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FY 23 Omnibus Spending Bill Released

House Appropriations Committee Chair Rosa DeLauro (D-CT) and Senate Appropriations Committee Chairman Patrick Leahy (D-VT) have released the Consolidated Appropriations Act, 2023 with all 12 appropriations bills for FY 23including T-HUD. The bill comes after three months of negotiations and, according to the House Appropriations Committee press release “…is expected to be considered first in the Senate and then later in the week by the House. The measure funds federal agencies through September of 2023.

The press release states that the Act provides $1.7 trillion in discretionary funds, including $858 billion in defense funding and $800 billion in non-defense (NDD) funding, a $68 billion, or 9.3 percent, increase over last year. The NDD figure is inclusive of veterans’ health care funding. Republicans exclude this figure and therefore present a lower figure for NDD.

 

Appropriations for HUD Programs

The bill provides a total of $61.8 billion, or $8.1 billion (or 15 percent) more than FY 22-enacted levels, for HUD programs, though many accounts are only level funded.

 

Voucher Renewals and Admin Fees

Funding for voucher HAP renewals increased by $2.3 billion, or 9.57 percent, an increase that PHADA and other industry groups advocated for to address renewal needs and to cover an additional 32,000 vouchers that HUD expects will occur through additional leasing from reserves. The amount needed to simply fund renewals annually has increased dramatically in the last five years, with approximately 30 percent more needed just to keep pace.

An increase of over 12 percent was provided for administrative fees, reflecting PHADA’s ongoing advocacy for this important account. A summary of selected accounts is provided in the chart below.

Other Voucher Funding

There is $337 million provided for tenant protection vouchers (TPVs), an increase of $237 million from last year. PHADA and other industry groups circulated a revised request for additional TPVs to Hill leadership in November.

There is also $200 million, a doubling of last year’s figure, for: significant increases, as determined by the Secretary, in renewal costs of vouchers resulting from unforeseen circumstances; portability; vouchers not in use in the previous 12 months; increases in VASH costs; and for agencies that, despite taking reasonable cost savings measures, as determined by the Secretary, would otherwise be required to terminate rental assistance for families as a result of insufficient funding.

For new incremental vouchers, $50 million is available to fund an estimated 5,000–6,250 vouchers (at a cost estimated by PHADA between $8,000–$10,000 per voucher). The House Appropriations Committee summary estimates that this figure would serve 12,000 families (at an estimated cost of $4,166 per voucher). The allocation of these vouchers will be made pursuant to a method determined by HUD and “may include such factors as severe cost burden, overcrowding, substandard housing for very low-income renters, homelessness, and administrative capacity, where such allocation method shall include both rural and urban areas. HUD may also specify that vouchers be used for survivors of domestic violence, or individuals and families who are homeless.

 

Project Based Rental Assistance (PBRA)

For PBRA, $14.9 billion is provided to fully fund renewal of all contracts. This represents an increase of $967 million, or 6.93 percent. PHADA advocated for full funding of this account and strongly supports additional funds for agencies that have converted to RAD. In its request to Congress, PHADA specifically requested funding in this account to support the cost-effective conversion of public housing properties that are unable to convert using only the funds provided through existing appropriations.

 

Public Housing

PHADA and other industry groups recommended $5.384 billion in funding for the Public Housing Operating Fund, which would have addressed operating fund shortfalls not funded in FY 22. A 1.38 percent increase is disappointing and woefully inadequate. PHADA has argued strenuously to HUD that its operating fund formula Is not reflective of current inflation factors.

The Capital Fund is level funded at $3.2 billion, a figure that does not even meet the 2010 HUD study figure of $3.4 billion that was estimated to meet annual capital needs. PHADA has estimated that at least $70 billion is needed to also address the national capital need backlog.

There is also provided $25 million for need-based allocations to HAs that experience or are at risk of financial shortfalls; $50 million for emergency capital needs, of which $20 million is for HAs under receivership or under the control of a Federal monitor, $65 million for competitive grants to HAs to evaluate and reduce residential health hazards, including lead-based paint, carbon monoxide, mold, radon, and fire safety, of which not less than $25 million is designated for lead hazards; $15 million for administrative and judicial receiverships; and $50 million for public housing financial and physical assessment activities.

 

HUD General Provisions

The Omnibus appropriations bill also includes a provision (SEC. 229) that PHADA has championed for five years preventing HUD from using any FSS program evaluation to determine FSS renewal funding. It also includes language (SEC. 239) related to the annual contributions contract (ACC): The Secretary shall comply with all process requirements, including public notice and comment, when seeking to revise any annual contributions contract. PHADA has advocated for transparency and equity for housing authorities since HUD first attempted to amend unilaterally and illegally the ACC.

 

LIHTC 

The bill does not include any tax provisions that are often part of a year-end spending bill, aside from a separately negotiated, bipartisan retirement savings package. This means that the 12.5 percent Low-Income Housing Tax Credit (LIHTC) allocation increase that expired at the end of 2021 was not reinstated. The other important provision that PHADA and advocates fought for was lowering the “50 percent test” bond financing threshold to increase access to 4 percent LIHTC equity. While the bill is expected to pass before the current Continuing Resolution expires on December 23, the LIHTC provisions could still be in play if there is an amendment process. 

PHADA will provide additional details and analysis in the upcoming Advocate. The full bill can be found here (see HUD funding, page 1704). The House Appropriations Committee summary can be found here.

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