HAs Need More Local Flexibility, Deregulation, Fungibility
PHADA President Mark Gillett.
Congress returned to Washington this week for a “lame duck” session. Lawmakers will be in the capital parts of this month and December. One issue that remains on the agenda is the Continuing Resolution (CR) that funds the government until December 20. House Appropriations Committee Chairman Tom Cole (R-OK) has indicated he would like to conclude work on this year’s budget, but added he will defer to the President-Elect. Some other lawmakers have suggested that Congress should defer action until the 119th Congress assumes office. This would mean a CR would remain in effect until later in the first quarter of 2025.
At a time of escalating costs (especially insurance) and winter utility bills on the way, this kind of delay creates even more uncertainty and potential problems for us and the millions of residents we serve. PHADA is therefore advocating that lawmakers finish the budget before January.
Senate Bill is Preferable
Of the two versions that are pending, the Senate’s is preferable. Proposed appropriations in that legislation include: a four percent increase for voucher administrative fees; an over 300 percent increase to the public housing shortfall account; a 12.4 percent increase in appropriations for Housing Choice Voucher (HCV) renewals relative to FY 24 enacted levels, a marginal decrease in the public housing operating fund and flat funding for the capital fund. It is notable that the Senate’s proposed operating fund is still $300 million more than what was included in the President’s budget request.
For more specific information, see PHADA’s FY 25 Appropriations Position Paper.
The Overall Budget Situation
Completion of this year’s spending bill is just one of a few major budgetary challenges confronting Congress. In 2025, lawmakers will again have to increase the debt ceiling to allow the government to continue its borrowing authority. In addition, the Trump tax cuts expire with the incoming Administration, and many lawmakers advocating they be permanently extended and even expanded.
All this will play out in a difficult 2025 budget environment. The Congressional Budget Office released a report indicating that the national debt will balloon to more than $50 trillion in the next decade. Because of rising interest rates, the government now spends more on annual debt service payments than on defense spending.
PHADA’s Local Flexibility Option
Given these budget realities and the election’s outcome, PHADA believes its Local Flexibility Option (LFO) is more relevant now than ever before. While the association will continue to advocate vigorously for adequate funding, it will be challenging to secure increased appropriations, making deregulation, local flexibility, and fungibility between accounts even more necessary.
Since one size does not fit all for thousands of local agencies, PHADA supports legislation allowing HAs the flexibility to operate within the context of their local conditions. PHADA recommends a broad rollback of federal restrictions and requirements. Highlights of our approach would include:
- Greater flexibility and fungibility in the use of funds. The success of both the original MTW agencies and the effective use of flexibility granted through CARES Act waivers demonstrate the greater effectiveness that can be achieved by local agencies with such flexibility.
- Elimination or revision of rules and restrictions that inhibit innovation and experimentation.
- Rollback of some HUD oversight and monitoring reporting systems and regulatory micromanagement while still ensuring accountability on the part of HAs.
Conclusion
There is some bipartisan support on Capitol Hill for these concepts. Key lawmakers in both chambers have expressed interest in these types of ideas. Senator Tim Scott (R-SC), for example, included a major expansion of MTW in a bill he introduced earlier this year. Importantly, the legislation would authorize HAs to transition to the original (and more flexible) version of the program. In the House, Representative Pat Ryan (D-NY) has authored similar legislation.
PHADA will do all it can to collaborate with them, our industry partners, others in Congress, and the new Administration to secure support and enactment of the commonsense themes behind our LFO.