Dear Chairwoman Mikulski, Vice Chair Shelby, Chairwoman Murray, Ranking Member Collins, Chairman Rogers, Ranking Member Lowey, Chairman Latham, and Ranking Member Pastor,
Mercy Housing is writing to encourage Congress to pass a full Fiscal Year (FY) FY 2015 THUD Appropriations bill. Mercy Housing is concerned about the repeated cuts housing and community development programs have taken and the negative impact that underfunding these critical programs has on low-income people, including those with disabilities, seniors, families with children, and people experiencing homelessness.
Mercy Housing is one of the nation’s largest nonprofit affordable housing organizations. We build new apartment communities and acquire and rehabilitate existing housing, in addition to managing our own and others’ affordable housing communities. We provide community finance for other affordable housing projects and are a leader in place based neighborhood stabilization. We are redefining affordable housing by creating a stable foundation where our residents can explore their potential, supported by practical Resident Services such as health classes, financial education, employment initiatives, parenting and after-school programs for children. On any given day, more than 144,000 people live in a Mercy Housing home.
Mercy Housing is a member of the Campaign for Housing and Community Development Funding (CHCDF), a coalition of national affordable housing and community development groups. CHCDF members include faith-based, private and public sector, financial intermediary, civil rights, developer, and advocacy groups. These groups work to meet the needs of low- and moderate- income renters and homeowners across the country.
Mercy Housing understands the timing and budget challenges currently facing Congress. However, we believe a long-term or year-long Continuing Resolution (CR) at FY 2014 funding levels for HUD’s programs will not adequately address the growing housing needs of millions of low-income households. Underfunding HUD programs undermines the goals of helping low-income seniors, people with disabilities, families with children, and many others to live in safe, stable, affordable housing and to revitalize their communities. Funding HUD’s housing programs at FY 2014 levels could force cutbacks in assistance in the near future, given increasing rents and stagnating incomes for the poorest households. The underfunding of HUD programs is particularly distressing in light of recent attention to economic inequality in the United States, and expressions by members of both parties of a commitment to address poverty. HUD is the federal agency whose programs are most targeted to ameliorating hardship faced by Americans with the lowest incomes.
Mercy is particularly concerned about funding for the project-based Section 8 program in FY 2015 and beyond. Both the House and Senate THUD Appropriations bills, drafted earlier this year, would incorporate the Administration’s plan to shift funding of Section 8 contracts from the present federal fiscal year cycle to a calendar year cycle. This policy will provide one-time savings in FY 2015, but according to HUD, will require at least $1.2 billion in additional budget authority in FY 2016 to fully fund the program. Both the House and Senate THUD Appropriations bills would reduce funding for Section 8 project-based rental assistance (PBRA) to $9.7 billion, consistent with HUD’s budget request and not enough in the long term to provide 12 months of funding for every contract.
HUD’s proposal is a good faith attempt to provide reliable, predictable funding for the project-based Section 8 program. In its Congressional justifications, HUD acknowledges that providing contractual funding increments of less than 12 months from expiration (“short funding”) is problematic and asserts that the calendar year proposal will provide a “more stable…funding structure.” Nevertheless, in a flat budget environment, securing the required $1.2 billion funding increase in FY 2016 presents a tremendous risk. Without this increase, thousands of contracts will be in peril of receiving less than is required to support them through calendar year 2016. Such inadequate funding would diminish private sector investment in these affordable rental properties and jeopardize housing quality and benefits for residents.
The project-based Section 8 program provides rental assistance for 1.2 million low-income households across the country. Section 8 allows seniors to live in the communities they helped to create, provides modest homes for residents who cannot work because of injury or disability, and offers a foundation to build on for young families who are just starting out or who are struggling with our slow economy. Privately owned properties with project-based Section 8 generate $460 million in property taxes for local municipalities and directly support 55,000 jobs. Yet, HUD’s proposal could result in short funding Section 8 contracts covering thousands of apartments, more than half of which are occupied by elderly and disabled households.
It is essential that Congress understand the important role that housing and community development programs have in supporting local economies and improving the lives of low-income households across the country. Mercy Housing, with CHCDF, urges Congress to pass a full FY 2015 THUD Appropriations bill this fall with funding levels sufficient to enable states and communities to continue to create more affordable housing options for the most vulnerable populations and stimulate more community revitalization. As part of this spending bill, Mercy Housing appeals to Congress to provide a full funding for project-based Section 8 contracts in FY 2015 and in future years.
Thank you for your consideration and please let us know if we can provide additional information.
President / CEO
Mercy Housing Inc.