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Affordable Housing , Community Development , Federal News , Supportive Housing

House Panel Proposes Cuts in HUD Funding

13 September 2011

The House Transportation, Housing and Urban Development, and Related Agencies (T-HUD) Appropriations Subcommittee voted on September 8 to deeply cut the U.S. Department of Housing and Urban Development’s (HUD) Fiscal Year 2012 budget, including cuts to many affordable housing and homelessness prevention programs.

Significantly, the bill eliminates funding for the HOPE VI program, including the Choice Neighborhoods Initiative, and proposes deep cuts for public housing programs, according to the National Low Income Housing Coalition (NLIHC). Although it increases funding for Tenant Based Rental Assistance by $375 million more than FY11, that figure is $100 million below the President’s request and is still not enough to renew all current vouchers. According to the Center for Budget and Policy Priorities (CBPP), 42,000 households currently served by the housing choice voucher program would lose their housing subsidy in FY12.

According to a CBPP report, the proposed cuts to Public Housing funding, if enacted, would amount to $1.4 billion, or 20 percent, below the 2011 level. Due to previous years’ budget cuts, this number is 40 percent below 2001 funding levels in inflation-adjusted terms. CBPP reports that the proposed funding level would cover less than half of the $3.4 billion in new repair and renovation needs that accumulate in public housing each year, failing to account for a nearly $26 billion backlog of unmet repair and renovation needs.

In addition, CBPP’s analysis indicates these proposed changes would amount to a greater financial responsibility for the federal government. Public Housing Agencies would be forced to cancel minor or routine repairs, leading to major deterioration that will be more expensive to repair in the long run. The proposed cuts would also, if passed, result in a loss of construction jobs, increased risk of neighborhood blight, decline in the number of units available to families on waiting lists, deteriorating living conditions and increased risk of safety hazards for current residents, and the loss of entire housing developments.

The bill would also prohibit public housing operating funding going to federal public housing units that were formerly state public housing units converted by using funds provided by the American Recovery and Reinvestment Act (ARRA), according to NLIHC. According HUD, 439 units in Connecticut were converted from state public housing to federal public housing under ARRA.

The bill is likely to be included as part of an omnibus appropriations bill in the future, according to NLIHC.  To learn more, click here to see NLIHC’s budget charts detailing changes to funding levels over the last several fiscal years. See below for an overview of the changes to various HUD programs.

Programs for which the House Subcommittee voted to increase funding in FY12 include:

  • Veterans Affairs Supported Housing (VASH) vouchers will be funded at $75 million, a 50% increase from FY11.
  • Section 8 Project-Based Rental Assistance is funded at $9.4 billion, 2% over the FY11 funding.
  • The Section 202 Housing for the Elderly program is funded at $600 million, 50% above FY11 funding.
  • The Section 811 Housing for People with Disabilities program is funded at $310 million, more than its FY11 and FY10 levels.

Programs for which the House Subcommittee voted to decrease funding include:

  • The Public Housing Capital fund is set at $1.53 billion, 25% below the FY11 level.
  • The Resident Opportunity and Supportive Services (ROSS) program is not included in the bill.
  • The Public Housing Operating Fund is set at $3.86 billion, 16% below the FY11.
  • Funding for the HOPE IV program, including the Choice Neighborhoods Initiative (a set-aside within HOPE VI), is eliminated.
  • Tenant Protection Vouchers are funded at $75 million, $35 million below the FY11 funding level.
  • Fees for administering Tenant-Based Rental Assistance (TBRA) would be cut to $1.1 billion, a 24% decrease from FY11.
  • The HOME Investment Partnership program’s funding is set at $1.2 billion, 25% below the FY11 level.
  • The Fair Housing and Equal Opportunity program, funded at $50 million, a 30% cut below FY11.
  • The Self-Help Homeownership Opportunity Program is not funded in the FY12 budget

Programs for which the House Subcommittee voted to maintain FY11 funding levels include:

  • The Interagency Council on Homelessness (ICH) as a Related Agency.
  • Homeless Assistance Grants, allocated at $1.9 billion.
  • The Community Development Fund, at $3.5 billion, all of which is allocated to the Community Development Block Grants (CDBG).
  • The Housing Opportunities for Persons with AIDS (HOPWA) Program, set at $334 
  • The Healthy Homes and Lead Hazard Control program, at $120 million.
  • The Native American Housing Block Grants, funded at $649 million.