By Eugene T. Lowe
July 24, 2006

The Senate Appropriations Subcommittee approved the spending bill for the FY07 Transportation, Treasury, the Judiciary, HUD and related agencies July 20 with an increased funding level for the Community Development Block Grant (CDBG) program and several other housing programs. CDBG formula grants are funded at $3.877 billion, $813 million above the administration’s budget request, and the Community Development Fund is funded at $4.2 billion, $1.2 billion over the budget request. The House, which passed its bill on June 14, approved funding CDBG formula grants at $3.873 billion. As the bills heads to conference, the house and senate are virtually the same with respect to CDBG formula grants.

The HOME program is funded at $1.9 billion, which is $184 million increase over last year’s funding. The HOME funding includes $25 million for the American Dream Downpayment program for first-time homebuyers. Homeless Assistance Grants are increased to $1.5 billion, $185 million more than last year’s funding. And two programs- Section 202 (Housing for the Elderly) and Section 811(Housing for Persons with Disabilities, which were recommended for deep cuts in the administration’s budget, are both funded slightly higher than last year’s levels and far above the proposed budget cuts. Section 202 is funded at $750 million, and Section 811 funding is $240 million.

Section 8 tenant based rental assistance is funded at $15.9 billion, while Section 8 project based rental assistance is funded at $5.7 billion. The Public Housing Capital Fund’s spending level is $2.5 billion, $21 million over last year’s funding and $282 million above the administration’s budget request. The Public Housing Operating Fund is $3.66 billion, $96 million above both last year’s funding and the budget request. HOPE VI, the severely distressed public housing program, which the administration recommended for termination, is funded at $100 million, the same as last year’s funding level. Housing Opportunities for Persons with AIDS (HOPWA) is funded at $295 million, nearly $9 million over last year’s funding, but $5 million less than requested by the administration.

The one major casualty in the Senate bill is that no funding is provided for the Brownfields Redevelopment program at HUD, a program strongly supported by the Conference of Mayors. Senate report language contends that the HUD program duplicates the Environmental Protection Agency’s brownfields program. Although this argument has been put forward year after year, it is well known that the EPA program is used for the cleanup of brownfields, while the HUD program is used for development. Funding for the program will probably be considered in the house/senate conference because the House, as the result of a floor amendment, funds brownfields at $15 million.

The Senate bill also reauthorizes HUD’s Mark-to-Market program, which is scheduled to sunset on September 30. The Senate bill would extend the eight-year old program to 2011. The program has been highly effective at preserving affordable housing in the nation’s cities, having been used to ensure physical and financial soundness in more than 200,000 housing units in 2,800 properties. At the 74th Annual Meeting, mayors called on Congress to extend the Mark-to-Market program.