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It could be that death by a thousand cuts will be the best description for Congress’ treatment of federal housing programs. The budget compromise for FY 2011 reached at the eleventh hour last Friday averted a government shutdown, but these reductions leave a number of housing programs severely hobbled.

In addition to the FY 2011 cuts, negotiations between the president and Congress over the 2012 budget and an increase in the federal debt ceiling are likely to lead to even deeper reductions for next year. A new proposal might come as early as tomorrow, when Obama will lay out a plan to reduce the federal deficit.

The shutdown-avoiding agreement for FY 2011 reduces HUD programs by a whopping $2.13 billion and USDA housing efforts by $185 million. These reductions are part of $38 billion in cuts to non-defense discretionary programs agreed to by Congressional leaders and the President. The agreement is headed for a vote this week.

According to National Low Income Housing Coalition (NLIHC), all discretionary programs are reduced by 0.2 percent. In addition, many programs are cut by more. Only one HUD program sees a budget increase: the McKinney Vento Homeless Assistance Grants.  This budget line was increased by $40 million above FY 2010 funding levels.

MHP will continue to monitor the implications for Minnesota of these and other changes in federal housing programs as the budget clashes continue.

Major Reductions to HUD Programs (and dollar reduction and percentage cut from 2010 funding available) Source: NLIHC

Programs that have been totally defunded

  • Family Unification vouchers (-$15 million, -100%)
  • Rural innovation fund (-$25 million, -100%)
  • Economic Development Initiative Grants (-$173 million, -100%)
  • Brownfields Redevelopment (-$18 million, -100%)
  • Energy Innovation Fund (-$50 million, -100%)
  • Housing Counseling Assistance (-$87.5 million, -100%)

Programs losing 50 to 100 percent of funding

  • Housing for the Elderly, Section 202 (-$426 million, -51.6%)
  • Housing for People with Disabilities, Section 811 (-$150 million, -50.1%)

Programs losing 10 to 50 percent of funding

  • Veterans Supportive Housing Vouchers (-$25 million, -33.5%)
  • Sustainable Communities Initiative (-$50 million, -33.5%)
  • HOPE VI, public housing (-$35 million, -26.1%)
  • Public Housing Capital Funding (-$460 million, -18.4%)
  • CDBG Formula Grants (-$654 million, -16.4%)
  • Healthy Homes and Lead Hazard Control (-$20 million, -14.5%)
  • HOME Formula Grants (-$218 million, -12%)

(USDA cuts include $24 million to the Rental Assistance Program, and $151 million to the Rural Housing Insurance Fund.)