On a 28-2 vote, the Senate Committee on Appropriations passed HUD’s FY12 funding bill on September 21, one day after the Subcommittee on Transportation, Housing and Urban Development, and Related Agencies (T-HUD) marked it up. S. 1596 would cut several critical rental programs serving extremely low income households and rescind funds from multiple HUD accounts. The legislation would level fund some programs and provide new or restored funding for others, but the overall allocation for HUD programs would be lower than the already low amount in the House Subcommittee’s bill (see Memo, 9/9).
Tenant-Based Rental Assistance
S. 1596 would provide $18.87 billion for the Tenant-Based Rental Assistance (TBRA) account, 2% less than President Obama’s budget request. Contract renewals would receive $17.14 billion, the amount that the Administration originally requested and a 3% increase over FY11 funding. However, this level may be insufficient to renew all existing vouchers as HUD this month submitted a revised cost estimate to Congress. In a September 12 memo, the Center on Budget and Policy Priorities (CBPP) estimated that $17.37 billion would be needed to maintain housing for all current TBRA voucher holders. HUD’s estimate reportedly is higher.
In its T-HUD bill, the House Appropriations Subcommittee provided $17.04 for TBRA contract renewals, an amount that Chairman Tom Latham (R-IA) and Ranking Member John Olver (D-MA) said was enough to maintain housing for all current tenants. This figure was constructed prior to HUD’s revised estimate and CBPP’s memo. If contract renewals were funded at the House level, CBPP estimates that 42,000 households would lose their vouchers in FY12.
The Senate bill would rescind $750 million in public housing agencies’ (PHAs) excess net restricted assets. The bill instructs HUD to preserve PHA reserves at a level equal to one month’s cost of operating a voucher program, but the language only requires it to do so “to the extent practicable.” PHAs with Moving to Work (MTW) status are not exempt from this rescission. It is unclear whether there exists $750 million in net restricted assets or whether the total must be reached by a rescission that would leave PHAs with less than one month of reserve funding.
Other provisions in the bill would result in cost savings for the voucher program (see related Memo article). However, the total amount to be realized in the first year of enactment is unclear.
S. 1596 would cut administrative fee funding for PHAs providing vouchers to $1.4 billion, 15% below the President’s request and 3% below FY11, when the fee was cut by $100 million. The House T-HUD bill would fund administrative fees at only $1.1 billion. Reducing administrative fees could force PHAs to lay off staff and slow the process of turning over vouchers. If this occurs, vouchers could be lost by attrition since funding allocations are based on prior year utilization. If the FY11 cuts reduce vouchers in use through FY11, it could affect the amount needed for FY12 contract renewals.
Not included in the Senate legislation is a House bill provision that would allow PHAs to use funds when they have end of year leasing rates exceeding the average 12 months. The FY10 bill included this language, which is important to note as FY11 funding was provided in a CR, which continued FY10 provisions and made only some funding and policy adjustments.
S. 1596 would provide $75 million for Tenant Protection vouchers, 32% below FY11 funding but consistent with the President’s request and the House Subcommittee level. The Senate bill would target $10 million of this amount toward enhanced vouchers to protect tenants in low vacancy areas who may pay more than 30% of their household income for rent (see related Memo article).
The Senate bill includes new language on Tenant Protection vouchers for demolition and disposition projects. It specifies that HUD may provide them when units pose an imminent health and safety risk to residents at the time a PHA submits a demolition or disposition application. Providing vouchers at the time of application could limit the number available to be place based following rehabilitation. NLIHC is evaluating the potential impact of the provisions.
The bill also allows the continued use of Tenant Protection funds for the Disaster Housing Assistance Program (DHAP). However, it would require that vouchers not be reissued upon turnover (see related Memo article).
Further, S. 1596 would provide the following:
- $60 million for Family Self Sufficiency Coordinators, consistent with FY11 funding levels, the President’s request, and the House Subcommittee bill.
- $113 million for Section 811 Mainstream vouchers, consistent with the President’s request and the House Subcommittee bill. Section 811 Housing for Persons with Disabilities voucher renewals were partially transferred to the TBRA account in FY11. The complete transfer is reflected in both this and the House bill.
- $75 million for new Veterans Affairs Supportive Housing (VASH) vouchers. The Senate estimates that this allocation will provide 11,000 new vouchers to veterans in FY12.
- $5 million for the Homeless Special Needs Demonstration, a new program included in the President’s FY11 budget request. The President requested $85 million in FY11 and $57 million in FY12 for this demonstration. The House T-HUD bill does not include funding. The demonstration would fund PHAs to provide housing and services for individuals and families. Eligible PHAs would partner with state and local Temporary Assistance for Needy Families (TANF) and other service providers, and with department of education homelessness liaisons. PHAs partnering with state Medicaid and behavioral health agencies would be eligible, as well.
- The TBRA account would include a new provision requiring HUD to separately track all “special purpose” vouchers.
S. 1596 would provide $1.87 billion for the Public Housing Capital Fund, an insufficient amount to keep up with the annual accrual of capital needs for public housing units. HUD estimates that accumulated capital needs total more than $25 billion. The Senate’s appropriation would fall short of the President’s requested $2.4 billion by 22% and below FY11 levels by 8%. Meanwhile, the bill would maintain a $50 million set aside for the Resident Opportunity and Supportive Services (ROSS) program, which the President’s request and the House Subcommittee bill would eliminate.
The Senate bill would provide $3.96 billion for the Public Housing Operating Fund. Similar to the President’s request and the House bill, this legislation would allow HUD to take into account PHA excess reserve funding to make up the difference between operating costs and FY12 funding. Although the amount is consistent with the President’s request and exceeds the House bill’s level, the Senate sets a $750 million cap on reserve contributions. Here, the Senate’s $4.71 billion is less than the President’s budget request, which assumes a $1 billion contribution from reserves for a total of $4.96 billion.
S. 1596 includes a new Rental Assistance Demonstration (RAD) that would allow PHAs to convert public housing units to project-based vouchers or contracts (see related Memo article).
The Choice Neighborhoods Initiative (CNI) would receive $120 million in S. 1596, while the HOPE VI program would receive nothing. Moving funds from HOPE VI to CNI is consistent with the President’s request and the Senate’s FY11 funding, though the President requested $250 million for CNI. The House bill does not include funding for either program.
Project-Based Rental Assistance and Housing Certificate Fund
The Project-Based Rental Assistance account would receive $9.42 billion, $10 million less than the President’s request and the House bill. S. 1596 also would rescind $200 million from the Housing Certificate Fund (HCF) account, which usually is applied to project-based contracts. This rescission might be used to pay for other portions of the bill. The language would allow HUD to take funds from other program accounts if the HCF does not have $200 million.
The Senate would cut the HOME Investment Partnership program by 39% below the President’s request and 38% below FY11 levels. In FY11, the program faced cuts from $1.82 billion to $1.6 billion. The House bill would fund it at $1.2 billion, compared to $1 billion in S. 1596.
This cut follows news reports criticizing the use of HOME funds. The Senate bill includes language about HOME oversight and monitoring. One new provision would require that homeownership units unsold within six months of a project’s completion be transitioned to rental units. Another one sets a four-year limit on the length of time between commitment of funds and project completion; if a project does not meet that timeframe, funds would need to be repaid. HUD would have flexibility to offer a one-year extension to the limit.
Housing for Vulnerable Populations
S. 1596 would level fund or cut many programs serving the nation’s most vulnerable households. Homeless Assistance Grants would receive $1.9 billion, 20% below the President’s request and level with FY11 funding and the House bill. This amount would be insufficient for HUD to fully implement the HEARTH Act.
The Senate bill would decrease funding for the Section 202 Housing for the Elderly program to $369 million, 51% below the President’s request and 7% below FY11. The program was funded at $825 million in FY10. Meanwhile, the Section 811 Housing for Persons with Disabilities program would be funded at 23% below the President’s request and the House bill. The Senate would provide $150 million for the program, consistent with the FY11 level, which was a significant cut below FY10.
After level funding the Housing Opportunities for Persons with AIDS (HOPWA) program in FY10 and FY11, the Senate bill would cut the program by $5 million to $330 million for FY12.
Community Development Fund
The Community Development Fund (CDF) would receive $3.4 billion in S. 1596, 11% below the President’s request and 3% below FY11 and House Subcommittee levels. The Senate Subcommittee bill funded CDF at $3 billion but a manager’s amendment offered at the full Committee mark up increased funding by $400 million for disaster assistance. This amount was not offset by other HUD programs.
The Community Development Block Grant (CDBG) formula grants, a set-aside within the CDF, would receive $2.85 billion under the Senate bill, a 23% cut below the President’s request and 15% below FY11. The Senate bill would fund the Sustainable Communities Initiative at $90 million and continue to allow CDBG planning, management, and administration expenses at the level of 20% of any grant. In contrast, the House bill would reduce these expenses to 10%.
S. 1596 would restore funding for the Housing Counseling program eliminated in the FY11 bill. It would provide $60 million, $28 million less than FY10. The House Subcommittee did not include funding though Representative David Price (D-NC) offered an amendment during the mark up to restore it (see Memo, 9/9).
Other programs would receive approximately the same level of funding as FY11 under S. 1596. The Native American Housing Block Grant would receive $650 million, $50 million below the President’s request and FY10 but a slight increase above FY11 and the House bill. The Native Hawaiian Housing Block Grant would receive $13 million, $3 million above the President’s request and consistent with FY11.
The Self-Help Homeownership Opportunity Program would receive $17 million, a 37% cut below FY11. The President did not request additional funding in FY12, but the House Subcommittee included $16 million in funding.
The Fair Housing and Equal Opportunity program would receive only $64 million in S. 1596, 11% below the President’s request and FY11. The House bill originally cut the program but funding increased to the FY11 level in Subcommittee mark up.
The Healthy Homes and Lead Hazard Control program would receive $120 million, 14% below the President’s request and FY10 but consistent with FY11 and the House bill.
HUD’s Policy Development and Research account would be funded at $46 million, a slight decrease below FY11 levels and the House bill but 20% below the President’s request.
In addition, $231 million in additional funds from the Rent Supplement account would be rescinded to fund the appropriations bill.
View the Committee Report at: http://www.gpo.gov/fdsys/pkg/CRPT-112srpt83/pdf/CRPT-112srpt83.pdf
View NLIHC’s budget charts at: http://www.nlihc.org/issues/budget
View CBPP’s September memo at: http://www.cbpp.org/files/9-12-11-IP-Memo-Approps.pdf