National Housing Law Project Housing Law Bulletin

House Appropriations Committee FY 2000 Housing Appropriations Measure Slashes Current Services by Bleeding Individual Programs

Endorsing the action of its VA, HUD and Independent Agencies Subcommittee, the House Appropriations Committee reported a $26 billion HUD budget to the full House on July 30./1/ The reported measure is $1.995 billion below President Clinton’s request of $28.079 billion. Although the bill appears to be $1.977 billion above the Fiscal Year (FY) 1999 enacted levels for HUD programs, HUD estimates that it in fact represents a $1.5 billion reduction from current service levels./2/ One-time offsets in FY 1999 appropriations, achieved through an increase in the FHA loan limits and changes to the single family property disposition program, made last year’s budget appear artificially low. This created the illusion of a near $2 billion increase in this year’s budget./3/

The full Committee reversed some actions taken by the Subcommittee. For example, the Subcommittee treated $3 billion of expenditures for Veterans Medical Care as an emergency appropriation. This was done in order to avoid having that amount charged against the budget caps adopted in the FY 1997 Budget Act in order to limit federal spending. The Committee rejected the strategy of emergency treatment for Veterans Medical Care. However, the Committee actually increased the President’s request and the FY 1999 enacted level for Veteran’s Medical Care by $1.7 billion, resulting in the largest increase for this account since the 1980s./4/ Similarly, emergency treatment for the Federal Emergency Management Agency (FEMA) in the amount of $2.48 billion was rejected and the President’s favored Americorps Program was zeroed out.

Language was added to the report endorsing the Fair Housing Assistance Program (FHAP) as the most suitable means to undertake enforcement action. FHAP funds government remedial actions while the Fair Housing Initiatives Program (FHIP) funds private enforcement of the housing anti-discrimination laws. The Committee opted to provide equal funding for each program, funding the FHIP program at $4 million below last year’s level and $8 million below the administration’s request.

The Committee provided $10.54 billion for the renewal of expiring Section 8 contracts, enhanced vouchers and relocation assistance. This includes a $25 million set-aside to assist disabled families moving from public housing designated for elderly-only. In its February budget submission, HUD estimated that $10.6 billion was needed to renew expiring contracts. HUD requested $156 million for relocation assistance but no funding for enhanced vouchers./5/ HUD’s budget request of $11.522 billion for the Housing Certificate Fund included a $4.2 billion advance appropriation from the FY 2001 appropriations. This proposal was recommended by the Office of Management and Budget but was not included in HUD’s initial budget request. The advance appropriation represented monies which would not have to be disbursed in FY 2000. The Committee rejected that request./6/

HUD’s request included funding for incremental vouchers at the following levels: 25,000 Welfare to Work, 18,000 Homeless, 15,000 for the Elderly, and 42,000 to be fair-shared. HUD also requested funding for Regional Opportunity Counseling to assist families in using their vouchers to move away from areas of poverty concentration. The Committee rejected each of these requests. In addition, HUD’s request included a $6 million increase in the Section 8 administrative fee for public housing authorities that was required by the public housing reform legislation. That request was also rejected and the Committee Report notes that the bill specifically precludes HUD from paying the fee./7/

The Committee Report mandated that HUD inventory and begin publishing yearly the results of an annual audit of housing designated for elderly and disabled families. The audit must include the number of apartments in buildings for the elderly and families as well as in buildings with special features to accommodate the needs of disabled families./8/

In addition, the Committee asserted its intent with regard to Section 8 enhanced vouchers created in the FY 1997 appropriations act. These vouchers were created in order to offer a higher subsidy for residents in prepayment properties in which the owner charges a higher rent. The report challenged HUD’s interpretation that the statute limits the enhanced voucher to only one rent increase. The Committee explained that use of the enhanced voucher for rent increases beyond the initial rent increase was contemplated. Moreover, the Committee acknowledged with approval the House Banking Committee’s consideration of preservation legislation./9/

Although the Committee funded the public housing operating fund at the same level as last year, $2.818 billion, that amount represents $185 million less than the Department projected as necessary to pay the portion of public housing operations costs not covered by tenant rents. Housing authorities project that this will underfund their FY 2000 Performance Funding System (PFS) needs by nearly half a billion dollars./10/ The performance funding system is the formula currently used to calculate annual PHA operating subsidy requirements. Public housing capital needs were reduced by 15 percent, almost $500 million from FY 1999 levels. The Committee reported $2.555 billion dollars for repairs and modernization activities including new construction and major systems repairs.

The HOPE VI program for the revitalization of severely distressed public housing was reduced $50 million from the administration’s request of $625 million. The $575 million funding represented an 8 percent reduction over current services. Funding for relocation vouchers for current residents of developments slated for revitalization is mandated to come from the Housing Certificate Fund.

The Committee reduced the popular Public Housing Drug Elimination program by $20 million from the HUD request, and recommended $290 million for law enforcement, security retrofitting, tenant initiatives and prevention programs. A $10 million set-aside was included for the Operation Safe Home Program administered by the HUD Inspector General and $5 million for technical assistance. Two administration initiatives--last year’s New Approach Anti-Drug Program and the new Youth Anti-Drug Diversion Program involving mentoring, after school and family programs--were rejected for funding.

Generally, programs in HUD’s Community Planning and Development accounts experienced smaller percentage reductions than other housing programs. Homeless Assistance Grants, which fund emergency shelter grants, supportive housing, section 8 moderate rehab SROs and the shelter plus care program, were decreased by $50 million from the administration’s request. The Committee, noting that the Banking Committee is working to preauthorize the Homeless Programs, declined to create a 30 percent set-aside for permanent supportive housing or a 25 percent match for supportive services, but indicated that it may reconsider this in conference.

The Community Development Block Grant (CDBG) which funds state and local government housing and economic development activities was funded at $4.5 billion, $275 million less than the administration’s request. The Committee Report justifies the reduction by noting that set-asides under the program--long a source of contention--are reduced by $267 million from current services. A number of set-asides sought in the HUD budget were rejected, including Homeownership Zones, Regional Connections, EZ/EC (Enterprise Zone/Empowerment Community), Targeted Technical Assistance, EZ Round II Planning and Implementation Grants, the Citizens Volunteer Housing Corps and the Community Empowerment Fund/Economic Development Initiative. Among the programs continuing as set-asides under CDBG are the Resident Opportunity and Social Services (ROSS) program, which was funded at $55 million. The funding includes money for service coordinators and congregate services along with supportive services for public housing residents. Also included is $67 million for Native Americans and $18.75 million for the National Community Development Initiative (NCDI).

NCDI has an additional layer of set-asides:

• $3.75 million for Habitat for Humanity International capacity building activities
• $20 million each for the Neighborhood Initiatives Program and Economic Development Initiative Grants
• $42.5 million for Youthbuild
• $10 million for the Rural Housing and Economic Development Program, only half of the administration’s request. Last year this new program was funded as a separate program. This year the Committee reported it as a set-aside under the NCDI.

The Committee report includes a directive to HUD to provide written guidance to housing officials which will facilitate participation in the Consolidated Planning process by persons with disabilities and their advocates./11/

The HOME Investment Partnerships Program which provides formula grants for acquisition, rehabilitation, new construction and rental assistance to state and local governments to increase the supply of affordable housing was reduced by $20 million from current services. The Committee recommends $1.58 billion, $30 million less than the President’s request.

The Committee recommended level funding at $660 million for the Section 202 Elderly Housing Program and $194 million for the the Sec. 811 Program of Housing for Persons with Disabilities. The Committee, expressing reservation about the administration’s proposal to increase the proportion of 811 funding devoted to rental assistance and noting the potential unavailability of such housing in rural areas and small towns, capped the amount of such funding that could be used for rental assistance at 25 percent. In addition, the Committee directed HUD to cease its conversion of Section 811 tenant-based funds to Section 8 rental assistance. This is being done in an effort to encourage nonprofit disability organizations to run programs.

The total Fair Housing Account is reduced by $9.5 million from the administration’s request. The Committee recommends $37.5 million. The Fair Housing Assistance Program, which provides funding to state and local fair housing enforcement agencies, is funded at $18.75 million. Private enforcement efforts, also funded through the Fair Housing Initiatives Program (FHIP), are funded at the same $18.75 million level, $8.5 million below the administration request.

Following Subcommittee action and prior to the vote of the full Committee, the administration issued a letter to the chairman of the House Appropriations Committee enclosing a strongly worded Statement of Administration Policy (SAP)./12/ The SAP specifically cites its request for 100,000 incremental vouchers and urges full funding for public housing drug elimination, fair housing, homeless assistance grants and CDBG among the core programs. In addition, the SAP recommends funding of several initiatives promoted in the FY 2000 budget. These included America’s Private Investment Companies (APIC), Redevelopment of Abandoned Buildings, Regional Empowerment Zones, and Regional Connections, as they all target the needs of distressed communities. Specifically noting "deep cuts to...the Department of Housing and Urban Development..." among other programs, the SAP threatens a presidential veto if the bill is presented to the President with these cuts intact.

The House is expected to vote on the measure following the August recess./13/ Senate Committee action on a funding bill is not anticipated until Congress returns after Labor Day.

Notes

1    H.R. 2684, Making appropriations for the Department of Veterans Affairs and Housing and Urban Development, and for sundry independent agencies, boards, commissions, corporations, and offices for the fiscal year ending September 30, 2000, and for other purposes; H. REP. NO. 106-286, 106th Congress, 1st Sess. (Aug. 3, 1999).

2    July 28, 1999 HUD Briefing on FY 2000 House VA, HUD and Independent Agencies mark-up.

3    The Department of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Act, 1999, Pub L. No. 105-276 (Oct. 21, 1998). See Conference Report 105-769, Title IV, p. 300 and Title VI, p. 302 (October 5, 1998).

4    Press Release Addressing Veterans, Housing and Environmental Needs: VA-HUD Completes Full Committee Mark Up, July 30, 1999, House Appropriations Committee, Chairman S.W. Bill Young (R-FL).

5    See More Funding for Housing: Real or Illusory?, 29 HOUS. L. BULL. 22 (Feb. 1999).

6    The advance appropriation is an accounting device by which funds which will not actually be disbursed until the subsequent fiscal year are included in the current budget request but counted against the next fiscal year’s budget authority.

7    House Report 106-286, p. 2. See H.R. 2684, Title II--Department of Housing and Urban Development, Housing Certificate Fund, which states: "...Provided further, that the fee otherwise authorized under section 8(q) of such Act shall be determined in acccordance with section 8(q), as in effect immediately before enactment of the Quality Housing and Work Responsibility Act" (emphasis added).

8    H. REP. NO. 106-286, 106th Congress, 1^st Sess,. p. 22. (Aug. 3, 1999).

9    See PRESERVATION ISSUE HEATS UP IN CONGRESS in this issue of the Bulletin.

10    See Public Housing Wracked-As Congress Converts Surpluses to Upper Class Tax Cut, CLPHA Congressional News, July 28, 1999 (rev.).

11    Committee Report, p. 26.

12    Letter from Jacob J. Lew, Director, Office of Management and Budget to Honorable C.W. Young, Chairman, Committee on Appropriations (July 30, 1999).

13    The House actually approved the rule for considering the measure before it left for the summer recess. House Resolution 275 (Aug. 5, 1999).

Back to this issue's Table of Contents.
Back to the Article List.
Back to the NHLP Home Page.