On May 3, 2017, the U.S. House of Representatives by a vote of 309 to 118 approved the $1.1 trillion omnibus appropriations bill—HR 244, the “Consolidated Appropriations Act, 2017,” which funds the federal government for fiscal year 2017 (FY17). The U.S. Senate followed up the House action on May 4 and passed the legislation by a vote of 79 to 18, and the President has indicated he will sign the bill once it reaches his desk.
As with previous omnibus bills, HR 244 is divided into alphabetical sections according to the funding categories of the various appropriations subcommittees. Division K comprises the Transportation, Housing and Urban Development, and Related Agencies (THUD) appropriations bill, and Title II in Division K contains the section for the Department of Housing and Urban Development (HUD). Each division is equivalent to a conference agreement between the House and Senate appropriations subcommittees. In the case of THUD, the full Senate passed their version of the FY17 appropriations bill in May 2016, while the House Appropriations Committee passed their version less than a week later, along with their respective committee reports.
Overall, in a politically-charged environment, with a new administration calling for elimination of some programs and drastic cuts to others in the coming fiscal year (the FY18 “skinny budget”), the FY17 public housing and related programs fared relatively well. Several programs in the skinny budget slated for elimination or deep cuts were increased. For example, the public housing capital fund received an increase over FY16, and the Choice Neighborhoods Initiative received more funding than ever before. Additionally, the Rental Assistance Demonstration (RAD) received an increase to 225,000 units.
CLPHA views the FY17 increases for skinny budget-targeted programs as a repudiation of the Administration’s direction for housing and community development programs, and as a hopeful sign for FY18. However, two disappointments in FY17 were the public housing operating fund—further explained below—which experienced a reduction when compared to FY16, and RAD, which was once again not funded.
Owing to persuasive arguments by CLPHA, the Moving to Work expansion received significant funding for the program evaluation. CLPHA argued that housing authorities should not have to pay from their funds for the evaluation since it is a requirement for participation in the expanded demonstration. Congressional policymakers agreed and housing authorities will not be subject to another unfunded mandate in order to participate in the program.
Below is a brief review of some issues and programs of interest to CLPHA members from the THUD portion of the omnibus funding bill, along with CLPHA’s updated funding chart.
The Explanatory Statement accompanying HR 244 specifies that it has the same effect with respect to funding allocation and implementation of the legislation as if it was a “joint explanatory statement of a committee of conference.”
According to the Explanatory Statement (“Explanatory Statement”) accompanying Division K in the omnibus for THUD, the “language and allocations included in this joint explanatory statement set forth in the House report (House Report 114-606) and the Senate report (Senate Report 114-243) carry the same weight as language included in this joint explanatory statement and should be complied with unless specifically addressed to the contrary in this division or joint explanatory statement. House report language and Senate report language, neither of which is changed by this joint explanatory statement, is a result of the 2017 appropriations agreement. The joint explanatory statement, while repeating some report language for emphasis, does not intend to negate the language referred to above unless expressly provided herein.”
Management and Administration
The Explanatory Statement directs the Government Accountability Office (GAO) to assess the effectiveness of the Departmental Enforcement Center (DEC) in HUD’s General Counsel’s Office in meeting the goal of “resolving issues of non-compliance with requirements for owners of public housing and multifamily housing properties, including physical and financial noncompliance.” GAO is to report its findings to Congress within six months of the omnibus enactment.
Public Housing Operating Fund: $4.4 billion. This is $1.064 billion below CLPHA’s request of $5.464 billion, $169 million below the Administration’s request of $4.569 billion, and $100 million below the FY16 enacted level. By CLPHA’s calculations, this amount represents an approximate 80.5 percent proration.
It should be noted, congressional sources indicate that, while the funded amount is less than FY16, according to HUD, it maintains their approximate 90 percent proration. HUD estimates it will cost less to operate the program in FY17 than FY16 due to increased tenant rents, lower utility costs and other factors. However, CLPHA continues to strongly disagree with HUD’s estimations and assumptions—participating in meetings and requesting HUD data to challenge their analyses—and we have expressed our disagreement to congressional policymakers.
Public Housing Capital Fund: $1.942 billion. This is $3.058 billion below CLPHA’s request of $5.0 billion, $77 million above the Administration’s request of $1.865 billion, and $42 million above the FY16 enacted level.
There is a set-aside of $15 million for the Jobs-Plus Pilot Program, equal to CLPHA’s request and $20 million less than the Administration’s request; a set-aside for the Resident Opportunities and Self-Sufficiency (ROSS) program of $35 million, equal to CLPHA’s request and $35 million more than the Administration’s request; and, a set-aside of $21.5 million for emergency capital needs with no less than $5 million for safety and security, $1.5 million more than CLPHA’s and the Administration’s request.
There are additional set-asides of $10 million for ongoing financial and physical assessment activities of the Real Estate Assessment Center (REAC), and up to $1 million is provided for the cost of administrative and judicial receiverships. The bill also allows HUD to provide bonus awards to housing authorities that are designated high performers in FY17.
There is also a set-aside of $25 million for competitive grants to housing authorities to evaluate and reduce lead-based paint hazards in public housing by carrying out activities of risk assessments, abatement, and interim controls. Additionally, the Explanatory Statement updates to June 30, 2017 the time frame set forth in the Senate Report for HUD to establish and implement a process that improves data collection and analysis of actions that housing authorities are taking to comply with lead-based paint regulations.
HUD is also directed to submit to Congress within three months of enactment a report on Real Estate Assessment Center (REAC) inspections of all HUD assisted and or insured properties. “This report shall include: the percentage of all inspected properties that received a REAC-inspected score of less than 65 since calendar year 2013; the number of properties in which the most recent REAC-inspected score represented a decline relative to the previous REAC score; a list of the 10 metropolitan statistical areas with the lowest average REAC-inspected scores for all inspected properties; and a list of the 10 States with the lowest average REAC-inspected scores for all inspected properties.”
GAO is further directed to submit to Congress within six months of enactment an evaluation report on the effectiveness of “REAC inspections of HUD assisted and or insured properties; HUD's selection and oversight of contractors that perform physical inspections; the property selection process; and enforcement mechanisms.”
Rental Assistance Demonstration (RAD): $0. This is $50 million below CLPHA’s and the Administration’s request of $50 million. The bill modifies the enabling legislation to increase or raise the unit cap to 225,000 units (Sec. 239 below).
The raising of the cap is a significant victory for CLPHA and the CLPHA-supported RAD Collaborative. We have strongly advocated for raising and/or eliminating the unit cap. CLPHA has repeatedly argued that the current cap on the number of units creates artificial limits on unit conversions; interferes with long-term portfolio planning; impedes the alignment of timeframes for additional funding sources; and hinders full portfolio conversion over multiple years.
Housing Choice Voucher (HCV) Renewals: $18.355 billion. This is $92 million below CLPHA’s and the Administration’s request of $18.447 billion, but $674 million above the FY16 enacted level. The bill language requires HUD to provide notification to housing authorities of their budget allocation no later than 60 days after enactment.
In addition, the bill provides $120 million to renew contracts under Section 811, housing for persons with disabilities, $10 million above the budget request. According to the omnibus bill language, any amounts “remaining available after funding renewals and administrative expenses…shall be available for incremental tenant-based assistance contracts under such Section 811, including necessary administrative expenses.”
According to conversations between CLPHA and congressional sources, these remaining amounts are considered amounts available for mainstream vouchers, or converted vouchers, and the authorizing statute (42 U.S.C. 8013(d)(4)(A)) states, “Such converted vouchers may be administered by the entity administering the vouchers prior to conversion. For purposes of administering such converted vouchers, such entities shall be considered a “public housing agency” authorized to engage in the operation of tenant-based assistance under section 1437f of this title;” thereby allowing public housing agencies to administer the vouchers to qualified persons with disabilities or to qualified non-elderly disabled families.
HCV Administrative Fees: $1.65 billion. This is $472 million below CLPHA’s request of $2.122 billion, $427 million below the Administration’s request of $2.077 billion, and equal to the FY16 enacted level. Of this amount, no less than $1.64 billion shall be allocated to public housing agencies; and, $10 million shall be available for public housing agencies that need additional funds to administer their Section 8 programs, subject to certain requirements.
Tenant Protection Vouchers (TPV): $110 million. This is $40 million below CLPHA’s request of $150 million, equal to the Administration’s request, and $20 million below the FY16 enacted level.
HUD-VASH Vouchers: $40 million. This is $35 million below CLPHA’s request of $75 million, $40 million more than the Administration’s request, and $20 million below the FY16 enacted level. This amount is for new incremental vouchers under the program.
Additionally, the bill provides $7 million for rental assistance and administrative fees to support Tribal HUD-VASH to serve Native American veterans that are homeless or at-risk of homelessness living on or near a reservation or other Indian areas.
Family Unification Program (FUP): $10 million. This is new incremental voucher assistance. The bill stipulates that these funds shall continue to be made available for FUP upon turnover. The bill further stipulates that if a housing authority administering FUP under prior appropriations determines it no longer has an identified need for FUP upon turnover, the housing authority shall notify HUD, who will recapture and reallocate the funds to other housing authorities.
Choice Neighborhoods Initiative (CNI): $137.5 million. This is $62.5 million below CLPHA’s and the Administration’s request of $200 million, and $12.5 million above the FY16 enacted level. It should be noted that, to date, this is the most funding in one year the program will receive in its history. This is a clear repudiation of CNI being slated for elimination in the FY18 skinny budget.
No less than $50 million may be made available to housing authorities; and up to $5 million of the funds may be provided as comprehensive local planning grants. HUD is directed to give priority to previously awarded planning grantees when making implementation grant awards.
Family Self Sufficiency Program (FSS): $75 million. This is $10 million below CLPHA’s request of $85 million, and equal to the Administration’s request and the FY16 enacted level.
Research and Technology: $89 million. Of this amount, HUD is directed to provide $6 million for a Moving to Work demonstration evaluation; and $6 million for continued evaluation of rent reform, in addition to other set-asides.
SEC. 217. Allows housing authorities with less than 400 units to be exempt from asset management requirements in the operating fund rule.
SEC. 218. 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. 224. 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. 226. Extends the HOPE VI program until September 30, 2017.
SEC. 228. Prohibits funds to be used to require or enforce the Physical Needs Assessment (PNA).
SEC. 239. Increases the unit cap to 225,000 under the Rental Assistance Demonstration, and extends the program to 2020.
Other Selected HUD Programs
Project-Based Rental Assistance: $10.416 billion. Of this amount, $235 million is set-aside for Performance-Based Contract Administrators (PBCA).
Community Development Block Grant: $3 billion.
HOME Investment Partnerships Program: $950 million.
Homeless Assistance Grants: $2.383 billion. Of this amount, set-asides include $310 million for emergency solutions grants program; $40 million for rapid re-housing of homeless; $12 million for a national homelessness data analysis project; and $43 million for comprehensive approach to serving homeless youth in up to 11 communities.
Section 202 Housing for the Elderly: $502.4 million. Of this amount, up to $75 million is set-aside for service coordinators and existing congregate service grants.
Section 811 Housing for Persons with Disabilities: $146 million.
Information Technology Fund: $257 million.