Thursday, April 11, 2013

President’s FY2014 Budget Reflects Deficit Pressure and Tough Times for Housing

by Ethan Handelman

The President’s FY 2014 budget, delivered April 10, follows the recurring theme in Washington of deficit reduction. It does so in ways that attempt to balance immediate job creation with the long-term need for investment in people, infrastructure, and industry, while also reducing the deficit. In housing, the budget shows the how the overall pressure to reduce spending filters down to the program level, with cuts or flat funding for some core housing programs alongside a few increases and new proposals in key areas. These cuts come on top of prior year reductions and the across-the-board sequestration cuts, leaving housing programs and the people they serve more vulnerable. Read our summary document here.

The budget arrives, however, after the Senate and the House of Representatives have each set their budgets for 2014 (S Con Res 8, H Con Res 25). It may therefore be less of a specific blueprint for appropriations and more a proposal in negotiations over the future of government funding. This summer will bring another potential battle over raising the debt limit, with sequestration still in place until an agreement on deficit reduction occurs. The budget proposal combines new revenue sources with cuts in spending, aiming for the still-elusive grand bargain needed to bring deficits down without harming the economy or the most vulnerable in America.

The top line HUD budget is $47.6 billion, which is a 9.7% increase above FY 2012 (two years ago). It renews funding primarily to preserve assistance for currently-assisted households, making cuts mostly in programs that create new units. In other words, the practical effect of this necessary triage is to put off and worsen the affordable housing needs of tomorrow by not creating needed units today. In several areas, the budget proposes program expansions or changes, noted in NHC’s budget summary, which also provides links to learn more. The summary table below gives a quick view of requested program funding levels.

Summary Table of FY 2014 Budget Proposal Compared to Past Years

Key: 

Programs (Figures in Millions)
FY11* Enacted
FY12* Actual
FY13 CR
FY13 CR Less 5% sequester**
FY14 Budget Proposal

Tenant Based Rental Assistance
18,371
18,914
19,006
18,056
19,989
Project Based Rental Assistance
9,257
9,340
9,395
8,925
10,272
Family Self Sufficiency

60
60
57
75
Rental Assistance Demonstration
-
-
-
-
10
Public Housing Operating Fund
4,617
3,962
3,986
3,787
4,600
Public Housing Capital Fund
2,040
1,875
1,886
1,792
2,000
Homeless Assistance Grants
1,901
1,901
1,913
1,817
2,381
Section 202 – Elderly
399
375
377
358
400
Section 811 – Disabled
150
165
166
158
126
CDBG (excluding disaster funds)
3,501
3,308
3,308
3,143
3,128
HOME
1,607
1,000
1,006
956
950
SHOP***
82
54
54
51
10
Sustainable Communities
100
0
100
95
75
Choice Neighborhoods/Hope VI
100
120
121
115
395
HOPWA
334
332
334
317
332
Housing Counseling
0
45
45
43
55
502 Single Family Direct****
1,119
900
900
855
360
502 Single Family Guaranteed
24,000
24,000
24,000
22,800
24,000
515 Rental Housing Direct
69
64
0
0
28
538 Rental Housing Guaranteed
31
130
150
143
150
521 Rental Assistance
954
905
907
862
1,015






Legend
=  increase, = decrease, = increase vs. last year but below historical levels, = no change

Notes

*FY12 Actuals and FY13 CR amounts as reported by HUD in the Congressional justification
**FY13 CR less 5% sequester calculated from FY 13 CR figures

***SHOP would receive only a $10 million carveout from the HOME budget



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