When sequestration cuts were imposed in FY 2013, rental housing vouchers were particularly hard hit.  According to the Center on Budget and Policy Priorities, there were 85,000 fewer families using vouchers in December 2014 than two years before.  This year, about 18,000 vouchers have been restored, and the Obama budget had proposed enough funding to restore the remaining 67,000.  The Transportation-HUD spending bill passed in Senate Appropriations on June 25 does add some funding for vouchers, specifying 10,000 new vouchers for homeless veterans and 2,500 vouchers to prevent families with children from being split up for lack of housing, as well as $40 million in new funding for homeless youth.  But there is not enough funding to restore the 67,000 vouchers still lost because of sequestration in FY 2013.  House-passed funding is somewhat lower than the Senate bill.
The President’s FY 2016 budget is able to increase funding because it rejects reimposing the sequester cuts.  The Senate and House bills again show the inadequacy of funding under the restrictive cap.  The Senate bill is $1.9 billion below this year’s funding.  The Public Housing Capital Fund drops to $1.74 billion in the Senate bill, down from $1.875 billion this year.  Although a little higher than the House appropriation, the Senate’s 7 percent cut would worsen the already extreme $26 billion backlog in needed repairs.  The HOME low-income housing construction program is slashed to only $66 million (funding is $900 million this year).  The House provides $767 million in appropriations and adds more HOME funding by shifting money from Fannie Mae/Freddie Mac income that had been intended to fund the National Housing Trust Fund.  The Trust Fund, a top priority for low-income housing advocates, will focus on increasing the housing supply for the lowest-income households.  The Senate bill does not cripple the Fund by diverting its funding source, but housing advocates did not want to lose the 40,000 units in FY 2016 that will result from the Senate’s HOME reduction.

The Senate bill calls for a large expansion in the Moving to Work program, which allows participating housing authorities to loosen current housing subsidy rules in ways that may divert funding from rental assistance for the lowest income tenants.  The Senate-proposed expansion would add 300 agencies to this demonstration program, affecting as many as 800,000 more units, growing to almost 40 percent of all housing vouchers and public housing units.  The bill blocks HUD’s plans to establish more effective controls over the Moving to Work program.

In another reduction below current year funding, the Community Development Block Grant is cut by $100 million, or 3 percent, in the Senate bill; the House funded the CDBG at last year’s level.  About 1,200 communities nationwide are eligible for CDBG funds, which support efforts to curb urban blight, assist small businesses, assist with home repairs, and provide other community assistance.  The Senate’s funding level will not be enough to maintain current grant levels to communities, according to the Senate T-HUD subcommittee minority.  The bill also cuts the Choice Neighborhoods program from $80 million to $65 million.  The House bill had slashed funding to only $20 million.  An Obama Administration priority, Choice Neighborhoods funds redevelopment of distressed public housing and other blighted neighborhood renewal.  The Administration had sought an increase to $250 million.

(For the National Low Income Housing Coalition table of HUD funding, showing both House and Senate FY 2016 proposals and comparisons to prior years, click here.)

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