Key Housing and Community Development Provisions in the FY 2016 Omnibus Appropriations Bill

Published by Peter Lawrence on Wednesday, December 16, 2015 - 12:00am

On Dec. 16, the House and Senate Appropriations Committee leadership released the fiscal year (FY) 2016 omnibus appropriations bill. The bill includes $1.149 trillion in discretionary spending for FY 2016, which was made possible by the Bipartisan Budget Act of 2015, which increased the discretionary spending caps for FY 2016.

For the U.S. Department of Housing and Urban Development (HUD), the bill provides $42.6 billion of gross appropriated funding. This is $1.6 billion (4 percent) more than the amount appropriated under FY 2015 funding levels, but $2.3 billion less than the FY 2016 HUD request, $181 million less than the revised Senate FY 2016 THUD bill and $570 million more than the House FY 2016 THUD bill.

Most notably, the bill provides $950 million for the HOME Investment Partnerships Program (HOME), which is $50 million more than FY 2015 and the House FY 2016 bill, but $884 million more than the Senate Appropriations Committee-approved bill. Furthermore, the bill does not include the provision from the House FY 2016 THUD bill that would have directed $133 million in funding from the Housing Trust Fund to the HOME account. The president’s FY 2016 request for HOME was $1.06 billion, including a $10 million set-aside for the Self-Help Homeownership Opportunities Program (SHOP).

Highlights of the rest of the bill follow.

Public and Assisted Rental Housing

Project-Based Rental Assistance (PBRA)

The bill provides $10.62 billion for Project-Based Rental Assistance, which is $890 million (9.1 percent) more than the FY 2015 funding level of $9.73 billion, but $140 million (1.3 percent) less than the FY 2016 request. The funding level is likely to provide full renewal funding for all contracts under the calendar-year cycle, based upon updated HUD renewal funding need estimates. The Senate bill provides $10.83 billion and the House bill provides $10.65 billion.

Tenant-Based Rental Assistance (TBRA)

Tenant-Based Rental Assistance is proposed to be funded at $19.6 billion. Of that amount, $17.68 billion is for Section 8 Housing Choice Voucher contract renewals, which is 1.7 percent more than FY 2015. It appears this level of funding would be sufficient to renew vouchers in use, again based on updated HUD renewal funding need estimates, but it would not fully restore vouchers lost due to sequestration, as the administration proposed to do in its request. The bill also provides a $60 million specific set-aside for the HUD-Veteran Affairs Supportive Housing (HUD-VASH) program, compared to $75 million in FY 2015 and Senate FY 2016 bill, and nothing in the request and House FY 2016 bill. The bill, like the House and Senate bills, provides $130 million for Tenant Protection Vouchers, the same as FY 2015, but $20 million less than the request.

Public Housing Capital and Operating Funds

The bill provides $1.9 billion for the Public Housing Capital Fund, $25 million (1.3 percent) more than FY 2015 and $70 million (3.6 percent) less than the request, but $157 million more than the House bill. The Public Housing Operating Fund would receive $4.5 billion, $60 million more than FY 2015 and the House bill, but $100 million less than the request.

Rental Assistance Demonstration (RAD)

The FY 2015 HUD spending bill increased the cap on the RAD program from 60,000 to 185,000 public housing units, enabling pending applications to go forward. The administration requested to remove the unit cap and an additional $50 million for incremental funding to enable RAD conversions where such incremental funding is needed for financial feasibility. However, the FY 2016 omnibus bill provides neither a unit cap increase nor any additional incremental funding. The Senate FY 2016 THUD bill increases the cap to 200,000 units, but didn’t provide any incremental funding. The House bill neither increased the cap nor provided any incremental funding.

Moving To Work (MTW) Demonstration

The bill permits up to an additional 100 public housing agencies (PHAs) to participate in the Moving To Work (MTW) Demonstration Program, an increase from the current limit of 39, but with increased requirements for research and outcome measurement. The MTW Demonstration allows PHAs to comingle their operating and capital subsidies and provides a wide range of waivers to HUD regulations. Such waivers are controversial among some housing advocates, which has led Congress not to increase MTW participation in the past. The MTW increase was smaller than the Senate’s proposed 300 PHA increase, but there was no increase in the House bill, and request limits the expansion to 15 PHAs with no more than 150,000 aggregate public housing units and vouchers.

Community Planning and Development (CPD) Programs

The bill provides $3 billion for Community Development Block Grant (CDBG) program, equal to FY 2015 and the House bill, and a $200 million increase from the request.

Homeless and Supportive Housing Programs

The Senate Appropriations Committee proposes funding McKinney-Vento Homeless Assistance Grants at $2.25 billion, a $115 million (5.4 percent) increase from FY 2015 funding, but $230 million (9.3 percent) decrease from the request. The Senate bill provides $2.235 billion and the House bill provides $2.185 billion. The omnibus bill includes a $1.918 billion set aside for the continuum of care and rural housing stability assistance programs, which is about $277 million less than the request, and at least $250 million for Emergency Solutions Grants, equal to the request, Senate and House bills.

The proposal provides $433 million for the Housing for the Elderly (Section 202) program, $13 million (3 percent) more than FY 2015 and the Senate bill, and $19 million more than the House bill, but $22 million (5 percent) decrease from the request. The Housing for Persons with Disabilities (Section 811) program is funded at $150 million, a $15 million (11 percent) increase from FY 2015 and $13 million more than the Senate bill, but $2 million less than the House bill and $27 million less than the request. The budget would provide $335 million for the Housing Opportunities for Persons with AIDS (HOPWA) program to provide housing and supportive services to persons living with HIV and AIDS, which is $5 million more than FY 2015 and Senate bill, $3 million more than the request, and equal to the House bill

Obama Administration Initiatives

Housing Trust Fund (HTF)

On Dec. 11, 2014, the Federal Housing Finance Agency (FHFA) Director Mel Watt directed Fannie Mae and Freddie Mac to start setting aside contributions to the HTF through the course of 2015. On Jan. 30, HUD published interim program regulations, but funding will not be available until 2016. The FY 2016 budget estimates that only $120 million will be allocated to the Housing Trust Fund in FY 2016. This estimate is notably lower than initial estimates, because 25 percent will come out of the assessment for one-time capitalization of the Treasury’s HOPE Reserve account. Furthermore, projecting out from the last four quarters of Fannie Mae’s and Freddie Mac’s loan purchases, we estimate that the HTF will receive $188 million and the Capital Magnet Fund will receive $101 million.

Choice Neighborhoods Initiative

The Choice Neighborhoods Initiative, which is designed to comprehensively revitalize high-poverty public and assisted-housing communities, is proposed to be funded at $125 million, which is $45 million (7.7 percent) more than the FY 2015 enacted level and $125 million less than the request, but $45 million more than the House bill.

U.S. Treasury Department’s Community Development Financial Institutions (CDFI) Fund

The bill provides $234 million for the U.S. Treasury’s CDFI Fund, $3 million more than FY 2015, equal to the request and the House bill, and $13 million more than the Senate bill.  It also provides $750 million in authority for the CDFI Bond Guarantee Program, equal to FY 2015 and the Senate bill, but $250 million less than the request.

Next Steps

The House will consider the FY 2016 omnibus spending bill Dec. 18. The Senate could consider it shortly thereafter the same day, but if some Senators decide to slow consideration, it could take until Dec. 22 for final passage. The president is expected to sign it.