March 17, 2017

Extreme Cuts to Housing and Community Development Programs in Skinny Budget

Share Posted By:

Today President Trump’s Administration released a Fiscal Year 2018 Budget outline, or “skinny budget,” that proposes extreme cuts to housing and community development programs at the Department of Housing and Urban Development (HUD), Department of the Treasury, and the U.S. Department of Agriculture (USDA). While this outline is not the Administration’s formal Budget Request to Congress, it provides topline numbers and indicates what the more detailed request will entail.

The skinny budget proposes $40.7 billion for HUD, or 13.2 percent below current funding levels and proposes eliminating several critical housing and community development programs at HUD including the Community Development Block Grant (CDBG) program, HOME Investment Partnerships (HOME) Program, the Section 4 Capacity Building for Affordable Housing and Community Development (Section 4) program and the Self-Help Homeownership Opportunity Program (SHOP). These community development programs provide flexible funding for local infrastructure, serve both rural and urban communities nationwide, and leverage more than $3 for every dollar invested into the programs. If enacted, these cuts could result in over 580,000 fewer affordable homes created and over 350,000 jobs lost over the next five years. 

Internal budget numbers leaked to the media last week additionally proposed cutting the Public Housing Capital Fund by $1.3 billion and the Public Housing Operating Fund by $600 million. These cuts will hurt Public Housing Authorities (PHAs), which already have over $26 billion in capital backlogs nationwide. The same leak also proposed cutting Section 8 Vouchers by $300 million, Section 202 Housing for the Elderly by $42 million, and Section 811 Housing for the Disabled by $29 million. Because of these cuts, hundreds of thousands of households would be forced into homelessness next year. 

The Administration also proposes eliminating funding for the Community Development Financial Institutions (CDFI) Fund at the Treasury Department. Eliminating this program would cut off a vital resource to communities lacking traditional sources of capital. With broad bipartisan support in Congress, the CDFI Loan Fund has been a model public-private partnership program that effectively uses public investment to leverage private capital. Other programs targeted for funding elimination include the Neighborhood Reinvestment Corporation, also known as NeighborWorks, the United States Interagency Council on Homelessness, and the Low Income Home Energy Assistance Program (LIHEAP). 

Although the skinny budget does not specifically address USDA’s Rural Housing Service, the proposal cuts USDA’s overall budget by 21 percent, or $4.7 billion, and seeks to eliminate programs at USDA the Administration deems duplicative. Rural communities have distinct housing needs, and the Rural Housing Service is uniquely geared towards addressing such rural housing challenges.

While the cuts proposed are only the first step in a lengthy budget and appropriations process, it is a clear signal that housing and community development programs are at risk. The need for affordable housing advocates and stakeholders to urge Congress to reject these cuts has never been more urgent. 

Our response to these program cuts to housing programs must be loud. Now is the time to take action and advocate for affordable housing in your community​​​​

Stay tuned in and sign up for Enterprise’s bi-weekly Capitol Express and daily Community Developments housing news updates.