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Will House Avert Cuts in Rental Aid?

July 10, 2017 at 4:15 PM

When a House subcommittee considers the 2018 funding bill for the departments of Transportation and Housing and Urban Development (HUD) tomorrow evening, a key question will be: will it sustain the rental aid that now enables 4.8 million low-income households — nearly all of which include seniors, people with disabilities, or children — to afford decent, stable homes?

To its credit, the House appears poised to reject President Trump’s proposed deep cuts in non-defense discretionary (NDD) programs for 2018, including his draconian HUD cuts. Still, the House apparently has agreed to cut NDD funding below the level required under the 2011 Budget Control Act, which has already forced deep cuts in housing and other programs over the past seven years.

In addition, the cost of renewing HUD rental aid will rise in 2018, even as House policymakers have fewer dollars to allocate across NDD programs. To renew all of the Housing Choice Vouchers that 2.2 million families are now using, for example, would require an estimated $19.9 billion in 2018, or $1.6 billion more than policymakers provided to renew those vouchers in 2017. Total voucher program funding, including administrative expenses, would have to grow to $21.8 billion.

The reasons for these higher costs are straightforward. Housing vouchers are effective in helping families afford rent only if they keep pace with rental costs in the private market. To meet this goal, we estimate that voucher subsidies must rise 3.5 percent in 2018, slightly less than the 4 percent that HUD says will be required in 2017.

In addition, the number of vouchers to be renewed will grow modestly next year as some vouchers authorized in the past several years — including those aimed at helping homeless veterans or preserving public housing units under the successful Rental Assistance Demonstration — will need renewal funding for the first time in 2018. These added vouchers will increase renewal costs by another 1.4 percent, we estimate.

At the aforementioned $21.8 billion, funding for 2018 would still be 3 percent below the 2010 level, adjusted for rent and utility cost inflation.

If policymakers don’t provide sufficient funds to renew housing vouchers, fewer families will receive needed help and more will experience hardship and homelessness. About half of the households that the program serves include seniors or people with disabilities; most of the rest are poor working families with children.

HUD’s other rental assistance programs face similar pressures. To keep assisting as many households in 2018 as in 2017, policymakers will have to raise funding for these programs (including vouchers) by more than $2 billion, we estimate.

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