Houston granted extension to spend $1.2B in federal money to build Harvey recovery housing

HOUSTON, Texas (KTRK) -- Two weeks ago, ABC13 reported that the City of Houston was being called on to return tens of millions of dollars to a federal Hurricane Harvey recovery grant stewarded by the state. The city should have provided affordable housing and support services to displaced families with the money as promised.

On Wednesday, Houston Mayor John Whitmire made a joint announcement with Texas Land Commissioner Dawn Buckingham that the U.S. Department of Housing and Urban Development (HUD) provided an extension for the entire $5.7 billion, 48-county grant, giving Houston an additional two years to spend the $1.2 billion it had been allotted.

With this money, the city purchased three tracts of land to build affordable single-family homes. Still, it couldn't meet the deadlines outlined by the grant program. For that reason, they were called to sell the three properties and return money to the grant. The deal terms meant they likely would have lost money in the transaction.

During the same timeframe, the city used the federal grant money to acquire four apartment complexes within floodplains. The city was required under federal law to provide the displaced tenants with relocation money.

Not only did they fail to earmark the funds, sending them searching for an additional $40 million to $45 million, but they failed to keep track of the tenants. It is estimated at least 900 households were displaced. The city and state are still working to identify and count them.

On Wednesday, Buckingham said they had begun working with faith and community leaders on outreach. She said they also planned to work with schools, sending pamphlets home in children's folders.

With the extension granted, the city plans to keep one tract of land and build about 250 affordable homes. They plan to sell the other two tracts, recouping an estimated $27 million to be returned to the grant. That money now will be used to fund relocation efforts.

Mike Nichols, the director of Houston's Housing and Community Development Department, said about $12 million left over from other projects affiliated with the grant will fill that gap, bumping the city close to the estimated $40 million to $45 million needed for relocation services.

Buckingham's office first requested the extension from HUD in October 2023. Buckingham said the extension was granted in large part due to Whitmire's efforts. The announcement was made two weeks after the issue was presented to Whitmire at the council. He promised to leverage his pre-existing relationship with Buckingham from state politics to find a solution.

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