Members of the U.S. Congress returned to their offices on Capitol Hill last week to continue their work on a number of spending bills, including the fiscal year (FY) 2024 bill for Transportation, Housing and Urban Development (THUD), which provides crucial funding for HUD’s vital affordable housing, homelessness, and community development programs.
Publicly, members of the U.S. House of Representatives and Senate have turned their attention to other matters, like finalizing and passing the “National Defense Authorization Act” (NDAA) and a supplemental spending package. However, work continues behind the scenes as congressional leadership, appropriators, and staff try to find a bipartisan, bicameral agreement on FY24 funding, and as tax staffers consider a potential end-of-year tax package.
Congress passed and President Biden signed into law a “two-tier” stopgap funding bill on November 15, keeping some federal programs – including HUD’s – funded until the stopgap measure expires on January 19. Funding for the remaining programs will expire on February 2.
The Senate has passed three of the 12 annual spending bills, including the THUD bill, while the House has passed seven spending bills, but the chambers provide vastly different funding levels for federal programs. The Senate’s FY24 spending bill for THUD provides $70.06 billion for HUD’s affordable housing, homelessness, and community development programs, an increase of $8.26 billion (slightly more than 13%) over FY23-enacted levels. In contrast, the House draft would fund HUD at $68.2 billion, a $6.4 billion (or roughly 10%) increase over FY23, while also proposing deep cuts to – and even the elimination of – some HUD programs.
While both drafts propose increased funding for HUD’s vital voucher programs, new research from the Center on Budget and Policy Priorities (CBPP) estimates that, at the funding levels proposed in the House bill, approximately 40,000 vouchers currently being used by households would expire upon turnover; at the Senate’s proposed levels, an estimated 6,000 vouchers would be lost upon turnover. CBPP estimates that the program will require at least $27.84 billion in FY24 – as provided in President Biden’s budget request – to fully renew all existing voucher contracts.
The Senate worked in a bipartisan fashion to draft FY24 spending bills to the limits agreed to in the “Fiscal Responsibility Act of 2023” (FRA; see Memo, 6/05), which imposes strict spending limits on annual appropriations through FY25. To bolster needed funding, senators also agreed to an additional $14 billion in supplemental funds designated as “emergency spending,” providing additional funding while also technically abiding by the conditions of the FRA. House Republicans, meanwhile, interpreted the limits established in the FRA as a “ceiling, not a floor” for spending cuts, and pushed for even steeper cuts to federal programs, with some members of the far-right House Freedom Caucus pushing for up-to-30% cuts to non-defense programs, including HUD. To pass a final spending bill, Congress will need to bridge the divide and reach a bipartisan, bicameral agreement on funding levels.
The Threat of a Year-Long Continuing Resolution
In addition to spending caps, the FRA would put in place mandatory, across-the-board 1% spending cuts – known as “sequestration” – if any of the 12 appropriations bills are not passed by January 1of the new year. While there is a four-month grace period that extends the actual deadline to April 30, some far-right Republicans, recognizing that their colleagues would not support their call for untenable cuts, are now pushing for a year-long CR to trigger sequestration at the end of April. Under sequestration, Congress would not be able to add the $14 billion in emergency spending provided by the Senate, resulting in even deeper spending cuts than would be provided under a final FY24 spending bill that adheres to the terms of the FRA. Moreover, because the costs of housing and development programs rise ever year (and have risen dramatically over the last year), increased funding is needed to maintain the current number of people served by HUD’s programs. Flat funding acts as a cut to HUD, and even seemingly mild cuts have broad impacts.
End-of-Year Tax Package
Members of Congress are also hoping to pass an end-of-year tax package that would, among other things, make permanent certain tax cuts included in the “Tax Cuts and Jobs Act of 2017” and expand the Child Tax Credit. NLIHC supports an expansion of the Child Tax Credit, which cut child poverty to its lowest level on record, and we are pushing for Congress to include in any end-of-year tax package reforms to the Low-Income Housing Tax Credit (LIHTC) program included in the “Affordable Housing Credit Improvement Act.”
LIHTC is the primary way that affordable housing construction is financed in this country, but on its own, LIHTC does not typically support the construction of units deeply affordable enough to reach the lowest-income renters. The “Affordable Housing Credit Improvement Act” would reform LIHTC to provide additional incentives to developers to build homes affordable to extremely low-income households, who are most impacted by the affordable housing crisis. The bill would also provide incentives to build affordable housing in rural and Tribal areas, which have some of the most urgent affordable housing needs in the country.
It is critical that advocates keep weighing in with their senators and representatives on the importance of increased funding for HUD’s vital affordable housing and homelessness programs in FY24. Tell Congress that it cannot balance the federal budget at the expense of people with the lowest incomes!
- Contact your senators and representatives to urge them to expand – not cut – investments in affordable, accessible homes through the FY24 spending bill, including full funding for NLIHC’s top priorities:
- Full funding to renew all existing contracts for the Tenant-Based Rental Assistance (TBRA) and Project-Based Rental Assistance (PBRA) programs.
- Full funding for public housing operations and repairs.
- The Senate’s proposed funding for Homeless Assistance Grants.
- Protecting $20 million in funding for legal assistance to prevent evictions in the Senate bill.
- The House’s proposed funding for Native housing.
- Join over 2,100 organizations by signing on to a national letter calling on Congress to support the highest level of funding possible for affordable housing, homelessness, and community development resources in FY24.
In addition, advocates can weigh in with their members and urge them to include in any end-of-year tax package the LIHTC reforms outlined in the “Affordable Housing Credit Improvement Act,” so that the program better serves people with the lowest incomes and the clearest housing needs.