Congressional appropriations committees working on fiscal 2012 funding legislation have shown they are still willing to take care of Sec. 8 contract renewal needs, but other programs are being squeezed because of budget defi- cit concerns.
The final shape of the 2012 appropriations bill is unclear, and a temporary continuing resolution may be needed to keep the Department of Housing and Urban Development (HUD) and other government agencies in business. However, the House and Senate committees have put together bills with a similar pattern—cuts in other programs to provide money for Sec. 8—though they differ in the details.
For Sec. 8 vouchers, the House bill provides $18.47 billion, including $17.04 billion for renewals, and the Senate bill has $18.87 billion, with $17.14 billion for renewals. The figures for Sec. 8 project-based assistance are $9.43 billion in the House bill and $9.42 billion in the Senate measure. According to both committees, the funds should cover all contract renewals.
One key difference in the two bills is the Sec. 8 tenant-based funding for administrative fees. The Senate bill includes $1.4 billion, down about 3 percent from 2011 funding, but the House bill provides only $1.1 billion.
For public housing, the House bill provides $1.53 billion for the capital fund and $3.86 billion for the operating fund, while the Senate bill has $1.87 billion for the capital fund and $3.96 billion for the operating fund. The fiscal 2011 appropriations, by comparison, are $2.04 billion and $4.62 billion, respectively.
To give housing authorities full formula allocations from the operating fund, the administration's budget included a controversial proposal to supplement the appropriation with $1 billion in excess pubic housing authority reserves. Both bills would allow HUD to implement this plan, but the Senate measure would limit the offset to $750 million.
Neither bill would fund the HOPE VI program for the revitalization of severely distressed public housing. The Senate bill includes $120 million for Choice Neighborhoods, the successor to HOPE VI that is intended to transform poor neighborhoods into mixedincome communities. The House measure has no money for Choice Neighborhoods.
Also, neither bill has funding for HUD's proposed rental assistance demonstration (RAD) program to convert public and assisted housing to Sec. 8 project-based vouchers or Sec. 8 project-based rental assistance. However, the Senate bill would authorize the department to implement the demonstration by using a portion of funds provided for other programs.
The HOME program, which has a fiscal 2011 appropriation of $1.61 billion, would be cut to $1.2 billion in 2012 under the House bill and $1 billion under the Senate measure.
Funding for other programs, with the House amount first, includes: Community Development Block Grants, $3.5 billion, $2.85 billion; Indian housing block grants, $648.7 million, $650 million; Housing Opportunities for Persons with AIDS, $334.3 million, $330 million; homeless assistance, $1.9 billion in both bills; Sec. 202 housing for the elderly, $600 million, $369.7 million; and Sec. 811 housing for the disabled, $196 million, $150 million.
For mortgage finance, both bills provide commitment limits of $400 billion for the FHA Mutual Mortgage Insurance Fund; $25 billion for the General and Special Risk program account, which insures multifamily mortgages; and $500 billion for Ginnie Mae mortgage-backed securities.
OMB orders agencies to find funding cuts for fiscal 2013
Whatever the outcome of the debate over HUD's fiscal 2012 funding, the department may face additional cuts in 2013 as the administration struggles to get a handle on the deficit.
The Office of Management and Budget has directed all agencies to develop fiscal 2013 budgets with aggregate discretionary funding that is at least 5 percent below the fiscal 2011 appropriation. In addition, the agencies must identify more funding cuts that would bring the request to at least 10 percent below the 2011 total. While cutting overall spending, the memo says, agencies should also identify programs to “double down” on because they can promote economic growth.
Obama's jobs bill includes $15 billion for rehab program
President Obama's $447 billion to boost the economy and create jobs would provide $15 billion for a Project Rebuild program to support state and local efforts to redevelop vacant and foreclosed residential and commercial properties and stabilize the affected neighborhoods.
Two-thirds of the money would be allocated by formula to states and units of general local government, while one-third would be distributed through a competitive funding process to states, localities, nonprofits, and for-profit entities.
The funds could be used to establish financing mechanisms for the purchase and redevelopment of abandoned and foreclosed properties; purchase and rehabilitate abandoned or foreclosed properties for sale, rental, or redevelopment; establish and operate land banks; demolish blighted structures; redevelop abandoned, foreclosed, demolished, or vacant properties; and engage in other activities that are consistent with program goals.
The funding allocation formula developed by HUD would have to ensure that funds go to states and local governments with the greatest need, based on the number and percentage of home foreclosures; number and percentage of homes in default or delinquency; and other factors such as established program designs, grantee capacity and performance, number and percentage of commercial foreclosures, overall economic conditions, and other market needs data.
Barry G. Jacobs is editor of Housing and Development Reporter, the nation's premier source for in-depth, factual coverage of all aspects of affordable housing and community development. The two-part publication includes informed reports and insightful analyses in “HDR Current Developments,” and an up-to-date compilation of essential documents in the “HDR Reference Files." Jacobs is also the author of the annually updated HDR Handbook of Housing and Development Law. For more information, call (800) 723-8077.