Appropriations for Fiscal Year 2015
Late on Thursday, December 11, the House of Representatives narrowly passed the Consolidated and Further Continuing Appropriations Act (H.R. 83), a $1.1 trillion omnibus spending bill which includes funding for nearly all government agencies for FY 2015.
President Obama has indicated that he would sign H.R. 83 when it reaches his desk, but the bill has drawn significant controversy from both parties in Congress. Bill riders which alter campaign financing rules and the Dodd-Frank Act have caused many lawmakers to object to the bill, which passed with a narrow margin of 219 to 206 in the House.
Although H.R. 83 is likely to become the appropriations bill for FY 2015, it has yet to be passed by the Senate. The U.S. is instead operating under a stopgap spending bill, H.J.RES 130, which provides FY 2015 appropriations for projects and activities of the federal government through Saturday, December 13, 2014. H.J.RES 130 was passed swiftly last night in order to prevent a government shutdown. The previous continuing resolution, H.J.RES 124, provided funding for the federal government only through December 11, 2014 in lieu of the regular appropriations bills that are necessary to keep the government open past the end of the fiscal year (September 30th).
Funding for HUD Programs
Below are the figures in H.R. 83 for affordable housing programs administered by HUD in comparison with the FY 2014 figures, the Obama Administration’s budget request for FY 2015, and the funding numbers as proposed in the separate Senate and House appropriations bills which were not passed:
| |
Project-Based Section 8 |
Tenant-Based Section 8 |
HOME |
Section 202 |
Section 811 |
Community Development Block Grant |
| H.R.83 – FY 15 Omnibus |
$9.73 Billion* |
$19.3 Billion** |
$900 Million |
$420 Million*** |
$135 Million |
$3 Billion |
| FY 2015 Budget Request |
$9.75 Billion |
$20.05 Billion |
$950 Million |
$440 Million |
$160 Million |
$2.80 Billion |
| FY 15 House Bill H.R. 4745 |
$9.75 Billion |
$19.35 Billion |
$700 Million |
$420 Million |
$135 Million |
$3 Billion |
| FY 15 Senate Bill S.2438 |
$9.75 Billion |
$19.56 Billion |
$950 Million |
$420 Million |
$135 Million |
$3.02 Billion |
| FY 2014 Enacted Level |
$9.92 Billion |
$19.18 Billion |
$1 Billion |
$383.5 Million |
$126 Million |
$3.03 Billion |
*Includes $400 million in Advanced Appropriations and $9.52 billion for contract renewals
** Includes $17.49 billion for contract renewals
***Includes $70 million for Service Coordinators
Project-Based Section received a funding cut this year. The $9.73 billion figure will place the program further behind the necessary $11.9 billion needed to fully fund all contracts upfront at the time of renewal for one year. Absent from the bill is language that would transition all contracts to a calendar year funding model, but HUD does have the authority to enact this change without specific instruction from Congress. All other programs are below the Obama Administration’s request except for the Community Development Block Grant.
General Provisions
Any changes to specific program functions or authority is typically listed in the General Provisions section. Much of the language in this omnibus bill is standard appropriations language, meaning it has appeared in numerous appropriations. However, there are some items of interest:
Section 232 grants an extension for the Mark to Market program, which was first created under the Multifamily Assisted Housing Reform and Affordability Act (MAHRA) of 1997. This provision extends the termination date from October 1, 2015 to October 1, 2017.
Section 233 states that “None of the funds made available by this Act may be used to require or enforce the Physical Needs Assessment (PNA).” According to House Appropriations Committee staff, the motivation for this provision is from Representative Charlie Dent (R-PA) who was concerned that the PNA would be too difficult for some smaller PHAs. NAHMA plans to follow up with Dent’s office to learn more about his opposition.
Section 234 extends the expiration date of the Rental Assistance Demonstration (RAD) program, component 1, from September 30, 2015 to September 30, 2018. The unit cap for public housing conversions was increased to 185,000 as was proposed previously but not enacted in the FY 2014 omnibus. NAHMA is still reviewing this provision as the second component of RAD may have been extended as well, though for an undetermined amount of time.
Section 239 states that “None of the funds made available by this Act may be used to require the relocation, or to carry out any required relocation, of any asset management positions of the Office of Multifamily Housing of the Department of Housing and Urban Development in existence as of the date of the enactment of this Act.” This language was previously included in the FY 2014 omnibus bill (H.J.RES 124) after an amendment from Representative Maxine Waters (D-CA) in the House Appropriations bill for FY 2015 (H.R. 4745).
Funding for Rural Housing Programs
As with HUD, some of the affordable housing programs administered by the U.S. Department of Agriculture’s Rural Development in H.R. 83 are funded below the Obama Administration’s FY 2015 Budget Request. Below is a chart comparing the figures:
| |
Section 515 |
Section 521 Rental Assistance |
Section 538(Loan Level) |
Revitalization and Rural Housing Vouchers |
| H.R. 83 – FY 2015 Omnibus |
$28.40 Million |
$1.088 Billion |
$150 Million |
$24 Million/ RHVs: $7 Million |
| Budget Request |
$28.43 Million |
$1.09 Billion |
$150 Million |
$28 Million/ RHVs: $8 Million |
| Senate Bill
S. 2389 |
$28.43 Million |
$1.09 Billion |
$150 Million |
$28 Million/ RHVs: $8 Million |
| House Bill H.R. 4800 |
$28.40 Million |
$1.09 Billion |
$150 Million |
$28 Million/ RHVs: $8 Million |
| FY 2014 Enacted Level |
$28.43 Million |
$1.11 Billion |
$150 Million |
$32.57 Million/ RHVs: $12.58 M |
The Multifamily Housing Revitalization program, which includes funding for Rural Housing Vouchers (RHVs), is slated to receive substantial cuts. As shown in the chart above, RHVs will be reduced by over $5 million from the FY 2014 level. In testimony submitted to the Senate and House Appropriations Subcommittees on Agriculture and Rural Development in March of 2014, NAHMA urged the members to carefully consider whether cuts to this program still allow the Agency to meet the demand for these Rural Housing Vouchers. At that time, the proposed cut in the House bill was less than the figure now included in H.R. 83.
There was language in both the Senate and House Agriculture Appropriations bills which would have allowed the Secretary of the Agriculture Department to use funds for the preservation and revitalization demonstration program for vouchers if the slated amount was insufficient. However, this caveat was not included in H.R. 83, and instead the bill reads “That if the Secretary determines that the amount made available for vouchers in this or any other Act is not needed for vouchers, the Secretary may use such funds for the demonstration program for the preservation and revitalization of multifamily rental housing properties.” NAHMA is unsure of the motivation for such a steep reduction, and for this language which seems to dismiss the possibility that $7 million will be inadequate for the program’s needs. We will follow up with Appropriations Committee and Rural Development staff and provide members with more details as they become available.
Section 521 Rental Assistance (RA) received a slight cut. NAHMA’s main concern here is that this amount must be sufficient to renew all rental assistance contracts in FY 2015 with full-funding. An additional concern is that legislators included a provision which bars contracts from being renewed within a 12 month period, as proposed in the original Senate and House Agriculture Appropriations bills. In testimony delivered to the Senate and House Agriculture, Rural Development Appropriations Subcommittees NAHMA opposed this proposal. This means that contracts that run out of funds before their next renewal date will not be replenished. The Office of Rural Development (RD) has stated that the purpose of this provisionl is for the Agency to gain better management of RA’s limited funds and address the program’s “challenges”. NAHMA will follow up with Rural Development staff to learn more about this issue.
Conclusion
Overall, the FY 2015 funding for affordable housing programs as outlined in H.R. 83 are disappointing, and in some cases, insufficient to meet the program’s true needs. NAHMA and its industry partners have been actively advocating for increased funding for these essential programs, but tight fiscal restraints have reduced the amount available for Congress’s discretionary spending abilities.
NAHMA will continue to advocate against cuts to affordable housing programs. The outlook for FY 2016 is poor as sequestration is set to return in 2016 if Congress fails to meet the budget limitations as set forth in the Budget Control Act of 2011. Less discretionary spending will be available then, so the appropriations available for affordable housing programs could be even leaner.
To view the entire text of H.R. 83, please
click here (the HUD section begins on page 1482. Rural Development begins on page 38)
To read a summary of the bill from the Senate Appropriations Committee, please
click here
