State Health and Housing Programs in the Proposed FY 2018 Federal Budget: Six Housing Programs to Watch

State health policymakers are increasingly acknowledging housing as a key component of health, and are weaving housing strategies into their broader health system transformations. States have powerful levers at their disposal and a range of funding streams that they can bring to bear to support integrated health and housing, while local public housing authorities also play a large role in community efforts to house vulnerable low-income households.

Proposed changes in the FY2018 White House budget, if enacted, could impact available funding to programs on which states rely to address the housing needs of low-income populations. While the proposed budget includes some funding for lead-safe housing, mortgage insurance programs, and other initiatives, it calls for substantial cuts to other programs.

State health policymakers should track proposed changes to federal housing funds in order to consider their potential implications on state supportive housing programs and other initiatives affecting health-related social needs. A few such programs are noted below, and referenced in Table 1.

1. The Community Development Block Grant (CDBG)
The 2018 budget proposes to eliminate the CDBG. The program was funded at $3 billion in 2017, so its loss would likely have significant impact on state programs, including those aimed at meeting the health-related social needs of low-income people.

The CDBG awards funds to states and localities for community development activities. It benefits primarily low- and moderate-income people through a range of public infrastructure investments, job creation activities, affordable housing construction and rehabilitation, and other activities. States could use CDBG funds to make public buildings more handicapped accessible, rehabilitate low-income housing, install streetlights in a neighborhood, or preserve a historic building. In some years, Congress also appropriates disaster recovery funds to the CDBG. For example, funding for Louisiana’s permanent supportive housing program—established in the aftermath of Hurricanes Katrina and Rita—incorporated CDBG funding for disaster recovery.

The budget justification acknowledges that the CDBG has awarded formula grants to state and local governments since 1974. It says that the cut “devolves community and economic activities to the State and local level” so that federal funding can be redirected elsewhere (HUD Budget Justification p. 10). The U. S. Department of Housing and Urban Development (HUD) also says that the CDBG was ineffective and did not measurably impact targeted communities.

  • Policy consideration: Will new disaster recovery funds elsewhere in the budget make up for the loss of the CDBG, and will states will be able to easily administer the new funding streams?

2. Housing Opportunities for Persons with AIDS (HOPWA)
The 2018 budget proposes to reduce funding for HOPWA by $4.4 million. Fiscal year 2018 funding would support 1,500 fewer permanent supportive housing households, and maintain the number of transitional/short-term housing available compared to fiscal year 2017 levels.

Since 1992, HOPWA has provided housing stability and connections to supportive services and case management for low-income persons living with HIV/AIDS who are at high risk for homelessness. Program evaluation results have shown high levels of connection to care, with 91 percent of participating households engaged in ongoing care during the 2015-2016 program year, according to the budget justification.

  • Policy consideration: How might states work with community and local organizations to leverage opportunities and maintain HOPWA funding for all individuals currently supported by this program?

3. The Housing Trust Fund (HTF)
The HTF is a mandatory formula grant program that supports the creation of affordable housing units. It is targeted for elimination in the 2018 proposed budget. The HTF is relatively small (the law guarantees each state a minimum allocation of $3 million; total 2016 allocations were roughly $173 million) and new (established by the Housing and Economic Recovery Act of 2008 and signed by President George W. Bush, but first funded in 2016), but its innovative funding structure is noteworthy.

Rather than being funded through Congressional appropriations, the HTF has a dedicated source of funding from assessments on Fannie Mae and Freddie Mac. The Office of Management and Budget determines how much money is available for states, and then HUD determines how much each state is allocated (with no matching requirement) according to the funding formula.

State grantees can use the funds to produce or preserve affordable housing for low-income households, and may target the funds to people experiencing homelessness or other subpopulations.

  • Policy consideration: Will the elimination of the HTF still require Fannie Mae and Freddie Mac to use the money generated by assessments for other low-income housing initiatives?

4. Section 8 Project-Based Rental Assistance (PBRA) Program
The Section 8 PBRA provides approximately 1.2 million low- and very low-income households with rental assistance to live in specific multi-family rental developments. The assistance is tied to the apartment, with tenants currently paying the building’s owner up to 30 percent of their income (with a minimum payment of $25), and PBRA payments to the owner making up the rest of the rent.

While the 2018 budget requests $10.751 billion to meet PBRA needs— $151 million more than in fiscal year 2017— it also proposes doubling the tenants’ minimum rental payments to $50, and increasing their maximum payments to 35 percent of income.

Up to $3 million of the funds allocated for contract renewals and amendments could be used for tenant education and outreach with the goal of improving access to community services and supporting self-sufficiency.

  • Policy consideration: What could the impact of the proposed rental increases be on tenants, and on state and local housing agencies?

5. Section 8 Housing Choice Vouchers
These tenant-based vouchers flow from HUD to local public housing authorities to support rents for low-income and elderly tenants, as well as tenants with disabilities. The voucher is tied to the tenant, not with the apartment or building, as it is in the project-based programs. Tenants pay a portion of the rent, and give the voucher to the landlord to make up the difference.

The 2018 budget would cut $310.6 million from the housing choice voucher program and increase the minimum rent payed by tenants, even though the budget justification acknowledges that the program has been effective compared to other programs at improving well-being and reducing food insecurity.

  • Policy consideration: How will cuts to this program impact the health-related social needs of low-income residents, and the state programs that serve them?

6. Section 811 Vouchers
Section 811 vouchers support affordable housing for individuals with disabilities and help them access community based supports and services such as case management. Under the Section 811 Project Rental Assistance (PRA) program for people with disabilities, state health and human services and Medicaid agencies are required to collaborate with state housing authorities to provide necessary support services, identify target populations, ensure sufficient outreach, and make timely referrals to Project Rental Authority units.

The 2018 budget requests $29.3 million less than fiscal year 2017 funding but aims to maintain full funding of the current number of low-income individuals with disabilities assisted by the program through several cost-saving measures and anticipated carryover funds from prior years into 2018. As with the Section 8 PBRA, cost-saving measures in the 2018 budget include a request for authority to increase tenant rent contributions.

  • Policy consideration: How can state departments of health and housing strengthen or create partnerships with sister agencies and with local and community organizations in order to maintain access to housing and supportive services for individuals currently served by housing vouchers and grants? What would states need to facilitate these partnerships?

Although the budget that Congress passes may be quite different from the current proposal, state health policymakers interested in the intersection of health and housing should watch for changes to HUD programs. State policymakers may also consider working with cross-agency and cross-sector partners to develop strategies that leverage available funding to advance state health and housing priorities.

Table 1. Proposed Cuts to Housing Programs in HUD 2018 Proposed Budget

Program Pays for Proposed FY2018 Federal Budget Changes
Community Development Block Grant Community development activities, which can include supportive housing. Decreases by $3 billion. Eliminates entire program.
Housing Opportunities for Persons with AIDS Permanent supportive housing for low income people living with HIV/AIDS. Decreases by $4.4 million
Housing Trust Fund Buying, building, or rehabilitating affordable housing. Decreases by $173 million (from 2016 allocation). Eliminates the entire program.
Section 8 Project-Based Rental Assistance (PBRA) Program Rental assistance for low income people. Increases by $151 million over 2017.
Section 8 Housing Choice Voucher Program  Rental assistance for the low-income and elderly, and people with disabilities. Decreases by $310.6 million
Section 811 Supportive Housing for Persons with Disabilities Low-income people with disabilities. Decreases by $29.3 million

 

Support for this blog was provided by the Robert Wood Johnson Foundation. The views expressed here do not necessarily reflect the views of the Foundation.