The House Appropriations Subcommittee on Transportation, Housing and Urban Development, and Related Agencies (THUD) passed its FY15 bill by voice vote on May 7. The unnumbered bill, which is expected to be taken up by the full House Committee on Appropriations as early as the week of May 19, would deeply cut numerous HUD programs. No amendments were offered at the mark-up, but several Members made statements about the bill.
The Subcommittee’s share of all FY15 non-defense discretionary funds, its 302b allocation, is $1.8 billion more than its FY14 302b allocation. However, because HUD’s receipts from Federal Housing Administration (FHA) programs are forecast to be $3 billion less in FY15 than in FY14, the Subcommittee is left with a net reduction of about $1.2 billion compared to FY14. “Like appropriators do, we made tough choices,” Subcommittee Chair Tom Latham (R-IA) said in his opening statement.
Chair Latham asserted that the bill would maintain housing assistance for all currently-served families. However, the Center on Budget and Policy Priorities disagreed with this analysis, saying in a blog post dated May 6 that the bill “likely provides too little money to renew all of the Housing Choice Vouchers that low income families will use this year. The bill’s $328 million funding increase to renew existing vouchers would only cover the cost of new vouchers that Congress funded in 2014 for homeless veterans and families that recently lost other housing assistance. It wouldn’t be enough to continue all vouchers funded in 2014 unless local housing agencies freeze the dollar value of their vouchers despite rising rents in many markets, forcing cash-strapped residents to pay even more to remain in their homes.” Advocates have been urging appropriators to restore the 40,000 housing choice vouchers lost due to the sequester but not replenished by the FY14 THUD bill.
The Subcommittee bill would provide $75 million for 10,000 new Veterans Affairs Supportive Housing (VASH) vouchers, which have been included in recent THUD bills. Voucher administrative fees would be cut from $1.5 billion in FY14 to $1.350 billion in FY15, well below the President’s request for $1.7 billion for administrative fees.
The public housing capital fund account would receive $1.775 billion, less than FY14’s $1.875 billion and a level not seen since the 1980s. The public housing operating subsidy would be flat funded at $4.4 billion.
The Subcommittee would decrease funding for the Choice Neighborhoods Initiative (CNI), from its FY14 level of $90 million to $25 million for FY15. CNI seeks to revitalize neighborhoods that have distressed public, assisted, and private housing.
The THUD Subcommittee bill does provide the exact amount requested by the Administration for the project-based rental assistance (PBRA) account, a decrease from FY14 funding of $9.917 billion to $9.746 billion. Tacit approval is given to HUD’s request to shift PBRA contract renewals to a calendar year cycle from the current rolling, 12-month basis. Explicit language sanctioning the calendar year shift is expected in the report to the bill. The change would result in a one-time FY15 savings of more than $1 billion for the PBRA account, savings the Subcommittee could not ignore for FY15. However, the change would require a $1.2 billion increase for the account in FY16, an increase advocates fear Congress will not grant, resulting in a failure to fully fund all PBRA renewals in FY16.
Especially disappointing, homeless assistance grants would be flat funded at $2.1 billion at a time when HUD’s programs are making strides to end homelessness among people with mental illness and other disabilities. HUD requested a $300 million increase for these programs in FY15, to $2.406 billion. The bill would also cut the Housing Opportunities for Persons with AIDS program (HOPWA) from $330 million in FY14 to $303 million in FY15.
The HOME program would receive a deep cut, from $1 billion in FY14 to $700 million in FY15. Community Development Block Grants would be cut by $30 million to $3 billion in FY15. Native American Housing Block grants would be flat-funded at the FY14 level of $650 million.
HUD’s Office of Fair Housing and Equal Opportunity would see its programs cut from $66 million to $46 million in FY15, and the Office of Healthy Housing and Lead Hazard Control would see a $40 million decrease in FY15 to $70 million. The Office of Policy Development and Research would see a funding cut of $6 million to $40 million in FY15.
HUD’s special populations programs would see increases. The Section 811 Supportive Housing for Persons with Disabilities program would receive $135 million in FY15, compared to $126 million in FY14. The Section 202 Supportive Housing for the Elderly program would receive $420 million in FY15, an increase from $384 million in FY14.
Subcommittee Ranking Member Ed Pastor (D-AZ) acknowledged that Chair Latham “received a tough allocation” when coupled with decreased FHA receipts, yet Mr. Pastor proceeded to read the long list of programs cut by the bill. House Committee on Appropriations Chair Hal Rogers (R-KY) agreed that the Subcommittee had a “tough allocation,” but called it a “good bill” and an example of the Subcommittee showing restraint in spending. Full Committee Ranking Member Nita Lowey (D-NY) said the HOME program would receive its lowest funding since its inception in 1992, and that the public housing capital fund would fall below levels imposed by the FY13 sequester. She urged Senate appropriators, who have not yet scheduled a mark-up of their THUD bill, to include “appropriate levels for programs” in their bill.
The President’s FY15 budget request included several new authorizing proposals, which Chair Latham said were “best left to authorizers to consider.” Aside from allowing HUD to shift to a calendar year funding cycle for the PBRA account, the Subcommittee bill does not include other policy changes sought by HUD in its FY15 request.
For example, the Subcommittee’s bill does not include expansion of the Rental Assistance Demonstration (RAD), a HUD priority that was also not included in the final FY14 HUD funding bill. Congress authorized RAD in its FY12 THUD bill, allowing up to 60,000 public housing and Section 8 Moderate Rehabilitation units to convert to either project-based rental assistance or project-based vouchers. HUD has given preliminary approval to convert to 60,000 units. There are another 115,000 units on a waiting list, should Congress approve an expansion of the demonstration
On May 5, House Committee on Financial Services Chair Maxine Waters (D-CA) sent a letter to House and Senate appropriators, asking them to “maintain the cap” on RAD. “Congress has not yet received any reports from HUD on outcomes thus far detailing the RAD deals that have closed. The purpose of the demonstration was for HUD to test new strategies to address the more than $26 billion backlog in capital needs for our nation’s public housing. HUD has not yet provided any answers to the questions outlined in statute, nor does Congress have any basis to determine whether the demonstration is a success,” Ranking Member Waters wrote. The statute authorizing the demonstration calls for HUD to evaluate RAD’s impact on the preservation and improvement of public housing, the amount of private sector money leveraged by RAD, and the effects on residents.
Other policy changes sought by HUD not included in the Subcommittee bill include:
- Full flexibility for non-troubled public housing agencies to mix public housing operating and capital funds (known as fungibility).
- Changing the income recertification period for fixed-income households to every three years in order to reduce administrative costs.
- Changing the medical expense deduction threshold from 3% to 10% of income, without proposing a concurrent increase in the standard deduction for elderly households or households that include a person with a disability.
- A budget neutral demonstration on energy efficient retrofits for HUD-assisted properties that would facilitate “financing of energy and water conservation improvements.”
- Changes to the Low Income Housing Preservation and Resident Homeownership Act (LIHPRA) of 1990 to allow the HUD Secretary to terminate or modify prepayment limitations and distributions of surplus cash in order to preserve affordable housing units by acquisition or refinancing.
The Senate Committee on Appropriations has not scheduled a mark-up for its THUD bill.
View NLIHC’s budget chart at: http://bit.ly/MLyt2i
Read CBPP’s blog about the House THUD Subcommittee bill at: http://bit.ly/1jamslN
Read Ranking Member Waters’ letter on RAD at: http://bit.ly/1mRsaqH
Read the House THUD Subcommittee’s bill at: http://1.usa.gov/RAqvfa