HUD Secretary Marcia L. Fudge testified on May 11 and May 12 before the House and Senate Appropriations Subcommittees on Transportation, Housing and Urban Development (T-HUD), and Related Agencies regarding the FY 23 Budget. The Budget, which was released on March 28, includes $71.9 billion for department programs, $6.2 billion more than the FY 22 enacted level.
House Chair’s Opening Statement
Retiring subcommittee Chairman David Price (D-NC), a strong advocate for HAs, praised the work of Secretary Fudge pointing to the department’s deployment of more than $7 billion in the American Rescue Plan Act (ARPA) funding and over $12 billion in CARES Act resources. He then pivoted to criticize the previous administration’s budget requests that flatlined housing infrastructure programs and zeroed out community revitalization programs such as Choice Neighborhoods and the HOME Investment Partnerships.
In addressing the Secretary, Chairman Price stated that the subcommittee has a “long-standing bipartisan commitment to addressing the complex housing challenges communities face across America, and [the subcommittee members] look forward to continuing our work with [her] to ensure that HUD has the resources necessary to carry out its critical mission.”
The Chairman then reflected on the budget request which seeks $71.9 billion for the department – a 9.4 percent increase over FY 22. He pointed out that the President’s FY 23 budget includes $32.1 billion in housing choice vouchers, $3.6 billion to combat homelessness, $3.8 billion to expand economic opportunities and improve the quality of life for low- and moderate-income families, and $2 billion to construct and rehabilitate affordable rental housing through the HOME program – all increases above FY 22.
House RM’s opening statement
Ranking Member Diaz-Balart (R-FL) expressed appreciation for the Secretary’s focus on the issues facing local governments that implement the department’s programs and her honest and direct communication. He then expressed concern about the proposed 13 percent funding increase in the Administration’s HUD budget above the 2022 enacted levels. He said, “[The budget] includes program expansion that I think will create liabilities for years to come.” He went on to say how he is committed to support “smart investments in HUD programs.” He ended his opening statement by focusing on reaching a compromise that balances defense and non-defense spending needs.
Senate Chair’s Opening Statement
Senate Subcommittee Chairman Brian Schatz (D-HI) began his opening statement by pointing out that a proposed 9.5 percent increase in the department’s budget request faces historically low vacancy rates and rents rising by more than 15 percent in some places, which accounts for more than half of that increase just to maintain the current housing programs. The Chairman mentioned concerns about emergency transfers, how institutional investors are reshaping homeownership markets, and CDBG-DR delays.
Senate Ranking Member’s Opening Statement
Ranking Member Senator Collins (R-ME) highlighted the work of the department and how the budget supports these activities including lead removal. She then expressed concern that nearly half of the previously provided CARES Act funds have not been spent to date and even less of the ARPA funding. Sen. Collins conveyed unease about the department’s ability to spend the funding despite its best intentions. The Senator then turned to the subject of vouchers, questioning whether the 200,000 additional incremental vouchers proposed in the White House budget could be utilized under present market conditions across the country. She stated that she does not believe that appropriating more vouchers when they cannot be leased is the answer, especially when the supply of affordable housing is insufficient, and she pointed out that there are problems with the department’s Fair Market Rents, which she noted are insufficient in many markets across the country. This results in households being unable to afford available rental units even with a voucher.
The Secretary delivered virtual testimony before the House subcommittee and sat in-person before the Senate. Her testimony before both committees highlighted the department’s current work and hopes for increased funding across many of its programs in FY 23. The Secretary’s full written Senate testimony can be found here. She focused on the administration’s key priorities to build a fairer America. Features of the Secretary’s testimony of particular interest to public housing authorities include:
- $32 billion for the HCV program to support an estimated 200,000 new vouchers;
- $3.6 billion to address homelessness through services and housing – increase of $576 million;
- A focus on ensuring the supply of housing meets demand which includes $2 billion for the HOME Investment Partnership Program, $15 billion for Project-Based Rental Assistance for people with disabilities and older Americans, and $180 million for the development of new units for those groups;
- Crucial investment in the public housing supply; and
- Funding to meet the need for an appropriate level of staffing at the department.
During her opening statements in both chambers, the Secretary said, “At HUD we understand that our homes represent more than four walls and a roof. Where we live determines the kinds of jobs we can get, how healthy we are, and where our children go to school. The President’s budget understands that too.”
While both subcommittees showed bipartisan concern for Americans faced with high housing costs, whether rental or homeownership, and with many members mentioning homelessness in their districts and across the county, many questions directed at the Secretary focused on niche interests. Below is a summary of the issues most pertinent to HAs.
In the Senate, Chairman Schatz, like Sen. Collins, expressed concerns about voucher utilization, seeking reassurance from the Secretary that passing appropriations for more vouchers would not simply lead to more vouchers being unused.
Secretary Fudge told the subcommittee that the department will issue a Federal Register Notice in August with a new FMR formula for public comment. PHADA will alert members when this Notice becomes available for comment.
Members of both the House and Senate subcommittees asked the Secretary about staffing issues at the department. Rep. Katherine Clark (D-MA) recalled that the department was leading the federal government in staff losses between 1991 and 2019, losing nearly 50 percent of their staff with half of the current workforce eligible for retirement in the coming year.
The Secretary responded that over the last two years the department has gained more employees than we have lost for the first time in a long time. She said, “We cannot do our work… without the proper staffing.” She continued, “It is probably one of the most important things we are asking for in this budget so that we can serve the people the way we should.”
PHADA has repeatedly asked the department regarding the final PBV rule. Originally, the department indicated that Sections 101–106 were all meant to be implemented during the spring of 2022, but more recently staff have stated that only Sections 102, 103, and 104 will be implemented and that the long-awaited PBV section will not be released until later this year. When asked by Rep. Diaz-Balart about the current timeline, the Secretary said that the final regulations would be published by the end of this year, or early 2023. PHADA is concerned by these continuous delays, as implementing the PBV section sooner could help address the dire need for more placed-based affordable housing units for low-income households around the country, both through preservation and production. If the PBV reforms from HOTMA had been implemented prior to COVID-19 and prior to this rapidly rising rental market and low vacancy rates, PHAs and the low-income households that they serve could be in a stronger position to address one major aspect of the voucher utilization problems that are occurring throughout the country, namely having a better supply of units available to help utilize vouchers.
In an exchange with Rep. Adriano Espaillat (D-NY) the Secretary highlighted an additional $1 billion to support public housing capital funds. She also mentioned the FCC’s Affordable Connectivity Program and the department’s request that HAs reach out to let residents know about the program. She also pointed out that this assistance provided under the ACP does not count as income for residents.
PHADA recently sent a letter to the department Secretary and met with the Secretary’s senior advisor and other executive level staff at the department and in Congress about the financial predicament and insolvency possibly facing some HAs related to TARS due to the loss of rental income. Regardless of the reason rents have gone unpaid, many HAs have faced higher than usual TARs related to the pandemic as well as the eviction moratorium. Unfortunately, when asked about this issue by House Ranking Member Diaz-Balart, the Secretary indicated that she was not aware of the issue and that it was isolated among a few HAs. PHADA is concerned by this response and will continue to press the issue with the department and Congressional staff.
PHADA will keep members apprised in the coming months as the House and Senate release their appropriations bills before final figures are determined for FY 23. PHADA encourages members to contact your representatives and senators to urge them to support the highest funding possible for key public housing and Section 8 accounts as well as any reconciliation bill that could include significant capital funding and voucher expansion.
If your Senator or Representative is on one of the sub-committees (shown below), we urge you to reach out and make sure they know how your agency is working locally to help their constituents. These THUD Subcommittee members (18 Senators and 15 Representatives) are among the most important to the future of the public housing and voucher programs. They hold sway over department program funding levels. Please make every effort to educate and inform your Subcommittee members about the impact of your housing activities in their districts.
T-HUD and Related Agencies Subcommittee Members
Majority members on the Senate subcommittee include Chairman Schatz, Sens. Jack Reed (D-RI), Pat Murray (D-WA), Richard Durbin (D-IL), Dianne Feinstein (D-CA), Christopher Coons (D-DE), Chris Murphy (D- CT), Joe Manchin (D-WV), and Chris Van Hollen, (D-MD). Minority members include Ranking Member Susan Collins (R-ME), Sens. Richard Shelby (R-AL), Roy Blunt (R-MO), John Boozman (R-AR), Shelley Moore Capito (R-WV), Lindsey Graham (R-SC), John Hoeven (R-NC), John Kennedy (R-LA), and Mike Braun (R-IN).
House subcommittee majority members include Chairman David Price (D-NC), Reps. Mike Quigley (D-IL), Katherine M. Clark (D-MA), Bonnie Watson Coleman (D-NJ), Norma J. Torres (D-CA), Pete Aguilar (D-CA), Adriano Espaillat (D-NY), Jennifer Wexton (D-VA), and David J. Trone (D-MD). Minority members include Ranking Member Mario Diaz-Balart (R-FL), Reps. Steve Womack (R-AR), John Rutherford (R-FL), Mike Garcia (R-CA), Ashley Hinson (R-IA), and Tony Gonzales (R-TX).