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Wednesday, August 31, 2011

Department of Housing and Urban Development (HUD): FY2012 Appropriations

Maggie McCarty, Coordinator
Specialist in Housing Policy

Libby Perl
Specialist in Housing Policy

Eugene Boyd
Analyst in Federalism and Economic Development Policy

Katie Jones
Analyst in Housing Policy

Bruce E. Foote
Analyst in Housing Policy

The President’s FY2012 budget was released on February 14, 2011. It included a request for nearly $47.8 billion in gross new appropriations for HUD in FY2012. After accounting for rescissions of prior-year unobligated balances and offsets available from the Federal Housing Administration (FHA) mortgage insurance programs, the President’s request for net new budget authority for HUD in FY2012 totals just over $41.7 billion.

The President’s budget requests funding for several new initiatives that were included in prior years’ budget requests. These include $200 million for the Transforming Rental Assistance initiative to convert some units of public housing and Section 8 project-based rental assistance to a new form of rental assistance, and funding for a Choice Neighborhoods program to replace the HOPE VI public housing program. The President’s budget lists homelessness assistance as a top priority and includes increased funding for homeless assistance grants, in addition to funding for new housing plus services demonstrations.

The President’s budget, which was released prior to enactment of a final FY2011 appropriations law, also includes some funding decreases relative to FY2010. These include a 17% reduction in funding for the public housing operating fund (compared to FY2010) and funding reductions for the two largest block grant programs in HUD’s budget, the Community Development Block Grant program (a 7.5% reduction compared to FY2010) and the HOME Investment Partnerships block grant (a 10% reduction compared to FY2010). Funding for the Section 811 Housing for Persons with Disabilities and Section 202 Housing for the Elderly accounts would also be reduced relative to FY2010 under the President’s budget request. However, in the case of all of these programs except the operating fund, the President’s requested amount is higher than what was provided in the FY2011 appropriations law.

The largest accounts in HUD’s budget, the Section 8 Tenant-Based Rental Assistance account and the Section 8 Project-Based Rental Assistance account, would receive the largest funding increases under the President’s budget request, relative to both FY2010 and FY2011.

In total, the President’s funding request for HUD would result in a nearly $2.5 billion increase in gross new appropriations in FY2012 relative to FY2011. However, because the President’s budget estimates a substantial increase (nearly $2 billion) in the amount of offsetting receipts available from the Federal Housing Administration (FHA) in FY2012 relative to FY2011, the net budget authority requested in the President’s budget would represent an increase of only about $600 million in FY2012 relative to FY2011.

While not directly affecting HUD funding, the provisions in the Budget Control Act of 2011 (P.L. 112-25) relating to statutory discretionary budget caps and their enforcement through sequestration could have implications for the amount of funding available for HUD in FY2012 (see the Appendix for more information).

Date of Report: August 23, 2011
Number of Pages: 28
Order Number: R41700
Price: $29.95

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