February 19, 2019

Modest Funding Increases for Housing in Fiscal Year 2019; Budget Deal Needed for Fiscal Year 2020

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Community Developments

Prolonged negotiations around fiscal year (FY) 2019 spending levels have finally come to a close, with Congress and the administration approving a spending package that funds nine federal agencies through the end of FY 2019, including the Department of Housing and Urban Development (HUD), Department of Agriculture (USDA), and Department of Treasury. For a detailed breakdown of final FY 2019 funding levels for housing and community development programs, see Enterprise’s updated budget chart.

Lawmakers overall provided strong funding levels for housing and community development priorities, although small cuts were made to some programs. Enterprise is grateful for the continued bipartisan leadership in Congress on affordable housing issues.

Department of Housing and Urban Development

The appropriations law allocates approximately $44.2 billion to HUD, an increase of nearly four percent over FY 2018 enacted levels. Much of this funding increase is directed towards the increased cost of renewing existing housing vouchers.

Lawmakers increased funding for Housing Choice Vouchers by over $400 million over FY 2018 enacted levels to $22.598 billion, which is adequate to renew all existing tenant-based voucher contracts. They also set aside $25 million for a family mobility demonstration program that aims to help families move to and remain in lower-poverty neighborhoods.

The law provides $11.747 billion for Project-Based Rental Assistance, which is approximately $230 million above FY 2018 enacted levels and is enough to renew all existing PBRA contracts.

Public housing received modest increases, with $2.775 billion for the Public Housing Capital Fund and $4.653 billion for the Public Operating Fund.

The Family Self-Sufficiency (FSS) Program received $80 million, a modest $5 million increase over FY 2018 enacted levels, and the Choice Neighborhoods Initiative received level funding at $150 million.

The law provides level funding for Community Development Block Grants at $3.3 billion and Section 4 Capacity Building at $35 million. However, after several years of level and increasing funding, lawmakers cut funding for the HOME Investment Partnerships Program by $110 million to $1.25 billion. HOME is a critical program that leverages $4.38 for every dollar invested in the program and is key source of gap financing in Low-Income Housing Tax Credit deals. Enterprise urges Congress to reverse this cut in FY 2020 and restore funding levels for HOME to no less than $1.5 billion.

Department of Treasury

Congress provided $250 million for the Community Development Financial Institution (CDFI Fund) at the Department of Treasury, which is even with FY 2018 enacted levels.

USDA Rural Housing Service

Lawmakers slightly decreased funding for Section 521 rural rental assistance in USDA’s Rural Housing Service to $1.331 billion, which is about $14 million below FY 2018 enacted levels. The law also slightly decreased funding for the Section 515 Rental Housing subsidy but supplied enough funding for all contract renewals.

NeighborWorks

Congress increased funding for the Neighborhood Reinvestment Corporation (NeighborWorks America) by $10 million above FY 2018 enacted levels to $150 million.

FY 2020 Budget Request

Now that FY 2019 appropriations are settled, attention on the Hill is quickly turning to FY 2020. The administration is expected to release its Budget Request mid-March, with a budget blueprint coming out the week of March 11 followed by the full request the week of March 18.

In the past two fiscal years, the administration has called for severe cuts to social safety net programs, including those for housing and community development. Both years, Congress has rejected the administration’s requests and continued funding bipartisan affordable housing priorities.

FY 2020 Budget Deal

Lawmakers were able to provide strong funding levels for housing and community development programs in FY 2018 and 2019 because of a two-year budget deal that raised the spending caps on discretionary spending. The Budget Control Act of 2011 imposed austere budget caps on discretionary spending through FY 2021.

To avoid dramatic cuts across federal programs, Congress will again need to raise the spending caps on discretionary spending programs in FY 2020.

Enterprise signed on to a letter with the Campaign for Housing and Community Development Funding (CHCDF) urging Congress to lift the spending caps and fund affordable housing programs at the highest possible levels. 

Next Steps

Enterprise and our partners will be circulating sign-on letters for the Section 4 Capacity Building Program and the HOME Investment Partnerships Program in the next couple of weeks. Stay tuned for action alerts through our daily newsletter Community Developments.

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