off the charts

Tens of Thousands Could Lose Housing Assistance Under Proposed Funding Cuts

Housing vouchers for tens of thousands — possibly close to half a million — low-income families could be eliminated under recent proposals to cut overall domestic funding. About 2 million low-income families use vouchers to cover part of the cost of renting modest apartments in the private market. The great majority of these households are poor; about one-third are headed by elderly people or people with disabilities. (Our primer has more on the voucher program.) Earlier this year, the full House and the Senate Appropriations Committee approved separate bills that would provide enough funding for fiscal year 2011 (which started October 1) to renew all vouchers now in use, according to our analysis. But Congress hasn’t approved any final funding bills for the fiscal year and, in the meantime, proposals to make deep cuts in overall funding for non-defense programs have gained momentum. Here’s a breakdown of what could happen to voucher funding under three plausible scenarios:
  • “Omnibus” spending bill could mean loss of vouchers for 38,000 families. If Congress approves an omnibus spending bill before the end of December, overall funding for discretionary programs is likely to be reduced at least to the level proposed by Senators Sessions and McCaskill earlier this year. If the reductions were spread evenly across nondefense discretionary programs, renewal funding for 38,000 vouchers would be eliminated.
  • Long-term funding resolution could mean loss of vouchers for 100,000 families. If Congress can’t agree on an omnibus appropriations bill, it could approve a resolution to continue to fund federal agencies at 2010 levels (without adjusting for inflation) through the rest of the fiscal year. Such a “continuing resolution” would eliminate funding for 100,000 vouchers. (The number is so large in part because Congress has funded new vouchers for homeless veterans, people with disabilities, and other vulnerable populations in recent years, and a large share of these vouchers must be renewed for the first time in 2011.)
  • Short-term funding resolution could mean loss of vouchers for 475,000 families. Congress could leave final decisions to the next Congress by approving a temporary resolution to fund federal agencies at 2010 levels through early next year. Under this scenario, the new House would almost certainly make major changes to most funding bills, and it likely would use as a starting point the September proposal by House Speaker-elect John Boehner to cut overall funding for nondefense discretionary programs by $101 billion. If such a deep cut were spread evenly across programs, the loss of voucher renewal funding would eliminate 475,000 vouchers.
The chart below compares the potential voucher loss under these three scenarios.
Nothing in the proposals requires Congress to distribute the funding cuts uniformly across non-defense discretionary domestic programs but, if Congress chose to protect vouchers and other programs assisting vulnerable people from cuts, it would have to make even deeper cuts elsewhere. If Congress didn’t protect the voucher program from cuts, then even under the most favorable of the three scenarios, many local housing agencies would be forced to terminate rental assistance for thousands of families, reduce further the number of families they assist through attrition, and take actions that raise rents sharply on low-income tenants. Some agencies would be able to offset part of the funding reduction by drawing down their own reserves, but many agencies have few or no reserves on which they can rely. Even today, only a fraction of low-income families eligible for housing assistance receive it due to — and the need for assistance is rising sharply. Since 2007, when the economy began to weaken, the number of poor families struggling to pay rental housing costs that exceed half of their income has increased by 800,000. (The federal government considers housing unaffordable if it exceeds 30 percent of a household’s income.) Large cuts in vouchers would only worsen the shortage of affordable housing, while hurting local economies and housing markets.