assistance Restructuring, Y, 4000 Portals Building Secretary’s Representative, 7AS (2) Director, Fair Housing and Equal Opportunity, 7AEH Director, Public Housing, 7APH Director, Community Planning and Development, 7DD Director, Community Planning and Development, 7ED Director, Multifamily Housing, 7AHM Audit Liaison Officer, Community Planning and Development, DOT, Room 7220 Audit Related Memorandum 2 Attachment Telephone: (913) 551-5870 http://www.hud.gov/oig/oigindex.html Fax: (913) 551-5877 Deputy Secretary, Special Assistant, SD, Room 10126 Field Audit Liaison Officer, 6AF, (2) Assistant to the Deputy Secretary for Field Management, SDF, Rm. 7108 Deputy Chief Financial Officer for Finance, FF, Room 2202 Acquisitions Librarian, Library, AS, Room 8141 Deputy Office of Budget, FO, Room 3270 Departmental Audit Liaison Officer, FM, Room 2206 State/Area Coordinators, Great Plains District Ranking Member, Committee on Governmental Affairs, 706 Hart Senate Office Building, United States Senate, Washington, DC, 20510 Chairman; Committee on Governmental Affairs, 340 Dirksen Senate Office Building, United States Senate, Washington, DC, 20510 Chairman, Committee on Government Reform, 2185 Rayburn Building, House of Representatives, Washington, DC, 20515 Ranking Member, Committee on Government Reform, 2204 Rayburn Building, House of Representatives, Washington, DC, 20515 Subcommittee on Oversight and Investigations, Room 212, O’Neil House Office Building, Washington, DC, 20515 Director, Housing and Community Development Issue Area, United States General Accounting Office, 441 G Street, NW, Room 2474, Washington, DC, 20548 Deputy Staff Director, Counsel, Subcommittee on Criminal Justice, B373 Rayburn House Office Building, Washington, DC, 20515 Chief, Housing Branch, Office of Management and Budget, 725 17th Street, NW, Room 9226, New Executive Office Building, Washington, DC, 20503 Audit Related Memorandum 3 Attachment Transmittal Memo Table of Contents Table of Contents Table of Contents ____________________________________________________________________________________ Special Report: Kansas City Needs A Housing Policy ______________________________________________________________________________ Table of Contents Introduction 1 Purpose and Authority 1 Report Objectives 1 Scope and Methodology 2 Background 3 Federal Housing Efforts Date Back to the 1930’s 3 City Government’s Interest in Housing Dates Back More Than 30 Years 5 Housing-Related Spending Is Nearly $47 Million Annually 6 Non-Governmental Agencies Also Provide Housing-Related Services 7 Findings and Recommendations 9 Summary 9 Kansas City Needs A Housing Policy 10 Consolidated Plan Details Activities, But Does Not Clearly Identify Policies or Performance Outcomes 10 Reported Housing Strategies Are Too Vague to Represent Policy 11 Housing Service Providers Were Unaware of City Policies 15 A Comprehensive Housing Policy Should Be Established 15 Service Providers, FOCUS, and HUD Can Serve as Resources 16 Current Housing Data Is Not Available 18 Perceptions on Housing Problems Differ 18 Information on Current Housing Conditions Is Inadequate 19 Housing Data Should Be Interpreted Carefully 20 The City Needs Current Housing Data to Determine the Type and Severity of Problems 21 Recommendations 22 Appendix A: Housing Questions and Housing Representatives Interviewed 23 Appendix B: Director of HUD's Office of Community Planning & Development's Response 29 Appendix C: City Manager's Response 33 ______________________________________________________________________________ Special Report: Kansas City Needs A Housing Policy ____________________________________________________________________________________ List of Exhibits Exhibit 1: HUD Funding to Kansas City, 1998 4 Exhibit 2: Estimated Expenditures for Housing-Related Activities 7 Exhibit 3: Housing-Related Spending by Funding Source 7 Exhibit 4: Problems/Obstacles Identified in Interviews 19 Exhibit 5: Selected Information on Housing Conditions 20 ______________________________________________________________________________ Introduction ______________________________________________________________________________ Purpose and Authority This special report on city housing policies, strategies, and activities was initiated by the city auditor pursuant to Article II, Section 13 of the Charter of Kansas City, Missouri, which establishes the Office of the City Auditor and outlines the city auditor’s primary duties. The report was completed jointly with the local Office of Inspector General, U. S. Department of Housing and Urban Development (HUD), pursuant to the Inspector General Act of 1978 as amended. In the past, council members have requested information regarding the effectiveness of outside agencies that receive city funding for housing- related efforts. Present council members have expressed concerns regarding the overall effectiveness of the city’s housing efforts. This special report provides information on housing-related activities currently performed by city departments, HUD, and non-city agencies. It is the first of two reports we will complete on housing activities. A subsequent performance audit will be completed during fiscal year 2001, reporting on the activities of the city’s Housing and Community Development Department. ______________________________________________________________________________ Objectives This report was designed to answer the following questions: • What are the city’s missions, goals, and strategies for addressing housing conditions in the city? • Are the developed missions, goals, and strategies appropriate for the city? • Is there consistency between the city’s missions, goals, and strategies and federal housing objectives? • Does the city request and receive appropriate levels and types of federal cooperation and assistance? • What are the quality, affordability, and availability of housing in the city? 1 Table of Contents Special Report: Kansas City Needs A Housing Policy ______________________________________________________________________________ Scope and Methodology This special report is intended to provide the mayor and City Council information on housing-related activities currently performed by city departments, HUD, and non-governmental agencies. Our work on this report was completed in accordance with applicable government auditing standards and included the following procedures: • Identifying and evaluating available data on housing such as internal housing reports, census information, and housing-related department documents. • Reviewing literature on housing conditions, policies, or strategies. • Interviewing city staff, HUD officials, representatives of local agencies involved in housing-related activities, and area housing experts. • Reviewing reports and other materials generated as part of the Forging Our Comprehensive Urban Strategy (FOCUS) Kansas City process. • Reviewing materials related to the activities of the U. S. Department of Housing and Urban Development, including the city’s 1999 Consolidated Housing and Community Development Plan. • Attending HUD’s Building a Better Tomorrow: 1999 Best Practices and Technical Assistance Symposium and the September 1, 1999, HUD/city staff consultation conference. This report was completed jointly by the Office of the City Auditor and the Office of Inspector General, U. S. Department of Housing and Urban Development. No information was omitted from this report because it was deemed privileged or confidential. 2 Table of Contents Introduction ______________________________________________________________________________ Background Federal Housing Efforts Date Back to the 1930’s The Housing Act of 1934 created the Federal Housing Administration in response to a national housing crisis resulting from the stock market crash of 1929. The Federal Housing Administration provided insurance for private mortgage loans on residential property, thereby protecting lenders against loss, while encouraging the use of long-term mortgages. The act was expanded in 1937 as the government began to build, own, and operate housing. Subsequent acts in 1949 and 1954 addressed issues of urban blight and urban renewal. In 1965, the Department of Housing and Urban Development (HUD) was established, consolidating a number of agencies created in earlier legislation. HUD’s mission is to provide housing. The statutory mission of HUD is to provide a decent, safe, and sanitary home and suitable living environment for every American. The six HUD objectives are: • Fighting for fair housing. • Increasing affordable housing and home ownership. • Reducing homelessness. • Promoting jobs and economic opportunity. • Empowering people and communities. • Restoring the public trust. HUD programs are intended to increase the availability of housing and shelters through expanded economic opportunities and social and supportive services for low- and moderate-income individuals, the homeless, and the disabled. Programs have specific purposes. HUD supports a number of targeted housing programs. Particular objectives of the programs include promoting local government’s development of housing strategies, providing financial and technical assistance to develop affordable low- income housing programs, and promoting partnerships among all levels of the government and the private sector. Individual HUD programs and their objectives are described below. • Community Development Block Grant Entitlement Program. Focuses on providing decent housing and expanding economic opportunities for individuals of low to moderate income. 3 Table of Contents Special Report: Kansas City Needs A Housing Policy • Emergency Shelter Grant Program. Supports emergency shelters and social services for the homeless; tries to restrict the increase of homelessness through preventive programs and activities. • Supportive Housing Program. Assists homeless persons in the transition from homelessness. • Shelter Plus Care. Provides supportive services for hard to serve homeless persons with disabilities and their families. • Home Investment Partnerships Program. Assists local governments and the private sector in the production and operation of affordable housing for low-income persons. • Housing Opportunities for Persons with AIDS. Provides states and municipalities with resources and incentives to meet the housing needs of persons with AIDS or related diseases and their families. HUD provides more than $29 million annually to Kansas City. Representatives of housing-related agencies both within and outside city government indicated through interviews that they believe the city receives its fair share of HUD dollars. A combination of grants and contracts provided over $29 million in funding to Kansas City during 1998. (See Exhibit 1.) Exhibit 1. HUD Funding to Kansas City, 19981 HUD Funding to Kansas City Amount Entitlement Grants Community Development Block Grant $11,324,000 Home Investment Partnership 2,618,000 Housing Opportunities for Persons with AIDS 778,000 Emergency Shelter Grant 445,000 Competitive Grants Continuum of Care—Shelter Plus Care 7,363,140 Economic Development Initiative—Special Purpose Grants 4,600,000 Brownfields Economic Development 1,250,000 Continuum of Care—Sheffield Place 483,660 Local Lead Hazard Awareness Campaign 190,257 Other Fair Housing Contract 191,910 Total HUD Funding $29,243,967 1 Figures for fiscal year 1998 are reported because not all awards for fiscal year 1999 were made when this report was completed. 4 Table of Contents Introduction Source: HUD-OIG calculations. The City has broad latitude in how it spends HUD funds. HUD programs are designed to give recipients discretion in how to use federal funds to address their housing needs. HUD programs allow substantial flexibility within the broad federal guidelines governing each program. For example, although HUD requires that at least 70 percent of the Community Development Block Grant funding be spent on programs benefiting low- and moderate-income persons, the city has broad latitude in the way it meets the requirement. Similarly, although the Housing Opportunity for Persons with AIDS, Home Investment Partnership, and Brownfields programs include restrictions to ensure the funds are used only to benefit the respective program, the city can design its own program within those guidelines. City Government’s Interest in Housing Dates Back More Than 30 Years Ordinance 33012 (passed on November 8, 1966) established the Community Services Department to replace the Welfare Department. The duties of the Community Services Department included serving: In a liaison capacity between city government and citizens, churches, schools, community organizations, law enforcement agencies and others, in such areas as housing, education, job training, employment and crime and delinquency control.2 Housing-related activities span several city departments. Seven city departments provide housing-related services. The departments and their housing-related responsibilities are described below. • Housing and Community Development. Responsible for increasing new housing construction as well as increasing the rehabilitation of existing housing within the city. • Neighborhood and Community Services. Responsible for neighborhood preservation through code enforcement efforts and the demolition of property that cannot be rehabbed. The department also provides assistance to persons who are homeless while seeking to prevent others from becoming homeless through rent and utility assistance. • Health. Contracts with a local agency to provide housing services for persons with HIV/AIDS, inspects dwellings upon suspicion of lead 2 Charter of Kansas City, Missouri, Article III, Section 39. 5 Table of Contents Special Report: Kansas City Needs A Housing Policy poisoning, and provides lead hazard remediation to privately owned homes and rental properties of low- and moderate-income individuals. • Codes Administration. Ensures compliance with building codes by providing residential plans review, testing and licensing tradesmen and contractors, issuing building and demolition permits, and conducting structural, mechanical, fuel gas, electrical, and plumbing inspections on new construction, renovations, and demolitions. Enforces the zoning and floodplain management ordinances. • City Planning and Development. Reviews and makes recommendations on zoning applications for development of property. Provides staff to the City Plan Commission; the Planning, Zoning and Economic Development Committee; the Board of Zoning Adjustment; and the Landmark’s Commission and is a liaison with the Economic Development Corporation. • Human Relations. Focuses on fair housing issues, investigating claims of discrimination in mortgage, rental, and real estate areas. • Municipal Court. Assists other city departments in their enforcement of property maintenance codes, building codes, and the zoning ordinance by adjudicating citations written against property owners, tenants, and permit holders through the Housing Court. Housing-Related Spending Is Nearly $47 Million Annually The city spends an estimated $47 million annually on housing-related activities. (See Exhibit 2.) If all city spending on housing-related efforts were consolidated in a single department, the nearly $47 million in annual spending would place the department third in total expenditures, trailing only police ($115 million) and fire protection ($56 million).3 3 Total expenditure figures for Police and Fire are from the fiscal year 2000 adopted budget. 6 Table of Contents Introduction Exhibit 2. Estimated Expenditures for Housing-Related Activities Department Expenditures HUD Contributions not otherwise included4 $16,760,103 Housing and Community Development 14,313,689 Neighborhood and Community Services 10,611,225 Health 2,793,091 Codes Administration 1,380,000 City Planning and Development 572,499 Human Relations 140,778 Municipal Court 79,860 Total $46,651,245 Sources: Adopted Budget FY 2000, conversations with department staff, and HUD-OIG/City Auditor’s Office calculations. Most housing funds come from grants. Almost $32 million in estimated city funding comes from state and federal grants. The city provides approximately $8 million (about 17%) from the general fund. (See Exhibit 3.) Exhibit 3. Housing-Related Spending by Funding Source Funding Source Total Expenditures Grants $31,663,775 General Fund 7,913,419 Local Use Tax 2,519,768 Capital Improvement Fund 2,375,000 Permit Fees 1,380,000 Infrastructure and Maintenance Fund 315,000 Special Housing Rehabilitation 260,000 Domestic Violence Shelter Operations 105,000 State General Fund 83,283 Police Drug Enforcement 36,000 Total $46,651,245 Sources: Adopted Budget FY 2000, conversations with department staff, and HUD-OIG/City Auditor’s Office calculations. Non-Governmental Agencies Also Provide Housing-Related Services In addition to HUD and city departments, there are a number of other non- governmental agencies involved in housing activities including developers, financial institutions, economic development organizations, community development corporations, and organizations for persons with special needs. The following briefly describes some of the organizations involved in housing-related activities. 4 The figures included in the individual department budgets do not reflect all annual HUD contributions. For consistency with Exhibits 1 and 3, we included here HUD funding not already shown in this exhibit. 7 Table of Contents Special Report: Kansas City Needs A Housing Policy • Developers. Responsible for the construction of housing and rental properties. • Financial institutions. Supply the funds for the development or purchase of housing. • Economic development organizations. Assist developers or other parties interested in housing construction. • Community development corporations. Develop or rehabilitate housing, generally in a specific area or neighborhood. • Special needs organizations. Provide assistance to those in need, such as the homeless or poverty stricken, by providing advocacy services or combating discrimination. 8 Table of Contents ______________________________________________________________________________ Findings and Recommendations ______________________________________________________________________________ Summary Limited information on the city’s missions, goals, and strategies for housing exists, although the city’s housing efforts appear consistent with federal housing objectives. While HUD provides a significant portion of the city’s housing funds, it allows cities broad latitude in determining how its funds should be spent. This autonomy gives Kansas City the opportunity to direct its own efforts, but also places responsibility on the city to identify housing problems and the best methods to address them. The city has not adequately met this responsibility as the city lacks a comprehensive housing policy. The lack of a housing policy reduces the city’s ability to determine the effectiveness of its efforts or evaluate their appropriateness. Current information on the quality, affordability, and availability of housing in the city is largely non-existent. Information on housing conditions reported in the city’s 1999 consolidated plan is at least ten years old and consequently should not be used to identify current conditions. Interviews with more than 60 frontline housing service providers identified problems that include deteriorating physical condition, lack of affordable units, and problems with city bureaucracy. Adequate knowledge of housing conditions is crucial for identifying problems, determining their severity, and developing policies that might address and correct them. We recommend the city begin the process of developing a clear, comprehensive housing policy that addresses all housing in the city, answers questions of city priorities, describes the methods to be used, and identifies program outcomes. A task force that includes city staff, local housing service providers, and housing experts should be established to develop the city’s housing policy. HUD, which currently provides adequate levels of cooperation and assistance, should also be used as a resource in the policy’s development, along with information developed from FOCUS. Information on housing conditions should be collected and used in these efforts. Once developed, the policies should be communicated to the City Council for deliberation and approval, then communicated to all interested parties and serve as the basis for evaluating efforts to address housing problems in Kansas City. 9 Table of Contents Special Report: Kansas City Needs A Housing Policy ______________________________________________________________________________ Kansas City Needs A Housing Policy Kansas City does not have a unified, clearly articulated policy directing its housing efforts. Part of the reason is that HUD allows cities to apply for and receive funds for housing efforts without requiring the establishment of city policies directing these efforts. The city annually develops a consolidated plan that provides little direction on the city’s housing objectives and strategies, allowing any change in housing conditions to be interpreted as a success. Interviews with more than 60 representatives of housing-related agencies found that 75 percent thought the city should assume the role of leadership or policy facilitator in housing, while just over ten percent felt the city currently accomplishes this role. We also found poor communication of the city’s goals and objectives to non-governmental organizations providing housing services. Although not specifically asked about city policies, several area frontline housing service providers stated that they were unaware the city had any housing policies. A comprehensive city housing policy is needed. The policy should address all housing in the city, regardless of the department providing the service. It should establish city priorities, describe the methods used to accomplish objectives, and identify desired program outcomes. A task force that includes city staff, HUD staff, developers, housing experts, and members of financial entities, special interest organizations, and neighborhood groups should be established and given responsibility for developing a comprehensive housing policy. Once developed, the policy should be communicated to the City Council for deliberation and approval, then used as a basis for identifying the duties and responsibilities individual city departments will accomplish. The developed policy should be communicated so that it is known and understood by all interested parties both within and outside city government and serve as the basis for measuring the effectiveness of city departments and outside agencies receiving city funding to resolve Kansas City’s housing problems. Consolidated Plan Details Activities, But Does Not Clearly Identify Policies or Performance Outcomes HUD requires cities to submit a consolidated plan as a condition of the city’s receipt of $15 million in entitlement grants from the numerous 10 Table of Contents Findings and Recommendations federal housing assistance programs.5 The consolidated plan should assess various housing needs in the community, and design affordable, special-needs housing strategies and action programs to meet those needs. The city’s Housing and Community Development Department develops the city’s plan with the assistance of other departments. Once developed, the consolidated plan is reviewed and approved by council resolution, then submitted to HUD for approval. The city’s 1999 Consolidated Housing and Community Development Plan was approved by Council Resolution 990088. HUD staff report that their agency’s role is one of oversight and monitoring to ensure funds are used within the broad parameters of its programs. As a result, it is the city’s responsibility to establish its own controls to ensure programs are effectively developed, coordinated, and communicated to all necessary parties. Reported Housing Strategies Are Too Vague to Represent Policy The information contained in the 1999 consolidated plan is inadequate to serve as an effective city housing policy. For example, one section of the plan includes directives such as “increase the supply of decent affordable housing” and “provide a variety of housing types.” These statements came from documents resulting from Forging Our Comprehensive Urban Strategy (FOCUS), an effort began in 1992 to design a clear vision and strategic direction for Kansas City to be used to develop a new community-driven, fact-based, cohesive policy framework to guide the city’s public policy discussions into the next century.6 The city’s five-year housing goal, also included in the 1999 consolidated plan, was similarly derived from FOCUS efforts. This goal is equally broad: To create a city for people that fosters stable, livable, economically-viable and diverse neighborhoods by substantially increasing opportunities for families – especially those of low and very-low income and those with special needs – which enables them to afford a standard dwelling unit in a suitable living environment.7 5 This requirement is a central provision of the Cranston-Gonzalez National Affordable Housing Act of 1990. 6 FOCUS was an effort by city staff and volunteers to replace Kansas City’s comprehensive plan, which was written in 1947. FOCUS is an interconnected plan that provides a new decision-making framework for complex issues. The resulting comprehensive and strategic plan, FOCUS Kansas City, was adopted by the City Council in 1997. 7 Kansas City, Missouri’s 1999 Consolidated Housing and Community Development Plan, pp. 74 and 75. 11 Table of Contents Special Report: Kansas City Needs A Housing Policy The results of the city’s FOCUS efforts were not intended to represent city policies, but to begin the discussion for policy development. When substituted for policy in the city’s consolidated plan, their lack of specificity makes it difficult to determine how these directives will be accomplished, the city’s role in these efforts, and which of the seven city departments will be responsible for achieving them. In addition, the lack of specific objectives limits opportunities to determine whether the objectives were successfully accomplished. The 1999 consolidated plan cannot substitute for comprehensive statements of the city’s goals for housing and the specific strategies it expects to employ. Not having this information leaves city staff with little direction for determining the best method of accomplishing the city’s housing goals or objectives. City strategies have apparently evolved without formal discussion or decision-making. Policy is a "standing decision," characterized by behavioral consistency and repetitiveness on the part of both those who make it and those who abide by it.8 While lacking policies, the city appears to have made some decisions regarding its housing efforts without formal deliberations or discussion. HUD staff report that Kansas City tends to distribute its funding to various neighborhoods throughout the city, although concentrating efforts in a particular area is another successful strategy. Determining whether the city should focus its efforts (and dollars) in specific geographic locations of the city or scatter them everywhere should be part of the policy development process. HUD staff also noted that Kansas City has many subgrantees and runs a mini-entitlement program based on its application process. The staff believe a better strategy for the city might be to identify specific projects it wants done, request proposals and award contracts based on the value of the proposals in relation to the city’s housing policy. Development of a city policy could provide a forum for determining which strategy will best achieve the city’s identified goals and objectives. Further, the manner in which these strategies were established is unclear. The city's housing activities are described in documents such as the consolidated plan and adopted budgets but information is limited on the policies, how they were developed, and who participated in their development. 8 Heinz Eulau and Kenneth Prewitt, Labyrinths of Democracy, (Indianapolis: Bobbs-Merrill, 1973), p. 465, quoted by Charles O. Jones, An Introduction To The Study Of Public Policy, 3rd ed., (Monterey: Brooks/Cole Publishing Company, 1984), p. 26. 12 Table of Contents Findings and Recommendations Minimal efforts could be viewed as success. Evaluating the effectiveness of the city’s housing activities becomes difficult if the city lacks clear goals or objectives against which operations can be compared. The strategies included in the consolidated plan allow any outcome to be declared a success, simply because conditions have changed. For example, if one house were constructed as a result of the city’s efforts, it would be considered a success because the city managed to “increase the supply of decent affordable housing.” Specific policies and goals would help to better evaluate whether such an effort was, indeed, a success. For example, specific goals relating to cost or viability of the developed housing could be used to determine whether the new construction was suitable for the neighborhood in which it was built, had a value in line with the cost of surrounding homes, and was constructed using quality materials and workmanship. The lack of housing policies increases the possibility that the nearly $47 million in annual citywide spending for housing-related activities may not be utilized in an efficient, effective, and equitable manner. Obtaining the greatest benefit from the city’s housing efforts requires that they grow out of a unified vision, articulated through guiding policies focusing on desired outcomes. By clearly articulating the goals and expectations in a housing policy, the city would be better able to determine whether its programs and activities are achieving the desired result. Components of Public Policy • Intentions: The true purposes of an action. • Goals: The stated ends to be achieved. • Plans or proposals: Specified means for achieving the goals. • Programs: Authorized means for achieving goals. • Decisions or choices: Specific actions taken to set goals, develop plans, implement and evaluate programs. • Effects: The measurable impacts of programs (intended and unintended; primary and secondary). rd Source: Charles O. Jones, An Introduction to the Study of Public Policy, 3 ed., (Monterey: Brooks/Cole Publishing Company, 1984), pp. 26 and 27. 13 Table of Contents Special Report: Kansas City Needs A Housing Policy Successful Efforts of the CIC Committee Provide a Model for Effective Housing Policy Development On September 11, 1997, the Community Infrastructure Committee (CIC) presented their final report, describing a strategy for planning, financing and administering the city’s capital improvement program.9 Problems the committee identified mirror those found in the city’s housing efforts: • lack of an orderly and understandable process; • lack of a standardized, consistent methodology for establishing priorities; and • lack of guiding principles and policies that would direct the course of the city’s efforts and standards for managing the city’s program. The CIC developed a decision-making framework by which infrastructure needs can be identified, prioritized, and sensibly financed, providing an orderly, predictable, understandable, and inclusive process which enhances public confidence, trust, and participation in the system, and better assures a consistent outcome. The committee proposed a number of recommendations that: • identifies the roles and responsibilities of the program participants; • identifies the process for program development; • describes how the program will be administered; • identifies objective and standardized criteria for use in establishing priorities; • includes a mechanism for systematic citizen involvement in planning and priority setting; • suggests balance, over time, between types of projects and geographic locations; • recommends coordination with the efforts of other jurisdictions and agencies; and • suggests methods of monitoring and reporting progress and consistency with the plan be formally adopted, user friendly, and published often. The committee reported that by instituting orderly procedures, standards, guidelines, and benchmarks and by better managing resources and exercising patience, the city can make more efficient use of monies available and have a greater positive impact. Development and implementation of a similar system could improve housing efforts. Source: Community Infrastructure Committee, “Closing the Gap” A New FOCUS On Capital Improvements, September 11, 1997. 9 The CIC was created by City Council Resolution 951551. It was charged with reviewing the city’s capital asset condition and needs, establishing goals to guide the development of annual and five-year capital budgets and plans, 14 Table of Contents Findings and Recommendations Housing Service Providers Were Unaware of City Policies We asked more than 60 frontline housing service providers for their impressions of the city’s housing efforts. While 75 percent of those interviewed thought the city should assume the role of leadership or policy facilitator, just over 10 percent felt the city currently accomplishes this role. In addition, several of those interviewed brought up the issue of a city housing policy, describing it as inadequate or non-existent. As part of our efforts for this report, we interviewed more than 60 individuals, including representatives of agencies involved in housing- related activities, members of the local HUD office, and local academic experts on housing issues. Each was asked a series of open-ended questions, including: • How would you describe Kansas City’s housing conditions? • What do you feel should be the city’s role concerning housing issues? • How does this role compare to the city’s current role in housing?10 When asked what should be the city’s role in housing, 75 percent of those interviewed thought the city should assume the role of leadership or policy facilitator. However, when asked how well the city currently accomplishes this role, just over 10 percent found the city’s efforts satisfactory. Similarly, almost 50 percent of those interviewed thought the city should facilitate partnerships between private organizations, non- profit agencies, and government entities, while just over 10 percent thought the city was currently successful in these efforts. Several providers identified the lack of a city policy. Although not specifically asked, several of those interviewed also spoke about the city’s housing policies. A few said they could not identify a coherent or cohesive housing message being disseminated from City Hall. Some thought the city has little or no housing policy. One person responded that most of the problems in housing result from the lack of a policy framework. Effectively accomplishing the city’s leadership role requires the development and communication of a comprehensive housing policy. A Comprehensive Housing Policy Should Be Established developing policies for prioritizing needs, identifying funding options, assessing current planning efforts, and developing long-term strategies to resolve capital improvement and deferred maintenance needs. 10 A complete list of the questions asked can be found in Appendix A. 15 Table of Contents Special Report: Kansas City Needs A Housing Policy Kansas City needs a comprehensive housing policy. The policy should explain the rationale behind decisions, describe methods to be used, and state anticipated program outcomes. Policy setting involves answering questions regarding issues and priorities. Aspects of a city housing policy, for example, should include decisions on the following types of issues: • Income level. On what income level (if any) should the city concentrate its resources? • Level of involvement. Should the city simply set the overall direction of housing policy and allow external actors to implement that policy or should it take a more active role in home construction? • Size. Should the city focus on small, in-fill projects or emphasize large-scale projects? • Type of activity. Should the city focus on improving rental opportunities or homeownership opportunities? • Priority. Should the city’s economic development strategy focus on commercial development in hopes that housing will follow, or should incentives be granted to residential projects first in hopes that new housing will attract commercial development? • Geographic location. Should specific areas of the city be targeted for housing initiatives or should all parts of the city receive equal housing resources? Establishing its policy on these issues would give the city a framework for developing criteria for prioritizing housing needs, identify methods that would be best to address these needs, and provide guidance in the development of long-term strategies to resolve housing problems in the city. This information should also provide a basis for evaluating the effectiveness of city departments and those agencies contracted by the city to accomplish specific housing goals and objectives. Service Providers, FOCUS, and HUD Can Serve as Resources The FOCUS documents contain resources useful in the development of a city housing policy. These documents should serve as a policy framework or “reference manual” for policy development. In addition, our interviews with frontline housing service providers and HUD representatives indicated their willingness to aid in the development of a city housing policy. A task force that includes city staff, local housing service providers and experts, and HUD staff should be formed to develop a city housing policy for deliberation and approval by the City Council. 16 Table of Contents Findings and Recommendations Housing Objectives Derived from FOCUS The FOCUS Kansas City Plan includes draft objectives for developing housing programs. These include: • Leveraging • Involving partners/anchors • Having an impact on surrounding properties • Helping historic properties • Being located close to employment areas • Preserving/contributing to the variety of building densities/types Source: City Planning and Development Department. FOCUS report can assist in policy development. In the area of housing programs, FOCUS addresses issues such as where housing programs should be concentrated and emphasizes targeting incentives and partnership development. FOCUS strategies were not intended to replace policy decisions. Information contained in the FOCUS documents was developed to begin policy discussions, not replace them. FOCUS strategies on housing are included in the city’s consolidated plan prepared for HUD. FOCUS provides policy direction for the city; however, it should not be used in place of public decision-making. FOCUS frames the public debate about important issues facing our city and pulls in the entire community to help with innovative solutions. FOCUS provides a mechanism for integrated decision-making, not only at City Hall, but throughout the entire city. . . .The plan is intended to be used as a “reference manual” to guide our public policy decisions, not an encyclopedia with all the answers.11 HUD recommends partnerships be part of the policy development process. HUD identifies partnering as one of the “best practices” in housing. Developing strong relationships with those who have a direct interest in the outcome allows each participant to contribute valuable insights, skills, resources, and connections to create a group capability greater than the sum of its parts. HUD recommends partnerships 11 FOCUS Kansas City, Phase 1: The Policy Plan, A Strategic and Comprehensive Plan for Kansas City, Missouri, February 1994, pp. 3 and 9. 17 Table of Contents Special Report: Kansas City Needs A Housing Policy throughout program planning, implementation, operation and monitoring.12 Service providers and HUD should be involved in policy development. Some of the frontline housing service providers we interviewed indicated that they believed that the city should consult with them when developing or carrying out the city’s housing policies. This would provide important ideas and feedback to the city’s efforts. Because of HUD’s awareness of “best practices” in housing, knowledge of housing efforts by other cities, and access to and analysis of nationwide information on housing conditions, we recommend they also be included when the city develops its comprehensive housing policy. We recommend the city develop a housing policy that addresses all housing efforts of the city, answers questions of city priorities, describes the methods that will be used, and clearly articulates the desired outcomes to be achieved. The policy should be developed by a task force of city staff, HUD employees, representatives of area housing-related organizations, and local housing experts. Once developed, the policies should be communicated to the City Council for deliberation and approval. After approval, the policy should be communicated to all interested parties both within and outside city government and used to evaluate efforts to address Kansas City housing problems. ______________________________________________________________________________ Current Housing Data Is Not Available Current information on the quality, affordability, and availability of housing in the city is largely non-existent. Information on housing conditions reported in the city’s 1999 consolidated plan is at least ten years old and consequently should not be used. Interviews with area representatives of housing-related agencies identified problems including deteriorating physical conditions, difficulties in dealing with city bureaucracy, and a lack of affordable units; however, we found little data that could identify other problems or confirm the perceptions of the representatives interviewed. The lack of current data adversely impacts the city’s ability to best address its housing issues. It also contributes to a lack of accountability for the city's housing activities and limits measuring the impact of these efforts. Adequate knowledge of housing conditions is 12 Center for Visionary Leadership for the U. S. Department of Housing and Urban Development, Celebrate the Spirit of Success!, A Guide to Best Practices, July 1998, p. 51. 18 Table of Contents Findings and Recommendations crucial for identifying problems, determining their severity, and developing policies that might address and correct them. Perceptions on Housing Problems Differ We asked more than 60 individuals representing agencies providing housing-related services a series of open-ended questions to solicit their opinions regarding Kansas City housing conditions. Some identified Kansas City housing conditions as good as or better than most major cities. Others identified significant problems. Most cited obstacles, but also reported opportunities unique to the city. All were asked to identify any housing-related problems or obstacles they see in Kansas City. Exhibit 4 identifies the problems reported most often, arranged by the frequency in which each was mentioned in interviews. Exhibit 4. Problems/Obstacles Identified in Interviews Problem/Obstacle Frequency Mentioned Lack of affordable housing units/high costs 48% Deteriorating physical condition 41% City bureaucracy – cooperation 34% Lack of credit/income 30% City bureaucracy – timeliness 30% City bureaucracy – inconsistency 23% City bureaucracy – communication 23% Crime 18% City bureaucracy – fairness 16% Schools 16% Inability to charge high rents 16% Sources: Interviews with housing service providers. Almost half of those interviewed cited a lack of affordable units or high costs as a problem, while less than 20 percent cited problems with crime, schools, rental rates, or fairness in city bureaucracy. While the interviews are not conclusive evidence that the problems identified actually exist, they do identify potential areas to explore when seeking to improve housing in the city. Determining the validity of these opinions requires current housing information. Information on Current Housing Conditions Is Inadequate We found little current data that we could use to identify problems or confirm perceptions or opinions regarding housing conditions. A few local studies have been undertaken to assess current housing conditions in Kansas City. The data that was available was limited in quantity, questionable in quality, and out of date. For example, the city last 19 Table of Contents Special Report: Kansas City Needs A Housing Policy conducted a study of housing conditions in 1988. More recent studies (most notably the Mid-America Regional Council’s 1993 Urban Core Study and 1997 Analysis of Impediments to Housing Choice) relied heavily upon 1990 U. S. census data that is now 10 years old. Information in the city’s 1999 consolidated plan was derived from data developed by the city in 1988 and 1989, and information from the 1980 and 1990 U. S. census. As such, the information is too old to be useful for current policy making efforts. Some of it is also inaccurate. The age of this information adversely impacts using it to evaluate current conditions. For example, the 1999 consolidated plan states that almost 15,000 persons are homeless. (See Exhibit 5.) That figure, however, was developed for the 1994 U. S. Conference of Mayors. Using it to evaluate the relative significance of the city’s homeless problem would be unwise. Further, developing policies or setting priorities based on this information would also be ill-advised. For example, the 1999 consolidated plan also reports that 10,000 housing units need to be demolished, an estimate developed in 1988. Devoting current resources to the demolition of these 10,000 homes could either result in an over-commitment of resources if current conditions show improvement, or result in limited success if the number of homes needing demolition has increased. Exhibit 5. Selected Information on Housing Conditions Information Number Percentages Housing Units Owner-occupied 101,108 50% Renter-occupied 76,493 38% Vacant 24,172 12% Housing Condition Sound condition 110,000 54% Needs minor repair 39,000 19% Needs major repair 43,000 21% Needs demolition 10,000 5% Homeless 14,872 N/A Estimated Shortage of Affordable Housing 20,000 N/A Sources: 1999 Consolidated Housing and Community Development Plan and City Auditor’s Office calculations. Housing Data Should Be Interpreted Carefully We also found that some housing data has been used incorrectly. In 1988, City Planning and Development evaluated the condition of every fifth 20 Table of Contents Findings and Recommendations house within the city limits.13 Surveyors were given a book containing photographs of various housing conditions and asked to judge the condition of the houses in their sample by comparing them to the photographs. Summer interns charged with the task of observing and rating the condition of housing units began in the city’s most deteriorated neighborhoods. Funding limitations prevented completion of survey observations in newer sections in the north, far south and far east sections of the city. As a result, the interns were only able to sample homes in 87 percent of the city’s neighborhoods. The sections of the city that were not surveyed are generally considered to contain a greater proportion of newer units, which could be expected to be some of the best housing stock. Although the survey data came primarily from older neighborhoods with greater concentrations of houses in poorer condition, the information obtained from the survey was assumed to represent housing conditions citywide. As a result, the information reported as citywide housing conditions in the 1999 consolidated plan (and included in Exhibit 5) reports greater percentages of the city’s housing stock as needing repair and lower percentage of housing in sound condition than probably actually existed. The City Needs Current Housing Data to Determine the Type and Severity of Problems Adequate knowledge of housing conditions is crucial for identifying problems, determining their severity, and developing policies that might address and correct them. Without current housing information, identifying housing problems is difficult. It also adversely impacts city staff’s ability to address the city’s housing issues. We recommend the development of a mechanism for routinely gathering information on housing conditions in Kansas City. The mechanism should specifically identify what information will be gathered, how it will be collected, the departments responsible for collection, and the frequency in which the new information will be obtained. Once established, the information should be considered during deliberations for or modifications to established city housing policy. 13 1988 Housing Condition Survey, City Planning and Development. 21 Table of Contents Special Report: Kansas City Needs A Housing Policy ______________________________________________________________________________ Recommendations 1. The city manager should prepare for City Council consideration a resolution for the establishment of a broad-based task force to develop an integrated housing policy that describes all facets of the city’s housing efforts. Participants in the task force should include city and HUD staff, individuals involved in housing-related activities and area housing experts. The policy developed by the committee should state the city’s strategies and clearly articulate the desired outcomes from its housing efforts. These outcomes should be stated in such a way that performance against them can be measured. The policy should at least address the following areas: • The income level on which the city’s efforts should be concentrated; • The degree of involvement on the part of the city in the actual development of new home construction; • The city’s priorities regarding project size (large scale redevelopment or small, in-fill houses); • The emphasis on renting or homeownership; • The emphasis on commercial development or residential projects; and • The geographic areas on which the city’s efforts will be focused. 2. The city manager should ensure the developed housing policy is communicated to the City Council for review and approval. 3. The city manager should develop mechanisms for routinely gathering information on housing conditions. The mechanism should identify the information that will be obtained, how it will be collected, who is responsible for gathering it, and the frequency in which the new information will be collected. 4. The city manager should ensure the developed housing policy is communicated to all interested parties both within and outside city government. 5. The city manager should ensure departments utilize the developed housing policy when measuring the outcome of the city’s housing- related activities and programs, and as a basis for measuring the performance of agencies which provide housing-related services in return for city funding. 22 Table of Contents ____________________________________________________________________________________ Appendix A ______________________________________________________________________________ Housing Questions and Housing Representatives Interviewed 23 Table of Contents Special Report: Kansas City Needs A Housing Policy 24 Table of Contents Appendices Housing Questions We interviewed more than 60 individuals involved in housing-related activities including members of the local HUD office; developers; academic housing experts; representatives of financial entities, economic development organizations and non-profit organizations; and members of agencies that address special housing needs and fair housing concerns involved in housing-related activities. We asked them a series of open-ended questions designed to solicit their opinions on housing conditions and city efforts to address housing problems. We asked the following questions: 1. How would you describe Kansas City’s housing conditions? 2. What would you say are the problems, threats, and opportunities of housing in Kansas City? 3. How is the housing situation reflected in the goals and objectives of your agency? a. Do you have a mission statement? b. How do you determine how well your mission is achieved? c. How do you fund your agency’s activities? 4. What do you feel should be the city’s role concerning housing issues? 5. How does this role compare to the city’s current role in housing? 6. What are the opportunities or obstacles to your efforts? 7. What more can the city do to help you in your housing efforts? (Potential follow-up for question 6.) 8. Do you feel that the city requests and HUD provides enough and the right kinds of assistance? (Question for HUD staff only.) 9. Does the city maximize the use of housing programs available to it? Is funding available that is not being used? (Question for HUD staff only.) Housing Service Providers Interviewed Below is a list of the individuals interviewed and the organizations they represent. Sam Alpert, Heartland Apartment Association John Bills, Landlords Inc. Andy Boeddeker, U. S. Department of Housing and Urban Development Bill Boyd, U. S. Department of Housing and Urban Development Damon Broadus, United Services Community Action Agency Bill Brown, Fannie Mae Flora Buford, East Meyer Community Association Tom Corwin, U. S. Department of Housing and Urban Development Debra Crouch, Salvation Army Bill Dana, Central Bank Floyd Davis, Landlords Inc. Jenifer Degen, Old Northeast, Inc. 25 Table of Contents Special Report: Kansas City Needs A Housing Policy Michael Duffy, Legal Aid Of Western Missouri Joe Egan, Housing and Economic Development Finance Corporation Dr. Nolan Ellison, University of Missouri - Kansas City Deana Ervin, U. S. Department of Housing and Urban Development Charles Garney, Briarcliff West Development Company Chuck Gaston, Community Builders of K. C. Patricia Gilmore-Wilkins, Housing Information Center Dr. Nathanial Gordon, Urban Housing Management & Development Council Reverend Steve Gordon, Urban Housing Management & Development Council Richard Gross, Missouri Housing Development Commission Mike Grube, Bank of America Matthew Hall, Landlords Inc. Rick Hamblin, U. S. Department of Housing and Urban Development Greg Harris, U. S. Department of Housing and Urban Development Lance Henning, Habitat for Humanity Northland Colleen D. Hernandez, Kansas City Neighborhood Alliance Sylvester Holmes, The Black Economic Union of Greater Kansas City Ken Hopgood, Metropolitan Lutheran Ministry Homeless Services Center Lorin Hunt, U. S. Department of Housing and Urban Development Ed Jardak, Landlords Inc. Charmaine Johnson-Davis, Housing Authority of Kansas City, Missouri Ellen King, SAVE Inc. Nancy Kwilas, Old Northeast Inc. Michael Lester, SAVE Inc. Edwin Lowndes, Housing Authority of Kansas City, Missouri Ray Mendes, Landlords Inc. Kirk McClure, University of Kansas Rose Mitchell, Metropolitan Lutheran Ministry Homeless Services Center Don Moore, Land Clearance for Redevelopment Authority Mark Murfield, U. S. Department of Housing and Urban Development Larry Myer, Landlords Inc. Jim Nutter, James B. Nutter & Company Dallas Parks, Housing Authority of Kansas City, Missouri Thomas H. Randolph Jr., Kansas City Fair Housing Center Sandra Rayford, Community Builders of K. C. Joe Remke, U. S. Department of Housing and Urban Development Michael Rogers, Sr., Landlords Inc. Diane Rojas, Guadalupe Center Alese Romano, Landlords Inc. Bonnie Rosen-Cowherd, Mid America Assistance Coalition Bill Rotert, U. S. Department of Housing and Urban Development Tony Salazar, McCormack Baron Gerald Shechter, Westside Housing Organization Eric Scott, Housing Authority of Kansas City, Missouri Stephen Summers, Landlords Inc. Gary Ultican, U. S. Department of Housing and Urban Development Chris Vedros, Planned Industrial Expansion Authority and the Industrial Development Authority Carolyn Vellar, Northland Neighborhoods, Inc. 26 Table of Contents Appendices Catherine Wagner, Old Northeast, Inc. Kathryn Walker, Kansas City Neighborhood Alliance Jan Wallace, Twelfth Street Heritage Development Corporation Jim White, Local Initiative Support Corporation Laura Whitener, Economic Development Corporation Janice Williams, Community Builders of K. C. Jeff Williams, Legal Aid Of Western Missouri Craig Wolfe, Craig Wolf & Company Tim Underwood, Home Builders Association Ron Yaffee, J. C. Nichols 27 Table of Contents Special Report: Kansas City Needs A Housing Policy 28 Table of Contents ____________________________________________________________________________________ Appendix B ______________________________________________________________________________ Director of HUD’s Office of Community Planning & Development’s Response 29 Table of Contents Special Report: Kansas City Needs A Housing Policy 30 Table of Contents Appendices 31 Table of Contents Special Report: Kansas City Needs A Housing Policy 32 Table of Contents ________________________________________________________________________ Appendix C ________________________________________________________________________ City Manager’s Response 33 Table of Contents Special Report: Kansas City Needs A Housing Policy 34 Table of Contents Appendices 35 Table of Contents Special Report: Kansas City Needs A Housing Policy 36 Table of Contents Appendices 37 Table of Contents Special Report: Kansas City Needs A Housing Policy 38 Table of Contents Appendices 39 Table of Contents Special Report: Kansas City Needs A Housing Policy 40 Table of Contents Appendices 41 Table of Contents Special Report: Kansas City Needs A Housing Policy 42 Table of Contents Appendices 43 Table of Contents Special Report: Kansas City Needs A Housing Policy Appendices 44 Table of Contents Appendices 45 Table of Contents Special Report: Kansas City Needs A Housing Policy Appendices 46 Table of Contents Appendices 47 Table of Contents Special Report: Kansas City Needs A Housing Policy Appendices 48 Table of Contents Appendices 49 Table of Contents Special Report: Kansas City Needs A Housing Policy Appendices 50 Table of Contents
City Housing Policies City of Kansas City, Missouri
Published by the Department of Housing and Urban Development, Office of Inspector General on 2000-04-06.
Below is a raw (and likely hideous) rendition of the original report. (PDF)