Losing Ground: The Impact of Proposed FY 2000
HUD Budget Cuts on America's Communities
"At a time of unprecedented national prosperity, Congress should not rob the poorest Americans to provide reckless tax cuts and create a new deficit. Now is the time to invest in a brighter future for people and places left behind."
-- Andrew Cuomo, Secretary
In February of this year, the President submitted to Congress a budget to build on last year's bipartisan budget for the U.S. Department of Housing and Urban Development. The President's budget would have increased vital investments in families and communities by $2 billion. In July of this year, the House of Representatives completed a "mark-up" of the HUD budget rendering deep cuts in funding that would hurt our Nation's ability to provide safe, affordable housing and economic opportunities for all Americans. For example, the House Appropriations Committee's mark-up of the FY2000 HUD/VA bill would fail to fund any incremental housing vouchers and would impose a 5 percent cut in the critical Community Development Block Grants (CDBG) program. If passed by the full Congress, these cuts would have a devastating impact on families and communities nationwide. Overall, the cuts represent: an estimated 156,000 fewer housing units for low-income families in America at a time when worst case housing needs are at an all-time high; 16,000 homeless families and persons with AIDS who will not receive vital housing and related services; and 97,000 jobs that will not be generated in communities that need them.
Specifically, the House mark would:
HOUSING FOR DISADVANTAGED FAMILIES
Fail to fund the Administration's request for 100,000 incremental housing vouchers at a time when worst case housing needs remain at an all-time high and time on waiting lists for housing assistance is growing. Despite a booming economy, the number of families with worst case housing needs-defined as paying over 50 percent of their income on rent-remains at an all-time high of 12.5 million people, including 4.5 million children, 1.5 million elderly, and 3.5 million persons in families on welfare. Families in the transition from welfare to work have a special need for assistance since housing is typically their greatest financial burden. In addition, the amount of time that families wait for public housing and Section 8 housing vouchers has increased substantially in selected cities around the country from 1996 to 1998, according to HUD's recent report Waiting in Vain. For the largest public housing authorities, the average wait for public housing increased by 50 percent to more than 2 ½ years. Nationally, the average waiting time for a Section 8 housing voucher has increased to more than 2 years. The proposed cuts would result in a total of over 128,000 families being denied housing vouchers. It would also eliminate the Regional Opportunities Counseling program, which provides critical assistance to families trying to move out of areas with high concentrations of poverty.
Fail to fund the rehabilitation of almost 28,000 units to create quality housing. The HOME Investment Partnerships program, a flexible block grant that helps communities build and rehabilitate housing, would be cut by $20 million compared to FY1999 levels. The HOPE VI program to replace severely distressed public housing with well-designed, mixed-income communities would be cut by $50 million, and public housing capital funds would be cut by $445 million, despite the huge backlog of rehab and repair needs in the Nation's housing of last resort.
Slow down the fight against housing discrimination. The 6 percent cut in the Fair Housing Assistance and Fair Housing Initiatives Programs would deny the assistance needed by State and local fair housing agencies to process fair housing complaints and would deny funds to local communities who want to establish new private fair housing organizations where local public agencies do not exist.
Increase disadvantaged children's exposure to lead paint poisoning. Lead poisoning is the foremost environmental health risk to American children, especially poor children and those living in older, poorly-maintained housing. The $10 million cut in the Lead Hazard Control Grant program will mean that about 900 private homes will not be made lead safe, putting at least 600 low-income children under 6 years of age at risk of permanent developmental and health problems from elevated blood lead.
HOMELESS AND PERSONS WITH AIDS
Deny assistance to almost 16,000 homeless families and persons with AIDS. Help for homeless individuals and families would be cut by $5 million compared with 1999 levels. Ten million would be cut from the Housing Assistance for Persons with AIDS (HOPWA), despite the fact that housing is perhaps the most critical unmet need for those suffering with AIDS. Combined, these cuts would result in almost 16,000 homeless people and persons with AIDS being denied essential services, including transitional and permanent housing, mental health counseling, job training and drug treatment.
Significantly under-fund job creation nationwide. Community and economic development activity under the Community Development Block Grant (CDBG) program would be cut by $250 million from the level enacted in 1999, and $5 million would be cut from the job-generating Brownfields Economic Development Initiative. This means that approximately 97,000 jobs that could be created by these programs would not be. CDBG is a flexible source of funds used by local officials to create jobs, construct or rehab shelters for battered spouses and the homeless, make buildings accessible to the elderly and handicapped, help working families become first-time homeowners, and other vital community development activity. The Brownfields program provides grants that leverage significant private dollars to redevelop formerly contaminated commercial and industrial sites.
* Included in the CDBG cut are drastic cuts from the Administration's requests for critical programs-the Community Empowerment Fund to develop and expand businesses in distressed areas; Youthbuild to prepare young people for careers through empowering construction and rehabilitation experience in their communities; and the Community Outreach Partnership Centers Program that allows colleges and universities to act as community building partners. And the House mark-up completely eliminated funding for vital technical assistance and information systems improvement.
In addition to cuts as compared to FY1999 enacted levels, the innovative, newly-proposed America's Private Investment Companies (APIC) program is not funded in the Committee mark-up. Modeled after a highly successful Small Business Administration program, APIC would stimulate $1.5 billion in private investment in large-scale businesses in distressed areas, both urban and rural, every year-at very modest cost to the taxpayer ($37 million for credit subsidy and program operations).
The proposed cuts would come at a time when too many communities are not sharing in our booming economy:
Some communities still struggle in the slow lane of the Nation's strong economy. As HUD reported in Now Is The Time: Places Left Behind in the New Economy earlier this year, close to one in three central cities had poverty rates of 20 percent or more in 1995¾50 percent higher than the national rate. One out of six central cities had an unemployment rate 50 percent or more above the national rate. In fact, one in seven central cities faces "double trouble" continued high unemployment relative to the Nation as a whole plus either significant long-run population loss or persistently high poverty rates or both. These problems confront all regions of the country, cities, and counties, both large and small (66 percent of the doubly burdened cities are small or mid-sized with populations of 100,000 or less). Many rural communities are struggling as well, especially Appalachia, the Mississippi Delta, Indian Country, and the borderland Colonias.
These proposed budget cuts would move America in exactly the wrong direction. Despite our unprecedented prosperity, there are significant unmet needs in our Nation's communities. We should be expanding, not cutting, programs that meet these vital housing and economic development needs. Congress should fully fund the HUD budget, including 100,000 new Section 8 vouchers, America's Private Investment Companies (APIC) and other important initiatives.
Appendix A: Comparison of FY99 Total Budget and Enacted Funds vs. Proposed Congressional Cuts in FY 2000 Mark-Up (Table)
Appendix B: Potential Budget Impacts-Mark-Up vs. FY 99 Enacted, by Entitlement Community (Table)
Content Archived: January 20, 2009