As of October 1st, HUD is currently being funded via a three month Continuing Resolution (CR) that is set to expire on December 8th. The House also passed an Omnibus FY 2018 appropriations package in September, which included its Transportation Housing and Urban Development (THUD) appropriations bill, but the Senate floor has not approved its THUD appropriations bill as of yet. Currently, it is not clear whether Congress will be to reconcile the differences between the two bills and approve FY2018 appropriations legislation before December 8th or if they will have to issue a second CR.
All of the federal actions that relate to the HUD budget taken this year are detailed in chronological order below starting with release of the startling Executive budget laden with steep cuts to non-defense discretionary programs this spring that led to a furious public outcry that the House and Senate Appropriations Committee heard and allayed in their approved THUD bills this summer. Subsequently, after devastating Hurricanes hit Texas, Florida and the Caribbean, a Disaster Relief Spending Package was quickly bundled and approved with a three month CR and debt ceiling extension, and then shortly after the House approved its Omnibus Appropriations package.
President Trump’s released a preliminary budget blueprint in March and his full budget request to Congress in May, which proposed $7.7 billion in housing cuts compared to FY 2017 levels. The budget proposed increasing defense spending by $52 billion by slashing non-defense programs such as HUD assistance, food stamps, TANF and Medicaid. It also proposed the elimination of several key housing and community development programs as well as devastating Rental Reform policy reforms. In New York alone, the President’s budget would have cut more than $1 billion in housing funds statewide.
Executive Budget’s Impact on NY State:
- 26,530 households receiving Section 8 rental assistance across New York State would be at risk of homelessness.
- -$409,387,940 cuts to public housing authorities including NYCHA
- -$286,644,708 eliminated in CDBG funds across the state.
- -$91,483,440 eliminated in HOME funds for low-income rental housing
- Rent burden would be increased from 30% to 35% of tenant income in a pilot impacting 98,700 Project-Based Rental Assistance (PBRA) and 14,800 households residing in Housing for the Elderly (Section 202) and Housing for Persons with Disabilities (Section 811) in New York State. Note that average tenant income for 202 households is $13,300 annually. In these buildings, owner adjustments are frozen and utility allowances are also proposed to be eliminated.
Programs Eliminated or Unfunded
- Community Development Block Grant
- HOME Investment Partnerships
- Choice Neighborhoods
- Section 4 Capacity Building program
- Self-Help Homeownership Opportunity Program
- National Housing Trust Fund (HTF) is eliminated and Trump’s budget permits the HUD secretary to redirect these remaining resources to offset the cost of salaries, contract expenses, and technology improvements at the Federal Housing Administration (FHA).
Rental Reforms (full details are linked here)
- An increase in the tenant contribution toward rent from 30 percent of adjusted income to 35 percent of gross income. The Department does not plan to implement this provision in the Section 8 or Public Housing programs in 2018, but nonetheless requests authority for this change across core rental assistance programs. The Department will implement this provision as a pilot in Project Based Rental Assistance (PBRA), Housing for the Elderly (Section 202), and Housing for Persons with Disabilities (Section 811) in 2018. Hardship exemptions, as defined by the Secretary, will be available for tenants.
- The establishment of mandatory minimum rent of $50 per month, with hardship exemptions.
- Elimination of utility reimbursement payments to tenants, with hardship exemptions.
- For PBRA/202/811: A one-year freeze on annual rent adjustment increases.
- Ability of the Secretary of Housing and Urban Development to waive, or specify alternative requirements for, statutory or regulatory provisions related to public housing agency (PHA) administrative, planning, and reporting requirements, energy audits, income recertification, and program assessments.
- HCV program will no longer provide higher payments for enhanced vouchers. This reform would apply the same cost limitation on the maximum subsidy that may be paid under the voucher program to enhanced vouchers, but the tenant rent limitation will be waived so that families will not be required to relocate as a result of this change.
HOUSE of REPRESENTATIVES THUD APPROPRIATIONS BILL
In July, after months of public outcry against the President’s HUD budget cuts, the House Appropriations Subcommittee on Transportation Housing and Urban Development (THUD) released and approved their spending bill, which cuts HUD programs by $487 million below the fiscal year 2017 enacted level. Thanks to advocacy efforts and public pressure, the House bill’s proposed HUD cuts are drastically smaller than the president’s by $6.9 billion. However, these cuts would still have real impacts on New York families.
For New York State, the cuts would mean:
- ~14,000 families using Section 8 vouchers to pay rent would be at risk of homelessness.
- $330 million decrease to NYCHA capital funding.
- NYCHA expects 2,500 residents would be impacted in 23 buildings needing boiler replacement. Another 2,250 residents would be impacted at one development that would be unable to repair brickwork causing water damage.
- 11% cut to HOME funds, which help fund supportive housing development and homeownership opportunities statewide.
- 3% cut to Community Development Block Grants, including a $6 million cut to HPD, which uses funds for Code Enforcement.
- No new HUD VASH vouchers for returning veterans. House funding only covers renewal of current vouchers.
Fortunately, none of the Executive budget’s dangerous rental reform proposals were included in the House THUD budget. While the House Appropriations bill may be better than the President’s draconian budget request, the House budget fails to provide needed federal investment in affordable and public housing. The decreases to NYCHA capital funding will continue the deterioration of public housing buildings across New York, impacting the health and well-being of residents plagued by mold. HUD cuts will also exacerbate the growing homelessness crisis in New York, as housing agencies will be unable to issue Section 8 rental assistance vouchers and will have less capital dollars to create and preserve affordable homes. Additionally, proposed cuts will impact the ability to enforce housing quality standards for all New Yorkers.
SENATE THUD APPROPRIATIONS BILL
Senate Appropriations Committee approved its Transportation, Housing and Urban Development (THUD) Appropriations bill at the end of July. The bill provides increased funding for HUD programs: $40.2 billion in HUD funding for FY 2018, $1.4 billion above FY 2017 levels and $1.94 billion more than the House THUD bill. The Senate bill includes level funding for the HOME and Community Development Block Grants after push back from mayors across the country. The Senate maintaining and even slightly increased HUD’s funding levels are a direct result of the affordable housing community and public’s tremendous advocacy efforts showing the impact of this important and critical programs. It also like the House THUD bill did not include any of the harmful Executive budget rental reform proposals.
The Senate bill allocates:
- $21.365 billion for tenant-based Section 8 vouchers ($1.07 billion above the FY 2017 enacted level);
- $6.45 billion for public housing ($103.5 million above the FY 2017 enacted level); $11.5 billion for project-based Section 8 ($691 million above the FY 2017 enacted level);
- $573 million for Housing for the Elderly ($70.6 million above the FY 2017 enacted level);
- $147 million for Housing for Persons with Disabilities (nearly $1.0 million above the FY 2017 enacted level);
- $40 million for new HUD-VASH vouchers (same as FY enacted level);
- $2.456 billion for homeless assistance programs and includes $20 million for new family unification vouchers to prevent youth exiting foster care from becoming homeless.
- $55 million is provided for grants and technical assistance to test comprehensive efforts to end youth homelessness in urban and rural areas;
- $25 million for rapid rehousing assistance for domestic violence.
SHORT-TERM SPENDING AND DISASTER RELIEF PACKAGE
In the beginning of September, Congress passed a three month legislative spending package that provides funding for Hurricane relief and recovery, lifts the debt ceiling, and keeps the government funded through December 8th. The bill’s Continuing Budget Resolution extends FY 2017 levels for three months with a 0.68% across the board reduction to keep funding under the Budget Control Act (BCA) spending caps. The legislative package also provides an initial $15.25 billion in disaster spending that includes $7.4B for FEMA’s Disaster Relief Fund, $450 million in Small Business Administration disaster loans, $7.4 billion in Community Development Block Grant Disaster Recovery (CDBG-DR) funds. In addition, the legislation also includes a provision granting a necessary extension of the National Flood Insurance Program for three months, which was set to expire on September 30th, and language to provide FEMA with flexibility under the bill’s Continuing Resolution to continue to respond to Hurricanes Harvey and Irma, as well as other disasters.
HOUSE OMNIBUS APPROPRIATIONS PACKAGE
On September 14th, the House then passed its FY2018 Omnibus appropriations package entitled ‘The Make America Secure and Prosperous Appropriations Act’. It is too soon to know if the Senate will also pass an Omnibus which will have to be conferenced with the House or if a second Continuing Resolution (CR) will be passed for FY 2018.
While the House funding level for HUD programs remains unchanged from the House THUD bill approved in July, there were a few notable housing amendments that were included in it:
- Section 202 Housing for the Elderly amendment to increase funding for the program by $2.5 million. The increase is offset by a $2.5 million reduction to HUD’s Office of Policy Development and Research.
- Public Housing Capital amendment to increase the public housing capital fund by $2 million. The funds would be offset by a $2 million reduction to HUD’s Information Technology (IT) Fund.
- Public Housing Operating/CDBG amendment would shift $10 million in funding from the public housing operating fund to CDBG.
- CDBG amendment to increase funding for CDBG by $100 million. The increase is offset by a $100 million reduction to HUD’s IT Fund.
- HOPWA amendment to increase funding for HOPWA by $19 million. The increase is offset by a $19 million reduction to HUD’s IT Fund.
- Section 4 Capacity Building amendment to increase funding for the program by $5 million. The increase is offset by a $5 million reduction to funds initially set aside for FHA administrative contract expenses.
- Sanctuary Cities amendment that prohibits HUD funds from being used for a State, or local government entity or official if that entity prohibits, or in any way restricts any government entity or official from sending to, or receiving from, the Immigration and Naturalization Service information regarding the citizenship or immigration status, lawful or unlawful, of any individual.
- Fair Housing Initiatives Program (FHIP) Amendment to shift FHIP funding designated for private nonprofit organizations toward state and local governments.
On February 9th, President Barack Obama released his budget request for FY 2017. The President called for more than $48 Billion in 2017 spending for the U.S. Department of Housing and Urban Development (HUD), an increase of about $2B over FY 2016. Much of the proposed increase in spending would be devoted to a much welcomed new initiative to combat homelessness. There are also several new policy proposals, many supporting efforts to affirmatively further Fair Housing.
- NEW Ending Family Homelessness Effort– The President’s budget request proposes a bold new proposal to end family homelessness by 2020, building on the success of the initiative to end veteran homelessness. Through this effort, known as Opening Doors, the President challenged Congress to authorize $11B in new “mandatory” spending to serve 550,000 families over a 10 year period. As a mandatory program, the initiative would not be subject to the often contentious annual discretionary appropriations process. Specifically, the Administration is requesting $88 million for 10,000 new (incremental) Section 8 housing choice vouchers targeted to homeless families with children, as well as funding for 25,000 new permanent supportive housing units, and funds to provide 8,000 families with rapid rehousing assistance. If enacted, New York would be certain to receive a considerable increase in Section 8 vouchers given our high levels of family homelessness. Statewide, more than 80,000 New Yorkers are homeless including more than 23,000 children sleeping in shelters each night.
Other housing highlights from the President’s budget proposal are found below. For a detailed budget chart, see the National Low Income Housing Coalition’s website linked here or see the National Housing Conference Open House blog for further analysis.
- Section 8 Housing Choice Vouchers- The 2017 budget request would fully fund all expiring Tenant Based Assistance (i.e. existing vouchers). The budget also includes $10.8 billion for the Project-Based Rental Assistance program, which supports 12 months of funding for rental assistance contracts. $2.1 billion is allocated for fees to housing agencies administering Section 8, using a new evidence-based formula aiming to more accurately reflect the actual cost of running the program and to provide low-income families greater access to opportunity areas.
- NEW Housing Choice Voucher Mobility Demonstration- $15M is requested to assist households to move to areas of opportunity. In high cost cities like New York, Section 8 voucher use is primarily concentrated in low-income neighborhoods due to the limitations of Fair Market Rent levels.This is a welcomed proposal which mirrors NYHC’s policy priorities suggesting a similar program on the local level.
- Public Housing- Operating Funds would be increased slightly while Public Housing Capital Funds would be decreased. Given the tremendous capital needs of PHAs like NYCHA, this is disappointing. The Choice Neighborhoods Initiative, a signature program of this administration to revitalize neighborhoods and transform public housing, would see a substantial increase in funding from $125M in 2016 to $200M in 2017.
- RAD- The President seeks $50 million to expand the Rental Assistance Demonstration (RAD), another signature initiative of this administration to aid public housing. RAD leverages private capital for public housing through the conversion of operating funds into rental assistance. HUD also proposes to remove the 185,000 unit cap on the number of public housing units that can be preserved under RAD. Additionally, the budget proposes to make Section 202 Project Rental Assistance Contract (PRAC) owners eligible to convert their subsidy stream under RAD.
- Section 202 Elderly Housing- Funding for Section 202 Elderly Housing is increased only to cover refinancing. No funding is proposed to create any new senior housing. The federal government has not funded new senior housing for several years, which is a huge failure given current demand and anticipated population growth. According to recent LiveOn NY survey, more than 200,000 seniors are on 202 wait lists for an average of 7 years. By 2040, NYC will see a 40% increase in elderly households, rising to 1.4 million seniors.
- CDBG & HOME- Unfortunately, the request calls for a $200M cut in Community Development Block Grants (CDBG) which fund a wide variety of programs in New York and support HPD’s code enforcement activities. HOME funding would be maintained at FY 2016 levels.
- National Housing Trust Fund- In the request, HUD estimates that the National Housing Trust Fund will receive $136 million in 2017. This newly funded program support low-income rental housing and is allocated to States.
- NEW Pay-for-Success (PFS)- The budget proposes a one-time mandatory appropriation of $300 million for a new Pay for Success (PFS) fund within the Department of the Treasury which would fund state and local PFS contracts or Social Impact Bonds that are expected to save federal dollars. This could be beneficial to supportive housing or innovative MRT-type projects NYS has undertaken.
- LIHTC Income Averaging- The President’s proposal calls for Congress to authorize Low Income Housing Tax Credit (LIHTC) Income Averaging which would encourage income-mixing in projects and allow cross-subsidization to achieve deeper affordability in high-cost cities like New York. This is one of NYHC’s top priorities. Learn more about benefits for New York in NYHC analysis here.
- NEW QCT Cap Lift- A legislative proposal in this budget to remove the cap on the number of census tracts that can be designated as qualified census tracts (QCTs) would greatly benefit New York by allowing more areas to qualify for the 30% LIHTC basis boost. Until this year, all of NYC qualified for the basis boost as the entire metropolitan area was considered a difficult to develop area (DDA), which also qualifies projects for the basis boost. Currently, the population living in QCTs cannot exceed 20 percent of the population of a metropolitan area, which is problematic for dense urban areas including New York City and San Francisco.
- NEW QAP Requirement- Qualified Allocation Plans (QAPs) for tax credit allocating agencies will be required to include “Affirmatively Furthering Fair Housing” as an explicit allocation preference. While we support this policy change, it still may not be effective in driving development in many “high opportunity areas” in NYC, where land costs are prohibitively high.
- NEW Local Housing Policy Grants- The budget proposes $300 million in mandatory funds for a new Local Housing Policy Grants program. This program will provide grants to localities and regional coalitions to support new policies, programs or regulatory initiatives that create a more elastic and diverse housing supply, and in turn, increase economic growth, access to jobs and improve housing affordability.
The President’s proposals face, at best, an uncertain future given the election year and the difficulty we have seen in authorizing appropriation bills in recent years, not to mention Congress’ demonstrated desire to cut rather than increase funding for many of these programs. Ideally, the House and the Senate will take up the HUD budget request in the Spring as part of a “Transportation/HUD Appropriations Bill”. Each chamber will put forward funding bills which will then be “conferenced” to resolve any differences and a final bill will be sent to the President prior to the end of the fiscal year on September 30th. In recent years however, Congress has not been able to agree on appropriations for individual agencies and has instead passed Omnibus “Continuing Resolutions” (CRs). We will know more about what to expect in the FY2017 budget process in the upcoming months.
Analysis of 2016 Federal Housing Budget & Policy
The House passed H.R. 2577 on June 9th and the Senate passed their Transportation, Housing and Urban Development (THUD) Bill on Thursday, June 25th. These bills, still operating under sequester budget levels, do not provide the funding for affordable housing required in NY or other parts of the country struggling with housing affordability. The only hope in avoiding further cuts this federal fiscal year would be a bipartisan budget deal to end sequester spending caps. It is unlikely that we will know more about THUD funding this year until we are closer to the end of the fiscal year in September.
For a comparison of select HUD programs, please see the National Low Income Housing Coalition’s FY16 Budget Chart.
Impact for New York, varies by program
HOME funds are significantly reduced from $900 million in 2015 to $767 million in the House budget (28% cut) and essentially eliminated in the Senate budget at $66 million with a 93% cut. Only 5 years ago, the City of New York received more than $100 million annually in HOME funds prior to the damaging sequester cuts. This funding for low-income rental housing is primarily used to build supportive housing for the homeless in New York. If the program is not funded at the President’s requested level of $1.06 billion, there would be a loss of an estimated 38,665 affordable housing units across the country.
Section 8 Tenant Based Rental Assistance
Section 8 Tenant Based Rental Assistance and Homeless Assistance Grants both increase very slightly in the House and Senate budgets. It is unclear if the minor increases in rental assistance funding in either bill will provide any new vouchers or just cover program renewals.
Project Based Rental Assistance
Project Based Rental Assistance is underfunded by the House and slightly increased in the Senate. Underfunding will be problematic for these existing affordable housing buildings.
Public Housing Capital
Public Housing Capital is set to decrease in both budgets (10% cut in House and 7% cut in Senate), adding to the mounting capital needs facing many public housing authorities.
Public Housing Operating
Public Housing Operating is flat in the House at $4.44 billion and only barely increased in the Senate ($4.5 billion).
Community Development Block Grants
Community Development Block Grants, funding an array of services and municipal functions in low- and moderate-income communities including code enforcement and emergency repair programs in New York neighborhoods, is maintained at $3 billion in House budget and slightly reduced in Senate.
The New York State Legislature passed a $153 billion FY 2017-2018 budget on April 9th. The spending plan appropriates $2.7 billion for affordable housing including $2.5 billion for a new 100,000-unit, state-wide, 5-year housing plan. NYHC would like to again thank Governor Cuomo, Speaker Heastie, and Majority Leader Flanagan for funding the 5-year housing plan to address the growing affordable housing need across NY State. Through their leadership efforts, NY has shown the rest of the nation how fundamental and critical it is to invest in affordable housing despite being in a period of great federal funding uncertainty. This unprecedented achievement is also a credit to our ongoing advocacy and the strong partnerships between New York housing groups. Congratulations to everyone involved in the fight for the MOU funds!
Last year’s $1.97 billion Housing Plan funds were reappropriated this year and supplemented by $541.5 million in future year capital to create the $2.5 billion Housing Plan funds. Similar to previous years, ongoing HCR programs are funded through the general fund and the Mortgage Interest Fund (MIF). $97 million was appropriated from the general fund for housing programs- some funding levels differ significantly from previous year. The MIF was also tapped for excess reserves for nearly $134 million for housing programs administered by Homes & Community Renewal. MIF funds were also allocated for the following purposes: $1,000,000 for NORC; $1,000,000 for NNORC; $6,522,000 for HHAC; and $12,500,000 for “municipal relief to the City of Albany”. This funding for the City of Albany is a departure from housing-related uses seen in previous years. For full details, see NYHC NYS Housing Program Budget Chart linked here.
According to the budget legislation, the appropriation schedule for the $2.5 billion in housing plan funds will provide an average of $543 million annually over the next 4 years. Since capital funds may be rolled over into future fiscal years, it is unclear what the production schedule is for this plan that started a year late.
Housing Plan Programs
A full list of all funded housing programs is found in the NYHC NYS Housing Program Budget Chart. Below are programs funded in the $2.5 billion housing plan.
• Supportive Housing– $950 million for the construction of 6,000 supportive housing units throughout the State. With lack of political will to renew the successful city-state NY/NY supportive housing agreements, the State is now independently funding their own supportive housing plan. Supportive housing is proven to save taxpayer dollars by stably housing homeless people with disabilities.
• New Construction– $472 million for new construction or adaptive reuse of rental housing affordable to households that earn up to 60 percent of area median income (AMI). We expect this funding will go towards new housing on state-owned sites, including sites in the “Vital Brooklyn Initiative” investing in Central Brooklyn.
• New York City Housing Authority Capital– $200 million for projects and improvements related at housing developments owned or operated by NYCHA. The FY 2018 budget requires NYCHA funds to have a plan approved by the Director of the Budget, in consultation with NYCHA and DASNY, for the purpose of capital projects and other improvements. NYHC has been a strong advocate for State funding to meet NYCHA’s most pressing capital needs. We hope this funding is released in a timely manner and goes towards critical capital needs such as roof replacement.
• NEW Affordable Housing Preservation– $177 million for substantial or moderate rehabilitation of affordable multi-family rental housing currently under a regulatory agreement. NYHC made recommendations with other housing groups for this “Year-15” type program to ensure we are preserving existing affordable housing.
• Moderate Income Finance Program– $150 million for new construction, adaptive reuse, or reconstruction of rental housing affordable to households that earn between 60% and 130% AMI.
• NEW Senior Housing– $125 million for developing or rehabilitating affordable housing targeted to low-income seniors, aged 60 and above. This new program is a welcome start to building for our aging population. NYHC worked with senior housing advocates to ensure dedicated senior housing funding was part of the statewide housing plan.
• NEW Upstate Public Housing– $125 million for substantial or moderate rehabilitation and/or the demolition and replacement through new construction of public housing authority developments outside of New York City. This funding is critical for PHAs to take advantage of HUD’s RAD program to revitalize public housing across the state. The budget bill also includes tenant protections and notification requirements strengthening provisions in HUD’s RAD program.
• NEW Low Income Affordable Housing Preservation & Development Program– $100 million for the preservation, restoration or creation of affordable housing units in a city with a population of a million or more. Priority will be given to not-for-profits with prior experience in community development projects. This is a new preference for dedicated funding with a non-profit preference.
• Rural and Urban Community Investment Fund (CIF)– $79.5 million for mixed-use affordable housing developments that may include retail, commercial or community development components.
• Mitchell-Lama Rehabilitation– $114.5 million to preserve and improve Mitchell-Lama properties throughout the State.
• NEW Small Building Construction– $62.5 million for rehabilitation and/or the demolition and replacement through new construction of buildings of 5 to 40 units. This is an important program for hard-to-finance buildings and reflects another NYHC priority.
• Homeownership– $41.5 million for promoting homeownership among families of low and moderate income and stimulating the development, stabilization, and preservation of New York communities.
• Mobile and Manufactured Homes– $14 million for mobile and manufactured home programs. New provisions are also established outlining the program’s replacement contract requirements and restrictions, Energy Star mandates, and financial assistance format details.
• NEW Community Restoration Fund– $1 million to facilitate the development of nonprofit community land trusts. This is a new program taking advantage of the potential land trusts have to create affordable rental and homeownership opportunities.
• Main Street Programs– $14.2 million for stimulating reinvestment in properties located within mixed-use commercial districts located in urban, small town, and rural areas of the State.
Homes & Community Renewal is subject to a new annual Housing Plan reporting requirement. HCR must provide a detailed annual report to the Legislature and Director of the Budget of projects and activities undertaken until the final disbursement of those funds has occurred.
On Friday, Governor Cuomo and leaders of the NY State Legislature announced a budget deal with significant new funding for affordable housing. New York Housing Conference thanks Governor Cuomo and members of the NY State Legislature for $2 billion in new funding for a comprehensive statewide housing plan to combat housing affordability and homelessness.
With big ticket items like minimum wage, paid family leave and income tax breaks being negotiated down to the wire, lawmakers funded a new housing plan but could not reach agreement on details of this new initiative. Therefore, funding will be subject to a Memorandum of Understanding (MOU) between the Governor, Assembly and Senate. New PACB and ESDC approvals for “volume cap” proposed in the Governor’s Executive were not included in the final budget. This is good news as we believe they would have been detrimental to affordable housing and were advocating to exclude new approvals from the budget.
While we don’t have too many details on the Governor’s 100,000-unit, 5-year affordable housing plan, we expect significant budget increases for many existing programs listed in the chart below. We hope Governor Cuomo will release his comprehensive vision for affordable housing preservation and development in New York State in advance of the MOU talks to facilitate discussion around the housing needs of New York State.
- More than $1 million in settlement funds have funded housing and homeless programs over the past year since NYHC issued analysis on availability of funds from bank settlements. In this budget, $590 million of the $2 billion in new housing capital is funded by settlement funds. NYHC analysis of accumulated settlements was helpful in establishing the availability of these funds for housing.
- Low Income Housing Trust Fund, Homes for Working Families and the Rural and Urban Community Investment Fund Program all see increases. In addition, significant funding in the new housing plan will be allocated to producing supportive housing as the Governor has committed to 20,000 new units over the next 15 years.
- It is unclear if a new Affordable Senior Housing Program will be funded out of the $2 billion housing plan this year although there certainly was great interest in senior housing in Albany thanks to our advocacy partners who helped us reinforce the need to plan for our State’s growing elderly population.
- Unlike last year, NYCHA has not been appropriated $100 million this year, which we have been advocating to go towards new roofs. Given the financial needs of the housing authority and the serious consequences of mold to tenants’ health, we hope $100 million will be funded out of the $2 billion housing plan to ensure NYCHA buildings are safe and healthy homes for their residents.
Analysis of the fiscal year 2015-16 enacted budget for the state of New York
In the early morning hours of April 1, the NY State Fiscal Year 2016 budget was enacted into law. The record $142 billion budget includes a $5.4 billion bank settlement surplus. Most of the surplus will be used for infrastructure investments and $1.5 billion will fund an economic development program for upstate New York. We are disappointed that none of the $5.4 billion in bank settlement surplus was directed to housing programs and that settlement recommendations specifically outlining uses for $492 million of the funds for housing were ignored. However, overall funding for housing and homeless programs in the FY 2016 budget has increased significantly compared to last year. This is mainly due to the programming of $439 million from a separate JP Morgan settlement, which is required to be spent on housing. Nearly $312 million of this funding was enacted in last year’s budget without agreement on programmatic use.
We thank Governor Cuomo and the Legislature for increasing appropriations to housing programs in 2016. Given the extent of New York’s af fordability crisis, the New York Housing Conference will actively advocate for a more substantial commitment from New York State in future appropriations to fund housing programs creating new af fordable housing opportunities, preserving existing af fordable and public housing and strengthening neighborhoods recovering from the foreclosure crisis.
Housing Program Highlights
$100 Million for NYCHA
Last autumn, the NYHC Advisory Board made preserving public housing one of our top three policy priorities for 2015. We are thrilled that $100 million will support NYCHA’s capital repair needs, improving conditions for existing tenants and preserving public housing for future generations.
New Middle Income Housing
$25 million has been allocated for a new program to support mixed and middle income housing. This new capital program will create units affordable to tenants earning up to 130% AMI. Communities will greatly benefit from enhanced income diversification in affordable housing.
Supportive Housing Programs
Under the $124.5 million listed in the linked chart, $74.5 million has been allocated for a new state-wide supportive housing initiative and $50 million ($10 million per year for five years) for Ofice of Mental Health Supported Housing to help ofset cost increases in scatter-site housing in areas with rapidly escalating fair market rents. While this is a great start, NYHC will continue advocating with the supportive housing community for a larger statewide program. MRT Supportive Housing Program is funded at $254 million over two years. This is a $32 million increase over last year’s funding level, providing service funds, rent subsidies and capital dollars to create supportive housing for high-cost Medicaid recipients. For full analysis of supportive housing funding, please see the Supportive Housing Network of New York analysis linked here.
40 million will fund New York City’s LINC rental assistance programs to get families out of shelters. This sorely needed funding may help reduce New York City’s homeless census of 60,000 New Yorkers. Another $15 million will fund a new homeless prevention pilot. A full analysis of these and other Statehomeless program funding will be posted here by Coalition for the Homeless in upcoming days.
Analysis of Fiscal Year 2014-15 Enacted Budget for the State of New York
Governor Cuomo and the Legislative leaders reached an agreement over the weekend on the Fiscal Year 2014-15 State Budget, and the various budget bills were being finalized and approved on March 31st as this summary was released. Cuomo once again waived the three-day waiting period required by law to age legislation – clearing the way for the fourth on-time budget in a row.
The Budget, which holds spending growth below two percent, provides significant new spending for housing, mostly due to one-time proceeds from a settlement agreement reached by the Attorney General last November. The settlement funds make up over $312 million of the $382.5 million increase for State housing programs over the Fiscal Year 2013-14 Budget. The increased funding includes legislative adds to restore funding cuts to the popular Neighborhood and Rural Preservation Programs and a restoration of funding for the NYCHA Tenant Pilot Protection Program. Summarized below are some of the highlights, followed by a chart showing all funding for State housing programs.
Housing Program Highlights
Public Protection/General Government Article VII (S.6355-D):
This section of the budget bill amends the State Finance Law by adding a new section 99-v establishing in the joint custody of the State Comptroller and the Commissioner of Tax and Finance a trust and agency fund known as the “Mortgage Settlement Proceeds Trust Fund” to distribute settlement funds. There is a corresponding “Foreclosure Avoidance and Amelioration” appropriation in the NYS Division of Housing and Community Renewal’s (DHCR’s) Aid to Localities budget in the amount of $312,366,643 that states that such funds will be allocated in accordance with a plan approved in a memorandum of understanding (MOU) to be executed by the Division of the Budget, the Assembly and Senate. Under the MOU, the funds can be sub allocated to other agencies; however, $81,500,234 of the monies shall be distributed by the Attorney General. The appropriation sets forth a schedule for how much funding may be drawn down in each fiscal year in accordance with the settlement.
The Health and Mental Hygiene Article VII (S.6358-D/Part K):
This bill expresses concern for the number of children under the age of 18 living in homes headed by grandparent caregivers or other elderly relatives and directs the NYS Division of Housing and Community Renewal (DHCR) to conduct a Grandparent Housing Study. The study is to look at the scope and scale of the issue as it relates to housing, economic costs, and other factors. The study shall be led by DHCR and shall be done in consultation with the NYS Office of Children and Family Services (OCFS), The NYS Office of Temporary and Disability Assistance (OTDA), and the NYS Office of Aging (SOFA). DHCR must report their findings in 12 months. For services and expenses related to the study $200,000 is provided in the State Operations portion of DHCR’s budget.
The Budget continues the House NY program created last year to rehabilitate the State’s remaining Mitchell Lama portfolio which suffers from significant physical deterioration. The 44-project Mitchell Lama portfolio which was moved last year from the Urban Development Corporation to the Housing Finance Agency will benefit from an additional $32 million in FY 2014-15 funding.
The Low Income Housing Trust Fund Program benefits from a significant increase, $11.5 million over last year for total program funding of $46.7 million.
Funding for the Neighborhood Preservation Companies is restored to $10,073,000 and Rural Preservation Companies to $4,204,000, to bring them back to last year’s levels through a combined appropriation and funding from the Mortgage Insurance Fund.
2013-2014 New York State Housing Budget Analysis
It appears the Fiscal Year 2013-14 New York State Budget will be passed on time this year, although not as early as some had hoped. The Assembly and Senate starting passing bills late last week, but took the weekend to finalize details for the Aid to Localities and Capital spending bills which include funding for most state housing programs. These bills were printed Sunday night and are now “aging” to meet a provision in the New York State Constitution that requires lawmakers to wait three days before voting on new legislation. The Senate is expected to return today and start passing bills this afternoon when they can legally take action on the legislation. The Assembly does not return until this Thursday when they will take up the same bills.
According to the bills that have been introduced, the final budget plan includes funding for two new housing initiatives: 1) initial funding to preserve the state’s aging Mitchell Lama portfolio, and 2) the new Rural and Urban Community Investment Fund which will provide grants and loans to help develop commercial and retail space within mixed-use affordable residential developments. These two new initiatives will largely be financed from excess reserves from the Mortgage Insurance Fund (MIF), which proved to be a key source for this housing budget.
The legislature will agree to the Governor’s proposal to utilize the excess MIF reserves as a key part of the fiscal plan for 2013-14. This represents a fairly dramatic shift in public policy – changing the source for several of the housing programs within the Aid to Localities budget, from the State’s General Fund to the MIF. The MIF is a division of the State of New York Mortgage Agency (SONYMA). Existing statute allows for excess revenue from the MIF to be returned to the State with SONYMA Board approval, as long as the remaining reserves are sufficient to attain and maintain the State’s credit rating. So in future years when the MIF doesn’t have excess revenue, these programs could be facing an uphill battle to get back into the General Fund.
According to the plan, the MIF will fund the following this year:
- An amount of $8,479,000 would be provided to support the Neighborhood Preservation Program.
- An amount of $3,539,000 would be provided to support the Rural Preservation Program.
- An amount of $20,400,000 would support rental subsidies for low-income individuals under the federally funded Rural Rental Assistance Program.
- An amount of $17,582,000 would be transferred to HFA to support the refinancing and capital repairs of thirty-six Mitchell Lama affordable housing projects.
- An amount of $3,500,000 to support the new Rural and Urban Community Investment Fund Program.
- An amount of $3,000,000 to support the Low Income Housing Trust Fund Program.
- An amount of $2,000,000 to support the Urban Initiatives Program.
- An amount of $1,500,000 to support the Rural Area Revitalization Program.
- And an amount of $104,000,000 would be transferred to the General Fund.
Housing Program Highlights
Preserving Affordable Housing
The 2013-14 Budget will help Governor Cuomo’s House NY program to get underway with an initial investment of $17,582,000 from the MIF. This funding will go directly to the Housing Finance Agency (HFA) to support the refinancing and capital repairs for some of the State controlled Mitchell Lama portfolio. It is expected that an additional $158 million from the MIF will be available over the next four budget cycles to address some 35 Mitchell Lama projects in total, that suffer from significant physical deterioration. As part of this initiative, the Mitchell-Lama affordable housing asset portfolio will be transferred from Empire State Development to HFA.
Creating New Housing Opportunities
The legislature will create the Rural and Urban Community Investment Fund as part of the 2013-14 Budget with a total of $5,354,000 from the General Fund and the MIF. The Fund will provide grants and loans for the creation and improvement of affordable housing, as well as the commercial, retail and community facilitates related to mixed-use affordable residential developments. The program will have a one-third match requirement and sixty percent of the funds will be allocated to urban projects and 40 percent to rural projects. The new program will be administered by the Housing Trust Fund.
Homeless Housing Assistance Program
The legislature has omitted language in their bills that would have transferred the administration of the Homeless Housing Assistance Program (HHAP) from the Office of Temporary and Disability Assistance (OTDA) to the Division of Housing and Community Renewal. Instead, the program remains at OTDA with no change in funding over 2012-13 ($30 million from the Capital Budget).
Neighborhood and Rural Preservation Programs
The legislature did not agree to the Governor’s proposal to merge the Neighborhood and Rural Preservation Programs (N/RPP) into a single, performance based program. In addition, the legislature restored the funding levels for the N/RPP’s to prior year levels.
The legislature did not agree to the Governor’s proposal to fund a $5.7 million Tenant Protection Unit within DHCR.
The budget will reduce funding for the New York Main Street Program, increase funding for the Low Income Housing Trust Fund, and restore funding for the Rural Area Revitalization and Urban Initiatives Programs. Funding for all other capital programs (Access to Home, Affordable Housing Corporation, Homeless Housing Assistance Program, Homes for Working Families Program, Housing Opportunity Program for Elderly, and Public Housing Modernization Program) will remain at prior year levels. (See chart below).
Other Budget proposals of interest include the following:
The Budget continues the implementation of Medicaid Reform Team (MRT) recommendations, including making additional funding available for affordable housing.
The legislature will not enact the Executive’s proposal to limit the powers of a local Industrial Development Authority (IDA) to provide State Sales Tax abatements to local projects. However the agreement will limit the industries to which IDAs can offer State sales and other use benefits to key sectors, in particular excluding retail with certain exemptions. The law will also increase the reporting requirements for IDAs.
Source: 2013-14 New York State Executive Budget Education, Labor and Family Assistance, Article VII Legislation [S.2607D/A.3007D], Part K, L and M.
2012-2013 New York State Housing Budget Analysis
NEW YORK (March 29, 2012) – Governor Andrew Cuomo and the Legislature have reached a three way agreement on the FY2012-13 State Budget and the Legislature is poised to pass the final parts of the plan within the next few hours. The new fiscal year begins April 1. The housing part of the Budget is very favorable to supportive housing and the popular nonprofit networks known as the Neighborhood and Rural Preservation Companies. The affordable housing program highlights are below.
Housing Program Highlights
Local Assistance Funding for Affordable Housing:
The final Budget will more than restore full funding to the community based nonprofit organizations under the Neighborhood Preservation Companies program (NPCs) and Rural Preservation Companies program (RPCs). According to the Budget, NPCs will be funded at $10.072 million – this includes a restoration of the $8.479 million cut that had been proposed plus an additional $1.593 million over 2011’s funding level. The RPCs will be funded at $4.204 million – this includes a restoration of the $3.539 million cut that had been proposed plus an additional $665,000 over 2011’s funding level. This is the first increase in funding in five years for these two programs.
The Budget will increase funding for the Rural Rental Assistance Program (RRAP) which provides State funded rental subsidies to approximately 4,700 low income occupants of rural housing projects partially financed by the US Department of Agriculture. The program will receive an additional $4.798 million under the new Budget bringing the total appropriation to $19.6 million.
The Budget includes an agreement to continue to assist homeowners through the Subprime Foreclosure Prevention Program. The Budget provides $9 million for the continuation of mortgage foreclosure counseling services to be administered by NYS Homes and Community Renewal over the next 6 months until proceeds from the National Mortgage Servicing Settlement Agreement are realized. At that time, additional services will be financed with proceeds from the Settlement Agreement under the administration of the State Attorney General’s office.
Supportive Housing Programs:
Medicaid Redesign Team (MRT) Supportive Housing Development Program – The Budget includes $60 million for the MRT Supportive Housing Fund. Following the recommendations of the MRT, the budget establishes and funds a new Supportive Housing Development Program that will provide service funding, rent subsidies and capital dollars to create supportive housing for high-cost Medicaid recipients. The new fund will be funded with $60 million of State general funds this year, and $75 million of State general funds in each of the following two years, with funding originating in the NYS Department of Health, to be distributed to HCR, OTDA, OMH, OASAS, OPWDD and the DOH AIDS Institute. It also allows the fund to grow to $150 million annually if the State can convince the federal Center for Medicaid and Medicare Services to provide matching funds.
The State’s draft spending plan envisions approximately one-third of this year’s fund going to scattered-site rental and service subsidies, another third going to capital development of supportive housing units at NYS Homes and Community Renewal, and as much as $14.5 million to OTDA Homeless Housing Assistance Program (HHAP) for upstate projects, with the rest going to specific projects including $7 million to provide capital funding for the development of community-based permanent housing for residents of Goldwater/Coler Hospital. Further details will follow in the coming weeks.
Community Reinvestment in Supportive Housing – In addition to the $60 million in funding this year, the budget authorizes a new, ongoing community reinvestment vehicle, the Supportive Housing Development Reinvestment Program. This new program will redirect savings achieved by closing nursing home and hospital beds to build and operate new supportive housing in the community for high-cost Medicaid recipients.
NYS Supportive Housing Program (NYSSHP) & NYS Solutions to End Homelessness Program (STEHP) – The budget also increases funding for NYSSHP and STEHP by $1.5 million each, a total of $3 million in additional funding to the Homeless Housing and Prevention Services Program.
Capital Budget for Affordable Housing:
The Budget calls for the expansion of the State Low Income Housing Tax Credit Program. The Division of Housing and Community Renewal is authorized to allocate an additional $8 million annually in each of the next two years in aggregate credit awards to taxpayers who develop qualifying housing projects for low-income New Yorkers. Credits are given in equal installments for a ten-year period.
The Budget also calls for $32.2 million for the Low-Income Housing Trust Fund Program – same as 2011, which provides grants of up to $125,000 per unit to construct or renovate low-income apartment projects.
The Budget includes $25 million for the Affordable Home Ownership Development Program – same as 2011, which provides grants of up to $40,000 per unit to construct or renovate homes for low and moderate- income families.
The Budget includes $6.4 million for the Public Housing Modernization Program – same as 2011, which subsidizes repairs at 74 State-supervised public housing projects across the State. A total of $400,000 will be reserved for capital activities aimed at reducing illegal drug activities at these projects.
The Budget includes $7 million for the Homes for Working Families Program – same as 2011, which combines State funds with other available public and private sector moneys, Federal Low Income Tax Credit proceeds and non-State supported bond funds to construct affordable rental housing for low- and moderate-income households.
The plan calls for $400,000 for the Housing Opportunities for the Elderly Program (also known as RESTORE) – same as 2011, which provides grants to low-income elderly homeowners for emergency home repairs.
The Budget includes $1 million for the Access to Home Program – same as 2011, which provides funding for home adaptations for individuals with disabilities to enable them to continue to live in their own residences and avoid institutional care.
The New York Main Street Program, which provides financial resources and technical assistance to communities to revitalize historic downtowns, mixed-use neighborhoods, commercial districts and village centers was increased by $3 million, to $5.2 million.
The Budget also funds two programs that have been in existence for many years, but infrequently funded; the Urban Initiatives and the Rural Area Revitalization programs will each be funded at $4 million this year. Both are administered by NYS Homes and Community Renewal.
Analysis of New York City 2018 Budget
On June 2nd, Mayor De Blasio and the City Council reached an agreement on the FY 2018 budget, an $85.2 billion spending plan, which represents a 3.7% increase over the previous year’s adopted budget. It has been lauded as the earliest the city has reached a budget agreement since 1992.
The budget commits $1.9 billion in new Capital funding for the development to increase the affordability levels for up to 10,000 apartments of the 200,000 planned units in the Mayor’s 10-year housing plan (Housing New York), which was released in 2014. The plan’s goal is to develop 80,000 new housing units and preserve 120,000 units to meet the needs of more than 500,000 City residents. The new commitment will dedicate the resources to allow 10,000 more Extremely Low-Income households to afford housing constructed under the Mayor’s Plan, of which 5,000 will be dedicated to seniors and 500 units will house veterans. This increases the projected share of units reserved for New York ELI households from 20% (40,000) to 25% (50,000). The additional HPD funding will be allocated to the Extremely Low & Low-Income Affordability Program (ELLA) and the Senior Affordable Rental Apartments Program (SARA), among others.
The budget also includes $25 million in property tax exemptions for war veterans, which is estimated will save an average of $443 per person annually. Furthermore, the City Council has notably committed to providing:
- $11.2 million to HPD’s annual operating budget to support various housing initiatives, including tenant advocacy and education, code enforcement advocacy, housing court assistance, and other housing-related public education.
- $255,000 to DCA’s operating budget for financial empowerment support for tenants.
- $77 million towards unprecedented universal access to free legal services for tenants facing eviction in housing court. At full implementation, the City’s investment in anti-eviction legal services will total $155 million by Fiscal 2022.
Regarding Public Housing, earlier this year in January, the Mayor committed to $1 billion in City Capital over 10 years to fix 729 NYCHA roofs benefiting 120,000 residents. This is in addition to the administration’s previous funding commitments to NextGeneration NYCHA’s 10-year strategic action plan, which had been unveiled in 2015. This additional capital will not only fund the replacement of roofs and parapets, but it will also help to substantially reduce mold, which can be detrimental to the health of residents.
Analysis of City of New York 2017 Preliminary Budget
Last week, Mayor Bill de Blasio announced his preliminary 2017 fiscal year budget for New York City. The budget which totals $82.1 billion funds the Mayor’s promise to raise the minimum wage for city workers and provides additional support to combat homelessness.
In particular, the Mayor is calling for additional FY2017 investments of $8 million for a Shelter Repair Squad 2.0; $12.3 million to move New Yorkers out of illegal, unsafe, and unstable housing to permanent homes; $4 million for “Homebase” Prevention to double the number of single adults at risk of homelessness assisted to stay in their homes; $16.9 million for adult shelter programming to help over 10,000 clients find employment; and $12.5 million to operate the first of 15,000 new supportive housing units.
The Department of Housing Preservation and Development (HPD) will also receive funding for expanded staff capacity to implement the 200,000-unit Housing New York plan and participate in homeless shelter and three quarter housing inspections as follows:
- New HPD Staff– The addition of 80 positions (in various offices including Development, the Office of Neighborhood Strategies, Technology and Strategic Development, and Asset & Property Management) and $6.8 million in city tax levy funding to support the continued success of Housing New York.
- The addition of 10 positions to implement the Local Law #462 Elevator Repair Program. The program will officially rollout in FY17. A total of $6.5 million in FY2017 will be tax levy but the remaining program funding will be covered with Community Development Block Grant funding (CDBG).
- Funding to cover the HPD’s participation in the DHS Shelter Inspection Task Force. Since May, HPD has been part of the Shelter Repair Squad, working with other City agencies to identify and address problems in the City’s homeless shelters. Mayor de Blasio recently announced a new inspection, repair, and capital improvement plan – Shelter Repair Squad 2.0 – to promote the long-term sustainability of emergency shelter housing, greatly expanding HPD’s role in the effort.
- The addition of 4 positions and $7.8 million to support the continued inspection and relocation of individuals impacted from the three quarter house initiative.
Analysis of New York City 2016 Budget
The 2016, $78.5 billion, budget for the City of New York was enacted on Friday. Congratulations to Mayor Bill de Blasio and Speaker Melissa Mark-Viverito for a budget that supports affordable housing.
Following through on Mayor de Blasio’s promised investment of more than $7 billion in City funds for affordable housing over 10 years, an increase in City capital has been strategically allocated to support the development of 80,000 new construction units and the preservation of 120,000 across the 5 boroughs.
Local investment in affordable housing is $7.45 billion in capital, which is comprised of $7.1 billion from City Capital, $279 million in HOME and $75 million in Reso A over 10 years. City Capital must account for any reductions of federal HOME and CDBG funds stemming from anticipated federal cuts and transfers to other City agencies. HPD’s budget also includes the following new additions and changes:
- $64M-New funding for 450 homeless set aside units in the Extremely Low and Low-Income Affordability Program (ELLA). This capital funding will be used to supplement existing per unit subsidy outlined in term sheets.
- $5M-New funding to support the ¾ Houses Task Force. These expense funds primarily pay for shelter and Emergency Repair Program (ERP) funding.
- $18M-A capital transfer to HRA will create a new HOME Tenant-Based Rental Assistance Program for 1,250 homeless families.
- $3M-Pays for HPD housing inspections and provision of temporary shelter related to East Village gas explosion.
- $5.6M-Funds about 74 positions across HPD. Agency headcount was reduced by almost 25% from 2008-2014 but it on the rise again to support an ambitious housing plan.
NEW SERVICES IN SENIOR HOUSING
In Mayor de Blasio’s State of the City early this year, a 10,000-unit senior housing program was announced. A new item in this budget, and one that NYHC has been advocating for with partners at LiveON NY, is a program to fund on-site services for seniors. This funding is needed to allow seniors to age in place and also support the new homeless set aside requirement in the Senior Affordable Rental Apartments (SARA) program.
- $750M-New expense funding will provide service contracts for 500 units of senior housing per year for just 5 years. The expense budget is only a 5-year financial plan so they are not able to provide 10-years of funding to match the housing plan. This new program is great news and we are awaiting information on how the funds will be implemented as they are expected to be administered by the Department for the Aging (DFTA).
To support an increase of affordable housing production at a time when City-owned land is scarce and land costs are high, significant investment in infrastructure is being made to aid development and improve communities.
- $586M-For projects that will “unlock” housing opportunities including sites in the Southwest Bronx and Hunter’s Point South. Funds will also be used for roads and sewers and to create or improve parks and open space etc.
- $512M-New Affordable Housing Fund will be dedicated to infrastructure investments required to make potential development sites viable.
- $750K-New EDC Acquisition Fund to acquire mixed-use sites.
- $700M-New Neighborhood Development Fund will focus on community infrastructure and help balance community needs especially in the case of upzonings.
- $330M-New sewer infrastructure.
NYCHA receives significant local investment this year as outlined below. Additional funding from City Council and Borough Presidents is also provided in the budget but we don’t have a breakdown yet.
- $100M-New capital funds for roof repair, matching a new State capital contribution this year.
- $3M-Funding for senior centers.
- $30M-Representing payment in lieu of taxes (PILOT) forgiveness