President’s Budget Request Creates Grim Outlook for Low Income Housing

President’s Budget Request Creates Grim Outlook for Low Income Housing

WASHINGTON, D.C. – February 14, 2012 – (RealEstateRama) — President Barack Obama’s FY13 budget request, released today, struggles to keep housing programs funded at a basic level while relying on the lowest income Americans to bear part of the burden of deficit reduction.

The budget request, which contains a mix of deep cuts, flat funding, and troublesome policy recommendations, cuts deeply into a program that has been key to making decent housing available to nearly 1.2 million households. Called Project-Based Rental Assistance, this program makes it possible for tenants to pay an affordable rent in the private rental market. It is one of three of core HUD programs that serve the lowest income families and seniors.

To stay within the constraints on discretionary spending imposed by the Budget Control Act of 2011, HUD is proposing to enter into partial year contracts with two-thirds of the owners of these properties. “HUD has tried this budget gimmick before,” said Sheila Crowley, President of the National Low Income Housing Coalition, “and it wrecked havoc in the lives of hundreds of thousands of vulnerable people.”

Another problematic proposal is that the Administration wants to raise the minimum rents paid by the very poorest HUD-assisted households. According to HUD officials, raising the minimum rents from $25-$50 a month to at least $75 a month would provide a savings of $150 million, which is .003% of the total HUD budget.

“The Budget Control Act created spending limits that are so unworkable that the federal government is reduced to picking the pockets of the poorest of the poor.  It is Scrooge-like,” said Crowley.

While cuts to project-based assistance were met with criticism, advocates were pleased to see the National Housing Trust Fund is funded at $1 billion in the President’s request. The National Housing Trust Fund will, once capitalized, provide communities with funds to build, preserve, and rehabilitate rental homes that are affordable for extremely and very low income households,

Attention now turns to Congress, as the House and Senate craft their own budget proposals for FY13.

Budget Request Specifics

Administration request for major HUD programs serving extremely low income households:

  • Tenant Based Rental Assistance- $19.1 billion
  • Project Based Rental Assistance- $8.7 billion
  • Public Housing Operating- $4.5 billion
  • Public Housing Capital- $2 billion
  • Homeless Assistance- $2.2 billion

Administration request for HUD programs providing capital for affordable housing:

  • HOME- $1 billion
  • Section 811- $ 150 million
  • Section 202- $475 million

Administration request for rural rental housing:

  • Section 514- $26 million
  • Section 515- $0 (funding for preservation is included)
  • Section 516- $9 million
  • Section 521- $907 million

Administration request on the mandatory side of the budget for housing production for extremely low income households:

  • National Housing Trust Fund- $1 billion. (Funding for the NHTF is separate from the HUD appropriations process.)

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Established in 1974 by Cushing N. Dolbeare, the National Low Income Housing Coalition is dedicated solely to achieving socially just public policy that assures people with the lowest incomes in the United States have affordable and decent homes.

National Low Income Housing Coalition
727 15th Street NW, 6th Floor, Washington, D.C. 20005
202/662-1530; Fax 202/393-1973; ">www.nlihc.org

Contact:
Amy Clark, , 202.662.1530 x227

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NLIHC

The National Low Income Housing Coalition (NLIHC) is dedicated solely to achieving socially just public policy that assures people with the lowest incomes in the United States have affordable and decent homes.

The National Low Income Housing Coalition is dedicated solely to achieving socially just public policy that assures people with the lowest incomes in the United States have affordable and decent homes.

Contact:

Tel: 202/662-1530
Fax:  202/393-1973

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