Examining claims of local effectiveness in administration of housing disaster funds

There have been a lot of claims voiced by Councils of Governments (COGs), local officials and the Texas Office of Rural Community Affairs (ORCA) that there will be greater efficiencies and cost savings in allowing disaster recovery funds to be administered locally by COGs. To test the accuracy of these claims we can examine the track record of the COG’s administration of disaster relief funds over the past two and one-half years.

On July 28, 2006, 29 months ago, the Texas Department of Housing and Community Affairs (TDHCA) approved a plan, proposed by three southeast Texas Councils of Government to administer $40,259,276 in Community Development disaster relief funds to repair and rebuild houses damaged by Hurricane Rita.

The COGs contracted with the State of Texas to spend the money to repair and rebuild 1,487 houses. The chart below shows the housing programs the COGs contracted to undertake.

                                EMERGENCY  HOUSING    HOUSING      DOWN PAYMENT
COG                             REPAIRS    REHAB   RECONSTRUCTION  ASSISTANCE    TOTAL
Deep East Texas COG               300        200          6             -         506
Houston-Galveston Area COG        271         81         21            27         400
SE TX Regional Planning Comm COG  271        108        189            21         581

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Twenty-nine months later the three COGs have completed rebuilding a grand total of only 340 houses (135 site built homes and an additional 205 mobile homes). The COGs amended their original contract to work on 1,487 homes and now propose to complete a total of 430 houses, 29 percent of the overall number they originally contracted to assist. If the COGs eventually reach their goal of 430 homes, the average amount of CDBG funds spent by the COGs per home (at current rates of expenditure) will be $93,277, with 60 percent of these homes being mobile homes.

It is important to point out that the COGs have abandoned their plans to repair any homes. The only housing activity the COGs have engaged in is contracting with homebuilders and mobile home sellers to replace homes of Hurricane Rita survivors. All efforts to undertake the more complex and challenging work of repairing homes have been abandoned.

The tables below report on the budgets, contractual obligations and accomplishments of the COGs as of December 1, 2008 as reported in the latest official report prepared by TDHCA.

COG                                    BUDGET      HOUSES    COST PER HOUSE
Deep East Texas COG                  $6,745.034        96           $70,261
Houston-Galveston Area COG           $7,015,706       105           $66,816
SE TX Regional Planning Comm COG    $26,348,536       229          $115,059

                                        Accomplishments as of 12/1/2008
                                            SITE-BUILT
COG                             PROMISED      HOUSES     MOBILE HOMES
Deep East Texas COG                96           10            99
Houston-Galveston Area COG        105           11            59
SE TX Regional Planning Comm COG  229          114            47

                                                     Accomplishments as of 12/1/2008        
                                            SITE-BUILT        MOBILE HOMES
COG                             PROMISED  HOUSES COMPLETE  PURCHASED & INSTALLED  % COMPLETE
Deep East Texas COG                96           10                  99               114%
Houston-Galveston Area COG        105           11                  59                67%
SE TX Regional Planning Comm COG  229          114                  47                70%
TOTAL                             430          135                 205                79%

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I do not imply that this project was easy. Nor do I wish to imply that the COGs did not do their best and act in good faith.

I do however challenge the claims ORCA, the COGs and their supporters are making about the greater speed, efficiency and thus, the desirability of turning over the new $1.3 billion disaster program to these entities that were obviously so severely challenged in attempting to administer a much smaller $40 million program.

12/20/2008 NOTE: Corrected data is presented here.