The House and Senate Appropriations Committees have each approved THUD budget bills that reject the deeply harmful cuts and policy changes proposed in the President’s Budget Request.

The Senate bill would provide $73.3 billion for HUD, an increase of about $3.3 billion from FY25 while the House provides $67.8 billion — a decrease of $939 million from FY25. We are concerned about the underfunding of housing vouchers and elimination of HOME in the House and cuts to public housing in both chambers. The funding cliff for over 9,400 Emergency Housing Vouchers in New York also needs to be addressed before the end of next year.

Despite the polarizing political environment, we are seeing strong signs of bipartisan support for housing this year from the expansion of LIHTC in reconciliation to the bipartisan ROAD to Housing Act package currently moving through the Senate. In this spirit, we hope Congress will advance a budget to fully fund HUD programs that serve every community in this country.

Rental Assistance

Section 8 Tenant-Based Rental Assistance – The House provides just $35.26 billion for the program, an overall cut of $780 million from FY25 and maintains flat funding for voucher renewals. Flat funding for renewals is effectively a cut. Rent increases mean the program must receive increased funding every year to continue serving the same number of tenants. 

The Senate provides $37.35 billion for Tenant-based Rental Assistance, $1.3 billion above FY25 levels and provides $33.9 billion for voucher renewals.

NYHC estimates that the House budget will fund about 20,000 fewer Section 8 vouchers in NY state than the Senate. Further, the National Low Income Housing Coalition (NLIHC) estimates neither chamber provides enough funding to renew all existing voucher contracts. We hope the final budget will fully fund this program.

Section 8 Project-Based Rental Assistance – The House provides $17.13 billion, an increase of $237 million and the Senate provides $17.8 billion, an increase of $514 million for project-based rental assistance.

Housing for the Elderly (202) & Persons w/ Disabilities (811) – Both chambers provided increases for housing for the elderly and disabled. The House provides $950 million and $262 million for HUD 202s and 811s respectively – increases of $19 million and $6 million.

The Senate provides $972 million and $265 million for HUD 202s and 811s respectively – increases of $41 million and $9 million.

Public Housing

Both chambers propose cuts to public housing operating and capital. The House provides $5 billion for operating and $2.3 billion for capital – cuts of $500 million and $1.1 billion respectively.

The Senate provides $5.08 billion for operating and $3.2 billion for capital- cuts of $414 million and $210 million respectively.

Increased funding for public housing operations and public housing capital needs is needed to continue serving almost 170,000 New Yorkers

Homelessness Assistance

Continuum of Care (CoC) – the House provides $3.85 billion an increase of $366 million and the Senate provides $4.02 billion an increase of $530 million from FY25.

Housing Opportunities for People with AIDS (HOPWA) – the House provides flat funding at $505 million and the Senate provides $525 million, an increase of $20 million from FY25.

Emergency Solutions Grants – Both chambers provide flat funding for ESG at $290 million.

Block Grants

HOME Investments Partnership – The House eliminates HOME, citing nearly $5B yet to be spent from the American Rescue Plan (ARP). HOME-ARP is supplemental funding and not as flexible as standard HOME, which supports affordable housing for low-income households. HOME-ARP – like other pandemic era assistance – is targeted to the most vulnerable populations such as those experiencing or at risk of homelessness and domestic violence and trafficking survivors.

In FY24, NY received over $116 million from HOME. It is an important tool used in every community to help finance new construction and preservation of affordable and supportive housing, fund rental assistance and provide affordable homeownership opportunities. Further, HOME is a key source of gap financing for LIHTC projects. It has been used to finance 2,459 LIHTC units in New York from just 2020-2024.

The Senate provides $1.25B for HOME, the same as FY25.

Community Development Fund – The House provides $3.3B for the Community Development Block Grant (CDBG), the same as FY25 and the Senate provides $3.1B, a $200 million cut.

Both chambers restore funds for congressionally directed spending that was cut in the FY25 continuing resolution. The House provides $2.3B and the Senate, $1.3B. Commonly known as earmarks, this funding supports economic development projects as requested by the members and often includes funding for individual affordable and public housing developments.

Emergency Housing Vouchers

Neither Chamber fully addressed the funding cliff facing over 20,000 of the most vulnerable New Yorkers who rely on Emergency Housing Vouchers to help pay their rent. The pandemic era program is expected to run out of funding by next year – four years earlier than anticipated. If adequate funding is not provided to maintain these vouchers, the abrupt loss of funding will be harmful to families, children, property owners, and the state as a whole.

The House draft included a proposal to allow funding for Tenant Protection Vouchers (TPVs) to be used to maintain EHVs. While it is a positive sign that the House acknowledged the need to maintain EHVs, it would create a competing use for an extremely small pot of funding. TPVS are already used to rehab public housing units with huge capital needs through RAD and PACT. The House bill provides $375 million for TPVs while NYHC estimates it could cost over $212 million to maintain EHVs in just NY for one year.

Insurance

The Senate THUD bill included an amendment that directs the HUD Secretary to complete a, “report on the current state of the property insurance market with an emphasis on affordable housing properties that are rent-restricted or rent-assisted,” and provide an analysis on, “the potential impact that increasing insurance premiums may have on: (1) the supply of new affordable housing, and (2) the financial sustainment of existing affordable housing.” It also directs the Secretary to, “assess the implications of rising insurance costs on program operations, such as housing authorities’ levels of reserves, and conduct outreach to property owners to solicit qualitative feedback on how rising insurance costs affect their ability to effectively meet the goal of providing affordable housing.” 

This amendment is similar to language included in last year’s Senate THUD and Financial Services and General Government (FSGG) bills, which New York Housing Conference worked on with Senator Kirsten Gillibrand and Minority Leader Chuck Schumer. However, it leaves out coordination with the Federal Insurance Office.

In a brief last year, NYHC analyzed the portfolios of some of our partners and found the average cost to insure an affordable apartment is $1,770 – a 103% increase from 4 years ago when the average annual per unit premium was $869. Rapid increases in insurance costs are adding pressure to increase rents and putting the financial viability of affordable multifamily rental housing at risk. We found that costs are skyrocketing due to a number of factors, including climate change, fewer insurance companies offering multifamily coverage, changes in the reinsurance market, inflation and discrimination. However, lack of data continues to be major barrier to understanding this issue and proposing policy solutions.

Policy Provisions

The House includes several policy changes that could undermine the delivery of federal housing resources such as:

Removing the “Coronavirus Aid, Relief, and Economic Security (CARES) Act” 30-day eviction notice requirement, which requires a 30-day eviction notice for HUD-assisted tenants.

Banning “local jurisdictions that refuse to comply with a request from the

Department of Homeland Security to provide advance notice of the scheduled release of an immigrant without legal documentation” from receiving appropriated funds. We understand this language to refer to places that are commonly understood to “sanctuary cities.” If enacted, this could jeopardize HUD funding for many cities across New York.

Allowing PHAs to waive or create alternatives to “tenant payment, tenant rental payments, and housing assistance payment amounts.” NYHC is concerned about any PHA being granted discretion to modify rent burden.

Restricts HUD’s ability to use appropriated funds to update minimum energy efficiency standards for new HUD-funded housing, as outlined in the federal notice, “Adoption of Energy Efficiency Standards for New Construction of HUD- and USDA-Financed Housing.” These standards went into effect last summer and marked the first time HUD updated its energy standards since 2015.

For more details, view the updated budget chart from the National Low Income Housing Coalition.