President’s Budget Proposes Major Hikes in Housing Funding

The Biden administration recently released its budget request for fiscal year (FY) 2023. This signals the start of the appropriations process as Congress must now pass appropriations bills to provide money to carry out government programs for that year. The president’s budget proposal serves as a fiscal indicator of the administration’s policy priorities and signals to Congress what the White House hopes to accomplish over the coming years. The 2023 President’s Budget requests $71.9 billion for HUD, approximately $11.6 billion more than the 2022 annualized continuing resolution (CR) level.

HUD Secretary Marcia L. Fudge stated, “This Budget tells the American people that the President, and our agency, view housing as a foundational platform to help address the most urgent challenges facing our nation. This Budget will help us meet our mission to provide security and stability for those who live on the outskirts of hope, advance opportunity and equity on behalf of marginalized communities, and meet the existential threats posed by natural disasters and climate change.”

The administration has proposed funding for a new HUD program to address the affordable housing shortage, sufficient funding to cover existing rental assistance contracts and increase the number of Housing Choice Vouchers, and investments for rehabilitation and modernization to further climate resilience and energy efficiency. Here are some of the budget’s highlights:

Housing Supply Fund

The budget seeks $35 billion for a new Housing Supply Fund to be administered by HUD. The budget requests the program receive $7 billion in funding each year through FY 2027 so it can expend $35 billion over the next 10 years. Of this amount, $25 billion would be awarded to state and local housing agencies to create streamlined financing tools to support the development of affordable multifamily and single-family housing of modest density for low- and moderate-income families. The additional $10 billion from the Housing Supply Fund would be provided to state and local governments that amend their zoning laws to make it easier to build affordable housing.

Housing Choice Vouchers

The budget request proposes to significantly increase access to Housing Choice Vouchers. It calls for $32.1 billion to renew all existing housing vouchers and to expand assistance to an additional 200,000 households with a focus on those who are experiencing homelessness or fleeing domestic violence. If enacted, it would be the most significant expansion of housing vouchers in the program’s history.

Specifically, the budget proposes $26.2 billion, a $2.1 billion increase, for contract renewals; $3 billion, a $604 million increase, in administrative fees; $220 million, a $120 million increase, for tenant protection vouchers (TPVs); $445 million for a new mobility services program; and $1.6 billion for new incremental vouchers to serve 200,000 additional families.

The budget also proposes $667 million for Section 811 mainstream renewals, a $208 million increase over FY 2022. It also requests authority to establish a set-aside for funding adjustments to public housing agencies that face shortfalls that would require them to terminate families or that have experienced a significant increase in mainstream renewal costs due to unforeseen circumstances. The budget also proposes $300 million in competitive grants to pay for efficiency upgrades in public housing.

Section 8 Project-Based Rental Assistance

The budget proposes $15 billion for Project-Based Rental Assistance (PBRA), representing a $595 million increase. Of that amount, $14.325 billion is for renewing expiring Section 8 project-based contracts, $80 million for the Rental Assistance Demonstration program, and $204 million for Moderate Rehabilitation and Single Room Occupancy renewal programs.

The budget request also includes $375 million for performance-based contract administrators’ (PBCA) administrative fees, an increase of $20 million over FY 2022. This funding level would also allow for continuation of Management and Occupancy Reviews, incorporate projected transfers of existing non-PBCA administered contracts into the PBCA portfolio, and include projected increases in Fair Market Rents, upon which fees are based.

Section 202, Housing for the Elderly

The budget provides $966 million, a $67 million decrease from FY 2022, for Section 202 housing. This amount includes $742 million to renew contracts, $120 million to support service coordinators, $100 million in new capital advances, and $4 million for property inspections and related administrative costs.

Section 811, Housing for Persons with Disabilities

The budget requests $288 million, a decrease of $64 million, for Section 811 housing. This includes $205 million for Project Rental Assistance Contracts, renewals, and amendments; $82 million for capital advances, new operating assistance, and State Project Rental Assistance to expand the supply of affordable housing for low-income persons with disabilities; and $2.7 million for inspections and related administrative costs.

Green and Resilient Retrofit Program

The budget proposes $250 million for a new Green and Resilient Retrofit Program to provide funding to rehabilitate assisted multifamily properties to be more energy efficient, healthier, and more resilient to extreme weather events.

Lead Hazard and Healthy Homes

The budget proposes $400 million for the Office of Lead Hazard Control and Healthy Homes program, a $15 million decrease from FY 2022. The budget includes $5 million for radon testing and mitigation in public housing units.