House Looks to Cut Public Housing Funds
By Anton Marx, Center on Budget and Policy Priorities
CBPP has released a new analysis on the need for additional funding for public housing operating subsidies in 2007, available on-line at http://www.cbpp.org/10-11-06hous.htm.
A House-passed 2007 funding bill would result in the deepest shortfall in public housing operating subsidies (the funds that enable local housing agencies to maintain developments, pay utility bills, and keep rents affordable to needy families) in more than 25 years. The Senate Appropriations committee passed a version that provides close to $100 million in additional funds, but still falls far short of what is needed. Much of the underfunding stems from HUD’s failure to request funds to cover sharp utility cost growth in recent years.
Without additional 2007 funding, an increasing number of local housing agencies will have to balance their budgets through steps that harm the vulnerable people they serve, about half of whom are elderly or have disabilities. Funding shortfalls in 2005 and 2006 have already forced some agencies to raise rents on the neediest households, defer safety-related improvements, and make other painful cuts.
Congress will finalize the 2007 appropriations bills at some point after it returns to session following the elections in November. Congress would need to provide at least $3.85 million — $290 million above the level in the House bill — merely to make up for the utility costs HUD ignored in its budget estimates.
Even this amount would only cover about 86 percent of the funds housing agencies are legally eligible for under the operating subsidy formula. A total of about $4.5 billion would be needed to fully fund operating subsidies in 2007. It currently appears unlikely that Congress will provide this full amount, because congressional leaders have committed to keeping total domestic appropriations within tight caps proposed by the Administration. But it is vital that the Administration request full funding for operating subsidies in its 2008 budget and that Congress meet that request.