0. Community Development Programs
Outlook on
Federal Housing &
Community Development Programs
Douglas Rice
March 14, 2017

1. Overview
Congress’s 2017 agenda: Major threats to safety net; a few small opportunities to strengthen housing programs
HUD FY 2017 budget: How and when will Congress finalize it, and what’s at stake?
HUD FY 2018 budget: What are the risks, and when will Congress make decisions?
Tax reform, infrastructure & housing policy: risks and opportunities

2. Congress’s 2017 Agenda
Repealing the Affordable Care Act (including Medicaid expansion); no clear consensus yet on replacement
Possible deep cuts, harmful structural changes to Medicaid, SNAP
Major tax cuts for the wealthy that could force deeper cuts elsewhere in budget
FY 2017 & FY 2018 appropriations (spending) bills that will stick to, or cut below, the current austere budget caps for domestic programs

3. BCA Caps Have Forced Housing/CD Cuts
Under the Budget Control Act of 2011 cap on nondefense discretionary (NDD) spending, annual funding for HUD & USDA housing and community development programs has declined $4.7 billion (8.6%) from 2010 to 2016 (adj. for inflation)
Public housing and block grants have seen the deepest funding cuts
Sequestration caused the loss of housing vouchers for more than 80,000 households in 2013 & 2014, but PHAs restored these vouchers in 2015 & 2016

4. Public Housing and Block Grants Have Seen Deepest Funding Cuts

6. HUD FY 2017 Budget Recap
Budget Control Act of 2011 limits nondefense discretionary (NDD) funding to $518.5 billion in FY 2017, same as FY 2016
Despite limits, House/Senate appropriations committees approved bills last summer that increased HUD program funding by $1/$1.5 billion, respectively
Both bills reflected strong — but in hindsight insufficient — commitments to renewing existing rental assistance
“Continuing resolution” funds HUD and other agencies through April 28 at FY 2016 levels

7. House/Senate FY 2017 THUD Funding

8. Finalizing HUD’s FY 2017 Budget: What’s at Stake?
Congress may try to break “parity” by increasing 2017 defense funding; would make it harder to raise NDD caps in future years
Some Republicans may try to reduce NDD funding below BCA cap level to offset added defense or homeland security spending
Continuing resolution v. full HUD funding title? Focus on program funding levels, not bill form
Housing voucher renewal costs have grown to $18.86 billion, above House/Senate bill levels

9. HUD FY 2017 Budget Goals
Sustain parity for defense & NDD; no defense relief without equal NDD cap relief
Sufficient funding to fully renew housing vouchers & project-based Section 8 contracts
CBPP paper explains HCV renewal need, state-by-state impact of inadequate funding
Fund public housing, homeless assistance grants, other areas, consistent with highest levels in respective House/Senate bills

10. HUD & USDA Budgets Will Tighten Further in 2018, Unless Congress Raises Caps
For FY 2018, BCA cap for NDD programs is $14 billion (3%) below the FY 2017 limit, $96 billion (16 %) below the FY 2010 level (adj. for inflation)
Veterans’ health care funding will rise in FY 2018, deepening the cuts in other NDD programs
Rental assistance renewals will require more funding, too, to avoid cuts in the number of assisted families, tightening the squeeze
Trump Administration has proposed deep further cuts in NDD program funding

11. Trump Proposes Big NDD Cuts
Pres. Trump proposes to increase defense funding $54 billion in FY 2018 & cut NDD programs by an equal amount
This lowers the 2018 NDD cap by 11%; after protecting vets’ health increase & homeland security, other NDD cuts would be 15%
No HUD proposal yet, but a 15% ($7.1 billion) cut would have devastating consequences:
15% cut would eliminate 625,000 housing vouchers & Section 8 PBRA units, more units in other programs
If protected rental assistance families, would have to eliminate remainder of HUD budget to absorb 15% cut

12. Image/Chart/Graph

13. Strong Effort Needed to Lift BCA Caps, Protect Housing/CD Programs
Pres. Trump’s proposal is only the start of the appropriations process — Ds & Rs who support NDD programs have leverage because of Senate filibuster rules, Republican divisions
Lawmakers must use leverage to raise the caps & sustain parity in defense and NDD funding — or to prevent NDD cuts below BCA cap at least
Whatever the NDD cap level, HUD & USDA should receive priority in funding to sustain current rental assistance, avoid deepening cuts in other housing/community development programs

14. FY2018 Budget Timeline Action Timing (target) Comments
Trump FY 2018 budget brief
March 16
Probably “topline” numbers, including for non-defense discretionary funding; may include details on a few individual programs
fY 2018 budget resolution or “deeming resolutionS”
By April 
Set the overall discretionary funding limits for defense and non-defense programs that the House and Senate appropriations committees will use in drafting FY 2018 funding bills
FY 2018 Transportation-HUD and other appropriations committee markups
May/June/July
House and Senate committees set priorities, approve legislation with specific program funding levels
Final fY 2018 TRANSPORTATION-hud bill
September - December
Likely “continuing resolution” by September 30; THUD and most funding bills will likely be finalized later in fall. Set HUD and USDA program funding levels for FY 2018

15. Tax Reform and Housing Policy
Tax reform a high priority for Trump/Congress, but dynamics fluid – and effort may fail
To achieve Republican goal of big rate cuts, without adding to the deficit, requires cutting or modifying many current tax expenditures & could risk deep cuts in safety net programs
Tax cuts + safety net cuts in a reconciliation bill probably = Republican-only
Even then, LIHTC cut unlikely. Bill may include changes to retain value of credits despite cut in corporate rate
If tax reform bipartisan, could provide opportunity to increase LIHTC and possibly add renters’ credit

16. Potential Infrastructure Investment
Trump priority; Congressional Rs lukewarm
Vehicle and timing unclear, though likely part of or after tax reform (if enacted)
Senate Democrats’ proposal includes substantial resources for housing
Democratic support likely contingent on substantial new funding beyond tax credits
If bipartisan, potential opportunity to add funds for public housing repair and other housing
Secretary Carson indicated support for including funding for housing in an infrastructure bill

17. Possible Housing-Related Activity by Authorizing Committees
GSE reform
Priority for House Financial Services and Senate Banking chairs, and Treasury Secretary Mnuchin, though approaches likely to differ
If happens, unclear outcome for Housing Trust Fund
Possible interest in variety of program “improvements”
More efficient administration; cost savings
More access to areas with greater opportunities
Less regulatory requirements; more flexibility
Encourage self-sufficiency; possible work requirements
Bipartisan agreement and busy Congressional calendar challenging

18. CBPP Resources
Substantial Funding Boost Needed to Renew Housing Vouchers in 2017, report with state data: to-renew-housing-vouchers-in-2017
Chart Book: Cuts in Federal Assistance Have Exacerbated Families’ Struggles to Afford Housing: assistance-have-exacerbated-families-struggles-to-afford
Chart Book: Rental Assistance Reduces Hardship, Promotes Children’s Long-Term Success: reduces-hardship-promotes-childrens-long-term-success
National and State Housing Fact Sheets & Data: sheets-data
Trump Plans Big Cut in Domestic Programs:

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20. Douglas Rice