March 21, 2019

President’s 2020 Budget Request Again Includes Significant Cuts for Affordable Housing and Community Development Programs

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Earlier this week, the White House followed up its ‘skinny’ budget with the second and final installment of the President’s Fiscal Year (FY) 2020 budget request. Despite requesting increases to a few programs, as in previous years the Administration is proposing significant cuts to affordable housing and community development programs.

Overall, the request called for HUD to be funded at $44.1 billion, down $9.7 billion, or 18%, from the $53.8 billion enacted for FY19. Those reductions were reached in part by proposing the elimination of a number of programs that are vital to the creation and preservation of affordable housing and community development, including the HOME Investment Partnerships program (HOME), the Community Development Block Grant (CDBG) program, the Section 4 Capacity Building program, and the Public Housing Capital Fund. The Administration also proposed eliminating allocations to the National Housing Trust Fund.

The budget also proposes reductions to a number of critical housing programs. The Tenant-Based Rental Assistance (TBRA) program would receive $22.224 billion, down more than $300 million from FY19. Section 202 Elderly Housing Program would be funded at $644 million, a decrease of $34 million from FY19. Section 811 Housing for Persons with Disabilities Program would see a cut of over $27 million dollars, to $157 million for FY20. The Native American Housing Block Grant Program would lose $155 million, more than 20% of its FY19 operating budget of $755 million. Finally, the Housing Opportunities for Persons with AIDS (HOPWA) program would be funded at $330 million in FY20, a reduction of $63 million.

The White House proposed a small increase to the Project-Based Rental Assistance (PBRA) program – from $11.747 billion to $12.021 billion in FY20-- although it’s unclear at this point whether that would be sufficient to renew all existing contracts. It also plussed up HUD’s lead remediation program from $279 million to $290 million and would authorize $100 million for the Rental Assistance Demonstration (RAD) program. However, the budget also indicates the Administration again intends to seek rent-reform policies aimed at increasing housing costs for working families, seniors, and people with disabilities.

Affordable housing and community development programs housed outside of HUD were targeted for cuts as well. For example, the USDA’s Section 515 Rural Multi-Family Housing Loan program was zeroed out, and Treasury’s Community Development Financial Institutions (CDFI) fund and Native American CDFI Assistance program both saw their program funding eliminated.

In all, the proposal would slash important resources and reduce significantly the capacity of federal, state, and local jurisdictions to provide affordable housing and community revitalization to communities in need. Many of these programs bring in critical capital from additional public and private sources, and all of them provide a crucial buffer against homelessness and extreme economic hardships for millions of low- and middle-income Americans.

Enterprise’s President, Laurel Blatchford, commented on the Administration’s Budget Request, stating: “Enterprise is deeply concerned by the Administration’s proposed fiscal year 2020 budget – and the profound damage it would inflict on working families across the country. Investments in affordable housing and community development programs should be expanded, not slashed: they create safe, healthy and affordable places for Americans to call home, giving millions of people access to better opportunities.”

It is important to note that the President’s request serves as a vehicle to communicate the Administration’s priorities for FY20 to Congress, and is non-binding. In the past two years, lawmakers have mostly rejected the proposals. Congress faces a tough road ahead, with budget caps again returning as a result of the Budget Control Act of 2011. Enterprise urges Congressional leaders to negotiate a bipartisan deal to increase the budget caps, and fully fund affordable housing and community development programs in FY20.

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