GOP’s rhetoric about spending cuts sparks worry among housing advocates

WASHINGTON — House Republicans’ vow to use the debt ceiling negotiations to extract spending concessions from Democrats has housing advocates worried about cuts targeting crucial programs amid a strained supply and elevated rents.

The stakes are especially high for the Housing and Urban Development Department because the cost of maintaining some of its biggest programs, such as rental vouchers, at their existing level increases each year as rents rise, advocates said.

“Depending on how they do it, it could result in resources being taken away from households that are already receiving housing assistance,” said Sarah Saadian, the National Low Income Housing Coalition’s senior vice president of public policy. “At a time where we’re seeing rising rents, eviction rates that are reaching pre-pandemic levels, homelessness is on the rise in many communities, this is the exact time where Congress should be expanding resources, expanding housing resources, not cutting them back.”

At stake is billions of dollars HUD uses to fund housing programs each year, including maintenance of the public housing system, rental vouchers, homelessness assistance, and grant programs for state and local affordable housing and other community initiatives. In fiscal 2023, Congress provided HUD with $58.2 billion in discretionary spending, with about half going to subsidize rent for 2.3 million low-income households through the Section 8 voucher program.

Although Republicans control only one chamber of Congress, they’ve vowed to use the threat of default to extract spending concessions from the White House and Senate Democrats in negotiations to raise the debt ceiling.

Treasury Secretary Janet L. Yellen told Congress in a letter that the “extraordinary measures” she took in January to stave off default may not last beyond early June.

“If past is prologue, we have a lot to be worried about,” Saadian said, referencing the 2011 standoff between President Barack Obama and House Republicans that resulted in a decade of discretionary spending caps in exchange for raising the debt limit.

“The last time we had a Republican-controlled House, and a Democratic Senate and White House, we still ended up with the Budget Control Act and 10 years of spending caps,” she said in an interview. “I think that this Republican Congress seems to be even more willing to threaten default on the debt ceiling or government shutdowns than Republicans back in 2011.”

Top appropriators said it’s too early to say how spending fights will shake out, or which programs they will prioritize.

Rep. Tom Cole, R-Okla., chairman of the House Transportation-HUD Appropriations Subcommittee, said without top-line budget numbers it’s too early to know whether housing assistance would continue in fiscal 2024 for everyone already receiving it.

“It’s too early for me to say,” he said in an interview. “Until I have a number, I can’t give you much of a definitive” answer.

Rep. Rosa DeLauro of Connecticut, House Appropriations ranking Democrat, said cuts would “wreak havoc on people’s lives,” citing one Republican proposal that would pare back spending by about $130 billion, to fiscal 2022 levels.

“Housing would be one of those issues, which is a very critically important area,” she said in an interview. “I know from the state of Connecticut, we’re looking at housing, and the shortage of housing and affordable housing.”

Andy Winkler, director of housing and infrastructure projects at the Bipartisan Policy Center, said domestic spending would be hit even harder by cuts if defense programs were spared, as some Republicans have advocated. Domestic programs would have to compete with each other as Democrats weigh what to prioritize in negotiations with House Republicans, which could be bad for HUD spending, he said.

“The challenge here is, is it a high enough priority to go to bat for when you’re facing cuts across all 12 appropriations titles. I hope that that’s the case,” he said in an interview. “But I’m not sure that it is yet the highest order priority on the list.”

The voucher problem

Another challenge for HUD is that the cost of maintaining some of its biggest programs, particularly rental vouchers that subsidize housing costs, increase each year as the costs associated with housing rise. Cuts would hit HUD especially hard, Winkler said.

“Even in a normal year, things get more expensive,” he said. “Housing vouchers have to account for rising rents, and so you always typically see a slight increase in appropriations to keep pace with costs in the economy with inflation. To go even further back and cut to levels from last year, I think it’s going to be difficult.”

Even keeping HUD funding flat would mean the voucher program, which makes up about half the department’s spending, reaches fewer people than the year before. That could be the scenario if Congress resorts to long-term continuing resolutions that maintain fiscal 2023 levels, said Sonya Acosta, a senior policy analyst for the Center on Budget and Policy Priorities.

“With a CR, especially with the voucher program, you have housing agencies a little more reluctant to spend some of their funding,” Acosta said in an interview. “If someone exits the program, and there’s money for a new voucher to be issued, PHAs (public housing authorities) might just not issue that, meaning that the total number of people receiving assistance goes down.”

Cole said the annual increase in the cost of housing vouchers is a perennial issue faced by the Transportation-HUD Subcommittee.

“That’s going to be a challenge for us, particularly in an inflationary environment. It’s a challenge every year anyway. We understand how many people depend on these things,” Cole said of Section 8 vouchers. “So we’ll see what we can do.”

The fiscal 2023 omnibus provided $30.3 billion for tenant-based rental assistance. The $2.9 billion increase from fiscal 2022 covered the increased cost of the existing 2.3 million vouchers and expanded the program to an additional 12,000 households.

Cole said it’s too early to commit to fully funding existing housing vouchers without top lines set by the Budget Committee.

The Senate

Some advocates are hopeful the White House and the Democratic-controlled Senate, where Republicans tend to be friendlier to housing, will check House Republicans’ push for cuts, even with the debt ceiling threat.

“There are two chambers of Congress,” said Peggy Bailey, vice president for housing and income security at the Center on Budget and Policy Priorities. “So we don’t want to start from a position of thinking that cuts are inevitable.”

Sens. Patty Murray, D-Wash., and Susan Collins, R-Maine, who are taking over this year as the chair and ranking member of the Senate Appropriations Committee, have championed housing programs in the past, Bailey said in an interview. Collins was the ranking member on the Transportation-HUD Subcommittee in the last Congress.

“What gives me hope is that traditionally the housing programs, especially the voucher program and the homelessness assistance programs, have benefited from bipartisan support. So I am hopeful that we will at least be able to maintain the assistance that we have,” Bailey said. “That said, obviously, we are preparing for needing to do a lot of education in the House, to put it mildly.”

Collins said it’s “premature” to say what the funding level of HUD should be without seeing the president’s budget request, but said she would be keeping a close eye on the department’s point-in-time count of homeless people. The count that takes place in January is HUD’s metric for measuring homelessness each year.

“That will be very illuminating to see because at least in my state, there’s been a huge increase in the number of unsheltered individuals and families,” she said. “But that will be one factor.”