Final Debt Ceiling Agreement Will Likely Harm Renters and People Experiencing Homelessness

President Joe Biden and House Speaker Kevin McCarthy (R-CA) reached an agreement on May 27 to lift the debt ceiling in exchange for a two-year freeze on spending for important domestic programs and increased work requirements for certain recipients of food and cash assistance programs, among other things. Because some HUD programs require additional funding to keep up with inflation, higher rents, and interest rate hikes, the debt ceiling agreement will result in significant cuts to affordable housing and homelessness assistance. In fiscal year (FY) 2024 alone, HUD will require between $13 billion and $16 billion in additional funding just to maintain current levels of assistance. Unless further action is taken by Congress, tens of thousands of households will be at risk of losing rental assistance.

“House Republicans held our nation’s lowest-income and most marginalized people hostage in exchange for lifting the debt ceiling,” NLIHC President and CEO Diane Yentel said in a statement. “By preventing necessary inflationary cost increases for critical HUD programs, this debt ceiling deal could lead to tens of thousands of families losing rental assistance during an already deepening housing and homelessness crisis. Expanding ineffective work requirements and adding time limits for food assistance adds salt to the wound, further harming some of the lowest income and most marginalized people in our country.”

Under the debt ceiling agreement, FY2024 spending for domestic programs would be capped at FY2023 levels and spending increases in FY2025 would be limited to just 1%. Unobligated COVID-19 relief resources would be rescinded, although critically important Emergency Housing Vouchers and Emergency Rental Assistance funds would be spared.

The U.S. House of Representatives has already voted to pass the bill, and the Senate is almost certain to follow suit before the nation defaults on its debts on June 5.

Effective advocacy helped prevent some of the most extreme House Republican proposals from being enacted. The collective efforts of advocates everywhere increased public pressure to prevent HUD’s budget being cut by 30%, which could have put nearly 1 million households at risk of losing their rental assistance and denied services to 120,000 fewer people experiencing homelessness.

But the final debt ceiling agreement will still cause significant harm to households with the greatest needs. Once the agreement is enacted, Congress will turn its attention to divvying up the available funds among various departments and programs and drafting and voting to approve final spending bills. Your continued advocacy will be needed over the coming weeks and months to ensure the highest level of funding possible within these tight budget caps for affordable housing and homelessness programs and to protect thousands of our nation’s lowest-income and most marginalized households from losing their rental assistance.

Thank you for your advocacy!