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Appropriations Bills Prioritize Rental Assistance, Though House Bill Makes Sharp Cuts

The House and Senate bills funding Department of Housing and Urban Development (HUD) programs for 2024 take different approaches to dealing with tight spending caps. While both bills increase funding for rental assistance in recognition of rising rent costs in the program, they provide less funding than may be needed to keep the number of families receiving rental assistance from falling — though the Senate funding level comes closer to meeting this goal than the House. Insufficient resources for these programs would result in increases in homelessness and evictions.

And the House bill makes other cuts below 2023 levels to important housing programs that would cause additional harm because the House Republican appropriators are providing less funding overall than was included in the debt ceiling agreement. Additionally, both bills include some helpful funding increases and different troubling policy changes to housing programs.

As Congress continues the appropriations process for 2024, it should prioritize providing enough funding to avoid cuts in rental assistance programs and remove harmful provisions from both proposals.

Funding for Housing Assistance in the House and Senate Bills

The spending caps negotiated as part of the debt ceiling deal — combined with increases in rental costs — creates challenges for Congress to provide enough federal rental assistance funding to serve the same number of families as in 2023. Congress has in most years prioritized maintaining housing vouchers and other rental assistance in the HUD funding bill, even when overall funding has been tight and Congress has been divided.

The House imposed even stricter caps for non-defense discretionary funding than the debt ceiling deal set. Within these limits, the House bill does increase funding over 2023 levels for Housing Choice Vouchers and Project-Based Rental Assistance (PBRA), two of the largest federal rental assistance programs.

But the additional rental assistance funding would not be enough to cover rising rental costs and maintain current levels of assistance, according to HUD budget estimates. Under the bill’s levels, tens of thousands fewer families would get vouchers, which are our most effective tool to address homelessness and housing instability. The proposal also provides zero new vouchers, including those serving veterans and foster youth, and cuts resources for housing agencies to administer the voucher program. The House also cuts funding for public housing below 2023 levels, continuing a long pattern of disinvestment in this important source of affordable housing, and risking the loss of affordable units to disrepair.

The Senate bipartisan bill uses the negotiated budget cap. As a result, it gets much closer to, though still falls short of, HUD’s estimated needs for housing vouchers, PBRA, and public housing. (Additional voucher funding above the HUD estimate could be needed to cover recent rent increases.) The Senate proposal further supports the voucher program by increasing resources to cover housing agencies’ administrative costs and funding an estimated 4,000 new vouchers for veterans and youth exiting foster care.

The Senate also includes a small but important demonstration to test whether using voucher subsidy funds to cover tenants’ security and utility deposits helps households use their vouchers more easily in high-cost, low-vacancy rental markets. Another provision lets HUD give housing agencies additional flexibilities in their administration of population-specific vouchers for people with disabilities and foster youth, acknowledging the barriers these households face and making it easier for them to use their voucher to secure safe, affordable homes.

Both bills include an additional important funding increase for the Native American Housing Block Grant. The House proposes providing an additional $324 million over 2023 levels for the program, and the Senate includes an increase of $61.6 million. This program provides a flexible pot of funding to tribal governments (or tribally designated housing entities) for affordable housing initiatives that serve American Indians and Alaska Natives with low incomes who live in tribal areas (a similar program helps eligible Native Hawaiians with low incomes live on their homelands).

Funding for the program has remained relatively flat since its inception in 1998, so funding boosts can help make up for decreases in purchasing power over the years and help tribes build desperately needed new housing, repair existing homes, and continue important rental and homeownership assistance programs. The proposed increase in the House bill would almost make up for the purchasing power lost to inflation, unlike the Senate’s more modest increase.

House Bill Cuts Other Important Housing Investments

The House bill also cuts other programs, some of them drastically. This includes cutting the HOME Investment Partnership program, which funds affordable housing development and rehabilitation, by $1 billion (67 percent) compared to 2023. The bill also eliminates the Choice Neighborhoods Program, which is needed to revitalize public and affordable housing and the surrounding neighborhoods that have long been denied resources due to redlining and other discriminatory policies.

The House also proposed rescinding $25 billion that the IRS needs to make wealthy tax cheats pay the taxes they legally owe and modernize its systems — a step that would add to the deficit by cutting revenues and goes beyond the IRS rescissions agreed to in the debt ceiling deal.

In contrast, the Senate made more modest cuts, with the largest nominal reduction in project-specific funding (sometimes referred to as earmarks).

Both Bills Include (Different) Harmful Policy Changes

Unfortunately, both proposals include harmful provisions that should not be in a final bill. The House bill attempts to block HUD from finalizing its Affirmatively Furthering Fair Housing rule, which provides guidance to HUD-funded entities on how they can adhere to the Fair Housing Act of 1968’s mandate to proactively combat discrimination in housing and community development policies. HUD released a proposed rule in January 2023, and the final rule will be a critical tool for creating more equitable communities.

The Senate bill includes a provision directing HUD to extend and make no changes to agreements governing 39 state and local agencies’ participation in the Moving-to-Work (MTW) initiative. MTW allows certain agencies to operate outside of nearly all federal protections that govern the public housing and housing voucher programs.

Some of the 39 agencies are well-run organizations that have applied MTW flexibility in useful ways, but all the agreements include flawed provisions. For example, many of the covered agencies receive more funding at the expense of all other agencies that administer public housing and vouchers, accumulate large reserves of unspent voucher funds, and provide rental assistance to many fewer families than they could with available funds. The current MTW agreements don’t expire until 2028, so there is no urgency to renew them. Congress should not require HUD to extend the agreements without reforms to address these issues.