President Biden’s Fiscal Year 2024 Budget Proposal
The President’s recent budget proposal requests $73.3 billion for HUD for fiscal year 2024, which is approximately $1.1 billion more than the 2023 enacted funding level. Below is a breakdown of key HUD rental assistance programs with proposed funding levels for FY24:
TBRA–The Budget requests $32.7 billion for Tenant-Based Rental Assistance, which is $2.5 billion more than the 2023 enacted level. This includes:
- $27.8 billion for Contract Renewals, which is an increase of $1.4 billion from the 2023 levels;
- $3.2 billion in Administrative Fees, an increase of $424 million;
- $385 million for Tenant Protection Vouchers (TPV), which is an increase of $48 million;
- $686 million for Section 8 Mainstream Renewals, which is an increase of $79.5 million;
- $565 million for Incremental Vouchers, which is an increase of $515 million; and
- $25 million for Mobility Services, which is an increase of $25 million .
PBRA–The Budget requests $15.9 billion for the Project-Based Rental Assistance (PBRA) program, which is $997 million more than the 2023 enacted level. This includes:
- $15.3 billion for contract renewals and amendments, including $48 million for public housing properties that converted to PBRA via the Rental Assistance Demonstration (RAD), $183 million for Section 8 Moderate Rehabilitation and the Single Room Occupancy Program for Homeless Individuals (commonly known as the Mod Rehab and SRO programs) renewals, and $34 million for Original Term contract amendments.
- $62 million for RAD conversion subsidy, including $50 million for conversions from Public Housing, $10 million for conversions from Section 202 Project Rental Assistance Contracts (PRACs), and $2 million to fund contract support for lower capacity and small property owners converting through RAD;
- $28 million to support budget-based rent increases (BBRIs) for at-risk Mark-to-Market (M2M) properties ($25 million) and other PBRA properties that have health and safety deficiencies ($3 million)
- $25 million for the Distressed Properties Capital Loan Program;
- $31 million for BBRIs for PBRA properties serving the elderly to cover the cost of a service coordinator; and
- $448 million for Performance-Based Contract Administration (PBCA).
This Budget also requests modifications to the RAD statute in the General Provisions to expand and improve the efficacy of RAD conversions to both PBRA and Project-Based Vouchers.
Section 202– The Budget requests $1.023 billion for Housing for the Elderly, which is $52 million less than the 2023 enacted level. This includes:
- $797 million to fund renewals and amendments of Project Rental Assistance Contracts (PRACs) and Senior Preservation Rental Assistance Contracts (SPRACs);
- $110 million for new Capital Advances to increase the supply of affordable housing for seniors by approximately 1,000 units;
- $112 million to fund the renewal of approximately 1,600 existing Service Coordinator and Congregate Housing Services grants; and
- $4 million for administrative and other related expenses.
In addition, to support HUD’s focus on climate resilience, Section 202 property owners who seek to improve their properties may be eligible to receive grants or loans under the forthcoming Green and Resilient Retrofit (GRRP) program, funded by the Inflation Reduction Act.
Section 811– The Budget requests $356 million for the Housing for Persons with Disabilities account, which is $4 million less than the 2023 enacted level. This includes:
- $207 million for Project Rental Assistance Contract (PRAC), Project Assistance Contract (PAC), and State Project Rental Assistance (State PRA) renewals and amendments.
- $148 million for Capital Advance and Project Rental Assistance to increase the supply of affordable, community-based housing for persons with disabilities.
- $1 million for administrative and other related expenses.
In addition, to support HUD’s focus on climate resilience, Section 811 property owners that seek to improve their properties may be eligible to receive grants or loans under the forthcoming Green and Resilient Retrofit (GRRP) program funded by the Inflation Reduction Act.
HOME Program— The Budget requests $1.8 billion for the HOME Investments Partnerships Program, which is $300 million more than the 2023 enacted level. This request includes $100 million for the FirstHOME Downpayment Assistance initiative to States and insular areas to better ensure sustainable homeownership.
Public Housing— The Budget requests $8.9 billion for the Public Housing Fund, which is $379 million more than the 2023 enacted level. This funding would support the following activities:
- $8.4 billion for Public Housing Formula grants, of which approximately $5.133 billion is distributed based on the Public Housing Operating Fund formula and $3.225 billion is distributed based on the Public Housing Capital Fund formula; · $300 million for new Site-Based Public Housing Enhancement, Resilience, and Efficiency (SPHERE) Grants (including $20 million for Utility Benchmarking);
- $15 million for new Physical/Capital Needs Assessment Initiative;
- $60 million for Housing Health Hazards and $25 million for Lead-Based Paint Hazards;
- $20 million for Emergency and Disaster grants;
- $20 million for Safety and Security grants;
- $45 million for Receivership, Troubled and High-Risk PHAs; and
- $50 million for Operating Shortfall Prevention.
For USDA, the Budget requests $30.1 billion for 2024, a $3.8 billion or 14-percent increase from the 2023 enacted level. This includes:
- $1.650 billion for Section 521 Rental Assistance, an increase of $162 million;
- $200 million for Section 515 Rental Housing Direct Loans, an increase of $130 million;
- $75 million for the Rental Preservation Demonstration, an increase of $39 million;
- $38 million for Section 542 Rural Housing Vouchers; a decrease of $10 million; and
- $400 for Section 538 Guaranteed Rural Rental Housing Program.
The Budget also includes a new proposal to eliminate the existing low-income borrower penalty that requires individuals to repay subsidy costs for Single-Family Direct loans—a requirement that only exists for rural housing. This initiative would allow the Administration to reduce rent burdens for low-income borrowers while also increasing the resiliency of rural housing to the impacts of climate change through a proposal to require energy and water efficiency improvements and green features in USDA’s rural housing programs that include construction.
Presidential budget requests serve as a symbolic document that outlines an Administration’s funding and policy priorities for future fiscal years. Congress will soon begin drafting their own spending bills and NAHMA will continue to advocate for increased increase investments in affordable housing and community development programs.
Senate Finance Committee Holds Hearing on Tax Policy’s Role in Increasing Affordable Housing Supply
Last week, the Senate Finance Committee held a hearing to debate how certain tax policies can contribute towards increasing the affordable housing supply. Members discussed the need to spur the construction of more affordable housing and how increased support for LIHTC would help alleviate the housing shortage. The discussion centered around proposed changes to the LIHTC program that would help to address and incentivize developers to build more affordable housing. Chairman of the Committee, Ron Wyden (D-OR) also used the hearing to introduce the DASH Act (Decent Affordable Safe Housing for All), which contains many provisions to improve and enhance LIHTC. Witnesses included Denise Scott, President of Local Initiatives Support Corporation; Steve Walker, Executive Director of Washington State Housing Finance Commission; Sharon Wilson Géno, President of the National Multifamily Housing Council; Mark A. Calabria, Senior Advisor for the Cato Institute; and Garrett Watson, Senior Policy Analyst And Modeling Manager of Tax Foundation.
To view the hearing, click here.
Senate Banking Committee Holds Hearing on Federal Plans to End Homelessness
The Senate Banking Committee recently held a hearing examining the federal strategic plan to prevent and homelessness. Witnesses included Jeff Olivet, Executive Director, U.S. Interagency Council on Homelessness; and Dr. Richard Cho, Senior Advisor for Housing and Services, U.S. Department of Housing and Urban Development. Members and witnesses discussed the effectiveness of the Housing First approach, how programs introduced during the pandemic can continue to house America, and the importance of interagency collaboration.
To view the hearing, click here.