Sequestration’s Impact on Homelessness

NJ Could Lose $3.5 million in McKinney Funding

Sequestration’s Impact on HomelessnessUnfortunately, the devastating, major cuts to federal affordable housing program made in recent months are not all that housing advocates, providers, and the homeless will face in the coming years.

The consequences of the “Super-Committee‘s” failure to come up with an alternative plan are further cuts to homelessness and affordable housing programs scheduled to begin in January 2013. If Congress changes the BCA to protect some programs, such as defense, from the cuts, the amount that needs to be cut from domestic discretionary programs could increase, thus worsening the scenario for homeless programs.

Without an alternative deal, automatic, across-the-board cuts from the President and Congress, this “sequester” will go into effect for federal affordable housing and homelessness programs on January 2, 2013. And every single homeless assistance and affordable housing program would be cut. These devastating cuts translate into thousands of people who will not receive housing and other critical safety net services.

Sequestration will result in an estimated 9.1 % across-the-board cut to non-defense discretionary programs. Discretionary spending, as opposed to mandatory spending like Medicaid, is determined each year through the congressional appropriations process and includes virtually all targeted homelessness and affordable housing programs. These cuts would be in addition to the projected reductions of 5% to 10% that the Office of Management and Budget is projecting for each federal department for FY13.

NAEH’s chart details the projected funding level for select federal homeless assistance programs, along with the dollar value impact of a 9.1 percent cut to those programs through a January 2013 sequestration.

In addition, the chart provides an estimate of the number of people who will not be served by a program in fiscal year (FY) 2013 as a result of the sequester. These calculations are based on historical data about the average cost per person served for each program. This estimate does not take into account the additional people impacted by further cuts mandated by law in FY13 as well as in coming years.

Impact of Sequestration on Homelessness through Selected Programs


Est. FY 2013 Funding Level (millions)

Est. FY 2013 Sequestration Cut (millions)

Est. # People Not Served because of Cuts

HUD’s McKinney-Vento Homeless Assistance Grants




HUD’s Section Tenant Based Rental Assistance




HUD’s Runaway and Homeless Youth Act (RHYA) Basic Center and Transitional Living Programs




HHS’s Projects for Assistance in Transition from Homelessness




HHS’s Health Care for the Homeless (HCH) Program




Under the BCA, community health centers, including HCH programs, are limited to a 2 percent cuts in 2013.

Click here to read the National Alliance to End Homelessness’ recent policy brief post on this Sequestration.

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  1. Thank you for sharing the chart about the Sequestration’s Impact on Homelessness. This is helpful to get us aware of the figures..