Appropriations hearings begin in Washington, DC

Housing budgets face decreases in 2007

WASHINGTON, DC—March 3, 2006—HUD Secretary Alfonso Jackson addressed the Senate Appropriations Sub-Committee on Thursday, March 2, describing the President's suggested budget for the U. S. Department of Housing and Urban Development as a budget that, "truly reflects his intent to address our nation’s housing, economic, and community development requirements." 

Jackson stressed the home-ownership components of the budget: "The HUD portion of that budget will help promote economic and community development through increased opportunities for homeownership and affordable rental housing, free from discrimination; it will also lay the groundwork for reform by focusing community development funding more carefully toward those most in need; and it will enable HUD to continue along the path to greater Departmental efficiency and effectiveness."
 
U.. S. Senator Patty Murray (D-WA) did not share the Secretary's assessment. She warned that the President's budget proposal for HUD will hurt families and undermine community development efforts nationwide. Murray is the top Democrat on the subcommittee that oversees HUD funding. On Thursday, she questioned HUD Secretary Alphonso Jackson about the President's budget proposal for Fiscal Year 2007. Murray described the HUD budget levels as follows:

• Housing for the elderly – cut 26 percent
• Housing for the disabled – cut 50 percent
• Community Development Block Grants – cut by more than $1 billion
• Funding for public housing authorities for utility costs – frozen again (for the 5th year in a row)
• Funding to keep more than 13,000 public housing properties from falling into dilapidated, decrepit and inhumane conditions -- cut 11 percent. (Public Housing Capital Fund)

Murray said the President's budget reflects the wrong priorities. She noted that while the Administration is proposing to cut $620 million from HUD, it's working to boost spending for Exploration Systems in NASA by more than $860 million.

'"I support the overall goal of space exploration. But when it comes to sending an astronaut to Mars or housing our elderly and disabled neighbors here on earth, there's no doubt where my priorities lie," Murray told Secretary Jackson.

The President’s budget is proposed at levels almost 5 percent below the 2005 enacted budget.  Section 8 funding is proposed at a level slightly higher than in 2006 and the Public Housing Operating Subsidy is proposed at the same level as 2006 enacted. But the Capital Fund is proposed for a cut of nearly 12 percent from 2006.  That would leave the Capital Fund at a level more than 18 percent below the 2005 enacted level.  None of these numbers takes inflation into account.  Adjusting for inflation would add about 5 percent in buying power to the cut over the two years.

According to Seattle Housing Authority Executive Director Tom Tierney, "If the budget were adopted exactly as proposed, it would mean a reduction in capital funds for the Seattle Housing Authority of about $1.4 million. SHA currently receives about $12 million in capital funds; a 12 percent decrease would take this funding level to $11.6 million." This is a preliminary estimate, and could change depending on how the 12 percent reduction is applied.

There is also a proposed cut of almost 38 percent for the Community Development Block Grant (CDBG) program.  This is funding that the City of Seattle uses for both capital projects and services related to low-income people.  According to Tom Tierney, "The cut in CDBG poses a problem for housing advocates beyond the loss of resources. The Block Grant program remains a high priority for cities nationwide, and they will lobby hard to keep its funding, which will make it that much more difficult to lobby for restoring funding to programs such as the Public Housing Capital Fund. 

"Typically, the President’s Budget is only the starting point for budget discussions. With this budget proposal, the current administration has made its priorities clear. Equally clear is that housing for low-income residents of Seattle or any other major U.S. city is far down on the list," said Tierney.

Since the budget proposal was released in early February, housing advocates across the country have raised objections. In a recent statement Sunia Zaterman of the Council of Large Public Housing Authorities (of which SHA is a member) pointed out the inconsistency of the budget priorities when compared to the funding requirements for low-income housing defined by HUD itself. She said:

“Nothing could have done more to demonstrate the nation’s housing problems – and the limits of the market in solving those problems -- than trying to find homes for 250,000 hurricane evacuees.   Yet HUD abandons 20 percent of the current public housing stock in the administration’s budget proposal this year, making an already scarce commodity – affordable housing – even more scarce, particularly for the elderly, disabled and working families."