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HUD Assigns $130 Million In More Funds For P.R. Public Housing

by Ivonne Garcia

June 8, 2000
Copyright © 2000 CARIBBEAN BUSINESS. All Rights Reserved.

SAN JUAN — June 8, 2000 - Gov. Pedro Rossello and U.S. Housing and Urban Development (HUD) Secretary Andrew Cuomo on Wednesday signed an accord that allocates $130 million over four years to the Puerto Rico Public Housing Administration (PRPHA), including technical assistance "to ensure that the funds are spent effectively and appropriately."

Under the afternoon sun in a ceremony at the La Fortaleza gardens, Rossello and Cuomo said the agreement effectively settles a lawsuit filed by the Puerto Rico government against the federal agency in 1996 over the disparity in federal housing funds allocated to the island when compared to other states and territories.

"There was a basic injustice to Puerto Rico when HUD allocated federal funds," Cuomo said, explaining that the formula established in 1974 "shortchanged" the island. He said the decision by the Rossello administration to file a lawsuit had been unfortunate but correct because the situation with Puerto Rico was "egregious."

"The problem with the formula was that when we compared ourselves with states we came out lower, and when we also compared ourselves to other, smaller, U.S. territories, we also had less," Rossello said.

The settlement provides for a redesign of the nationwide formula used to allocate money to Puerto Rico, along with the other 3,200 public housing authorities in the U.S. The duty of reworking the 25-year-old formula will fall upon the Harvard Graduate School of Design and will take three to four years, Cuomo said.

The announcement of the added federal funding for the PRPHA comes at a time when the federal government has issued at least 11 indictments to people involved in fraud schemes related to the local housing agency.

The latest indictment involved former New Progressive Party Sen. Freddy Valentin, who was arrested Monday for alleged involvement in an influence-peddling and extortion scheme related to the Housing Department’s now defunct Housing and Urban Renewal Corp. (CRUV by its Spanish acronym).

Asked about the indictments and a report that found gross mismanagement at the PRPHA, Cuomo said people shouldn’t "mix apples and oranges" and said HUD would look at the report and the Puerto Rico government’s response and develop a plan of action.

"We have to have zero tolerance for waste, mismanagement and abuse," Cuomo said. "Money has to be well managed."

Still, Cuomo did not directly respond to a question of whether it worried him that the additional funds were being assigned to an agency that had been plagued by financial mismanagement.

"You have to do the two things simultaneously," he said. "You have to work on management systems and build housing."

The $130 million is divided in $20 million yearly in increased operating subsidies for the PRPHA, the second largest public housing authority in the U.S. Another $50 million will be provided over the four years in grants and technical assistance "to make public housing on the island more affordable, livable and safe," a prepared statement said.

The PRPHA received $261.4 million in fiscal year 2000, including $86.9 million in operating subsidies.

This Caribbean Business article appears courtesy of Casiano Communications.
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