By Eugene T. Lowe
September 19, 2011

The House Transportation and HUD Appropriations Subcommittee on September 8 approved FY2012 funding for the Community Development Block Grant (CDBG) program at $3.5 billion, nearly a $200 million increase over FY2011 funding of the program. The HOME Investment Partnership, however, was cut from $1.6 billion to $1.2 billion.

National groups, including The U.S. Conference of Mayors, pushed hard over the last several months to increase CDBG and HOME funding after the dismal outcome of FY2011 funding, when both programs were cut. CDBG saw a nearly 17 percent decrease. With the situation looking dim for FY2012, an intense effort was made by mayors, county executives local and state community development directors, and national non-profits, including the YWCA and Habitat for Humanities. The Conference of Mayors sent a letter with nearly 200 mayoral signatures to the House Subcommittee in August requesting that CDBG and HOME be funded at $3.9 billion and $1.825 billion, respectively.

While the increase in CDBG funding was great news, the House Subcommittee would reduce the program’s administration from its existing 20 percent to ten percent. In a letter to the Senate, the national groups, including the Conference of Mayors, urge opposition to the House provision. The letter argues that the “provision will have a detrimental effect on already pared down budgets. Grantees need this funding to manage and operate their CDBG programs to ensure that all of the regulatory requirements are met and carried out in a timely fashion. Such a reduction would cause lay-offs, impede the timely expenditure of CDBG funds, and thwart ongoing planning processes.”

In other HUD programs, the Subcommittee approved a mixture of increases, level funding, and cuts. Homeless Assistance Grants at $1.9 billion, and Housing Opportunities for Persons with AIDS at $334 million would be funded at the FY2011 level. Though cut in FY 2011, both the Section 202 Housing for the Elderly program and the Section 811 Housing for People with Disabilities program would be increased in FY2012. Section 202 was funded at $400 million in FY2011, and is increased in FY2012 to $600 million. Section 811 is increased from nearly $200 million in FY2011 to $300 million in FY2012.

Section 8 Housing Choice Vouchers are increased for contract renewals from $16.669 billion to $17.04 billion. But according to the Center on Budget and Policy Priorities, the level of funding for contract renewals is $325 million below what is actually needed. In short, the House Subcommittee bill would leave 42,000 households without a housing subsidy.

Finally, public housing capital and operating are both deeply cut. The Capital Fund is cut from $2 billion in FY2011 to $1.5 billion in FY2012. The Operating Fund is cut from $4.6 billion in FY2011 to $3.8 billion in FY2012.