Senior Policy Analyst
A rescission bill from House Majority Leader Kevin McCarthy would cut $38.8 million from the public housing capital fund, which helps more than 2 million seniors, people with disabilities, children, and other vulnerable people live in decent, safe, and sanitary housing. These funds also give public housing residents access to job training programs, which help raise their earnings. This rescission would reverse bipartisan congressional action in the 2018 government funding bill that wisely invested more than $800 million in new funding for these purposes, recognizing the program’s substantial unmet needs.
Public housing agencies (PHAs) use capital funds mainly for longer-term investments to maintain their housing stock. Due to the long-term nature of these investments and the considerable time needed to appropriately allocate the resources, federal law lets PHAs spend their annual appropriation over multiple years. The McCarthy proposal would rescind $23 million in unobligated funds, meant for renovations, that were appropriated from fiscal years 2015-2017. PHAs can still use at least $21.9 million of that $23 million to remediate mold, make units accessible to disabled families, improve heating and cooling systems, and similar purposes.
President Trump’s rescission proposal to Congress — which was the precursor to the McCarthy proposal — freezes some capital funds that the Department of Housing and Urban Development (HUD) had not yet awarded to PHAs. Congress should reject any rescissions to the public housing capital fund. HUD should award these funds to PHAs, and the PHAs should then be able to put them to use. (Funds already awarded to PHAs through HUD’s accounting system are unaffected by the rescission proposals.)
The effects of recapturing funds that HUD and PHAs could target for specific purposes — including for paying for major renovations under the Rental Assistance Demonstration program that the Administration strongly supports —— could be severe. The current level of public housing capital funding, even before the proposed rescission, is so inadequate that last October, 4 in 5 New York City Housing Authority residents went without heat for at least two days. Rescinding capital funds could make such hazardous situations more common.
The rescission bill undercuts the bipartisan agreement of just months ago by the House and Senate, which increased federal investments in our public housing infrastructure. Neither the Trump proposal nor the McCarthy bill provides a justification for this rescission, nor does either provide an alternate plan on how to address the significant backlog of capital needs among our public housing stock if these funds are rescinded. Even with these additional funds, that backlog is estimated to be well over $26 billion and grows each year.
While disinvesting in much-needed public housing repairs, the Trump proposal and McCarthy bill also cut $15 million in 2017 funding to extend, to additional PHAs, employment services for PHA residents through the Jobs Plus program — a voluntary program now operating in 24 PHAs that combines employment and training services, modified rent rules that let workers keep more of what they earn, and neighbor-to-neighbor conversations about available work opportunities. The Administration and Congress both have committed to expanding the availability of work-promoting initiatives — yet both rescission proposals would cut funds for this proven program that helps public housing residents find and keep jobs.
Policymakers often use rescissions to recapture federal funds that the government doesn’t need to spend for the purpose involved. That’s not true in this case. When they wrote the 2018 funding bill, policymakers rightfully determined that addressing our nation’s ailing public housing stock warranted significant investment. Rescinding these funds would undermine that decision and would have direct consequences on residents who need safe, decent housing.