President Attempts to Maintain and Even Increase Rental Housing Resources
but Proposes Harmful Policy for Poorest Rural Housing Residents
from National Low Income Housing Coalition “Memo to Members,” 3/4/14
March 4, President Barack Obama sent his fiscal year 2015 (FY15) budget request to Congress. The request includes strong funding for some rental housing programs, despite the tight spending caps set by Congress.
Mandatory Funding for NHTF
The President’s budget request includes $1 billion in mandatory funding for the National Housing Trust Fund (NHTF), which the Administration anticipates would create 16,000 units affordable to extremely low income households. President Obama continues to show his support for the NHTF by including this funding request to Congress, as he has in each of his budget requests. HUD Secretary Shaun Donovan called the $1 billion a down payment for the NHTF, whose future funding is being debated in the context of housing finance reform.
HUD and USDA Discretionary Funding
On the discretionary side of the budget, the President’s budget request would maintain assistance for extremely low income households currently served by HUD’s main rental housing programs, provide slight funding increases for a number of HUD programs, and decrease funding for certain critical housing production and other programs.
The President proposes restoring tenant-based Section 8 vouchers that were lost due to sequestration, in addition to maintaining all tenancies in 2014. It is unclear whether the amount of funding proposed would be sufficient to restore a substantial portion of the tens of thousands of vouchers lost due to sequestration.
The President would provide slight increases in public housing operating and capital funds in order to maintain current units and address some capital needs. However, funding for the two accounts would still be below FY10 levels.
The Project-Based Rental Assistance account would be funded at a slightly lower level than FY14. The Administration proposes shifting funding for contracts to a calendar year cycle, which HUD says accounts for this difference while providing a year of funding for every contract on January 1 of each year.
The Homeless Assistance account would be increased to maintain the current housing and services provided by the Emergency Solutions Grant and Continuum of Care programs and attempt to make further progress on decreasing homelessness.
The President’s budget would cut the HOME Investment Partnerships program, adding to the approximately 40% funding cut the program has experienced since FY12.
Numerous other HUD programs are increased slightly in the President’s request including the Section 202 Housing for the Elderly and the Section 811 Housing for People with Disabilities programs, which would both have funding for new supportive housing units.
The President’s proposal for USDA rural rental housing programs is similar to the FY14 appropriation. The request also includes a policy proposal to institute a minimum rent payment of $50 for residents with Section 521 rental assistance in Section 514 or 515 properties. NLIHC believes this proposal, which is based on HUD’s minimum rent policy, will harm the very lowest income residents by imposing unaffordable rents. The USDA budget also proposes changes related to contract renewal terms.
Budget Request Specifics
For the major HUD programs serving extremely low income households, the Administration requests:
- Tenant-Based Rental Assistance: $20.045 billion, compared to $19.177 billion in FY14.
- Project-Based Rental Assistance: $9.746 billion, compared to $9.746 billion in FY14.
- Public Housing Operating Fund: $4.6 billion, compared to $4.4 billion in FY14.
- Public Housing Capital Fund: $1.925 billion, compared to $1.875 billion in FY14.
- Homeless Assistance Grants: $2.406 billion, compared to $2.406 billion in FY14.
For HUD programs that provide capital for affordable housing the Administration requests:
- HOME Investment Partnerships Program: $950 million, compared to $1 billion in Fy14.
- Section 811 Housing for Persons with Disabilities: $160 million, compared to $125 million in FY14.
- Section 202 Housing for the Elderly: $440 million, compared to $384 million in FY14.
For rural rental housing, the Administration requests:
- Section 514 Farm Labor Housing Loans: $24 million, level with FY14 funding.
- Section 515 Rental Housing Direct: $28 million, level with FY14 funding.
- Section 516 Farm Labor Housing Grants: $16 million, compared to $8 million in FY14.
- Section 521 Rental Assistance: $1.089 billion, compared to $1.110 billion in FY14.
NLIHC FY15 Budget Chart. View a detailed chart of the HUD and USDA affordable housing and community development requests included in the President’s FY15 budget: http://bit.ly/MLyt2i
NLIHC Webinar. Register for NLIHC’s webinar on HUD and USDA Housing for the lowest income households in the FY15 budget on Wednesday, March 5 at 2pm ET: http://bit.ly/1fFvtvi
NLIHC Detailed Analysis. Look for a full analysis of the President’s affordable housing budget request in the March 7 issue of Memo to Members. To receive Memo to Members, become an NLIHC member by e-mailing email@example.com. View the current issue at: http://nlihc.org/library/memos.
The President’s HUD budget request: http://1.usa.gov/1hJWhiz
The President’s USDA budget request: http://1.usa.gov/MLCuUw