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Senate Appropriations Committee Approves FY18 Housing Spending Bill

Despite the difficult budget climate on Capitol Hill, the Senate Appropriations Committee approved a FY18 Transportation, Housing and Urban Development (THUD) spending bill that increases funding for affordable housing and community development programs. The Committee voted to approve the bill by a vote of 31 to 0. The bill now heads to the Senate floor. For more details, see NLIHC’s updated budget chart.

The Senate bill rejects President Donald Trump’s proposed budget, which would have enacted the deepest cuts to HUD programs since the Reagan administration. The funding levels in the bill are a direct result of strong advocacy by residents and affordable housing organizations throughout the country and the efforts of Congressional champions of affordable housing led by Subcommittee Chairwoman Susan Collins (R-ME) and Ranking Member Jack Reed (D-RI).

Unlike the House of Representatives, which set overall spending limits for domestic programs at $3 billion below the already tight Budget Control Act (BCA) spending caps, the Senate agreed to write their spending bills at FY17 levels, which exceed the BCA caps. This approach allowed the Senate Appropriations Committee to allocate $8 billion in additional funding. Overall, the THUD spending bill provides $2.41 billion above FY17 enacted levels and $3.6 billion more than the House version. HUD programs received $1.4 billion more than the current year.

Ms. Collins stated that the bill provides enough funding to continue housing assistance for all individuals currently served by federal housing programs at HUD and, in many cases, provides modest increases. “The bill protects all existing rental assistance for Section 8, public housing, elderly, and disabled housing programs,” Collins said. “In light of the affordable housing crisis afflicting so many parts of our nation, the committee continues to recognize that without this vital assistance, the most vulnerable families would be at risk of becoming homeless.”

NLIHC and other advocates are concerned, however, that despite the increase in funding, the bill may still not cover the full extent of inflationary costs, putting tens of thousands of vouchers at risk. It is imperative that Congress reach a budget deal to lift the spending caps and to fully fund affordable housing programs to ensure that no housing vouchers are lost. This spending bill sets the stage for a bi-partisan budget deal, but housing advocates must continue to weigh in with their members of Congress.

Rent Policy Changes

Like the House version, the Senate bill rejects the rent policy changes proposed by the Trump administration that would have given HUD the authority to increase the financial burden on current and future tenants.  The Trump administration had proposed providing the HUD secretary with the authority to: increase a tenant’s rent contributions from the currently standard of 30% of their adjusted income to 35% of their gross income; increase the minimum monthly rent for tenants to $50, beginning with a tenant’s first annual or interim authorization; prohibit tenants from receiving utility reimbursements used to cover the cost of heat and water; and freeze annual rent adjustments for properties receiving housing assistance.

NLIHC and others are encouraged that the House and Senate bills reject these changes and will continue to monitor closely any efforts to impose punitive measures that would jeopardize family stability and increase the financial burdens tenants face.

National Housing Trust Fund

Both the House and Senate bills reject the president's proposal to eliminate the national Housing Trust Fund (HTF), the first new federal housing resource in decades that is exclusively targeted to serve people with the lowest incomes. Protecting the HTF in these bills represents a significant victory for housing advocates, including NLIHC, that urge Congress to increase funding to the HTF through other legislative measures, includes housing finance reform, tax reform, an infrastructure spending package, and others. If the HTF had been eliminated through the appropriations process, it would have become far more difficult for advocates and Congressional champions to expand this much-needed resource.

Tenant Based Rental Assistance

Unlike the budgets proposed by President Trump and the House Appropriations Committee, the Senate bill provides a significant increase in funding for Housing Choice Vouchers (HCVs). The president’s budget would have led to more than 250,000 of the lowest income people losing their housing vouchers, putting them at immediate risk of eviction and, in worst cases, homelessness. The House bill also proposed significant cuts that could have resulted in more than 140,000 vouchers being lost.

Overall, the Senate bill provides $1 billion in additional funding for HCVs above FY17, which Ms. Collins states is sufficient to renew all existing vouchers. NLIHC, CBPP and other advocates will continue to call for a higher allocation for HCVs in any final spending bill to ensure that no vouchers are lost due to inflation.

The Senate bill also provides $40 million for new HUD-Veterans Affairs Supportive Housing (VASH) vouchers and $20 million to support new Family Unification Program (FUP) vouchers, while increasing funding for new vouchers targeted to people with disabilities to help them secure an affordable home in an integrated setting.

Project Based Rental Housing

The bill provides $11.51 billion to renew all project-based rental assistance contracts for calendar year 2018, an increase of $691 million from the FY17 funding level.

Public Housing

Both the public housing operating and capital funds receive modest increases. The operating fund allocation rose from $4.4 billion in FY17 to $4.5 billion, and the capital fund allocation increased to $1.95 billion. The bill also permanently extends the Rental Assistance Demonstration (RAD) by eliminating the program’s sunset date and lifts the cap on housing units eligible for conversion.

Homelessness

The Committee increased funding for homeless assistance programs to $2.46 billion from $2.38 billion in FY17. Additionally, the bill targets $55 million to address youth homelessness and waives the requirement that youth 24 years old or under provide third-party documentation to receive housing and supportive services within the Continuums of Care. The bill also provides $25 million for rapid rehousing assistance for survivors of domestic violence.

Other Housing Programs

The Senate bill provides $573 million to the Section 202 Housing for the Elderly program - enough to renew all contracts - and increases funding for the Section 811 Housing for People with Disabilities program by $1 million to $147 million. The bill also includes legislative language allowing Section 202 Project Rental Assistance Contract (PRAC) properties to convert under RAD.

The bill would level-fund the HOME Investments Partnerships program at $950 million and the Community Development Block Grant program at $3 billion. It also temporarily lifts the 24-month funding commitment deadline under the HOME program. Because of the additional requirements on project selection, underwriting standards, and developer capacity under the HOME program, many communities have struggled to meet the two-year commitment deadline, which led to funding being recaptured by HUD. The new language removes this barrier while keeping in place other, more meaningful deadlines.

While most programs received flat funding or modest increases, three programs would see a reduction in funding: the Housing Opportunities for People With AIDS (HOPWA) program, which is cut to $330 million or $26 million less than FY17 levels; Choice Neighborhoods grants, which are cut from $138 million in FY 17 to $50 million in FY18; and Housing Counseling, down from $55 million in FY17 to $47 million in FY18.

Fair Housing

The bill flat-funds HUD’s Office of Fair Housing and Equal Opportunity and includes language previously offered by Senator Collins to prohibit HUD from directing local and state governments to make specific changes to its zoning laws to comply with the Affirmatively Furthering Fair Housing (AFFH) rule or with the AFFH assessment tool. This language represents a compromise with more conservative members of Congress, who in the past have advocated to prohibit HUD from implementing its AFFH rule and assessment tool altogether.

Healthy Homes

The bill provides $160 million to the Office of Lead Hazard Control and Healthy Homes’ grants, a $15 million increase over FY17, to address lead-based paint hazards in affordable housing.

The bill also takes steps to address the physical conditions of HUD-assisted housing to ensure residents are living in decent and safe homes. It requires HUD to take action against property owners receiving rental subsidies that do not maintain safe properties. The language authorizes the HUD secretary to replace a property’s management agent with one approved by HUD, impose civil monetary penalties, change HUD’s contract with the property owner until problems are resolved, transfer the property or contract to a new owner, and relocate tenants, among other actions.

U.S. Interagency Council on Homelessness

The Senate bill funds the U.S. Interagency Council on Homelessness (USICH) at $3.6 million. It also eliminates the USICH sunset date, which would have required the agency to cease operations on October 1, 2018. President Trump’s proposal and the House bill would have eliminated USICH.

Amendments

Mr. Reed offered an amendment to provide additional funding for infrastructure investments, including $1.5 billion for public housing, $1.27 billion for the HOME Investment Partnerships program, $230 million for HUD-VASH, and $200 million for lead abatement programs. The amendment was voted down along party lines due to BCA funding limitations.