In 2015, cuts likely for U.S. Dept. of Housing and Urban Development budget - Metropolitan Planning Council

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In 2015, cuts likely for U.S. Dept. of Housing and Urban Development budget

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U.S. Dept. of Housing and Urban Development programs that provide support to local organizations and municipalities are in jeopardy.

Do you know what percent of your income goes toward housing costs? Nearly 50 percent of households in northeastern Illinois reported being housing cost burdened—meaning the household pays over 30 percent of its income on housing and utilities—in the most recent American Community Survey. We also know that, in our region, the number of suburban households living in poverty grew by 76 percent in the 2000s. Low-income households that rely upon rental assistance have been hit especially hard, as many regional housing authorities were forced to cut back on services and the number of households that were able to receive assistance during the past year due to sequestration.

The Metropolitan Planning Council (MPC) works to create quality housing and vibrant communities that are accessible by households across the income spectrum. MPC’s Regional Housing Initiative is a one-of-a-kind partnership between eight regional housing authorities in northeastern Illinois and the Illinois Housing Development Authority. Participating housing authorities pool a portion of their available rental assistance to provide long-term support for the rehabilitation or construction of multifamily, affordable rental homes in great communities across the region. The Regional Housing Initiative utilizes Housing Choice Vouchers, a rental subsidy program administered nationally through the U.S. Dept. of Housing and Urban Development. Unfortunately, the Housing Choice Voucher program experienced an unprecedented reduction in federal appropriations in 2013 due to sequestration. Nationally, 70,000 fewer households were able to use their rental assistance vouchers at the end of 2013, compared with a year earlier. Funding remained low in fiscal year 2014.

The Community Development Block Grant program is another crucial funding source that MPC and its partners use to creating strong communities. The three regional housing collaboratives—Chicago Southland Housing and Community Development Collaborative, West Cook County Collaborative and Northwest Suburban Housing Collaborative—as well as many counties and municipalities across the region that are implementing recommendations from MPC’s Homes for a Changing Region initiative,  rely upon these Block Grant funds to implement foreclosure prevention, community planning and economic development projects. Nationally, around $147 million worth of these funds were slashed due to sequestration in fiscal year 2013, with Illinois losing $12 million.

The Fiscal Year 2015 Transportation-Housing and Urban Development bill as a critical opportunity to increase federal funding available to pre-sequestration levels. The Obama Administration’s fiscal year 2015 budget request includes $20 billion for the Housing Choice Voucher initiative. This 4.3 percent increase from fiscal year 2014 would support all existing vouchers and restore vouchers lost through sequestration. To support the Housing Choice Voucher program, the Administration additionally put forth policy proposals that would increase the efficiency of housing authority activities and spending. This is a major commitment to ensuring the availability of quality, affordable housing by the Administration. The Administration budget request includes $2.8 billion for the Community Development Block Grant program, which is a decrease in funding from fiscal year 2014. The three regional housing collaboratives and units of local government that depend upon the Block Grant funds for their activities could be negatively impacted in fiscal year 2015 at this funding level.

Here’s a summary of the two appropriations bills, based upon the Administration’s budget request, moving forward in Congress right now:

The U.S. House of Representative’s Transportation-Housing and Urban Development appropriations bill, H.R. 4745, was passed on June 10, 2014. The bill includes cuts across the board, with low-income housing assistance programs cut twice as much (as a percentage) as the overall percentage funding reduction for other non-defense discretionary programs, like education, healthcare and environmental protection. The Housing Choice Voucher program received a 1 percent increase in funding from fiscal year 2014. This level of funding would permanently remove the 70,000 vouchers lost nationally due to sequestration, leaving a large number of families and seniors at risk of homelessness.

None of the policy proposals to streamline housing authority operations and reduce administrative costs in the Obama Administration budget request were included, which is a missed opportunity to introduce cost-savings to cover the cost of restoring lost vouchers. This bill fails to provide adequate funding to protect low-income households and would be detrimental to the economies and livability of cities and towns in the region and across the nation. One of the only positive aspects to this bill is that it includes $200 million more Block Grant funds than the Administration requested.

The U.S. Senate’s Transportation-Housing and Urban Development appropriations bill, S. 2438, was passed by the Senate Appropriations Committee on June 5, 1014 and will be considered by the full voting body during the week of June 23 or later. While the funding allocated in this bill is less than requested by the President, it is better for low-income families than the House bill. The Community Development Block Grant program received $3 billion, which is $20 million more than the House bill provides and $220 million more than the Administration’s request. The bill provides the Housing Choice Voucher initiative with a budget 2 percent higher than fiscal year 2014 levels, but this isn’t a large enough increase to restore all of the 70,000 lost vouchers.

As the bills move toward conference committee to have their differences worked out between members of both houses in the coming months, local and regional advocates, policymakers and government leaders should urge Congress to support greater funding for neighborhood stabilization, affordable housing and rental assistance programs. Support for these programs is critical to stemming the tide of increasing poverty that leads to declines in a number of other quality of life indicators like quality of schools, public health and public safety. Congress is facing very tough fiscal constraints, but funding for programs that keep people in homes and help households succeed should be prioritized, not disproportionately cut.


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