Members of the U.S. House of Representatives adjourned for the holiday recess while the U.S. Senate delayed its holiday recess to continue negotiations on a border security deal that would clear a path for aid to Ukraine and Israel. When members return during the week of January 8, they will face a fast-approaching deadline for fiscal year (FY) 2024 spending bills and additional priorities, including a tax package and emergency war funding bill.
Appropriations
The House left town for the holiday recess without agreeing on topline spending limits for the fiscal year (FY) 2024 appropriations bills, leaving little time for lawmakers to work out the details of the annual spending bills in January. On November 15, Congress passed and President Biden signed into law a “two-tier” stopgap funding bill that keeps some federal programs – including HUD’s – funded through 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 FY24 bill for Transportation, Housing and Urban Development (THUD), 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, a new analysis from the Center on Budget and Policy Priorities (CBPP) estimates that, at the funding levels proposed in the House bill, 112,000 fewer families would receive vouchers; at the Senate’s proposed levels, an estimated 80,000 fewer families would be served. CBPP estimates that the program will require at least $900 million more than the amount proposed 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 House will not return to business until January 9, leaving just eight legislative days after this week to pass the spending bills through both chambers. According to Representative Rosa DeLauro (D-CT), ranking member of the House Appropriations Committee, the process to negotiate full-year spending bills typically takes four to six weeks.
The Threat of a Year-Long Continuing Resolution
U.S. House of Representatives Speaker Mike Johnson (R-LA) recently proposed an unprecedented “date change” continuing resolution (CR), or a full-year CR with no adjustments. In this case, doing so would extend FY23 funding levels without revisions for addressing new or changed needs in FY24. Because the costs of housing and development programs are tied to market rates, which have risen dramatically in recent years, flat funding acts as a cut and reduces the number of people served by HUD’s vital affordable housing and homelessness programs.
While long-term CRs always act as a cut to HUD programs, a long-term CR would be especially harmful under the terms of the FRA. If any of the 12 annual federal appropriations bills are still operating under a CR by April 30, mandatory sequestration – or across-the-board spending cuts – will be triggered by the FRA. For domestic programs – including those run by HUD – a “date change” CR would result in cuts of up to 9.4% – or more than $73 billion – from the topline funding agreed to in the FRA.
A resource released by the Senate Appropriations Committee notes that a “date change” CR would cut assistance for nearly 700,000 households who rely on HUD’s housing assistance programs to keep a roof over their heads. The CR would also result in the production of nearly 3,000 fewer units of affordable housing at a time when the nation’s affordable housing shortage has become worse, especially for people with the lowest incomes.
End-of-Year Tax Package
Congressional leaders are working quickly to reach an agreement on a tax package – including an extension of the Child Tax Credit and several business tax incentives – before the 2024 tax filing season begins. NLIHC strongly supports an extension of the Child Tax Credit and urges Congress to also reform the Low-Income Housing Tax Credit (LIHTC) in a tax package. Housing advocates have a narrow window to voice their priorities!
If reached, the tax deal could include resources to expand and reform LIHTC. Congress must ensure that any new LIHTC resources serve the millions of households experiencing or at risk of homelessness – those most harmed by our nation’s housing crisis. LIHTC is the largest source of federal funding for the creation of affordable housing, but critical reforms are needed for the program to reach those most in need. While LIHTC is an important source of federal funding for affordable housing, it is rarely sufficient on its own to build or preserve homes affordable to households with the lowest incomes – those with the greatest, clearest needs. The majority (58%) of extremely low-income renters living in LIHTC developments who do not also receive rental assistance are severely cost-burdened, paying more than half their incomes on rent.
Because there are so few opportunities in 2023 and 2024 to expand housing resources at the federal level, it is critical that Congress ensure that these new resources are spent as effectively as possible to address the underlying causes of the housing crisis and to help those with the greatest needs. Make your voice heard! Tell Congress that any expansion of LIHTC must be paired with key bipartisan reforms to better serve America’s lowest-income and most marginalized households and renters living in rural and Tribal communities.
Take Action
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 – including those who serve on the Senate Finance Committee or House Ways & Means Committee – to urge them to ensure that any new LIHTC resources reach households experiencing or at risk of homelessness.
Ask your members of Congress to pair any expansion of LIHTC with key bipartisan reforms, including:
- Expanding the basis boost – known as the Extremely Low-Income (ELI) Basis Boost – for housing developments that set aside at least 20% of units for households with extremely low incomes or those experiencing homelessness.
- Designating Tribal and rural communities as “Difficult to Develop Areas” (DDAs), which would make it more financially feasible for developers to build affordable homes in these areas.
Learn more about how to urge Congress to pair LIHTC expansions with key reforms at: https://p2a.co/ZhQtlH2