With the election over, the Senate Appropriations Committee released drafts of all 12 spending bills for FY 21. The House released its bills earlier this year and now negotiations will begin with the hope of a deal before the current Continuing Resolution (CR) expires on December 11, averting the need for another CR or a government shutdown.
The Public Housing Operating Fund and Public Housing Capital Fund accounts have been combined into a single Public Housing Fund. In the report accompanying the spending bill, it is noted that this consolidation will bring the public housing program in line with rental assistance programs, which are all funded through a single account. Although the Committee consolidates the two accounts, there is no flexibility between operating and capital activities beyond those flexibilities that are already statutorily permitted.
Historically there has been concern about such a consolidation, which, in essence, “block grants” the accounts, making them more susceptible to cuts. However, for now this concern is mitigated by the fact that specific amounts have been allocated for each account. The FY 21 Senate budget allocates $4.517 billion for Operating and $2.923 billion for Capital versus $4.549 billion and $2.869 billion, respectively, for FY 20 enacted, for a decrease of $32 million to the Operating Fund and an increase of $54 million to the Capital Fund. These numbers are also lower than PHADA’s and the industry’s recommendations as well as the House numbers for FY 21.
For more information on the FY 21 budget process, see PHADA’s Position Paper on FY 21 Appropriations.
The Operating Fund allocation noted above includes $25 million for financial shortfalls among HAs. Funds will be allocated first to HAs with 249 or fewer public housing units and less than one-month of reserves before allocating funds to larger HAs. The rationale provided was that these HAs comprise over 75 percent of all HAs and are unlikely to be able to avail themselves of other mitigation strategies relative to larger HAs.
For Voucher Renewals, the Senate allocates $22.891 billion, which is slightly higher than the House at $22.852 billion, and represents an increase of 6.4 percent from FY 20 enacted. For Admin Fees, the Senate allocation of $2.160 billion is slightly higher than the House number of $2.154 billion, for a 9.3 percent increase over FY 20.
The budget for Choice Neighborhoods was cut by 43 percent, from $175 to $100 million, and is $150M less than the House approved figure for FY 21. The budget for Project Based Assistance increased from $12.570 billion in FY 20 to $13.403, for a 6.6 percent increase, but is $48 million less than the House figure for FY 21.
Public Housing Agency Accreditation
The Senate bill supports further exploration of the feasibility of a partnership between HUD and one or more entities that provide accreditation services to public housing agencies on a voluntary basis. These entities would be nonprofit organizations that have developed standards for, and are experienced with, accrediting affordable housing organizations, including HAs, and promoting best practices to implement a national accreditation process for affordable housing organizations. Such accreditation would include an evaluation of an HA’s operations, policies, procedures, practices, communications, and relationships with residents and stakeholders. The Appropriations Committee directs HUD to report to the House and Senate Committees on Appropriations within 240 days of enactment of this act on the feasibility of such partnerships.
PHADA members, led by Vice President of Housing Josh Meehan (Executive Director of Keene Housing, NH) met with Congress and HUD to advocate for such a system, believing it has the potential to increase the visibility and public awareness of affordable housing, leading to greater public trust and increased credibility for affordable housing. After the House adopted accreditation language, PHADA urged the Senate to act similarly.
PHADA urges all members to call your Representatives and Senators and urge them to support the higher House numbers for Operating and Capital Funds, as well as to maintain the separation between these accounts, and for Choice Neighborhoods and Project Based Assistance. Members should also advocate for the higher Senate numbers for the Voucher Program.
PHADA will continue to provide analysis of the FY 21 budget on its webpage and in future Advocates, and will advocate vigorously for the higher numbers in all accounts.