Yesterday, the Trump Administration released its 2018 Budget Proposal, proposing a 13% or $6.2 billion cut to the HUD budget. The significantly reduced budget maintains all existing vouchers (HUD’s largest expense) by increasing expenses for tenants and placing a freeze on rent adjustment increases for PBRA, Section 202, and Section 811, among other strategies. The expanded document reflects many of the priorities outlined in the “Skinny Budget” released earlier this year by the Trump Administration. The proposal would fully zero out funding for key community development programs including CDBG, HOME, and Choice Neighborhoods Initiative, and would make dramatic cuts to Project-Based and Tenant-Based Rental Assistance, Section 811, Homeless Assistance Grants, and Public Housing Capital and Operating Funds. The budget document proposes a modest increase to the Section 202 program.

NH&RA Executive Director Thom Amdur notes, “It is hard to imagine a more austere HUD budget proposal. These proposed cuts, if enacted would have a devastating impact on low-income families and communities around the country. In particular, the public housing capital backlog would be exacerbated even further. Multifamily owners of Project-Based section 8 properties will also experience substantial stress in the proposed budget.”

While the budget proposal makes much-needed changes to expand the RAD program, housing advocates will not be satisfied with changes to rental assistance programs.

Changes for RAD would include:

  • Eliminating the 225,000 unit cap
  • Eliminating the September 30, 2020 deadline for first component applications
  • Expanded authority to include conversion of Sec. 202 PRAC
  • Non-profit ownership at conversion may also now include situations where LIHTCs are used or where foreclosure, bankruptcy, or default occurs

Changes to rental assistance programs include:

  • A one-year freeze would be placed on rent adjustment increases for PBRA, Sec. 202, and Sec. 811
  • Decreasing voucher amounts: Rather than contribute 30% of adjusted income, tenants would have to spend 35% of gross income on monthly rent
  • Establishes minimum rental payments of $50 per month for tenants
  • Eliminates utility reimbursements (tenants would now be required to pay for utility bills in excess of rent limits)
  • Expanded waiver authority granted to TBRA and Public Housing for issues like income recertification, energy audits, program assessments and administrative/reporting requirements
  • The HUD Secretary would have authority to define hardship exemptions for items like the increase in tenant rent contribution and the $50 minimum rent payment
HUD PROGRAMS ENACTED FUNDING FY 2017 (in Millions) Trump FY-18 Proposal (in Millions) Difference between FY-18 Proposal and Enacted FY-17 (in Millions)
Project-Based Rental Assistance  $10,816.00  $10,751.10  $(64.90)
Tenant-Based Rental Assistance  $20,292.00  $19,317.90  $(974.10)
Public Housing Capital Fund  $1,941.50  $628.00  $(1,313.50)
Homeless Assistance Grants  $2,383.00  $2,250.00  $(133.00)
Choice Neighborhoods Initiative  $137.00  $-    $(137.00)
Housing for the Elderly Program  $502.40  $510.00  $7.60
HOME Investment Partnerships  $950.00  $-    $(950.00)
Community Development Block Grants  $3,060.00  $-    $(3,060.00)
Public Housing Operating Fund  $4,400.00  $3,900.00  $(500.00)
Housing for Persons with Disabilities Program  $146.20  $121.30  $(24.90)