The House Appropriations Subcommittee on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies held a budget hearing on USDA’s Rural Development (RD) programs on April 4. RD staff testified about the Administration’s FY15 proposals for rural housing programs.
Subcommittee Chair Robert Aderholt (R-AL) opened the hearing with the report that the Subcommittee would not be able to meet all of the funding requests submitted to the Subcommittee by the Members because this is a tight budget year. He also criticized the Administration’s proposed cuts to RD single-family and other programs.
House Appropriations Committee Chair Hal Rogers (R-KY) questioned Doug O'Brien, Deputy Under Secretary for Rural Development (RD), about the Administration’s proposed cuts to the sweat equity housing program. Mr. O’Brien responded that the cut was proposed as a way to manage the increasing costs of other housing subsidies in RD’s portfolio.
The Administration’s proposal to establish minimum rents for tenants in RD assisted units was a topic of discussion at the hearing. Representative Aderholt questioned Tony Hernandez, Rural Housing Service Administrator, about the proposal to implement a mandatory $50 per month minimum rent for households receiving RD rental assistance (see Memo, 3/14). He asked what would happen if a tenant could not pay the proposed $50 minimum rent. Mr. Hernandez replied that USDA would adopt a “hardship clause” for the 10% of the 284,000 households served by RD who would be eligible for the exemption. Mr. Hernandez said he talked with HUD staff about its hardship exemption policy and anticipated changes, and believes USDA’s policy “will be successful.” However, he did not describe RD’s proposed hardship exemption policy. USDA’s budget documents indicate that 10% of the RD multifamily portfolio would be impacted by if the minimum rent proposal is adopted, potentially saving $5 million. But it is unclear how these savings would be realized if the entire population of impacted tenants is eligible for a hardship exemption.
Representative Rosa DeLauro (D-CT) called the minimum rent proposal “very concerning,” adding that minimum rents “would only impact the very lowest income tenants, only those who are earning $2,000 a year.” She asking, “Can you fathom an annual income under $2,000?” Ms. DeLauro said that 60% of RD households are elderly and that 48% of RD households include a person with a disability. She questioned how the proposed hardship exemption would protect residents, commenting, “It is not about the program but the people that we serve.”
Mr. O’Brien responded that “RD is focusing more and more of its resources in the hardest to reach places” and that each department has a goal of directing resources to address “persistent poverty.” Mr. Hernandez said that RD has the “same passion to keep people in housing” as Representative DeLauro. He responded to the question about minimum rents by saying that households earning $2,000 annually “probably wouldn’t have to pay because their income would be too low.” Mr. emphasized that RD wants all residents to contribute to addressing RD’s funding needs, and that minimum rents are another way “to make the program viable.”
View the USDA testimony: http://1.usa.gov/1ls6ou2