President Trump’s budget request to Congress was released today and it provides $6.2 billion in cuts as per the “skinny” budget but this is actually $7.7 billion in housing cuts compared to current 2017 levels.
The budget increases defense spending by $52 billion by slashing non-defense programs such as HUD assistance, food stamps, TANF and Medicaid. With concern for a growing deficit, the President proposes a “2-Penny Plan” to reduce non-defense spending by 2% every year for 10 years to bring total non-defense spending down from $519 billion to $385 billion by 2027. The President also shifts costs to states across a variety of programs, which would put a strain on local resources. For example, a 10% state match is introduced for the Supplemental Nutrition Assistance Program (SNAP or foodstamps) in 2020 increasing to 25% by 2023.
Additionally, the President calls for a deficit neutral tax reform plan, which will be enhanced by dynamic budget scoring, but will also look to non-defense discretionary such as health care to “free up” money for tax cuts.
Investment in a $1 trillion private/public infrastructure is still a priority, but a clear plan has not been outlined, only principles which emphasize private investment.
Overall there is a growing emphasis of shifting responsibility for housing programs to states. In a press release from HUD Secretary Carson, he stresses the need for, “a greater role for State and local governments, and the private sector, to address community and economic development needs”. There is also a focus on self sufficiency for residents and a pilot to increase rent burden, without regard to quality of life issues for low-income households or any acknowledgment of our growing rental housing crisis.
HUD Budget Impact for 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 is 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.
Notable Policy Changes:
Full details are linked here. Highlighted reforms below will be presented as part of a comprehensive rental assistance reform legislative proposal that the Administration is developing.
- 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.
RAD Proposed Amendments
- Elimination of the 225,000 unit cap on public housing projects authorized to convert assistance to long-term Section 8 rental assistance contracts.
- Elimination of the submission deadline of September 30, 2020 for submission of RAD Applications under Component I.
- Expansion of RAD Component II to include the conversion of Section 202 PRAC properties.
- Standardization of ownership and control requirements for converted public housing properties by extending the baseline standard of permitting non-profit ownership at conversion to situations where low-income housing tax credits are used or where foreclosure, bankruptcy, or default occurs.
- Protection of a tenant’s right to continued occupancy under Component II.
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).
• The National Low-Income Housing Coalition has posted a budget comparison chart and more detailed budget analysis at the program level.
• Center on Budget and Policy Priorities posted analysis and state impact.