President Biden released his FY24 budget proposal, which expands the Low-Income Housing Tax Credit, requests $73.3 billion in HUD funding – a 1.3 percent increase from the FY23 enacted levels, and proposes more funding for affordable housing in the mandatory side of the budget.
The budget proposal includes a $28 billion expansion of LIHTC and reduces the 50 percent test. The 50 percent requirement for private activity bond financing would be reduced to 25 percent permanently starting in 2024. This has been a major policy priority for NYHC. NY already uses all its volume cap towards affordable housing and relief is needed to meaningfully increase supply. Lowering the 50 percent test could potentially double affordable housing production in New York. The FY24 request also provides $15.6 billion for a new Neighborhood Homes Tax Credit to support affordable homeownership.
Read more about the tax side proposals at Novogradac.
- Rental Assistance – $32.7 billion – an increase of $2.4 billion for Housing Choice Vouchers (HCV) over the 2023 enacted level, to renew all existing housing vouchers and expand assistance to an additional 50,000 households through increased funding and another 130,000 households through program reserves.
- HOME Investment Partnerships Program (HOME) – $1.8 billion, an increase of $300 million
- Community Development Block Grants – $3.4 billion, an increase of $100 million
- Capital for public housing – $3.5 billion, an increase of $120 million
- Housing for the Elderly (sec 202) & Disabled (sec 811) saw decreases at $1.023 billion and $356 million respectively
While there are only modest increases to the HUD budget, the proposals for mandatory spending on housing are significant and sends a message that the administration continues to prioritize affordable housing in a way we haven’t seen in decades. Mandatory spending includes entitlement programs, such as Social Security and Medicare while discretionary spending is subject to annual fluctuations determined by Congress. NYHC has been a longtime advocate for mandatory housing funding for public housing and universal rental assistance and we are excited to see the administration recognize the need for this change.
- Rental assistance for vulnerable populations – $9 billion to establish a housing voucher program for all 20,000 youth aging out of foster care annually, and $13 billion to incrementally expand rental assistance to 450,000 extremely low-income (ELI) veteran families
- Eviction Prevention – $3 billion for grants to support State and local eviction prevention efforts, building off the success of the Emergency Rental Assistance program, which kept millions of renters stably housed during the pandemic.
- Public Housing – $7.5 billion in mandatory funding for comprehensive modernization of certain Public Housing
- Exclusionary Zoning – $10 billion in mandatory funding to incentivize the next group of jurisdictions to make zoning and land use reforms.
- Down Payment Assistance – $10 billion for a new First-Generation Down Payment Assistance program to help address racial and ethnic homeownership and wealth gaps
Read more detailed analysis of the HUD budget at NLIHC
The House majority has demanded deep spending cuts in exchange for avoiding a government shutdown. Some House members are even referring to a budget outline that proposes a 43 percent cut to housing programs, including phasing out the Section 8 program. While we expect the Senate to stand firm against the most draconian cuts, this is still a major barrier to securing additional resources. NYHC will continue to advocate to protect HUD funding and look for any opportunities to expand federal resources for affordable housing.