Real Estate

Trump’s proposed 2019 budget gives HUD’s funding a boost

Seeks a record $2.4 billion to support homelessness

President Donald Trump announced today his proposal for the fiscal year 2019 budget, which would allot for a slight bump in funding for the U.S. Department of Housing and Urban Development.

The budget requests $41.24 billion for 2019, an increase of 1% from the $40.7 billion in 2017. Last year, the president cut the department’s budget by 13.2% or $6.2 billion.

Originally, the administration released a budget that would cut the department’s funding to $39.2 billion, bringing the total cuts over the past two years to $8.8 billion or 18.3%. However, early Friday morning, Trump signed a massive spending bill that reopened the government from its second shutdown this year.

As a result of this budget deal, the administration revised its 2019 funding request, releasing the new HUD funding request for $41.24 billion Monday.

Under the new proposal, the administration focuses on several key initiatives, including ending homelessness. The budget requests a record $2.4 billion to support thousands of local housing and service programs assisting those living in the nation’s sheltering system and on the streets. This is an increase of $133 million from Trump’s 2018 budget request.

“The budget lays out a vision for a government that is efficient, effective, and accountable,” HUD Secretary Ben Carson said. “It provides for a strong national defense, lays the groundwork for further economic growth and opportunity through reduced regulatory burdens and taxes, and recognizes the importance of aggressively addressing our nation’s fiscal challenges.”

“I am confident HUD will deliver on its core programs, assist our most vulnerable populations, and make significant enhancements to our programs where needed,” Carson said.

The budget also requests $601 million for the Housing for the Elderly program and $140 million for the Housing for Persons with Disabilities program. These represent an increase of $91 million and $19 million respectively from last year’s budget request.

The budget would change rent assistance programs by merging the Public Housing Capital Fund into the Public Housing Operating Fund with reduced overall funding. This new combined operating fund will be given extra flexibilities to pay for capital improvement needs, HUD explained. The department said this better supports local needs by allowing increased flexibility for each PHA to make decisions that best serve their residents.

It supports homeownership through the Federal Housing Authority mortgage insurance programs by providing up to $400 billion in new loan guarantee authority, including funding to support improvements to FHA’s aging information technology systems, some of which are based upon the outdated COBOL programming language.

The budget also requests $550 billion in new guarantee authority for Ginnie Mae, a part of HUD, and asks for $62 million to support HUD’s fair housing mission.

The administration continues to seek the elimination of the Community Development Block Grant Program, shifting the activities the block grant program supports to the state and local level. Since 1980, and most recently in 2013, HUD studies found that CDBG is not well targeted to the poorest communities and has not demonstrated a measurable impact on communities. 

The president also proposed the elimination of HUD’s Choice Neighborhoods Initiative, HOME Investment Partnerships Program, and the Self-Help Homeownership Opportunity Program, saying state and local governments can better meet their communities’ needs.

The budget requests $145 million to promote healthy and lead-safe housing, an increase of $15 million from last year’s requested amount.

The budget would also realize one of Carson’s dreams through the funding of EnVision Centers. The budget would allow for $2 million to support the new EnVision Center Demonstration.

Carson previously explained his vision to HousingWire in an exclusive interview with Editor-In-Chief Jacob Gaffney, who wrote:

One of Carson’s main initiatives is establishing “envision centers” of learning, especially for teenage mothers who, more often than not, end their educational trajectory once they give birth. New York City is seen as a potential spot for one of the first such centers where young, low-income parents can access day care while learning to code and “balance a checkbook or unclog a toilet,” the secretary told me. The project remains far from being piloted, especially considering recent cuts to HUD’s budget. 

To read more of Gaffney’s conversation with HUD’s secretary, check out this magazine feature story.

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