HUD Asks Congress for Deep Cuts

Legislation | February 12, 2018 | by Linda Couch

On February 12, President Trump released his initial budget request to Congress for fiscal year 2019 (FY19) HUD funding. After a $2 billion add-in from the spending caps agreement is included, the devastating request would cut HUD funding by more than 14%, as compared to fiscal year 2017-enacted levels.

The initial request would underfund Section 202 Project Rental Assistance Contract and Project-Based Rental Assistance contract renewals, zero out the Public Housing Capital Fund (33% of public housing homes are senior households), and would result in 200,000 fewer housing choice vouchers in use in FY19 than in fiscal year 2018 (24% of voucher homes are senior households). The request would zero out the HOME and Community Development Block Grant programs, and eliminate the National Housing Trust Fund. President Trump’s request would fund homeless assistance programs at FY17 levels, at a time when homelessness among older adults is on the rise.

For FY18, the Section 202 account is funded at $573 million (Senate bill) and $576 million (House bill). For FY19, when Section 202 renewal costs are expected to increase, President Trump is requesting $563 million for the account. For Section 8 Project-Based Rental Assistance, which undergirds two-thirds of Section 202 homes, HUD’s request is $641 million below the Senate bill’s fiscal year 2018 (FY18) funding level. Congress has until March 23 to enact its FY18 spending bills.

The request also seeks an expansion of HUD's Rental Assistance Demonstration, including for Section 202 communities with Project Rental Assistance Contracts. This policy change, a LeadingAge priority, is in both the House and Senate FY18 HUD funding bills as well.

In tweets after the budget’s release, HUD Secretary Carson said, “The President’s 2019 Budget represents a commitment to fiscal restraint” and “The budget lays out a vision for a government that is efficient, effective, and accountable. It provides for a strong national defense, lays the groundwork for further economic growth through reduced regulations and taxes, and recognizes the importance of addressing our fiscal challenges.”

As expected, the initial request touts a forthcoming “comprehensive package of rental housing reforms” that would raise rents for all HUD residents, do away with medical expense and other income deductions, and allow housing authorities to impose work requirements for non-elderly, non-disabled residents. HUD said on February 12 it would apply $1 billion from spending caps deal to "hold harmless" seniors and persons with disabilities from the proposed rent increases. HUD's latest documents, released the week of February 19, say that only current seniors and persons with disabilities would be held harmless. According to HUD data, 12% of Section 202 homes turnover to new residents each year.

The February 9 spending caps deal is a two year deal of spending cap increases for both defense and non-defense discretionary programsprovides a $68 billion increase to the non-defense discretionary spending cap for FY19. On February 12, the same day the FY19 budget request was released, President Trump also released an addendum to the request, taking advantage of some, but not all, of the newly available non-defense discretionary funds. The addendum includes a request for $75 billion in new non-defense discretionary funding. Because the original Trump Administration requested $65 billion below the previous FY19 cap, the addendum uses only $10 billion of the newly approved $68 billion in funding.

The addendum recommends using $2 billion from the February 9 spending cap deal for HUD: $1 billion to hold harmless elderly households and households with persons with disabilities from HUD’s sweeping, proposed rent increases; $700 million to restore housing choice voucher funding from some of the cuts proposed for FY19; and, $300 million additional for the Public Housing Operating Fund account.

The upshot: even with $2 billion added in from the deal to increase spending caps, the HUD budget request remains painfully below necessary levels.