Congress seeks to gut affordable housing

by Diana Aqra23 Jul 2013

The House Appropriations Committee is proposing to cut billions out of affordable housing programs in FY14, which could have detrimental effects on the housing recovery in low- to moderate-income communities.
Many lower income communities have suffered from continual foreclosures and falling home prices, vacant and abandoned homes, and higher-than-average unemployment.  The programs would cut funding towards the 1,176 communities that currently receive funding towards neighborhood revitalization, housing rehabilitation, affordable housing finance and economic development activities.

A House Appropriations budget proposed in June would cut one major program by almost half of the 2013 allocation. Under the proposal, the Community Development Block Grant (CBDG) program would be cut to $1.4bn from FY13’s roughly $3bn. The program is the federal government’s largest and most widely available source of funding for housing revitalization and recovery. Under a Senate Appropriation, however, the program would be funded roughly the same amount as FY13, approximately $3.15bn, according to the CBDG Coalition.

Additionally, the House proposes to cut the HOME Investment Partnership Program by $250m; a program that provides state and local governments unique sources of financing for affordable housing developments, such as low-income housing tax credits. The Senate has approved its bill to fund the program with $1bn.

Both the Senate and Obama Administration are opposing the House’s proposed cuts. Monday, the White House’s Office of Management and Budget issued a statement saying, “The Administration strongly opposes the US 1.7bn funding level provided for the CDBG program, which would have significant impacts on State and local resources for public improvements, infrastructure, affordable housing, and public services for low to moderate income families.”

The Administration urged that there needed to be continued investment in regional and local planning efforts and to support neighborhoods still feeling the effects of the foreclosure crisis.



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