Trump Administration Proposes 2020 HUD Budget

President Trump recently released his fiscal year 2020 budget request. The 2020 President’s Budget requests $44.1 billion for HUD, approximately $8.7 billion less than the 2019 Annualized Continuing Resolution (CR). According to Secretary Carson, the budget strategically invests in programs and advances key priorities. The key investments include:

• Increasing rental assistance to $37.9 billion, maintaining services for all currently HUD-assisted households.
• Building on efforts to promote tenant self-sufficiency and reduce administrative burdens through proposed rent reforms and work requirements on non-elderly, non-disabled tenants.
• Continuing the march to ending homelessness through $2.6 billion in grants.
• Removing dangerous lead and other hazards from homes with $290 million in grants and technical development.
• Promoting transparency and accountability to taxpayers by investing in HUD’s financial transformation and critical staffing needs.
• Supporting Secretary Carson’s “Prescription for HUD” management and policy agenda.

Industry groups, however, are alarmed at the proposal to cut HUD’s budget by $8.6 billion or 16.4 percent below 2019 enacted levels. They’re urging Congress to reject the budget proposal and to significantly expand the investments in low-income housing.

Rent increases, work requirements. The proposed budget incorporates changes included in draft legislation known as the “Making Affordable Housing Work Act,” which was proposed by the administration last year. The draft legislation had proposed to increase rents on most non-elderly, non-disabled families by requiring that they pay 35 percent of their gross incomes, compared to 30 percent of their adjusted incomes previously, on their rents. The very poorest elderly and disabled families would also see their rents triple up to 30 percent of their gross incomes or $50, whichever is higher. The budget proposal would eliminate income deductions for medical or childcare expenses for all households, primarily impacting seniors, people with disabilities, and families with children. It would set a new mandatory minimum rent for households assumed to be able to work at more than $150 or three times more than its current rate. And the proposal would allow housing providers to broadly impose work requirements.

National Housing Trust Fund. The proposed budget calls for eliminating the national Housing Trust Fund (HTF). The HTF is funded in part through a small fee on Fannie Mae and Freddie Mac, housing finance reform, and other legislative opportunities. It’s the first new housing resource in a generation exclusively targeted to help build and preserve housing affordable to people with the lowest incomes, including those experiencing homelessness.

Tenant-Based Rental Assistance. The proposed budget would cut funding for tenant-based rental assistance (TBRA). The request provides $22.24 billion for TBRA. At this amount, the budget request wouldn’t provide enough funding to ensure that all contracts are fully renewed.

Project-Based Rental Housing. The budget proposal would provide $12.02 billion to renew project-based rental assistance (PBRA) contracts, an increase of $274 million from the FY19 funding level. However, this probably wouldn’t be sufficient to renew all existing contracts.

Public Housing. The budget again proposes to merge the Public Housing Capital Fund into the Public Housing Operating Fund, with reduced overall funding. In effect, the capital fund would be eliminated, and the allocation for the operating fund would fall significantly, from $4.65 billion in FY19 to $2.86 billion. Instead, the administration requests $100 million for the Rental Assistance Demonstration (RAD) to convert more public housing into housing vouchers and PBRA.

Homelessness. The proposed budget would fund homeless assistance programs at $2.599 billion, or $34 million less than 2019 enacted levels.

Healthy Homes. The administration would fund the Office of Lead Hazard Control and Healthy Homes grants at $290 million, a slight increase of $11 million compared to FY19.

Fair Housing. The budget would decrease funding for HUD’s Office of Fair Housing and Equal Opportunity. Specifically, the Fair Housing Initiatives Program (FHIP) would be cut by $3 million.

Other HUD programs. The budget would eliminate the Community Development Block Grant (CDBG) program, the HOME Investment Partnerships program, Choice Neighborhoods grants, the Section 4 Capacity Building program, and the Self-Help Homeownership Opportunity Program.

The proposed budget would provide $644 million to the Section 202 Housing for the Elderly program, a $34 million decrease from this year’s funding level. It would also reduce funding for the Section 811 Housing for People with Disabilities program to $157 million, $27 million less than the FY19 level. And funding for the Housing Opportunities for People with AIDS (HOPWA) program would decrease to $330 million, down from $393 million in FY19.