House Appropriations Committee Approves $68.4 Billion FY 2022 HUD Spending Bill

Published by Peter Lawrence on Tuesday, July 20, 2021 - 12:00am

The House Appropriations Committee approved Friday its $84.1 billion fiscal year (FY) 2022 Transportation, Housing and Urban Development (THUD) spending bill yesterday, following the THUD Subcommittee approval July 12. According the committee release, the proposed funding level for the full bill represents $8.7 billion (more than 11%) more than FY 2021.

For the U.S. Department of Housing and Urban Development (HUD), the bill provides gross appropriations of $68.4 billion, a $8.1 billion (13.4%) increase from FY 2020, but $250 million (0.4%) less than the FY 2022 request. Receipts from the Federal Housing Administration and Ginnie Mae along with other collections and rescissions are projected to be $12.0 billion, $1.3 billion (11.8%) more than in FY 2021, so Congress had more funding available to allocate to HUD programs and decreased the need for new appropriations. The bill provides HUD net appropriations of $58.5 billion, a $6.8 billion (13.7%) increase from FY 2021, and $314 million (0.6%) less than the FY 2021 request.

It bears reiterating that the “regular” annual HUD appropriations in the bill will be considered separately from the proposed one-time supplemental $213 billion in HUD and related housing funding proposed as part of infrastructure priorities in the Biden administration’s American Jobs Plan.

For the first time in a decade, the bill includes $973 million of economic development initiatives, otherwise known housing and community development “earmarks.” While earmarks were controversial, congressional leadership brought them back with reforms to help facilitate the passage of large spending bills. When members of Congress can cite specific funding for their district, it makes it easier for them to vote for the bill.

Highlights of the HUD program funding levels follow.

Blog Graphic: Key Programs of the U.S. Department of Housing and Urban Development Budget
Click to Enlarge

 

Public and Assisted Rental Housing

Project-Based Rental Assistance (PBRA)

The House bill provides $14.0 billion for PBRA, which is $545 million (4.0%) more than FY 2021 and $50 million (0.4%) less than the FY 2022 request. The proposed amount appears sufficient to renew expiring contracts with a full 12 months of funding.

Tenant-Based Rental Assistance (TBRA)

TBRA is proposed to be funded at $29.2 billion, a $3.4 billion (13.3%) increase from FY 2021 and a $1.2 billion (4.0%) decrease from the FY 2021 request. Of that overall TBRA amount, $25.0 billion is for Section 8 Housing Choice Voucher contract renewals, which is $1.9 billion (8.1%) more than FY 2021 and $50 million (0.2%) less than the request.

Following the lead of the FY 2022 request, the bill proposes a $1 billion increase for 125,000 incremental vouchers, which is 75,000 (37.5%) fewer vouchers and $1 billion (50%) less than the request, but if enacted, would represent the largest increase in the number of incremental vouchers since the Quality Housing and Work Responsibility Act of 1998.

For the HUD-Veteran Affairs Supportive Housing program, the bill provides $25 million, $15 million (0.2%) less than FY 2021, and $20 million (400%) more than the request, and $4 million of such funding is reserved for Native American veterans. The bill also provides $100 million for Tenant Protection Vouchers, $16 million (13.8%) less than FY 2021 and level with the request.

Public Housing Fund

For FY 2021, Congress merged the public housing capital and operating funds into the public housing fund. The House bill provides $8.64 billion for the public housing fund, which is $834 million (10.7%) more than FY 2021 and $65 million (0.8%) more than the request. For capital subsidies, it provides $3.4 billion, which is $635 million (10.7%) more than FY 2021, and $200 million (6.3%) more than the request. For operating subsidies, it provides $4.90 billion, $58 million (1.2%) more than FY 2021 and $10 million (0.2%) more than the request.

Rental Assistance Demonstration (RAD)

As have previous House THUD annual spending bills, the bill does not include the request to eliminate the unit cap on the RAD program, nor does it extend the program authorization nor authorize it as a permanent program. It also does not extend RAD conversion authority to PBRA contracts for Section 811 supportive housing for people with disabilities. The FY 2018 omnibus bill increased authorization from 225,000 public housing units to 455,000 public housing units and extended program authorization for public housing conversions through 2024. The bill does not provide incremental funding to facilitate such conversions, as proposed by the request ($50 million).

Choice Neighborhoods Initiative

The bill provides $400 million for the Choice Neighborhoods Initiative, which is designed to comprehensively revitalize distressed public and assisted housing communities and is a successor program to the HOPE VI revitalization program, $200 million (100%) more than FY 2021, and $150 million (60%) more than the request.

Community Planning and Development Programs

The bill provides $1.85 billion for HOME Investment Partnerships Program (HOME), a $500 million (37%) increase from FY 2021 and level with the request. Similarly, the bill provides $4.69 billion for the community development fund (the account for Community Development Block Grants), an increase of $1.21 billion (34.9%) from FY 2021 and $918 million (24.4%) more than the request. However, $924 million of this funding is specified via earmarks, so the amount available for CDBG formula funding is $3.76 billion, a $314 million (9.1%) increase from FY 2021 and $$19 million (0.5%) increase from the request. Because funding for these programs isn’t directly tied to specific families, but rather represents funding for future housing and community development activities, it is much more vulnerable than rental assistance funding.

Homeless and Supportive Housing Programs

McKinney-Vento Homeless Assistance Grants are proposed to be funded at $3.42 billion, $420 million (14%) more than FY 2021 but $80 million (2.3%) less than the request. This amount includes a $2.99 billion set-aside for the continuum of care (including $225 million for new continuum of care grants) and rural housing stability assistance programs, and $290 million for Emergency Solutions Grants.

The bill provides $1.03 billion for the Housing for the Elderly (Section 202) program, a $178 million (20.8%) increase from FY 2021 and $105 million (11.3%) more than the request. Within this account, the bill provides $205 million for new capital advances, which the Committee estimates will finance 2,250 new affordable rental homes for seniors. The bill also provides $126 million in renewal funding for service coordinators, which the committee estimates will fully fund 1,600 existing service coordinators.

The Housing for Persons with Disabilities (Section 811) program is proposed to be funded at $352 million, a $125 million (55.1%) increase from FY 2021, and a $80 million (29.4%) increase from the request.

The bill would provide $600 million for the Housing Opportunities for Persons with AIDS (HOPWA) program to provide housing and supportive services, $170 million (39.5%) more than FY 2021 and $150 million (33.3%) more than the request.

Next Steps

The full House is expected to consider the FY 2021 THUD bill packaged together with the FY 2022 Financial Services & General Government spending bill funding Treasury and five other annual spending bills the week of July 26. It is unclear when the Senate Appropriations THUD Subcommittee to markup its FY 2021 bill, and the timing is complicated by the fact that the Senate is focused on the bipartisan infrastructure legislation and passing a FY 2022 budget resolution before it is currently scheduled to recess for the rest of the summer Aug. 6. While the recess may be delayed in order to finish consideration of those two priorities, it appears likely that the Senate Appropriations Committee won’t consider FY 2022 spending bills until after the August recess.

Given the limited time in September (the House doesn’t plan to hold floor votes until Sept. 20) to pass the Senate and final versions of the FY 2022 spending bills, most policy insiders expect Congress to consider a short-term continuing resolution to fund the government starting at the beginning of FY 2022 Oct. 1 and lasting through mid-November or early December. It is possible that Congress could also consider legislation to suspend the debt ceiling as part of the continuing resolution. The current debt ceiling suspension expires July 31, and Treasury is expected to be able exercise its “extraordinary measures” to avoid breaching the new debt ceiling for no more than two months given the amount of stimulus funding Congress has authorized in the past 18 months.

Before the end of the 2022 calendar year, Congress appears likely to follow its common practice to pass a FY 2021 omnibus spending bill containing all of the annual spending bills that are not enacted earlier in the fall. Such a bill could also serve as a vehicle for tax legislation, including tax extenders that expire at the end of 2021, such as the 12.5% increase in 9% LIHTC allocations originally enacted in 2018.