New Developments, Who exactly is winning here?

4 min read

Just last week, I was optimistic that this year’s federal budget cycle, dysfunctional though it is, might offer reasons for hope. To avert (nearly) a second federal government shutdown in as many months, Congress passed a second six-week continuing resolution that included permanently lifting the sequester that has throttled critical domestic and military spending priorities. In fact, the House and Senate passed legislation that increased statutory budget caps for the next two years, leaving me cautiously optimistic that Congress would be prioritizing modest increases in domestic funding—including at HUD—in the coming year.

Then the White House released President Trump’s Fiscal Year 2019 budget proposal and, unfortunately, the administration has indicated that it sees the new budget caps as a ceiling not a floor.  In point of fact, the administration is proposing $3 trillion in ten-year spending cuts. The House of Representatives, Senate and White House may all be controlled by Republicans, but their budget priorities (I hope!) are worlds apart.

For HUD, this means the president’s “commitment to fiscal responsibility” by recognizing “a greater role for state and local governments and the private sector to address community and economic development needs for affordable housing production” results in a budget request of $39.2 billion in gross discretionary spending, an $8.8 billion or 18.3 percent decrease from the 2017 enacted level. The budget also requests $33.8 billion across HUD’s rental assistance programs, a decrease of 11.2 percent relative from the 2017 enacted level. These proposed cuts are justified by “legislative reforms” that will provide significant cost savings. Somehow these funding levels along with reform “should support currently assisted house-holds while strategically decreasing the Federal footprint of HUD’s rental assistance programs over time.”

Now, I’m all for finding operational efficiencies and encouraging self-sufficiency too, but I can’t conceive of any responsible reform that would continue to provide support for our current assisted households (let alone the millions of people in need without assistance) while cutting rental assistance by 11.2 percent. I should also reiterate that the budget proposes to eliminate, entirely, the Community Development Block Grant Program, Choice Neighborhoods Initiative and the HOME Investment Partnership Program, all critical resources developers use to leverage private sector finance.

But perhaps the most disturbing affordable housing omission in the budget is its proposal to zero out funding for the Public Housing Capital Fund, maintaining that “the provision of affordable housing should be a responsibility more fully shared with state and local governments.” This is a shocking position to take, especially considering the substantial capital backlog within the nations’ public housing stock. Promises previously made by the administration that proposed cuts to housing programs would be made up in the now released $200 billion infrastructure proposal also failed to materialize.

Furthermore, though the administration has championed the Rental Assistance Demonstration in the budget, calling for $100 million in additional funding, it does not seem to realize or acknowledge that its proposal to eliminate the Public Housing Capital Fund would effectively kill the program.

Ok, taking a deep breath now.

Fortunately, while it’s the president’s job to recommend a budget and it’s the Congress’ job to appropriate funding, it is our job to advocate and educate on the critical need for affordable housing resources. We had success in preserving the LIHTC in last year’s tax reform, but the LIHTC alone is not sufficient to solve our affordable housing crisis. While the president’s budget may be “dead on arrival” at Congress (which is the norm for any President and Congress), that does not mean that the content or spirit can be ignored – it frames the debate for the year to come. There may be some good ideas in this budget proposal, such as an expansion to the Family Self Sufficiency Program, but they are hard to find amidst the cuts and do not offset the pain the slicing would create.

The President’s Budget Message, the introduction to this proposal, speaks of a “new era of American Greatness,” highlighting how the budget would eliminate wasteful spending and expand economic growth and opportunity. Affordable housing is in fact a proven method to expand economic growth and opportunity. Yet, somehow, this budget seems to consider it wasteful spending.

I’m all for America “winning again,” but I don’t see who wins when affordable housing resources are cut to the bone.

Thom joined National Housing & Rehabilitation Association (NH&RA) in 2004 and currently serves as its as Executive Vice-President and Executive Director. NH&RA is a national trade association and peer-network for affordable housing and tax credit developers and related professionals including: investors, lenders, public agencies and professional advisers. Thom directs the association’s day-to-day operations including legislative and regulatory advocacy, committee activities, conferences and events, publications, financial management and strategic planning. Thom also serves as the Executive Director of the Tennessee Developers Council, a state-wide trade association for affordable housing developers and professionals active in Tennessee. In 2013 he spearheaded the launch of NH&RA's Preservation through Energy Efficiency Project, a major educational initiative supported by the John D. and Catherine T. MacArthur Foundation. Thom also serves on the Board of Directors for International Center for Appropriate & Sustainable Technology (iCAST) as well as the Advisory Board for its ResourceSmart program, a turn-key, cost-effective, green rehab provider for multifamily affordable and market-rate housing communities and nonprofit facilities. Thom is a frequent speaker at affordable housing, sustainable development and tax credit industry events and has been published in a variety of industry journals including Tax Credit Advisor, Independent Banker, and the Novogradac Journal of Tax Credit Housing. Thom also serves as the Associate Publisher of Tax Credit Advisor, a monthly magazine for tax credit and affordable housing professionals and is an Executive Vice-President at Dworbell Inc., a boutique association management and communications firm in Washington, DC. Thom was previously employed at a national lobbying firm focusing on financial services and technology issues. Prior to moving to Washington, Thom worked in media relations in the New York State Assembly and as a research assistant for New Hampshire Governor Jeanne Shaheen. Thom graduated Magna Cum Laude from Tufts University with a double major in Political Science and History.