The Obama administration recently released its long-awaited 2014 budget. While it preserves important affordable housing programs, advocates have their work cut out for them to ensure that these programs receive adequate funding to continue to be able to serve low income households.
The good news
The 2014 budget proposes funding increases from the 2012 levels for several programs that serve the lowest income households, such as public housing and project-based rental assistance and vouchers:
- Project Based Rental Assistance (PBRA): increased 10% over the 2012 levels, which will allow all existing contracts to be fully funded for 12 months. Unfortunately, this increase rests on the assumption that Congress will move beyond months of political impasse and find an alternate solution to sequestration. If sequestration continues into 2014, then Section 8 contracts will likely be cancelled, and families will face homelessness.
- Tenant Based Rental Assistance (TBRA): increased 6% over the 2012 levels, which includes $18 billion for contract renewals, $111 million to renew Section 811 (for persons with disabilities), and $75 million in new vouchers for veterans (HUD-VASH). The vast majority (90%) of TBRA funding is targeted toward Section 8 renewals.
- The Public Housing Operating Fund: increased 15% from the 2012 levels. The budget also includes proposals to allow public housing authorities to form consortia to administer public housing and the flexibility to use their operating and capital funds for eligible expenses under either. Operating funds can be used for routine maintenance, utilities, management, supportive services, security, and insurance.
- The Public Housing Capital Fund: increased 1% from the 2012 levels. The capital fund can be used for modernization, demolition, and replacement housing. The budget includes the ability to use the funds for emergency purposes resulting from non-presidentially declared disasters.
- The National Housing Trust Fund (NHTF): $1 billion in mandatory spending to finally capitalize the NHTF, authorized in 2008, but left unfunded. The NHTF, once funded, will provide communities with funds to build, preserve, and rehabilitate rental housing that is affordable for extremely and very low income households.
The bad news
The budget proposes funding decreases from the 2012 enacted levels for the following programs:
- The HOME Investments Partnership Program: decreased 5% from the 2012 levels, but since this program would now include $10 million for the Self-Help and Assisted Homeownership Opportunity Program (SHOP), it effectively cuts HOME funding by 7%.
- The Community Development Block Grants (CDBG): decreased 14% from 2012 levels. This was in part because HUD stated that CDBG funds are "not optimally targeted based on community need or used most effectively in many cases." HUD will seek input over the coming months to see how the formula funds can be better targeted.
- Low Income Housing Tax Credit: while not taking a cut, the administration did not request Congress to provide fixed rates to the tax credits which advocates have sought. Instead, a formula was proposed with a floating rate that would be somewhat higher than today's rates. This would cause uncertainty for investors and developers, and may stifle development or require states to fill gaps
What the budget boils down to
At least 90% of the increased funding in the budget request goes toward Section 8 contract renewals alone. On one hand, this means that a majority of voucher holders will not find themselves homeless, but it also means that there is not much funding left over to put toward expanding affordable housing opportunities to the millions of low income renters that still need safe, decent and affordable housing. Fortunately, the budget proposes funding for the National Housing Trust Fund, but it's up to advocates to persist until this becomes a reality.
What can you do?
Even though the NHTF is in the budget, there is fear that the Administration will not push hard for it; thus it is up to advocates to ensure that it is funded once and for all. One promising effort is the bill recently introduced by Rep. Keith Ellison that would modify the mortgage interest deduction and use the savings to fund affordable housing programs, including the NHTF. If you or your organization supports this measure, endorse it here.
The House and Senate Committees on Appropriations will soon decide how much funding each appropriations subcommittee will receive for 2014. The National Low Income Housing Coalition recently prepared a letter, addressed to the House and Senate chairs and ranking members of the appropriations committees, urging them to invest in the success of America's communities by increasing funding for the Transportation, Housing and Urban Development, and Related Agencies Subcommittee to the highest possible level in 2014.
Sign onto the letter to support increased housing funding in 2014.