President Obama's fiscal year 2014 budget for the U.S. Department of Housing and Urban Development (HUD), released on April 10, 2013, increases funding for many programs. The budget also includes legislative language that would change some aspects of the public housing program, and it provides a preview of legislative proposals that HUD intends to have introduced in Congress later this spring.

The budget suggests funding increases for many programs:

  • It calls for $2 billion for the public housing capital fund, a slightly higher amount than the $1.78 billion funded in fiscal year 2013 under the automatic spending cuts known as sequestration.
  • The Public Housing Operating Fund would be funded at $4.6 billion, which is a 13 percent increase over the fiscal year 2013 funding amount of $4.054 billion.
  • Renewal funding of $17.97 billion for housing choice vouchers is intended to support renewal of all vouchers in use in 2013. Language in the budget would permit HUD to offset allocations by the excess amount of agencies' reserves, as determined by HUD.
  • Administrative fees for the housing choice voucher program would increase 29 percent, from $1.306 billion in fiscal year 2013 to $1.685 billion in fiscal year 2014. A sharp drop in administrative fees in previous years had resulted in housing authorities opting out of operating the housing choice voucher program, and strained operations of the program across the country.
  • The spending plan includes $75 million in incremental funding for Veterans Affairs vouchers.
  • The budget proposes $400 million for the Choice Neighborhoods Program, a dramatic increase from $114 million appropriated in fiscal year 2013. The budget states that this money will fund 10 implementation grants and 20 planning grants.
  • The budget would allocate $10 million to the Rental Assistance Demonstration (RAD) program to support conversion of units in high-poverty neighborhoods that could not convert under existing funding levels. The budget also proposes to expand the maximum number of units that can convert under RAD from 60,000 to 150,000.
  • The Neighborhood Stabilization Program would be allocated $200 million in new competitive funds.
  • The Project Based Rental Assistance program would be funded at $10.3 billion. The budget includes a proposal to allow HUD to collect excess residual receipts from owners and use these funds to support assistance payments.

The budget includes language that would implement changes to the public housing program, including allowing full flexibility between the public housing operating and capital funds to high-performing housing authorities with HUD approval; a requirement for transitioning the calculation for flat rents for public housing to a floor of 80 percent of area median income; and language to permit consortia of housing authorities to operate public housing. The budget also includes language that would limit compensation of housing authority personnel, linking it to the number of units administered by the housing authority.

The budget document states that HUD will release legislation to Congress later this spring to substantially expand the Moving to Work Program to high-performing agencies; streamline the community service requirement; and establish a utilities conservation pilot to encourage public housing authorities to undertake energy conservation.

Ballard Spahr will continue to monitor the appropriations process and track how Congress responds to the President’s proposed funding levels and new programs. For more information, please contact any member of Ballard Spahr's housing group.

Copyright © 2013 by Ballard Spahr LLP.
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