House T-HUD Subcommittee Decreases HUD Funding for FY2012

(from Memo To Members of the National Low Income Housing Coalition) The U.S. House of Representatives proceeded with its appropriations work during its first week back after Labor Day. The Transportation, Housing and Urban Development, and Related Agencies (T-HUD) Appropriations Subcommittee released its draft FY12 bill on September 7, followed quickly by a mark-up on September 8. The subcommittee's T-HUD overall bill will cost $55.15 billion. The total for HUD and the Related Agency, the Interagency Council on Homelessness in the bill is $38.1 billion.

The bill, which does not yet have a number, would cut some HUD programs deeply, particularly public housing programs; maintain funding for other programs at the FY11 levels; and provide small increases to a few programs. Several amendments were offered at the markup to restore HUD funds cut in the draft bill, but none passed.

Public housing accounts would be cut significantly. The Public Housing Capital fund set at $1.53 billion is 36% below the President's FY12 request and 25% below the FY11 level. This is almost $1 billion below the FY10 level. Cuts of this magnitude mean public housing agencies (PHAs) will not be able to maintain current units and may have to take units offline, making them unavailable to households on waiting lists.

The Resident Opportunity and Supportive Services (ROSS) program, a set-aside within the Capital Fund, was not included in the bill, consistent with the President's request. NLIHC advocated for continued funding of the ROSS program, which offers valuable resources for residents of public housing.

During the markup, Subcommittee Ranking Member John Olver (D-MA) offered an amendment to restore funding to the Public Housing Capital Fund. Mr. Olver's amendment failed with only the Democratic members of the subcommittee voting in favor.

The Public Housing Operating Fund would be funded at $3.86 billion, 3% below the $3.96 billion requested by the Administration and $755 million, or 16%, below the FY11 level. The Administration requested an amount $1 billion below the operating formula level and proposed that PHAs with excess reserves (amounts determined by HUD to be more than necessary to hold in reserve) use those reserves to make up the difference in operating cost in FY12.

Funding for the HOPE VI program would be eliminated by the subcommittee bill. This includes funding for the Choice Neighborhoods Initiative, a set-aside within HOPE VI. The program was funded at just under $100 million in FY11. Representative David Price (D-NC) offered an amendment to restore funding to the HOPE VI program, which also failed along party lines.

The bill does provide sufficient funding to maintain assistance for households currently assisted through Section 8. The Tenant Based Rental Assistance (TBRA) program would receive $18.5 billion, with $17 billion allocated to contract renewals. The contract renewal figure is $100 million below the President's requested amount, but $375 million more than the FY11 figure. The bill would provide $75 million for Tenant Protection Vouchers, consistent with the Administration's budget, which was $35 million below the FY11 funding level. The subcommittee would provide funding for new Veterans Affairs Supported Housing (VASH) vouchers at the FY10 level of $75 million. In FY11, less than $50 million was provided for new VASH vouchers.

Fees for administering the TBRA program would be cut below the President's request by $548 million, or 33%, and below the FY11 level by $347, or 24%. The bill proposes a funding level of $1.1 billion compared to the President's requested $1.6 billion and the FY11 level of $1.4 billion. Cuts to administration fees could impede PHAs' ability to issue vouchers in a timely and effective manner, which could result in vouchers lost by attrition.

The subcommittee bill would fund Section 8 Project-Based Rental Assistance at $9.4 million, level with the President's request and 2%, or $171 million, over the FY11 funding level.

Several programs would receive level funding despite the Administration requesting higher funding levels. Homeless Assistance Grants are allocated $1.9 billion, level with FY11, and an increase over FY10. The Community Development Fund would receive $3.5 billion, all of which is allocated to the Community Development Block Grants. The Housing Opportunities for Persons with AIDS program is set at $334 million. The Healthy Homes and Lead Hazard Control program once again received just under $120 million. The Native American Housing Block Grants received level funding of $649 million. HUD's Policy Development and Research line item received $47.9 million.

The HOME Investment Partnership program would be funded at $1.2 billion, 27% below the President's request and 25% below the FY11 level. Other programs that were cut include Fair Housing and Equal Opportunity, funded at $50 million, a 31% cut below the President's request and a 30% cut below FY11; and the Self-Help Homeownership Opportunity Program, cut by $11 billion below FY11 and not funded in the Administration's FY12 budget. Funding for the Native Hawaiian Housing Block Grant program was eliminated in the House bill.

Funding for the Housing Counseling program, eliminated in FY11, would not be restored in the subcommittee bill. Mr. Price also offered an amendment to restore funding to the Housing Counseling Program. Subcommittee Chair Tom Latham (R-IA) spoke against the amendment, saying that HUD has been unable to provide the subcommittee with sufficient justification for the number of HUD staff required to manage the program. Mr. Latham also cited the funding included in the bill for NeighborWorks for some types of housing counseling services as a reason to not fund Housing Counseling. Mr. Olver also commented on management challenges of the Housing Counseling program, saying that the program may have been managed more effectively when it was a set-aside in HOME.

Representative Marcy Kaptur (D-OH) spoke in support of the amendment, noting that cutting counseling services was not a message that the subcommittee wanted to send when there are still many homeowners threatened with foreclosure. After lengthy discussion of the merits of the program, Chair Latham suggested that Mr. Price withdraw the amendment and seek more data and information from HUD to present to the full Appropriations Committee if it holds a markup of the bill. Mr. Price withdrew his amendment.

The subcommittee bill included two increases to programs cut in FY11. The Section 202 Housing for the Elderly program would be funded at $600 million, $201 million, or 50%, above FY11 funding. This would still represent a $157 million, or 21%, decrease from the Administration's FY12 request and a $225 million decrease from FY10 funding. The Section 811 Housing for People with Disabilities program receives a boost over its FY11 and FY10 funding levels. The program would receive $310 million with funds split between two accounts. Section 811 Mainstream Vouchers in the TBRA account would be funded at $114 million and the Section 811 account would receive $196 million.

The draft subcommittee bill included no funding for the Interagency Council on Homelessness (ICH) as a Related Agency. Ms. Kaptur offered an amendment to restore funding to ICH. Chair Latham offered an amendment to Ms. Kaptur's amendment that would use funds from HUD's working capital fund to restore ICH funding. Mr. Latham's support for the program brought about a unanimous vote in favor of his amendment as well as a unanimous vote in favor of Ms. Kaptur's amendment. ICH funding is restored in bill reported out by the subcommittee.

The subcommittee agreed to the bill by a voice vote. The full House Committee on Appropriations may or may not take up the bill. House leadership has said that it will not bring any more spending bills to the House floor individually this year. Instead, the T-HUD bill may be passed as part of an omnibus appropriations bill.

With the end of the fiscal year fast approaching and Congress once again failing to complete the next year's appropriation, Congress must pass a Continuing Resolution (CR) to avoid a government shutdown. The House is expected to propose a short-term CR during the week of September 19 that will provide funding for around one month past the October 1 start of the fiscal year.

View the House T-HUD subcommittee draft bill, summary and tables: http://appropriations.house.gov/News/DocumentSingle.aspx?DocumentID=259012