The Senate Appropriations Committee marked up the FY05 Veteran’s Affairs/Housing and Urban Development appropriations bill (S 2825) on September 21. None of the programs in the bill are funded below FY04 levels. This is in contrast to the House appropriations bill, which inflicted substantial cuts to all HUD programs with the exception of Section 8 housing voucher program.
Advocates’ efforts from around the country were evident in the strong funding level provided for the Section 8 program in the Senate bill. The appropriation for the Housing Certificate Fund, which includes the Section 8 program, is $20.7 billion, an increase of $2.2 billion over the President’s budget request. It is estimated that level will be adequate to fund all vouchers currently in use. The committee expressed concerns over HUD’s inability to implement FY04 funding as Congress desired in the last appropriations bill. Senator Barbara Mikulski (D-MD) made a strong case for funding all vouchers in use during FY04 and the increase in funding this year solidifies the committee’s commitment to the Section 8 program. (See April 23 edition of Human Needs Report for background on HUD’s threats to funding all vouchers in use. Or read this Center on Budget and Policy Priorities report about the changes made by HUD earlier this year.)

In addition to supporting the full funding of all current vouchers, the requirement that three-quarters of all vouchers go to extremely low-income families was strongly endorsed in the bill. The committee also made clear it does not agree with the Administration’s belief the Section 8 program is fatally flawed and needs to be converted to a block grant program. The Senate bill did not divide the Section 8 account into two distinct accounts, one for tenant-based and one for project-based vouchers, which the House bill did. (See CBPP’s response to HUD Secretary Jackson’s arguments that the Section 8 program is fatally flawed)

Because of cost concerns, the bill caps the amount public housing authorities (PHAs) will receive for vouchers at 102 percent of the PHA’s cost for the total number vouchers under lease as of October 1, 2004, plus an inflation factor. The cap may be adjusted by the HUD Secretary because of high utility costs, substantial decreases in tenant contributions, or when an owner has appealed.

In other programs, the bill appropriates $2.7 billion for the public housing capital fund. Included in this account is $15 million for the Neighborhood Networks Initiative in public housing, which will establish and operate computer centers in and around public housing.

For public housing operating funds (which cover the day to day expenses of public housing), the bill includes $2.6 billion to operate 3,000 public housing authorities. Legislative language would require all PHAs to convert to a calendar year budget in order to ease HUD’s management of authorities and to allow easier tracking of costs. This proposal is estimated to save $1 billion while keeping the monthly spending essentially equal.

The Community Development Block Grant program received $4.9 billion for FY05, $331 million more than the President’s budget request and a $16 million increase from FY04. HOPE VI, a program to revitalize and renovate severely distressed public housing, received $150 million. As in FY04, the Senate again refused the President’s request to eliminate the HOPE VI program. The HOME Investment Partnerships program was given a $45 million increase to $2.05 billion and includes $50 million for the American Dream Downpayment Act.

The Senate Committee included $1.26 billion for the McKinney-Vento Homeless Assistance Act, virtually the same level as last year and a $3 million increase over the President’s request. The Administration also requested an additional $25 million for prisoner reentry, and $50 million for the Samaritan Initiative (supportive housing for chronic homelessness), but neither of those requests were funded in the Senate bill.

The bill gives a small increase to the Section 202 program for elderly housing to $773.8 million. The committee report also encourages HUD to make the Section 202 program better targeted to extremely low-income elderly households.

The Senate bill provides $250 million for Section 811 housing for persons with disabilities, an increase of about $908,000 over FY04. Similar to previous years, the Committee emphasized that HUD should ensure that all tenant-based assistance made available under the Section 811 account be dedicated to persons with disabilities upon voucher turnover.

The bill funds the Housing Opportunities for People With Aids (HOPWA) program at $294.8 million, a slight increase over FY04 levels. In addition, it provides slightly less funding for fair housing education and enforcement (about $17,000 less than in FY04). HUD’s Office of Lead Hazard Control would receive approximately a $1 million increase over FY04 levels for lead reduction efforts.

The next steps for the VA-HUD appropriations bills are unclear. It is most likely the VA-HUD bill will be included in that large omnibus appropriations bill.

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