Estimated Cuts in Federal Housing Assistance and Community Development Programs Due to Sequestration, 2013

Automatic, across-the-board funding cuts in most federal programs (or “sequestration”) had been scheduled to begin on January 2, but the “fiscal cliff” budget deal enacted by President Obama and Congress delayed these cuts until March 1, 2013.  The budget deal also reduced the amount to be sequestered in fiscal year 2013 by $24 billion, to $85 billion. 

For non-security discretionary programs — including nearly all housing assistance and community development programs — the revised sequestration will mean a funding reduction of 5.0 percent beginning on March 1, unless Congress acts to reverse the cuts.  Tables 1 and 2 below show our estimates, by state, of the likely impact of sequestration cuts on core housing assistance and community development programs in 2013. 

Methodological Notes

Our calculations are based on the sequestration amounts released by the Office of Management and Budget (OMB) on March 1.^[1]   They assume that each state’s share of funding from each program in 2013 will equal its share in 2012.  For public housing, we estimated state allocations in 2012 from actual allocations of capital and operating funds in 2011, as reported in Tables 18-28 and 18-30 of Analytical Perspectives, Budget of the United States Government, Fiscal Year 2013, as actual data for 2012 were not accessible.  For all other programs, actual 2012 allocations were used, as reported by HUD.  For HOPWA, state funding figures are FY 2012 formula allocations; competitive grant awards for FY 2012 would also be reduced under sequestration, but are not included here.  Figures for Homeless Assistance combine ESG formula allocations for FY 2012 and CoC grants for FY 2011.

To calculate the number of families that could lose Housing Choice Voucher assistance under sequestration, each state’s share of the estimated cut in renewal funding cut was assumed to be in proportion to its share of housing assistance payments in the first six months of 2012, as reported to HUD’s Voucher Management System (VMS).  To calculate the number of families potentially affected, the estimated funding cut for each state was divided by the projected average per-voucher cost in that state in 2013, which was derived from costs reported to VMS in 2012, adjusted by a CPI-based inflator.