The Department of Housing and Urban Development would see its funding drop by 13 percent under President Donald Trump's fiscal 2018 budget proposal. The cuts, combined with others elsewhere in the federal government's discretionary budget, would offset proposed increases in defense and homeland security funding, including an increase of $54 billion for Department of Defense programs. The proposal, Trump said, "follows through on my promise to focus on keeping Americans safe."
Trump's proposal is only the first step in a long process for setting the federal budget, and it identifies the priorities of his administration. But ultimate responsibility for passing the budget rests on Congress, which can incorporate all, some, or none of the Trump administration's suggestions in the final budget. So far, many members of Congress—including many Republicans—have expressed concern that the proposed cuts go too far.
Rep. Hal Rogers (R-Ky.), a senior member of the House Appropriations Committee, said proposed cuts to community development grants are especially troubling because the funds are vital to many rural districts around the country. "I am optimistic that we can work with the administration to responsibly fund the federal government, including those agencies which serve as vital economic lifelines in rural parts of the country that are still working to overcome substantial challenges," he said.
The National Association of REALTORS® is looking carefully at the proposal, for which details will be released in May.
What Would Be Eliminated
Under a summary provided by the administration, HUD's budget will total $40.7 billion in fiscal year 2018, down from $46.9 billion this fiscal year. Here's what's on the chopping block.
- Community Development Block Grants would be the biggest casualty of the cuts. The program, which was created in the mid-1970s to provide funding to states and localities for a wide range of uses, including property acquisition, infrastructure development, and new affordable housing, would be completely eliminated. "The federal government has spent over $150 billion on this block grant since its inception in 1974, but the program is not well-targeted to the poorest populations and has not demonstrated results," the administration's budget summary says. "The budget devolves community and economic development activities to the state and local level, and redirects federal resources to other activities." The program is funded at $3 billion this fiscal year.
- In addition, funding would be eliminated for the HOME Investment Partnerships Program, a block grant program targeted exclusively to housing projects, as well as Choice Neighborhoods, which provides money to fix up distressed neighborhoods where there is publicly assisted housing, and the Self-Help Homeownership Opportunity Program, which helps nonprofits buy land or improve streets as part of an affordable homeownership effort. The budget summary notes that HUD already maintains support for homeownership through mortgages insured by the Federal Housing Administration. It does not detail any proposed changes to federally insured mortgage programs through the Department of Veterans Affairs or the Rural Housing Service.
- In a change to the Federal Emergency Management Agency that would be important to NAR, the budget would eliminate the Flood Hazard Mapping Program to save the federal government $190 million. In its place, FEMA would be directed to instead "explore other more effective and fair means of funding flood mapping efforts." In addition, user fees under the National Flood Insurance Program would be restructured "to ensure that the cost of government services is not subsidized by taxpayers who do not directly benefit from those programs."
- One item that would stay: A program for lead-based paint removal and abatement would actually see a modest funding increase of $20 million to $130 million, which would contribute to "lower healthcare costs and increased productivity," according to the budget summary.
More will be known once the administration releases its detailed budget proposal in May. Read the White House summary.
—Robert Freedman, REALTOR® Magazine