House Appropriations Committee Passes FY17 THUD Spending Bill

FY17 THUD Spending Bill Also Passes on Senate Floor

 

On May 24, the House Appropriations Committee (“the Committee”) on a voice vote passed the fiscal year 2017 (FY17) appropriations bill for the Departments of Transportation, Housing and Urban Development, and Related Agencies (THUD), readying the $58.19 billion discretionary spending bill for floor action. The bill includes a total of $38.7 billion for the Department of Housing and Urban Development (HUD) , an increase of $384 million above the fiscal year 2016 enacted level and $953 million below the Administration’s budget request.

 

THUD subcommittee chairman Mario Diaz-Balart (R-FL) said, “This bill provides for our nation's transportation and housing needs, while making tough choices to protect hard-earned taxpayer dollars. It recognizes the need to house the most vulnerable and get critical infrastructure back on track. Most importantly, it will ensure the safety of our infrastructure and improve the quality of our public housing programs.” Diaz-Balart in thanking committee members and staff for their hard work to fashion a “bipartisan nature” spending measure made particular mention of subcommittee ranking member, David Price (D-NC), “for his hard work and dedication to the issues.”

 

CLPHA is aware that, behind-the-scenes, Price was particularly instrumental in preventing the Choice Neighborhoods Initiative from being drastically cut. Through his strong support, he was able to limit the reduction to only $25 million below the FY16 enacted level, and CLPHA is deeply appreciative of his efforts. Price was one of the strongest advocates in Congress for the HOPE VI program, and has continued that strong support with CNI.

 

Similar to the Senate bill, public housing and related programs fared better than expected, nonetheless, most of the House funding levels are still below CLPHA and industry recommended levels. In particular, unlike the Senate bill, the Rental Assistance Demonstration program did not receive an increase in the unit cap or funding (see below). The only amendment adopted by the full committee was the manager’s amendment which made technical and noncontroversial changes to the bill and committee report. The manager’s amendment was adopted on a voice vote.

 

The following is a brief review of policies and programs of interest to CLPHA members in the House bill, and insight into House intent from the Committee Report, accompanied by CLPHA’s updated funding chart.

 

Program Funding

 

Public Housing Operating Fund: $4.5 billion. This is $964 million below CLPHA’s request of $5.464 billion, $175 million below the Senate recommendation of $4.675 billion, $69 million below the Administration’s request of $4.569 billion, and equal to the FY16 enacted level.

 

Public Housing Capital Fund: $1.90 billion. This is $3.10 billion below CLPHA’s request of $5.0 billion, $35 million above the Administration’s request of $1.865 billion, and equal to the FY16 enacted level.

Set-asides include $15 million for the Jobs-Plus Pilot Program, $35 million for the Resident Opportunities and Self-Sufficiency (ROSS) program, and $20 million for emergency capital needs (with no less than $5 million for safety and security), all equal to CLPHA’s request.

 

The Senate recommended similar amounts as the House for ROSS and Jobs Plus, plus $1.5 million more for emergency capital needs; while the Administration asked $20 million more for Jobs Plus, but no funding for ROSS. Similar to the Senate, the bill increases the Capital Fund to Operating Fund flexibility to 25 percent; provides a set-aside of $10 million for ongoing financial and physical assessment activities of the Real Estate Assessment Center (REAC), and provides $1 million for the cost of administrative and judicial receiverships.

 

Additionally, the bill includes language prohibiting funding for HUD’s physical needs assessment (PNA) requirement for housing authorities. According to the Committee report, “implementation of PNA requirements on PHAs unnecessarily increase administrative burdens on PHAs and appear to have no operational benefit for local housing programs.”

 

Housing Choice Voucher (HCV) Renewals: $18.312 billion. This is $135 million billion below CLPHA’s and the Administration’s request of $18.447 billion, $43 million below the Senate recommendation, and $630 million above the FY16 enacted level.

 

The bill did not include the Administration request for new special purpose vouchers, specifically mandatory and discretionary funding for vouchers targeted to reduce homelessness. “However, the Committee encourages HUD to facilitate the issuance of vouchers for vulnerable populations, including families that face homelessness, as vouchers become available to PHAs upon turnover.”

 

HCV Administrative Fees: $1.650 billion. This is $472 million below CLPHA’s request of $2.122 billion, $119 million below the Senate recommendation, $427 million below the Administration’s request of $2.077 billion, and equal to the FY16 enacted level.

 

Tenant Protection Vouchers (TPV): $110 million. This is $40 million below CLPHA’s request of $150 million, equal to the Senate recommendation and the Administration’s request, and $20 million below the FY16 enacted level.

 

HUD-VASH Vouchers: $7 million. This is $68 million below CLPHA’s request of $75 million, $43 million below the Senate recommendation, $7 million more than the Administration’s request, and $53 million below the FY16 enacted level. The $7 million is available for renewal grants and new grants only to Native American veterans that are homeless or at-risk of homelessness living on or near a reservation or other Indian areas.

 

Over-income Residents: HUD is encouraged to continue working with housing authorities to reduce the number of residents in public housing who are over-income, while not impeding policies that increase residents’ self-sufficiency. HUD is directed to provide a report to Congress, no later than six months after enactment, identifying measures they are  taking to address over-income residents.

 

Choice Neighborhoods Initiative (CNI): $100 million. This is $100 million below CLPHA’s and the Administration’s request of $200 million, $20 million below the Senate recommendation, and $25 million below the FY16 enacted level.  No less than $50 million (50 percent) of the funding shall be awarded to public housing agencies, and up to $5 million of the funds may be provided to assist communities develop comprehensive planning grants. HUD is encouraged “to give prior year planning

grant recipients priority consideration when awarding implementation grants.”

 

Family Self Sufficiency (FSS) Program: $75 million. This is $10 million below CLPHA’s request of $85 million, and equal to the Senate recommendation, the Administration’s request, and the FY16 enacted level. HUD is expected “to prioritize assistance to individuals and families that results in job stability, increased tenant incomes, and greater rent contributions.”

 

Rental Assistance Demonstration (RAD): no funding provided. CLPHA and the Administration requested $50 million, and the Senate recommended $4 million. The bill provides no funding for RAD. According to the report, the Committee, “does not provide a separate line of funding or expanded authorities requested for the program. The Committee believes that the current cap of 185,000 units eligible for conversion will allow a significant number of PHAs to undertake RAD conversions in fiscal year 2017, as conversions have been completed on only a fraction of the 185,000 total unit cap.”

 

 

General Provisions

 

Sec. 210. Exempts Los Angeles County, Alaska, Iowa, and Mississippi from the requirement of having a PHA resident on the board of directors for fiscal year 2017. Instead, the public housing agencies in these States are required to establish advisory boards that include public housing tenants and section 8 recipients.

 

SEC. 218. Allows housing authorities with less than 400 units to be exempt from asset management requirements in the operating fund rule.

 

SEC. 219. Restricts the Secretary from imposing any requirement or guideline relating to asset management that restricts or limits the use of capital funds for central office costs, up to the limit established in QWHRA.

 

SEC. 226. Restricts the amount of Section 8 (under the tenant based rental assistance program) and Section 9 funding that public housing agencies can use to pay employees above the annual rate of basic pay for a position at level IV of the Executive Schedule in FY17. 

 

SEC. 229. Prohibits funds to be used to require or enforce the Physical Needs Assessment (PNA). 

 

Sec. 235. Authorizes HUD to award to McKinney-Vento homeless assistance fund recipients 1-year grants to transition from one continuum of care program component to another.

 

Other Selected HUD Programs

 

Project-Based Rental Assistance: $10.901 billion. This amount is equal to the Senate recommendation with $235 million set-aside for Performance-Based Contract Administrators (PBCA).

 

Noting that PBCAs are integral to HUD’s efforts to reduce improper payments, protect residents, and ensure properties are well maintained, the Committee directs HUD “to solicit and award PBCA contracts under full and open competition and without geographic limitation in accordance with the Competition in Contracting Act and the Federal Acquisition Regulation. Notwithstanding any provision of state law, the Committee rejects any attempt to weaken the PBCAs’ comprehensive oversight of the properties administered under their management, diminish the applicability of federal law, or limit out-of-state competition by reliance on letters from state attorneys general, as seen in the 2012 NOFA process, or otherwise.”

 

Community Development Block Grant: $3 billion. This amount is equal to the Senate recommendation.

 

HOME: $950 million. This amount is equal to the Senate recommendation.

 

Homeless Assistance Grants: $2.487 billion. This amount is $157 million above the Senate recommendation. Of this amount, set-asides include $310 million for emergency solutions grants (ESG) program, and $7 million for a national homelessness data analysis project. There is a $40 million set-aside in ESG funds for negatively impacted communities to be distributed by formula.

 

Section 202 Housing for the Elderly: $505 million. This amount is equal to the Senate recommendation with $75 million set-aside for service coordinators and existing congregate service grants.

 

Section 811 Housing for Persons with Disabilities: $154 million. This amount is equal to the Senate recommendation.

 

Information Technology Fund: $100 million. This amount is $173 million below the Senate recommendation and $150 million below the FY16 enacted level.

 

Policy Development and Research: $80 million. This amount is equal to the Senate recommendation. Included in this amount is $5 million for new and continuing studies and evaluations with up to $2 million for the MTW study. The Committee also specifically urged HUD to “target truly troubled or at-risk PHAs requiring assistance to conduct basic business and housing responsibilities versus assisting with glitzy new and bonus endeavors, such as energy performance contracts.”

 

The Committee also encourages HUD to improve the process regarding fair market rents (FMRs). In addition to recommending that HUD give sufficient time and notice to interested parties on FMR publishing dates, and adhering to established procedures, the Committee also recommends “that HUD

establish and publish a clear process for public housing agencies to follow in order to request reevaluation of FMRs, where public housing agencies are having demonstrable difficulty placing voucher

tenants in units (e.g., low success rates despite high payment standards). The Committee recommends that, where available, HUD incorporate the most recent, statistically reliable, regional data on rents paid in a market when determining FMRs for a community.”

 

The Committee commended HUD’s efforts to test FMRs using small areas to gauge the impact on local housing choices, “but urges HUD to also look at the current measurement methodology of area median income (AMI) in metropolitan areas in order to more accurately and locally measure AMI to offer affordable housing. Within 180 days of enactment of this Act, the Committee directs HUD to submit a report to the Committee on the options for measuring AMI using more localized methodologies, the feasibility of using these alternative measurements, and if HUD has plans to test the identified alternatives.”

 

Lead Hazard Control and Healthy Homes: $130 million. This amount is $5 million below the Senate recommendation. The Committee concerned with updated lead inspection standards given the significant impact lead exposure can have on children and their development, directs the Government Accountability Office (GAO) to report to Congress, within six months of enactment, on the lead hazards in housing, including: “(1) an assessment of the implications of changing Department regulations to align with the Centers for Disease Control and Prevention guidance; and (2) an assessment of the implications of requiring a risk assessment (beyond a visual assessment) for initial and periodic inspections for lead-based paint hazards for housing receiving federal assistance through HUD, and the impact it would have on landlord participation and the availability of affordable housing; (3) an analysis of whether existing federal programs and funding for lead hazard control activities in housing receiving federal assistance meet the current and evolving needs; (4) recommendations on how to improve coordination and leveraging of public and private funds to reduce the costs associated with the identification and remediation of lead hazards; and (5) an identification of existing partnerships among public housing agencies and public health agencies to address lead-based paint hazards, what gaps exist in compliance and enforcement, and whether the partnerships can be replicated and enhanced through better data collection and dissemination among stakeholders.”

 

Management and Administration

 

Notice of HUD assistance: There is no single point of contact for HUD in a local community for the many different types of stakeholders including individuals, public housing authorities, not-for-profit organizations, states and governors, mayors and cities, and landlords. To comprehensively track all of HUD’s investments, projects, and programs across a single community is difficult.  Consequently, the Committee directs HUD “either through the various program offices or through technical assistance initiatives, to notify local officials where HUD assistance is, or will be, used for new construction, hazard remediation, or substantial rehabilitation of multifamily units, public buildings, or other projects which involve the construction of or rehabilitation of properties other than single family homes.”

 

 

Senate Action:

 

On May 19, 2016, the Senate passed by a vote of 89 to 8 their FY17 funding bill for HUD. (see 4/26/16 CLPHA report for bill details)

 

Since the Senate action preceded the House—which constitutionally should act first on funding bills—the floor managers resorted to a procedural slight-of-hand to take up and pass the bill in the Senate. The Senate’s original FY17 THUD bill, S. 2844 needed an HR number to be considered on the Senate floor. The Senate amended HR 2577, last year’s THUD funding bill passed by the House in June 2015.

 

HR 2577, as amended, became the new Senate version of the FY17 HUD funding bill.  Included on the THUD bill is a second appropriations bill tied to it. Division A of HR 2577 is the FY17 THUD appropriations bill, and Division B is the FY17 Military Construction and Veterans Affairs appropriations bill.

 

The House and Senate are eventually expected to reconcile their versions of the FY17 THUD funding bill in conference.