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Note: Given the fast-changing nature of the legislative process, some information in this article may be outdated by the time of publication.
The annual appropriations process is a task that Congress must complete each year to ensure the federal government and all its vital programs – including affordable housing and homelessness programs – continue to operate. Congress is tasked with enacting a new budget by October 1, which marks the beginning of the new federal fiscal year, but it rarely meets this deadline. Instead, Congress typically enacts a short-term continuing resolution (CR), which briefly extends funding for the federal government at its current level, granting Congress more time to finalize its spending bill for the new fiscal year.
After enacting a series of short-term CRs, Congress passed a final fiscal year (FY) 2023 budget on December 23, 2022. The final bill included significant funding for HUD’s housing and homelessness programs, providing HUD with $61.8 billion, an increase of $8.1 billion over the previous year. Enough funding is provided in the final bill to renew all existing Housing Choice Voucher (HCV) contracts and Project-Based Rental Assistance (PBRA) contracts and to expand HCV assistance to an additional 12,000 households targeted to individuals and families at risk of or experiencing homelessness. The bill also increased funding for homelessness assistance, Public Housing, Native American housing block grants, and Section 202 Housing for the Elderly and Section 811 Housing for Persons with Disabilities, among other programs. See NLIHC’s full analysis and our updated budget chart for more details.
While the final spending bill provides much-needed increases for vital HUD programs, far more resources are needed to address the nation’s growing affordable housing and homelessness crisis.
Congress aimed to enact a tax extenders package by the end of 2022 but did not manage to do so. Congress regularly extends expiring tax provisions that are only authorized for a set number of years, and the 2022 tax extenders package presented the opportunity to expand and reform the Low-Income Housing Tax Credit (LIHTC) so that it better serves extremely low-income (ELI) households and people experiencing homelessness.
LIHTC is the primary source of financing for the construction and preservation of affordable housing. While an important resource, LIHTC on its own is generally insufficient to support the construction and preservation of homes affordable to households with the lowest incomes. NLIHC will continue to urge Congress to expand LIHTC and include needed reforms in any tax extenders package that would:
• Incentivize developers to set aside at least 20% of units in a development for extremely low-income households and people experiencing homelessness.
• Set aside 8% of tax credits to help offset the cost to build developments where at least 20% of units are reserved for households with extremely low incomes or those experiencing homelessness.
• Incentivize the development of affordable housing in rural and tribal areas, which have some of the most pressing affordable housing needs in the nation.
Looking Forward to the New Congress in 2023
Republicans will have a narrow majority in the House, and Democrats will maintain control of the Senate with a slim majority of 51 members. The race for one of Georgia’s Senate seats was decided after an early December runoff election in which incumbent Democratic Senator Reverend Raphael Warnock defeated Republican candidate Herschel Walker.
Working with a divided government (with a Republican-controlled House and Democratic-controlled Senate) during the 118th Congress in 2023 and 2024 will require a strong focus on moving bipartisan legislation forward. It is extremely unlikely that there will be opportunities to move priorities through legislative maneuvers like reconciliation, which allows legislation to pass the Senate with a simple majority of 51 votes, rather than the 60 votes typically required in the chamber.
As the 118th Congress begins its work, NLIHC will continue to pursue administrative and legislative priorities to serve extremely low-income households by building bipartisan support for critical investments in affordable housing and homelessness programs around the country.