America’s affordable housing projects in limbo as funding cuts

New Delhi| The Trump administration in America has stopped funding of $60 million allocated for affordable housing, leaving hundreds of housing projects in limbo. This information has come to light quoting documents and sources found by The Associated Press. Actions like grant cuts, staffing cuts and contract cancellation taken in the Department of Housing and Urban Development (HUD) have increased uncertainty in the affordable housing sector.

This funding was to be given to small non-profit organizations in the form of seed money (initial investment), which would have led to cheaper housing projects. But HUD canceled the contracts of two of the three organizations through which these $60 million were to be distributed.

“Many organizations had already allocated funds for workers, contractors and homeownership consultants”, said Sean Donovan, CEO and former HUD secretary at Enterprise Community Partners. Now they have to stop work immediately, which will lead to jobs being lost and cheap house projects coming to a standstill.

On the other hand, a HUD spokesperson claimed that the “Section 4” program would continue and was not being cut, but that grants were being realigned. However, it is not clear when and how the new funds will be released, due to which the work of many organizations is stuck.

“I have to assume now that the money won’t be forthcoming, which is what we have to change our plan”, said Jonathan Green, head of a nonprofit organization working on a 36-unit affordable housing project in Mississippi.

Green was scheduled to receive $20,000 in grant funding, $10,000 of which was for environmental review and licensing. Now due to this amount hanging in the balance, their conversations with investors are also being affected. “If this project stops now, we’ll probably never get it started,” he raised concerns.

According to a letter from HUD, the contracts were canceled on the instructions of the Department of Government Efficiency. It said these organizations were not in line with Trump’s executive order targeting diversity, equality and inclusion (DEI) programs. Musk currently holds the work of the efficiency department. Although HUD has given organizations the option to appeal, the Local Initiatives Support Corporation (LISC) warned that without this initial funding, housing for low-income families would stop, leaving them homeless. Habitat for Humanity International is the third organization to have this grant disbursed, but has not responded to it so far.