City legal counsel and staff briefed the Affordable Housing Advisory Committee on recent HUD notices and related litigation about the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), and the committee responded by directing staff to limit the immediate CDBG funding round to infrastructure-only projects.

Elizabeth Ochel of the city attorney’s office described the federal issue: "Per PRWORA... federal public benefits as defined under the law can only be accessed by citizens and certain eligible aliens," and staff reported that HUD issued a new interpretation suggesting that this could apply to block grants such as CDBG. Counsel explained states (including Oregon) and a coalition of cities and housing authorities sued to block HUD’s new interpretation; HUD has stipulated that it will not apply the new interpretation in the states that sued while litigation proceeds. The litigation and related injunctions create uncertainty about whether grant conditions requiring immigration-related verification or other executive-order conditions would bind the city or subrecipients should higher courts rule differently.

Given those uncertainties and the abbreviated schedule needed to meet HUD deadlines, staff proposed three paths: a broad 'wide-net' application across priorities; a 'crab-pot' limited to development and infrastructure; or option 3, an infrastructure-only application intended to reduce exposure to conditions that are uncertain to apply. After discussion of risks for subrecipients and developers, the committee reached consensus to limit this funding round to CDBG and to proceed with option 3 (infrastructure-only). Staff said applications would open promptly and close in January; staff will return with final CICT and affordable housing funding timing and numbers.

Why it matters: the committee’s direction balances the desire to use federal funds with legal and operational uncertainty that could impose new compliance obligations on the city and subrecipients. Staff and counsel emphasized that council would face any later formal decision if courts or HUD change the status of grant conditions.