The U.S. Department of Housing and Urban Development (HUD) released its proposed 2018 budget on Tuesday, saying it will continue to provide rental assistance for 4.5 million households. The bottom line is about $41 billion in discretionary spending, down from about $57 billion in mandatory and discretionary spending in 2017. Support appears to be continued at or near 2017 budget levels for many programs although several were eliminated completely.
Rental assistance will apparently continue through existing programs such as Housing Choice Voucher, Project Based Rental Assistance, Housing for the Elderly and for Persons with Disability although raises are proposed to tenant rent contributions "with some protections for those who experience hardships." HUD says, "The Administration seeks to provide funding flexibilities and relieve regulatory and other cost burdens on public housing authorities."
The Community Development Block Grant (CDBG) program is proposed for defunding. HUD's press release said the agency was "devolving the activities the CDBG program supports to the State and local level" as studies have found CDBG "is increasingly not well targeted to the poorest communities and has not demonstrated a measurable impact on communities." An admittedly cursory examination of the 351-page budget proposal did not reveal any funding for states and local areas to whom the activities are to be devolved.
The budget also proposes the elimination of HUD's Choice Neighborhoods Initiative, HOME Investment Partnerships Program, and the Self-Help Homeownership Opportunity Program (SHOP), 'because State and local governments are better-positioned to serve their communities' needs." It also appears that several housing programs specific to native Americans are being defunded.
On the winning side of the budget is support at 2017 levels for homelessness programs and increased funding for programs involving detection and remediation of lead paint.
At first glance FHA and Ginnie Mae seem to be proposed for funding at about the same levels as last year with up to $400 billion in new loan guarantee authority requested for FHA along with changes to strengthen the Home Equity Conversion Mortgage (HECM) or 'reverse mortgage' program. The budget also seeks $500 billion in new guarantee authority for Ginnie Mae. FHA may get an additional $30 million to support and modernize its aging computer systems although the amount appears to be a pass-through from a new or increased administrative fee.
The Administration proposes removing the current 225,000 statutory limit on the number of public housing units that can participate in HUD's Rental Assistance Demonstration (RAD), although a new ceiling level wasn't apparent. HUD calls RAD is an important strategy to recapitalize the nation's at-risk public housing stock, and said in the program's short history, it had generated more than $4 billion in private investment in public housing, preserving more than 61,000 units of affordable housing.
"This Budget reflects this Administration's commitment to fiscal responsibility while continuing HUD's core support of our most vulnerable households," said HUD Secretary Ben Carson. "We will work very closely with Congress to support the critical work of our agency as we vigorously pursue new approaches to help work-eligible households achieve self-sufficiency."
We will take a closer look at the budget to determine if there are other significant cuts or increases to the budget and will also await reaction to it from some of its stakeholders. Further articles may be forthcoming.