HUD Secretary Marcia L. Fudge provided testimony before both the U.S. House of Representatives’ Committee on Transportation, Housing, and Urban Development’s (THUD) Subcommittee on Appropriations on April 18 and the U.S. Senate’s THUD Subcommittee on Appropriations on April 20 regarding President Biden’s fiscal year (FY) 2024 budget request.
The President’s FY24 budget request calls for increased funding for affordable housing and homelessness resources using two approaches: modest funding increases to HUD programs through the regular appropriations process, and major investments in housing through mandatory spending proposals. Through the regular appropriations process, the budget calls for funding HUD programs at $73.3 billion, an approximately $1.1 billion – or 1.6% – increase over FY23-enacted funding. Through its mandatory spending proposal, the budget calls for significant investments to address extremely low-income peoples’ urgent housing needs, including additional resources for eviction prevention, funding to expand vouchers for youth aging out of foster care and low-income veterans, and assistance to address the capital needs of the most distressed public housing properties, among other resources. For full details, read NLIHC’s analysis here.
“Whether you rent or own, having a good home in a neighborhood with opportunity sets the foundation for everything else in a person’s life,” said Secretary Fudge in her opening remarks. “Without a home, it is harder for a person to access good paying jobs and decent schools; it drives up costs for families and adds to inflationary pressures.”
The hearings come as House Republicans, under the leadership of House Speaker Kevin McCarthy (R-CA), roll out their proposal to lift the federal debt ceiling, which would require Congress to cap FY24 domestic spending at FY22 levels in exchange for a vote to raise the debt ceiling until March 2024. The Secretary highlighted in her opening statement what the impact of such draconian cuts would be: “a reduction to FY22-enacted levels would mean thousands would lose access to the vouchers that keep them in their homes.”
“We cannot carry out our mission to end homelessness and protect affordable housing…if we do not invest in the federal agency and federal workers who are charged with doing that important work,” she continued. Secretary Fudge pointed out the President’s FY24 budget request calls for a modest increase to HUD funding, “one that is necessary to ensure millions of families and communities can maintain access to services upon which they rely.”
During the April 18 House hearing, both Republican and Democratic members acknowledge the importance of HUD’s programs. House THUD Subcommittee Chair Tom Cole (R-OK) emphasized the necessity of reaching an agreement on FY24 funding and avoiding a long-term continuing resolution (CR), which extends appropriated federal funding from the previous fiscal year for a specified amount of time. Congress enacts CRs when they are not able to enact new appropriations bills before the start of the new fiscal year on October 1. Chair Cole asked Secretary Fudge to describe the impacts of a long-term CR on HUD programs, and she noted that, because the cost of housing rises from year to year, flat funding enacted through a CR acts as a cut, reducing the number of people being served by HUD’s programs.
Ranking Member Mike Quigley (D-IL) agreed with Chair Cole that a CR would cause harm to the people and communities served by HUD programs but stated that a 20% cut to HUD’s budget – like the one proposed in Speaker McCarthy’s debt ceiling bill – would be devastating. Secretary Fudge agreed, stating that such a massive spending cut would make it impossible for HUD to perform simple operations, like inspections, and would prevent HUD from conducting other vital work, including making repairs to HUD properties, addressing the capital needs backlog in public housing, and renewing housing voucher and Project-Based Rental Assistance (PBRA) contracts.
“[There is] nothing we can do that is going to be good with this process; everything is going to be reduced,” said the Secretary, emphasizing the dramatic impact funding reductions would have on HUD programs. “There would be no good decisions.”
In response to a question from Representative Bonnie Watson-Coleman (D-NJ) about the impacts of capping FY24 spending at FY22 levels, Secretary Fudge emphasized that increased funding for HUD programs is needed more than ever as the U.S. continues to navigate the economic fallout from the pandemic: “People do not realize the gravity, and the crisis that we find ourselves in as a nation. When you have, on any given night, over 500,000 people sleeping on the streets, and [because of funding cuts] you cannot assist some 50,000 more, it makes the problem worse…we would be in the position where we could not support half of what we do.”
Members also pressed Secretary Fudge to make needed improvements to HUD guidance and regulations, including improving landlord participation in the Housing Choice Voucher (HCV) program. Representative Juan Ciscomani (R-AZ) stated that his district has seen an uptick in the number of people experiencing homelessness and praised the HCV program as a “proven [effective] tool in reducing homelessness and housing instability.” The Congressman emphasized the need for increased landlord participation in the program to improve voucher uptake, to which the Secretary responded that HUD can better incentivize landlord participation with additional information on why landlords are reluctant to participate.
Secretary Fudge returned to Capitol Hill on April 20 to testify before the Senate THUD Committee’s Appropriations Subcommittee. As was the case during the Secretary’s testimony before the House, Subcommittee members on both sides of the aisle agreed that HUD’s programs are vital for families, communities, and the economy.
Subcommittee Chair Brian Schatz (D-HI) stated in his opening remarks that the Senate Appropriations Committee is working diligently to draft and move all 12 appropriations bills through regular order in the chamber and expressed hope that the bill will recognize the country’s urgent need for housing resources.
“Housing and homelessness are a major concern, not only in major cities but in rural areas and small towns, and most severely in tribal communities,” he said. “Now is not the time to slash housing programs; we should be building more housing, building faster, and getting more families into housing they can afford…We should be doing more – not less – to combat homelessness.”
Chair Schatz also praised Housing First, an evidence-based approach to ending homelessness that has garnered bipartisan support for its effectiveness and cost savings. Housing First prioritizes moving people and families experiencing homelessness into safe, low-barrier housing with wrap-around services as needed, providing the stability needed to help improve long-term housing stability and well-being.
“We know that Housing First works, and we can do more to connect housing and supportive services to get people off the streets and into stable housing,” said the Chair. Senate Appropriations Committee Vice Chair Susan Collins (R-ME), who formerly led the THUD Subcommittee, agreed, thanking Secretary Fudge for HUD’s assistance with an influx of people experiencing homelessness in Bangor, Maine.
“[It was] a tremendous success; city officials have been so pleased with the expertise and recommendations that the HUD team brought,” said Vice Chair Collins, noting that the city was recently able to take down an encampment after successfully housing the individuals who had been living there.
THUD Subcommittee Ranking Member Cindy Hyde-Smith (R-MS) also praised HUD programs and the public-private partnerships they help facilitate. “These partnerships assist low-income working families, seniors, and people with disabilities, ranging from providing houses for those experiencing homelessness to enabling homeownership. They also support community and economic development activities in large, urban areas, as well as the small towns of rural America,” she said in her opening remarks.
Even while recognizing the vital role HUD programs play, the Ranking Member warned that HUD is “not immune to the broader fiscal struggles we face as a country,” and that the year will require tough conversations around the budget and federal funding. Compounding HUD’s budgetary challenges is a $7 billion decrease in offsetting receipts from the Federal Housing Finance Agency (FHFA), which will require HUD funding to increase by an estimated $13 billion in FY24 just to maintain the level of services currently being provided by the department.
Members of the Subcommittee also highlighted HUD’s role in long-term disaster recovery. Chair Schatz emphasized the importance of permanently authorizing the Community Development Block Grant-Disaster Recovery (CDBG-DR) program, which he noted would allow Congress and local leaders to provide disaster recovery funding to communities in an “intelligent, predictable, responsive, accountable way.” Chair Schatz, along with Committee Vice Chair Susan Collins, introduced in the previous Congress the “Reforming Disaster Recovery Act,” which would permanently authorize the CDBG-DR program, making it easier to deploy HUD resources to disaster-impacted areas to assist with long-term recovery efforts.
Secretary Fudge agreed, noting that seven months after Hurricane Ian tore through eastern and central Kentucky, there were still people sleeping in tents. “It doesn’t make sense for us not to be able to go in and help people quickly,” she said. “And it doesn’t save a penny,” agreed Chair Schatz. “The way to assert fiscal discipline is to have a program, have accountability, not just to spend the money after [people have suffered].”
Senate Appropriations Committee Chair Patty Murray (D-WA) was last to question Secretary Fudge, and opened her questioning with a statement on the central role housing plays in broader stability and mobility: “When it comes to keeping folks safe, setting families up for success, and strengthening our country, it really starts, as you well know, with making sure everyone has a roof over their head, and no one is left on the streets or out in the cold.”
Chair Murray fought for critical investments in affordable housing, homelessness, and community development resources in the FY23 budget and emphasized her commitment to continuing building on those investments in FY24, noting “these are investments that pay off for our country in a lot of ways – they help families build wealth, they provide safety and stability so our kids can focus on schools and adults can focus on their jobs, and strengthen our families, our communities, and our economy.”
Watch a recording of the House THUD Appropriations Subcommittee hearing at: https://bit.ly/3LhglgD
Watch a recording of the Senate THUD Appropriations Subcommittee hearing at: https://bit.ly/3LuacPv