President Donald Trump has proposed a budget that includes substantially reducing federal spending on rental assistance programs administered by the Department of Housing and Urban Development (HUD).
The Office of Management and Budget submitted a discretionary spending request to the Senate Committee on Appropriations outlining $33.6 billion in cuts to HUD’s budget. The largest share – $26.7 billion – would come from programs that provide tenant-based rental assistance, public housing, and shelter for the elderly and people with disabilities.
The request called the current federal rental assistance programs "dysfunctional: and proposes a state-based formula grant that would allow states to design their own rental assistance programs based on their unique needs and preferences.
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“A state-based formula program would also lead to significant terminations of federal regulations, said the proposal. “In combination with efforts related to opening up federal lands, this model would incentivize states and the private sector to provide affordable housing. This proposal would encourage states to provide funding to share in the responsibility to ensure that similar levels of recipients can benefit from the block grant.”
The proposal asks for a new two-year cap on rental assistance for able-bodied adults, prioritizes funding to go to the elderly and disabled, and includes $25 million in housing grants for youth aging out of foster care.
An NPR report characterized the proposed budget cuts as an end to Section 8 and other housing voucher programs and quoted low-income-housing advocates who predicted an escalation in homelessness as a result of the proposed cuts. Housing advocates noted the cuts would be disruptive not only for tenants but also for landlords who receive federal rental aid. The report points to data that suggests nearly half of all renters are considered cost-burdened and homelessness is at a record high.
But keep in mind that the president’s proposal is only a suggestion, and Congress ultimately has the authority to pass its own budget. There is some thought that the legislative body won’t go as far as the proposed budget requests for housing program cuts, according to NPR.
Kevin Corinth with the conservative American Enterprise Institute thinks it's worth asking whether federal housing programs are fair. "It makes sense to get people aid when they need it," he said, "but we don't necessarily want them to stay on it forever."
Meanwhile, local advocates say decreases in housing funding could have ripple effects across local communities, including increased usage of emergency rooms for routine care, a greater need for food aid, and interruptions to education if families are forced to leave their housing.
The proposed cuts come just weeks after news surfaced that funding for emergency housing vouchers, including for those fleeing domestic violence, was running out much faster than expected, and local housing authorities were warned to prepare for the program to end next year.
Additionally, the president's budget includes reductions to the Community Development Block Grant (CDBG) program, among other cuts.
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Kristen Smithberg
Kristen Smithberg is a Colorado-based freelance writer who covers commercial real estate, insurance, benefits and retirement topics for BenefitsPRO and other industry publications.
