9 proposed Trump HUD program cuts & the case for block grants

This first proposed Trump Budget could kill the Community Development Block Grants completely if HUD's working recommendations survive OMB

According to the Washington Post — based on a preliminary agency working document it examined — overall proposed funding cuts to the Department of Housing and Urban Development (HUD) are about 14 percent, leaving $40.5 billion for FY2018. The proposed HUD program cuts would press public housing authorities in public housing building maintenance and repair expenses, and eliminate funding for community development projects valuable to cities and counties across the United States.

The document recommended shifting funds to the Trump Administration's promised infrastructure package. While the working document recommended the programs cut should receive funding from other sources, it's unclear what those sources might be.

According to a HUD spokesman contacted by the Washington Post, the document may not have been reviewed yet by the Office of Management and Budget, which finalizes the budget proposal before it goes to Congress.

The Associated Press also reported that Housing Secretary Ben Carson emailed HUD employees telling them the proposed HUD program cuts were just "starting numbers."

Nevertheless, the starting point for HUD cuts include:

  1. Maintaining the same level of funding for rental assistance programs
  2. Minimizing HUD salaries and administrative expenses by 5 percent
  3. Slashing the public housing capital fund by $1.3 billion, a reduction of 32 percent
  4. Cutting $600 million would from the public housing operating fund
  5. Lowering direct rental assistance payments — including Section 8 Housing and homeless veterans vouchers — by $300 million
  6. Removing 10 percent ($42 million) for elderly housing Section 202
  7. Reducing disabled housing programs under Section 811 by 20 percent ($29 million)
  8. Reducing Native American housing block grants by 20 percent ($150 million)
  9. Eliminating the $3 billion Community Development Block Grants (CDBG) program -- i.e., Choice Neighborhoods and HOME Investment Partnerships

The Case for Saving CDBG 

Cities depend on Federal HUD funds for housing services, homelessness and prevention, education and workforce development that helps people and families get out of subsidized housing, blight and housing for the elderly, at-risk youth, disabled people and those in urgent need.

The more than 40-year old CDBG program is a cornerstone tool for cities to pay for affordable housing development, create economic opportunities and ensure suitable living environments for low- and moderate-income residents.

CDBG was cut by more than $2 billion in 2016, but cities like McKinney, Texas, are still accepting applications from eligible organizations for CDBG grants, while places like Barnstable County, Mass., are planning for next year.

Community organizations in cities like Cincinnati reported they would be greatly affected. For example, Choice Neighborhood projects like that of the city's Avondale neighborhood — which helped leverage redevelopment of Avondale Towne Center and a neighborhood health clinic and more — depend on continued funding. Avondale's Choice Neighborhood Transformation plan has been realized by the work of groups like The Community Builders (TCB), Urban League, Cincinnati Public Schools and Center for Closing the Health Gap that are funded by CDBG grants.

Cuts to CDBG during the Bush Administration were criticized by then New York City Mayor Michael Bloomberg because of their significance to social justice, and he advocated for mixed-use development in Federally-funded housing projects:

It's simply too important and too valuable to be allowed to die on the vine," Bloomberg reportedly said in a 2006 speech before 300 members of the National Low Income Housing Coalition.

Last year, along with Denver, Louisville, St. Louis and Camden, N.J., HUD awarded Boston a $30 million Choice Neighborhoods grant for the mixed-use Whittier Choice Neighborhood Transformation Plan.

The total $120 million in CDBG grants enable the cities to replace 1,853 severely distressed public housing units with nearly 3,700 new mixed-income, mixed-use housing units as part of plans to revitalize specific neighborhoods. At the time, HUD calculated that with these CDBG grants, the cities are leveraging an additional $636 million through public-private partnerships.

New Orleans Mayor Mitch Landrieu slammed the proposed HUD program cuts. In a press release, he indicated that his city has relied on CDBG grants for community health clinics and to help low-income seniors and other homeowners:

HUD’s CDBG program is the most vital lifeline to cities and counties to get things done for real people on the ground. President Trump’s plan to cut critical CDBG funding used to build infrastructure and fund services to senior citizens, recreation and blight remediation, among others, will not make America great again," said Landrieu.

The Threat of Increased Homelessness

New York City stands to lose at least $35 million from proposed HUD program cuts, according to the Wall Street Journal.

Housing groups are saying the result of the Trump Administration moving forward with funding cuts for the New York City Housing Authority would be an increase in the city's vast homelessness.

New York City hit a record high for the number of homeless residents in November 2016, according to CBS New York.

Mayor Bill DeBlasio's affordable housing strategy and homelessness promises — already complicated for numerous reasons from 'land grabs' to sparring with New York Governor Andrew Cuomo over the city's tax credit approach with developers — will become even more problematic in the face of the proposed HUD program cuts in the working document obtained by the Washington Post.

Will Housing Secretary Ben Carson Pull Back on Killing Block Grants and Reducing Veterans Vouchers?

The choice of Carson, a retired neurosurgeon, for Housing Secretary was widely criticized during his nomination hearings due to his lack of experience in the public housing sector.

During those Congressional hearings, Carson's answers to questions were not entirely controversial, as reported by Affordable Housing Finance. At the time, Diane Yentel, president and chief executive officer of the National Low Income Housing Coalition, said she was relieved by his responses to key questions:

[Carson] gave strong support to rental assistance programs, public housing, VASH vouchers, Community Development Block Grants, Choice Neighborhoods and lead abatement programs, and he recognized the role housing plays as a social determinant of health. He acknowledged that fair housing is the 'law of the land' and committed to upholding and implementing the law."

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