Senate Appropriations Committee Passes FY 2025 Transportation-HUD Bill

Funding for tenant-based vouchers would increase $2.9 billion above FY 2024.

On July 25, in a 28 to 1 vote, the full Senate Appropriations Committee approved the Transportation, Housing and Urban Development, and Related Agencies Appropriations Bill.

The bill includes higher funding levels than the fiscal year 2025 House bill, which was passed by the House Appropriations Committee on July 10. The Senate bill is one step toward final FY 2025 HUD appropriations.

• The bill provides $69.8 billion for rental assistance and self-sufficiency support for low-income working families, seniors, and the disabled; housing and services to homeless individuals; and support for economic and community development. Here’s how the funds may be allocated to the different offices within HUD:
• Office of Public and Indian Housing: $45.9 billion, including $35.3 billion for Tenant-based Rental Assistance, $8.8 billion for the Public Housing Fund, $200 million for self-sufficiency programs, and $1.5 billion for Native American/Native Hawaiian programs.
• Office of Community Planning and Development: nearly $11 billion, including $3.3 billion for the Community Development Block Grant program, $4.3 billion for Homeless Assistance Grants, and $1.4 billion for the HOME program.
• Office of Housing: $18 billion, including $16.7 billion for Project-based Rental Assistance, $1 billion for Housing for the Elderly, and $257 million for Housing for Persons with Disabilities.

Affordable Housing Supply

The bill seeks to address the shortage of affordable homes by making investments to increase the supply of housing. The bill includes:

• $1.425 billion for the HOME Investment Partnerships Program, a $175 million increase above FY 2024. The HOME program is the primary federal tool for state and local governments to produce affordable rental and owner-occupied housing. This funding level will allow for construction of more than 8,400 new affordable homebuyer and rental units.
• $100 million for the third year of the “Yes In My Back Yard” grant program. State and local zoning and land use laws and regulations that limit the number of units that can be built are a significant contributor to the lack of housing supply and production. These restrictions on development are driving up housing costs. While some communities have made progress in removing barriers to affordable housing production to keep up with market demand, the federal government plays a supporting role to strengthen these efforts and help jurisdictions increase their housing stock and lower housing costs.
• $4.6 billion for local community development and affordable housing needs through the Community Development Block Grant formula program and Economic Development Initiatives.
• $115 million for Section 202 Housing for the Elderly Capital Advance grants, which will lead to over 900 new units of affordable, supportive rental housing for low-income seniors.

Rental Assistance Programs

The bill maintains support for HUD’s rental assistance programs. It also provides new funding for rehabilitation efforts to help preserve the project-based affordable housing stock and improve living conditions for tenants. This includes:

• $35.3 billion for tenant-based Section 8 vouchers, a $2.9 billion increase above fiscal year 2024, which includes funding to make 3,000 new incremental vouchers available to youth aging out of foster care and veterans at risk of or experiencing homelessness.
• $16.7 billion for the project-based rental assistance (PBRA) program to renew housing contracts, a $644 million increase above fiscal year 2024.
• $8.8 billion to operate and address the capital needs of public housing.
• $10 million for HUD to make rent adjustments to 20 to 30 PBRA properties that have been renewed through the mark-to-market program and are distressed or at risk of becoming distressed.
• $25 million for a new loan program to assist in the rehabilitation of 15 to 20 PBRA properties that are already at market-rate rents but need additional capital.

Insurance Costs

The committee’s report directs the HUD Secretary to coordinate with the Director of the Federal Insurance Office to complete a report on the current state of the property insurance market with an emphasis on affordable housing properties that are rent-restricted or rent-assisted. This should include properties developed through the use of the Low-Income Housing Tax Credit and other applicable state-level affordable housing tax credits, public housing that isn’t self-insured, or properties participating in any federal housing assistance program.

The report also directs the HUD Secretary to make all existing data available, to the extent possible, to the Federal Insurance Office and coordinate to provide an analysis on the potential impact that increasing insurance premiums may have on the supply of new affordable housing, and the financial sustainment of existing affordable housing.

The report tasks HUD with providing an analysis and prediction on the potential effects of increased insurance premiums on federal Section 8 Housing Choice Voucher and project-based rental assistance housing, including properties that have undergone or are undergoing conversion through the rental assistance demonstration. The committee report says the analysis should be done within two years of the date of the bill’s enactment, and update the House and Senate Committees on Appropriations on the status of the report every six months.