The House Appropriations Subcommittee on Transportation, Housing and Urban Development, and Related Agencies’ FY12 funding bill, reported out on September 8, would make cuts to many HUD programs (see Memo, 9/9). The bill also proposes changes to the structure of public housing funding.
Instead of providing the public housing operating fund with the level necessary to operate units in FY12, the Subcommittee bill would require that public housing agencies (PHAs) to contribute operating reserves to meet FY12 expenses. The bill would direct HUD to take into account a PHA’s “excess operating reserves” when determining a PHA’s FY12 funding. The bill would allow HUD to determine a level of reserves that are considered “excess.” HUD could then choose to allocate less operating funds to those PHA with excess reserves, relying on PHAs to apply these reserve funds to make up the balance. HUD could allocate full funding levels to PHAs with no excess reserves. Moving to Work (MTW) agencies would not be exempt from this provision.
The bill would also prohibit public housing operating funding going to federal public housing units that were formerly state public housing units converted by using funds provided by the American Recovery and Reinvestment Act (ARRA). States with state aided public housing stock converted a portion of these units to federal public housing stock when ARRA funding became available in 2009. New York State converted 12,697 state aided units to federal public housing. Massachusetts converted 4,000 state aided units, and Connecticut converted 496 units. Under the House bill, these 17,000 units of federalized public housing would not be funded.