February 12, 2018

President’s FY 2019 Budget Request Would Cut Funding, Eliminate Programs

This morning the administration released the president’s fiscal year (FY) 2019 budget request, which proposes dramatic cuts to housing and community development programs across agencies, including the Department of Housing and Urban Development, the USDA Rural Housing Service, and the Department of Treasury. 

The budget request is being released following tax legislation that reduces taxes by $1.5 trillion over the next ten years and a budget deal that raises discretionary spending caps by $300 billion over the next two years.

See Enterprise's updated budget and appropriations chart for more information about funding levels.

Among HUD programs, the request proposes to eliminate funding for:

  • Section 4 Capacity Building for Affordable Housing and Community Development (Section 4)
  • HOME Investment Partnerships (HOME)
  • Community Development Block Grants (CDBG)
  • Community Development Financial Institutions (CDFI) Fund
  • Public Housing Capital Fund
  • Choice Neighborhoods Initiative

A bright spot in the request is a proposal for $100 million for the Rental Assistance Demonstration (RAD) program. This $100 million would be awarded to Public Housing Agencies (PHAs) to help public housing properties convert to project-based Section 8 contracts that can leverage private capital and financing to address the $26 billion public housing capital backlog nationwide. The request also would eliminate the 225,000 unit cap on RAD conversions and eliminate the September 30, 2020 deadline for RAD applications.

 The Administration’s request additionally proposes to:

  • Reduce funding for Tenant-Based Rental Assistance (TBRA), also known as Housing Choice Vouchers, to $20.09 billion, and provide $17.5 billion for TBRA contract renewals.
  • Slightly increase funding for Project-Based Rental Assistance to $10.952 billion
  • Eliminate the Public Housing Capital Fund, combine it with the Public Housing Operating Fund, and reduce funding for public housing to $2.975 billion
  • Reduce funding for Housing Opportunities for Persons with AIDS (HOPWA) to $330 million
  • Provide level funding for the Family Self-Sufficiency (FSS) program at $75 million
  • Provide level funding for Homeless Assistance Grants at $2.383 billion
  • Increase funding for Section 202 Housing for the Elderly to $563 million
  • Reduce funding for Section 811 Housing for Persons with Disabilities to $132 million

The Administration released an addendum to with the budget request that provides an additional $2 billion of funding for HUD to reflect the budget deal that became law on February 9. The addendum provides $1 billion for prevent rent increases on the elderly or persons with disabilities who live in HUD-supported housing, due to rent reforms supported in the request. These funds would be available across the TBRA, public housing, PBRA, Section 202, and Section 811 accounts. The addendum additionally includes an additional $700 million to restore TBRA vouchers that would have otherwise been cut in the request and also provides the Public Housing Operating Fund with with an additional $300 million to assist Public Housing Authorities that "could potentially face insolvency." 

At the Department of Treasury, the request seeks to eliminate funding for the CDFI Program and reduce funding for the CDFI Fund to just $14 million solely for administrative funding to support the management of the New Markets Tax Credit Program and the CDFI Bond Guarantee Program.

The President's budget request also proposes eliminating funding for a number of programs in the U.S. Department of Agriculture's (USDA) Rural Housing Service that provide critical housing grants and loans for low-income households in rural communities nationwide. The request proposes to:

  • Reduce funding Section 521 Rental Assistance to $1.351 billion, which is about $50 million below FY17 enacted levels
  • Eliminate Section 502 Single Family Direct Loans
  • Eliminate Section 504 Very Low-Income Repair Loans
  • Eliminate Rural Housing Assistance Grants
  • Eliminate Farm Labor Housing Loans and Grants
  • Eliminate Section 515 Rental Housing Direct Loans
  • Eliminate Section 523 Mutual and Self-Help Housing Grants
  • Eliminate the Multifamily Housing Revitalization Program Account, including the Housing Demonstration Preservation Program
  • Transfer Section 542 Rural Housing Vouchers and combine with the Section 521 Rental Assistance Account

The Administration also proposes discontinuing federal funding for the Neighborhood Reinvestment Corporation (NeighborWorks America) and eliminating the U.S. Interagency Council on Homelessness (USICH).

The budget request additionally proposes eliminating the National Housing Trust Fund and the Capital Magnet Fund. These program are not funded through discretionary appropriations but rather through a set-aside of new business from the Government Sponsored Enterprises (GSEs).

At a time when 11 million renters spend more than 50 percent of their income on rent and when state and municipal budgets are already cash strapped, now is the time to increase, not to reduce, federal investment in affordable homes and communities. A safe and affordable place to live is a foundation that helps families climb the economic ladder and achieve financial independence. 

Last year, Congress largely ignored the dramatic funding cuts proposed in the President’s budget request, but is critical that advocates for housing and community development keep up the drumbeat to ensure that lawmakers understand the importance of programs like  HOME, Section 4, CDBG, and the CDFI Fund for their constituents and in their communities.

See Enterprise's updated budget chart, and look out for additional analysis from Enterprise on the budget request and policy provisions and their impact on housing and community development.

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