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The state is under scrutiny for how it distributed billions in U.S. Department of Housing and Urban Development dollars to prevent future storm and flood damage. But whether the feds will take action to address discrimination concerns is an open question.
Civil rights and housing advocates are worried about the Biden administration’s willingness to enforce civil rights laws, because of how the Department of Housing and Urban Development has handled a dispute with Texas over billions of dollars in disaster recovery money.
The heart of the dispute is the way in which Texas is distributing money it is receiving from the federal government through a branch of the Community Development Block Grant program. Texas is set to receive $4 billion in response to 2017’s Hurricane Harvey, one of the most damaging storms to ever hit the United States. The money at stake is specifically designated to help mitigate damage from future disasters in economically distressed areas.
But after complaints from advocates, HUD determined that Texas violated federal civil rights laws when it picked projects to get the money.
In the initial round of funding, the Texas General Land Office did not award any money to Harris County – home of Houston and one of the hardest-hit areas in the hurricane. It also did not award any money to the cities of Houston, Beaumont, Port Arthur or Corpus Christi, all of which are closer to the coast and have significant Black or Hispanic populations. Instead, half the money went to more rural, inland counties where more of the population is white.
Under legal and political scrutiny, the General Land Office did later award money directly to Harris County, which was counting on the funding for flood-control improvements. But the big cities still have not received direct aid from Texas, despite being some of the most vulnerable places to future storms.
Texas officials dispute HUD’s findings that they violated the Civil Rights Act and other federal laws. A spokesperson for the General Land Office told Route Fifty the findings by HUD Secretary Marcia Fudge were a “baseless letter written by a political appointee.” The spokesperson said more than two-thirds of the beneficiaries were Black and Hispanic.
But Texas officials spurned federal requests to work out the problem voluntarily with a rare public rebuke.
Fair housing advocates, including the NAACP’s Legal Defense Fund and the National Low Income Housing Coalition, asked HUD to either cut off the funding for Texas or refer the matter to the U.S. Department of Justice. HUD has done neither.
“It’s a basic principle, really: Discriminators don’t get federal money,” said Sara Pratt, a former HUD attorney who is now representing the fair housing group Texas Housers in their push to redirect the federal mitigation funding to more vulnerable communities.
“This is bigger than a Texas vs HUD issue. This is an issue of how the federal government will look at civil rights violations and whether it will take appropriate action when those violations occur and are still unremedied,” she said.
HUD officials declined to comment for this story.
A New Approach to Disaster Mitigation
After Hurricane Sandy ravaged the New York metropolitan area in 2012, the Obama administration tried to leverage disaster recovery money to prevent the kind of widespread destruction that the area suffered from the 2012 storm, said Carlos Martin, the director of the Remodeling Futures Program at the Joint Center for Housing Studies at Harvard University.
HUD developed experimental programs for mitigation efforts after Hurricane Sandy, but there was no formal program to do so in the future.
Ultimately, Congress decided in 2018 to add mitigation funds administered through HUD’s Community Development Block Grants. The CDBG program is familiar to many cities and local governments, and it already has a separate initiative that specifically helps communities recover from disasters. But the mitigation money has only been included in a one-time bill to deal with natural disasters, and it largely uses existing CDBG rules.
“CDBG is one of the most flexible programs in the federal government, and it is a huge chunk of change,” Martin said. “The whole purpose of this is to provide states and local governments flexibility to say, ‘This is where we need to spend the money, because it's going to benefit our communities the most.’”
Martin and other advocates hope that the CDBG mitigation program can be extended for future disaster-stricken communities. Congress appears unlikely to take up any much-needed overhauls of federal disaster response policies, Martin said, but in the meantime CDBG gives local recipients more flexibility than similar programs.
But recipients must “walk a tightrope,” Martin said. They have broad discretion in how they spend the money, but they have to promise to obey federal fair housing laws.
There have been instances when states landed in hot water for their distribution of CDBG's disaster relief funds, which are subject to most of the same rules as the CDBG mitigation funds.
The most prominent example might be when Louisiana and HUD had to settle a civil rights lawsuit that alleged the state’s Road Home Program discriminated against Black homeowners. Civil rights groups argued that Black residents got shortchanged, because the program gave people home repair grants based on the value of their homes prior to Hurricane Katrina, rather than on the cost to repair their homes.
In the wake of Hurricane Sandy, New Jersey agreed to spend an additional $240 million to support low-income residents, after civil rights groups filed an administrative complaint. The groups alleged that New Jersey’s relief plans underestimated the number of renters impacted by the storm. They also said Black applicants were denied housing assistance at more than twice the rate of white applicants, agencies provided inaccurate funding information in Spanish-language documents and New Jersey sent money to areas unaffected by the storm instead of counties that were directly hit.
Debby Goldberg, the vice president for housing policy and special projects at the National Fair Housing Alliance, said even in those cases, HUD officials never had the inclination to “bring the hammer down” on local jurisdictions.
“They want to work with jurisdictions to address any problems that might come up,” she said. “On the other hand, here we have a situation where Texas was put on notice, HUD did an investigation had made a finding of discrimination. And Texas is refusing to address the problems that have been identified.”
Goldberg said she couldn’t think of another situation where a jurisdiction has flat out rebuffed HUD over concerns about civil rights violations.
“Not only does that harm the people in Texas that HUD has already identified who’ve been disadvantaged here, but it sends a bad signal to everybody else,” she said.
Urgent Needs in Texas
Texas and Puerto Rico (which was recovering from Hurricane Maria) were the biggest recipients for the mitigation grants.
Hurricane Harvey caused more damage than any other U.S. storm besides Katrina. Harvey dumped more than 50 inches of rain on southeast Texas, causing major flooding in Houston and other cities.
While the whole region was affected, some of the poorest areas suffered disproportionately, housing advocates say.
“They have flooded not once, not twice, but in some cases a dozen times in recent years,” said John Henneberger, a co-director of Texas Housers. “The communities in Houston we’re talking about, they don’t even have any stormwater drainage. They’ve got ditches by the side of the road that aren’t even maintained by the city and the county. When it rains, they live in a lake. Water rises up and floods, and it happens time and time and time again.”
Both Harris County and the city of Houston prepared to address those problems with federal disaster mitigation money. Harris County, in fact, launched a $5 billion effort to mitigate flooding from its bayous in the wake of Harvey. That plan included funding from voter-approved bonds and from the federal mitigation program. The voter-approved bonds financed improvements in wealthier areas, while the federal dollars were supposed to pay for projects in lower-income neighborhoods, Henneberger said. But Texas blocked the federal money.
The General Land Office held a competition for $1.1 billion of Texas’ share of mitigation funding. In doing so, the office allowed counties that were farther away from the coast to apply, in addition to the harder-hit counties near the coast that HUD indicated were a priority. Plus, the criteria that GLO used favored lower-population counties over higher-population counties.
The additional counties that the state added got half of the funding in that round, the most allowed under HUD’s rules.
Brittany Eck, a spokesperson for the General Land Office, said in an email that the state agency was following guidelines set forth by HUD. It was HUD’s rules, for example, that capped the size of projects that could get funding at $100 million. And federal rules initially prevented Texas from directly handing Harris County money for mitigation efforts, although HUD eventually granted Texas a waiver to send $750 million to Harris County following the outcry over the grant results.
“What you need to understand is that the CDBG-Mitigation funding was a completely new funding source,” Eck wrote. “This means there was no standard operating procedure and HUD’s federal register notice and technical guidance were the only direction for grantees to use to develop action plans for distributing the funds. Action plans are approved by HUD before any dollars can be spent.”
But Henneberger said HUD’s approval of Texas’ plan was only preliminary. Texas officials did not disclose their method for evaluating grant applications until later, and the public didn’t know the effect until the awards were announced. That’s when it became clear that Harris County, Houston, Beaumont, Port Arthur and Corpus Christi would not receive grants.
Meanwhile, projects that did make the cut, according to Texas Housers, include:
- $4.2 million for a half-mile road in Bastrop County, near Austin, connecting a Walmart and a Home Depot, on the basis that it would help emergency vehicles if the nearby interstate was clogged with evacuees.
- $6 million for a sheriff’s radio tower and equipment in Gonzales County, 90 miles from the Gulf Coast.
- $10.9 million to build a sewage system in a town of 209 people, more than 140 miles from the Gulf.
- $17.5 million for a community center in Caldwell County, also more than 140 miles from the coast.
Along with eventually sending funds directly to Harris County, Texas is distributing the bulk of the remaining money to regional councils of government, which, in turn, will decide which projects should be funded.
Still, that leaves places like Houston at a disadvantage, because they didn’t get a fair share in the initial round of funding, Henneberger said.
“We want communities regardless of the color of the people who live there to be able to have equal access to the money, which means that the cities with these large populations of low-income people and low-income people of color, need to receive a fair share of the funds,” he said.
That would require a “reallocation,” shifting money away from communities that did receive grants in the competition to ones that were shut out, he said.
But the money from HUD is still flowing.
Texas Housers sent a formal complaint to HUD about the awards process last summer, shortly after the awards were announced.
HUD ultimately agreed with Texas Housers and issued a finding in March that the competition “diverted funds from projects that would have assisted residents with some of the greatest needs, and disproportionately disadvantaged minority residents.” It concluded that the state violated civil rights laws.
In a May follow-up letter, HUD officials also rejected GLO’s arguments that minority residents benefitted from the competition.
“Merely asserting, though, that minority residents benefited from the competition, without more, provides no basis to question HUD’s findings that the scoring criteria at issue in the [letter of finding] disproportionately harmed Black and Hispanic residents. The GLO also does not proffer any justification for the use of these discriminatory criteria,” the agency’s enforcement division wrote.
GLO held firm, arguing that it used “transparent, race-neutral” criteria for the competition. “GLO believes that the sort of steps [Texas Housers] and HUD would like to see taken are unnecessary and likely unlawful. As such, GLO does not believe that further settlement discussions are warranted,” lawyers for the office wrote.
HUD tried to get Texas officials to voluntarily comply with the findings, to no avail. “HUD should close this case without following through on the threats made in your letter, which would only slow funding for Texans who truly need disaster mitigation,” Gov. Greg Abbott wrote in an August letter.
HUD has not indicated how it will proceed. “We’re considering our options and have no further comment,” a spokesperson wrote in late October.
The department’s apparent inaction has alarmed many housing advocates.
Pratt, the lawyer for Texas Housers, has also worked in civil rights enforcement for HUD. She said she appreciates the pressures on federal officials, who might not want to cut off funding to Texas and stop anyone from getting the benefit that it's supposed to provide.
“But for the people who wrote Title VI [of the Civil Rights Act] – the Congress – and for those of us who enforce it, compliance with civil rights law is as important as the other requirements that the government puts on funding, like you can’t go out and buy a Cadillac with it,” she said.
“You have to have the money go in a way that benefits low- and moderate-income people which in Texas, like most states, is mostly Black and brown people. Those are program requirements that are set up by statute and regulations,” she said.
Meanwhile, a coalition of 11 advocacy groups has written HUD three times to try to get the agency to put its foot down with Texas.
“We are deeply alarmed by HUD’s failure to enforce civil rights laws and hold jurisdictions accountable for its violations,” they wrote in September. “The Biden-Harris administration has made racial equity a key focus. HUD’s failure to enforce civil rights law would directly undermine the administration’s mandate to increase equity, however, if the agency does not respond to this clear challenge in Southeast Texas.”
Henneberger, the co-director of Texas Housers, said all of Texas’ HUD money should be at stake, not just the disaster mitigation money.
“Either civil rights laws mean something,” he said, “or they don’t.”
Daniel C. Vock is a senior reporter for Route Fifty based in Washington, D.C.
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