Trump administration FY 2021 budget keeps pushing housing cuts - Affordable Housing Online

Trump administration FY 2021 budget keeps pushing housing cuts

By on February 11th, 2020

Tagged As: Affordable Housing News

Photo by whitehouse.gov.

The Trump administration is proposing huge cuts to affordable housing programs for the fourth year in a row. The administration released its FY 2021 budget with $47.9 billion for the Department of Housing and Urban Development (HUD). This is 15% lower than what was passed in FY 2020. 

The budget again proposes large cuts to public housing, and eliminates many programs that help build affordable housing and improve community infrastructure. The proposal also targets low-income tenants with rent increases and work requirements.

As was the case for the last three years, the Trump administration proposes drastic cuts to public housing. The budget would eliminate the Housing Capital Fund. This fund pays for major repairs, renovations and improvements to public housing. It pays for new boilers and roofs, removing environmental hazards, increasing energy efficiency and improving accessibility. 

The budget also proposes reducing the Public Housing Operating Fund by almost $1 billion from FY 2020 levels. The Operating Fund pays for ongoing maintenance, small repairs, screening new tenants and other work needed to keep up public housing. The administration is requesting $3.572 billion for FY 2021, down from $4.549 billion available in FY 2020.

The Trump HUD budget does include some program increases serving vulnerable populations. The Section 202 Housing for the Elderly program would get $853 million in FY 2021, up from $793 million enacted in FY 2020. The Section 811 Housing for Persons with Disabilities program would receive $252 million for FY 2021, compared with $202 million in FY 2020. However, the administration does propose a significant cut to the Housing Opportunities for Persons with AIDS (HOPWA) program. Congress provided HOPWA with $410 million in FY 2020, but the administration is only asking for $330 million in FY 2021.

Section 8 Housing Choice Vouchers (HCV) appear to receive a slight increase in the president’s FY 2021 budget, but the funds proposed will likely not be enough to renew all vouchers.The administration’s FY 2021 budget provides $18.833 billion for HCV, plus $5.185 billion for Moving to Work (MTW) Public Housing Agencies. Combined, this is a slight increase over the FY 2020 HCV amount of $23.874 billion. In FY 2020, the MTW funds were included in the total voucher amounts. 

The MTW funding only affects a small number of public housing authorities. There are currently only 39 MTW agencies. HUD is working to select another 100 MTW agencies that Congress authorized in 2016. This expansion is likely behind the separate MTW funding line for FY 2021.

MTW housing authorities have more flexibility in how they can use their HCV funds, including building new housing, case management and self-sufficiency programs. This means they will likely serve fewer voucher families as some funds are redirected to other purposes. Program evaluations found that in 2015, MTW agencies had a net loss of 60,000 vouchers as they shifted 19% of their funding to other purposes.  When voucher losses from MTW’s flexible funding are combined with the lower amount for HCV in the FY 2021 budget, it could mean up to 160,000 households could lose their vouchers over time.

President Trump during the 2020 State of the Union address. Photo by Shealah Craighead at defense.gov.

The administration did propose a small increase in Section 8 Project-Based Rental Assistance (PBRA). The budget requests $12.642 billion for PBRA in FY 2021, an increase of $72 million over the FY 2020 level. However, this is likely not enough to renew all contracts.

The White House has tried to eliminate important block grant programs for the last three years, and the FY 2021 budget does the same. The Trump budget would eliminate the Community Development Block Grant (CDBG) and HOME programs. CDBG funds infrastructure, affordable housing, community development and economic revitalization. Many communities use it to support Meals on Wheels programs for seniors. In FY 2020 CDBG was funded at $3.425 billion. The HOME program supports new affordable housing and rental assistance. It received $1.35 billion in FY 2020.

The Trump budget shows limited support for ending homelessness. The administration provides flat funding for homeless assistance grants. Budgeted at $2.773 billion for FY 2021, this is $4 million less than provided by Congress in FY 2020. At a time when communities are working to reduce homelessness among veterans, the Trump budget provides no money for Veterans Affairs Supportive Housing (VASH) vouchers. VASH provides homeless veterans with rental assistance and supportive services to help them stay in their homes. The program has made a big impact in reducing veteran homelessness.

The president again proposes rent increases for tenants in federally assisted housing. This includes tenants with Section 8 HCV, apartments with Section 8 PBRA, and those living in Public Housing. Able-bodied residents would have to pay 35% of their gross monthly income towards rent, compared with 30% of adjusted income under current rules. The proposal would eliminate income deductions for child care and medical expenses, among others. Elderly and disabled residents would pay 30% of gross income for rent, but have their minimum rent doubled to $50. Between the loss of income deductions and the higher minimum rent, many elderly and disable residents will see their rents go up.

The administration also proposed tenant work requirements again. It would allow affordable housing providers to impose work requirements on able-bodied residents, but it does not provide any resources to help residents move into good-paying jobs. It would not apply to elderly or disabled residents.

Low-income renters in rural areas would be hit especially hard by Trump’s FY 2021 budget. The administration proposes eliminating all rural rental programs run by the Department of Agriculture (USDA). These include the Section 515 Rural Rental Housing program and the Section 514/516 Farm Labor Housing programs. The only funding requested is $1.45 billion for Section 521 Rural Rental Assistance. This would fund renewal of rental assistance contracts on existing rural rental properties.

President Trump’s budget should be seen as a blueprint of his administration’s priorities. The final funding amounts are very likely to be much higher than the budget request. Congress is currently operating under a two-year budget deal that sets spending caps through FY 2021. The spending caps are greater than what the president is proposing. Especially in an election year, Congress is likely to fund affordable housing programs at the higher amounts under the two-year agreement. 

Congress has also repeatedly rejected the Trump administration’s past efforts to impose rent increases and work requirements on tenants. For Congress to continue resisting these budget cuts and penalties for residents, senators and representatives will need to hear from low-income renters that affordable housing programs need full funding.

Every year, Affordable Housing Online provides an easy to read summary of the proposed budget, and this year’s report is currently under production. Budget summaries from previous years can be found here:

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Chris Holden

Chris Holden, Affordable Housing Online's Senior Housing Analyst, has been in the affordable housing field for 25 years. Originally from Keene, New Hampshire, he has worked as a researcher, policy analyst, lender, trainer and real estate developer. He also taught political science at Keene State College. He is focused on making housing policies more accessible for low-income renters.