Housing advocates hope a budget compromise just passed by Congress might finally put an end to their nightmare of relentless cuts to federal housing programs.
“There’s still a lot to be determined about how this money will be distributed, though certainly some of this will go into low-income housing,” says Doug Rice, senior policy analyst for the Center on Budget and Policy Priorities.
Once they return from the holidays, lawmakers will set to work writing new budgets for federal programs that no longer include the harsh spending cuts mandated by the Budget Control Act of 2011, also known as the sequester. However, it’s not clear exactly what balance of spending the Republican-controlled House of Representatives and the Democrat-controlled Senate will be able to agree to for particular housing programs. Some housing advocates are more optimistic than others.
“Presumably most housing programs may be able to avoid further cuts, but that so far is unclear,” says a statement from the Housing Assistance Council.
The House of Representatives approved the broad outline of the budget compromise by a 332-94 vote Dec. 12, despite protests by the most conservative lawmakers. The Senate passed the measure Wednesday, Dec. 18, with a 64-36 vote, in which nine Republicans joined all the Democrats, according to Politico.
The compromise would raise the amount the federal government spends in fiscal 2014 from $967 billion, the level set by the sequester, up to $1.012 trillion in 2014 and $1.014 trillion in fiscal 2015. “That’s enough money to restore funding to the pre-sequestration 2013 level,” says Rice.
Senate and House appropriation Chairs Sen. Barbara Mikulski (D-Md.) and Rep. Harold Rogers (R-Ky.) will take up the job of restoring funding to certain programs, including federal housing programs hurt by the sequester. “Funding levels for Department of Housing and Urban Development (HUD) programs could be determined by the end of the year,” according to a statement from the National Low Income Housing Coalition.
There’s lots of room for disagreement on those funding levels. For example, project-based rental assistance received $9.3 billion in the budget for fiscal 2013 enacted by Congress. But because of the sequester, the program received only $8.9 billion. Earlier this year, House Republicans proposed increasing the program to $9.5 billion—that’s unusual, conservatives in the House proposed cutting most HUD programs. But the Senate proposed more than a billion dollars more than the House: $10.8 billion.
“Sec. 8 Housing will not likely receive the full 12-month funding it needs,” says Bob Moss, principal and national director of governmental affairs, for accounting and consulting firm CohnReznick.
The House and Senate also have deep differences in their proposals for HUD programs like Choice Neighborhoods, the Public Housing Capital Fund, and Community Development Block Grants.
A fresh budget would probably include some commonsense changes that have strong bipartisan support, but have been held up by years of legislative gridlock. For example, there’s bipartisan consensus that very low-income seniors who receive HUD Sec. 8 rental subsidy should no longer have to re-certify their income every year, says Rice. Once every three years should be enough.
It’s also positive that the budget compromise would avoid another government shutdown. Bruising battles over the budget have added some chaos and uncertainty to the process of running federal housing programs. For example, during the October shutdown, the Federal Housing Administration and Rural Development both ran out of credit authority needed by their loan programs, delaying the closing of many loans to multifamily properties.