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With Budget Deal, Congress Can Reverse Recent Housing Voucher Losses

Policymakers’ recent bipartisan budget deal eliminates the risk of deep federal budget cuts in fiscal year 2020 and paves the way for Congress to provide more funding for key priorities. One priority should be the Housing Choice Voucher program, which due in part to repeated funding delays is now assisting tens of thousands fewer low-income families than it did two years ago.

Housing vouchers are highly effective, helping more than 5 million people — most of whom are children, seniors, or people with disabilities — in more than 2 million low-income households pay the rent and make ends meet. This assistance is critical at a time when a near-record 8.3 million renter households with very low incomes either pay more than half their income for rent or live in severely substandard housing, and only 1 in 4 eligible households receives assistance due to funding limitations.

Unfortunately, the voucher program is now assisting fewer low-income families than it did in 2017 in part because of funding delays caused by policymakers’ recent battles over the discretionary budget. Policymakers delayed final funding decisions well beyond the October 1 start of the fiscal year in 2017, 2018, and 2019, when the President didn’t sign the final bills into law until the following May, March, and February, respectively. When that happens, the state and local housing agencies that administer vouchers must make difficult decisions about how many vouchers to renew amid rising rental costs and deep uncertainty about their final program budgets. Many react cautiously by reissuing fewer vouchers when families leave the program, thereby reducing the number of households that the program assists while they await policymakers’ final decisions. This reaction, while understandable, worsens the problem: serving fewer families in one year also reduces agencies’ funding eligibility in the next year because eligibility for most agencies is based on voucher usage and costs in the prior year.

In addition, Congress failed to anticipate a jump in program costs in 2017, which caused funding shortfalls at housing agencies across the country. This has all created a downward spiral in the voucher program, as the number of households using housing vouchers fell by 50,000 from March 2017 to September 2018. (See figure.)

To reverse this trend, Congress must approve, in a timely fashion, a final appropriation bill that sets adequate voucher program funding levels for 2020. That would reassure housing agencies that if they use the funds that Congress provided for 2019 to restore vouchers to families that need them, thereby beginning to reverse the recent losses, sufficient funds will be available to continue that assistance next year.

The House took a strong first step to reverse the decline in June by approving a bill that includes $23.8 billion for the program, a $1.2 billion increase over 2019. Any Senate bill should at minimum match these funding levels, which we estimate would be sufficient to renew all vouchers that families will likely use this year while providing vouchers for an additional 9,000 households: 4,500 homeless veterans and 4,500 families and youth that are homeless or living in areas of concentrated poverty (and participating in a promising mobility demonstration that the House bill also funds), or that child welfare agencies have identified as being at risk. Another House bill provision worth including would authorize the Department of Housing and Urban Development to provide modest additional funds to housing agencies that are now serving fewer families because of the recent funding disruptions, which would help them restore housing vouchers to needy families on their waiting lists.

Taken together, these provisions would help reverse the recent loss of housing vouchers and enable more families, including veterans, to secure decent, stable housing. While the housing voucher program is not the only area in which Congress should boost funding — the House bill also includes important investments in the public housing, homeless assistance grant, and Family Self-Sufficiency programs, for instance — it should certainly be a high priority.