The federal budget and affordable housing

As Congress and the President continue to debate what the federal budget should and shouldn’t look like, the MCC Washington Office continues to advocate for protection and investment in programs which address poverty and assist families with low incomes.  Starting with affordable housing, we’ll blog on how the federal budget affects issues that are important to MCC in the United States and internationally.

See our website for articles, resources for action and reflections on this topic.

Affordable housing sees significant cuts in each of the budget proposals out there.  Here are some basic numbers and impacts for what the budget means for affordable housing:

  • Overall, the Public Housing Capital Fund is reduced 43 percent in FY 11 by the the House of Representatives, 19 percent by the President and held even by the Senate.  If cut 43 percent, the 1.2 million households in public housing will see further deterioration of their homes because maintenance and upkeep will suffer.  Already, the U.S. Department of Housing and Urban Development estimates that there is between $20 and $30 billion in maintenance backlog for public housing.
  • Administrative fees for Section 8 vouchers is cut 23 percent by the House of Representatives and increased by the President.  This fund has been decreasing steadily since 2003, but this is the sharpest decrease by far.  Without the ability to keep administration steady, jobs with local Public Housing Authorities are lost and landlords of Section 8 units receive subsidy payments inconsistently.  Already a disincentive for landlords to stay in the program, this will likely decrease the number of units available to voucher holders.
  • Section 202, vouchers for elderly individuals is cut by 2/3 by the President, and slightly more by the House of Representatives.  The Senate maintains level funding.
  • Section 811, assistance for persons with long-term disabilities, is cut 60% by both the President and the House of Representatives.  If this cut is made law, out of the 14,000 voucher-holders that currently receive assistance, only 4,000 will keep their assistance.  10,000 persons with long-term disabilities would lose housing assistance.
  • A program which would provide 10,000 new vouchers for veterans experiencing homelessness (there are an estimated 135,000 veterans in this position) would be eliminated by both the President and the House of Represtentatives.
  • The Low Income Heating and Energy Assistance Program (LIHEAP) would be cut so that millions of households would lose utility assistance, which has grown in demand since 2007.

These distinct cuts to low-income programs would create more homelessness, especially because middle- and low-income families are still struggling to recover from the 2007 mortgage crisis.

Despite a continual shortage in affordable housing and increased risk of homelessness for more people than ever before, these cuts are being seriously considered by Congress and the President.

This doesn’t have to be the case.  Congress and the President can and should look to military spending, tax breaks for the wealthiest portion of society and for corporations, and should responsible address the entitlement programs which benefit our aging population.

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