Trump’s 2019 Budget Would Devastate Affordable Housing Efforts: Rural Housing Advocates Have More Immediate Concerns

President Donald Trump’s administration released its FY 2019 federal budget proposal on Monday (2/11/2018) and as with his 2018 budget; the President proposes to slash affordable housing and community development programs.  Trump would zero out the HOME Partnership Program, Community Development Block Grant (CDBG), and the National Housing Trust Fund.  At USDA Rural Development the budget eliminates funding for the Section 502 direct mortgage loan program, Section 504 loans and grants, Water and Wastewater grants and guarantees and Community Facility Loans.  The list of cuts and program eliminations goes on and on but as was the case with the President’s 2018 budget, Congress is expected to ignore the President’s proposal.   (A table is appended to the end of this article with 2017 adopted budget and 2018 budget proposals from the Senate and House).

As of this writing, Congress and the President have our federal government operating on the fourth of a series of Continuing Resolutions (CR) that generally funds the government at 2017 levels.  Both Houses of Congress now believe that they are closing in on a deal for a FY 2018 budget that would cover the period October 1, 2017 through September 2018.  In adopting the current CR, Congress agreed to lift the 2011 Budget Control Act limits allowing defense spending to increase by $80 billion and domestic spending to rise by $63 billion in FY18.   This step was not assured but was absolutely necessary if they were going to avoid deep cuts in a range of domestic spending including HUD and USDA programs.  Advocates should be watching as the Congress attempts to negotiate an FY 18 budget by early next month.  Generally, housing advocates would favor the Senate’s approach to the budget over the House proposal.

Meanwhile, the recently adopted federal tax bill and the Cuomo administration’s proposed FY 19 New York State budget contain serious challenges for the development of affordable rental housing.  While housing advocates were successful in lobbying for the continuation of the federal Low Income Housing Tax Credit (LIHTC), Private Activity Bonds and their associated 4% tax credits in the tax bill, the value of these tax credits will be somewhat diminished as the corporate tax rate falls from 35% to 21%.  The net result is that New York’s commitment to invest $2.55 million in affordable housing will leverage less in private equity investment than would have been the case under the previous tax law.

Further diminishing the leverage of state housing capital, Governor Cuomo proposes to defer claims for the State Low Income Housing Credit (SLIHC) for two years.  While this action does not stop the allocation of SLIHC it is expected to cool the interest of investors and result in a reduced amount of equity that developers will raise through the sale of the credits.

Below is the table that NYS Rural Advocates will be using to track progress towards the FY 2018 and FY 2019 federal budget.  Once again, we would like to thank Rapoza Associates and the National Rural Housing Coalition for this template.

Federal Housing and Community Development Programs
HUD Appropriations – Selected Programs,  FY 17 Final, FY18 Budget, House, Senate and FY 19 Budget — $ in millions
HUD FY 17 Final FY 18 Budget FY 18 House FY 18 Senate FY 18 Final FY 19 Budget
HOME 950 0 850 950   0
Capacity Building 0 0 0 0   0
Transformation Initiative 0 0 0 0   0
Housing Counseling 55 43 50 47   43
Community Development Fund 3060 0 2960 3060   0
  CDBG Formula funding 3000 0 2900 3000   0
Choice Neighborhoods Initiative 137.5 0 20 50   0
Housing Trust Fund** 220 0       0
SHOP ## 54 0 45 54   0
Section 108 Program Level 300 0 300 300   0
Section 202 Housing for Elderly 502.4 510 573 573   566
NeighborWorks 140 0 140 140   27.4
 
EPA FY 17 Final FY 18 Budget FY 18 House FY 18 Senate FY 18 Final FY 19 Budget
Clean Water SRF 1393.8 1393 1143.8 1.394   997
Safe Drinking Water SRF 863.2 863.2 863.2 864   863
**Mandatory Account authorized under HERA of  2008 and proposed for elimination in 2018
## House number includes $30m ($ 5m for rural) for Sec.4;$5 million for national technical assistance for rural; $10 M for SHOP loans
Senate number includes $35 m for capacity building for Sec.4 ;$5 m for rural; $10 m for SHOP loans;$4 m for veterans
 

 

 

Agriculture Appropriations — Selected Programs  FY 17 Final, FY18 Budget, House, Senate, FY 19 Budget  — $ in millions

RHS/RUS Programs FY 17 Final FY 18 Budget FY 18 House FY 18 Senate FY 18 Final FY 19 Budget
502 Single Family Direct 1,000 0 900 1,000   0
502 Single Family Guaranteed 24,000 24,000 24,000 24,000   24,000
504 Loans 26.278 0 24 26.278   0
504 Grants #28.7 0* [0] #28.7   0
514 Farm Labor Housing Loans 23.855 0 15 23.855   0
515 Rural Rental Housing 35 0 23.398 35   0
516 Farm Labor Housing Grants 8.336 0 6 8.336   0
521 Rural Rental Assistance 1,405.03 1,345.29 1,345.29 1,345.00   1,371.00
523 Self-Help TA 30 0 25 30   0
533 Housing Preservation Grants #5 0 [0] #5   0
538 Rental Housing Guaranteed 230 250 230 230   250
Multi-Family  Restructuring (BA) 41.4 20 35 41.4   0
Housing Preservation  Demonstration 0 0 (15) (22)   0
Voucher Demonstration (19.4) (20) (20) (19.4)   0
Supervisory TA Grants 0 0 0 0   0
Community Facility Loans 2,600 3,000 2,600 3,000   3,500
Community Facility Grants 30 0* [0] 30   0
Community Facility Guarantee 148.305 0 148.305 148.305   0
Water-Wastewater Disposal Program Account 571.19 0 472.70 550.38    
Water-Wastewater Loans 1,200 0 1,200 1,200   1,200
Water-Wastewater Grants 391.98 0 358.9 393.98   0
Water-Wastewater Guarantee 50 0 50 50   0
Solid Waste Grants 4 0 4 4   0
Small Systems Revolver 1 0 1 1   0
Rural Business Enterprise Grants 24 0 24 24   0
Intermediary Re-lending 18.889 0 17.5 18.889   0
RCDI 4 0 0 4   0
B&I 919.765 0 919 919   0
Rural Microenterprise Investment BA/Program Authority 0/0 0/0 0/0 0/0   0
   Rural Economic Infrastructure Grants N/A 162 122.692 0   0
            REIG – Appalachian  Region   [80] [60] N/A   0
 
( ) included in amount displayed for Multi- Family Restructuring
* Included in Rural Economic Infrastructure Grants, established in the 2018 Budget Request.
# Included in the amount provided for Rural Housing Assistance Grants – $33.701 million.
[] included in the amount for REIG

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s