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Senate Bill Restores Some Public Housing Funds, but Still Makes Damaging Cuts

As I have written, a House subcommittee this month passed deep cuts to public housing that would expose low-income residents to deteriorating living conditions and raise federal costs in the long run by putting off energy efficiency improvements and other cost-effective investments.  The people who would be harmed are some of the nation’s most vulnerable. Most public housing residents have incomes below the poverty line, and close to two-thirds of public housing units house someone who is elderly or has a disability.

Fortunately, the Senate Appropriations Committee has since passed legislation that would ameliorate the worst of these consequences by restoring $560 million of the $1.4 billion the House bill cut.  It also includes important policy improvements that would let agencies use reserves accumulated by managing public housing efficiently to renovate developments, and test a HUD proposal — the Rental Assistance Demonstration (RAD) — to switch some developments to more reliable, sustainable subsidies.   As we’ve written, RAD (previously called Transforming Rental Assistance, or TRA), is an important innovation that would make it easier for local agencies to leverage private investment to rehabilitate public housing.  (We have some concerns about the specifics of the Senate bill’s RAD provision, which we’ll explain in a future post.)

But the Senate bill still deeply underfunds public housing.  Its $1.88 billion in public housing capital funding is $165 million below last year’s level and would not cover the annual increase in the renovation and repairs needed in developments.  And the bill only provides 80 percent of the operating subsidies for which local housing agencies are expected to be eligible in 2012.  This level of funding will ultimately lead to crumbling buildings, unsafe conditions for residents, and higher federal costs down the road.

This year’s Budget Control Act requires an overall cut of about 5 percent in fiscal 2012 non-security discretionary funding.  But appropriators could allocate it in a way that reflects the principle (laid out by the Bowles-Simpson fiscal commission and other groups) that the burden of deficit reduction should not fall on vulnerable low-income people.  The Senate bill’s 12 percent cut to public housing — though far less harsh than the House bill’s 20 percent cut  — does not meet this standard and instead puts a disproportionate burden on the people who rely on public housing for their homes.