Congressional leaders released today a final fiscal year (FY) 2023 omnibus spending bill that includes significant funding for HUD’s housing and homelessness programs. Overall, the final spending bill provides HUD programs with $61.8 billion, or $8.1 billion more than FY22-enacted levels. At this amount, the final bill provides approximately $745 million more than the amount provided in the Senate proposal, but nearly $1 billion less than the amount provided in the House proposal. For more details on the FY23 spending bill, see NLIHC’s updated budget chart.
Both the House- and Senate-proposed FY23 budgets, released earlier this year, were negotiated with little to no Republican input. To enact a final FY23 bill, appropriations leaders in the House and Senate had to come to a bipartisan agreement on funding levels, which led to relatively low topline spending numbers for HUD programs.
Despite the tighter toplines, advocates and key congressional champions were able to secure significant funding increases for HUD’s vital affordable housing programs. The increase in funding is due to the hard work of advocates across the nation and champions in Congress, including Senators Brian Schatz (D-HI) and Susan Collins (R-ME), and Representatives David Price (D-NC) and Mario Diaz-Balart (R-FL), the chairs and ranking members of the Senate and House Transportation-HUD Appropriations Subcommittees.
The final spending bill provides funding increases to many programs compared to FY22, including significant funding for NLIHC’s top priorities. Enough funding is provided to renew all existing contracts provided through Housing Choice Vouchers ($30.3 billion) and Project-Based Rental Assistance ($14.9 billion), and the bill expands rental assistance vouchers to an additional 12,000 households targeted to individuals and families experiencing or at risk of homelessness. Other programs also received an increase in funding, including Homeless Assistance Grants ($3.6 billion), Public Housing Operating Funds ($5.1 billion), Native American housing block grants ($787 million), Housing for Persons with AIDS ($499 million), Section 202 Housing for the Elderly ($1.08 billion), Section 811 Housing for People with Disabilities ($360 million), and fair housing programs ($86 million).
Some programs received level funding compared to FY22, including the Community Development Block Grants program ($3.3 billion), HOME Investment Partnerships (HOME) program ($1.5 billion), Choice Neighborhood program ($350 million), and competitive tribal funds ($150 million).
Two programs received a slight decrease in funding: Healthy Homes ($410 million, down from $415 million in FY22) and Public Housing Capital Funds ($3.38 billion, down from $8 million compared to FY22).
While the final FY23 spending bill provides meaningful increases for vital HUD programs, far more resources are needed to address the nation’s growing affordable housing and homelessness crisis. The bill does not include, for example, the House’s proposed expansion of the Housing Choice Voucher (HCV) program to an additional 140,000 households. Without this expansion, Congress has missed a critical opportunity to help more households struggling to make ends meet in the wake of rising rents, increased evictions, and more homelessness.
The final spending bill does not include a tax extenders package. Advocates had urged Congress to include a tax extenders package with an extension of the Child Tax Credit and provisions related to the Low-Income Housing Tax Credit (LIHTC). NLIHC advocated for pairing any expansion of LIHTC with key reforms to ensure the program better serves households with the greatest and clearest needs. Efforts to enact tax legislation will likely continue into 2023.
Advocates should contact their representatives and senators and urge them to pass this final FY23 spending package as quickly as possible and thank them for their leadership in ensuring robust funding for housing and homelessness programs. The Senate is expected to vote on the bill as soon as today. The bill will then be voted on in the House of Representatives and head to the president’s desk for his signature before the current continuing resolution (CR) expires on December 23.
Detailed Analysis of FY23 Bill
Tenant-Based Rental Assistance
The bill provides a total of $30.253 billion for tenant-based rental assistance (TBRA), including $26.4 billion to renew previous contracts. This funding is likely sufficient for renewing existing TBRA contracts. Of the amount provided, $2.65 billion comes from an emergency supplemental for tenant-based rental assistance in a separate section of the bill.
The bill includes $50 million to expand rental assistance vouchers to an additional 12,000 households, including individuals and families experiencing or at risk of homelessness, such as survivors of domestic violence and veterans. This expansion of vouchers is critically needed, but it falls short of the House’s proposed expansion of Housing Choice Vouchers to an additional 140,000 households. The final spending bill directs HUD to incorporate key lessons learned from the implementation of Emergency Housing Vouchers provided by the “American Rescue Plan Act.”
The bill allocates $7.5 million to serve Native American veterans, which is $2.5 million more in funding compared to FY22.
The bill provides $607 million for Section 811 mainstream vouchers – an increase from the $459 million provided in FY22 – and provides level funding for Family Unification Program vouchers ($30 million).
The final spending bill directs HUD to consult with stakeholders and report to Congress on ways to make the administrative fee formula more relevant to what it costs to administer a high-performing and efficient voucher program today. Moreover, HUD is directed to review ways to address barriers to serving special populations, including people experiencing homelessness, due to the lack of project-based rental assistance, including considering relaxing the cap on project-based vouchers.
Project-Based Rental Housing
The bill provides $14.9 billion to renew Project-Based Rental Assistance (PBRA) contracts, an increase of $967 million from FY22 funding levels. Advocates estimate this amount will be sufficient to renew all contracts. Of the amount provided, $969 million comes from an emergency supplemental for project-based rental assistance in a separate section of the bill.
The bill provides the public housing capital account with $3.38 billion, an $8 million decrease from the FY22 funding level. Housing agencies need additional resources to maintain services and make critical repairs that will improve living conditions for tens of thousands of residents. Our country’s public housing infrastructure currently has an estimated capital needs backlog of $70 billion.
Funding for the public housing operating fund increased to $5.134 billion, an increase of $70 million from FY22-enacted funding.
The Family Self-Sufficiency program is funded at $125 million – a $16 million increase over FY22-enacted levels.
The bill increases funding for homeless assistance programs to $3.63 billion – a $420 million increase from FY22 – and provides $4 million to the U.S. Interagency Council on Homelessness. Funding for homelessness includes $75 million for the construction, acquisition, or rehabilitation of new permanent supportive housing to expand housing options for people experiencing homelessness.
Other Housing Programs
The bill provides $1.075 billion to the Section 202 Housing for the Elderly program, an increase of $42 million from FY22-enacted levels, and increases funding for the Section 811 Housing for People with Disabilities program to $360 million, which is $8 million more than was provided in FY22. These amounts will provide sufficient funding to renew all current contracts. At this level of funding, the bill supports the construction of approximately 2,800 new affordable housing units for low-income seniors and people with disabilities.
The bill provides level funding for the Community Development Block Grant (CDBG) program at $3.3 billion, but it increases earmarks by $1.47 billion for a total of $2.98 billion in FY23 compared to $1.5 billion in FY22. Of the amount provided for CDBG, $85 million is set aside for the Yes In My Backyard Incentive, a new competitive grant program to encourage jurisdictions to improve inclusionary zoning practices, land use policies, and housing infrastructure that will ultimately increase the supply of affordable housing.
The bill provides $1.5 billion for the HOME Investments Partnerships (HOME) program – level funding compared to FY22.
The spending bill creates a new competitive grant program, the Preservation and Reinvestment Initiative for Community Enhancement, which is funded at $225 million. Under the program, grants will be provided to preserve and vitalize manufactured housing communities, including through the support of resident-owned cooperatives.
Funding for the Housing Opportunities for People with AIDS (HOPWA) program is increased to $499 million – $49 million more than was provided in FY22. Funding for the Choice Neighborhoods Initiative is funded at $350 million, or level funding compared to FY22-enacted levels.
The bill provides $787 million for the Native American Housing Block Grant program, an increase of $15 million from FY22-enacted levels, and the Native Hawaiian Housing Block Grant program is provided with level funding of $22 million in the FY23 bill.
The bill also includes $20 million to provide legal aid assistance for eviction prevention.
The bill allocates $410 million to the Office of Lead Hazard Control and Healthy Homes’ grants, a decrease of $5 million from FY22.
The bill includes $86.4 million in funding for HUD’s Office of Fair Housing and Equal Opportunity, an increase of about $1 million from FY22.
Smoke Alarms in Public and Federally Assisted Housing
The omnibus spending package also includes provisions from the "Public and Federally Assisted Housing Fire Safety Act," which requires owners and operators of federally assisted housing to install smoke alarms on every level of the unit, and in/near bedrooms. Programs impacted by the requirement include Public Housing, Tenant-Based Rental Assistance, Project-Based Rental Assistance, Section 202, Section 811, HOPWA, and USDA Section 514 and Section 516.
The final FY23 spending bill does not include a tax extenders package, and as a result, does not include either an expansion to or reform of the Low-Income Housing Tax Credit (LIHTC).
NLIHC had urged Congress to ensure that in a tax extenders package, any expansion of LIHTC was paired with key reforms to better serve households with the greatest and clearest needs, including extremely low-income households and households in rural and tribal areas.
Efforts to enact tax legislation will likely continue into 2023.
The final spending bill includes an emergency supplemental, with $3 billion in Community Development Block Grant-Disaster Recovery funds for recovery from major disasters occurring in 2022.
As noted above, the emergency supplemental also provides additional funding for tenant-based rental assistance and project-based rental assistance.