PATERSON, NJ - In the past two years, the city has lost more than $1.1 million in federal affordable housing funds because it failed to come up with ways to spend the money, according to the U.S. Department of Housing and Urban Development (HUD).
"We don't have the luxury of giving anything back,'' said Councilwoman Vera Ames-Garnes. "We need every dime and dollar that we can get.''
On October 25, HUD notified Paterson that it could no longer use $777,086 of its Home Investment Partnership Program (HOME) money from 2008 because the city had not committed the funds to particular projects, said a federal housing official.
About a year earlier, on Oct. 31, 2009, HUD told Paterson it could no longer use $78,195 of its 2007 HOME funding because the money hadn't been committed to projects, the official said. On that same day, HUD informed Paterson that it lost $278,163 of its 2004 HOME funding because a five-year deadline for spending the money had expired, the official said.
"Something is totally wrong with that picture,'' said Ames-Garnes, "and we will have to find out what happened. I'm going to ask that question at our next meeting.''
Under the federal HOME program
, local governments - often in partnership with nonprofit groups - fund a wide range of activities to build, buy, or rehabilitate affordable housing, allowing people with low incomes to rent or buy housing. The program requires that grant recipients like the city of Paterson commit the money to particular projects within two years and spend it within five years or they lose the funding.
Neither Mayor Jeffrey Jones nor his Community Development Director, Lanisha Makle, returned phone messages seeking an explanation of why Paterson lost the federal funds. Jones took office on July 1, while Makle has been on the job about two months. Councilman Kenneth Morris, who oversees the community development department, said he was seeking an explanation on the lost funding.
A federal housing official said it was "unusual" for a city not to spend all its HOME funds. Most cities, he said, spend 100 percent of their allotments. The annual allocations are based on a formula, so Paterson's future applications to the HOME program would not be affected by its failure to spend previous awards, the official said. In the three years prior to 2009, the federal government did not take back any of Paterson's HOME money, the official said.
The loss of $777,086 in 2008 HOME money represents more than 42 percent of the city's $1,770,553 allotment for that year. The $78,195 lost from 2007 is about 4 percent of that year's $1,836,703 in funding, while the $278,163 lost from 2004 is almost 14 percent of the $2,026,622 the city had been awarded.
The city has been awarded $1,662,102 in HOME money for 2009 and $1,651,038 for 2010. Here's how Paterson plans to spend its 2009 HOME funding, according to city council documents:
*$166,210 on administrative expenses.
*$351,831 for a first-time home ownership program.
*$319,061 on the New Jersey Community Development Corporation's Elm Street apartments project.
*$430,000 on the HOME Pride rehabilitation program.
*$160,000 on construction for the NJCDC's Spruce Street apartments.