Transition Hearings Continue With Testimony from Housing, COR3 Officials
Incoming committee questions ‘achievements’
The second day of the Puerto Rico government transition hearings continued Tuesday morning with presentations by the Housing Department and the Central Office for Recovery, Reconstruction and Resilience, or COR3.
Incoming Transition Committee President Ramón Luis Rivera questioned Housing Secretary Luis Carlos Trinchet about the pace of rebuilding and revitalizations three years after Hurricane Maria struck.
Trinchet said the large number of requirements from the U.S. Department of Housing and Urban Development (HUD) and the Federal Emergency Management Agency (FEMA) has slowed down the progress to begin rebuilding homes.
Only 231 homes—affected by hurricanes Irma and Maria—have been rebuilt and 16 property titles have been awarded out of 3,452 homes that are “deemed eligible” to be rebuilt.
Trinchet began his presentation speaking about the impact of hurricanes Irma and Maria on the island.
“We move forward 507 days, which takes us to February 2019. That is the moment the federal government tells Puerto Rico, you can begin to disburse the funds,” Trinchet said referring to the Community Development Block Grant Disaster-Recovery (CDBG-DR) Program funds.
He said there is an incorrect perception that right after the 2017 hurricanes, “suddenly there were $20 billion Puerto Rico with 2,000 workers to work on the program.”
“Five hundred and seven days passed before the first disbursement was authorized,” he stressed, while explaining to the incoming transition committee that once Gov. Wanda Vázquez appointed him to head the agency in February 2020, he started to look into what happened up to 2020 and what has been achieved since then.
“What do we have in Puerto Rico in CDBG-DR funds, we have a little over $20 billion assigned, $3.2 billion available, $1.2 billion obligated and $133 million disbursed,” he said. “When I arrived at the agency, only $10 million had been disbursed. Moving forward to this day, I am excluding the two months in Covid-19 lockdown, we have $133 million disbursed.”
He said that the change since he started leading the agency was evident and two federal monitors have recognized the achievements.
“We are trying to consolidate programs, simplify the process to ensure the funds are streamlined and reach where they are supposed to reach,” Trinchet assured.
Rivera then asked Trinchet about low-income housing tax credit (LIHTC) projects. He said in Coamo there are 69 units, 94 in Río Piedras and 438 units in Caguas being built.
“Do you think the costs of these projects are reasonable, for social interest housing?” Rivera asked.
“There is a big difference between this kind of project and a typical social interest project,” Trinchet replied. “These projects have two main segments, one is the operation and the second is the construction, so the kind of element that is added to the project has to be one that lasts 40 to 50 years.”
But Rivera said that if one divides the 69 units in the San Blas project in Coamo by the amount of money the project will cost, those units will cost $362,318 each.
“If I divide the 94 units in Río Piedras by the $34 million…we are talking about $361,702,” Rivera added. “My question is do you think that is a reasonable amount for a social interest housing unit that will probably have just one bedroom, because with $360,000 I can give the money to the participant and they can buy a house in Garden Hills [in Guaynabo]. I think the costs are elevated for social interest projects.”
Rivera continued by asking Trinchet how it was he believed the agency’s progress to date could be called an achievement.
Trinchet said the projects were begun this year and that before February there were no homes built and “that is an achievement.”
“We had eight months of progress,” the Housing chief stressed, adding that there was still much left to go “but we have had some achievements. If you think it’s reasonable to put a cap on the private market to build these houses, that is something that could be contemplated.”
Trinchet also pointed out that among the biggest challenges the agency has faced are a lack of workers and that their pay is less than those experts get when working in the private sector.
Meanwhile, the federal Inspector General Office has requested information regarding a contract awarded to the nonprofit Foundation for Puerto Rico.
“They have asked for information on who is the staff, what is the budget the entity is operating with,” Trinchet said about a contract awarded to Foundation for Puerto Rico for economic development projects.
He said Foundation for Puerto Rico has received $900,000 for administrative costs.
According to a memorandum of understanding (MOU) between the Housing Department and the foundation, the latter is tasked with leading the design and implementation of the CDBG-DR Whole Community Resilience Planning Program (WCRP) and provide overall project management.
Meanwhile, COR3 Executive Director Ottmar Chávez said $53 million has been obligated by FEMA to help reduce the severity of the damages in future natural disasters.
Some $23 million has been approved to comply with the building code and $5 million assigned to update local mitigation plans.