Analysis: Federal Budget Guts Housing Programs

Although the congressional reconciliation bill provides a small boost to the federal Low Income Housing Tax Credit (LIHTC) and establishes permanent funding for the Opportunity Zones program, an article by Roshan Abraham in Shelterforce argues that the budget is ultimately harmful to affordable housing.

The law’s massive cuts to social programs such as Medicaid and Medicare will contribute to the housing crisis, Abraham notes. “The tax law has dire implications for renters and homeowners, largely because millions of American renters rely on the country’s major social safety health programs, but also because cuts to climate tax credits will result in raised utility bills.”

Housing advocates say that the LIHTC does not have the same tenant protections as other HUD programs, and often acts as an incentive for speculative developers, while also not providing deep enough affordability.

Advocates say federal cuts to rental assistance and fair housing enforcement programs will drive more people into homelessness. The federal budget calls for a 29 percent reduction in funding for administrators for public housing authorities that help people find Section 8 voucher housing. “Given the stringent requirements of the program and ongoing challenges of voucher-holders who face income-based discrimination, this would significantly slow down tenants’ ability to find homes.” The bill also eliminated the Fair Housing Initiatives Program, putting fair housing enforcement in jeopardy.