HUD FY2018 Appropriations: In Brief

Contents

• Status of Appropriations
• Enactment of FY2017 Appropriations
• President's Request
• House Action
• Senate Action

Most of the funding for the activities of the Department of Housing and Urban Development (HUD) comes from discretionary appropriations provided each year in the annual appropriations acts, typically as a part of the Transportation, HUD, and Related Agencies appropriations bill (THUD). HUD's programs are designed primarily to address housing problems faced by households with very low incomes or other special housing needs.¹

Three rental assistance programs—Public Housing, Section 8 tenant-based rental assistance (which funds Section 8 Housing Choice Vouchers), and Section 8 project-based rental assistance—account for the majority of the department's funding (nearly 80% of total HUD appropriations in FY2017). Two flexible block grant programs—HOME and the Community Development Block Grant (CDBG) program—help communities finance a variety of housing and community development activities designed to serve low- and moderate-income families. Other more specialized grant programs help communities meet the needs of homeless persons, including those living with HIV/AIDS. HUD's Federal Housing Administration (FHA) insures mortgages made by lenders to homebuyers with low down payments and to developers of multifamily rental buildings containing relatively affordable units. FHA collects fees from insured borrowers, which are used to sustain the insurance fund. Surplus FHA funds have been used to offset the cost of the HUD budget.

This In Brief report tracks progress on FY2018 HUD appropriations and provides detailed account-level, and in some cases sub-account-level, funding information as wells as footnotes with additional detail or context (Table 1).

Status of Appropriations

The FY2018 appropriations process has been affected by two important and related circumstances: the transition from the Barack Obama Administration to the Donald Trump Administration, which resulted in a delay in the release of the President's FY2018 budget request; and the delayed completion of the FY2017 appropriations process, which meant that final FY2017 totals were not known in time for the new Administration to prepare its FY2018 request.

Enactment of FY2017 Appropriations

Following a series of continuing resolutions, on May 5, 2017, the Consolidated Appropriations Act of 2017 was signed into law (P.L. 115-31). Title II of Division K provided full-year FY2017 appropriations for HUD. The law appropriated $48.1 billion for HUD's programs and activities. After accounting for offsets, the net discretionary budget authority provided for the department by the bill totaled $38.8 billion. This represented a $1 billion increase in funding over FY2016, which was primarily attributable to funding increases for the tenant-based rental assistance account (+$663 million) and project-based rental assistance account (+$196 million). The increased funding largely maintained current services for the roughly 3 million low-income families who receive housing assistance through the Housing Choice Voucher program and the project-based Section 8 program. The largest relative increase in funding was provided for HUD's lead hazard reduction programs (+32%). The law also included $400 million in disaster assistance provided through the CDBG program.

President's Request

On May 23, 2017, the Trump Administration submitted its detailed FY2018 budget request.² (This followed the release of a FY2018 Budget Blueprint, or "skinny budget," in March 2017.) The budget request included $40.7 billion in gross discretionary appropriations for HUD, not accounting for savings from offsets and other sources. That amount is about $7.3 billion (15%) less than was provided in the final FY2017 appropriations law. When looking at net discretionary budget authority—accounting for the effect of offsets, rescissions, and other savings—the President's budget requested an even greater decrease relative to FY2017: At $31.2 billion in net discretionary funding for HUD, the request represents a decrease of about $7.6 billion (19.6%) compared to the net budget authority provided in FY2017. Much of the decrease is attributable to the President's proposal to eliminate funding for several HUD grant programs. Most notable among these are HUD's two largest block grant programs for states and localities, the CDBG and HOME programs, as well as those funded in the Self-Help Homeownership Opportunity (SHOP) account (i.e., funding for Habitat for Humanity and related sweat-equity programs and certain capacity building programs).

Additionally, the President's budget proposed several policy changes. These included an increase in the share of rent paid by certain recipients of HUD-assisted housing from 30% of family income to 35% and an elimination of utility reimbursements paid to families.

House Action

In anticipation of floor action following the August recess, on August 16, 2017, the House Rules Committee posted the text of H.R. 3354, the Department of the Interior, Environment, and Related Agencies Appropriations Act, 2018, which is to serve as the legislative vehicle for the consolidated appropriations bill, the Make America Secure and Prosperous Appropriations Act, 2018. It combines the texts of the remaining appropriations bills that have not been considered by the full House, including H.R. 3353, the Transportation, HUD and Related Agencies Appropriations Act, 2018, with some changes. (The substance of the HUD portion of H.R. 3354 appears unchanged from H.R. 3353.) H.R. 3353 was reported by the Appropriations Committee on July 21, 2017, following full committee consideration July 17, 2017, and THUD subcommittee approval on July 11, 2017.

H.R. 3353 would increase gross appropriations for HUD's programs and activities by 18% over the President's budget request, providing a gross total that is level with FY2017. It does not follow the President's proposal to eliminate funding for HOME, CDBG, and SHOP, but it would reduce the funding for those accounts relative to FY2017 (-11%, -3%, and -17%, respectively). It would increase funding for the Housing for the Elderly account relative to FY2017 (+14%) and would provide level funding for most other HUD accounts.

In terms of policy changes, the bill does not include the rental assistance policy reforms requested by the President's budget.

Senate Action

On July 27, 2017, the Senate Appropriations Committee approved its version of a FY2018 THUD appropriations bill two days after it was approved in subcommittee. The bill, S. 1655, would increase gross appropriations for HUD's programs and activities by 4% over FY2017 and H.R. 3353 and by 23% over the President's request. It did not follow all the funding reductions proposed in the President's budget and would provide funding increases to the majority of HUD accounts relative to H.R. 3353.

In terms of policy changes, like H.R. 3353, the bill does not follow the President's rental assistance policy reform proposals. It includes several new policy changes, including an expansion of the Rental Assistance Demonstration—eliminating the cap on the number of units that may convert, modifying the terms of conversion for some properties, and expanding the program to Section 202 Housing for the Elderly properties (Section 236 of the General Provisions)—and new penalties for HUD if the agency does not issue reports to the committee about properties that fail inspection (Section 202 of the General Provisions).

Author Contact Information

Key Policy Staff

Footnotes