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FY07 HUD Funding at Risk in Joint Funding Resolution

Capitol Hill
Memo to Members: Vol 12, No. 2, January 12, 2007

The list of people at risk of losing or never getting housing assistance if Congress decides to keep FY07 HUD spending at FY06 levels became longer and more clear the week of January 8. House and Senate Democrats have agreed to finish the uncompleted appropriations business of the 109^th Congress by enacting a single "joint funding resolution" through FY07, which ends September 30, 2007. HUD programs will be included in this measure and most will be harmed if kept at FY06 funding levels.

The House and Senate hope to enact the joint funding resolution by February 15, when the current short-term continuing resolution runs out. There has been speculation by Senate Minority Whip Trent Lott (R-MS) that Congress will have a hard time meeting the February 15 deadline and an additional, short continuing resolution will be necessary. A continuing resolution until February 15 is currently keeping federal programs funded.

Unless "cataclysmic" harm can be shown, funding levels will remain at FY06 levels. Many people in HUD-assisted housing programs will suffer such harm if programs are funded at FY06 levels. In addition to funding levels, advocates are seeking policy changes to fix major policy failings and to extend necessary programs. Advocates are pushing for the joint funding resolution to include critical fixes to the voucher funding distribution system and to extend HUD's Mark-to-Market program. Congressional staff members have said that there will be few, if any, policy changes in the joint funding resolution.

The following list provides a snapshot of what is at risk:

•      Without a $487 million increase above the FY06 level and language linking Public Housing Authorities' (PHA) voucher costs to recent leasing and cost data, 70,000 vouchers will be cut at local agencies in FY07.

•      Contracts on at least 107,000 Section 8 project-based units will not be able to be renewed in FY07 if Congress does not increase the project-based Section 8 budget by $636 million above the FY06 level.

•      Public housing operating subsidies will be underfunded by about 25% of what HUD says is needed in FY07, an historic low compounding the effects of many years of underfunding. Public housing capital needs will continue to be neglected if this fund remains at FY06 levels. Public housing has lost more than $1 billion in funding since FY01.

•      Unless funding is increased by $185 million for FY07, 14,000 homeless people will face yet another year of homelessness.

•      Even people served by smaller programs like Housing for Persons with AIDS will be in jeopardy. If the $14 million requested increase for HOPWA is not enacted in FY07, 3500 fewer people with AIDS and their families will receive housing assistance. 

•      If funding for the Census is not increased by $50 million for FY07, the ability of the Census Bureau to accurately determine funding allocations and produce the American Housing Survey will be compromised.

There are also changes needed to help people in need of affordable housing after Hurricanes Katrina and Rita. One major request for the FY07 bill is to extend the availability of HUD's disaster voucher program funds past September 2007. HUD has said it will terminate the program regardless of whether funds remain.

HUD has requested that Congress extend fungibility provisions for public housing operating and capital funds and voucher funds for affected housing agencies in Louisiana and Mississippi. To extend fungibility, NLIHC thinks certain conditions must be met. For example, funds must be used to repair units that are minimally damaged for immediate occupancy, and housing agencies must be required to seek public input on fungibility plans.

Finally, for disaster-related housing, Congress should mandate that FEMA extend for 12 months its housing assistance programs for households displaced by Hurricanes Katrina and Rita. Given the extremely slow pace of recovery on the Gulf Coast, temporary housing needs remain.

House leadership intends to bring the measure to the House floor by the third week of January. The measure will then be considered by the Senate. Advocates are encouraged to contact their Senators and Representatives and ask that all HUD programs be adequately funded in the FY07 joint funding resolution.