Despite Difficult Budgetary Environment, President’s Budget Emphasizes Support for Supportive Housing and Programs that Serve the Most Vulnerable

On April 10th the Obama Administration released the Fiscal Year 2014 Budget.  The budget rolled out two months later than usual, a result of the protracted debate around sequestration and Fiscal Year 2013 funding levels.  Despite significant budgetary headwinds, the Administration requested $47.6 billion for Department of Housing and Urban Development (HUD) programs, an increase of $4.2 billion, or 9.7 percent, above the 2012 enacted level. Over 90 percent of this funding increase is used to maintain current levels of rental and homelessness assistance for vulnerable families. The Administration requested increases of 5.1 and 8.5 percent respectively for the Department of Health and Human Services and the Department of Veterans Affairs (VA).  The request for the VA includes $1.4 billion to support efforts to prevent and end veteran homelessness.

Within HUD, the most notable increase is to the McKinney-Vento program, where the Administration requested $2.38 billion, an increase of $350 million over the FY 13 appropriated level (prior to sequestration cuts).  The request would use $1.95 billion for competitive renewals in the CoC program, and apply $346 million for the Emergency Solutions grants program ($60 million of which would be used for rapid rehousing in high need communities).  The request projects $40 million being available for new supportive housing projects.

CSH is also grateful to see a strong commitment to the Section 8 program, including the VASH program for homeless veterans.  Overall, HUD requested $20 billion for Housing Choice Vouchers, including $75 million for a new round of 10,000 VASH vouchers.  The request also noted the inclusion of an initiative that CSH has advocated for, allowing Housing Authorities to “sponsor-base” Section 8 vouchers, would be included in a forthcoming legislative proposal to reform the program on the whole.  Finally, we are pleased to see a proposal for a significant increase in Administrative Fees for public housing agencies (PHAs); in the process of engaging public housing authorities in serving highly vulnerable people it is critical PHAs have sufficient funding to cover costs in fulfilling their mission.

Within the Treasury Department, the Administration proposed a number of changes to the rules governing the low income housing tax credit (LIHTC) program. First, the budget proposes allowing states to convert some private activity bond volume cap into authority to allocate additional LIHTCs. Second, to serve households in greater need and to provide incentives for creating mixed-income housing, the budget proposes to allow projects to comply with an income-averaging rule. Third, the budget proposes to change the formula used to determine 9 percent and 4 percent rates to provide a more consistent benefit. Fourth, the budget proposes to add preservation of federally assisted affordable housing to the selection criteria for LIHTC allocation state housing agencies are required to include in the qualified allocation plans (QAPs). Finally, to increase the demand for LIHTCs, the budget proposes to make them beneficial to real estate investment trusts (REITs).

Finally, the President’s budget proposes $119 million for Second Chance Act (SCA) programs, an increase of $80 million above the amount previously proposed by the Administration.  SCA grants can pay for a variety of services for people re-entering communities following incarceration including housing and many services made available in supportive housing such as employment training and substance abuse treatment.  We are also pleased to see funding proposed for the Justice Reinvestment Initiative, which helps state and local governments avert growth and cut costs in their corrections systems and reinvest those dollars.  CSH sees an important role for supportive housing in the process of justice reinvestment initiatives.  Finally, the Budget unfortunately proposes that funding for the Mentally Ill Offender Treatment and Crime Reduction Act (MIOTCRA) be combined with a drug and mental health courts program. Despite the Administration’s efforts to consolidate the program, Congress has expressed their support for MIOTCRA through continuous funding of the program during FY 2006-2013.

The U.S. Interagency Council on Homelessness has prepared this fact sheet regarding the budget.  Additionally, the National Alliance to End Homelessness has created a chart of funding levels for several key programs.

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