FY 2019 Proposed Budget Slashes HUD Funding

The President unveiled his FY 2019 budget this morning, once again outlining his vision of devastating funding cuts to most HUD programs. The budget proposal outlined by the Office of Management and Budget (OMB) provides only $39.2 billion for HUD, an 18.3 percent reduction from FY 2017 enacted levels. This funding level is achieved by eliminating all community development programs and the Public Housing Capital Fund, as well as by slashing the Public Housing Operating Fund and other programs. 
The Administration’s budget focuses on HUD’s “commitment to fiscal responsibility by reforming programs to encourage the dignity of work and self-sufficiency while supporting critical functions that provide assistance to vulnerable households.” The document references forthcoming legislative reforms that would “produce significant cost savings” and requires those capable of work to shoulder a higher rent burden.  
The President also proposes a dramatic disinvestment in our nation’s public housing inventory, abolishing the Public Housing Capital Fund and gutting the Public Housing Operating budget by 44 percent. The proposal shifts resources to the Rental Assistance Demonstration program, requesting $100 million to help with conversions and an expansion of the program by removing both the cap and the deadline for applications.
Eliminating the entire community development function of the HUD mission, the Administration claims programs like the Community Development Block Grant (CDBG) program are “duplicative or have failed to demonstrate effectiveness.” The proposal shifts the burden to state and local governments, which the Administration says are “better equipped to respond to local conditions.”
Overall, the budget put forth by the Administration works toward the goal of “support[ing] currently assisted households while strategically decreasing the Federal footprint of HUD’s rental assistance programs over time.”
(Note: these FY 2019 funding numbers are compared to FY 2017 enacted, and do not include a potential additional $2 billion as a result of the budget deal signed into law last Friday.)
  • Public Housing Capital Fund: $0, a $1.941 billion decrease
  • Public Housing Operating Fund: $2.477 billion, a 44 percent or $1.6 billion decrease 
  •    o Note: the Operating Fund includes an additional $364 million in additional funds for set-asides that were previously funded through the Capital Fund, such as Jobs Plus. The budget lists top-line funding as $2.8 billion.
  • Rental Assistance Demonstration: $100 million, a $100 million increase 
  •   o Note: The budget proposes an expansion of the RAD program and eliminates both the cap and September 30, 2020 deadline for submission of applications.
  • Choice Neighborhoods: $0, a $137.5 million decrease
  • Section 8 Housing Assistance Payment Renewals: $17.514 billion, a 4.6 percent or $841 million decrease
  • Ongoing Administrative Fees: $1.53 billion, a 6.7 percent or $110 million decrease
  • Family Self-Sufficiency: $75 million, level funding
  • Section 8 Project-Based Rental Assistance: $10.866 billion, a $50 million increase
  • Community Development Block Grant: $0, a $3 billion decrease
  • HOME Investment Partnerships: $0, a $950 million decrease
  • Housing Opportunity for Persons with AIDS: $330 million, a 7 percent or $26 million decrease
  • Homeless Assistance Grants: $2.383 billion, level funding
While the President’s budget proposal is a critical first step in the appropriations process and sets the tone for the national conversation of budget priorities for the fiscal year, it is purely a political document that does not carry the force of law. Congress controls the nation’s purse strings and can choose to adopt or ignore the proposal.
Feb 15 2018
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