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House HUD Funding Bill Has Bright Spots But Falls Short

May 18, 2018 at 2:45 PM

A House subcommittee approved a fiscal year 2019 appropriations bill this week for the Department of Housing and Urban Development (HUD) that rejects President Trump’s proposed deep cuts and provides additional resources for core rental assistance programs in HUD’s very tight budget. Unfortunately, it doesn’t fully fund the renewal of housing vouchers and other rental assistance now in use, thus largely offsetting its important advances in several areas.

The bill authorizes an innovative mobility demonstration to help more children in families with vouchers grow up in neighborhoods with quality schools and other opportunities. That can significantly improve their chances of succeeding in school and as adults, research shows.

It also includes $335 million for new vouchers for an estimated 5,000 homeless veterans, 32,000 people with disabilities, and 2,000 families with children (the last of which is tied to the mobility demonstration).

But these new vouchers wouldn’t offset the likely decline in the number of households assisted due to the bill’s inadequate funding for renewing existing rental assistance for millions of seniors, families, and others.

At first glance, the bill appears to increase HUD’s budget by $941 million, to $43.6 billion for 2019. But more than half of the added funds simply plug a hole created by an expected decline in premiums that HUD will collect from mortgage insurance issued next year. As a result, only $440 million of the increase will go to HUD programs, and HUD program funding will thus rise by less than 1 percent in 2019. That’s far less than rental market inflation, and well below the overall increase in non-defense discretionary funding under the bipartisan budget deal enacted earlier this year.

To the subcommittee’s credit, it allocated the additional $440 million to major rental assistance programs — particularly the two largest, the Housing Choice Voucher and Section 8 Project-Based Rental Assistance programs — to cover the rising cost of renewing existing aid. (These programs’ costs are closely tied to private market rents, which have risen more than 3 percent a year in recent years, a trend that will likely continue in 2019.) The bill also provides $2.75 billion to make badly needed repairs to public housing, equal to the 2018 level but well above those of recent years.

But even with the increased funds, the bill would likely fail to fully renew rental assistance next year. Its $20.1 billion for renew existing vouchers is about 2.6 percent above the 2018 level, for instance, but with rents rising by more than 3 percent and an estimated 38,000 more vouchers needing renewal in 2019 than in 2018, the bill would leave nearly 50,000 vouchers now in use without funds next year, we estimate. These losses would more than offset the bill’s expansion of rental aid.

When the Senate subcommittee considers its bill, likely early next month, it should support the House bill’s mobility demonstration and expand rental assistance, particularly for families with children. But it should also fully renew the existing rental assistance that seniors, families, and others rely on to make ends meet and avoid homelessness.

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