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HUD Secretary Defends FY13 Budget Before House Appropriators

HUD Secretary Shaun Donovan testified before the House Appropriations Subcommittee on Transportation, Housing and Urban Development and Related Agencies (THUD) on March 21, in defense of the Administration’s FY13 budget request for HUD, completing his appearance before appropriations panels for the fiscal year. 

In his opening comments, Subcommittee Chairman Tom Latham (R-IA) focused mainly on the mortgage market and FHA issues.  However, when speaking to the issue of rental assistance renewals, he remarked, “I am concerned that we are at a tipping point—with the amount of renewals overtaking the rest of the Department’s budget. For every $1 you increase in Public Housing, you have to cut $5 from other HUD programs.”  Later during the question and answer session with Secretary Donovan, Latham remarked on the recent article appearing in the New York Times, which claims “there are 55,000 units in New York City’s public housing stock that are “underoccupied” — about one-third of all its apartments” and several thousand more that are “overhoused.”  Donovan acknowledged the problem is not limited to New York but cited the ongoing difficulties HAs face in managing fluctuating household sizes, and spoke of the helpful reforms for HAs contained in the rental assistance authorizing legislation that would give flexibility and help reduce the costs of administering rental assistance programs. 

Latham also remarked on Rep. Barney Frank’s (D-MA) successful amendment to the Financial Services Committee’s budget views and estimates, which recommends not funding the Choice Neighborhoods Initiative and Sustainable Communities Initiative and instead transferring the proposed $250 million to the Community Development Block Grant Program.

Rep. John Carter (R-TX), reminding Donovan that he represents the largest military base in the world at Fort Hood, asked if more VASH vouchers are needed to address the problem of veteran’s homelessness.  Donovan responded that another two to three more years of  allocation at 10,000 vouchers a year will be needed in order to fully combat the problem of veteran homelessness. 

Rep. Steve Womack (R-TX) raised a question about executive compensation of HA executive directors, claiming that the language in last year’s THUD appropriations bill that referred to the use of federal funds for salaries “at any time during any public housing agency fiscal year 2012” is being interpreted by some HAs to allow use of prior year federal funds.  Womack decried this practice and Donovan promised to look into the matter.  Donovan also stated HUD’s goal is to provide transparency on the issue of HA executive compensation and noted that HUD will soon make available the top five salaries of HA executives around the country.

In response to a question from Ranking Member John Olver (D-MA) about Section 8 administrative fees, and specifically on the costs of running the Section 8 program, Donovan stated that since the beginning of the calendar year, 18 housing authorities have “turned back their voucher programs” because the administrative fees are inadequate to properly run their program.

Two days earlier, on March 19, House Budget Committee Chairman Paul Ryan (R-WI) introduced his budget proposal.  The budget proposal would raise defense funding above the Budget Control Act of 2011 (BCA) caps, and would cut non-defense discretionary funding far below the BCA caps by approximately 22 percent. 

Rep. David Price (D-NC) asked Donovan what the implication of the Ryan budget cuts would be on HUD programs such as public housing, Choice Neighborhoods, HOME and others.  Donovan responded that, under the proposed Ryan budget, approximately one million households could lose their housing.  Of the one million households at risk under the Ryan budget, Donovan estimated that 585 thousand would come from the Housing Choice Voucher Program, 425 thousand from the Project-Based Voucher Program, and 110-180 thousand from homeless assistance programs.  He also mentioned that an estimated 17 thousand jobs would be lost from CDBG, and cuts to the HOME program would mean tens of thousands of new affordable housing units would not be built.

There are no further hearings on the HUD budget proposed by the House for fiscal year 2013, except for a hearing next week on management issues with the HUD Inspector General expected to testify.

For more information, contact CLPHA Legislative Director Gerard Holder at gholder@clpha.org.