Real Estate

Proposed 2020 HUD budget sees meager increase from last year’s proposal

But there’s a catch

President Donald Trump announced his budget proposal Monday for fiscal year 2020, including a nearly 7% increase for the U.S. Department of Housing and Urban Development's 2019 budget proposal.

But this proposal is actually a decrease from 2019’s enacted budget. While the funding is an increase from Trump’s requested budget for 2019, it is down a whole $8.6 billion, or 16.4%, from 2019's enacted budget.

The Trump administration requested $44.1 billion for HUD, saying the funds would be used to prevent and end homelessness, invest funding to reduce lead and other home health and safety hazards and preserve the rental assistance to HUD-assisted households.

This is up 6.9% from the administration’s 2019 request of $41.24 billion. While the administration continues to increase its request for HUD’s budget each year, last year’s budget request was up 1% from 2018, Trump began his administration by slashing the department’s budget by 13.2%, or $6.2 billion.

HUD explained the president’s budget is a commitment to fiscal restraint, and targets lower value HUD programs for elimination or reduction.

“This Budget advances our key priorities, including empowering HUD-assisted families to achieve self-sufficiency,” HUD Secretary Ben Carson said. “For generations, the idea of the federal government providing housing assistance meant only one thing—helping to pay the rent so families can have a roof over their heads.”

“But we must also think about how we can help families to access financial programs, educational opportunities and higher paying jobs,” Carson said. “In short, we must think beyond investing in bricks and mortar, and think about investing in people.”

Some of the programs HUD’s proposed 2020 budget supports include:

Ending homelessness: The budget calls for $2.6 billion to support local housing and service programs that assist those living in shelters and on the streets. This funding request is up $215 million, or 9%, from the 2019 budget request.

Promoting health: The administration asked for $290 million to put toward HUD’s Office of Lead Hazard Control and Healthy Homes. It is double the funding Trump requested in 2019, and seeks to protect families from potentially dangerous lead-based paint or other safety hazards.

Rent assistance: The budget request includes $22.2 billion for the department’s Housing Choice Voucher Program, which will allow local Public Housing Authorities to maintain support of about 2.2 million families. It represents a 7.6% increase from the 2019 budget request. It also includes $12 billion to renew renal subsidies to privately owned multifamily housing developments through the project-based Rental Assistance Program, an $874 million increase from the last budget request.

Elderly and disabled: The budget requests $644 million for its Housing for the Elderly program and $157 million for its Housing for Persons with Disabilities program. This represents increases of $43 million and $17 million, respectively.

But the budget also works toward reform in its multifamily sector. HUD claims its rental assistance programs create disincentives to employment and impose large administrative burdens for Public Housing Authorities, private owners and tenants.

Back in April 2018, HUD proposed to reform its rental assistance programs through the Making Affordable Housing Work Act, which it submitted to Congress. Now, this new budget incorporates those reforms.

These reforms include increased tenant rent contributions for those able to work, not including elderly/disabled households, reduced frequency of income re-certifications and additional flexibilities for public housing authorities and property owners to develop alternative rent structures. In addition, the budget proposes uniform work for work-able households, while exempting the elderly, the disabled, those caring for a disabled family member or small child and pregnant women.

The budget asks for $62.3 million to support its fair housing initiative, unchanged from its request for 2019.

But despite these increases, the budget did cut some programs HUD described as “lower value.” And again, these increased are from the proposed levels for 2019, and some housing groups are not on board.

“President Donald Trump’s fiscal year 2020 budget request – released today – proposes to drastically cut housing benefits that help millions of low-income seniors, people with disabilities, families with children, veterans and other vulnerable people afford their homes,” said Diane Yentel, National Low Income Housing Coalition president and CEO.

“Like his other budget requests in FY18 and FY19, the proposal would reduce housing benefits for the lowest-income people by slashing federal investments in affordable homes, increasing rents and imposing harmful work requirements on America’s struggling families,” Yentel said. “If enacted, it could leave even more low-income people without stable homes, undermining family stability, increasing evictions, and, in worst cases, leading to more homelessness.”

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