Finally! A Final Budget From HUD – Very Important Read

Important blog piece from the National Alliance to End Homelessness – KRS

The Final HUD Budget: Implications and Next Steps

18th November
written by Steve Berg

Two days ago, the House and Senate Appropriations Committees finished their negotiations and published a final fiscal year 2012 funding bill for HUD, among other agencies.  This is a conference committee report, meaning that it goes for an up-or-down vote in the House and Senate, no amendments allowed.  Every indication is that it will pass Congress and be signed by the President this week.

As we pored through its contents Monday night and Tuesday morning, the bill set off mixed emotions, starting with a letdown that our efforts to get an increase in homeless assistance had not worked but relief that homeless assistance grants had escaped any cuts and that HUD-VASH had been expanded.  This was followed by shock at the extent of the final cuts in some HUD programs and intense frustration with the overall state of federal affordable housing policy.

Here’s our take on what the HUD funding bill means for ending homelessness.

HUD homelessness funding – With the homelessness-specific programs, it’s important to be clear about two things to start:

  • HUD-VASH continues to grow each year, building on unified support.  The bill includes $75 million for new HUD-VASH vouchers, enough to house another 11,500 homeless veterans or more.  Earlier this year, there were serious questions about whether the new Congress would continue to support this program.  These questions have been put to rest, at least for now.
  • In light of what turned out to be substantial cuts in HUD spending, maintaining level funding for homelessness assistance, one of the larger programs at HUD and the one that serves the most politically powerless constituency, is a remarkable achievement.

These results are testament to the hard work of many people, especially our partners all over the country.  After last fall’s election, people embraced the important work of building relationships with decisionmakers who were either new to Congress or new to leadership positions, and convincing them that solutions to homelessness are worth investing in and are in the interests of Republicans and Democrats both.  This work is something to build on next year and in years to come.

At the same time, the economy remains bad, the number of homeless people (especially children) is going up, and the number of people teetering on the brink of homelessness is going up a lot.  Level funding for homeless assistance programs is not enough.   A substantial increase in homelessness remains a grave possibility.   We still have a lot of work to do in order to deal with this threat of increased homelessness at the local and state level and to convince political leaders that they need to be partners in our effort.

HUD Overall – The overall HUD budget did see a cut, for the second year in a row.  In the area of housing, the oft-repeated promise that federal budget problems will not be resolved on the backs of the poor has not been fully borne out.

Although it is too early to tell for sure, one apparent cause for relief is the protection for existing Section 8 vouchers.  Section 8 vouchers are funded at close to full renewal level, and if PHAs with large monetary reserves use some of that money, we may get through the year with the voucher program housing as many people as it does today.  Meanwhile, beside the new HUD-VASH vouchers, there is also some “tenant protection” money to replace demolished public housing.  Funding for PHAs to run the programs, however, remains a concern.

Meanwhile, three large programs were cut severely, accounting for the bulk of the reductions for HUD:

  • CDBG – Cut by over 11 percent, on top of much larger cuts last year, leaving CDBG funding at the lowest level in many years.  Because CDBG largely funds one-time capital costs of new projects, Congress tends to regard it as something that can be reduced in tight budget years.  Unfortunately, though, 20 percent of CDBG funding is used for administration, often paying salaries for city and state government employees who work locally on homelessness.
  • HOME – Cut to $1.0 billion, from $1.6 billion last year and $1.825 billion in FY 2010.  HOME is an important resource for affordable housing development.  This cut will mean less new affordable housing.
  • Public Housing – Cut by over 12 percent from last year. Last year there was also a large cut in public housing capital expenditures, softened by money for public housing in the 2009 American Recovery and Reinvestment Act (commonly referred to as the “stimulus”).  This year, Congress piled on and cut even more, especially for operating expenses.  It is hard to see how PHAs can absorb this cut without maintenance backlogs, more uninhabitable apartments, and fewer people housed.

To be clear, it’s not like there is any other version of a HUD budget that could start with this little money and somehow get substantially better results.  The problem here is bigger, and there are two parts to it:

1) Because of the deficit reduction deal reached earlier this year and the push in the new Congress to cut spending, the overall amount of money in the budget is low; and

2) Within those constraints, housing for low-income people has not turned out to be a high enough priority for many decisionmakers.

The overall budget constraints are expected to be even tighter over the next few years, especially if the super-committee process either fails to produce legislation, or produces legislation that causes further problems for low-income Americans. On the bigger budget issues, it seems clear that Congress will have more to say before anything is finalized for FY 2013.

The probable situation over the next few years, however, is that there will be a whole range of things Congress can no longer afford to do.  In the past, such decisions have been moderated by a determination to pick out some relatively small initiatives and continue to grow those – expanding funding for new permanent supportive housing in 2005 and 2006, while many other programs were being slashed, is an example.

Will Congress abandon efforts to end homelessness?  Or will it pick the initiative back up in the coming years?  The stakes will grow higher as more and more people experience or live in danger of homelessness.

Fortunately, the work our community has already done with the new Congress, and the substantial assets we bring to bear, make this a challenge we can meet.  New decisionmakers are increasingly getting the message that money spent on homelessness produces tangible and profound results, moving toward solutions to a problem that very few people, only a few years ago, thought could be solved.  Our commitment to achieving better results every year, and to sharing those results with the people who make decisions, has given us the ability to generate support for homelessness programs in any political or fiscal environment.  We’ll need to build that support and be more vocal about how other HUD programs contribute to our success.

We’re going through a tough period now, and it will require us, working together, to continue to do remarkable things. But remarkable things are the stock in trade for the community of people around the country working to end homelessness.  At the Alliance, we are proud to be a part of this community and we are confident that together, we will succeed.


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