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Preserving Low-Income Housing Assistance in Tight Budgetary Times

The Senate Appropriations Committee recently approved a funding bill for the Department of Housing and Urban Development (HUD) that’s a big improvement over the President’s 2013 budget, our new report explains.

The Senate bill provides much more adequate funding for the Housing Choice Voucher and Project-Based Rental Assistance programs, placing far fewer low-income families at risk of losing assistance next year.  Together, these programs help around 3.4 million families rent modest housing at an affordable cost.

The Senate bill also takes a more responsible approach to program reform.  It adopts important cost-saving measures, such as a change in voucher program rules that would save $200 million per year by targeting more vouchers to working-poor families.  (Vouchers for these families are less costly since they need less help affording housing.)  And it rejects cost-saving proposals that would unnecessarily harm vulnerable families — like the President’s proposal to raise rents sharply on 500,000 of the poorest HUD-assisted households.

The House should follow the Senate’s lead by prioritizing the renewal of rental assistance for vulnerable families in its HUD funding bill for 2013 and rejecting cost-saving measures that would harm low-income families.

Equally important, Congress should seize the opportunity to adopt more comprehensive reforms to make HUD rental assistance programs more efficient.  Funding for nondefense discretionary programs — a budget category that includes most low-income housing programs – will shrink by more than 15 percent over the next decade under the spending caps in last year’s Budget Control Act.  At the same time, the rental assistance programs face major cost pressures driven by rising rents in the private market, a multi-billion-dollar backlog of capital repair needs in public housing, and growing demands for rental assistance that far outstrip the supply.

Fortunately, a reform package based on many years of negotiation has gained bipartisan support.  The latest iteration is the Affordable Housing and Self-Sufficiency Improvement Act (AHSSIA), which the House Financial Services Committee is expected to consider on May 31.  It includes many useful cost-saving measures in the President’s budget as well as further steps to streamline program rules, support work among recipients of housing assistance, and give housing agencies more flexibility to develop and preserve affordable housing.

Altogether, AHSSIA would save more than $1.5 billion over the first five years.  It’s truly “must-pass” legislation for the future of HUD rental assistance.