Fair housing expert says HUD could threaten funding

October 16, 2013 7:30 am • By Chris Zavadil/Fremont Tribune(10) Comments
Fremont could lose out on federal funding in the future – and possibly get sued to return previously received grants – because of what one fair housing expert said are deficiencies in Fremont’s responsibility to further affirmative housing.


Tim Butz, assistant director of the Fair Housing Center of Iowa and Nebraska, told a city council study session on Tuesday that the U.S. Department of Housing and Urban Development has concerns about Fremont’s illegal immigrant ordinance, and other factors involved in the city’s responsibility under HUD criteria to further affirmative housing actions.


Provisions of Ordinance 5165 requiring the use of E-Verify have been implemented, but portions requiring renters to obtain occupancy licenses are being delayed while challenges work through the courts. Currently the ordinance is at the Eighth U.S. Circuit Court of Appeals awaiting a decision on whether the entire bench will hear the case after a three-judge panel earlier upheld it.


Tina Engelbart, deputy director of the Northeast Nebraska Economic Development District, said the city has received approximately $7.1 million in Community Development Block Grants in the past 15 years to address comprehensive revitalization, housing, downtown revitalization and economic development. Federal CDBG funds are distributed to the city through the state.


HUD, while auditing the state’s administration of federal money, completed an analysis of impediments to fair housing, “and it turned up some problems,” Butz said.


“The state failed to identify Ordinance 5165 as an impediment,” he said. “They didn’t say the law was illegal, that it violated anybody’s rights, but it did say that the state had failed to take into consideration the chilling affect that that has, and that the state had failed to take any action to counteract whatever chilling affect is had or is created by the ordinance.”

He referred to two letters written from HUD officials to the Nebraska Department of Economic Development, critical of the state for, in part, not including the ordinance as an impediment, but also recommending 11 specific actions that city should take.


“The most important of that was they wanted a new analysis of impediments to incorporate the effects of 5165,” Butz said, adding officials “from the highest levels of HUD” talk to him regularly about the ordinance.


“You do have a big target on you, let’s be honest,” he said. “They’re not going to forget you. They’re not going to let this ordinance go by without it being addressed by the city. They’re not telling you that you have to repeal it, although I think repealing it would satisfy their concerns. … They’re not saying at this point that the ordinance places you outside compliance with your duty to affirmatively further fair housing.


“HUD has the power to stop your CDBG funding, they can tell the state to turn the tap off, and you won’t get another dime,” he pointed out. “They’re not ready to do that yet, and I’m not here to speak for HUD, I am not HUD. … I’m here to tell you that you need to act. You cannot ignore this thing. You’ve got to do something to counteract the effect of the ordinance on the Hispanic population of this city.”


Butz, whose nonprofit agency was created under a HUD grant as part of Family Housing Advisory Services Inc. in 1994, said the Fair Housing Center carries credibility with HUD.


Butz said he looked at 18 Fremont grant applications, “and I could make an argument to you that this city engaged in false certification on a number of those applications. You told DED you had … an anti-discrimination ordinance with a means to enforce it, and you didn’t.”


He claimed Fremont made other false certifications, including indicating the city would conduct housing studies, education and other activities the state has no record of.


He said Fremont and Dodge County were “frozen out of the Metropolitan Area Planning Authority Vision 2050 planning process” because (MAPA) “feared they would lose their grant from HUD because you had litigation going on involving fair housing issues.”


Butz maintained that HUD’s concerns were not prompted by the ordinance alone.

“These are things you should have been doing anyway. This isn’t punitive because of the ordinance. What happens is that you’ve become nationally prominent (because of the ordinance),” he said.


Mayor Scott Getzschman pointed to a fair housing study in 2011, but Butz said the study, conducted by Hanna:Keelan Associates PC of Lincoln, was “cheap” and “defective.”


“I think something that would impress HUD with your commitment to affirmatively furthering fair housing would be to go back and get that analysis of impediments document revised to incorporate the concerns that they address,” he said.


Engelbart disputed some of Butz’s claims, saying Fremont and Dodge County are not part of MAPA’s territory, but are part of NENEDD’s regional plan, and recounting that the city’s lack of a fair housing ordinance was “a misunderstanding,” quickly rectified when city staff realized a resolution was in place but not an ordinance.


Engelbart said all of the applications, which her agency prepared, met DED criteria, and nobody, including DED, ever contacted her agency regarding Fremont’s applications being falsified or out of compliance.


Nor has the city been contacted, City Administrator Dale Shotkoski added.


But it appears, Shotkoski said, “that HUD is putting pressure on the state to step up its review of what we’re doing.”


Shotkoski said the city wants to proactively work with agencies like the Fair Housing Center and Northeast Nebraska Economic Development District to meet HUD’s criteria – a unique situation, he said, because other cities using HUD funds don’t also have to work a similar illegal immigrant ordinance into their formula, leaving the cost of compliance a mystery at this point.


Bobbi Luca, president of Cornerstone Associates, an Omaha firm interested in providing affordable housing for seniors in Fremont, said her department relies heavily on federal funding.


“My concern with regard to the ordinance – and I’m not agreeing or disagreeing with the ordinance – is the fact that it could negatively impact any type of future development that comes in that relies on any form of federal funding,” she said.


Steve Bullock, vice president of Midland University, said the ordinance already has made it harder to recruit Hispanic students, including legal citizens, and had a negative impact on donors.


Fremont resident Maggie Zarate, a Realtor who said she represents the Hispanic community, said the ordinance is negatively affecting the entire community, not just Hispanics.


“If there’s anything that you guys can do, if you can repeal that ordinance because that has just brought fear to the city,” Zarate said.

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