Landrieu to Nagin: Use cash or lose it

Sen. Mary Landrieu is threatening to have federal housing money stripped from the city of New Orleans if Mayor Ray Nagin's administration doesn't work with her office to give out millions in unspent and expiring grants.

Since the inception of the U.S. Department of Housing and Urban Development's HOME fund in 1992, New Orleans has failed to spend close to $34 million for affordable housing for low-income residents, and stands to lose about $11 million if it doesn't commit to specific projects by a May 31 deadline.

The city gets about $6 million to $7 million a year in HOME money, which can be used to gut and rehabilitate houses or for redevelopment and direct rental assistance. But New Orleans has money left over from every year except the inaugural year of the program, 1992. HUD says it wants to see the old money committed to specific projects, but about $15 million of it hasn't even been earmarked yet, HUD data show.

With Nagin visiting Capitol Hill on Wednesday, Landrieu had her chief of staff, former Cleveland Mayor Jane Campbell, hand the mayor the letter.

"I would like to work with the city of New Orleans to secure an extension of the deadline by which the HOME funds must be expended," Landrieu wrote. "However, unless the city of New Orleans can commit to working with my office to ensure that these funds are going to be spent effectively, I will be compelled to appeal to HUD to identify an alternative recipient for this funding."

In deference to Hurricane Katrina's toll, HUD already has given the city three extensions for spending HOME money.

Landrieu, who sits on the powerful Senate Appropriations Committee, went on to say that the city would have to make "significant administrative changes" for her to endorse another extension. Her spokeswoman, Stephanie Allen, said Landrieu specifically wants to see improvements at the city's Affordable Housing Bureau, which is rebuilding its staff....