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Fact check: Neighborhood stabilizaton program

  • Blog Post by: Eric Roper
  • April 3, 2013 - 2:24 PM

During the first debate of Third Ward candidates for City Council last month, Diane Hofstede touted many of her accomplishments over eight years at City Hall. Among them was a federal program, created in Washington D.C., that has awarded $7 billion to areas across the country to buy and rehab foreclosed homes.

“The NSP, that’s the neighborhood stabilization program, has been a project that I initiated with Rep. Keith Ellison and the federal government in order to improve affordable housing and availability of housing within the city,” Hofstede said.

This statement is misleading.

Minneapolis housing policy director Tom Streitz, who helped design the local implementation of NSP, said the program emanated from and was shaped in Washington, D.C., in response to the national foreclosure crisis. While city council members participated in local implementation, he said the application process to win $35 million in funding for Minneapolis was a staff-driven effort.

So how did Hofstede “initiate” something that is administered by the U.S. Department of Housing and Urban Development?

The council member said in an interview that she held one of the first public discussions regarding mortgage foreclosures in the city, at the Hawthorne Huddle in 2007.

“Then I followed up with Rep. Ellison,” Hofstede said. “And based on the information and the work that I had done, along with others, we gave him information so then he could then bring the federal hearings regarding mortgage foreclosures. And of course that went and became federal programs.”

Ellison, who has endorsed Hofstede’s campaign, said Hofstede placed him in her car in 2008 and drove him around North Minneapolis viewing foreclosed properties.

“We met for two hours. We were set to meet for half an hour. And the neighborhood was really blasted,” Ellison said. “And she was saying we need some kind of a program for the city to take control of these properties so we can stop the freefall and put some families back in here.”

Back in D.C., Ellison had a meeting with U.S. Reps. Barney Frank and Maxine Waters, who had seen foreclosure issues in their own neighborhoods. They were discussing federal strategies to alleviate the problem. “I said, ‘Absolutely, in fact I was talking to a city council member’ and I kind of recounted the story about Diane to my colleagues in Congress.”

Waters later sponsored the Neighborhood Stabilization Act of 2008, with Ellison as a co-sponsor, which passed the House but not the Senate. Initial NSP funds were later granted under the Housing and Economic Recovery Act of 2008, sponsored by then-Speaker Nancy Pelosi.

“I’m not saying that there never would have been a neighborhood stabilization program if Diane hadn’t have grabbed me,” Ellison said. “But I’m saying that Diane did grab me. I did contribute to the establishment of this program. And my active participation is because of what Diane Hostede showed me firsthand and insisted that I get in the car with her.”

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