HUD Seeks 15% Cut, But More for 202

Legislation | February 10, 2020 | by Linda Couch

The headlines are clear: The Administration’s request for HUD in FY21 is terrible. Overall, HUD is seeking a 15% cut to its own agency. The request seeks to eliminate the HOME and CDBG program, the national Housing Trust Fund, basically eliminate public housing as we know it today, and not provide enough funding for voucher renewals in FY21. These are all programs that serve older adults.

Overall: HUD Seeks 15% Cut

The headlines are clear: The Administration’s overall request for HUD in FY21 is terrible. HUD is seeking a 15% cut to its own agency. The request seeks to eliminate the HOME and CDBG program, the national Housing Trust Fund, basically eliminate public housing as we know it today, cut homeless assistance grants, and appears to not provide enough funding for voucher renewals in FY21. These are all programs that serve older adults and are all proposals LeadingAge strongly opposes.

HUD Requests Strong Section 202 Account 

In the Section 202 account, the request acknowledges the efficacy of HUD’s flagship senior housing program, the Section 202 Housing for the Elderly program. For this program in FY21, HUD is seeking a more than 8% increase for 202/PRAC contract renewals (we assume (but don’t know for certain) that this is sufficient for full 202/PRAC renewal funding), $100 million for new Section 202 homes (this Administration has not requested any funding for new Section 202 homes until today), full renewal of Service Coordinator grants, an extension of HUD’s current 40-site Integrated Wellness in Supportive Housing (IWISH) demonstration, and accommodations in RAD for PRAC to allow for rents to meet services needs.

PRACs to Five-year Renewals with OCAFs

The request also seeks to transition 202/PRAC renewals to five-year renewals, instead of annual, subject to annual appropriations and the use of an operating cost adjustment factor (OCAF). Section 202/PRAC communities currently receive budget-based rent increases. The rationale for such a shift, according to HUD’s request, is to offer “significant administrative streamlining” and reduce HUD staff time on renewals. LeadingAge does not yet have an opinion on this proposal as we continue our analysis.

PBRA

LeadingAge supports the full funding of Section 8 Project-Based Rental Assistance (PBRA) contracts: 1) PBRA contracts provide the ongoing rental subsidy for two-thirds of the nation’s Section 202 communities, and 2) in addition to the PBRA for the Section 202 communities, 36% of PBRA-assisted households are older adult households. Because the request may rely on savings from the proposed rent increases on residents, and renewal needs can fluctuate during the appropriations process, LeadingAge will continue to work with Congress to ensure funding for full contract renewals. LeadingAge supports funding to assist tenant groups and others with “addressing tenant concerns within at-risk properties and improving tenant access to community services that support self-sufficiency.”

Suspension of Rent Adjustments

Once again, HUD is seeking authority to suspend the current requirement to provide rent adjustments for operating subsidy contracts HUD has with private owners. Just as Congress has the last two years, LeadingAge opposes this request.

Rental Assistance Demonstration

The request seeks authority to exempt Section 202/PRAC properties from the requirement that RAD conversion be done on a budget-neutral basis. Such a change, which LeadingAge supports, would ensure a RAD for PRAC conversion does not put at risk the ongoing provision and coordination of services or result in a reduction of project subsidy.

The request would also expand eligibility for HUD’s Rental Assistance Demonstration to two additional programs: communities with Senior Preservation Rental Assistance Contracts (of which there are fewer than 20 in the country) and Section 811 Housing for Persons with Disabilities, which LeadingAge and many others support.

Housing + Services

Within HUD’s budget request for its Office of Policy Development and Research, HUD says one of its four FY21 “Agency Priority Goals” to “Enhance Rental Assistance” is to “collaborate with other federal partners on approaches to using Medicare and Medicaid funds to support affordable senor housing as a platform for coordinating health and wellness programs.” This language is very close to language LeadingAge successfully worked with appropriators to include in the report to HUD’s FY20 funding bill. LeadingAge is pleased to see the report language reflect in the Administration’s own request.

IWISH Demonstration

HUD’s three-year demonstration on Integrated Wellness in Supportive Housing (IWISH) is in its final year. The three-year demonstration on the impact of an enhanced service coordination model on healthcare utilization and continued independent living amount seniors in assisted housing is set to expire on September 30, 2020. HUD’s budget request seeks $14 million for an extension of the demonstration and the collection of additional data, which, the request says, “will significantly strengthen the reliability of the research findings on the outcomes from this investment in the well-being of older low income tenants.”  LeadingAge supports the demonstration’s extension.

HUD Oversight / Inspections

The request also recommends Congress make changes to how HUD responds to communities with project-based assistance that receive low physical inspection scores or fail to certify to HUD within three days that any exigent health and safety deficiencies identified by the inspector have been corrected. In addition to these, HUD recommends another circumstance that would require a HUD response: a community that fails to meet local code requirements that establish standards for decent, safe, and sanitary housing. The request would also require various documents and notices be provided to tenants of impacted HUD-assisted communities, and for tenants to have an opportunity to comment on the physical condition and management of impacted properties. LeadingAge is continuing to analyze these proposals.

Rent Reform and Work Requirements

For the third year in a row, HUD’s request also seeks authority to impose rent increases and work requirements for HUD-assisted residents, including older adults. These proposals would immediately impact newly-housed seniors. The proposed housing reforms also redefine who’s considered “elderly” to push more than 291,000 households currently considered “elderly” (because at least one person in the household is 62) to become not “elderly” under HUD’s proposed definition (which would require everyone in the household to be 62 years old). These 291,000 households would then be under the proposal’s even more draconian rents and work requirements. Congress has flatly rejected similar requests for big cuts and damaging rent increases and work requirements from the Administration for the last two years. In 2020, Hill offices have already been clear they will oppose these proposals again for FY21.

LeadingAge's HUD Funding Priorities

  • Expand the supply of HUD Section 202 housing for older adults with very low incomes. Ask: $600 million in FY21 for new Section 202 homes.
  • Preserve existing affordable housing. Ask: Amount for full renewal of PRAC and Section 8 PBRA contracts (forthcoming).
  • Ensure all federally-assisted housing provides the service coordination necessary so residents may age in community. Ask: $100 million for Service Coordinator grant renewals in FY21.
  • Expand the number communities that have a Service Coordinator. Ask: $75 million for new Service Coordinators in 300 communities currently without them.
  • Prevent and end homelessness among older adults. Ask: Adequate funding for Homeless Assistance Grants.
  • Extend HUD’s Integrated Wellness in Supportive Housing demonstration for two years.