Senate HUD Funding Bill a Huge Improvement Over House Bill, But Concerns Remain

Before leaving for August recess, the Senate Appropriations Committee approved a 2018 funding bill for the Departments of Transportation and of Housing and Urban Development (HUD) that includes a substantial increase for rental assistance for low-income households. Yet the increase may not be enough to keep pace with rising rents in the largest rental assistance program — Housing Choice Vouchers — and tens of thousands fewer families could have stable homes as a result.

The Senate bill is a huge improvement over President Trump’s budget, as well as the bill that the House Appropriations Committee approved on July 21. The Senate bill provides $45.5 billion for HUD programs in 2018, $1.9 billion more than in 2017. The added funding would go primarily to renewing rental assistance, where costs rise every year due to rising private-market rents and other factors. The bill includes increases of $1 billion to renew Housing Choice Vouchers, $691 million for Section 8 project-based rental assistance, and $100 million for public housing operations. It has smaller increases for homeless assistance grants and the Section 202 and 811 rental assistance programs for the elderly and people with disabilities.

The bill would also take modest steps towards reducing homelessness by providing $40 million for about 5,000 new VASH (Veterans Affairs Supportive Housing) vouchers for homeless veterans, and $55 million for HUD’s homeless youth initiative. In addition, it includes $20 million to provide Family Unification housing vouchers to about 2,400 families with children that are in (or risk being placed into) foster care or to youth aging out of foster care, as well as funding for roughly 1,500 new vouchers to help non-elderly people with disabilities live in communities of their choice. Funding for most other HUD programs would stay at roughly 2017 levels.

Like the House committee, the Senate committee rejected the Administration’s harmful changes in rent policy<, explaining in its report that it “is unfortunate that the Department is seeking to achieve much of its cost-savings on the backs [of] its tenant population, a significant portion of which is elderly or disabled.”

Given the continuing squeeze on overall non-defense appropriations, the Senate bill reflects a strong commitment to the nearly 5 million households — mostly seniors, people with disabilities, and families with children — that use HUD rental assistance to help pay the rent and make ends meet.

Still, the bill’s funding for Housing Choice Vouchers may not be adequate to renew all vouchers now in use. The bill’s $19.4 billion for voucher renewals is 2.4 percent above the 2017 cost of renewing all vouchers in use, according to HUD’s estimate. But we estimate that another $550 million above the Senate level will likely be needed, after adjusting for expected rental cost inflation (which recent data suggest is rising at well over 3 percent per year) as well as the cost of new vouchers that policymakers recently funded and must be renewed for the first time in 2018.

Before completing a final 2018 funding bill this fall, policymakers should reassess voucher renewal funding requirements in light of updated program cost data and adjust voucher funding to renew every voucher that a low-income family is using this year.