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Trump’s Proposed Cuts Risk Slashing Rental Aid

We’ve explained that if President Trump’s proposed $54 billion cut to non-defense discretionary (NDD) spending excludes veterans’ health care and homeland security, as seems likely, other NDD programs would shrink by 15 percent next year even before adjusting for inflation.  The Administration hasn’t said where it would cut, but one thing is clear: if it doesn’t shield the Department of Housing and Urban Development (HUD) from an average 15 percent cut, the cuts will fall hard on low-income households struggling to pay the rent.  It’s mathematically impossible to cut 15 percent from the HUD budget without massive cuts to rental assistance, wholesale elimination of other HUD programs, or both. 

If a 15 percent cut were applied evenly across HUD programs in 2018, 625,000 households would lose the vouchers or other “Section 8” assistance that helps them to live in private apartments at an affordable rent, and as many as 200,000 other households could lose public housing or other rental assistance.  (These estimates reflect expected increases in rental costs next year.)  The vast majority of these cuts would fall on seniors, people with disabilities, or families with children, putting many at risk of eviction and even homelessness.

The Administration could try to limit rental assistance cuts by making deeper cuts elsewhere in the HUD budget, but the options are extremely limited.  Rental assistance makes up 85 percent of the HUD budget (see chart), so a 15 percent cut would amount to $7.1 billion — or roughly HUD’s entire budget outside of rental assistance

Even keeping funding for HUD programs at their 2017 levels next year would cause the loss of housing vouchers for 100,000 families due to rising rents and other factors.  (We’re facing a similar situation this year, as we explained in a recent paper.)  Rental assistance programs will need additional funding in 2018 just to sustain assistance to the seniors, people with disabilities, and families currently receiving it. 

Moreover, any program cuts would come on top of the sizeable cuts in recent years.  Public housing funding fell by 21 percent between 2010 and 2016 after adjusting for inflation, for example, while HOME funding fell by 52 percent).  And they would worsen the severe and growing shortage of federal rental assistance.  Three out of four low-income households that struggle to pay rent receive no assistance due to funding limitations.