Federal Housing Programs on the Chopping Block

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Advocates for federal government programs for the poor are warning that deep cuts to the housing voucher program may be coming. The co-authors of a report from the Washington-based Center on Budget and Policy Priorities said late last year that housing programs for the poor may be slashed by the new Republican majority in the U.S. House of Representatives

New House Speaker John Boehner of Ohio and other U.S. House Republicans will begin re-writing funding bills for 2011, with a goal of making substantial cuts.

“(Boehner) proposed to cut $100 billion from a broad range of domestic programs,” said Douglas Rice, one of the co-authors of the center’s report. “And it will be very difficult, but not impossible to make cuts of that depth without cutting low-income housing programs like the voucher program,”

In a joint phone interview on Dec. 20, Rice and coauthor David Lara predicted that the US Congress would pass a short-term funding bill that will fund federal domestic programs at 2010 levels through early March. Congress did pass the short-term funding bill shortly thereafter. But Lara said the Center’s staff was not optimistic that the programs would continue to get funded at 2010 levels:

“We’re not hopeful that those levels will stay, but be cut more drastically.”

Rice and Lara wrote “Proposals to Cut Domestic Programs Threaten Loss of Housing Assistance for Thousands of Low-Income Families,” which looks at the total funding for federal housing programs in the U.S. Department of Housing and Urban Development’s budget. Cuts to HUD’s programs could have “deleterious impacts” on thousands of low-income families now using housing vouchers, Rice and Lara wrote. Several Congressional proposals to reduce overall funding for fiscal year 2011 “threaten cuts in voucher funding that could cause tens of thousands of low-income families to lose their rental assistance.”

The report states that renewal of all the vouchers is “critical to preventing homelessness and other hardships.”

A summary of the center’s report states that voucher cuts would also hurt local economies and the housing markets. Federal rental assistance has not kept pace with the growing needs from 2003 to 2009, and rents have risen as home prices declined from May 2006 to May 2010.

According to the center, the U.S. House of Representatives and the Senate Committee on Appropriations have already approved separate bills to fund programs administered by HUD for fiscal year 2011. But Lara and Rice say those bills are “frugal” and below the 2010 funding level, adjusted for inflation.

“If the final bill were funded at the midpoint between the two bills, total discretionary funding would be reduced, in real terms, by $453 million, or 0.7 percent, below the real 2010 funding level,” Lara and Rice wrote.

“If Congress does not protect the voucher program from cuts, then even under the most favorable of the scenarios…many local housing agencies would be forced to terminate rental assistance for thousands of families, reduce further the number of families they assist through program attrition, and take actions that raise rents sharply on low-income tenants.”

They added that “Under the worst-case scenario – delaying a final HUD funding bill until next year and imposing a 21 percent cut – it would be impossible for agencies to avoid terminating rental assistance for hundreds of thousands of low-income families.”

The summary of the report can be found here: http://www.cbpp.org/cms/index.cfm?fa=view&id=3332 .

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