Senate Committee Passes Sequester-Constrained THUD Bill

In swift succession, the Senate Appropriations Subcommittee for Transportation, Housing and Urban Development, and Related Agencies (THUD) and the Senate Appropriations Committee approved the FY16 THUD funding bill. The Subcommittee passed the bill on June 23 by a voice vote. The full Committee passed the bill on June 25 by a vote of 20 to 10. Senators Barbara Mikulski (D-MD), Dianne Feinstein (D-CA), Tammy Baldwin (D-WI), and Brian Schatz (D-HI) voted with all 16 Committee Republicans in support of the bill.

The bill’s most drastic provisions are a 93% cut to the HOME and an expansion of the Moving to Work (MTW) demonstration program from 39 to 339 Public Housing Agencies (PHAs). The cuts to HOME allows the bill to maintain funding for most other HUD programs and expand some programs. The cut is necessitated by spending caps dictated by Budget Control Act of 2011. During Subcommittee consideration, THUD Chair Susan Collins (R-ME) described the “tyranny of math” caused by the 2011 Budget Control Act sequester spending caps that allow almost no new resources for FY16 despite the need for additional funds to simply maintain some HUD programs. THUD Subcommittee Ranking Member Jack Reed (D-RI) called it a “very, very difficult bill.”

During the full Committee markup, Senator Collins said the bill would be better if there was a bi-partisan agreement to lift the spending caps. Full Committee Vice Chair Barbara Mikulski (D-MD) urged swift action on a budget deal. She said, “We don’t need showdowns and threats of shut downs. We need to end the sequester, which will have dire consequences.”

A sequester relief deal, such as the Ryan-Murray agreement that provided sequester cap relief in FY14 and FY15 is necessary for FY16 as well. Until such a deal is struck, appropriators are forced to write bills in compliance with the caps.

It is highly unlikely that the bill as passed will be considered by the full Senate. Senate Democrats are successfully implementing their plan to block consideration of all appropriations bills on the Senate floor. Further, President Barack Obama has stated he will veto any spending bill that is written under the 2011 Budget Control Act spending caps.

HOME. The bill would cut HOME funding from $900 million in FY15 to $66 million in FY16. In FY10, HOME was funded at $1.8 billion. The block grant program is used to provide homeownership assistance, rental production, and tenant-based rental assistance.

“The draconian cut to the HOME program was driven by sequestration,” NLIHC President and CEO Sheila Crowley said in a June 23 media release. “Until the sequester spending caps are removed, it will be impossible for Congress to provide key programs at the Department of Housing and Urban Development (HUD) the funds they need to effectively serve low income families and communities.”

According to HUD, if HOME is zeroed out for FY16 and not funded at President Barack Obama’s requested level of $1.06 billion, there would be a loss of an estimated 38,665 affordable housing units (16,045 homebuyer units, 15,099 new or rehabilitated rental units, and 7,521 rehabilitated owner-occupied homes), and 8,813 fewer families would be assisted with HOME tenant-based rental assistance. 

The House THUD bill would cut HOME by $133 million, and would empty the National Housing Trust Fund to flat fund HOME program for FY16. The NHTF campaign is grateful that the Senate THUD bill does not raid the NHTF program to backstop cuts in other programs.

During full Committee mark-up, Senator Reed introduced an amendment that would have increased the bill’s funding for HOME, Community Development Block Grants (CDBG), Public Housing Capital, the Choice Neighborhoods Initiative, and HUD’s Lead Hazard and Healthy Housing programs. The amendment would also have provided new funding for vouchers for domestic violence victims. The amendment failed on a party line vote of 14 to 16.

Senator Chris Coons (D-DE) also offered an amendment to increase HOME funding and noted that Senators Patrick Leahy (D-VT), Richard Durbin (D-IL), Jeanne Shaheen (D-NH), Jeff Merkley (D-OR), and Tom Udall (D-NM) joined him in offering his amendment. The amendment also failed on a party line vote of 14 to 16.

Senator Collins defended the cuts to HOME, saying that the CDBG program can provide the housing assistance that HOME does. She mentioned the "extensive Washington Post series" that reported that HOME was "fraught" with "misuse" and "fraud." She added, "Not exactly a program with a stellar record." She also talked about the choices she had to make in the bill, which are limited because 83% of HUD's budget is rental assistance renewal for currently housed tenants, who are the priority.

Community Development Block Grants. The bill would cut Community Development Block Grants, from $3 billion in FY15 to $2.9 billion in FY16.

Project-Based Rental Assistance. The bill would provide $10.826 billion for project-based rental assistance (PBRA), an increase in funding needed to renew contracts for 12-month terms for calendar year 2016. This amount is slightly more than HUD requested, and almost $200 million more than the House bill, which would underfund renewals in 2016. The increase over the President’s request is because the Committee did not increase the medical deduction threshold, a cost-saving measure in the President’s request. Advocates oppose the measure because it does not coincide with an increase in the standard deduction for households with seniors or persons with disabilities.

The Senate bill would provide $172 million more for PBRA renewals than the House. The House bill would rely on savings from changes to project-based contract administrators, savings that advocates understand would not be realized until contracts are renewed after 2016.

The Senate bill continues various policies regarding preservation of the assisted housing stock, including transfer of debt and restricted use agreements from obsolete to viable projects, HUD management or disposition of at-risk properties to ensure continued assistance to tenants, and actions HUD must take when a property’s real estate assessment center (REAC) score falls below certain levels.

The bill allows PBRA tenants to participate in the Family Self-Sufficiency (FSS) program, but provides no FSS funds for the PBRA program. However, the bill would allow owners to use funding from residual receipts accounts to hire FSS coordinators.

Housing Choice Vouchers. The 93% cut to HOME allowed the Committee to provide sufficient funds to renew all existing Housing Choice Vouchers, and to provide $75 million for new Veterans Affairs Supportive Housing (VASH) vouchers and $20 million for new 2,500 Family Unification Program (FUP) vouchers.

The President’s request did not seek new VASH vouchers for FY16, but did request funds to restore the remaining 67,000 Housing Choice Vouchers lost due to sequester cuts. Of the 67,000 vouchers, HUD would target 30,000 vouchers to special populations: 22,500 for homeless families, veterans, tribal families, and survivors of domestic or dating violence; 5,000 to implement the Violence Against Women Act’s emergency housing transfer provision; and 2,500 for FUP. The remaining 37,000 vouchers would not be targeted beyond allocation “based on relative need.”

New FUP vouchers have not been issued since FY11. The Committee bill would increase from 18 to 36 months the time that FUP vouchers could used for youth between 18 and 21 years old who left foster care at age 16 or older but who lack adequate housing. There is no time limit on FUP family vouchers if a lack of adequate housing is a primary factor in either the imminent placement of children in foster care or in the delay in the return of children to their families.

Voucher administration fees would be increased from $1.530 billion in FY15 to $1.620 billion in FY16.

The House provides slightly less for voucher renewals and provides no new resources for VASH or FUP vouchers. The House bill would also level fund voucher administration fees.

Public Housing. The public housing operating fund would receive $4.5 billion in FY16, a slight increase over the $4.440 billion in FY15. However, the bill cuts the public housing capital fund from $1.875 billion in FY15 to $1.742 billion in FY16. Within the capital fund, the set-aside for the Resident Opportunities and Self Sufficiency grants would decrease from $45 million in FY15 to $35 million in FY16. The Senate bill would level fund the Jobs Plus pilot at $15 million.

The bill would cut the Choice Neighborhoods Initiative from $80 million in FY15 to $65 million in FY16. The President requested $250 million. Compared to the House bill funding for the capital fund, operating fund, and CNI, the Senate bill would provide public housing with $186 million more.

The Senate bill would increase from 185,000 to 200,000 the number of public housing units that could convert their subsidy streams under the Rental Assistance Demonstration to either project-based rental assistance or project-based vouchers. The Administration requested an elimination of the cap altogether. The bill would also allow public housing agencies to establish replacement reserve accounts with capital funds. The bill also would exempt “small” public housing agencies from participating in HUD’s physical needs assessment.

Moving to Work. The bill would require the HUD Secretary to expand of the number of Public Housing Agencies (PHAs) that can participate in HUD’s Moving to Work (MTW) demonstration, from the current limit of 39 PHAs to 339 PHAs. Of the 300 new MTW PHAs at least 150 must administer fewer than 600 combined public housing units and vouchers, at least 125 must administer between 601 and 5,000 combined units, and no more than 20 could administer between 5,001 and 22,000 combined units. No new MTW PHA could administer more than 22,000 combined units, leaving the largest PHAs, such as New York City and Los Angeles, out of the expansion.

The bill does not provide any reforms to the MTW demonstration, long sought by NLIHC and others. Under the current MTW flexibility, participating PHAs can impose rent structures that have no relation to tenant income, choose not to assist any new extremely low income households, implement time limits and work requirements, and shift funds between the public housing and voucher programs without a requirement to serve the same number of households.

According to the Center on Budget and Policy Priorities, the Senate proposal would bring between 200,000 and 800,000 additional units of public housing and housing choice vouchers into the demonstration, roughly tripling the size of MTW. As a result, 40% of all public housing and housing choice voucher units would be subject to block grant funding, putting at risk overall funding for housing voucher renewals and public housing operations, which are now governed by need-based formulas. In contrast, the Administration’s proposal to expand MTW for FY16 would allow no more than 150,000 additional units into a modified demonstration.

In addition to the expansion of the MTW demonstration, the bill requires HUD to extend the contracts of the existing 39 MTW PHAs until the end of FY28 “under the same terms and conditions of such current agreements, except for … changes… mutually agreed upon….” Senator Mikulski thanked Senator Collins for solving the MTW problem that she had raised, referring to HUD’s plan to modify the contracts with 11 of the 39 MTW PHAs, which gives them considerably more public housing operating subsidy than all of their PHA peers. HUD and the existing MTW sites are currently negotiating the contact extensions.

Homeless Assistance. The bill would increase funds for homeless assistance programs from $2.135 billion in FY15 to $2.235 billion in FY16. Included in the increase is $40 million for efforts to address youth homelessness. The House bill would provide $2.135 billion for HUD’s homeless assistance programs in FY16.

Within the bill’s homeless assistance account, the Emergency Solutions Grants program would receive $250 million, level with FY15. Funding for Continuum of Care and Rural Housing Stability Assistance programs is increased to $1.918 billion from $1.862 billion in FY15. The bill would provide $7 million in new resources for HUD to coordinate with the Secretary of Health and Human Services on a national study of youth homelessness, and $33 million in new resources for up to ten communities “to implement projects to demonstrate how a comprehensive approach to serving homeless youth, age 24 and under, can dramatically reduce youth homelessness.”

Section 202 Housing for the Elderly. The bill would level fund the Section 202 Housing for the Elderly program at $420 million. This amount includes $77 million for service coordinators, the amount requested by the President, and a $7 million increase over FY15. This amount would provide one-year contract extensions for service coordinators, but would not provide for new service coordinator grants.

Section 811 Housing for Persons with Disabilities. For the Section 811 Housing for Persons with Disabilities program, the bill would provide a $2 million increase over FY15, to $137 million in FY16. The bill includes authorization for the HUD Secretary to transfer, in response to requests received in FY16 through FY20, some or all project-based assistance, capital advances, debt, and statutorily required use restrictions from housing assisted under Section 811 to “other new or existing housing, which may include project, units, and other types of housing, as permitted by the Secretary.”

Lead Hazard Control and Healthy Homes. The Office of Healthy Homes and Lead Hazard Control would receive $110 million, equal to the FY15 amount. The House bill would cut this office’s programs to $75 million for FY16.

HOPWA. The Housing Opportunities for Persons with AIDS (HOPWA) program would be flat funded at $330 million. The bill also includes an updated formula for the distribution of HOPWA resources so funds can more effectively get to communities most in need.

Fair Housing and Equal Opportunity. The bill would provide flat funding of $65.3 million for fair housing programs, $5.7 million less than the President’s request. Of this amount, $40.1 million is for the Fair Housing Initiatives Program, $23.3 million for the Fair Housing Assistance Program, $1.6 million for the National Fair Housing Training Academy, and $300,000 for the creation, promotion, and dissemination of translated materials.

New Policy Provisions. The bill includes provisions, passed by the House earlier this year in a stand-alone bill, to reduce the frequency of income recertifications for certain HUD rent-assisted households whose income is at least 90% from fixed-income sources. Recertifications would take place only every three years, instead of annually. The bill would allow the HUD Secretary to define “fixed income.” Various versions of rent assistance reform legislation have defined fixed income to include Social Security or Supplemental Security Income (SSI).

The bill would also establish energy reduction demonstrations for public housing and project-based rental assistance, including Section 202 and Section 811. The bill would authorize up to 150,000 units of PBRA, Section 202, and Section 811 housing to participate in a demonstration program to reduce energy and water consumption. The bill also establishes a demonstration program to provide incentives to public housing agencies to reduce their energy and water consumption.

An NLIHC press release is at

An NLIHC budget chart is at