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First THUD Appropriations Hearing Held, Second Hearing Scheduled

On March 1, HUD Secretary Julián Castro testified on the agency’s FY17 budget request before the House Appropriations Subcommittee on Transportation, Housing and Urban Development, and Related Agencies (THUD).

Subcommittee Chair Mario Diaz-Balart (R-FL) questioned the 3.5% increase HUD is seeking for FY17 and the agency’s decision to request funds on the mandatory side of the federal budget. “HUD is requesting a total of $49 billion in new budgetary resources in Fiscal Year 2017. Now this is not a dramatic increase. Unfortunately, however, there are so many accounting gimmicks in the budget as a whole, that it makes it difficult to frankly take any of it very seriously,” Mr. Diaz-Balart said in his opening statement. “HUD proposes billions of dollars in extra spending by classifying new programs as mandatory. Look, spending is spending, regardless of how it is categorized. Just because you call it mandatory doesn't mean that it won't increase our national debt.” The President’s budget request includes $11 billion in mandatory spending over the next ten years to end family homelessness, 80% of which would be for new housing vouchers and 20% for rapid rehousing assistance.

Mr. Diaz-Balart also voiced concerned with the number and seriousness of Inspector General (IG) reports he received that showed “poor financial controls, possible Anti-Deficiency Act violations, lacks in program oversight, major risk to IT systems, [and] major gaps in the cyber security.” Mr. Diaz-Balart noted that the IG and Government Accountability Office (GAO) have repeatedly found that HUD does not have performance measures to evaluate the effectiveness of the Moving to Work (MTW) program, and that some PHAs participating in the program have used funds for purposes other than serving people in need. Secretary Castro said that with the MTW program expanding from 39 to 100 agencies, HUD has the opportunity to include more performance metrics in the contracts of the new participating agencies. He said that an advisory committee was established to oversee the MTW expansion and would be making recommendations in the next few months. The expansion would be phased-in over several years.

Subcommittee Ranking Member David Price (D-NC) said that while last year’s budget agreement partially corrected distortions created by sequestration, the deal’s cost constraints likely would force the subcommittee to write a bill that will not sufficiently address known housing needs. “The resources available to this subcommittee make it virtually certain that we can only address the most pressing needs, rather than thinking boldly about the future of housing in this country,” Mr. Price stated.

Secretary Castro said that the president’s FY17 budget calls for increased HUD funding to ensure low income families are not rent burdened, so that they can spend more money on groceries, education, and retirement.  He also said that the request would reinforce “HUD’s commitment to empower more Americans through housing mobility,” while also reflecting the agency’s “duty to revitalize underserved communities.” However, Secretary Castro noted that more than three quarters of the budget request is dedicated towards maintaining current tenants in housing—a “challenging task.”

Appropriations Committee Chair Hal Rogers (R-KY) asked the secretary about the IG report concerning over-income families living in public housing. Secretary Castro responded that HUD had begun taking action by sending out guidance to PHAs to adopt policies encouraging highly over income families to transition out of public housing and by issuing notice of advanced rule making on the issue. Secretary Castro cautioned that a change in policy must be nuanced so as not to be a disincentive to families to increase their incomes out of fear of immediately losing their assistance once they became over-income. 

Representative David Joyce (R-OH) said that he had “great concern” with HUD’s Affirmatively Furthering Fair Housing (AFFH) rule, saying that HUD was using its “authority like a hammer, and [was] robbing… communities of their rightful say in local zoning laws.” Secretary Castro assured him that the rule was about “giving… communities the data that they need to make prudent decisions about how they invest… federal taxpayer dollars and how they also live up to Fair Housing Act requirements.” He added, “We can't tell a local jurisdiction, ‘You have to adopt this zoning law, or planning law, or land use restriction.’”

Appropriations Committee Ranking Member Nita Lowey (D-NY) spoke of the current lead contamination scandal in Flint, MI, and lamented the lack of funding for the Lead Hazard and Healthy Homes programs, which have made large strides in eliminating lead poisoning nationwide. Secretary Castro responded that HUD was only able to fund half of the eligible applicants in the program and that the need outstripped the resources HUD received. He did note that Community Development Block Grant (CDBG) funds could be used to address lead issues.

Representative Henry Cuellar (D-TX) asked Secretary Castro about a proposal to increase funds for the Colonias communities that border Mexico. HUD is requesting an amendment to the Community Development Block Grant (CDBG) statute to increase from 10% to 15% the set-aside for Colonias in the CDBG funds received by Arizona, California, New Mexico, and Texas.

The Senate Appropriations Subcommittee on Transportation, Housing and Urban Development, and Related Agencies will hold its hearing on HUD’s FY17 budget request on March 10.  HUD Secretary Julián Castro again will be the only witness. The hearing will be at 2:30pm ET in room 192 of the Dirksen Senate office building.

Watched the archived hearing here:

Read Secretary Castro’s testimony here:

Read Mr. Diaz-Balart’s testimony here:

Read Ranking Member Price’s testimony here: