Wednesday, February 5, 2020 (2:00 PM) -- A Future Without Public Housing? Examining the Trump Administration’s Efforts to Eliminate Public Housing Connect with the House Financial Services Committee
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This hearing will have one panel with five witnesses:
• Sylvia Blanco, Chief Operating Officer, Housing Authority of the City of Austin
• Bobby Collins, Executive Director, Housing Authority of the City of Shreveport
• Susan Popkin, Senior Fellow, Urban Institute
• Kate Walz, Vice President of Advocacy, Shriver Center on Poverty Law
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Purpose
Public housing plays a central role in addressing America’s affordable housing needs. Under the
program, the Department of Housing and Urban Development (HUD) provides federal grants to local public housing authorities (PHAs) that collectively own and manage roughly one million permanently affordable housing units. Public housing is home to approximately 1.7 million low-income seniors, people with disabilities, families with children, and other individuals. Over half of public housing households are headed by seniors and people with disabilities, while families with approximately 634,000 children comprise more than 35% of public housing households. The average income of a household living in public housing is $15,692 per year, and 82 percent of public housing residents are extremely or very low-income. In order to ensure affordability, rent for public housing residents is generally capped at 30 percent of household income.
Over the past few decades, funding for the public housing program has decreased significantly.
Congress provides funding for public housing through the Capital Fund, which primarily is used to
address physical needs of public housing properties, and through the Operating Fund, which is used for day-to-day operating costs. In 2018, funding for the Capital Fund had fallen 36 percent since 2000, and Congress had provided sufficient funding for the Operating Fund only three times during the same time period. While Congress recently increased funding for public housing in fiscal years 2018 and 2019, overall funding for the program is still 17 percent lower than the FY 2010 funding level, after adjusting for inflation. As a result of this chronic underfunding, there is an estimated $70 billion backlog in needed capital repairs to fix tenants’ homes from substandard and unsafe conditions, and more than 10,000 public housing homes are lost each year due to disrepair. This represents a permanent loss of our public housing stock due to the Faircloth Amendment, which prohibits PHAs from constructing any new public housing units if it results in a net increase to their overall stock.
Current federal resources to preserve public housing
One of the main challenges in preserving public housing is the limitation on using public housing as collateral for loans. This limitation is intended to protect the permanent nature of public housing because a foreclosure would change the ownership of the property and threaten affordability, among other things. Thus, PHAs are limited to federal and other grants to rehabilitate aging public housing properties.
Trump Administration’s efforts to eliminate public housing
Proposed budget cuts
The Trump administration has proposed cuts to the public housing capital fund, as well as CNI, in
every budget request it has submitted to Congress. In President Trump’s first budget request, funding for the Public Housing Capital Fund would have been cut to $628 million in FY18, a 68 percent cut. For both FY19 and FY20, the Administration proposed to eliminate funding for the Public Housing Capital Fund and CNI in its budget request. Instead, the Administration requested $100 million for RAD, and $30 million for competitive grants to facilitate the demolition of physically obsolete public housing properties. Affordable housing stakeholders have stated that such cuts would prevent PHAs from addressing their most pressing capital needs, including fixing leaking roofs or replacing outdated heating systems.
Advocates have also pointed out that defunding the Public Housing Capital Fund
would make it harder for PHAs to convert their stock under the RAD program, since they need their
capital reserves to make conversions possible financially.
HUD’s “repositioning” initiative
In November 2018, HUD’s Office of Public and Indian Housing (PIH) sent a letter to PHAs outlining
the agency’s efforts to “reposition” public housing, meaning conversion to other forms of
assistance. The letter states, “Under the leadership of Secretary Carson, [PIH] is focusing on
repositioning public housing by providing PHAs with additional flexibilities.” HUD pointed to...
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