President Trump’s FY 2020 budget proposal entitled “A Budget for a Better America: Promises Kept. Taxpayers First” was released today highlighting the Administration’s top priorities, of which housing definitely is not one. This budget includes $2.7 trillion in spending cuts—higher than any other administration in history and reduces non-defense discretionary spending. The administration requests $44.1 billion in funding for HUD’s Budget, which represents a 18% cut from the enacted FY 2019 budget. If enacted, this budget would seriously harm HUD-assisted households and severely damage affordable and public housing programs in New York and across the country.
SETTING NYCHA UP TO FAIL
Only one month after HUD reached a settlement agreement with NYCHA, in which the City of New York commits more than $2 billion, the Trump Administration audaciously proposes the complete elimination of public housing capital funds. The Administration is effectively divorcing itself of its responsibility to fund the maintenance and repair of public housing and proposes moving to rental assistance platforms like RAD to leverage private financing. However, it is not a real plan with only a paltry $100 million in RAD funding and not enough Section 8 to even maintain current use. Additionally, the budget requires that RAD funding must be prioritized for redevelopment use in Opportunity Zones, which will have limited use in New York City. Despite HUD’s Regional Administrator Lynne Patton’s spotlight on conditions during her month stay in NYCHA housing and her introduction of President Trump to Frederick Douglass Houses Tenant Association President Carmen Quiñones, this budget completely fails public housing residents. It also sets NYCHA and its new monitor up to fail. It is impossible for NYCHA to meet substantial compliance with federal regulations relating to health and safety outlined in the settlement agreement without a substantial and sustained increase in funding from all levels of government.
With $8.7 billion in proposed cuts, the President’s attack on low-income households continues with reissued proposals for work requirements and rent reforms in the Making Affordable Housing Work Act (MAHWA). These proposals would increase rent for thousands of HUD-assisted households. Despite the contradiction, Secretary Carson top budget priorities include 1) Increasing rent assistance (although the budget cuts it); 2) Continuing homeless grants (also cut); 3) Removing lead and health hazards from homes (slight increase but wildly insufficient funding); 4) A 5-year “Financial Transformation” plan and meeting critical staffing needs (lowest staffing levels reached under his leadership) and lastly 5) “The Prescription for HUD” focused on economic opportunity and streamlining HUD processes (Envision Centers rebrand existing programs). Check out NLIHC’s budget chart for a full comparison to FY2019 funding levels. Here are some HUD budget highlights worth noting:
- Public housing capital funding is eliminated and operating funds cut by ~40%.
- CDBG, HOME, Choice Neighborhoods, Self-Help and Assisted Homeowner-ship Opportunity Program are all eliminated.
- Section 8 is cut by $354 million, which means fewer vouchers to combat homelessness and insufficient Tenant Protection Voucher funding to meetNYCHA’s conversions needs.
- Homeless Assistance Grants are slightly decreased.
- While the budget boasts ~$60 million proposed increase for the mitigation of lead-based paint and other hazards in low-income homes, that number is based on the President’s FY2019 proposed budget and not the actual budget enacted by Congress. When compared to the actual enacted budget of FY2019, the proposed increase is only a mere $11 million extra nationwide.
- Opportunity Zone Technical Assistance Funding is new for local municipalities that are seeking to attract public and private investments to their communities. This is something to watch as aligning HUD programs with OZones can be potentially be problematic in a state like New York with a robust affordable housing pipeline.
- HUD’s staffing levels have declined over the last four decades from a high of almost 18,000 full-time equivalents (FTEs) in 1977 to fewer than 7,600 FTEs in FY 2018, while its budget authority has steadily increased from just under $30 billion to more than $50 billion. Surprisingly, the President’s Budget allocates $1.6 billion toward salaries and expenses (S&E), almost $56 million above the 2019 Annualized CR level. This funding will enable HUD to increase its staffing to nearly 7,800 FTEs.
- FHA lender enforcement program and down-payment assistance practices reform legislative proposals are expected to be forthcoming.
OTHER FEDERAL PROGRAMS
- The budget reduces the USDA budget by 15%.
- Eliminates Community Development Financial Institutions (CDFI) Fund discretionary grant and direct loan programs.
- The president once again pushes for work requirements across all safety-net programs and proposes substantial changes to Temporary Assistance to Needy Families which would impact homeless families and NYC’s shelters.
- The President has called upon the Congress to pass legislation that generates at least $1 trillion in infrastructure investment. His infrastructure proposal last year was described by CBPP as a “mirage”.
President Trump’s budget will cost New York State at least $1 billion and hurt low-income families. As in prior years, we expect Congress will fully reject the President’s proposal. NYHC will be advocating against these cuts and will produce more detailed analysis of impact on New York housing programs in the next weeks.