May 1, 2017

Congress Reaches Deal on FY17 Spending Bill

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Over the weekend, top congressional leaders and appropriators came to a bipartisan compromise on government funding for the remainder of the fiscal year, averting a government shutdown. The legislative text for the remaining eleven fiscal year (FY) 2017 appropriations bills that had not yet been finalized was released early Monday morning. Given its bipartisan nature, the omnibus package will likely be passed and signed into law by the President before the end of the week when the current week-long continuing resolution expires on May 5.

The long-awaited omnibus includes modest increases for many key housing programs at the Department of Housing and Urban Development (HUD) and the Department of Agriculture’s Rural Housing Service. The FY 17 Transportation, Housing and Urban Development (THUD) Appropriations Bill provides a $512.5 million net increase over FY 16 enacted levels.

The bill increases funding for Tenant-Based Rental Assistance (Housing Choice Vouchers) by $660 million over FY 16 enacted levels to $20.3 billion, including $18.36 billion to renew existing contracts. While the increase is significant, it is about $450 million less than what is required to fully renew all vouchers in use. The omnibus also increases funding for Project-Based Rental Assistance (PBRA) by $196 million over FY 16 enacted levels, to $10.81 billion, in order to fully fund the program.

Several Community Development and Planning programs, including the Community Development Block Grant, HOME Investment Partnerships, and Section 4 Capacity Building for Affordable Housing and Community Development, all received level funding. The bill also includes a provision that provides a 4-year suspension of the 24-month commitment deadline for HOME funds that would otherwise have expired in 2016, 2017, 2018, or 2019. Due diligence rules that went into effect in 2013 have other more meaningful deadlines that make the 24-month commitment deadline redundant and burdensome for Participating Jurisdictions. 

The bill also provides a $41.5 million increase to the Public Housing Capital Fund over FY 16 enacted levels to $1.94 billion, but cuts the Public Housing Operating Fund by $100 million below FY 16 enacted levels to $4.4 billion. In addition, the bill raises the cap on the number of public housing units authorized to participate in the Rental Assistance Demonstration (RAD) from 185,000 to 225,000, providing the authority for the more than 18,000 units on the waitlist to convert to more stable financial footing under the demonstration.

The Choice Neighborhoods Initiative, Housing Opportunities for Persons with AIDS (HOPWA), Homeless Assistance Grants, and Section 202 Housing for the Elderly, Lead-Based Paint Hazard Reductions also received funding increases. The Section 811 Housing for Persons with Disabilities program, however, saw its funding cut by $4 million.

The Community Development Financial Institutions (CDFI) Fund at the Department of Treasury received a $14.5 million funding increase over FY 16 enacted levels to $248 million – the largest appropriation in the history of the fund.

The Neighborhood Reinvestment Corporation (NeighborWorks America) received $140 million, $5 million of which must be used for a new multi-family rental housing program. The bill also extends the sunset date for the US Interagency Council on Homelessness until October 1, 2018.

The Agriculture Appropriations bill provides increases for several rural housing programs including Section 502 Single Family Direct Loans, Section 504 Housing Repair Grants, Section 515 Rental housing Direct Loans, and Section 521 Rental Assistance.  For more information on funding levels for HUD and the USDA Rural Housing Service, see Enterprise's updated FY17 budget chart.

These modest increases for many key HUD and USDA programs demonstrate that Congress understands the critical importance of many of these programs. While Enterprise is encouraged to see the likely passage of the FY 17 THUD and USDA appropriations bills, the FY 18 budget and appropriations process poses alarming risks for housing and community development programs. The White House’s FY 18 Budget Request is expected in several weeks, and it will likely propose extreme cuts to programs that Enterprise and our partners care about. See more about the White House’s skinny budget outline and how housing and community development programs create jobs and benefit communities on Enterprise’s blog.

See Enterprise’s budget chart for more information about funding levels.