Chickasaw (Ala.) Housing Authority: HUD Budget Cuts Would Mean Repayment Problems, No Security Services

 

As the House and the Senate begin their work on an omnibus spending package for FY 2018, they do so in the shadow of the White House proposed budget, which includes an 18.3 percent cut for the Department of Housing and Urban Development (HUD). This budget also eliminates the Public Housing Capital Fund (funded at $4.5 billion in 2016) and cuts $1.93 billion from the Public Housing Operating Fund (a 44 percent decrease). These devastating cuts to public housing, which provides affordable homes to 2.1 million low-income Americans, would harm communities nationwide.

The Chickasaw Housing Authority (CHA) houses 487 people, including 194 children and 87 senior citizens. Of these residents, 77 are classified as individuals with disabilities. “The cuts proposed in the President’s 2019 budget would have far-reaching consequences for the people we serve,” said Executive Director Michael Sweet. “Current levels of funding only allow for modest renovations – zeroing out the Capital Fund would bring this work to a complete halt.”

The cuts would affect not only future improvements but also ongoing obligations and operations. In 2007, the CHA participated in the Capital Fund Financing Program (CFFP), which allows housing authorities to borrow against future Capital Funds in order to make improvements to their properties. Participation in the program was approved by HUD. “We are currently still paying off our obligation,” Sweet explains. “If our Capital Fund allocation goes away, I am not sure what would happen to that debt.”

Resident safety and security may also be put at risk. “We pay for our security operations through the 1406 BLI of the Capital Fund,” Sweet says, referencing a provision that allows housing authorities to use some of their Capital Fund money to pay for operating expenses with HUD’s approval. “We would probably have to eliminate security services.”

“Those proposed budget cuts would put us in a terrible position,” Sweet concluded. “We would be unable to make improvements to our buildings, to provide security for our residents, or even to meet our debt obligations.”

NAHRO CEO Adrianne Todman agreed. “It is difficult to comprehend how out of touch this budget is with the realities of immediate housing needs. We now look to the Congress to craft a realistic budget that addresses the immediate needs that face Chickasaw and other communities nationwide.”

About NAHRO

NAHRO, established in 1933, is a membership organization of almost 20,000 housing and community development agencies and professionals throughout the United States whose mission is to create affordable housing and safe, viable communities that enhance the quality of life for all Americans, especially those of low- and moderate-income. NAHRO's membership administers more than 3 million housing units for 7.6 million people.

Contact: Sylvia Gimenez