The House Committee on Appropriations Subcommittee on Transportation, Housing and Urban Development, and Related Agencies (THUD) has approved an FY16 appropriations bill that would direct all 2016 National Housing Trust Fund (NHTF) resources into the HOME program. The bill also would also prohibit any funds from any source going to the NHTF.
The House THUD bill cuts HOME appropriations from $900 million in FY15 to $767 million in FY16. Republican Appropriations Committee leaders assert that they keep HOME funding level at $900 million. Committee staff report that they are counting an estimated $133 million that would be diverted from the NHTF to make up for the cut in HOME appropriations.
Funding for the NHTF comes from dedicated revenue on the mandatory side of the federal budget and is not subject to annual appropriations. Funding is based on an annual assessment on the volume of business of Fannie Mae and Freddie Mac. The NHTF is a block grant to states administered by HUD. The first funds from the NHTF are scheduled to go the states in calendar year 2016 (see Memo 2/2).
During the Subcommittee mark up, full House Committee on Appropriations Ranking Member Nita Lowey (D-NY) raised objections to using the NHTF to fund the HOME program. “While the Chairman has provided sufficient funding for HOME, I am concerned about how it is paid for. On the surface, HOME and the Housing Trust Fund appear to both be affordable housing programs, but the Housing Trust Fund targets the lowest of the low income while HOME focuses on low to moderate incomes. We have a lack of supply of affordable housing at all income levels, but I am concerned that by taking money dedicated for the Housing Trust Fund, we will perpetuate another gap in the spectrum of affordable housing,” she said.
House Committee on Financial Services Ranking Member Maxine Waters (D-CA) issued a statement condemning the emptying of the NHTF. “While this bill contains many harmful provisions, most egregious among them is the decision to rescind funding to the Housing Trust Fund, which allocates a tiny percentage of Fannie Mae and Freddie Mac’s profits to provide safe, decent and affordable housing for millions of American households where there is the greatest need. Ending this funding source will negatively impact the lives of millions of extremely low income Americans, particularly as Republicans seek to divert this money to another program that does not focus specifically on this vulnerable population,” said Ms. Waters in her statement.
Representative Ed Royce (R-CA), a longtime opponent of the NHTF, whose bill, H.R. 574, would prohibit Fannie Mae and Freddie Mac from funding the NHTF as long as the companies are in conservatorship (see Memo, 2/2), told Congressional Quarterly (CQ) that he would rather see these funds go toward reducing the federal deficit than to the HOME program. "While I’m supportive of keeping money siphoned away from the GSEs out of the hands of ideological housing groups, I’m concerned about the precedent set by redirecting money from the Trust Fund to other housing programs,” Mr. Royce told CQ.
NLIHC President and CEO Sheila Crowley released a statement on the Subcommittee’s diversion of all of the NHTF funds on April 28, the day the House released its draft THUD bill. “The House THUD bill released today expresses a callous disregard for the plight of millions of Americans who labor in the low wage workforce and still cannot find modest housing they can afford to rent,” Ms. Crowley said.
The NHTF Campaign issued a “Call to Action” after the subcommittee vote on April 29 urging constituents of all the Members of the full House Appropriations Committee to voice their opposition to the raiding of the NHTF. The NHTF Campaign is calling for the removal of any reference to the NHTF in the THUD Appropriations bill. The “Call to Action” makes the following points:
- The NHTF is the only federal program that provides new money specifically to expand the supply of rental housing that is affordable for extremely low income (ELI) households.Nationwide, there is a shortage of 7.1 million rental housing units that are available and affordable for ELI families. In most of the country, ELI is less than the federal poverty level. The shortage of rental housing that extremely low income households can afford is the reason so many people are homeless in the United States.
- The funding for the NHTF is a dedicated source of revenue on the mandatory side of the federal budget, and as such, is not subject to annual appropriations. Funding for the NHTF is based on an assessment of the annual volume of business of Fannie Mae and Freddie Mac. This is a reliable, predictable stream of funding, separate from HUD appropriations. It is not subject to sequestration.
As an appropriated program, HOME has suffered deep cuts in recent years, including cuts dictated by sequestration. Its FY15 appropriation of $900 million is less than half of the FY10 appropriation. The Appropriations Committee should not be managing the sequester cuts to HUD programs by raiding mandatory funds that have a dedicated purpose.
- Neither the NHTF nor HOME are funded anywhere near what is required to address the unmet housing need.
The NAACP sent a letter to House THUD Subcommittee Chair Mario Diaz-Balart (R-FL) and Ranking Member David Price (D-NC) on April 28 expressing opposition to the treatment of the NHTF in the FY16 THUD bill. The U.S Conference of Catholic Bishops and Catholic Charities USA reissued their earlier letter to the House expressly opposing any efforts to block NHTF funding (see Memo, 3/23).
The full House Committee on Appropriations is expected to mark up the THUD bill during the week of May 11.
Ranking Member Waters’ statement is at http://democrats.financialservices.house.gov/news/documentsingle.aspx?DocumentID=399001.
NLIHC’s press release is at http://nlihc.org/press/releases/5773.
The NHTF Call to Action is at http://nlihc.org/article/take-action-bill-zeroes-out-nhtf-funds.
The NAACP letter is at http://nlihc.org/sites/default/files/NHTF_THUD_APPROPS_SUBCOMM_042815.pdf