By Kim Johnson, NLIHC
Note: Given the fast-changing nature of the legislative process, some information in this article may be outdated by the time of publication.
HUD’s Fiscal Year 2024 Budget
The U.S. Congress passed and President Biden signed into law on March 8 a fiscal year (FY) 2024 spending bill for HUD’s vital affordable housing, homelessness, and community development programs. Despite funding caps, the bill provides an $8.3 billion boost to HUD’s budget, bringing total funding for HUD in FY24 to $70 billion.
In a major win for affordable housing advocates and homelessness advocates, the bill provides increased funding for HUD’s Housing Choice Voucher (HCV) program to cover the full cost of all existing contracts, and to expand the program to an additional 3,000 new households. The bill also increases funding for Homeless Assistance Grants, public housing operations and capital needs, and the Native American Housing Block Grant to help build more affordable, accessible housing in Native communities, and maintains funding for HUD’s Eviction Prevention Grant Program.
Background: The “Fiscal Responsibility Act” and an Historic Speaker Vote
While Congress is supposed to enact a new budget by October 1, the start of the new fiscal year, drama in the House of Representatives slowed the FY24 budget process to a crawl. In June 2023, Congress passed the “Fiscal Responsibility Act (FRA),” an agreement to raise the federal debt ceiling in exchange for capping spending in the FY24 and FY25 federal budgets. The debt ceiling, or the “debt limit,” is the legal limit on how much the federal government can borrow to pay for already-approved spending. When the federal debt begins approaching the debt ceiling, it is necessary for Congress to vote to raise the debt ceiling to ensure the federal government can continue paying its bills.
While raising the debt ceiling is typically a routine procedure, former House Speaker Kevin McCarthy (R-CA) refused to agree to raise the ceiling without steep cuts to domestic spending programs, leading to the enactment of the FRA. The FRA lifted the debt ceiling until 2025, in exchange for capping FY24 spending at FY23 levels and limiting spending increases to just 1% in 2025, among other provisions.
Despite the budget caps, far-right members of the House Freedom Caucus initiated a vote to remove Rep. McCarthy from his role as House Speaker on October 3, 2023, citing his willingness to negotiate with Democrats and to pass a continuing resolution (CR) to keep the federal government funded and avoid a government shutdown. In an historic first, Freedom Caucus members joined House Democrats to remove McCarthy from his position. This move also brought legislative work in the House to a freeze for weeks, as the chamber could not advance legislation without a new House Speaker in place. Republicans voted in a new Speaker of the House – Representative Mike Johnson (R-LA) – on October 25, 2023.
Looking Ahead:
Funding Fights in FY25
The cap on FY25 spending put in place by the FRA means that advocates will once again have to mobilize to secure increased funding for HUD’s affordable housing and homelessness programs in FY25. Because the cost of housing and homelessness assistance programs rise every year – and because the recent increase in the cost of housing far outpaces increases in wages – increased funding is needed every year to maintain the number of households served by HUD’s programs. Congress will have until October 1 to finalize and enact a FY25 budget for HUD programs.
House Republicans released a budget resolution for FY25 on March 6 that, as in the previous year, proposes an up to 30% cut to domestic spending programs. A “budget resolution” is a nonbinding document that can act as a blueprint to help guide Congress as it makes spending decisions. While Congress does not have to follow the resolution, it nevertheless signals potential priorities for House Republicans in FY25. NLIHC will continue to track the FY25 budget cycle, and work with our members, partners, and allies to ensure HUD’s affordable housing and homelessness programs receive increased funding in the coming fiscal year.
Tax Bill Passes House, Stalls in Senate
The U.S. House passed on January 31 a bipartisan tax deal, the “Tax Relief for American Families and Workers Act of 2024,” that expands the Child Tax Credit (CTC) in exchange for extending corporate tax breaks included in the “Tax Cuts and Jobs Act of 2017.” The CTC is a tax credit that provides low-income families with children additional money to help with the cost of raising a child. The Center on Budget and Policy Priorities estimates the CTC expansion will lift as many as 400,000 children out of poverty.
In addition, the bipartisan tax deal expands certain provisions of the Low-Income Housing Tax Credit (LIHTC) but fails to include key reforms that would better target the program to meet the housing needs of people with the lowest incomes and those experiencing homelessness. LIHTC is the nation’s primary source of federal financing for the construction and preservation of affordable housing, but on its own, the tax credit is rarely used to build homes affordable to people with the greatest and clearest needs.
“By failing to include critically needed reforms to our nation’s largest source of financing for affordable rental housing, Congress continues to neglect the housing needs of those experiencing or at risk of homelessness,” said NLIHC President and CEO Diane Yentel in a statement. “Increased homelessness is the tragic, yet predictable, consequence of underinvesting in the resources and protections that help people find and maintain safe, affordable housing. Despite the clear and pressing need, this tax package’s housing provisions will do little to help states and communities address America’s growing homelessness crisis and will leave too many unhoused people without a safe, affordable place to call home.”
Despite passing the House, the bill has stalled in the Senate as some Republicans, led by Senator Mike Crapo (R-ID), push for changes to the bill text that would limit which families can receive the credit and how much families would be able to receive.
Supreme Court HEARS Most Significant Case About Homelessness in Decades
The Supreme Court of the United States (SCOTUS) heard City of Grants Pass v. Johnson on April 22, a case that will determine whether people experiencing homelessness have a constitutional right to camp on public property when they do not have an alternative place to sleep. SCOTUS will decide whether laws regulating camping on public property constitute “cruel and unusual punishment,” which is prohibited by the Eighth Amendment. The court will likely issue a ruling by the end of June.
A 2018 ruling from the Ninth Circuit found that, under the Eighth Amendment, cities cannot punish people experiencing homelessness for breaking anti-camping laws if there are no available shelter beds. As a result of the ruling, communities in the nine states under the Ninth Circuit’s jurisdiction face legal challenges and greater scrutiny when they clear encampments and are pressured, instead, to focus on long-term housing solutions for people experiencing homelessness.
If SCOTUS upholds the current decision, jurisdictions around the country will no longer be able to respond to homelessness with imprisonment or fines and will need instead to focus on ensuring the true solution to homelessness – housing. A ruling against the current decision would empower cities and states to pass laws that punish people who have no other option than to sleep outside.
NLIHC and our partners at the National Alliance to End Homelessness, National Coalition for the Homeless, and National Homelessness Law Center held a rally at the steps of the Supreme Court on April 22 to show support for people experiencing homelessness, and show SCOTUS, Congress, and the media that homelessness and poverty are not crimes. NLIHC and our partners published a toolkit for advocates around the country to take action the week of April 22.
Take action on NLIHC’s policy priorities at: www.nlihc.org/take-action