saw public housing in Rock County, Illinois that stood out like a sore thumb   and proclaimed itself to be public housing.  "They had one they called Flintstone Village because it had these old style boulders that were glued onto the building," Olvera recalled in an interview in his office in the Madison Municipal Building.  "There was no grass ever at this place. It looked like something out of the Stone Age."
      Olvera's wife was also impressed with the quality of Madison's public housing and how it blended into the surrounding neighborhoods.  "When we first moved up here, my wife found this half of a duplex," Olvera said. "She said 'You just have to  see this. It's a beautiful place. We should try to rent it."  She took me to the place. It was great. She wanted to find the owner to see if we could rent it. I said  'I have the key.' It was public housing."
      Now Olvera is charged with maintaining the city's high quality public housing. But there are federal storm clouds on the horizon that threaten Madison's long-standing tradition of providing decent and affordable public housing. Since the 1970s, the heyday of public housing, the formula-based payments that the federal Housing and Urban Development  Department (HUD) gives to local governments to provide public housing has not kept up with inflation. Olvera explained how HUD determines the amount each governmental unit will receive.  "HUD gives us money based on the number of apartment units we have," he said.  "They have a formula that says what it should cost to run a housing authority per unit.  And they try to devise a formula that takes into account various things such as geographic location. So they say, 'Here's the formula.  It should take you this dollar amount to run your housing authority.' Then, they subtract out what you get for rents and that difference is the subsidy they give you because they know you are serving low-income people who can't pay market-rate rents. The subsidy is supposed to make up      that difference."
      While inflation steadily eroded the value of the dollar throughout the 1970s into the early 1980s, HUD only increased its allocation by an average of one percent per year. A real dollar gap began  to appear between what HUD was paying and what it took to provide quality public housing.
      Oftentimes, depending upon the goals of the administration that occupied the White House at the time, HUD would provide supplemental funding to provide ancillary services in public housing.  "During one administration, there was recognition that there were a lot of gang and drug problems going on in public housing," Olvera said. "So we could apply separately for grant funding for drug prevention programs. We gave some money to the East Madison Community Center to do some drug prevention programs. We subcontracted with several other agencies to do some preventive programming. We also hired some additional security at some of our sites."
      When the Bush administration took office in 2001, with its private sector,  "shrink government philosophy, HUD began to cut back on ancillary funding to local housing agencies. And it sought  ways to reduce the basic funds it provided for public housing. In 2003, HUD contracted with Harvard University to study the public housing subsidies and devise a new formula.  "Under that formula, most housing authorities got additional money," Olvera said. "Madison, under that formula, would have got additional money.  The Harvard study said that public housing authorities are under funded.  They need more money across the board. HUD said 'We don't like this formula," and so, they started changing the formula. Now, with a new formula, lots of cities are getting less."
      Since they changed the formula, public housing authorities have been experiencing steep cuts.  "Three years ago, they gave us 94 percent of what we were supposed to be getting," Olvera said.  "Then it was 89 percent of what we were supposed to be getting.  And for this coming year, 2007, we will probably be getting 80 percent of  what we are supposed to be getting under HUD's formula for public housing. There is some talk that it could go down to 74 percent for next  year. It's unknown at this time." Madison stands to lose $224,000 in subsidies for 2007.
      As HUD reduces the amount of funding it provides to local housing authorities, it is trying to implement a change in basic philosophy for public housing: it is trying to force local units to serve fewer unemployed people. "HUD has told us that we really should start  marketing to and creating preferences for working people," Olvera said.  "We should not be serving the poorest of the poor. We should be serving working families because working families can pay some rents, which would help us and allow HUD to give less of a subsidy." If Madison  gave in to the new philosophy, it would have dire consequences for some of  the current residents of public housing. Another of the agenda items of the Bush administration is to force public housing authorities to adopt project-based accounting,      which may be antithetical to the mission of public housing, namely providing quality housing to low-income people and families.  "They';re requiring us to keep a detailed accounting of  expenditures and revenues per various projects," Olvera said.  "We've had housing going back to the 1940s, but it's something we've always maintained. In the private sector, they might  not invest in it. It might start to deteriorate and then they might unload it. There's always the depreciation aspect. We don't take depreciation on our properties because we are governmental entities. So, I      think that kind of thinking is flawed. We would just let it get run down and then unload it. We always try to maintain our housing. Our mission is different. It is the Bush administration's perspective that we should be more like the private sector. So if we find that we have a project that is losing money granted if you have a project you can't lease up because it needs repair, obviously you would do repairs so that it is marketable; we would unload it."
      The Bush administration is using a carrot and stick  approach to "persuading local governments to adopt the new accounting  procedures. While the stick is that public housing authorities may only receive 80 percent of what the HUD formula says they are entitled to, HUD has also said that if the local units adopt the new accounting procedures  by October 15, they'll restore the local unit;s funding to 95percent. That're every housing unit's funding to 95 percent.         "I went to this training in Chicago to learn how  to do this new accounting system," Olvera said. "The trainer  told us that there was concern that HUD doesn't have the money to give back 95 percent of the cuts to everyone. So his thinking was they will be looking for reasons to disqualify you. So people have to put in a perfect submission, otherwise they just don't have the money.  Hopefully, we can get the money back. I'm working now to submit a      proposal to meet their deadline of October 15th. But I have to be concerned  that if I didn't put a comma in that they will disqualify us."
      Olvera and the city of Madison face some difficult  decisions in the months ahead. Ironically, it is the Bush administration with its "shrink government" attitude that is using the power  of the federal government to force local government to conform to its thinking. Madison's progressive tradition of providing quality public housing may depend upon Madison's ability to resist the federal government's efforts.
Madison Housing Units' Agustin Olvera
Public housing blues
by Jonathan Gramling
     Agustin Olvera, unit director for the city of Madison  Housing Operations Unit, was impressed with Madison's public housing' back in the early 1990s when he moved here. Olvera had seen the Cabrini' Greens in Chicago that stood out as blighted public housing. He also
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