Is Congress Providing Enough Funding to Fight Homelessness?

written by Steve Berg
May 14, 2014

The year of sequestration, 2013, may be over, but homeless programs are still waiting for the final hammer to fall when The Department of Housing and Urban Development (HUD) announces which Continuum of Care projects will and won’t get funded. The impact of Congress’s decision to underfund HUD’s homelessness programs in Fiscal Year (FY) 2013 won’t be good for the people served by those programs. And while homeless programs won’t face downsizing in FY 2014, their prospects in FY 2015 are far less certain.

Congress provided a healthy increase in funding for homeless assistance in the FY 2014 appropriations bill. Spending for Continuum of Care program won’t go down, and we could very well see spending on Emergency Solutions Grants go up. Nevertheless, you can expect HUD to continue encouraging homeless programs to become more efficient by reallocating funding, improving program models, and re-housing more people

But that brings us to FY 2015, which Congress has already begun to work on. It was supposed to be another decent year. The Murray-Ryan budget agreement, which increased discretionary spending above the sequestration amount for 2014, added an additional $2 billion for FY 2015 for nondefense discretionary spending, not much in a nondefense discretionary budget of around $500 billion, but enough for a tiny amount of breathing room.

Unfortunately, the entire $2 billion and more disappeared when the Congressional Budget Office (CBO) issued its “re-estimate” of the Administration’s budget. HUD’s budget was based on the Office of Management and Budget’s (OMB’s) projection that the receipts from HUD’s Federal Housing Administration and other mortgage insurance programs would increase, but the CBO projects that these receipts will instead be substantially less in FY2015 than in 2014.

Predicting the receipts of HUD mortgage insurance programs is well outside of my area of expertise, so I can’t say which projection is correct. Two things are clear, however: CBO, now that it has issued its re-estimate, is highly unlikely to change its mind; and Congress will make its decisions based on CBO’s estimate, not OMB’s, because federal law requires it to.

The House T-HUD subcommittee recently released its proposed FY 2015 appropriations bill for the Departments of Transportation and for HUD.  Under the House version, this subcommittee had to bear far more than its share of the net loss of nondefense discretionary funding created by the mortgage insurance problem.  What the subcommittee proposed would be very bad for HUD and communities fighting homelessness. The result would be a reduction from FY 2014 of over $700 million for HUD programs; and level funding for homeless assistance, which translates into more downsizing at the local level due to expiring multi-year grants that will be up for renewal.

To avoid another year of downsizing homeless programs and to get back to making progress toward ending homelessness, Congress will need to decide that this is unacceptable, and pass a spending bill for FY 2015 that appropriately funds HUD and its homeless programs.

President Obama’s budget proposes an increase of $301 million for homeless assistance, some of it to fund expiring multiyear grants and other increased costs, but mostly to provide new permanent supportive housing for 37,000 additional people, enough to end chronic homelessness.

That increase, while small compared to the entire domestic discretionary budget, would ultimately save taxpayers money by reducing the huge cost of chronic homelessness to hospitals, jails and shelters. More importantly, though, it would make a tremendous impact on the lives of thousands of vulnerable people who need our help.