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Analysis of President Trump’s FY2020 Budget Request

President Donald Trump’s Fiscal Year 2020 budget request – released today - proposes to drastically cut housing benefits that help millions of low-income seniors, people with disabilities, families with children, veterans, and other vulnerable people afford their homes. Like his other budget requests in FY18 and FY19, the proposal would reduce housing benefits for the lowest-income people by slashing federal investments in affordable homes, increasing rents, and imposing harmful work requirements on America’s struggling families. If enacted, it could leave even more low-income people without stable homes, undermining family stability, increasing evictions, and, in worst cases, leading to more homelessness.

Overall, the administration proposes to cut HUD by an astounding $9.6 billion or 18% below 2019 enacted levels, imposing deep cuts to affordable housing and community development, as well as other essential programs that ensure basic living standards.

NLIHC strongly urges Congress not only to reject Mr. Trump’s budget, but to significantly expand the investments in affordable homes that America’s families and communities need to thrive.

At a time when the affordable housing crisis has reached new heights and homelessness is increasing in some communities, the president’s proposal would eliminate or deeply cut essential housing and community development programs like the national Housing Trust Fund, the HOME Investments Partnership program, and public housing capital repairs.

The president would underfund rental assistance through the Housing Choice Voucher program and raise rents - by as much as three times current levels - on America’s poorest families. While the administration suggests its budget would provide an increase in funding to the voucher program, this is misleading; the proposes budget, in fact, includes cuts to housing assistance.

The budget would also impose punitive measures that would jeopardize family stability, increasing the financial burdens they face through higher rents and harmful work requirements that often push families deeper into poverty. Last year, HUD unveiled legislation to cut housing benefits through rent increases and work requirements. Learn more about President Trump’s proposed legislation to cut housing benefits, how cutting housing benefits would increase homelessness and housing poverty, and why this approach is has nothing to do with “increasing family self-sufficiency.”

“With this budget request, President Trump and Secretary Carson are making clear in no uncertain terms their willingness to increase evictions and homelessness - for the vulnerable seniors, people with disabilities and families with kids who will be unable to manage having to spend more of their very limited incomes to cover rent hikes,” said Diane Yentel, NLIHC president and CEO. “The administration callously disregards its responsibility to the millions of households living in deteriorating public housing and to low-income people and communities working to recover and rebuild after disasters by eliminating critical resources for public housing, rental housing construction and community development. This is a cruel and unconscionable budget proposal, and it should be soundly rejected by Congress.” For more information, see NLIHC’s updated budget chart. The Administration is expected to release more details on funding proposals next week.

HUD Programs

Rent Increases and Work Requirements Will Increase Homelessness and Housing Poverty

The budget supports cutting housing benefits for some of America’s lowest-income people by increasing rents and imposing work requirements on current and future tenants. The budget incorporates changes included in the draft legislation, known as the “Making Affordable Housing Work Act,” proposed by the administration last year.

If enacted, these proposed changes would hurt tenants already scraping to get by and would make it more difficult for them to achieve financial stability and live with dignity. The draft legislation had proposed to increase rents on most non-elderly, non-disabled families by requiring that they pay 35% of their gross incomes, compared to 30% of their adjusted incomes previously, on their rents. The very poorest elderly and disabled families would also see their rents triple up to 30% of their gross incomes or $50, whichever is higher. His proposal would eliminate income deductions for medical or childcare expenses for all households, primarily impacting seniors, people with disabilities and families with children. It sets a new mandatory minimum rent for households assumed to be able to work at more than $150 – or three times more than its current rate. And the proposal allows housing providers to broadly impose work requirements, without any resources to help people gain the skills they need for well-paying jobs.

Taking away housing benefits from poor families will only force them to make impossible tradeoffs between paying rent or paying for medicine, groceries, and other necessities.

Congress rejected the president’s proposal to impose rent increases and work requirements for the past two years. We urge Congress to again reject these harmful proposals.

National Housing Trust Fund

Mr. Trump’s budget calls for eliminating the national Housing Trust Fund (HTF), the first new housing resource in a generation exclusively targeted to help build and preserve housing affordable to people with the lowest incomes, including those experiencing homelessness.

NLIHC and a broad coalition of national, state, and local organizations are working to expand the HTF, which along with the Capital Magnet Fund is funded through a small fee on Fannie Mae and Freddie Mac, through housing finance reform, an infrastructure package, and other legislative opportunities. The president’s proposal to eliminate the HTF could make it more difficult for housing finance reform legislation to attract the bipartisan support needed for passage.

Tenant-Based Rental Assistance

Mr. Trump would cut funding for tenant-based rental assistance (TBRA). The request provides $22.244 billion for TBRA. At this amount, the budget request does not provide enough funding to ensure that all contracts are fully renewed. As a result, NLIHC and others expect that this would result in the loss of thousands of vouchers.

Project-Based Rental Housing

The budget proposal would provide $12.021 billion to renew project-based rental assistance (PBRA) contracts, an increase of $274 million from the FY19 funding level. This will likely not be sufficient to renew all existing contracts.

Public Housing

Public housing takes a huge hit under the Trump budget proposal. The public housing capital fund, which received $2.775 billion in FY19, would be eliminated in FY19. The allocation for the operating fund would fall significantly, from $4.65 billion in FY19 to $2.86 billion, or 38%.

Instead, the administration requests $100 million for the Rental Assistance Demonstration (RAD) to convert more public housing into housing vouchers and PBRA, despite the fact that the ability to successfully convert public housing through RAD requires fully funding vouchers and PBRA.

Homelessness

Mr. Trump would fund homeless assistance programs at $2.599 billion, or $34 million less than 2019 enacted levels.

Healthy Homes

The administration would fund the Office of Lead Hazard Control and Healthy Homes grants at $290 million, a slight increase of $11 million compared to FY19.

Fair Housing

The budget would decrease funding for HUD’s Office of Fair Housing and Equal Opportunity. Specifically, the Fair Housing Initiatives Program (FHIP) would be cut by $3 million.

Other HUD Programs

The budget would eliminate the Community Development Block Grant (CDBG) program, the HOME Investment Partnerships program, Choice Neighborhoods grants, the Section 4 Capacity Building program, and the Self-Help Homeownership Opportunity Program. There is no discussion of how eliminating CDBG would impact future disaster relief efforts, which heavily rely on CDBG-Disaster Recovery funds to address unmet housing and infrastructure needs.

The budget provides $644 million to the Section 202 Housing for the Elderly program, a $34 million decrease from this year’s funding level. It also reduces funding for the Section 811 Housing for People with Disabilities program to $157 million, $27 million less than the FY19 level. At these levels, the budget request will likely not provide sufficient funds to renew all existing contracts.

Funding for the Housing Opportunities for People with AIDS (HOPWA) program would decrease to $330 million, down from $393 million in FY19.

The budget cuts funding for the Native American Housing Block Grant program by $55 million, or a little more than 8%, when compared to FY19. The Native Hawaiian Housing Block Grant program would receive no funds.

USDA Rural Housing

Rural Rental Housing

President Trump proposes to essentially eliminate all rural housing grants and direct-loan programs at the U.S. Department of Agriculture (USDA). The budget would fund Section 521 Rural Rental Assistance at $1.407 billion. It is unclear whether this is sufficient to cover all existing contracts. In addition, the budget proposing increasing the minimum monthly rent for tenants living in rural housing properties to $50.

The budget also eliminates funding for the Multifamily Preservation and Revitalization demonstration, Section 502 Direct Homeownership Loans, Section 514/516 Farm Worker Housing Loans and Grants, Section 523 Mutual and Self-Help Housing, and Section 504 Rural Housing Assistance grants and loans.

The only housing programs that would remain – other than rental assistance - are guaranteed loan programs that use fees to offset any federal costs and tend to serve relatively higher-income households.