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Affordable Housing , Community Development , Federal News , Homelessness , Supportive Housing

HUD Faces Deep Cuts in FY12 Budget

17 November 2011

The U.S. Department of Housing and Urban Development (HUD) faces deep cuts in the Fiscal Year 2012 (FY12) HUD budget that is expected to pass the House and Senate this week. In the Conference Committee Bill released on November 16, HUD’s budget is cut by 9% overall compared to FY11, with much larger cuts to several affordable housing and community development programs, such as the Public Housing Capital Fund, the HOME Program, and CDGB Formula Grants and the Sustainable Communities program. Of note:

Rental Assistance & Vouchers

The bill funds Tenant Based Rental Assistance programs at levels 3% higher than FY11, but adjusts several voucher programs drastically.

Tenant protection vouchers are cut nearly 32%, but Veterans Affairs Supportive Housing (VASH) vouchers have been funded 50% higher than FY11 at $75 million. Section 811 Mainstream tenant-based vouchers are fully funded at $112 million. Project Based Rental Assistance vouchers were funded at a flat rate from FY11.

In addition, the bill authorized a “Rental Assistance Demonstration” (RAD) allowing the voluntary conversion of up to 60,000 public housing and Mod Rehab units to project-based rental assistance to help Public Housing Authorities (PHA) and other owners more easily finance capital improvements, though according to the Citizens’ Housing and Planning Association (CHAPA), the language for this authorization is unclear.

Public Housing

The funding levels for both the Public Housing Operating Fund ($3.961 billion) and the Public Housing Capital Fund ($1.875 billion) are deeply cut from FY11 levels, at 14% and 8% respectively.

As requested by President Obama, HOPE VI has been eliminated from the budget and replaced by the Choice Neighborhoods Initiative, which is funded at $120 million in FY12. The bill cuts Housing Opportunities for Persons with AIDS (HOPWA) funding about 1% and includes $50 million in funding for the Resident Opportunities and Self Sufficiency (ROSS) program.

In addition, a ban on using funds to assist federalized units, which housing advocates had feared would be in the final bill, was not included according to CHAPA.

Community Development

The bill cuts the Community Development Fund nearly 3%, entirely removing funding for some programs. Community Development Block Grant (CDBG) Formula Grants were cut nearly 12% to $2.95 billion and the Sustainable Communities Initiative was completely defunded. Housing Counseling Assistance, which received no funding in FY11, is funded at $45 million in the bill and Fair Housing received $70.8 million, a slight decrease from FY11.

Other Programs

The HOME Program, which has faced scrutiny in recent months, was cut nearly 38% and funded at $1 billion, down from $1.6 billion in FY11. Homeless Assistance Grants were flat funded from FY11 levels at $1.9 billion, which includes $250 million in Emergency Solutions Grant funding.

Funding for Section 202, Supportive Housing for the Elderly, was cut 6% at $375 million, while Section 811, Supportive Housing for Persons with Disabilities, saw its funding increase to $165 million, up 10% from FY11 levels.

To Learn More:
CHAPA HUD Budget Summary
CHAPA HUD Budget Side-by-Side Table