The Texas General Land Office was granted control over $1.2 billion in funding that had previously been available for the City of Houston to use as part of an agreement with the state for its Hurricane Harvey recovery programs.
The U.S. Department of Housing and Urban Development approved the GLO's plan on Tuesday to take over part of Houston's housing programs as thousands of homeowners continue to wait for help on repairing their storm-damaged homes.
In July, the City of Houston filed a lawsuit against the GLO to block the takeover. The lawsuit is currently before the Texas Supreme Court.
Statewide, more than $5.6 billion was granted to help Texans with long-term recovery efforts following Harvey. Although the state typically administers those disaster funds through its own programs, the GLO granted the City of Houston and Harris County direct allocations of about $1.2 billion each to use to rebuild Harvey-damaged homes.
HUD's decision on Tuesday strips Houston's control more than $1.2 billion, including $428 million in funds that were previously allocated for the city's Homeowner Assistance Program. The funds will remain in the Houston community, but will now be managed by the GLO, which "will administer homeowner assistance, rental and economic revitalization programs to serve eligible city of Houston residents."
"Unfortunately, the City of Houston heard the news of HUD's approval from the media rather than the GLO directly. We have reached out to the GLO but have not heard back," Mayor Sylvester Turner said in a statement. "We hope they are willing to proceed with all the multifamily projects, which will provide over $1 billion of safe, resilient, affordable housing for Houston residents. One is scheduled to close tomorrow, and this news puts that project and all other projects in jeopardy. Unfortunately, we cannot fund and go forward with these projects without GLO's confirmation that we can use the funds that have been already reserved for these projects."
HUD's decision also modified Harris County's Harvey program, although it still allows the county some control of funding as they work in conjunction with the state to provide county residents aid.
The GLO said it sought to take over Houston's program because of slow progress. In Houston, 48 homes have been rebuilt, according to the city's latest report on its program from August. An additional 82 reimbursements have been issued for homeowners and 31 rehabilitations have been completed.
The legal battle between the city and the state over who has control of a homeowner assistance program for Houstonians started in April, when GLO Commissioner George P. Bush sent a letter to Houston Mayor Sylvester Turner issuing a "notice of intent to eliminate funding" and end city oversight of Harvey recovery aid.
The GLO announced it would be taking over control of some of Houston's aid amid slow progress, saying the city "hindered" recovery for thousands of 2017 flood victims still waiting for relief years after the storm.
At the time, Turner announced his intent to take legal action and blamed the decision to end city oversight of the program on "politics," citing the GLO previously said it was satisfied with the city's actions in spending the funds following an audit and review.
Over the summer, Houston filed a temporary restraining order and temporary and permanent injunctions to prevent the state agency from "illegally taking control of $1.27 billion in disaster relief funds" for Harvey storm victims. The temporary restraining order was denied, but the temporary injunction was granted.
In August, the Texas Supreme Court granted the GLO's temporary relief to move forward with taking over the program, despite the city's ongoing lawsuit. The city's lawsuit against the state is still pending a final ruling before the Texas Supreme Court.