Obama Proposes Increase in HUD Budget, Eliminates HOPE VI

President Obama released details of his administration’s 2010 budget which includes increases for key housing and community development programs, replaces the HOPE VI programs and suggests legislative language will be offered to more deeply target Community Development Block Grant (CDBG) funds.

Highlights of the proposed 2010 budget for the Department of Housing and Urban Development (HUD) include:

1. A total budget of $43.7 billion, a $3 billion increase above the FY 2009 enacted figure of $40.7 billion.

2. A slight increase in funding for the Public Housing Operating Fund. The administration proposes an increase to $4.455 billion and claims it will fund operating expenses at 100 percent.

3. The budget reduces funding for the Public Housing Capital Fund to $2.244 billion which is slightly below the 2009 figure of $2.450 billion. According to the administration, the reduction is due to the $4 billion funding made available to the program through the American Recovery and Reinvestment Act of 2009.

4. The budget includes $1 billion to fund the Housing Trust Fund.

5. The proposed funding for the Community Development Block Grant (CDBG) program is $4.5 billion but the administration indicates it will submit legislative language to “better target” these funds. There will be a major legislative battle between low income advocates and state and local elected and appointed officials over this issue.

6. The budget includes a slight increase funding for both tenant-based and project-based vouchers. It calls for $16.189 billion in tenant-based renewals (a slight increase from the $15 billion in the Omnibus bill) and $7.7 billion for project-based assistance (a $600 million increase).

7. The budget does not provide an increase in the Home Program but proposes to maintain the FY 2009 funding level.

8. The budget proposal eliminates the HOPE VI program and replaces it with a new Choice Neighborhoods Initiative with a proposed funding level of $250 million. The proposed initiatives funded under this program appear to be similar to the HOPE VI program but allows for a broader array of eligible applicants beside housing authorities to include non-profits, local governments and for-profit developers.

9. Homeless programs will receive a seven percent increase un funding under the budget proposal.

10. The budget includes funding for HUD’s Sustainable Communities Initiative which is designed to integrate housing and transportation initiatives to create a regional approach to sustainable development. The proposed funding for the initiative is $150 million.

11. The budget provides $243.6 million for the Community Development Financial Institutions (CDFI) Fund including $113.6 million for the CDFI Program and $80 million for the Capital Magnet Fund. The Capital Magnet Fund is new program authorized to increase capital investment for the development, preservation, rehabilitation, or the purchase of affordable housing for low-, very low-, and extremely low-income families.

HUD Secretary Shaun Donovan is tentatively scheduled to testify on the FY 2010 budget in the House on May 18.

Study Finds Stimulus Jobs not Enough to Pay for a Home

The Center for Housing Policy released a study May 7 which showed affording a home is still not within reach despite the influx of federal stimulus dollars.

The study, Paycheck to Paycheck: Wages and the Cost of Housing in America, took an in-depth look at housing affordability for five construction-related occupations that would likely see a boost from the stimulus package. This included construction managers, carpenters, equipment operators, long haul truck drivers and construction laborers. The study found homeownership is unaffordable for each of those positions except for those performing as construction managers. The Center, which is the research arm of the National Housing Conference, included a section which covers common questions asked about the study.

Interesting Read

Presidency 2012: The Invisible Primary Begins
Larry J. Sabato
Center For Politics

Democratic ‘Oboomers’ to Defend Black-Influenced Congressional Districts
By Jonathan Allen
Congressional Quarterly