No Government Shutdown Isn’t Good Enough

October 13, 2016

As I’m sure you know, the federal government doesn’t have a budget for this fiscal year. Congress narrowly averted a shutdown with a continuing resolution. So programs that depend on annual spending choices can keep operating at their current funding levels until December 10.

Then what? Well, the government almost surely won’t have a new budget to replace the CR. Nothing unusual about this. Congress has relied on at least one CR in all but four budget seasons since 1977.

Speaker Paul Ryan said the House would return to “regular order” under his leadership, i.e., pass each of the dozen appropriations bills that make up the budget. So did Senate Majority Leader Mitch McConnell.

But they’re not even close. The Senate has passed only three appropriations bills and the House five. They haven’t negotiated final versions of any, though one got folded into the CR.

So we’re likely to have another — either that or a package containing some newly-passed appropriations bills and an extension of current funding levels for the rest.

One way or the other we’re unlikely to have a government shutdown. So why should we care whether we’ve got a bona fide budget or not?

We shouldn’t, I think, care much if Congress decides to punt again — and only once more. But a longer-term CR would leave critical programs under-funded, including some especially important for low-income people.

Consider affordable housing. The Housing Choice voucher program needs more funding annually merely to sustain the number of vouchers in current use because, as you’ve probably noticed, rents rise — and with them, the amount the vouchers must usually cover.

The U.S. Department of Housing and Urban Development needs roughly $765 million more for that, according to the President’s proposed budget. A somewhat similar program administered by the Agriculture Department needs an additional 18 million.

And steady state isn’t good enough. Fewer than one in four low-income households that qualify for housing assistance have it. Three quarters of those who don’t pay at least half their income for rent.

And, of course, some can’t. We don’t know yet how many people nationwide the latest homeless counts found. But we do know that last year’s identified about 564,700, including nearly 127,790 children who were with parents or other caregivers.

Yet the current budget is still shy about 59,000 vouchers left unfunded by the across-the-board cuts the Budget Control Act required and choices Congress made to comply with its (modified) spending caps.

These are indefinite-term vouchers. HUD’s homeless assistance grants fund, among other things, the time-limited vouchers local agencies provide through their rapid re-housing programs.

They also help fund permanent supportive housing for chronically homeless people — not necessarily permanent, but subsidized for as long as occupants need it.

As with other types of housing, per-unit costs steadily rise. Just renewing current contracts would cost roughly $2 billion, HUD estimates.

This is barely less than the total current funding level for homeless assistance grants, which also help cover costs of shelters, diverse services and short-shot aid to prevent homelessness. Costs for these rise too.

A long-term CR would obviously tighten the squeeze — and so put progress toward ending homelessness even further behind what’s needed to achieve the goals that federal agencies collectively set in 2010.  Likewise the goals that local communities have embraced, including the District of Columbia.

All such efforts require ramped-up investments in housing that poor and near-poor people can afford, as well as the subsidies and services funded in part through HUD’s homeless assistance grants.

The federal partner would need to do considerably more than the majorities in Congress seem inclined to. Both the House and Senate have, however, passed bills that would provide somewhat more funding for both regular housing vouchers and homeless assistance.

But not identical bills. So even slight increases might not reach state and local agencies — and if not them, then not the people who are homeless or paying so much for rent that they’re short on money for food, medical care, shoes for the kids, etc.

These slices of the HUD budget are, of course, only examples of what prolonged level funding would mean.

CLASP cites several others. These would further limit job prospects for youth and older adults who lack the education and skills our labor market demands — and for affordable, high-quality child care.

Experts in other areas could undoubtedly name a host of others that a long-term CR would significantly shortchange. Not only low-income people would suffer, but they’d get hit from more directions.

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DC Moves Forward on Affordable Housing. House Republicans Pull Back.

May 18, 2015

Here in the District of Columbia, we’re hopeful about prospects for more affordable housing, especially for our very lowest-income neighbors — both those homeless now and those at high risk because they’re paying at least half their income for rent.

The Mayor’s proposed budget largely accounts for these hopes. Meanwhile, our Republican neighbors on Capitol Hill have decided to put a damper on our progress — and the progress of communities nationwide.

National Housing Trust Fund Defunded

The Mayor’s proposed budget would dedicate $100 million to the Housing Production Trust Fund — our largest source of public financial support for projects to build and renovate affordable housing.

This would double the amount the Fund has for the current fiscal year and probably expand the District’s affordable housing stock by 1,000 or more units, the DC Fiscal Policy Institute reports.

The District could have counted on a share of the revenues that at long last were to flow to the National Housing Trust Fund. But the House subcommittee responsible for the U.S. Department of Housing and Urban Development’s appropriations raided those revenues.

A bit of budgetary legerdemain here. Basically, the subcommittee cut funds for the HOME program, which provides grants to state and local governments for a wide variety of activities related to housing and home ownership.

But it then partially offset the cut by allocating to HOME all the funds that were supposed to go to the Trust Fund. And for reasons not altogether clear to me, it tucked into its bill a provision prohibiting any other funding for the NHTF.

The defunding — and the under-funding I’ll discuss below — were approved by the full Appropriations Committee last week, on a straight party-line vote.

So much then, so far as the majority’s concerned, for funds intensively targeted to rental housing for extremely low-income households, as only 40% of the District’s Trust Fund resources must be.

Federally-Funded Housing Vouchers at Risk

The Mayor’s proposed budget would expand the Local Rent Supplement Program — the District’s locally-funded version of the federal Housing Choice (formerly Section 8) voucher program.

LRSP would get an additional $6.1 million — $3.7 million for tenant-based vouchers, which go directly to extremely low-income households so that they can afford to rent at market rates, and $2.4 million for project/sponsor-based vouchers, which help cover the operating costs of housing that’s affordable for these households.

But it’s doubtful the DC Housing Authority, which administers both LRSP and Housing Choice, will have more vouchers to award.

The House HUD appropriation reduces the funding local housing authorities will have to renew Housing Choice vouchers. They’d be shy a total of $183 million of what HUD estimates they’d need to sustain all vouchers now in use.

Here in the District, about 280 fewer families would receive Housing Choice vouchers, according to a White House fact sheet. If accurate, this means that DCHA would have to retire even more vouchers than it did after the across-the-board cuts known as sequestration.

DCHA and other housing authorities may face similar problems with the contracts they’ve awarded to affordable housing projects. The President’s proposed budget included HUD’s best estimate of the cost of renewing all such contracts. The House HUD appropriations bill falls $106 million short of that.

Further Losses in Habitable Public Housing

A nationwide study conducted for HUD five years ago found a $26 billion shortfall in the funds needed to repair and renovate public housing units. DCHA alone figured it would need $1.3 billion to preserve and redevelop all the units it manages.

That was about a year ago, not long before Congress level-funded the public housing capital fund, leaving it with $625 million less than it had when the HUD study produced its shortfall estimate. And level-funding doesn’t translate into the same level and quality of goods and services, as all of us with personal and household expenses know.

The House Appropriations Committee has nevertheless cut funding for the capital fund by $194 million. Hard to see how this wouldn’t further increase the number of public housing units left vacant — or demolished — because they’re egregiously substandard or so damaged by fire, flooding and the like that repair costs exceed available resources.

Squeeze on Homeless Services

The Mayor’s proposed budget includes a range of investments to move the District forward toward the goal of making homelessness in the District “rare, brief, and non-recurring,” as the new Interagency Council on Homelessness strategic plan envisions.

Her budget also includes a more realistic estimate of the costs of providing emergency shelter for families during the winter months — a refreshing change from the past few years, when the Gray administration minimized family shelter needs and then had to shift funds from other human services programs to cover the costs of motel rooms.

As in the past, local funds would supply most of the homeless services budget. But the District also expects a small increase in homeless assistance funding from HUD.

The House Appropriations Committee would, in fact, provide a small, increase for the grants — $50 million more than approved for this fiscal year. For all intents and purposes, however, the grants would, at best, preserve the status quo.

No additional money to help communities achieve the goals set by the U.S. Interagency Council on Homelessness — a source for the District’s own ICH goals.

And lest I haven’t rained on this parade enough, the Mayor’s plan to expand permanent supportive housing includes an as-yet unreported number of Housing Choice vouchers supplied by DCHA. So we could be looking here at a robbing Peter to pay Paul.

Not the District’s fault. It’s what the Republican Congressional majority chose when it decided not to lift the caps imposed by the 2011 Budget Control Act, but instead to boost defense spending through another bit of budgetary legerdemain.

None of this is yet a cause for hand-wringing, though teeth-gnashing seems appropriate. A bill passed by one appropriations committee is a long way from becoming an agency’s budget.

But we’re a long, long way from a HUD budget that would meaningfully support the District’s commitments to more affordable housing and a lot less homelessness.

 

 

 


HUD Budget Bill Shortchanges Homeless and Affordable Housing Programs

May 29, 2014

The DC Housing Authority figures it will need $1.3 billion to preserve all the public housing units it operates. It’s not expecting anything like that any time soon, as Dena Levitz at The Atlantic reports.

In fact, its share of what Congress provides for public housing development and maintenance is currently about $11 million less than in 2000. And it’s short on funds for operating costs too.

At the same time, DCHA has an affordable housing waiting list so long that it decided to close it somewhat over a year ago.

This reflects an acute shortage of federal funds not only for public housing, but for vouchers, including the kind that extremely low-income people can use to help pay market rate rents.

These shortages help explain the very high number of homeless people in the District, though they’re certainly not the only factor. We must also look to soaring housing costs and inadequate local funding for affordable housing programs.

These aren’t problems for the District alone. New York City, for example, had more than 64,000 homeless people during last year’s one-night count. There too, low-income residents face skyrocketing rents, relatively stagnant incomes, a voucher shortage and public housing in disrepair.

A nationwide study conducted four years ago estimated a $26 billion backlog in public housing capital needs. And that was before the Budget Control Act tightened the screws on federal spending — in part through sequestration.

Well, the December 2013 budget deal provided some temporary relief from sequestration. Non-defense discretionary programs, i.e., those that depend on annual appropriations, have $9.2 billion more for the upcoming fiscal year.

Yet key programs administered by the Department of Housing and Urban Development are in trouble. Homeless assistance grants and major affordable housing programs stand to lose $510 million, in inflation-adjusted dollars, under the bill the House Appropriations Committee approved last week.

The subcommittee for HUD and Transportation Department appropriations got $1.8 billion more than it had to work with last year. But this was more than offset by a projected $3 billion or so reduction in revenues from mortgages insured by the Federal Housing Administration.

The subcommittee chairman says, “Like appropriators do, we made choices.” They’ll force some very tough choices on state and local agencies — and setbacks for the homeless and other low-income people they serve.

Here are some of the specifics, summarized from a new Center on Budget and Policy Priorities brief.

Housing Choice vouchers. The 2013 across-the-board cuts forced agencies to reduce the number of households receiving rental assistance through these vouchers by an estimated 72,000 nationwide.

This year’s budget provided enough money to restore about half. But the House appropriations bill could more than undo the improvement, leaving 12,000 fewer low-income households with vouchers than before.

The problem here is partly that vouchers issued to veterans under a separate program no longer have their own funding stream and so would have to be renewed out of the overall Housing Choice budget.

That would leave agencies without sufficient funds to cover expected rent and utility cost increases for all vouchers now in use.

So they can again cut back on vouchers for non-veterans. Or they can shift the cost increases to voucher holders by freezing the value of the subsidies. One of those tough choices.

Note that we’re talking only about preserving the rental assistance Housing Choices has recently provided — not about addressing the needs of 11.3 million households that are probably paying more than half their income for rent, including at least 50,150 in the District alone.

Public housing capital investments. The House appropriations bill cuts the under-funded public housing capital fund by $100 million, leaving DCHA and other housing authorities with only half the funds they need to cover new development and renovation needs.

Public housing operations. Not enough funding for public housing operations either — about  86% of what HUD said was needed.

Agencies can cope with the shortfall in various ways, e.g., by cutting back on routine maintenance, passing on more of their utilities costs to residents, exercising their discretion to impose a $50 minimum rent on the very poorest families. More tough choices.

Homeless assistance grants. The House bill level-funds homeless assistance grants, rejecting the Obama administration’s request for additional funds to support 37,000 new units of permanent supportive housing for chronically homeless people.

It’s not clear that the $2.1 billion in the House bill would even be enough to sustain all the PSH units supported by federal funds, since it would leave at least some grant recipients with less.

What is clear is that the House bill — in this area, as well as others — dumps responsibility for a major national problem on state and local governments and on nonprofits, whose resources are already stretched thin.

HOPWA (Housing Opportunities for People with AIDS) grants. A particular special needs population would lose out under another part of the House bill. Funds that help state and local agencies provide housing for people living with HIV/AIDS would be cut by more than 8%.

That would leave this relatively small, but vital program with less than it had after sequestration — and so less able than ever to meet the needs of more than 145,000 vulnerable people who reportedly need housing assistance.

This isn’t the whole story — and happily not the end. The Senate Appropriations Committee has just decided how to parcel out funds among its subcommittees. And Transportation-HUD has about $2.4 billion more than its House counterpart had to work with.

Now let’s see what it does.

 

 

 


HUD Budget Shifts Rent Costs to Low-Income Elderly and Disabled

March 9, 2012

U.S. Department of Housing and Urban Development Secretary Shaun Donovan admits that his department’s proposed Fiscal Year 2013 budget includes “some very difficult choices we would not have made in a better fiscal environment.”

“Tough choices,” he continues, “include reforms to HUD rental assistance programs that save over $500 million in 2013 without reducing the number of families served.”

One of those reforms, as I earlier wrote, would require the very poorest of these families to pay a $75 per month minimum rent — unless they could get one of the rarely-granted hardship exemptions.

Another would change part of the complex formula used to calculate the income that’s used to set the 30% the rest pay.

A bit of background first.

The amount households must contribute to their rent is based on their adjusted income, not the total amount they receive in wages, cash benefits and the like.

Part of the formula excludes — or partly excludes — certain types of income. The other part consists of deductions.

Two related deductions address certain out-of-pocket costs that households with elderly and/or disabled members incur for medical care, attendant care and “auxiliary apparatus,” e.g., a wheelchair, a hearing aid.

The latter two are deductible only if they’re necessary for some member of the household — not necessarily the person with the disability — to work.

At this point, the expenses are deductible if they exceed 3% of the household’s income, after exclusions and the standard deduction the families receive if the elderly or disabled member is the head of the household or married to him/her.

The proposed HUD budget would raise the threshold to 10% of income.

This, of course, would increase the amount that many families with elderly and disabled members must contribute to their rent.

The more they pay, the less the public housing authority pays. The less the PHA pays, the less it costs HUD to renew rental assistance contracts. Also, the budget indicates, the less it will have to pay to subsidize public housing operating costs.

Voila! Estimated savings of $200 million* in the upcoming fiscal year — all shifted to vulnerable low-income families.

The 10% deduction threshold isn’t a new idea. As with the minimum rent proposal, HUD borrowed it from a housing assistance reform bill that’s been evolving in Congress for at least five years.

The bill seeks, among other things, to simplify the rules of setting tenant rent payments. As part of that, it raises the deduction threshold for the same types of costs the HUD budget would.

But the successive versions of the bill also raise the standard deduction for the households headed by seniors or people with disabilities. And they index it to inflation.

This would at least partly offset the impact on rent from the hike in the threshold for out-of-pocket deductions.

The proposed HUD budget would leave the standard deduction just where it is — $400 per month. No relief for households that will get stuck with higher rent because their medical co-pays, attendant fees and the like didn’t consume a full tenth of their income.

So HUD’s tough choice will mean tough choices for around 650,000 very low-income families — rent versus prescription renewals, for example.

I’m hard put to believe they’re necessary — fiscal environment notwithstanding.

If the President could find more than $525 billion for the Pentagon, surely some $350 million could have been found to sustain the low-income housing assistance programs without the punitive policy changes the HUD budget would make.

* HUD’s budget justification to Congress accounts only for savings in the Housing Choice voucher program, but clearly indicates that the higher deduction threshold would also apply to public housing and Section 8 project-based housing residents. The estimate I’m citing here comes from a Congressional Budget Office analysis of one version of the reform bill I refer to below.


What Would HUD’s Proposed Minimum Rent Mandate Mean for Extremely Poor DC Residents?

March 1, 2012

Researching the impacts of the mandatory minimum rent proposal in the President’s Fiscal Year 2013 budget, I asked myself what it would mean for extremely low-income District residents who benefit from the Department of Housing and Urban Development’s rental housing programs.

The answer, I think, is maybe less than for the poorest beneficiaries in most of the country. But it’s hard to be sure because we don’t know how broadly HUD would apply the new policy.

Here’s what we do know.

DCHA (the District’s public housing authority) doesn’t impose a minimum rent, as it could under the current law. It’s chosen — wisely I think — to let the lowest of low-income households conserve their cash for other needs.

These, recall, are households whose adjusted incomes are so low that the usual 30% they’d owe for rent is negligible, except to them.

In one scenario, they’d have to pay $75 a month, as would more than half a million of the poorest households nationwide, though DCHA could grant hardship exemptions for some of them.

But DCHA is one of the 34 public housing authorities that participate in HUD’s Moving to Work demonstration project. As such, it’s exempt from many of the rules most PHAs must comply with.

So it’s possible that DCHA could preserve its current rent policy for most residents who’d otherwise be affected.

According to DCHA’s latest annual report, 12,752 individuals and families had Housing Choice vouchers in its MTW program. It plans to increase the number to 12,784 by the end of this fiscal year.

DCHA says that close to 20,000 additional residents live in public housing units.

If the proposed policy change is like the one in a bill the House is considering — and it does seem that way — then the minimum mandatory rent wouldn’t automatically apply to either the voucher holders or the public housing residents.

Or so I gather from a bill analysis by the Center on Budget and Policy Priorities.

But the minimum mandatory would apply to residents of project-based Section 8 housing, i.e., units that have federally-funded vouchers attached to them.

That, says CBPP, would put 1,273 extremely low-income District households at risk of “serious hardship and even homelessness.”

Do we really need anything more to push up our homelessness rates?


Rental Housing Assistance Budget Balanced on Backs of Poorest

February 24, 2012

If you look at the President’s  Fiscal Year 2013 budget for low-income housing assistance as a whole, you’d think it’s pretty good — at least, considering the caps imposed by last fall’s debt ceiling/deficit reduction deal.

Or at least I did. But, as they say, the devil is in the details. And there are some very devilish details in the policy changes proposed to help make the numbers work.

One of them would raise monthly rents for the very poorest households that live in public housing or participate in any one of several programs the budget classifies as Tenant-Based Rental Assistance.

Current Minimum Rent Policy

Under current law, residents of public housing and people with housing vouchers generally must pay 30% of their adjusted income for rent. The same holds for residents of project-based Section 8 housing, i.e., units that have federally-funded vouchers attached to them.

The local public housing authority pays the rest, up to a cap based on the fair market rents the U.S. Department of Housing and Urban Development sets for the area.

For the very lowest-income households, however, 30% of adjusted income can be zero or pretty darn near. PHAs may, if they choose, require them to pay a minimum rent, but only up to $50 a month.

They can, but don’t have to also impose a minimum rent, up to the same maximum, on public housing residents. A $25 minimum rent is generally mandatory for residents of project-based Section 8 housing.

According to a 2010 study for HUD, 88% of PHAs have opted for a minimum rent. Not all of them, however, charge as much as $50 a month.

White House Proposal

For Fiscal Year 2013, the President proposes $4 million less to renew housing voucher contracts than Congress approved for this fiscal year.

Yet the White House fact sheet asserts that HUD’s rental assistance programs will serve as many families as they do now.

How can that be? In the past, increases have been needed just to keep up with rising rents.

Part of the answer is that PHAs would have to charge a minimum rent. And the minimum would be $75 a month, rather than the $50 that’s permissible now.

This may not seem like much, especially for households that are already paying the maximum minimum.

But to fall into the minimum rent category at the $50 rate, a household’s income, with adjustments, would have to be less than $167 a month. The new mandatory minimum would be nearly 45% of this.

Well, the fact sheet says, households would be eligible for hardship exemptions. Nothing new about these.

Under current law, PHAs must have policies for granting such exemptions. Most of the hardships their policies must include a significant loss of income, e.g., a job loss, the death of a family member.

But exemptions are also supposed to be granted if the minimum rent would result in an eviction — in other words, if the family simply couldn’t pay it.

Problem is that hardship exemptions are apparently few and far between. Of the PHAs the HUD study surveyed, 82% granted them to fewer than 1% of the households they served.

Maybe because $50 worked a hardship on only a few. Maybe because PHAs construe acceptable hardships too narrowly. Maybe, as the study suggests, because they don’t make sure that households know they can get exemptions.

Whatever the case, I see no reason to believe that PHAs will suddenly start granting more.

HUD apparently doesn’t think they will since Secretary Donovan has said that the new minimum rent requirement will save $150 million next year.

Households at Risk

The Center on Budget and Policy Priorities recently analyzed a bill already introduced in the House that would set a somewhat lower mandatory minimum rent.

It concluded that nearly 491,000 extremely low-income households would be exposed to “serious hardship and even homelessness.” The President’s proposal, it says, would affect about 15,000 more, bringing the total to well over half a million.

Nearly two-thirds of these households nationwide are families with children. As many as 40,000 include members who are elderly or have disabilities.

Seems to me the right hand doesn’t know what the left hand is doing — or maybe knows, but doesn’t care.

The President proposes a $330 million increase for homeless assistance grants to “continue progress” toward his administration’s goals for preventing and ending homelessness.

At the same time, he seeks savings in housing assistance that could well put more people on the streets — or into the already-stressed shelters and housing the homeless grants support.

NOTE: Fellow D.C. residents, I’ll have a separate post on what this proposal may mean for our HUD-funded rental assistance programs. So check back — or subscribe. You can now get my posts as e-mails just by clicking the Follow button.