Rental Vouchers at Risk in Budget Battle

70,000 Vouchers Could Be Lost
Join Us For Hill Day July 31st

Homes for the HomelessAs we prepare for Hill Day on July 31st, we wanted to share this update from the Center for Budget and Policy Priorities on the impact of the Senate and House HUD budgets.

Although the Senate budget is a significant improvement over its House counterpart, it still falls short in major respects, despite allocating about $1 billion more to HUD and its programs than the House bill.

The Senate’s bill provides a total of $19.6 billion for Housing Choice Vouchers (HCVs, also known as Section 8 Vouchers or Tenant-Based Rental Assistance), just over $200 million more than the House bill but $280 million less than the President’s request. The increase compared to the House primarily bolsters HCV administrative fees.

The Senate bill includes $17.7 billion for voucher renewals, only $26 million more than the House. Overall, neither bill makes progress toward restoring the remainder of the vouchers lost due to sequestration that were not funded in 2014, and both risk locking in the full sequestration loss of 72,000 vouchers.

Budget ComparisonThe Senate’s 2015 proposed funding for voucher renewals is $353 million above the 2014 level, but nearly $300 million of this increase will go toward renewing HUD-VASH and tenant-protection vouchers that were funded for the first time in 2013 and 2014. (HUD-VASH and tenant protection vouchers are provided initially through separate funding streams, but after the first year they must be renewed in the voucher renewal account.)

Although voucher renewal funding in 2014 is sufficient to restore roughly half of the more than 70,000 vouchers lost to sequestration, after accounting for first-time renewals and inflation the Senate and House bills will fail to renew these restored vouchers in 2015, unless PHAs freeze subsidies in spite of rising rent and utility costs. If PHAs do not increase their payment standards, tenants may be forced to pay higher out-of-pocket rent or utility costs, and their housing choices may be more limited. By undoing much or all of the progress toward restoring sequestration cuts made possible by the FY2014 funding levels, the House and Senate bills would likely lock in these losses for years to come.

Particularly if public housing agencies spend the additional funds they are receiving in 2014 to serve additional families, there is a reasonable chance that the final bill will increase the renewal funding level. The Statement of Administration Policy on the House bill expresses “deep concern” about the funding levels for HCV renewals and administrative fees in the House bill, indicating that the Administration will continue to push for higher funding levels in conference. The Senate Report states that the Appropriations Committee “will continue to monitor leasing data to make sure residents are protected.”

HCV Administrative Fees

The Senate committee bill provides a significant increase in funding for HCV program administrative fees. The Senate’s funding level of $1.55 billion for administrative fees is $205 million more than the House and $55 million more than 2014. The Senate level would provide an estimated 76 percent of agency eligibility (otherwise known as the proration), compared to 66 percent in the House bill.

HUD-VASH

Both bills provide $75 million for about 10,000 new HUD-VASH vouchers for homeless veterans. New HUD-VASH vouchers have been funded every year since 2008, but have not been available to Native American veterans living on tribal lands. This year, the Senate directs HUD to set aside a portion of HUD-VASH funding to conduct a pilot to provide housing for homeless veterans living on tribal lands.

With so much at risk, this is the year to join us for Hill Day in DC on July 31st. Click here for more information.