Appropriators Raise Concerns About Proposed Cuts and Block Grant
PHADA President John T. Mahon.
The FY 26 budget process is underway as the House and Senate appropriations panels hosted HUD Secretary Scott Turner for two hearings in mid-June. Meanwhile, PHADA and the other industry organizations issued our joint budget priorities for the coming fiscal year, which begins in about 3 months.
The Trump Administration’s proposed budget would slash non-defense domestic discretionary spending by roughly 22 percent. The White House plan proposes both dramatic cuts to, and a major restructuring of, federal housing assistance. Overall, HUD funding would total $43.5 billion—one-third less than the amount appropriated for the Department in this fiscal year.
As PHADA has previously reported, the President is proposing major changes in the way housing assistance is delivered. Specifically, the budget proposes creating a block grant—a “State Rental Assistance Program” that would replace virtually all housing assistance funding. Programs that would be replaced include Housing Choice Voucher renewals and administrative fees, public housing operating and capital funds, Project-based Rental Assistance, Housing for the Elderly (Section 202), and Housing for Persons with Disabilities (Section 811). Compared to the funding allocated this year to these programs, there would be a $26.7 billion cut.
This is not the first time a block grant model has been proposed for federal housing programs. The George W. Bush Administration proposed a similar plan for the HCV program more than 20 years ago. Then and now, PHADA raised deep concerns regarding a block-grant approach. For example, it could weaken long-term support for affordable housing programs, allow states to divert housing funding to non-housing uses, and create inconsistencies in subsidy levels and service delivery across the fifty states. Not to mention that many states simply do not possess the capacity to devise and oversee such complex programs.
During the recent congressional hearings, lawmakers on both sides of the aisle raised questions and concerns about how HUD’s plan could be implemented without inflicting pain on assisted families. Members of both parties also said the Department would need to get approval from the congressional authorizing committees because they set federal housing policy—not the appropriations committees. It is highly unlikely the authorizing committees could consider and adopt such changes that could clear Congress just a few months before the start of the new fiscal year.
We have many other concerns with HUD’s proposed budget. For example, it zeroes out funding for Community Development Block Grants (CDBG), HOME Investment Partnerships, and the Pathways to Removing Obstacles to Housing (PRO Housing) programs.
Timing on FY 26 Appropriations Bills
Both the House and Senate will work to develop their respective funding bills over the summer, and the House has tentatively scheduled a mark-up of its Transportation and HUD (T-HUD) appropriations bill for July 10. Given that FY 26 is just three months away, the prospects for another Continuing Resolution are growing more likely. While the Trump Administration’s spending plan is unlikely to advance, we are concerned about the possibility of inadequate “topline” spending targets Congress may set for domestic programs, including housing.
Use Our Material in Your Advocacy
PHADA will continue to strongly advocate for preserving federal programs that ensure safe and decent housing for low-income households. With this in mind, the industry groups recently issued our joint budget recommendations.
We noted that by cutting funding in half, the White House plan would reduce the number of households receiving assistance by 2.3 million. The cuts and other proposals in the budget would not only destabilize housing for millions of families but also harm local economies and erode communities.
A copy of our budget recommendations can be found here. I urge you to consult this material and use the information in your communications with your own Representatives and your two Senators. FY 26 begins on October 1, so please act now. Thank you.